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ACQUISITION AGREEMENT
 
between
 
HCI VIOCARE TECHNOLOGIES LIMITED
 
Centrum Offices, 38 Queen Street,
 
Glasgow, G1 3DX, Scotland UK
 
and

 
CHRISTOS KAPATOS
 
66 Stewarton Drive, Cambuslang,
 
Glasgow G72 8DG, Scotland, UK
 
 
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CONTENTS
 

 
Claus
Page No.
1.
Definitions
3
2.
Commencement and Duration
6
3.
The Project
6
4.
Good Faith
6
5.
Company’s Representative
6
6.
Acquisition and Consideration
7
7.
Intellectual Property Rights
7
8.
Infringement
8
9.
Exploitation
9
10.
Warranties and Representations
9
11.
Indemnities and Limitation of Liability
10
12.
Confidentiality
10
13.
Statements
11
14.
Protection of Business Interests
11
15.
Termination
12
16.
Consequences of Termination
13
17.
Entire Agreement
13
18.
Variation
13
19.
Waiver
13
20.
Severability
13
21.
Assignation
13
22.
Force Majeure
13
23.
Notices
14
24.
Governing Law
14
       
SCHEDULE
   
Part 1 – Details of the Project
15
 
Part 2 – Individual’s Background IPR
16

 
 
2

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ACQUISITION AGREEMENT
 
THIS AGREEMENT (the “Agreement”) dated February 12, 2014 (the “Effective Date”)
is made by and between
 
HCI VIOCARE TECHNOLOGIES LIMITED, a company registered in the UK under number
467480, whose registered office is at Centrum Offices, 38 Queen Street, Glasgow,
G1 3DX, Scotland UK (the “Company”); and
 
CHRISTOS KAPATOS, resident of 66 Stewarton Drive, Cambuslang, Glasgow G72 8DG,
Scotland UK (the “Individual”)

 
WHEREAS:
 
(A)             The Individual is the proprietor of the Individual’s Background
IPR, which the Company wishes to acquire in order to undertake the Project;
 
(B)             the Individual is willing to assign the Individual’s Background
IPR to the Company for the purposes of the Project and to enable the
Exploitation of the results of the Project; and
 
(C)             the Parties wish to record in writing the terms on which they
have agreed to collaborate in the Project and in the Exploitation of the results
of the Project.
 
NOW THEREFORE, it is hereby agreed as follows:

 
1.
Definitions

 
1.1.
In this Agreement, unless the context requires otherwise, the following words
and phrases shall have the meanings set opposite them:

 
“Agreement”
means this Agreement together with the Schedule and recitals;
 
“Commencement Date”
means 16 January, 2014, notwithstanding the date or dates of execution of this
Agreement;
 
“Confidential Information”
means any and all confidential and proprietary information of any of the
parties, including, but not limited to, information relating to the business,
finances, transactions and affairs of any of the parties, and any other
information which is designated as confidential by a Party or which, because of
its character or the circumstances or manner of its disclosure is evidently
confidential;
 
“Consideration”
means the consideration as defined under Section 6.1 herein
 

 
 
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“Documentation”
means all papers relating to the Individual’s Background IPR, their
applications, designs, drawings, research production, prototypes and formulation
details;
 
“Exploitation”
means  the  commercial  exploitationofthe Individual's Background IPR, the
Foreground IPR, and/or any Patent, and "Exploit" shall be construed accordingly;
 
“Exploitation Proceeds”
means any and all proceeds generated from the Exploitation of the  Individual's
Background  IPR,  the Foreground  IPR and/or any Patent by way of licensing to a
third party other than a Spin-out Company, which are received by the Company,
whether in money or money's worth, including, for the avoidance of doubt, cash,
or shares in a company other than a Spin-out Company;
 
“Foreground IPR”
means all and any IPR arising, created or developed in the course of and
relating to the Project but excluding all the Individual’s Background IPR;
 
“Group Company”
means any undertaking which from time to time is: (a) a subsidiary of the
Company; (b) apparent undertaking of the Company; or (c) a subsidiary of any
such parent undertaking where "subsidiary undertaking" and "parent undertaking"
have the meanings given to them in the Companies Act 1985 section 258;
 
“Individuals Background IPR”
means any and all IPR owned or available for use by the Individual, acquisition
of which the Company determines is necessary or desirable for the purposes of
the Project, including but not limited to that which is set out in Part 2 of the
Schedule;
 
“IPR”
means any and all intellectual property or industrial rights of any description
anywhere in the world including without limitation to the foregoing generality
any patents, trademarks, domain names, registered designs,  copyright (including
without limitation to the foregoing generality rights in computers  software,
object and source code), rights in the nature of copyright, database rights,
semi-conductor topography rights, unregistered design rights, rights in and to
trade names, business names, product names and logos, inventions, databases,
discoveries, specifications, formulae, processes, know how, trade secrets,
confidential information and any analogous or similar right in any jurisdiction
(whether any such rights referred to in this definition are registered,
unregistered, registerable or not), and any  applications or rights to apply for
registration of any of them together with any registered rights resulting from
any such applications or rights to apply for registration;
 
“Knowhow”
means all knowhow relating to the Individual’s Background IPR and the Project;
 
“New Individual IPR”
shall have the meaning given to it in Clause 6.3;
 
“Parties”
means the Company and the Individual and "Party" shall be construed accordingly;
 
“Patent(s)”
means any and all patent applications filed by the Parties in accordance with
Clause 7.3 and any patents granted pursuant to such applications;
 
