1037-00006 · Solstice Biomedical Devices Ltd · Transaction Documents

non-competition-agreement-form.docx DOCUMENT M&A / Corporate

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FORM OF NON-COMPETITION AND NON-SOLICITATION AGREEMENT

Exhibit D to the Stock Purchase Agreement

This form is to be executed by each of the following individuals at Closing: [Insert Name of Restricted Party]. This form will be executed in counterpart by each of Dr. Marcus Ellsworth, Catherine Pryor, and Dr. Raj Subramanian. Each executed counterpart shall constitute a separate, binding agreement between Buyer and the applicable Restricted Party.

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

This Non-Competition and Non-Solicitation Agreement (this "Agreement") is made and entered into as of [●], 2024 (the "Effective Date"), by and between:

Solstice Biomedical, Inc., a Delaware corporation, with its principal offices located at 1200 Innovation Drive, Suite 400, Wilmington, Delaware 19801 (the "Buyer"), which is a wholly owned subsidiary of Solstice Biomedical Devices Ltd., an Irish private limited company; and

[Insert Name], an individual residing at the address set forth on the signature page hereto (the "Restricted Party").

The Buyer and the Restricted Party are each referred to herein individually as a "Party" and collectively as the "Parties."

As used herein, the "Company" refers to Meridian Surgical Technologies, Inc., a Delaware corporation, with its principal headquarters located at 780 Keystone Boulevard, Suite 200, King of Prussia, Pennsylvania 19406.

RECITALS

WHEREAS, Buyer, the Company, the Sellers party thereto, and Dr. Marcus Ellsworth, in his capacity as the Sellers' Representative, have entered into that certain Stock Purchase Agreement, dated as of August 20, 2024 (as may be amended, restated, supplemented, or otherwise modified from time to time, the "Purchase Agreement"), pursuant to which Buyer is acquiring all of the outstanding shares of common stock of the Company and cancelling all outstanding vested stock options of the Company, on the terms and subject to the conditions set forth therein;

WHEREAS, the aggregate base purchase price payable by Buyer to the Sellers under the Purchase Agreement is Two Hundred Twenty Million Dollars ($220,000,000), with the potential for additional earnout consideration of up to Thirty-Five Million Dollars ($35,000,000), subject to and in accordance with the terms and conditions of the Purchase Agreement;

WHEREAS, the Restricted Party is a stockholder of the Company who will receive a substantial portion of the purchase price consideration and/or a key employee and officer of the Company who possesses specialized knowledge, skills, customer relationships, and confidential information regarding the Company's business, operations, products, technology, and competitive position;

WHEREAS, with respect to each individual executing a counterpart of this Agreement:

(a) Dr. Marcus Ellsworth is the Founder and Chief Executive Officer of the Company and the holder of 2,845,900 shares of the Company's outstanding common stock, representing approximately 38.2% of the Company's issued and outstanding shares, and is entering into a new employment agreement with Buyer at Closing pursuant to which he will serve as Division President, Orthopedic Instruments, of Buyer;

(b) Catherine Pryor is the President and Chief Operating Officer of the Company and the holder of 372,500 shares of the Company's outstanding common stock, representing approximately 5.0% of the Company's issued and outstanding shares, and is entering into a new employment agreement with Buyer at Closing pursuant to which she will serve as Senior Vice President, Operations, of Buyer; and

(c) Dr. Raj Subramanian is the Chief Technology Officer of the Company and the principal architect of the ArthroNav robotic-assisted arthroscopy platform, and is entering into a new employment agreement with Buyer at Closing pursuant to which he will serve as Senior Vice President, ArthroNav Development, of Buyer;

WHEREAS, the execution and delivery of this Agreement by the Restricted Party is a material condition precedent to the obligations of Buyer to consummate the transactions contemplated by the Purchase Agreement, and the Restricted Party acknowledges receiving good and valuable consideration in connection therewith, including without limitation purchase price consideration for the Restricted Party's shares of common stock of the Company (if applicable), employment on favorable terms pursuant to the Employment Agreement (as defined below), and other compensation and retention arrangements as set forth in the Purchase Agreement and the ancillary agreements thereto;

WHEREAS, in connection with the Restricted Party's employment with and ownership interest in the Company, the Restricted Party has had access to and has acquired, and following the Closing will continue to have access to, Confidential Information (as defined below) of the Company, Buyer, and their Affiliates, the disclosure or misuse of which would cause significant and irreparable harm to Buyer and the value of the business being acquired; and

WHEREAS, Buyer would not have entered into the Purchase Agreement, and would not consummate the transactions contemplated thereby, absent the Restricted Party's agreement to the restrictive covenants set forth herein, and the Restricted Party acknowledges and agrees that the restrictive covenants set forth herein are a material inducement for Buyer to enter into and consummate the transactions contemplated by the Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Purchase Agreement.

Section 1.1 "Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to control another Person if the first Person owns, directly or indirectly, more than fifty percent (50%) of the voting equity interests of the second Person.

Section 1.2 "Business" means the design, development, manufacture, marketing, distribution, sale, and servicing of minimally invasive surgical instruments for orthopedic procedures, including without limitation (a) single-use arthroscopic blades (including the PrecisionBlade product line), (b) powered shaver systems, (c) robotic-assisted arthroscopy platforms (including the ArthroNav platform and all current and successor generations thereof), (d) related software modules (including, without limitation, software modules for real-time cartilage thickness mapping), (e) components and accessories related to the foregoing, and (f) any other products or services offered by the Company or any of its subsidiaries as of the Effective Date or that were in active development by the Company or any of its subsidiaries as of the Effective Date, as more fully described in Exhibit A attached hereto.

Section 1.3 "Closing" shall have the meaning ascribed to such term in the Purchase Agreement.

Section 1.4 "Competing Business" means any Person engaged in, or planning to engage in, the Business or any material portion thereof, whether directly or through any subsidiary, division, joint venture, partnership, or other arrangement. For the avoidance of doubt, a "Competing Business" includes any Person that designs, develops, manufactures, markets, distributes, sells, or services minimally invasive surgical instruments for orthopedic procedures, robotic-assisted arthroscopy systems, or related software, components, or accessories, to the extent that such activities overlap with or are competitive with any material portion of the Business.

Section 1.5 "Confidential Information" means all non-public, proprietary, or confidential information of the Company, Buyer, and their respective Affiliates, regardless of the form in which such information is maintained, including without limitation: (a) trade secrets; (b) customer lists, customer contact information, customer purchasing histories, and customer preferences; (c) supplier and vendor information, including pricing, terms, and supply chain data; (d) pricing data, pricing strategies, and discount structures; (e) product development plans, product roadmaps, and research and development strategies; (f) manufacturing processes, methods, techniques, and know-how; (g) proprietary algorithms, including without limitation real-time cartilage thickness mapping algorithms developed for the ArthroNav platform; (h) patent strategies, patent prosecution files, invention disclosures, and intellectual property portfolios; (i) regulatory strategies, regulatory submissions (including 510(k) submissions to the U.S. Food and Drug Administration and CE marking submissions), and related correspondence with regulatory authorities; (j) financial data, financial projections, budgets, and business plans; (k) marketing strategies, sales forecasts, and competitive analyses; (l) personnel information, compensation data, and organizational plans; and (m) any other information designated as confidential by Buyer or the Company.

Notwithstanding the foregoing, "Confidential Information" shall not include information that: (i) is or becomes generally available to the public other than as a result of a breach of this Agreement or any other confidentiality obligation owed to the Company, Buyer, or their Affiliates by the Restricted Party or any Person acting on the Restricted Party's behalf; (ii) was available to the Restricted Party on a non-confidential basis from a source other than the Company, Buyer, or their Affiliates, provided that such source was not bound by a confidentiality agreement with or other contractual, fiduciary, or legal obligation of confidentiality to the Company, Buyer, or any of their Affiliates with respect to such information; (iii) is independently developed by the Restricted Party without reference to or use of any Confidential Information; or (iv) is required to be disclosed by applicable law, regulation, legal process, or order of a court or governmental authority of competent jurisdiction, provided that the Restricted Party shall, to the extent legally permitted, provide Buyer with prompt written notice of such requirement prior to any such disclosure so as to enable Buyer to seek a protective order or other appropriate remedy, and the Restricted Party shall cooperate with Buyer in connection therewith and shall disclose only such portion of the Confidential Information as is legally required to be disclosed.

Section 1.6 "Customer" means any Person that (a) was a customer of the Company or any of its subsidiaries at any time during the two (2)-year period preceding the Effective Date, (b) purchased products or services from the Company or any of its subsidiaries at any time during the two (2)-year period preceding the Effective Date, or (c) was being actively solicited by the Company or any of its subsidiaries as a prospective customer as of the Effective Date.

Section 1.7 "Effective Date" means the date first written above, which shall be the Closing Date under the Purchase Agreement.

Section 1.8 "Employment Agreement" means the employment agreement entered into by the Restricted Party with Buyer (or an Affiliate of Buyer) concurrently with the execution and delivery of this Agreement, as such employment agreement may be amended, restated, supplemented, or otherwise modified from time to time.

Section 1.9 "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, governmental authority, or any other entity or body.

Section 1.10 "Purchase Agreement" means the Stock Purchase Agreement, dated as of August 20, 2024, by and among Buyer, the Company, the Sellers party thereto, and Dr. Marcus Ellsworth, as Sellers' Representative, as such agreement may be amended, restated, supplemented, or otherwise modified from time to time.

Section 1.11 "Restricted Period" means the period commencing on the Effective Date and ending on the second (2nd) anniversary of the Termination Date; provided, however, that if the Restricted Party's employment with Buyer and its Affiliates terminates on the Effective Date or if the Restricted Party does not commence employment with Buyer or its Affiliates, the Restricted Period shall mean the period commencing on the Effective Date and ending on the second (2nd) anniversary of the Effective Date.

Section 1.12 "Restricted Territory" means (a) the United States of America (including all states, territories, and possessions thereof), (b) each member state of the European Union, (c) the United Kingdom, and (d) any other country, territory, or jurisdiction in which the Company or any of its subsidiaries conducted business, marketed products, sold products, or had customers or distributors as of the Effective Date, or in which Buyer or any of its Affiliates conducts business, markets products, sells products, or has customers or distributors at any time during the Restricted Period.

Section 1.13 "Supplier" means any Person that was a supplier, vendor, manufacturer, fabricator, service provider, or other source of goods or services to the Company or any of its subsidiaries at any time during the two (2)-year period preceding the Effective Date.

