EXHIBIT 10.5

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

LICENCE CONTRACT

BETWEEN

THE EUROPEAN UNION

AND

VULCANOS s.r.l.

[*********************]

The European Union, hereinafter referred to as the “Union”, represented by the
European Commission, hereinafter referred to as “the Commission”, represented
for the purpose of signing this contract by Mr. Vladimir Šucha, Director-General
of the Joint Research Centre (hereinafter referred to as “the JRC”),

on the one part,

Vulcanos s.r.l., having its seat at via Firenze, 40, Trezzano Rosa (Milan),
Italy, registered under the number MI-2072973 at the Entrepreneur Register of
Milan, VAT number 09162250964, hereinafter referred to as the “Licensee”,
represented for the purpose of signing this contract by Mr. Andrea Biffi in his
capacity as sole director, duly authorized to enter into this agreement pursuant
to the by-laws of the company (hereinafter referred to as “VULCANOS” or “the
Licensee”)

on the other part,

both parties hereinafter referred to collectively as “the Parties” or
individually as “a Party”,

WHEREAS

VULCANOS is an Italian company totally held by SOFAR S.p.A. (hereinafter
referred to as “SOFAR”), having its seat at via Firenze, 40, Trezzano Rosa
(Milan), Italy, registered under the number MI-852745 at the Entrepreneur
Register of Milan, VAT number 03428610152.

On 7th January 1998, the Commission adopted a Decision concerning the European
Technology Transfer Initiative whereby it seeks to promote the transfer of Joint
Research Centre technologies to companies/organisations in the Member States, to
provide access of companies to JRC research results and to validate the
expertise and the installations of the JRC.

In this context, the JRC seeks to promote the commercialisation of its
technologies through the creation of new enterprises and via the transfer of
technology to existing companies.

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Pursuant to Commission Decision of 12 September 2001 SEC (2001) 1397 Article 13
the Union has the mandate to exploit technologies resulting from the programmes
and activities under its responsibility, grant licences thereto and promote
technology transfer.

The Commission and SOFAR had already collaborated during the period of 25 months
from the 12 July 2002 to the 12 August 2004 on the basis of the Collaboration
Agreement [**************************], a letter of intent signed on the
12 December 2003, the Collaboration and Option Agreement [*************] from
9 September 2004 as amended by the Amendment N° 1 to the Collaboration and
Option Agreement of 8 September 2006, and SOFAR duly paid all the sums for
services and for the Licence Option fee established by the above-mentioned
Agreements on the basis of the work progress.

SOFAR on one hand provided engineering services, software development, equipment
supply and manufacturing support for the full development and testing of the
tele-medical system designed and patented by the JRC.

On the other hand, the JRC directed the development works and transferred
know-how to SOFAR personnel on the JRC-owned software for robotics motion
control -named GENERIS- and on robotics manipulators design and development.

The Union is the owner of the patents, copyright and any intellectual property
rights on the Product listed in Annex A to this Agreement over which it has the
power of disposal.

SOFAR was owner of the trademark ALF-X, over which the Union has no rights or
powers.

SOFAR had a diversity of competencies in the health care and pharmaceutical
industries and was interested in expanding its area of expertise and market in
the field of medical devices by developing and commercialising tele-medical
robotics systems.

The scientific results obtained through the JRC SOFAR collaboration were highly
innovative with potential applications in other fields.

SOFAR was interested to extend this cooperation with the JRC in order to jointly
carry out application development of the technology established by the JRC in
view to enable SOFAR’s commercial exploitation of the technology owned by the
Union.

On the above basis, the Union and SOFAR entered on the 17.11.2008 into a License
Agreement to manufacture, further develop and extend the functionalities of the
Product in the Field of Use, to distribute it, to use and to offer, sell or
sub-licence in the Territory, to which the Commission agrees in order to ensure
the effective commercialisation of the Technology.

On December 2011, SOFAR obtained the CE Trademark certification.