“Permitted Costs”
means those incurred by the Company and arising from the following:
a)the filing, prosecution, procurement and maintenance of any Patent(s) after
the commencement of Exploitation;
b)proceedings before the Patent Office or other appropriate forum, including any
appeals;
c)professional advice (including consultant’s and advisers’ fee) on the
Patent(s) and other intellectual property matters relating to the Individual's
Background IPR or the Patent(s) or the Foreground IPRs;
d)proceedings by or against the Company in any court or tribunal for the
enforcement or defence of any Patent or for revocation of or opposite onto any
such Patent or for any other cause relating to the Individual's Background IPR
or the Foreground IPRs (including any costs or sums awarded against the Company
in any such proceedings);
e)agents’ commission;
f)marketing and public relations activities in relation to the Individual's
Background IPR, the Patent(s) and/or any Foreground IPRs;
g)establishing and managing any Spin-out Company;
h)negotiating and managing any licence of the Individual's Background IPR, the
Patent(s) and/or any Foreground IPRs;
i)arranging  and maintaining any intellectual property insurance in respect of
the Individual's Background IPR, the Patent(s) and/or any Foreground IPRs;
j)any  tax, charges, duties, deductions or withholdings which the Company is
required to pay or make by law; and
k)any other expenditure which may be agreed from time to time by the Individual
and the Company;
 

 
 
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“Project”
means  the  final  development of the technology entitled ‘Socket Fit’ for the
Company to take it to the market, and the funding of any ongoing and/or further
development for the purposes of the Project, as more generally described in Part
1 of the Schedule;
 
“Schedule”
means the schedule in two (2) Parts annexed to this Agreement which shall be
deemed incorporated herein;
 
“Spin-out Company”
means any separate legal entity established by the Company as a vehicle to
Exploit the Foreground IPRs;
 

 
1.2.
In this Agreement:

 
 
1.2.1.
the use of the singular includes the plural and vice versa;

 
 
1.2.2.
references to gender include references to all genders;

 
 
1.2.3.
unless otherwise stated, any reference to a Clause or Schedule is to the
relevant Clause or Schedule of or to this Agreement and any reference to a sub

 
 
1.2.4.
clause or paragraph is to the relevant sub-clause or paragraph of the Clause or
Schedule in which it appears;

 
 
1.2.5.
the Clause headings are for reference only and will not affect the construction
or interpretation of this Agreement; and

 
 
1.2.6.
references to statutes, any statutory instrument, regulation or order will be
construed as a reference to such statute, statutory instrument, regulation or
order as amended or re-enacted from time to time.

 
1.3.
In this Agreement, except where the context otherwise requires, any reference
to:

 
 
1.3.1.
another agreement or any deed or other instrument or document will be construed
as a reference to that other agreement, deed or other instrument or document as
the same may have been, or may from time to time be, amended, varied,
supplemented or notated;

 
 
1.3.2.
the words “include” or "including" are to be construed as meaning without
limitation;

 
 
1.3.3.
a “day” means a period of 24 hours (or such other number of hours as may be
relevant in the case of changes for daylight saving) ending at 12.00 midnight;

 
 
1.3.4.
a "week" means a period of 7 consecutive days;

 
 
1.3.5.
a "month" means a calendar month; and

 
 
1.3.6.
a "person" includes any individual, partnership, firm, company, corporation,
joint venture, trust, association, organisation or other entity, in each case
whether or not having a separate legal personality.

 
 
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2.
Commencement and Duration
 

This Agreement shall commence on the Commencement Date and shall continue unless
terminated in accordance with the provisions of this Agreement.
 
3.
The Project

 
3.1.
The Project will be undertaken by the Company.

 
3.2.
The Individual will at all times during the period of this Agreement use his
best endeavours to promote the interests of the Company.

 
3.3.
The Individual warrants that he will not, as a consequence of entering into and
performing his obligations under this Agreement, be in breach of any terms
express or implied (whether concerning confidentiality, non-competition or
otherwise) of any contract, agreement or other arrangement with, or any
obligation to, any third party binding upon the Individual and that the
Individual is under no obligation, covenant or restriction which would or might
give rise to any conflict of interest between the Individual and the Company or
any Group Company.

 
4.
Good Faith

 
4.1.
Subject to sub-clauses 4.2 and 4.3, the Individual may have a financial interest
in or advise or act as a consultant to any business provided that the Individual
will not during the period of his involvement in the Project (unless with the
prior written consent of the Company) undertake any other activities or accept
other engagements which may interfere with or detract from the Individual's
obligations, whether as specified in this Agreement or otherwise. In the event
of a conflict between the Individual's foregoing obligations and the
Individual's obligations to any third party, the Individual’s foregoing
obligations to the Company or any Group Company shall take precedence.

 
4.2.
The Individual will not use or otherwise turn to the Individual's advantage the
Individual's knowledge of any connection or contact with any of the
manufacturers used by customers of, or suppliers to the Company or any Group
Company or any prospective manufacturers, customers or suppliers in a manner
that is detrimental to the interests of the Company or any Group Company.

 
4.3.
The Individual will not receive or obtain directly or indirectly any discount,
rebate, commission or other benefit in respect of any goods or services supplied
to or acquired by the Company or any other business transacted by it and, if the
Individual does receive any such discount, rebate, commission or other benefit,
the Individual will account to the Company for it.

 
5.
Company’s Representative:

 
The person within the Company who will act as the main contact point and channel
of communication for the Project during the period of this Agreement is Sotirios
Leontaritis. The Company will inform the Individual of any change in the
identity of such person.
 
 
6

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6.
Acquisition and Consideration
 

6.1.
In consideration for the acquisition, the Company shall cause the issuance of a
total of five hundred thousand (500,000) common shares of the common stock of
China Northern Medical Device, Inc., the parent corporation of the Company, to
the Individual, which shares shall be issued on the execution of this Agreement
and shall be subject to such restrictions as may be required by the requisite
regulatory authorities (the “Consideration Shares”).
 