Section 1.14 "Termination Date" means the date on which the Restricted Party's employment with Buyer and all of its Affiliates ceases for any reason, whether by voluntary resignation, involuntary termination (with or without cause), mutual agreement, retirement, disability, death, or otherwise.

ARTICLE II — NON-COMPETITION COVENANT

Section 2.1 Non-Competition. During the Restricted Period, the Restricted Party shall not, directly or indirectly, alone or in association with any other Person, whether as principal, agent, partner, member, manager, officer, director, employee, consultant, independent contractor, advisor, investor, licensor, licensee, franchisee, or in any other capacity whatsoever:

(a) engage in, own, manage, operate, control, participate in, consult with, advise, render services for, be employed by, or in any manner be connected with any Competing Business within the Restricted Territory;

(b) establish, found, organize, acquire, invest in (whether through equity, debt, convertible instruments, or otherwise), or finance any Competing Business within the Restricted Territory; or

(c) assist, encourage, or facilitate any Person in establishing, acquiring, organizing, financing, or operating any Competing Business within the Restricted Territory, including by providing any form of technical, managerial, financial, or strategic advice or support.

The restrictions set forth in this Section 2.1 shall apply regardless of whether the Restricted Party's activities in connection with a Competing Business are compensated or uncompensated, and regardless of whether the Restricted Party's involvement is on a full-time, part-time, temporary, or occasional basis.

Section 2.2 Permitted Activities; Exceptions. Notwithstanding the provisions of Section 2.1, nothing in this Agreement shall prohibit or restrict the Restricted Party from:

(a) owning, solely as a passive investment, not more than two percent (2%) of the outstanding equity securities of any class of securities of any corporation or other entity that is publicly traded on a national securities exchange or over-the-counter market, provided that the Restricted Party is not otherwise involved in, and does not participate in, the management, operations, governance, or business activities of such corporation or other entity;

(b) making a passive investment in a diversified mutual fund, exchange-traded fund, index fund, or similar pooled investment vehicle that may hold securities of a Competing Business, provided that the Restricted Party does not control or direct the investment decisions of such fund or vehicle with respect to the acquisition or disposition of securities of any Competing Business;

(c) engaging in any activity that has been approved in advance in writing by an authorized officer of Buyer (which approval may be granted, withheld, conditioned, or revoked in Buyer's sole and absolute discretion);

(d) continuing to engage in charitable, civic, philanthropic, educational, or religious activities, including service on boards of directors or advisory boards of non-profit organizations, to the extent that such activities do not compete with, or provide assistance to any Person that competes with, the Business; and

(e) engaging in the practice of medicine (including clinical practice and patient care), teaching, lecturing, publishing academic research, or conducting academic research at a university, medical school, teaching hospital, or similar academic or medical institution, to the extent that such activities do not involve the design, development, or commercialization of products, devices, software, systems, or technologies that are competitive with the Business.

The burden of establishing that any activity falls within the scope of one of the exceptions set forth in this Section 2.2 shall rest with the Restricted Party.

ARTICLE III — NON-SOLICITATION OF EMPLOYEES

Section 3.1 Employee Non-Solicitation. During the Restricted Period, the Restricted Party shall not, directly or indirectly, whether on the Restricted Party's own behalf or on behalf of any other Person:

(a) solicit, recruit, hire, engage, retain, or attempt to solicit, recruit, hire, engage, or retain any employee, consultant, or independent contractor of the Company, Buyer, or any of their respective Affiliates, or any individual who was an employee, consultant, or independent contractor of the Company, Buyer, or any of their respective Affiliates at any time within the six (6) months preceding the date of such solicitation, recruitment, hiring, engagement, or retention; or

(b) induce, encourage, persuade, or attempt to induce, encourage, or persuade any employee, consultant, or independent contractor of the Company, Buyer, or any of their respective Affiliates to terminate, reduce, or otherwise modify his or her employment, consulting engagement, or independent contractor relationship with the Company, Buyer, or any of their respective Affiliates.

The restrictions set forth in this Section 3.1 shall apply regardless of whether the employee, consultant, or independent contractor would be hired or engaged to perform duties that are competitive with the Business.

Section 3.2 Exceptions to Employee Non-Solicitation. The restrictions set forth in Section 3.1 shall not prohibit or restrict:

(a) general solicitations of employment that are not specifically directed at or targeted toward employees, consultants, or independent contractors of the Company, Buyer, or their Affiliates, including without limitation advertisements published in newspapers, trade journals, industry publications, or on general-purpose online job boards or employment websites (such as Westmark Health IT job postings that are not targeted at specific individuals employed by the Company, Buyer, or their Affiliates), provided that the Restricted Party does not otherwise directly or indirectly solicit, recruit, or hire any such individual who responds to such general solicitation; or

(b) the solicitation, recruitment, or hiring of any individual whose employment or engagement with the Company, Buyer, or any of their respective Affiliates was terminated by the Company, Buyer, or such Affiliate without cause more than six (6) months prior to the date of such solicitation, recruitment, or hiring.

ARTICLE IV — NON-SOLICITATION OF CUSTOMERS AND SUPPLIERS

Section 4.1 Customer Non-Solicitation. During the Restricted Period, the Restricted Party shall not, directly or indirectly, whether on the Restricted Party's own behalf or on behalf of any other Person:

(a) solicit, contact, call upon, service, or do business with any Customer for the purpose of selling, marketing, distributing, or providing any products, services, technologies, or solutions that are competitive with the Business, or that could serve as a substitute for any product or service offered by the Company, Buyer, or their Affiliates in connection with the Business; or

(b) induce, encourage, persuade, or attempt to induce, encourage, or persuade any Customer to cease, reduce, terminate, limit, divert, transfer, or otherwise modify its business relationship with the Company, Buyer, or any of their respective Affiliates.

For the avoidance of doubt, the restrictions set forth in this Section 4.1 shall apply to the Restricted Party regardless of whether the Customer was serviced by or known to the Restricted Party during the Restricted Party's employment with the Company or Buyer.

Section 4.2 Supplier Non-Interference. During the Restricted Period, the Restricted Party shall not, directly or indirectly, whether on the Restricted Party's own behalf or on behalf of any other Person, interfere with, disrupt, impair, or attempt to interfere with, disrupt, or impair, the relationship between the Company, Buyer, or any of their respective Affiliates, on the one hand, and any Supplier, on the other hand. Without limiting the generality of the foregoing, the Restricted Party shall not (a) solicit, induce, encourage, or persuade any Supplier to cease, reduce, or modify its supply of goods or services to the Company, Buyer, or their Affiliates, (b) divert or redirect any Supplier to a Competing Business, or (c) take any action intended to, or that the Restricted Party knows or reasonably should know is likely to, impair the ability of the Company, Buyer, or their Affiliates to procure products, components, materials, or services from any Supplier, including without limitation key suppliers that provide critical components and materials for the Company's products, such as surgical-grade stainless steel, piezoelectric actuators, sterile packaging, and specialized electronic assemblies.

ARTICLE V — CONFIDENTIALITY

Section 5.1 Non-Disclosure Obligation. The Restricted Party shall not, during or after the Restricted Period, directly or indirectly, use, disclose, disseminate, publish, transfer, or otherwise make available any Confidential Information for any purpose other than the performance of the Restricted Party's duties and responsibilities to Buyer or its Affiliates as set forth in the Employment Agreement or as otherwise authorized in writing by Buyer. This obligation shall apply to all forms of Confidential Information, whether communicated orally, in writing, electronically, or by any other means, and whether or not such information is marked or designated as "confidential," "proprietary," or with any similar legend.

Without limiting the generality of the foregoing, the Restricted Party specifically acknowledges that the following categories of information constitute Confidential Information and shall be subject to the restrictions of this Article V: (a) trade secrets of the Company, Buyer, and their Affiliates, including proprietary algorithms for real-time cartilage thickness mapping and other proprietary software algorithms developed for or incorporated into the ArthroNav platform; (b) product development plans, product roadmaps, and technical specifications for the ArthroNav platform and all other Company products; (c) patent portfolio strategies, invention disclosures, patent prosecution files, and intellectual property assessments; (d) 510(k) submission data, pre-submission meeting materials, clinical data, and regulatory strategies related to FDA and international regulatory approvals; (e) manufacturing processes, methods, formulations, tolerances, and quality control procedures; (f) customer and supplier pricing, discount structures, contractual terms, and negotiation strategies; and (g) financial performance data, projections, budgets, and strategic business plans.

The Restricted Party shall exercise at least the same degree of care to protect the Confidential Information as the Restricted Party exercises with respect to the Restricted Party's own confidential information, but in no event less than a reasonable degree of care.

Section 5.2 Return of Materials. Upon the termination of the Restricted Party's employment with Buyer and its Affiliates for any reason (or at any time upon the written request of Buyer), the Restricted Party shall promptly return to Buyer all documents, files, records, data, notes, memoranda, correspondence, reports, presentations, manuals, drawings, prototypes, samples, devices, equipment, computer hardware, computer software, access credentials, keys, access cards, and all other tangible and electronic property and materials belonging to the Company, Buyer, or any of their respective Affiliates, or containing or embodying any Confidential Information, including all copies, reproductions, extracts, and summaries thereof, in whatever form or medium (whether written, printed, electronic, magnetic, optical, or otherwise). The Restricted Party shall not retain any copies, extracts, summaries, notes, or other reproductions of any Confidential Information in any form, including on any personal computer, personal email account, cloud storage service, external storage device, or other medium. Upon Buyer's request, the Restricted Party shall certify in writing that the Restricted Party has complied with the obligations set forth in this Section 5.2.

Section 5.3 Defend Trade Secrets Act Notice. Pursuant to the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), the Restricted Party is hereby notified that:

(a) An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (i) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(b) An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (i) files any document containing the trade secret under seal and (ii) does not disclose the trade secret, except pursuant to court order.

Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such provision. Nothing in this Agreement shall limit the Restricted Party's right to communicate with any governmental authority, including the U.S. Securities and Exchange Commission, the U.S. Department of Justice, or any state attorney general, regarding possible violations of law, or to file a charge or complaint with any governmental authority, without providing notice to Buyer.