 

2

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

In March 2014, SOFAR started negotiations with the Union to amend the license
Agreement. After negotiations, SOFAR and the Union agreed to terminate the
previous licence agreement and make the Union and VULCANOS enter into this
license agreement under the following terms and conditions. SOFAR was of the
view that it had exposed heavy costs in the further development of the
technology and the Union was of the view that allowing a new licensee to launch
its activities under new terms and conditions would better favour the societal
impact and reach of the technology.

THE PARTIES HAVE AGREED AS FOLLOWS:

ARTICLE 1 - Definitions

The following terms will have the meaning given hereunder:

 

1.1 Effective date - date of signature of this Agreement by the last Party, save
as provided in Article 23.

 

1.2 Technology - all know-how, data, scientific or technical information related
to methods and apparatus for tele-medical assisted procedures as further
identified in the Patents.

 

1.3 Product - any and all products which make use of the Technology and fall
within the Field of Use. In the context of this Agreement, the Product is
identified as a tele-medical system of robotic manipulator arms displaying the
design and features claimed in the patents listed in Annex A and B. This system
is designed with the know-how of the JRC and runs the JRC software Technology
mentioned in Annex A and B as the software control platform. The aforementioned
system does not comprise specific surgical instruments to be adapted to the
manipulator arms and other accessories not covered by the claims of the patents
listed in Annex A and B. The system may be composed of at least two and up to
five manipulator arms.

 

1.4 Field of Use - medical procedures including minimally invasive robotic
surgery and diagnostic procedures, installed in private and public hospitals,
universities, medical training centres and research organizations.

 

1.5 Know-how - all the technical information, knowledge and expertise which the
Union owns and administers on the Effective date that are transmitted to the
Licensee by any means including technical assistance, namely the confidential
know-how developed in the course of this project including any software code
that is essential to the application of the Technology.

 

1.6 Sub-licence - any licence granted to any third party by the Licensee with
the aim to commercially exploit the Product in the Field of Use and the
Territory.

 

1.7 Net sales - for a given year, the sum of sale invoices issued by VULCANOS
during that year, related to the sales or commercialisation of the identified
Product, net of credit notes. Net sales is further defined in Article 13 in case
of operative leasing or other forms of making available of the Product on the
market.

 

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REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

1.8 Sale price - the price indicated on an sale invoice relating to the sale or
commercialization of the Product issued by VULCANOS, net of any discounts,
rebates, transportation, insurance costs, sales taxes and custom duties. Sale
price is further defined in Article 13 in case of operative leasing or other
forms of making available of the Product on the market.

 

1.9 Territory - the territories, as designated in the patent registrations or
applications; at the moment of signature of this Agreement, this covers a number
of countries in Europe (Austria, Belgium, Switzerland, Cyprus, Germany, Denmark,
Spain, France, United Kingdom, Greece, Ireland, Italy, Holland, Poland,
Portugal, Sweden and Turkey), the USA, Canada, Japan, Mexico, Brazil, Russia,
India, Korea and China.

 

1.10 Intellectual property rights - all industrial and intellectual property
rights as listed in Annex A and B, such as, but not limited to, copyrights,
rights on patents, patent applications, utility models, trademarks (whether
Benelux, Community, international or foreign ones), trade names, designs and
models, in particular:

 

  A) Patents - the patents, patent applications listed in Annex A and B to this
Agreement including the inventions described and claimed therein as well as any
divisional, continuations, continuations-in-part, reissues thereof, improvements
and derivative work patents.

 

  B) Copyright - the copyright on the software listed in Annex A and B to this
Agreement.

 

1.11 Invention - the Technology covered by the Patents.

 

1.12 Developments and Derivative Works - the results deriving from research and
development activities related to the Technology and based on the Technology.

 

1.13 Confidential Information - the confidential information exchanged between
the Commission and the Licensee before or during the execution of this
Agreement.