6.2.
The Individual hereby assigns exclusive, perpetual, irrevocable, transferable,
royalty free, worldwide ownership of the Individual’s Background IPR and Knowhow
to the Company for the purposes of using it to the extent necessary or desirable
to further develop and exploit the Individual’s Background IPR, and to create,
develop and exploit the Foreground IPR.
 

6.3.
The Individual shall, to the extent he has not already done so, disclose all of
the Individual’s Background IPR to the Company and deliver all Documentation to
the Company.

 
6.4.
If, following the Commencement Date, the Individual undertakes any research and
development work based on or relating to the Individual’s Background IPR and IPR
is created or arises as a result of such research and development work ("New
Individual

 
6.5.
IPR") then from the date of its creation, such New Individual IPR shall form
part of Individual’s Background IPR and shall be the Company’s exclusive
property pursuant to Clause 6.1. The Individual shall disclose all such New
Individual IPR to the Company promptly after its creation or arising.

 
6.6.
The Individual shall, at the request and expense of the Company, promptly
execute any further document and perform any further action which may be
reasonably required by the Company to provide the full benefit of this Clause 6
to the Company and to give full effect to the intention of the Parties to this
Agreement.

 
7.
Intellectual Property Rights
 

7.1.
Subject to Clause 7.4, the Parties hereby acknowledge and agree that any and all
Foreground IPR arising or created out of the Project shall be the exclusive
property of the Company, and the Individual hereby agrees that he shall not
acquire any right to any Foreground IPR.

 
7.2.
The Parties hereby acknowledge and agree that the Company shall be solely
responsible for all decisions relating to the preparation, filing, and
maintenance of any Patent comprised with the Individual’s Background IPR and/or
the Foreground IPR.

 
7.3.
The Company shall procure that any Patent comprised within the Individual's
Background IPR and/or the Foreground IPR shall be filed in the joint names of
the Company and the Individual, and that the Individual shall be named as
inventor in any such Patent.

 
7.4.
The Individual hereby assigns to the Company exclusive, perpetual, irrevocable,
transferable, royalty free, worldwide ownership of the Individual’s rights in,
to, and under any Patent.

 
7.5.
All costs, fees and expenses relating to the prosecution and maintenance of any
Patent application (or application for other intellectual property) shall be
borne by the Company.

 
 
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8.
Infringement

 
8.1.
Each party shall promptly and fully notify the other of:

 
8.1.1.
any actual, threatened or suspected infringement which comes to its notice of
any of the Individual’s Background IPR or of any Foreground IPR or of any of the
Company’s Patents irrespective of when such infringement occurred; and

 
8.1.2.
any proceedings threatened or commenced against it in which the validity of any
Individual’s Background IPR or of any Foreground IPR or any of the Company’s
Patents is challenged irrespective of when such challenge arose.

 
8.2.
As soon as practicable after any such notification has been given pursuant to
Clause 8.1, the Company shall notify the Individual whether or not it has
decided that the proceedings shall be defended in the circumstances referred to
in Clause 8.1.2 limited to any of the Individual’s Background IPR.

 
8.3.
In the event that the Company notifies the Individual that it has decided not to
defend any proceedings pursuant to Clause 8.2., the Individual shall be entitled
to take such action as it sees fit subject to informing the Company of its
proposed action and advising the Company of the outcome.

 
8.4.
Any action taken pursuant to Clause 8.2 will be at the Company's sole expense
and any action taken pursuant to Clause 8.3 will be at the Individual’s sole
expense.

 
8.5.
As exclusive owner the Company shall be free to take such actions as
contemplated by Clause 8.2 above (and irrespective of when the challenge
occurred) in its own name provided that it consults reasonably with the
Individual in this regard prior to such action being taken.

 
8.6.
Where the Company takes action as provided for in 8.2 above, any award, damages
or settlement monies awarded shall accrue to the benefit of the Company,
provided that any reasonable and properly validated costs incurred by the
Individual in a court action shall be fully reimbursed by the Company.

 
8.7.
If for any reason (other than lack of funds) the Company cannot take such action
as is contemplated by Clause 8.2 above but does wish to defend or commence
proceedings or if the Company, as  exclusive owner, is  unable to  pursue  any
proceedings unless the Individual is joined as a pursuer or defender, the
Company  can require the Individual to take such action in the Individual’s own
name, subject to the following:

 
8.7.1.
the costs reasonably and necessarily incurred by the Individual shall  be met by
the Company as they fall due (and the Individual shall keep the Company fully
advised of the extent and nature of all such costs as soon as the Individual
becomes aware of the same);and

 
8.7.2.
any award, damages or settlement monies awarded to the Individual shall accrue
to the benefit of the Company and, if received by the Individual, shall be held
by the Individual as agent for the Company. For the avoidance of doubt, if the
Individual takes such action pursuant to Clause 8.3., any award, damages, or
settlement monies awarded to the Individual as a result of such action shall
accrue to the benefit of the Individual.

 
8.8.
The Individual shall do all such things and execute all such documents as may
reasonably be required of it by the Company for the purpose of assisting the
Company in bringing or defending any proceedings as contemplated by Clause 8.2,
and the Company shall bear the cost of the provision of such assistance.

 
8.9.
For the avoidance of doubt, in no circumstances can the Individual agree to the
settlement of any such action as contemplated by Clause 8.2 above, without the
prior written consent of the Company.