ARTICLE VI — INTELLECTUAL PROPERTY AND WORK PRODUCT

Section 6.1 Acknowledgment of Company Ownership. The Restricted Party acknowledges and agrees that all inventions, discoveries, improvements, developments, designs, methods, processes, compositions, techniques, works of authorship, software, algorithms, data, databases, formulas, trade secrets, know-how, and other intellectual property and proprietary rights (whether or not patentable, copyrightable, or otherwise protectable) (collectively, "Work Product") that were made, conceived, created, reduced to practice, developed, or contributed to by the Restricted Party, either alone or jointly with others, during the course of or in connection with the Restricted Party's employment with the Company, Buyer, or any of their Affiliates, and that relate to or are useful in connection with the Business, are and shall remain the sole and exclusive property of Buyer (as successor-in-interest to the Company). This Section 6.1 applies to all Work Product, regardless of when or where such Work Product was made, conceived, or developed, and regardless of whether such Work Product was made, conceived, or developed during normal working hours, on the premises of the Company, Buyer, or their Affiliates, or using the resources, equipment, or facilities of the Company, Buyer, or their Affiliates, to the extent permitted by applicable law. The terms and conditions of this Section 6.1 are in addition to, and do not limit or supersede, any applicable provisions of the Employment Agreement relating to intellectual property, inventions, and work product.

Section 6.2 Assignment. To the extent that any Work Product is not already owned by or assigned to the Company, Buyer, or any of their Affiliates (whether by operation of law, by contract, or otherwise), the Restricted Party hereby irrevocably assigns, transfers, and conveys to Buyer all of the Restricted Party's right, title, and interest in and to such Work Product, including all intellectual property rights therein, throughout the world, in perpetuity. The Restricted Party agrees to execute and deliver such additional assignments, documents, and instruments, and to take such further actions, as Buyer may reasonably request to evidence, perfect, register, enforce, or defend such assignment and Buyer's ownership of the Work Product, at Buyer's expense. To the extent any rights in Work Product are not assignable under applicable law, the Restricted Party hereby grants to Buyer an exclusive, irrevocable, perpetual, worldwide, royalty-free, fully paid-up license (with the right to sublicense through multiple tiers) to use, reproduce, distribute, display, perform, modify, create derivative works from, and otherwise exploit such Work Product for any purpose. The Restricted Party hereby irrevocably waives and agrees never to assert any moral rights or similar rights that the Restricted Party may have in or to any Work Product assigned or licensed hereunder, to the fullest extent permitted by applicable law.

ARTICLE VII — REASONABLENESS; ACKNOWLEDGMENTS

Section 7.1 Acknowledgment of Reasonableness. The Restricted Party acknowledges and agrees that:

(a) The restrictive covenants set forth in Articles II, III, IV, V, and VI of this Agreement are reasonable and necessary in scope, duration, and geographic area to protect the legitimate business interests of Buyer and its Affiliates, including without limitation the goodwill, trade secrets, confidential information, customer relationships, supplier relationships, employee relationships, and other business assets acquired or to be acquired by Buyer in connection with the transactions contemplated by the Purchase Agreement, and the substantial investment made by Buyer in connection therewith.

(b) The Restricted Party has received, and will receive, substantial consideration in connection with the transactions contemplated by the Purchase Agreement and the execution and delivery of this Agreement, including without limitation (i) for Restricted Parties who are stockholders of the Company, substantial purchase price consideration for their shares of common stock of the Company (and, if applicable, the cancellation of vested stock options), and the opportunity to earn additional earnout consideration, and (ii) for all Restricted Parties, employment with Buyer on favorable terms and conditions pursuant to the Employment Agreement, including base salary, bonus opportunities, equity incentive awards, and other benefits and perquisites, and such consideration is adequate and sufficient consideration for the restrictive covenants set forth herein.

(c) The restrictions set forth in this Agreement will not impose undue hardship on the Restricted Party and will not prevent the Restricted Party from earning a livelihood, in light of the Restricted Party's education, training, skills, experience, and abilities, and the scope of the permitted activities set forth in Section 2.2.

(d) The Restricted Party has had a full and adequate opportunity to review and consider this Agreement and to consult with independent legal counsel of the Restricted Party's own choosing regarding the terms and provisions of this Agreement prior to its execution and delivery.

(e) The Restricted Party's services are unique and extraordinary and the Business of the Company is conducted throughout the Restricted Territory, and therefore the geographic scope of the restrictive covenants is reasonable and appropriate.

Section 7.2 Independent Covenants. The Restricted Party acknowledges and agrees that each of the restrictive covenants set forth in this Agreement constitutes an independent and severable covenant and obligation. The existence of any claim or cause of action by the Restricted Party against Buyer, the Company, or any of their Affiliates, whether arising under this Agreement, the Purchase Agreement, the Employment Agreement, or otherwise, shall not constitute a defense to the enforcement of any restrictive covenant set forth in this Agreement and shall not excuse the Restricted Party's compliance with the obligations set forth herein.

ARTICLE VIII — REMEDIES

Section 8.1 Injunctive Relief. The Restricted Party acknowledges and agrees that a breach or threatened breach of any of the restrictive covenants or obligations set forth in this Agreement would cause irreparable harm to Buyer and its Affiliates that cannot be adequately compensated by monetary damages alone. Accordingly, in the event of any such breach or threatened breach, Buyer shall be entitled to seek and obtain temporary, preliminary, and permanent injunctive relief and orders of specific performance to enforce the provisions of this Agreement, in any court of competent jurisdiction, without the necessity of (a) proving actual damages, (b) posting any bond or other security, to the maximum extent permitted by applicable law, or (c) showing the inadequacy of monetary damages as a remedy. Such injunctive relief and specific performance shall be in addition to, and not in lieu of, any other remedies available to Buyer at law or in equity, including the right to seek and recover monetary damages (including consequential and incidental damages), attorneys' fees, and costs.

Section 8.2 Extension of Restricted Period. If the Restricted Party violates any of the restrictive covenants set forth in Articles II, III, or IV of this Agreement, the Restricted Period applicable to such restrictive covenant shall be automatically tolled and suspended during the period of such violation and shall be extended by a period of time equal to the duration of such violation, so that Buyer receives the full benefit of the restrictive period contemplated by this Agreement.

Section 8.3 Cumulative Remedies. All rights and remedies available to Buyer under this Agreement, at law, or in equity are cumulative and not exclusive of any other right or remedy. The exercise of any one right or remedy shall not be deemed a waiver or release of any other right or remedy, and Buyer may pursue any and all available remedies simultaneously or in any order.

ARTICLE IX — REFORMATION / BLUE PENCIL

Section 9.1 Judicial Modification. If any court of competent jurisdiction determines that any provision of this Agreement, including without limitation any restrictive covenant set forth in Articles II, III, IV, or V, is unenforceable or invalid because the duration, geographic scope, scope of restricted activities, or any other aspect of such provision is excessive or unreasonable, then the Parties expressly agree that such court shall have the authority and is hereby requested to reform such provision to the minimum extent necessary to render it valid and enforceable, and this Agreement, as so modified, shall remain in full force and effect. In particular, and without limiting the generality of the foregoing, if any court determines that the Restricted Period is too long, the Restricted Territory is too broad, or the scope of restricted activities is too extensive, such court is hereby authorized and requested to reduce or modify the applicable provision to the maximum duration, geographic area, or scope of activities that such court deems reasonable and enforceable under the circumstances.

The Parties acknowledge and agree that it is their intention that each restrictive covenant set forth in this Agreement be construed as valid and enforceable to the fullest extent permitted by the law of the applicable jurisdiction. If any such provision cannot be reformed and made enforceable, such provision shall be severed from this Agreement, and the remaining provisions shall remain in full force and effect, in accordance with Section 12.8.

ARTICLE X — TERM AND SURVIVAL

Section 10.1 Term. This Agreement shall become effective as of the Effective Date and shall remain in full force and effect through the end of the Restricted Period; provided, however, that the confidentiality obligations set forth in Article V shall survive the expiration of the Restricted Period and shall continue in perpetuity, except that with respect to Confidential Information that constitutes a trade secret under applicable law, the confidentiality obligations of the Restricted Party with respect to such trade secret shall continue for so long as such information constitutes a trade secret under applicable law.

Section 10.2 Survival of Certain Obligations. The obligations of the Restricted Party set forth in Article V (Confidentiality), Article VI (Intellectual Property and Work Product), Article VII (Reasonableness; Acknowledgments), Article VIII (Remedies), and Article IX (Reformation / Blue Pencil), together with the general provisions set forth in Article XII, shall survive the expiration or termination of this Agreement for any reason and shall remain in full force and effect in accordance with their respective terms.

ARTICLE XI — REPRESENTATIONS AND WARRANTIES OF THE RESTRICTED PARTY

The Restricted Party hereby represents and warrants to Buyer as follows:

Section 11.1 Authority. The Restricted Party has full power, authority, and legal capacity to execute and deliver this Agreement and to perform each of the obligations set forth herein. This Agreement has been duly executed and delivered by the Restricted Party and constitutes the valid, legal, and binding obligation of the Restricted Party, enforceable against the Restricted Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally, and subject to general principles of equity (whether considered in a proceeding in equity or at law).

Section 11.2 No Conflict. The execution, delivery, and performance of this Agreement by the Restricted Party does not and will not (a) conflict with, violate, or result in a breach of any provision of any agreement, contract, arrangement, commitment, or obligation to which the Restricted Party is a party or by which the Restricted Party or any of the Restricted Party's properties or assets is bound, (b) violate any order, judgment, injunction, decree, statute, rule, or regulation applicable to the Restricted Party, or (c) require the consent, approval, authorization, or other action of any Person, other than consents or approvals that have been obtained and are in full force and effect as of the Effective Date.

Section 11.3 Adequate Consideration. The Restricted Party acknowledges and agrees that the consideration received by the Restricted Party in connection with the transactions contemplated by the Purchase Agreement, including without limitation (a) the purchase price paid or payable for the Restricted Party's shares of common stock of the Company (if applicable) and any earnout consideration that may become payable, (b) the cancellation of the Restricted Party's vested stock options (if applicable) in exchange for the option cancellation consideration set forth in the Purchase Agreement, and (c) the employment arrangements provided pursuant to the Employment Agreement, including base salary, annual bonus opportunities, equity incentive awards, and other benefits and perquisites, constitutes adequate, valuable, and sufficient consideration for the restrictive covenants and obligations of the Restricted Party contained in this Agreement, and the Restricted Party is not entering into this Agreement under duress or undue influence.

ARTICLE XII — GENERAL PROVISIONS

Section 12.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice-of-law, conflict-of-law, or similar rules, provisions, or principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the substantive laws of any jurisdiction other than the State of Delaware.