 

1.14

 
[**********************************************************************************************
***************************************************************************].

 

1.15 Related entity - a legal entity which is linked to another or associated
with another in the sense of Article 11 of the Belgian Company Code or of
equivalent provisions under European law. In this sense, company A will be
related to company B if company B controls company A or vice-versa, if they form
a consortium or if they are controlled by a same legal entity or form part of
the same group of companies.

 

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REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

ARTICLE 2 - Subject of the Agreement

 

2.1 The Union hereby grants the Licensee a personal, exclusive and
non-transferrable licence, limited to the Territory and Field of Use under the
Union’s ownership on the Product, entitling the Licensee to manufacture, further
develop and extend the functionalities of the Product, to distribute it, to use
and to offer, sell or sub-licence in the Territory, subject to Article 5.

 

2.2 This Agreement only applies to the activities described herein. Any new
product, service (not related to the sale of the Product), or new ways of
commercial exploitation related to or originating from the licensed Technology
will be negotiated and subject to a written amendment to the present Agreement.

 

2.3 Notwithstanding Article 2.1, the Parties acknowledge that the Licensee
wishes to commercially exploit the Product in the Field of Use in all countries
worldwide. The commercial exploitation of the Product in the countries outside
the Territory will be under the sole responsibility of the Licensee. If VULCANOS
wishes to commercialise the Product outside the Territory, it shall pay for each
Product sold outside the Territory [*****************] it would pay for Products
sold in the Territory, to compensate for the use of the Intellectual Property
Rights in the Territory.

 

2.4 Subject to Article 2.3, the Union undertakes not to supply any Know-how
and/or technical support related to the Product to third parties, directly or
indirectly, for the purpose of commercializing the Product in the Field of Use
in countries outside the Territory.

ARTICLE 3 - Duration, Renewal and Termination

 

3.1 The Agreement enters into force on the Effective Date and lasts until the
expiration date of the last of all Patents existing on the Effective Date in the
Territory, except (1) if it is terminated earlier by mutual consent of the
Parties on the basis of Article 3.2. or for breach on the basis of Article 3.3.
or (2) if it is extended after the expiry of the Patents because VULCANOS still
wishes to make use of the Software and/or of the Know-How, in conformity in such
case with the procedure of Article 3.6.

 

3.2 This Agreement may be terminated at any time by written mutual agreement
between the Parties.

 

3.3 In the event of non-performance by the Licensee of any of his obligations
arising out of this Agreement and without prejudice to the consequences provided
under the law applicable to this Agreement, the Commission may automatically
terminate the Agreement without any legal formality, upon notice by registered
letter to the Licensee at the address mentioned in Article 19, requiring
performance or remedial within thirty days. The consequences of such termination
shall be governed by the law specified in Article 18.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

3.4 In the event of termination of this Agreement either by mutual consent or
for breach by the Licensee, without prejudice to any other measures provided for
in the Agreement, the Licensee shall:

 

  a) discontinue the use of the Invention or any other activity covered under
Article 2;

 

  b) waive any claim for consequential damages, including any loss of
anticipated profits;

 

  c) take all appropriate measures to minimize costs, prevent damage, and cancel
his commitments; and

 

  d) only in case of termination by mutual consent, not be obliged to pay the
Commission any royalties or sums provided for in Article 13 of this Agreement
from the date of termination of the Agreement. Remuneration due at the date of
termination of this Agreement but not yet paid shall in any case remain payable.

 

3.5 Termination of this Agreement shall cause termination of any sub-licence
granted under Article 5 prior to the termination date, except if agreed
otherwise.

 

3.6 In the event of expiry of this Agreement due to the expiration of the
Patents, the Licensee will be entitled to continue the manufacture and
commercialization of the Product in the Field of Use, as any other third party
may do with patents which enter the public domain. If VULCANOS still wishes to
make use of the Software and/or of the Know-How, VULCANOS shall inform the Union
in advance and the Parties will negotiate in good faith the terms of a new
licence covering the Software and the Know-How. If no such licence is signed,
VULCANOS shall cease using the Software and the Know-How.