 
 
8

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9.
Exploitation

 
9.1.
The Parties hereby acknowledge and agree that the Company shall be solely
responsible for all decisions relating to the Exploitation of the Individual's
Background IPR, the Foreground IPR and/or any Patent.

 
9.2.
In the event that the Individual's Background IPR, the Foreground IPR and/or any
Patent is exploited by way of the Company establishing a Spin-out Company:

 
 
9.2.1.
the Company shall procure that the Spin-out Company is granted a licence or
sub-licence of the Individual’s Background IPR, the Foreground IPR and
any  Patent on such terms as may be negotiated with the Spin-out Company;

 
 
9.2.2.
if required by the Spin-out Company or its prospective investors, the Company
shall assign the Individual’s Background IPR to the Spin-out Company;

 
10.
Warranties and Representations

 
10.1.
The Individual represents and warrants to the Company that:

 
10.1.1.
to the best of his knowledge and belief, the Individual is the true and sole
owner of the Individual’s Background IPR and there are and will be no liens,
charges, encumbrances or restrictions which affect the Company’s ability to
acquire the Individual’s Background IPR in accordance with this Agreement;

 
10.1.2.
the Individual has not assigned property or granted any licence of the
Individual’s Background IPR to any other person, company or undertaking;

 
10.1.3.
the Individual is not aware that any third party owns or claims that it owns any
rights which would be infringed by the acquisition of the Individual’s
Background IPR by the Company in accordance with the provisions of this
Agreement;

 
10.1.4.
to the best of the Individual’s knowledge and belief, no third party has
infringed or threatened to infringe or is infringing or threatening to infringe
the Individual’s Background IPR; and

 
10.1.5.
the Individual has full power and authority to enter into and perform his
obligations under this Agreement without being in breach of any obligation or
undertaking to any third party.

 
10.2.
The Company represents and warrants to the Individual that:

 
10.2.1.
the Company is a corporation duly organized, validly existing, and in good
standing under the laws of Scotland, with full corporate power, authority and
capacity to conduct its business as presently conducted, to own or use the
properties and assets that it purports to own or use, and to perform all its
obligations under any applicable contracts;

 
10.2.2.
the Company has all requisite corporate power and authority to execute and
deliver the Agreement to be signed by the Company and to perform its obligations
hereunder and to consummate the Acquisition.  The execution and delivery of the
Agreement by the Company and the consummation of the Acquisition have been duly
authorized by the board of directors of the Company.  Other than as set out in
this Agreement, no other corporate or shareholder proceedings on the part of the
Company are necessary to authorize the Agreement or to consummate the
Acquisition.  This Agreement has been, and the Consideration when issued and
delivered by the Company as contemplated by this Agreement will be, duly
executed and delivered by the Company and this Agreement is a valid and binding
obligation of the Company enforceable in accordance with its respective terms;
and

 
10.2.3.
the Consideration Shares to be issued to the Individual pursuant to this
Agreement will, upon issuance, have been duly and validly authorized and, the
Consideration Shares when so issued in accordance with the terms of this
Agreement, will be duly and validly issued, fully paid and non-assessable shares
in the capital of China Northern Medical Device Inc.

 
 
9

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11.
Indemnities and Limitation of Liability

 
11.1.
The Company shall indemnify the Individual on demand in respect of all loss,
damages, costs, claims, demands and expenses (including all legal and other
professional fees and expenses on a full indemnity basis but always excluding
all indirect losses) suffered or incurred by the Individual as a result of any
breach by the Company of this Agreement or as a result of any negligent act or
omission of the Company in connection with this Agreement.

 
11.2.
The Individual shall indemnify the Company on demand in respect of all loss,
damages, costs, claims, demands and expenses (including all legal and other
professional fees and expenses on a full indemnity basis but always excluding
all indirect losses) suffered or incurred by the Company or any Group Company as
a result of any breach by the Individual of this Agreement or as a result of any
negligent act or omission of the Individual in connection with this Agreement.

 
11.3.
Subject to Clause 11.4, the aggregate liability of each Party to the other,
whether in contract, delict (including negligence or breach of statutory duty)
or otherwise arising in connection with this Agreement shall not exceed five (5)
years.

 
11.4.
Nothing in Clause 11.3 shall exclude or limit the liability of a Party for death
or personal injury caused by that Party's negligence, nor for any matter, in
respect of which it would be illegal for that Party to exclude or limit, or
attempt to exclude or limit, its liability.

 
12.
Confidentiality

 
12.1.
The Parties agree and undertake that during the term of this Agreement and
thereafter they will keep confidential and will not use for their own purposes
except for the performance of this Agreement nor, without the prior written
consent of the Party who discloses the relevant Confidential Information,
disclose to any third party any Confidential Information provided to them,
unless:

 
12.1.1.
the receiving Party can show such information is public knowledge or already
known to the receiving Party at the time of disclosure, or subsequently becomes
public knowledge other than by breach of this Agreement; or

 
12.1.2.
the receiving Party can show that such information subsequently comes lawfully
into the possession of the receiving Party from a third party without an
obligation of confidentiality; or

 
12.1.3.
Clause 12.3 applies to such information, to the extent only as permitted by
these Clauses.

 
12.2.
Any Confidential Information disclosed by any Party to any other Party prior to
the execution of this Agreement and/or the Commencement Date shall be considered
as having been disclosed under this Agreement.

 
12.3.
Any party may disclose Confidential Information to the extent it is required to
do so by a statutory, legal, regulatory or parliamentary obligation placed upon
the Party making the disclosure (including in the case of the Company, its
obligations to Audit Scotland and any successor body to Audit Scotland),
provided, to the extent practicable, that the Party obliged to make the
disclosure will provide the Party to whom the Confidential Information belongs
with a reasonable opportunity to make representations to the body compelling
such disclosure as to the nature and extent of

 
12.4.
the disclosure required and the procedures for maintaining confidentiality of
the Confidential Information to be disclosed.