Section 12.2 Jurisdiction and Venue. Each Party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of (a) the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to exercise jurisdiction, any other state court of the State of Delaware), and (b) the United States District Court for the District of Delaware, for the purposes of any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and each Party hereby irrevocably and unconditionally agrees that all claims in respect of any such action, suit, or proceeding may be heard and determined in any such court. Each Party hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, (i) any objection that it may now or hereafter have to the laying of venue of any such action, suit, or proceeding in any such court, and (ii) the defense of an inconvenient forum to the maintenance of any such action, suit, or proceeding in any such court. Each Party agrees that a final judgment in any such action, suit, or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law. Each Party irrevocably consents to service of process in the manner provided for notices in Section 12.7 of this Agreement; provided, however, that nothing in this Agreement shall affect the right of any Party to serve process in any other manner permitted by applicable law.

Section 12.3 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, OR ENFORCEMENT HEREOF. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY SUCH ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM, SEEK TO ENFORCE THIS WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.3.

Section 12.4 Entire Agreement. This Agreement, together with the Purchase Agreement, the Employment Agreement, and any exhibits, schedules, annexes, or attachments hereto or thereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, representations, warranties, discussions, and commitments, whether written or oral, between the Parties with respect to such subject matter. No representations, warranties, promises, or inducements have been made by or on behalf of any Party concerning this Agreement other than those contained herein and in the Purchase Agreement, the Employment Agreement, and the exhibits, schedules, annexes, and attachments thereto.

Section 12.5 Amendments and Waivers. No amendment, modification, supplement, restatement, or waiver of any provision of this Agreement shall be effective unless it is set forth in a written instrument duly executed by both Buyer (or its authorized successor or assignee) and the Restricted Party. No failure or delay on the part of Buyer in exercising any right, power, or privilege under this Agreement, and no course of dealing between the Parties, shall operate as a waiver of any such right, power, or privilege, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.

Section 12.6 Assignment. The Restricted Party may not assign, delegate, or otherwise transfer this Agreement, or any of the Restricted Party's rights, interests, or obligations hereunder, in whole or in part, without the prior written consent of Buyer, and any attempted assignment, delegation, or transfer without such consent shall be null and void and of no force or effect. Buyer may freely assign this Agreement, and any or all of its rights and obligations hereunder, to any Affiliate of Buyer or to any Person that is a successor to all or substantially all of the business or assets of Buyer (whether by merger, consolidation, reorganization, sale of assets, or otherwise), without the prior written consent of the Restricted Party, and this Agreement shall be binding upon and inure to the benefit of any such assignee or successor. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.

Section 12.7 Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered by hand or by nationally recognized overnight courier service, (b) when sent by certified or registered mail, return receipt requested, postage prepaid, or (c) when sent by email (with confirmation of receipt by the recipient, which confirmation may include a reply email, a read receipt, or other electronic confirmation), in each case, to the applicable address or email address set forth below (or to such other address or email address as a Party may designate by notice given in accordance with this Section 12.7):

If to Buyer:

Solstice Biomedical, Inc. 1200 Innovation Drive, Suite 400 Wilmington, Delaware 19801

Attention: General Counsel

Email: legalnotices@solsticebiomed.com

With a copy to (which shall not constitute notice):

Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, New York 10022

Attention: Beatrice Holloway

Email: b.holloway@calderwoodharkness.com

If to the Restricted Party:

At the address set forth on the signature page hereto, or at such other address as the Restricted Party may designate by written notice to Buyer in accordance with this Section 12.7.

Section 12.8 Severability. If any term, provision, covenant, or restriction of this Agreement is held by a court of competent jurisdiction or other governmental authority to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated, so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either Party. Upon any such determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby may be consummated as originally contemplated to the fullest extent possible.

Section 12.9 Counterparts and Electronic Signatures. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by facsimile or by electronic transmission in portable document format (PDF) or any other electronic format shall be effective as delivery of a manually executed counterpart of this Agreement. The words "execution," "signed," "signature," and words of like import in this Agreement shall be deemed to include electronic signatures and the keeping of records in electronic form, each of which shall be of the same legal effect, validity, and enforceability as a manually executed signature or the use of a paper-based recordkeeping system, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act (15 U.S.C. § 7001 et seq.) and the Uniform Electronic Transactions Act, as adopted in the applicable jurisdiction.

Section 12.10 Third-Party Beneficiaries. Except as expressly provided in this Section 12.10, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement. Notwithstanding the foregoing, (a) Solstice Biomedical Devices Ltd., the ultimate parent company of Buyer, and (b) the Company (following the Closing), shall each be express third-party beneficiaries of this Agreement and shall be entitled to enforce the provisions hereof as if such entity were a party hereto.

Section 12.11 Construction. The headings and captions contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The word "including" (and correlative words such as "include" and "includes") means "including without limitation" or "including but not limited to." All references to "days" in this Agreement shall mean calendar days, unless otherwise expressly specified. References to any "Section," "Article," or "Exhibit" shall mean a Section, Article, or Exhibit of or to this Agreement, unless otherwise specified. The use of the singular shall include the plural and vice versa, and the use of any gender shall include all genders, as the context requires. The words "hereof," "herein," "hereto," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement, and in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

Section 12.12 Relationship to Purchase Agreement and Employment Agreement. In the event of a conflict or inconsistency between the terms and provisions of this Agreement, on the one hand, and the terms and provisions of the Purchase Agreement, on the other hand, with respect to the restrictive covenants, non-competition obligations, non-solicitation obligations, confidentiality obligations, or intellectual property obligations applicable to the Restricted Party, the terms and provisions of this Agreement shall control and prevail. This Agreement is supplemental to, and not in limitation of, any other restrictive covenants, non-competition obligations, non-solicitation obligations, confidentiality obligations, or intellectual property obligations to which the Restricted Party may be subject under the Employment Agreement or any other agreement with Buyer or its Affiliates. For the avoidance of doubt, in the event of a conflict between this Agreement and the Employment Agreement with respect to the scope, duration, or geographic reach of any restrictive covenant, the provision that provides broader protection to Buyer shall control.

[Signature Pages Follow]

SIGNATURE PAGE TO NON-COMPETITION AND NON-SOLICITATION AGREEMENT

IN WITNESS WHEREOF, the Parties have executed this Non-Competition and Non-Solicitation Agreement as of the date first written above.

BUYER:

SOLSTICE BIOMEDICAL, INC.

By: ________

Name: Helena Byrne

Title: President

Date: ________

RESTRICTED PARTY:

________________________________________

Name: [Dr. Marcus Ellsworth / Catherine Pryor / Dr. Raj Subramanian]

Address: ________

________________________________________

Date: ________

EXHIBIT A

DESCRIPTION OF BUSINESS

This Exhibit A sets forth a detailed description of the "Business" as defined in Article I of the Non-Competition and Non-Solicitation Agreement to which this Exhibit A is attached, specifying the product lines, technology platforms, and geographic markets of Meridian Surgical Technologies, Inc. (the "Company") as of the Effective Date.

1. Product Lines and Technology Platforms.

The Business includes the design, development, manufacture, marketing, distribution, sale, and servicing of the following product lines, technology platforms, and related products and services:

(a) Single-Use Arthroscopic Blades (PrecisionBlade Product Line). The Company's PrecisionBlade product line consists of single-use, disposable arthroscopic blades designed for minimally invasive orthopedic surgical procedures, including arthroscopic procedures performed on the knee, shoulder, hip, ankle, elbow, and wrist. The PrecisionBlade product line includes a range of blade configurations, sizes, and profiles designed for specific surgical techniques, including cutting, resecting, debriding, and shaping articular cartilage, meniscal tissue, labral tissue, and other soft tissues.

(b) Powered Shaver Systems. The Company designs, develops, manufactures, and sells powered shaver systems for use in arthroscopic and other minimally invasive orthopedic surgical procedures. These systems include handpieces, shaver blades, burrs, control consoles, and related accessories. The Company's powered shaver systems are designed for use in both standalone configurations and in conjunction with the ArthroNav robotic-assisted arthroscopy platform.

(c) ArthroNav Robotic-Assisted Arthroscopy Platform. The Company's ArthroNav platform is a proprietary robotic-assisted arthroscopy system that integrates robotic guidance, real-time imaging, and proprietary software to enhance the precision and reproducibility of arthroscopic surgical procedures. The ArthroNav platform includes:

(i) Generation 1.0 — The current-generation ArthroNav system, which includes a robotic arm, arthroscopic camera integration module, navigation console, and proprietary software for intraoperative surgical planning and instrument guidance.

(ii) Generation 2.0 Software Module for Real-Time Cartilage Mapping — A next-generation software module currently in active development as of the Effective Date, which incorporates proprietary algorithms for real-time cartilage thickness mapping, enabling surgeons to assess and visualize cartilage thickness and integrity intraoperatively using data from the ArthroNav system's integrated imaging sensors.

(d) Related Components, Accessories, and Software. The Business includes all components, accessories, attachments, replacement parts, consumables, software modules, software updates, service contracts, maintenance and repair services, and other ancillary products and services associated with or designed for use in connection with the products described in subsections (a) through (c) above.

(e) Products and Services in Development. The Business includes all products, technologies, software, systems, and services that were in active research, design, development, prototyping, testing, or pre-market regulatory review by the Company or any of its subsidiaries as of the Effective Date, regardless of whether such products, technologies, software, systems, or services had been commercially launched or approved for marketing as of the Effective Date.

2. Manufacturing Operations.

The Company's principal manufacturing facility is located at 45 Forge Creek Road, Exton, Pennsylvania 19341, where the Company manufactures, assembles, tests, packages, and ships its products, including the PrecisionBlade product line, powered shaver systems, and components of the ArthroNav platform.

3. Geographic Markets.

The Business is conducted in the following geographic markets:

(a) United States. The Company markets and sells its products throughout the United States to hospitals, ambulatory surgery centers, orthopedic clinics, and other healthcare providers and institutions. The Company maintains a direct sales force and also utilizes independent distributors and sales agents in certain regions.

(b) International Markets. The Company markets and sells its products internationally through a network of authorized distributors and commercial partners, including in member states of the European Union, the United Kingdom, Canada, Australia, Japan, South Korea, Brazil, and other countries. The Company holds applicable regulatory clearances and approvals (including FDA 510(k) clearances and CE markings) necessary for the commercialization of its products in the markets in which it operates.

4. Customers and End Users.

The Company's customers include hospitals, ambulatory surgery centers, orthopedic surgical practices, academic medical centers, and other healthcare facilities and providers that perform minimally invasive orthopedic surgical procedures, as well as group purchasing organizations, healthcare distributors, and other intermediaries that facilitate the procurement of medical devices and surgical instruments.