ARTICLE 4 - Maintaining the Patents in force

 

4.1 The Union is entitled to request the Licensee to provide advice and
cooperation in any prosecution, filing, and maintenance of the Patents.

 

4.2 During the term of this Agreement, the Union shall communicate to the
Licensee all Developments relating to the Patents or to the Products, which
shall automatically be included as part of the Product at
[**************************************** ****************].

 

4.3 The Union shall not be obliged to maintain the Patents in force. If the
Union decides not to maintain the Patents in force or to discontinue the
registration in any given country, it shall inform the Licensee in writing at
least three (3) months before the due date required for the formalities
necessary to maintain the Patents in force, and the Licensee shall be entitled
to take over the Patents on reasonable terms to be negotiated.

 

6

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

ARTICLE 5 - Sub-licensing

 

5.1 Subject to the provisions in Article 2, the Licensee is entitled to grant
sub-licences to a third party and in such cases will notify the Union
accordingly, at least two (2) months in advance of its signature. The
non-respect of the above obligation may lead to an immediate termination of the
Agreement. In any event, the Licensee shall remain responsible for all acts and
omissions of such third parties or sub-licensees as though they were by the
Licensee. Sub-license agreements shall not contain any clauses which are
contrary to this Agreement. The Union shall receive copies of sublicense
agreements concluded by the Licensee within one (1) month of their signature.

 

5.2 Any sale or commercialisation of the Product by a sublicensee is considered,
in terms of payment of royalties to the Union, in the same way as a sale or
commercialisation directly by VULCANOS, as further provided in Article 13.

ARTICLE 6 - Licensee’s obligations

 

6.1 The Licensee shall:

 

  a) within three (3) months of signature of this Agreement,
[********************************************
******************************************************************************************
****************];

 

  b) [************************************************] by doing no less than
all best efforts, pro-actively market and promote the Products in the Territory;
it is understood by the Licensee that it is, for the Union, of major importance
that the Licensee makes all necessary efforts to ensure that, as soon as
possible, the Product is put on the market in the European Union and is actually
installed and available to a good number of hospitals and patients in the
European Union;

 

  c) make its best efforts to obtain FDA approval in the shortest possible time
and notify the Union accordingly;

 

  d) manufacture, distribute, use and offer for sale, sell or sub-licence in the
Territory the Product, under the conditions mentioned in Articles 2 and 5;

 

  e) pay the minimum amounts of royalties as provided in Article 13. It is
understood that paying such minimum amounts of royalties does not discharge the
Licensee from its obligation to, in addition to paying the minimum amounts of
royalties, pro-actively market and promote the Products and it does not allow
the Licensee to decide to “freeze” the Technology and/or concentrate its efforts
only on a competing technology;

 

  f) acquire appropriate use rights to the software elements being subject to
open source or proprietary licenses and any corresponding rights as set forth in
the Copyright definition under Article 1.10.B.

 

7

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

6.2 The Know-how and all Information supplied to the Licensee by the Union shall
remain the property of the Union. The Licensee shall undertake to respect its
confidential nature and to ensure that his staff and third parties, including
distributors, sub-licensees and sub-contractors, who may be concerned in the
manufacture and commercialisation of the Product, do likewise. The obligations
of confidentiality will cease to apply if and when the Know-how and Information
become publicly known through no fault of the Licensee.

 

6.3 Licensee shall refer clearly that the Product is DEVELOPED UNDER A LICENCE
OF THE EUROPEAN COMMISSION JOINT RESEARCH CENTRE on any promotional material
including its website.

ARTICLE 7 - Technical support

 

7.1 The Union is under no obligation to provide the Licensee with any additional
service or technical support regarding the know-how, training, co-development of
the software, advice and all technical documents in its possession.