 
 
10

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13.
Statements
 

The Individual, will not at any time whether during the term of this Agreement
or at any time thereafter make any public statement in relation to the Company
or its businesses,  affairs, customers or clients or officers and employees
except when both the making of and terms of any such statement have been
approved by the Company.
 
14.
Protection of Business Interests
 

14.1.
Since the Individual is likely, in the course of the Project, to have access to
Confidential Information and dealings with the customers, clients and suppliers
and other contacts of the Company or any Group Company, he hereby agrees, in
order to safeguard such Confidential Information and the good will of the
Company and any such Group Company that, in the event of the termination of this
Agreement he shall not for a period of five (5) years (except where expressly
stated otherwise in this Clause 14.1) from the date of such termination:

 
14.1.1.
in competition with the Company, entice or solicit, or endeavour to entice or
solicit, away from the Company or any  Group Company, the custom or business of
any person, company or other undertaking, who or which is or has been a customer
or client of the Company or such Group Company, and with whom or which the
Individual has regularly dealt at any time during the five (5) years immediately
prior to the date of such termination in the course of the Project or by reason
of services rendered to or offices held by him in or his employment by the
Company or any Group Company; or
 

14.1.2.
in competition with the Company, accept any business from any person, company,
or other undertaking, who or which is or has been a customer or client of the
Company or any Group Company and with whom or which the Individual has regularly
dealt at any time during the five (5) years immediately prior to the date of
such termination in the course of the Project or by reason of services rendered
to or offices held by him in or his employment by the Company or any such Group
Company, provided that this restriction shall not prohibit the Individual from
having business dealings with or accepting business from any such person,
company or other undertaking in respect of any business which is not in
competition with the Company or any such Group Company as at the date of such
termination and in which the Individual was concerned to a material extent
during the five (5) years immediately prior to the date of such termination; or
 

14.1.3.
without the prior written consent of the Company, be engaged, interested or
concerned in any business carried on, or about to be carried on, by any person,
company or other undertaking which is in competition with any business carried
on by the Company or any Group Company as at the date of such termination in any
territory in which such business was carried on, provided that this restriction
shall not prohibit (i) the Individual from being engaged, interested or
concerned in any such business, company or other undertaking so

 
14.1.4.
far as his/her involvement therein or duties in connection therewith shall
relate exclusively to work of a kind or nature with which the Individual was not
concerned to a material extent during the five (5) years immediately prior to
the date of such termination; or (ii) the Individual from being beneficially
interested in any class of securities in any company, if such class of
securities is listed or dealt in a recognized stock exchange where the
Individual (together with his spouse and children) neither holds nor is
interested in more than five percent (5%) of any single class of securities in
that company; or
 

14.1.5.
entice or solicit, or endeavour to entice or solicit, away from the employment
of the Company or any Group Company any person who was senior employer or
consultant at anytime in the five (5) year period prior to the date of the
termination of the Agreement and with whom the Individual regularly dealt or had
contact in the course of the Project or by reason of services rendered to or
offices held by him in or his employment by the Company or any such Group
Company; or
 

14.1.6.
employ or engaged any person who was a senior employee of or consultant to the
Company or any Group Company or any employee or consultant who has Confidential
Information about a customer or client (as defined in Clause 5.1) of the Company
or any Group Company for a period of five (5) years from the date on which this
Agreement terminates; or
 

14.1.7.
at any time after the date of termination of this Agreement carry on business or
trade under a name which is identical or similar to any name used by the Company
or any Group Company; or
 

14.1.8.
at any time after the termination of the Agreement do or say anything which
might reasonably be expected to be harmful to the reputation of the Company or
any Group Company or which may lead any person to cease to do business with the
Company or any Group Company on substantially the same terms to those previously
offered or at all.

 
 
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The restrictions set out in this Clause 14.1 shall apply to any action taken by
the Individual in any capacity (whether as principal, agent, representative,
partner, director, party to a joint venture, consultant or otherwise).
 
14.2.
On the termination of this Agreement (how so ever caused), the Individual shall
not, at any time thereafter, represent himself still to be connected with the
Company or any Group Company, except with the prior consent, or at the request,
of the Company or to the extent that he shall be so connected as a result of
being a shareholder or director of the Company or any Group Company.

 
14.3.
The Individual acknowledges and agrees that each of sub-paragraphs 14.1.1 to
14.1.7 (inclusive) of Clause 14.1 constitutes an entirely separate and
independent restriction on him and that the duration, extent and application of
each of such restrictions are no greater than is necessary for the protection of
the legitimate interests of the Company and any Group Company for which he is
required to perform duties.

 
14.4.
While the restrictions set out in sub-paragraphs 14.1.1 to 14.1.7 (inclusive) of
Clause 14.1 are considered by the Parties to be reasonable in all the
circumstances, it is acknowledged that restrictions of such a nature may fail or
become invalid for

 
14.5.
technical reasons unforeseen or because of changing circumstances and,
accordingly, the Parties agree that, if any of such restrictions shall adjudged
to be void or ineffective as going beyond what is reasonable in all the
circumstances for the protection of the interests of the Company or for any
other reason but would be valid and effective if part of the wording thereof was
deleted and/or any period or are a referred to therein reduced in time or scope,
such restrictions shall apply with such deletions or modifications as may be
necessary to make them valid and effective.