[End of Exhibit A]

FORM OF NON-COMPETITION AND NON-SOLICITATION AGREEMENT
Exhibit D to the Stock Purchase Agreement
This form is to be executed by each of the following individuals at Closing: [Insert Name of Restricted Party]. This form will be executed in counterpart by each of Dr. Marcus Ellsworth, Catherine Pryor, and Dr. Raj Subramanian. Each executed counterpart shall constitute a separate, binding agreement between Buyer and the applicable Restricted Party.
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
This Non-Competition and Non-Solicitation Agreement (this "Agreement") is made and entered into as of [●], 2024 (the "Effective Date"), by and between:
Solstice Biomedical, Inc., a Delaware corporation, with its principal offices located at 1200 Innovation Drive, Suite 400, Wilmington, Delaware 19801 (the "Buyer"), which is a wholly owned subsidiary of Solstice Biomedical Devices Ltd., an Irish private limited company; and
[Insert Name], an individual residing at the address set forth on the signature page hereto (the "Restricted Party").
The Buyer and the Restricted Party are each referred to herein individually as a "Party" and collectively as the "Parties."
As used herein, the "Company" refers to Meridian Surgical Technologies, Inc., a Delaware corporation, with its principal headquarters located at 780 Keystone Boulevard, Suite 200, King of Prussia, Pennsylvania 19406.
RECITALS
WHEREAS, Buyer, the Company, the Sellers party thereto, and Dr. Marcus Ellsworth, in his capacity as the Sellers' Representative, have entered into that certain Stock Purchase Agreement, dated as of August 20, 2024 (as may be amended, restated, supplemented, or otherwise modified from time to time, the "Purchase Agreement"), pursuant to which Buyer is acquiring all of the outstanding shares of common stock of the Company and cancelling all outstanding vested stock options of the Company, on the terms and subject to the conditions set forth therein;
WHEREAS, the aggregate base purchase price payable by Buyer to the Sellers under the Purchase Agreement is Two Hundred Twenty Million Dollars ($220,000,000), with the potential for additional earnout consideration of up to Thirty-Five Million Dollars ($35,000,000), subject to and in accordance with the terms and conditions of the Purchase Agreement;
WHEREAS, the Restricted Party is a stockholder of the Company who will receive a substantial portion of the purchase price consideration and/or a key employee and officer of the Company who possesses specialized knowledge, skills, customer relationships, and confidential information regarding the Company's business, operations, products, technology, and competitive position;
WHEREAS, with respect to each individual executing a counterpart of this Agreement:
(a) Dr. Marcus Ellsworth is the Founder and Chief Executive Officer of the Company and the holder of 2,845,900 shares of the Company's outstanding common stock, representing approximately 38.2% of the Company's issued and outstanding shares, and is entering into a new employment agreement with Buyer at Closing pursuant to which he will serve as Division President, Orthopedic Instruments, of Buyer;
(b) Catherine Pryor is the President and Chief Operating Officer of the Company and the holder of 372,500 shares of the Company's outstanding common stock, representing approximately 5.0% of the Company's issued and outstanding shares, and is entering into a new employment agreement with Buyer at Closing pursuant to which she will serve as Senior Vice President, Operations, of Buyer; and
(c) Dr. Raj Subramanian is the Chief Technology Officer of the Company and the principal architect of the ArthroNav robotic-assisted arthroscopy platform, and is entering into a new employment agreement with Buyer at Closing pursuant to which he will serve as Senior Vice President, ArthroNav Development, of Buyer;
WHEREAS, the execution and delivery of this Agreement by the Restricted Party is a material condition precedent to the obligations of Buyer to consummate the transactions contemplated by the Purchase Agreement, and the Restricted Party acknowledges receiving good and valuable consideration in connection therewith, including without limitation purchase price consideration for the Restricted Party's shares of common stock of the Company (if applicable), employment on favorable terms pursuant to the Employment Agreement (as defined below), and other compensation and retention arrangements as set forth in the Purchase Agreement and the ancillary agreements thereto;
WHEREAS, in connection with the Restricted Party's employment with and ownership interest in the Company, the Restricted Party has had access to and has acquired, and following the Closing will continue to have access to, Confidential Information (as defined below) of the Company, Buyer, and their Affiliates, the disclosure or misuse of which would cause significant and irreparable harm to Buyer and the value of the business being acquired; and
WHEREAS, Buyer would not have entered into the Purchase Agreement, and would not consummate the transactions contemplated thereby, absent the Restricted Party's agreement to the restrictive covenants set forth herein, and the Restricted Party acknowledges and agrees that the restrictive covenants set forth herein are a material inducement for Buyer to enter into and consummate the transactions contemplated by the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Purchase Agreement.
Section 1.1 "Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to control another Person if the first Person owns, directly or indirectly, more than fifty percent (50%) of the voting equity interests of the second Person.
Section 1.2 "Business" means the design, development, manufacture, marketing, distribution, sale, and servicing of minimally invasive surgical instruments for orthopedic procedures, including without limitation (a) single-use arthroscopic blades (including the PrecisionBlade product line), (b) powered shaver systems, (c) robotic-assisted arthroscopy platforms (including the ArthroNav platform and all current and successor generations thereof), (d) related software modules (including, without limitation, software modules for real-time cartilage thickness mapping), (e) components and accessories related to the foregoing, and (f) any other products or services offered by the Company or any of its subsidiaries as of the Effective Date or that were in active development by the Company or any of its subsidiaries as of the Effective Date, as more fully described in Exhibit A attached hereto.
Section 1.3 "Closing" shall have the meaning ascribed to such term in the Purchase Agreement.
Section 1.4 "Competing Business" means any Person engaged in, or planning to engage in, the Business or any material portion thereof, whether directly or through any subsidiary, division, joint venture, partnership, or other arrangement. For the avoidance of doubt, a "Competing Business" includes any Person that designs, develops, manufactures, markets, distributes, sells, or services minimally invasive surgical instruments for orthopedic procedures, robotic-assisted arthroscopy systems, or related software, components, or accessories, to the extent that such activities overlap with or are competitive with any material portion of the Business.
Section 1.5 "Confidential Information" means all non-public, proprietary, or confidential information of the Company, Buyer, and their respective Affiliates, regardless of the form in which such information is maintained, including without limitation: (a) trade secrets; (b) customer lists, customer contact information, customer purchasing histories, and customer preferences; (c) supplier and vendor information, including pricing, terms, and supply chain data; (d) pricing data, pricing strategies, and discount structures; (e) product development plans, product roadmaps, and research and development strategies; (f) manufacturing processes, methods, techniques, and know-how; (g) proprietary algorithms, including without limitation real-time cartilage thickness mapping algorithms developed for the ArthroNav platform; (h) patent strategies, patent prosecution files, invention disclosures, and intellectual property portfolios; (i) regulatory strategies, regulatory submissions (including 510(k) submissions to the U.S. Food and Drug Administration and CE marking submissions), and related correspondence with regulatory authorities; (j) financial data, financial projections, budgets, and business plans; (k) marketing strategies, sales forecasts, and competitive analyses; (l) personnel information, compensation data, and organizational plans; and (m) any other information designated as confidential by Buyer or the Company.
Notwithstanding the foregoing, "Confidential Information" shall not include information that: (i) is or becomes generally available to the public other than as a result of a breach of this Agreement or any other confidentiality obligation owed to the Company, Buyer, or their Affiliates by the Restricted Party or any Person acting on the Restricted Party's behalf; (ii) was available to the Restricted Party on a non-confidential basis from a source other than the Company, Buyer, or their Affiliates, provided that such source was not bound by a confidentiality agreement with or other contractual, fiduciary, or legal obligation of confidentiality to the Company, Buyer, or any of their Affiliates with respect to such information; (iii) is independently developed by the Restricted Party without reference to or use of any Confidential Information; or (iv) is required to be disclosed by applicable law, regulation, legal process, or order of a court or governmental authority of competent jurisdiction, provided that the Restricted Party shall, to the extent legally permitted, provide Buyer with prompt written notice of such requirement prior to any such disclosure so as to enable Buyer to seek a protective order or other appropriate remedy, and the Restricted Party shall cooperate with Buyer in connection therewith and shall disclose only such portion of the Confidential Information as is legally required to be disclosed.
Section 1.6 "Customer" means any Person that (a) was a customer of the Company or any of its subsidiaries at any time during the two (2)-year period preceding the Effective Date, (b) purchased products or services from the Company or any of its subsidiaries at any time during the two (2)-year period preceding the Effective Date, or (c) was being actively solicited by the Company or any of its subsidiaries as a prospective customer as of the Effective Date.
Section 1.7 "Effective Date" means the date first written above, which shall be the Closing Date under the Purchase Agreement.
Section 1.8 "Employment Agreement" means the employment agreement entered into by the Restricted Party with Buyer (or an Affiliate of Buyer) concurrently with the execution and delivery of this Agreement, as such employment agreement may be amended, restated, supplemented, or otherwise modified from time to time.
Section 1.9 "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, governmental authority, or any other entity or body.
Section 1.10 "Purchase Agreement" means the Stock Purchase Agreement, dated as of August 20, 2024, by and among Buyer, the Company, the Sellers party thereto, and Dr. Marcus Ellsworth, as Sellers' Representative, as such agreement may be amended, restated, supplemented, or otherwise modified from time to time.
Section 1.11 "Restricted Period" means the period commencing on the Effective Date and ending on the second (2nd) anniversary of the Termination Date; provided, however, that if the Restricted Party's employment with Buyer and its Affiliates terminates on the Effective Date or if the Restricted Party does not commence employment with Buyer or its Affiliates, the Restricted Period shall mean the period commencing on the Effective Date and ending on the second (2nd) anniversary of the Effective Date.
Section 1.12 "Restricted Territory" means (a) the United States of America (including all states, territories, and possessions thereof), (b) each member state of the European Union, (c) the United Kingdom, and (d) any other country, territory, or jurisdiction in which the Company or any of its subsidiaries conducted business, marketed products, sold products, or had customers or distributors as of the Effective Date, or in which Buyer or any of its Affiliates conducts business, markets products, sells products, or has customers or distributors at any time during the Restricted Period.
Section 1.13 "Supplier" means any Person that was a supplier, vendor, manufacturer, fabricator, service provider, or other source of goods or services to the Company or any of its subsidiaries at any time during the two (2)-year period preceding the Effective Date.
Section 1.14 "Termination Date" means the date on which the Restricted Party's employment with Buyer and all of its Affiliates ceases for any reason, whether by voluntary resignation, involuntary termination (with or without cause), mutual agreement, retirement, disability, death, or otherwise.
ARTICLE II — NON-COMPETITION COVENANT
Section 2.1 Non-Competition. During the Restricted Period, the Restricted Party shall not, directly or indirectly, alone or in association with any other Person, whether as principal, agent, partner, member, manager, officer, director, employee, consultant, independent contractor, advisor, investor, licensor, licensee, franchisee, or in any other capacity whatsoever:
(a) engage in, own, manage, operate, control, participate in, consult with, advise, render services for, be employed by, or in any manner be connected with any Competing Business within the Restricted Territory;
(b) establish, found, organize, acquire, invest in (whether through equity, debt, convertible instruments, or otherwise), or finance any Competing Business within the Restricted Territory; or
(c) assist, encourage, or facilitate any Person in establishing, acquiring, organizing, financing, or operating any Competing Business within the Restricted Territory, including by providing any form of technical, managerial, financial, or strategic advice or support.
The restrictions set forth in this Section 2.1 shall apply regardless of whether the Restricted Party's activities in connection with a Competing Business are compensated or uncompensated, and regardless of whether the Restricted Party's involvement is on a full-time, part-time, temporary, or occasional basis.
Section 2.2 Permitted Activities; Exceptions. Notwithstanding the provisions of Section 2.1, nothing in this Agreement shall prohibit or restrict the Restricted Party from:
(a) owning, solely as a passive investment, not more than two percent (2%) of the outstanding equity securities of any class of securities of any corporation or other entity that is publicly traded on a national securities exchange or over-the-counter market, provided that the Restricted Party is not otherwise involved in, and does not participate in, the management, operations, governance, or business activities of such corporation or other entity;
(b) making a passive investment in a diversified mutual fund, exchange-traded fund, index fund, or similar pooled investment vehicle that may hold securities of a Competing Business, provided that the Restricted Party does not control or direct the investment decisions of such fund or vehicle with respect to the acquisition or disposition of securities of any Competing Business;
(c) engaging in any activity that has been approved in advance in writing by an authorized officer of Buyer (which approval may be granted, withheld, conditioned, or revoked in Buyer's sole and absolute discretion);
(d) continuing to engage in charitable, civic, philanthropic, educational, or religious activities, including service on boards of directors or advisory boards of non-profit organizations, to the extent that such activities do not compete with, or provide assistance to any Person that competes with, the Business; and
(e) engaging in the practice of medicine (including clinical practice and patient care), teaching, lecturing, publishing academic research, or conducting academic research at a university, medical school, teaching hospital, or similar academic or medical institution, to the extent that such activities do not involve the design, development, or commercialization of products, devices, software, systems, or technologies that are competitive with the Business.
The burden of establishing that any activity falls within the scope of one of the exceptions set forth in this Section 2.2 shall rest with the Restricted Party.
ARTICLE III — NON-SOLICITATION OF EMPLOYEES
Section 3.1 Employee Non-Solicitation. During the Restricted Period, the Restricted Party shall not, directly or indirectly, whether on the Restricted Party's own behalf or on behalf of any other Person:
(a) solicit, recruit, hire, engage, retain, or attempt to solicit, recruit, hire, engage, or retain any employee, consultant, or independent contractor of the Company, Buyer, or any of their respective Affiliates, or any individual who was an employee, consultant, or independent contractor of the Company, Buyer, or any of their respective Affiliates at any time within the six (6) months preceding the date of such solicitation, recruitment, hiring, engagement, or retention; or
(b) induce, encourage, persuade, or attempt to induce, encourage, or persuade any employee, consultant, or independent contractor of the Company, Buyer, or any of their respective Affiliates to terminate, reduce, or otherwise modify his or her employment, consulting engagement, or independent contractor relationship with the Company, Buyer, or any of their respective Affiliates.
The restrictions set forth in this Section 3.1 shall apply regardless of whether the employee, consultant, or independent contractor would be hired or engaged to perform duties that are competitive with the Business.
Section 3.2 Exceptions to Employee Non-Solicitation. The restrictions set forth in Section 3.1 shall not prohibit or restrict:
(a) general solicitations of employment that are not specifically directed at or targeted toward employees, consultants, or independent contractors of the Company, Buyer, or their Affiliates, including without limitation advertisements published in newspapers, trade journals, industry publications, or on general-purpose online job boards or employment websites (such as Westmark Health IT job postings that are not targeted at specific individuals employed by the Company, Buyer, or their Affiliates), provided that the Restricted Party does not otherwise directly or indirectly solicit, recruit, or hire any such individual who responds to such general solicitation; or
(b) the solicitation, recruitment, or hiring of any individual whose employment or engagement with the Company, Buyer, or any of their respective Affiliates was terminated by the Company, Buyer, or such Affiliate without cause more than six (6) months prior to the date of such solicitation, recruitment, or hiring.
ARTICLE IV — NON-SOLICITATION OF CUSTOMERS AND SUPPLIERS
Section 4.1 Customer Non-Solicitation. During the Restricted Period, the Restricted Party shall not, directly or indirectly, whether on the Restricted Party's own behalf or on behalf of any other Person:
(a) solicit, contact, call upon, service, or do business with any Customer for the purpose of selling, marketing, distributing, or providing any products, services, technologies, or solutions that are competitive with the Business, or that could serve as a substitute for any product or service offered by the Company, Buyer, or their Affiliates in connection with the Business; or
(b) induce, encourage, persuade, or attempt to induce, encourage, or persuade any Customer to cease, reduce, terminate, limit, divert, transfer, or otherwise modify its business relationship with the Company, Buyer, or any of their respective Affiliates.
For the avoidance of doubt, the restrictions set forth in this Section 4.1 shall apply to the Restricted Party regardless of whether the Customer was serviced by or known to the Restricted Party during the Restricted Party's employment with the Company or Buyer.
Section 4.2 Supplier Non-Interference. During the Restricted Period, the Restricted Party shall not, directly or indirectly, whether on the Restricted Party's own behalf or on behalf of any other Person, interfere with, disrupt, impair, or attempt to interfere with, disrupt, or impair, the relationship between the Company, Buyer, or any of their respective Affiliates, on the one hand, and any Supplier, on the other hand. Without limiting the generality of the foregoing, the Restricted Party shall not (a) solicit, induce, encourage, or persuade any Supplier to cease, reduce, or modify its supply of goods or services to the Company, Buyer, or their Affiliates, (b) divert or redirect any Supplier to a Competing Business, or (c) take any action intended to, or that the Restricted Party knows or reasonably should know is likely to, impair the ability of the Company, Buyer, or their Affiliates to procure products, components, materials, or services from any Supplier, including without limitation key suppliers that provide critical components and materials for the Company's products, such as surgical-grade stainless steel, piezoelectric actuators, sterile packaging, and specialized electronic assemblies.
ARTICLE V — CONFIDENTIALITY
Section 5.1 Non-Disclosure Obligation. The Restricted Party shall not, during or after the Restricted Period, directly or indirectly, use, disclose, disseminate, publish, transfer, or otherwise make available any Confidential Information for any purpose other than the performance of the Restricted Party's duties and responsibilities to Buyer or its Affiliates as set forth in the Employment Agreement or as otherwise authorized in writing by Buyer. This obligation shall apply to all forms of Confidential Information, whether communicated orally, in writing, electronically, or by any other means, and whether or not such information is marked or designated as "confidential," "proprietary," or with any similar legend.
Without limiting the generality of the foregoing, the Restricted Party specifically acknowledges that the following categories of information constitute Confidential Information and shall be subject to the restrictions of this Article V: (a) trade secrets of the Company, Buyer, and their Affiliates, including proprietary algorithms for real-time cartilage thickness mapping and other proprietary software algorithms developed for or incorporated into the ArthroNav platform; (b) product development plans, product roadmaps, and technical specifications for the ArthroNav platform and all other Company products; (c) patent portfolio strategies, invention disclosures, patent prosecution files, and intellectual property assessments; (d) 510(k) submission data, pre-submission meeting materials, clinical data, and regulatory strategies related to FDA and international regulatory approvals; (e) manufacturing processes, methods, formulations, tolerances, and quality control procedures; (f) customer and supplier pricing, discount structures, contractual terms, and negotiation strategies; and (g) financial performance data, projections, budgets, and strategic business plans.
The Restricted Party shall exercise at least the same degree of care to protect the Confidential Information as the Restricted Party exercises with respect to the Restricted Party's own confidential information, but in no event less than a reasonable degree of care.
Section 5.2 Return of Materials. Upon the termination of the Restricted Party's employment with Buyer and its Affiliates for any reason (or at any time upon the written request of Buyer), the Restricted Party shall promptly return to Buyer all documents, files, records, data, notes, memoranda, correspondence, reports, presentations, manuals, drawings, prototypes, samples, devices, equipment, computer hardware, computer software, access credentials, keys, access cards, and all other tangible and electronic property and materials belonging to the Company, Buyer, or any of their respective Affiliates, or containing or embodying any Confidential Information, including all copies, reproductions, extracts, and summaries thereof, in whatever form or medium (whether written, printed, electronic, magnetic, optical, or otherwise). The Restricted Party shall not retain any copies, extracts, summaries, notes, or other reproductions of any Confidential Information in any form, including on any personal computer, personal email account, cloud storage service, external storage device, or other medium. Upon Buyer's request, the Restricted Party shall certify in writing that the Restricted Party has complied with the obligations set forth in this Section 5.2.
Section 5.3 Defend Trade Secrets Act Notice. Pursuant to the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), the Restricted Party is hereby notified that:
(a) An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (i) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(b) An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (i) files any document containing the trade secret under seal and (ii) does not disclose the trade secret, except pursuant to court order.
Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such provision. Nothing in this Agreement shall limit the Restricted Party's right to communicate with any governmental authority, including the U.S. Securities and Exchange Commission, the U.S. Department of Justice, or any state attorney general, regarding possible violations of law, or to file a charge or complaint with any governmental authority, without providing notice to Buyer.
ARTICLE VI — INTELLECTUAL PROPERTY AND WORK PRODUCT
Section 6.1 Acknowledgment of Company Ownership. The Restricted Party acknowledges and agrees that all inventions, discoveries, improvements, developments, designs, methods, processes, compositions, techniques, works of authorship, software, algorithms, data, databases, formulas, trade secrets, know-how, and other intellectual property and proprietary rights (whether or not patentable, copyrightable, or otherwise protectable) (collectively, "Work Product") that were made, conceived, created, reduced to practice, developed, or contributed to by the Restricted Party, either alone or jointly with others, during the course of or in connection with the Restricted Party's employment with the Company, Buyer, or any of their Affiliates, and that relate to or are useful in connection with the Business, are and shall remain the sole and exclusive property of Buyer (as successor-in-interest to the Company). This Section 6.1 applies to all Work Product, regardless of when or where such Work Product was made, conceived, or developed, and regardless of whether such Work Product was made, conceived, or developed during normal working hours, on the premises of the Company, Buyer, or their Affiliates, or using the resources, equipment, or facilities of the Company, Buyer, or their Affiliates, to the extent permitted by applicable law. The terms and conditions of this Section 6.1 are in addition to, and do not limit or supersede, any applicable provisions of the Employment Agreement relating to intellectual property, inventions, and work product.