 
15.
Termination

 
15.1.
This Agreement may be terminated by written notice with immediate effect in any
of the following events:

 
15.1.1.
by the Individual in the event of the liquidation (except for the purposes of a
solvent reconstruction or amalgamation) or receivership of the Company or the
appointment of an administrator of the Company or its ceasing or threatening to
cease trading; or

 
15.1.2.
by the Individual or the Company in the event of the material breach by the
other(s) of any of its or their obligations hereunder which is irremediable or
if it can be remedied, remains without remedy on the expiry of thirty (30) days
after receipt by the Party in breach of written notice from the Party serving
notice specifying the breach and the action required to remedy same; or

 
15.1.3.
by the Company if the Individual is in breach of any of the warranties set out
in Clause 11; or

 
15.1.4.
by the Company if it decides at any point to terminate the Project for any
reason.

 
15.2.
Termination of this Agreement shall not affect any rights or obligations of the
Parties in respect of the period up to the date of termination nor shall it
affect any rights or obligations of the Parties which, due to the nature
thereof, are due to be performed or observed following such termination,
including but not limited to Clauses 4.2, 4.3, 6.1, 6.2, 6.4, 6.5, 7, 8.8, 8.9,
9.1, 10, 11, 12, 13, 15, 16 and 24.

 
 
12

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16.
Consequences of Termination

 
In the event of termination of this Agreement by the Individual under Clause
15.1.1 or by the Company under Clause 15.1.4, the Company shall in good faith
negotiate with the Individual a renunciation of the ownership of IPR assigned to
the Company under this Agreement and an assignation of the Company’s interest in
the Foreground IPR and any Patent(s).
 
17.
Entire Agreement
 

This Agreement constitutes the entire agreement and understanding between the
Parties with respect to the subject matter hereof and cancels, terminates and
supersedes any prior agreement or understanding entered into between the
Parties, provided that nothing in this Clause 17 shall have effect to exclude
liability of any Party for fraud or fraudulent misrepresentation.
 
18.
Variation

 
None of the provisions of this Agreement may be varied, waived, extended or
modified except expressly in writing and signed by both Parties.
 
19.
Waiver
 

Any omission by either Party to exercise any right or remedy available to that
Party under the terms of this Agreement shall not be taken to signify acceptance
of the event giving rise to the right to exercise such right or remedy and shall
be without prejudice to the future exercise of any such right or remedy and/or
to the rights or remedies of either Party which may arise in the future.
 
20.
Severability
 

If any provision of this Agreement is declared to be void or unenforceable by
any judicial or administrative authority in any jurisdiction in which this
Agreement is effective, such provision will be deemed to be severable and the
validity and force of the remainder of the provisions of this Agreement shall
not be affected thereby.  The Parties shall each use their reasonable endeavours
in good faith to modify this Agreement so that the intent of the void and/or
unenforceable provision of this Agreement can be carried out legally.
 
Any void or unenforceable provision shall be construed as per the Governing law
defined hereinafter.
 
21.
Assignation

 
21.1.
Subject to Clauses 6.1, 7.3, and 21.2, neither Party shall be entitled to assign
the benefit or burden of this Agreement without the prior written consent of the
other (such consent not to be unreasonably withheld or delayed).

 
21.2.
The Company shall be entitled to assign or transfer any of its rights or
obligations under this Agreement to any Spin-out Company or Group Company.

 
22.
Force Majeure
 

Neither of the Parties shall be liable to the other nor be held to be in breach
of this Agreement to the extent that they are prevented, hindered or delayed in
the performance or observance of their obligations hereunder by any cause or
contingency whatsoever beyond their reasonable control.
 
13

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23.
Notices
 

Any notices required to be given pursuant to this Agreement shall be in writing
and shall be hand delivered or sent by certified e-mail (return receipt
requested) and by confirming letter sent by first class registered mail (or its
equivalent) posted within twenty four (24) hours of the said e-mail to the
address (and e-mail address) and for the attention of the relevant Party, as set
out below (or otherwise notified). Any such notice shall be deemed to have been
received twenty-four (24) hours after the time of dispatch to the e-mail in
question.

The Company:
For the attention of: Sotirios Leontaritis
Centrum Offices, 38 Queen Street,
Glasgow, G1 3DX, Scotland UK
 
E-mail: leosot@viocare.eu

 
The Individual:
 
For the attention of: Christos Kapatos
66 Stewarton Drive, Cambuslang,
Glasgow G72 8DG, Scotland UK
 
E-mail: c.kapatos@healthcare-innovations.com
 

 
24.
Governing Law

 
This Agreement shall be governed by, and is to be construed in accordance with,
the law of Scotland, and the Scottish Courts will have exclusive jurisdiction to
deal with any dispute which has arisen or may arise out of or in connection with
this Agreement.
 
IN WITNESS whereof the Parties have caused this Agreement to be signed as
follows:
 
HCi VIOCARE TECHNOLOGIES LIMITED
 
By:/s/ Nikolaos
Kardaras                                                                                             
/s/ Christos Kapatos
 
Name: Nikolaos
Kardaras                                                                                                CHRISTOS
KAPATOS
 
Title:    Attorney-in-Fact
 
14

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SCHEDULE
 
PART 1
 
Details of the Project
 
The number of amputees world-wide is estimated to be 20 million, and for most
amputees finding a well fitted prosthesis is far from easy. Traditional methods
of design, manufacture and fitting of a prosthetic socket are typically carried
out by “artisan” techniques but unfortunately often result in ill-fitting
devices that make wearing a prosthesis almost intolerable for a large number of
amputees.
 
A prosthetic socket is a custom-made “cone” that connects the rest of the
prosthesis (foot, shank and knee) to an amputee’s residual limb. Sockets
generally need to be replaced once or twice a year.  While many significant
technological advances have been made with the design and manufacture of
prosthetic components, such as electronic knee assemblies and feet, socket
design has not kept up. Over the past 20 years a great deal of research has been
undertaken to automate the process of socket design and manufacturing, but it
has met with limited success. Most sockets continue to be created with
hand-sculpted plaster moulds made by the Prosthetist or a technician hours or
days after examining the amputee. The result is that, typically, one in four
sockets are discarded because of their poor fit.
 
Many prosthetists, (if not all), are frustrated by the lack of an objective
method that would ensure an optimum fit of the socket. This ‘need’ for
assistance instigated the advent of industrial sector technologies to be taken
up in the field, even though these systems, in reality, lack the necessary
‘ingredient’ to allow the optimum socket to be produced. They merely attempt to
replicate current practices in a digital manner (CAD-CAM systems), without
taking into account the biomechanical or anatomical characteristics of the
residual limb.
 
The key element of the project is work done by Dr. Christos Kapatos to improve
the nature of the data used in socket modeling software. Finite element analysis
has been used widely in a variety of applications, including prosthetics. But
its prosthetics applications have suffered from the fact that only external
boundary data and limited information on the nature of the internal tissue was
provided. The results were not promising. By including far more data on the
nature of the internal anatomy as well as, for the first time ever (to our
knowledge) data on the bio-mechanical properties of the tissue to the FEA, a
system can be created that enables prosthetists to build a socket that evenly
distributes weight, provides enhanced comfort, and raises the bar across the
industry on socket creation.
 
SocketFit is a digital system for assessing an amputee’s residual limb and for
the production of truly functional and comfortable prosthetic sockets. It takes
account of the external and internal geometry of the amputee’s stump, the
biomechanical properties of the each individual soft tissue layer i.e. skin,
fat, muscle and bone, and the boundary and loading conditions of a complete
prosthesis to generate a virtual 3D model of the residual limb. It is then
possible to produce an accurate, functional and comfortable prosthetic socket.
 
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PART 2
 
Individual’s Background IPR
 
Existing techniques of socket production can neither provide information
relating to the internal geometry of the residual limb nor offer information on
the biomechanical properties of living tissue. The introduction of a system that
is capable of providing the Prosthetist with on-line information concerning a
detailed mapping of the residual limb and the pressure distribution at the
stump/socket interface, as well as the maximum stresses in the tissue, is an
innovation in this field and offers the following key advantages over existing
techniques:
 
 
·
Provides optimally fitted prosthesis.

 
 
·
Provides the Prosthetist with on-line information concerning the detailed
mapping of the residual limb (external and internal geometry and structure).

 
 
·
Real diagnosis of residual limb problems.

 
 
·
Accelerates the rehabilitation of the patient.

 
 
·
Improves the quality of prosthetic socket design.

 
 
·
Reduces costs by reducing the number of visits to the Prosthetist by the
patient.

 
 
·
Reduces costs by reducing materials and time wastage due to poor fitted
prostheses.

 
 
·
Improves the physical and mental well-being of the patients and therefore
increase the usage of their prosthesis as they will be more satisfied and feel
more comfortable wearing them.

 
 
·
The system requires minimum training and familiarisation by the Prosthetists.

 
 
·
Compact, mobile, and cost-effective.

 
Dr Christos Kapatos has carried out extensive research in designing a new system
to aid the creation of sockets for prosthetic limbs. This research differed from
other research as it aimed to acquire and utilise not only the external shape of
a residual limb but also:
 
 
·
The internal anatomy of the limb.

 
 
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·
Bio-mechanical properties of each individual tissue layer of the residual limb.

 
 
·
Known boundary conditions (i.e. socket template information and the effects of
internal and external forces on the residual limb).

 
SocketFit is a digital system for assessing an amputee’s residual limb and for
the production of truly functional and comfortable prosthetic sockets. It takes
account of the external and internal geometry of the amputee’s stump, the
biomechanical properties of the each individual soft tissue layer i.e. skin,
fat, muscle and bone, and the boundary and loading conditions of a complete
prosthesis to generate a virtual 3D model of the residual limb. It is then
possible to produce an accurate, functional and comfortable prosthetic socket.
By minimising the time and cost of socket production and by reducing the number
of faulty sockets (it has been reported that a quarter of all prostheses are
currently rejected due to poor fit), there will be a reduction in costs incurred
by health services and insurance companies worldwide as well as great benefits
to the amputee.
 
Socket-Fit consists out of three modules:
 
 
1.
The Ring -  a device to scan the residual limb and export data

 
 
2.
Data Tools – software to analyse and collate the data into intelligible
information.

 
 
3.
Socket Modelling – FEA simulation procedures that combine scanned information
with known boundary conditions to create a model of a socket for the specific
amputee.

 
The system consists of a “ring” attached on a vertical axis, capable of moving
vertically along this axis as well as spinning, with the use of a stepper motor
and a liner stepper slider. The “ring” is equipped with ultrasound transducers
and load transducers as well as with rotary position sensors. An ultrasound
transducer and a load transducer are placed on top of each other at the tip of a
protruding (spring-supported) arm at the internal side of the ring. A rotary
position sensor is also attached on the base of the arm. Two such arms are
present on the device.
 
The external geometry of the medium under examination, is acquired by the
position data from the stepper instruments and the use of the rotary position
sensors; as the ring moves vertically, spinning at the same time, the
spring-supported arms comes in contact with the entire residual limb, mapping
every detail and transmitting it to a PC.
 
The internal geometry is acquired with the use of the on-board ultrasound
transducers. Information on the mechanical properties of the tissues are also
been captured.
 