Section 6.2 Assignment. To the extent that any Work Product is not already owned by or assigned to the Company, Buyer, or any of their Affiliates (whether by operation of law, by contract, or otherwise), the Restricted Party hereby irrevocably assigns, transfers, and conveys to Buyer all of the Restricted Party's right, title, and interest in and to such Work Product, including all intellectual property rights therein, throughout the world, in perpetuity. The Restricted Party agrees to execute and deliver such additional assignments, documents, and instruments, and to take such further actions, as Buyer may reasonably request to evidence, perfect, register, enforce, or defend such assignment and Buyer's ownership of the Work Product, at Buyer's expense. To the extent any rights in Work Product are not assignable under applicable law, the Restricted Party hereby grants to Buyer an exclusive, irrevocable, perpetual, worldwide, royalty-free, fully paid-up license (with the right to sublicense through multiple tiers) to use, reproduce, distribute, display, perform, modify, create derivative works from, and otherwise exploit such Work Product for any purpose. The Restricted Party hereby irrevocably waives and agrees never to assert any moral rights or similar rights that the Restricted Party may have in or to any Work Product assigned or licensed hereunder, to the fullest extent permitted by applicable law.
ARTICLE VII — REASONABLENESS; ACKNOWLEDGMENTS
Section 7.1 Acknowledgment of Reasonableness. The Restricted Party acknowledges and agrees that:
(a) The restrictive covenants set forth in Articles II, III, IV, V, and VI of this Agreement are reasonable and necessary in scope, duration, and geographic area to protect the legitimate business interests of Buyer and its Affiliates, including without limitation the goodwill, trade secrets, confidential information, customer relationships, supplier relationships, employee relationships, and other business assets acquired or to be acquired by Buyer in connection with the transactions contemplated by the Purchase Agreement, and the substantial investment made by Buyer in connection therewith.
(b) The Restricted Party has received, and will receive, substantial consideration in connection with the transactions contemplated by the Purchase Agreement and the execution and delivery of this Agreement, including without limitation (i) for Restricted Parties who are stockholders of the Company, substantial purchase price consideration for their shares of common stock of the Company (and, if applicable, the cancellation of vested stock options), and the opportunity to earn additional earnout consideration, and (ii) for all Restricted Parties, employment with Buyer on favorable terms and conditions pursuant to the Employment Agreement, including base salary, bonus opportunities, equity incentive awards, and other benefits and perquisites, and such consideration is adequate and sufficient consideration for the restrictive covenants set forth herein.
(c) The restrictions set forth in this Agreement will not impose undue hardship on the Restricted Party and will not prevent the Restricted Party from earning a livelihood, in light of the Restricted Party's education, training, skills, experience, and abilities, and the scope of the permitted activities set forth in Section 2.2.
(d) The Restricted Party has had a full and adequate opportunity to review and consider this Agreement and to consult with independent legal counsel of the Restricted Party's own choosing regarding the terms and provisions of this Agreement prior to its execution and delivery.
(e) The Restricted Party's services are unique and extraordinary and the Business of the Company is conducted throughout the Restricted Territory, and therefore the geographic scope of the restrictive covenants is reasonable and appropriate.
Section 7.2 Independent Covenants. The Restricted Party acknowledges and agrees that each of the restrictive covenants set forth in this Agreement constitutes an independent and severable covenant and obligation. The existence of any claim or cause of action by the Restricted Party against Buyer, the Company, or any of their Affiliates, whether arising under this Agreement, the Purchase Agreement, the Employment Agreement, or otherwise, shall not constitute a defense to the enforcement of any restrictive covenant set forth in this Agreement and shall not excuse the Restricted Party's compliance with the obligations set forth herein.
ARTICLE VIII — REMEDIES
Section 8.1 Injunctive Relief. The Restricted Party acknowledges and agrees that a breach or threatened breach of any of the restrictive covenants or obligations set forth in this Agreement would cause irreparable harm to Buyer and its Affiliates that cannot be adequately compensated by monetary damages alone. Accordingly, in the event of any such breach or threatened breach, Buyer shall be entitled to seek and obtain temporary, preliminary, and permanent injunctive relief and orders of specific performance to enforce the provisions of this Agreement, in any court of competent jurisdiction, without the necessity of (a) proving actual damages, (b) posting any bond or other security, to the maximum extent permitted by applicable law, or (c) showing the inadequacy of monetary damages as a remedy. Such injunctive relief and specific performance shall be in addition to, and not in lieu of, any other remedies available to Buyer at law or in equity, including the right to seek and recover monetary damages (including consequential and incidental damages), attorneys' fees, and costs.
Section 8.2 Extension of Restricted Period. If the Restricted Party violates any of the restrictive covenants set forth in Articles II, III, or IV of this Agreement, the Restricted Period applicable to such restrictive covenant shall be automatically tolled and suspended during the period of such violation and shall be extended by a period of time equal to the duration of such violation, so that Buyer receives the full benefit of the restrictive period contemplated by this Agreement.
Section 8.3 Cumulative Remedies. All rights and remedies available to Buyer under this Agreement, at law, or in equity are cumulative and not exclusive of any other right or remedy. The exercise of any one right or remedy shall not be deemed a waiver or release of any other right or remedy, and Buyer may pursue any and all available remedies simultaneously or in any order.
ARTICLE IX — REFORMATION / BLUE PENCIL
Section 9.1 Judicial Modification. If any court of competent jurisdiction determines that any provision of this Agreement, including without limitation any restrictive covenant set forth in Articles II, III, IV, or V, is unenforceable or invalid because the duration, geographic scope, scope of restricted activities, or any other aspect of such provision is excessive or unreasonable, then the Parties expressly agree that such court shall have the authority and is hereby requested to reform such provision to the minimum extent necessary to render it valid and enforceable, and this Agreement, as so modified, shall remain in full force and effect. In particular, and without limiting the generality of the foregoing, if any court determines that the Restricted Period is too long, the Restricted Territory is too broad, or the scope of restricted activities is too extensive, such court is hereby authorized and requested to reduce or modify the applicable provision to the maximum duration, geographic area, or scope of activities that such court deems reasonable and enforceable under the circumstances.
The Parties acknowledge and agree that it is their intention that each restrictive covenant set forth in this Agreement be construed as valid and enforceable to the fullest extent permitted by the law of the applicable jurisdiction. If any such provision cannot be reformed and made enforceable, such provision shall be severed from this Agreement, and the remaining provisions shall remain in full force and effect, in accordance with Section 12.8.
ARTICLE X — TERM AND SURVIVAL
Section 10.1 Term. This Agreement shall become effective as of the Effective Date and shall remain in full force and effect through the end of the Restricted Period; provided, however, that the confidentiality obligations set forth in Article V shall survive the expiration of the Restricted Period and shall continue in perpetuity, except that with respect to Confidential Information that constitutes a trade secret under applicable law, the confidentiality obligations of the Restricted Party with respect to such trade secret shall continue for so long as such information constitutes a trade secret under applicable law.
Section 10.2 Survival of Certain Obligations. The obligations of the Restricted Party set forth in Article V (Confidentiality), Article VI (Intellectual Property and Work Product), Article VII (Reasonableness; Acknowledgments), Article VIII (Remedies), and Article IX (Reformation / Blue Pencil), together with the general provisions set forth in Article XII, shall survive the expiration or termination of this Agreement for any reason and shall remain in full force and effect in accordance with their respective terms.
ARTICLE XI — REPRESENTATIONS AND WARRANTIES OF THE RESTRICTED PARTY
The Restricted Party hereby represents and warrants to Buyer as follows:
Section 11.1 Authority. The Restricted Party has full power, authority, and legal capacity to execute and deliver this Agreement and to perform each of the obligations set forth herein. This Agreement has been duly executed and delivered by the Restricted Party and constitutes the valid, legal, and binding obligation of the Restricted Party, enforceable against the Restricted Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights generally, and subject to general principles of equity (whether considered in a proceeding in equity or at law).
Section 11.2 No Conflict. The execution, delivery, and performance of this Agreement by the Restricted Party does not and will not (a) conflict with, violate, or result in a breach of any provision of any agreement, contract, arrangement, commitment, or obligation to which the Restricted Party is a party or by which the Restricted Party or any of the Restricted Party's properties or assets is bound, (b) violate any order, judgment, injunction, decree, statute, rule, or regulation applicable to the Restricted Party, or (c) require the consent, approval, authorization, or other action of any Person, other than consents or approvals that have been obtained and are in full force and effect as of the Effective Date.
Section 11.3 Adequate Consideration. The Restricted Party acknowledges and agrees that the consideration received by the Restricted Party in connection with the transactions contemplated by the Purchase Agreement, including without limitation (a) the purchase price paid or payable for the Restricted Party's shares of common stock of the Company (if applicable) and any earnout consideration that may become payable, (b) the cancellation of the Restricted Party's vested stock options (if applicable) in exchange for the option cancellation consideration set forth in the Purchase Agreement, and (c) the employment arrangements provided pursuant to the Employment Agreement, including base salary, annual bonus opportunities, equity incentive awards, and other benefits and perquisites, constitutes adequate, valuable, and sufficient consideration for the restrictive covenants and obligations of the Restricted Party contained in this Agreement, and the Restricted Party is not entering into this Agreement under duress or undue influence.
ARTICLE XII — GENERAL PROVISIONS
Section 12.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice-of-law, conflict-of-law, or similar rules, provisions, or principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the substantive laws of any jurisdiction other than the State of Delaware.
Section 12.2 Jurisdiction and Venue. Each Party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of (a) the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to exercise jurisdiction, any other state court of the State of Delaware), and (b) the United States District Court for the District of Delaware, for the purposes of any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and each Party hereby irrevocably and unconditionally agrees that all claims in respect of any such action, suit, or proceeding may be heard and determined in any such court. Each Party hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, (i) any objection that it may now or hereafter have to the laying of venue of any such action, suit, or proceeding in any such court, and (ii) the defense of an inconvenient forum to the maintenance of any such action, suit, or proceeding in any such court. Each Party agrees that a final judgment in any such action, suit, or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law. Each Party irrevocably consents to service of process in the manner provided for notices in Section 12.7 of this Agreement; provided, however, that nothing in this Agreement shall affect the right of any Party to serve process in any other manner permitted by applicable law.