All the data are telemeter to the control box for onward transmission to the PC.
Software generates a 3D image of the stump’s external and internal geometry. FEA
and optimisation software generate the optimum design for the socket in order to
obtain the best pressure distribution, and therefore the most comfortable
prosthesis for the amputee. (Figures 1 and 2).
 
Figure 1, Basic elements of the SocketFit System.
 
[a.jpg]
 
 
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Figure 2, Schematic diagram of the system.
 

Schematic Diagram of the System [b2.jpg]
 
The software
 
Automation software that controls the hardware, and collects and pre-processes
the data.
 
The automation software calibrates all the sensors and initialises them,
controls the motion of both the stepper motor and the slider and acquires the
scanning data. These are then saved in a series of ASCI format files and are
passed to the appropriate analysis software.
 
The 1D ultrasonic data are processed by dedicated signal analysis software,
which by incorporating a number of advanced analysis methods, such as
deconvolution, spectral analysis and speckle registration, produces 2D
images/maps of the medium under investigation.  It also calculates the
displacement caused to the different tissue layers inside the medium by the load
applied by the contact “arms”.
 
 
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The displacement data supplied by the ultrasonic analysis software, together
with the pressure data collected by the pressure sensor, are fed in a custom
made bio-mechanical properties calculation software. The data, in the form of
stress vs. strain are processed and the bio-mechanical properties of the tissue
layers in the medium under examination calculated.
 
The final step of the analysis is the Finite Elements Analysis software, or FEA.
 
A 3D geometry is generated by the 2D images supplied by the ultrasonic analysis
software and the appropriate bio-mechanical properties are input into the FE
model. The FEA software then generates the shape a prosthetic socket that
applies even pressure at the entire surface of the specific medium, residual
limb, apart of course from specific points that cannot take any pressure.
 
The final data from the FEA analysis will be transferred, by means of email or
uploaded on data cloud to a 3D carver or a 3D printer where the prosthetic
socket, or in the case of a carver the negative mould, will be created. The
amputee will then wear the prosthesis and continue with his/her way of living.
 
1. Control and Acquisition Software
 
The vertical and rotational movement of the Ring is controlled by the control
software. Based upon thorough testing of the device the optimum resolution for
rotational movement was calculated to be 1 degree and for vertical movement 1
mm.
 
The software then acquires and saves the scanning data for later use in the
Ultrasonic Analysis and Bio-mechanical Properties Software.  Data is saved in a
series of ASCI format files and then passed to the appropriate analysis
software. Stored data includes:
 
 
·
pressure data

 
 
·
displacement data

 
 
·
positional data

 
 
·
coordinates data

 
 
·
ultrasound data

 
 
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2. Ultrasonic Analysis Software
 
The Ultrasonic Analysis Software is a set of signal and image processing
algorithms that have been combined to analyse and process the scanned data.
 
The algorithms were initially developed and used very successfully in the
seismic exploration industry.  The algorithms are been adapted and optimised to
work with Ultrasound for the first time.
 
The 1D ultrasonic data derived from the scan is processed by dedicated signal
analysis software, which by incorporating a number of advanced analysis methods,
such as deconvolution, spectral analysis and speckle registration, produces 2D
images/maps of the medium under investigation.
 
Additionally it also calculates the displacement caused to the different tissue
layers inside the medium by the load applied by the contact “arms”.
 
2D Images will only include the following anatomical information:
 
 
·
Bones (including exact positional information)

 
 
·
Fat (note we are only interested in the fat surrounding the muscle and not any
fat in between muscles in the centre of the leg)

 
 
·
Other Materials (all other materials will be grouped together as one, i.e.
different muscle groups, etc.)

 
The displacement data supplied by the ultrasonic analysis software, together
with the pressure data collected by the pressure sensor, are fed to a
custom-made bio-mechanical properties calculation software.
 
3. Volume Rendering
 
This module will take each of the 2D slices and generate a 3D representation of
the limb.   This representation will be fed into the Socket Modeling module.
 
There is still some debate around the best tools to use for this
module.   Options include:
 
 
·
developing a bespoke application

 
 
·
use an existing application

 
 
·
use existing facilities within FEA

 
 
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4. Bio-Mechanical Tools
 
The Bio-Mechanical Tools are a set of algorithms that use Bio-Mechanical data
derived from the scans to generate stress-strain curves for the tissue within
the limb.
 
This software can predict the stress distribution at any point inside the
residual limb, by just knowing the surface pressure applied. The calculated
stress, together with the known strain that is calculated by the ultrasonic
analysis software from tissue displacement data, produce actual stress vs.
strain curves which characterise the tissue layers derived from.
 
This information will also be fed into the Socket Modelling module.
 
Socket Modelling
 
The final step of the analysis is the Finite Elements Analysis software, or FEA.
The FEA module incorporates all the information output from the Data Tools
(external and internal geometry and bio-mechanical properties) against known
Boundary Information to create a model of a customised “uniform pressure” socket
for the amputee.
 
Boundary Information will include:
 
 
1.
Standard Socket Information – template sockets exist which are modified to suit
individuals.

 
 
2.
Information regarding the impact of external and internal forces (e.g. weight of
the amputee).

 
The FEA software then generates the shape a prosthetic socket that applies even
pressure at the entire surface of the specific medium, residual limb, apart of
course from specific points that cannot take any pressure.
 
The final data from the FEA analysis will be transferred, by means of email, CDs
or any other media, to a 3D carver or a 3D printer where the prosthetic socket,
or in the case of a carver the negative mould, will be created. The amputee will
then wear the prosthesis and continue with his/her way of living.

 
 

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