Section 12.3 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, OR ENFORCEMENT HEREOF. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY SUCH ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM, SEEK TO ENFORCE THIS WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.3.
Section 12.4 Entire Agreement. This Agreement, together with the Purchase Agreement, the Employment Agreement, and any exhibits, schedules, annexes, or attachments hereto or thereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, representations, warranties, discussions, and commitments, whether written or oral, between the Parties with respect to such subject matter. No representations, warranties, promises, or inducements have been made by or on behalf of any Party concerning this Agreement other than those contained herein and in the Purchase Agreement, the Employment Agreement, and the exhibits, schedules, annexes, and attachments thereto.
Section 12.5 Amendments and Waivers. No amendment, modification, supplement, restatement, or waiver of any provision of this Agreement shall be effective unless it is set forth in a written instrument duly executed by both Buyer (or its authorized successor or assignee) and the Restricted Party. No failure or delay on the part of Buyer in exercising any right, power, or privilege under this Agreement, and no course of dealing between the Parties, shall operate as a waiver of any such right, power, or privilege, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
Section 12.6 Assignment. The Restricted Party may not assign, delegate, or otherwise transfer this Agreement, or any of the Restricted Party's rights, interests, or obligations hereunder, in whole or in part, without the prior written consent of Buyer, and any attempted assignment, delegation, or transfer without such consent shall be null and void and of no force or effect. Buyer may freely assign this Agreement, and any or all of its rights and obligations hereunder, to any Affiliate of Buyer or to any Person that is a successor to all or substantially all of the business or assets of Buyer (whether by merger, consolidation, reorganization, sale of assets, or otherwise), without the prior written consent of the Restricted Party, and this Agreement shall be binding upon and inure to the benefit of any such assignee or successor. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.
Section 12.7 Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered by hand or by nationally recognized overnight courier service, (b) when sent by certified or registered mail, return receipt requested, postage prepaid, or (c) when sent by email (with confirmation of receipt by the recipient, which confirmation may include a reply email, a read receipt, or other electronic confirmation), in each case, to the applicable address or email address set forth below (or to such other address or email address as a Party may designate by notice given in accordance with this Section 12.7):
If to Buyer:
Solstice Biomedical, Inc. 1200 Innovation Drive, Suite 400 Wilmington, Delaware 19801
Attention: General Counsel
Email: legalnotices@solsticebiomed.com
With a copy to (which shall not constitute notice):
Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, New York 10022
Attention: Beatrice Holloway
Email: b.holloway@calderwoodharkness.com
If to the Restricted Party:
At the address set forth on the signature page hereto, or at such other address as the Restricted Party may designate by written notice to Buyer in accordance with this Section 12.7.
Section 12.8 Severability. If any term, provision, covenant, or restriction of this Agreement is held by a court of competent jurisdiction or other governmental authority to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated, so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either Party. Upon any such determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby may be consummated as originally contemplated to the fullest extent possible.
Section 12.9 Counterparts and Electronic Signatures. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by facsimile or by electronic transmission in portable document format (PDF) or any other electronic format shall be effective as delivery of a manually executed counterpart of this Agreement. The words "execution," "signed," "signature," and words of like import in this Agreement shall be deemed to include electronic signatures and the keeping of records in electronic form, each of which shall be of the same legal effect, validity, and enforceability as a manually executed signature or the use of a paper-based recordkeeping system, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act (15 U.S.C. § 7001 et seq.) and the Uniform Electronic Transactions Act, as adopted in the applicable jurisdiction.
Section 12.10 Third-Party Beneficiaries. Except as expressly provided in this Section 12.10, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement. Notwithstanding the foregoing, (a) Solstice Biomedical Devices Ltd., the ultimate parent company of Buyer, and (b) the Company (following the Closing), shall each be express third-party beneficiaries of this Agreement and shall be entitled to enforce the provisions hereof as if such entity were a party hereto.
Section 12.11 Construction. The headings and captions contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The word "including" (and correlative words such as "include" and "includes") means "including without limitation" or "including but not limited to." All references to "days" in this Agreement shall mean calendar days, unless otherwise expressly specified. References to any "Section," "Article," or "Exhibit" shall mean a Section, Article, or Exhibit of or to this Agreement, unless otherwise specified. The use of the singular shall include the plural and vice versa, and the use of any gender shall include all genders, as the context requires. The words "hereof," "herein," "hereto," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement, and in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
Section 12.12 Relationship to Purchase Agreement and Employment Agreement. In the event of a conflict or inconsistency between the terms and provisions of this Agreement, on the one hand, and the terms and provisions of the Purchase Agreement, on the other hand, with respect to the restrictive covenants, non-competition obligations, non-solicitation obligations, confidentiality obligations, or intellectual property obligations applicable to the Restricted Party, the terms and provisions of this Agreement shall control and prevail. This Agreement is supplemental to, and not in limitation of, any other restrictive covenants, non-competition obligations, non-solicitation obligations, confidentiality obligations, or intellectual property obligations to which the Restricted Party may be subject under the Employment Agreement or any other agreement with Buyer or its Affiliates. For the avoidance of doubt, in the event of a conflict between this Agreement and the Employment Agreement with respect to the scope, duration, or geographic reach of any restrictive covenant, the provision that provides broader protection to Buyer shall control.
[Signature Pages Follow]
SIGNATURE PAGE TO NON-COMPETITION AND NON-SOLICITATION AGREEMENT
IN WITNESS WHEREOF, the Parties have executed this Non-Competition and Non-Solicitation Agreement as of the date first written above.
BUYER:
SOLSTICE BIOMEDICAL, INC.
By: ________
Name: Helena Byrne
Title: President
Date: ________
RESTRICTED PARTY:
________________________________________
Name: [Dr. Marcus Ellsworth / Catherine Pryor / Dr. Raj Subramanian]
Address: ________
________________________________________
________________________________________
Date: ________
EXHIBIT A
DESCRIPTION OF BUSINESS
This Exhibit A sets forth a detailed description of the "Business" as defined in Article I of the Non-Competition and Non-Solicitation Agreement to which this Exhibit A is attached, specifying the product lines, technology platforms, and geographic markets of Meridian Surgical Technologies, Inc. (the "Company") as of the Effective Date.
1. Product Lines and Technology Platforms.
The Business includes the design, development, manufacture, marketing, distribution, sale, and servicing of the following product lines, technology platforms, and related products and services:
(a) Single-Use Arthroscopic Blades (PrecisionBlade Product Line). The Company's PrecisionBlade product line consists of single-use, disposable arthroscopic blades designed for minimally invasive orthopedic surgical procedures, including arthroscopic procedures performed on the knee, shoulder, hip, ankle, elbow, and wrist. The PrecisionBlade product line includes a range of blade configurations, sizes, and profiles designed for specific surgical techniques, including cutting, resecting, debriding, and shaping articular cartilage, meniscal tissue, labral tissue, and other soft tissues.
(b) Powered Shaver Systems. The Company designs, develops, manufactures, and sells powered shaver systems for use in arthroscopic and other minimally invasive orthopedic surgical procedures. These systems include handpieces, shaver blades, burrs, control consoles, and related accessories. The Company's powered shaver systems are designed for use in both standalone configurations and in conjunction with the ArthroNav robotic-assisted arthroscopy platform.
(c) ArthroNav Robotic-Assisted Arthroscopy Platform. The Company's ArthroNav platform is a proprietary robotic-assisted arthroscopy system that integrates robotic guidance, real-time imaging, and proprietary software to enhance the precision and reproducibility of arthroscopic surgical procedures. The ArthroNav platform includes:
(i) Generation 1.0 — The current-generation ArthroNav system, which includes a robotic arm, arthroscopic camera integration module, navigation console, and proprietary software for intraoperative surgical planning and instrument guidance.
(ii) Generation 2.0 Software Module for Real-Time Cartilage Mapping — A next-generation software module currently in active development as of the Effective Date, which incorporates proprietary algorithms for real-time cartilage thickness mapping, enabling surgeons to assess and visualize cartilage thickness and integrity intraoperatively using data from the ArthroNav system's integrated imaging sensors.
(d) Related Components, Accessories, and Software. The Business includes all components, accessories, attachments, replacement parts, consumables, software modules, software updates, service contracts, maintenance and repair services, and other ancillary products and services associated with or designed for use in connection with the products described in subsections (a) through (c) above.
(e) Products and Services in Development. The Business includes all products, technologies, software, systems, and services that were in active research, design, development, prototyping, testing, or pre-market regulatory review by the Company or any of its subsidiaries as of the Effective Date, regardless of whether such products, technologies, software, systems, or services had been commercially launched or approved for marketing as of the Effective Date.
2. Manufacturing Operations.
The Company's principal manufacturing facility is located at 45 Forge Creek Road, Exton, Pennsylvania 19341, where the Company manufactures, assembles, tests, packages, and ships its products, including the PrecisionBlade product line, powered shaver systems, and components of the ArthroNav platform.
3. Geographic Markets.
The Business is conducted in the following geographic markets:
(a) United States. The Company markets and sells its products throughout the United States to hospitals, ambulatory surgery centers, orthopedic clinics, and other healthcare providers and institutions. The Company maintains a direct sales force and also utilizes independent distributors and sales agents in certain regions.
(b) International Markets. The Company markets and sells its products internationally through a network of authorized distributors and commercial partners, including in member states of the European Union, the United Kingdom, Canada, Australia, Japan, South Korea, Brazil, and other countries. The Company holds applicable regulatory clearances and approvals (including FDA 510(k) clearances and CE markings) necessary for the commercialization of its products in the markets in which it operates.
4. Customers and End Users.
The Company's customers include hospitals, ambulatory surgery centers, orthopedic surgical practices, academic medical centers, and other healthcare facilities and providers that perform minimally invasive orthopedic surgical procedures, as well as group purchasing organizations, healthcare distributors, and other intermediaries that facilitate the procurement of medical devices and surgical instruments.
[End of Exhibit A]

FORM OF NON-COMPETITION AND NON-SOLICITATION AGREEMENT

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

RECITALS

SIGNATURE PAGE TO NON-COMPETITION AND NON-SOLICITATION AGREEMENT

SOLSTICE BIOMEDICAL, INC.

RESTRICTED PARTY:

EXHIBIT A

DESCRIPTION OF BUSINESS

Record

Parties

Dates

Amounts