ARTICLE 8 - Liability

 

8.1 The Union makes no representation as to the patentability and or breadth of
the Patents. Furthermore, the Union makes no representation as to patents now
held or which other parties in the Field of Use or outside the Field of Use will
hold for a particular purpose. The Union also makes no express or implied
warranties of merchantability or fitness for a particular purpose of the
Product. The Union declares that it has no knowledge of any deficiencies
impairing the validity of the Patents or of any technical defects in the
Invention protected by these Patents. The Union assumes no liability in respect
to any infringement of any patent or other right of third parties due to the
Licensee’s activities under this Agreement.

 

8.2 The Union disclaims all warranties, expressed or implied, relating to the
Patents, the Product or the use thereof by the Licensee or by third parties,
except for damages caused by its willful conduct or gross negligence. The Union
will not be liable for any loss of use, interruption of business or
consequential damages of any kind, including but not limited to loss of profits,
loss of contracts, goodwill or anticipated savings, even if the Union has been
advised, knew or should have known of the possibility of such damages.

 

8.3 If the extent of protection of the Patents should be limited by a legal or
administrative decision in such a way that third parties can freely manufacture
and sell/exploit the Product without infringing the Patents, or if one or more
of the Patents are revoked following an action brought by a third party, or if
the Licensee, following a decision by the Union not to bring an action for
infringement as provided for in this agreement, can prove a substantial decrease
in turnover of the Product, the Licensee shall be entitled either:

 

  a) to reduce accordingly the remuneration to the extent agreed with the Union,
in order to avoid any distortion of the market for Product, or

 

8

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REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

  b) to terminate this Agreement as of a date to be agreed jointly.

In neither of the aforementioned cases shall any remuneration already paid be
refunded. Remuneration due but not yet paid shall remain payable.

ARTICLE 9 - Infringements by third parties

The Parties shall inform each other of any infringement of the Intellectual
property rights coming to their knowledge and support the other Party in any
action, which said Party brings against a third party for such infringement. The
Union shall have the possibility to decide whether or not to bring an action for
infringement against the infringer. In the event the Union decides not to bring
an action for infringement against the infringer, it will, within one (1) month
of becoming aware of the infringement, notify the Licensee, who will be entitled
to do so directly.

ARTICLE 10 - Action for infringement brought by third parties

If actions for infringement are brought against the Licensee as a result of the
manufacture of the Product, the costs incurred for its defence and payment of
damages shall be borne by the Licensee. If an action for infringement is brought
against the Licensee, he shall notify the Union and enable it to intervene in
the action. The Union may undertake to provide the Licensee with any assistance
considered to be appropriate for its defence. If the Licensee should be found
guilty or constrained to acquire a licence to exploit the infringed Invention,
the Parties shall consult each other in order to determine whether the terms of
this Agreement should be revised or the Agreement be terminated.

ARTICLE 11 - Developments and Derivative Works

 

11.1 The Licensee shall inform the Commission in writing of all Developments and
Derivative Works made to the Product, at least once a year.

 

11.2 The Union shall be released from all liability arising from failure to
comply with legal or statutory obligations in respect of marking of the Product.

 

11.3 Developments made shall be owned by the Party that developed them but will
only be exploited while duly respecting all pre-existing Intellectual property
rights of the Party which developed the pre-existing Technology.

 

11.4 If further Developments to the Product made and owned by the Commission are
patentable by the Commission, the Licensee shall be free to accept or refuse an
exclusive licence on those patents within three (3) months from their filing.
This right of use shall cover work, orders or research undertaken by third
parties for the Union’s account. In the latter scenario, the possibility of
licence remains open to further economic operators.

 

11.5 Any other Developments outside the scope of this Agreement but linked to
the Invention made by the Union will not automatically be transferred to the
Licensee. Should the Licensee be interested in acquiring the Development made by
the Union, a specific contract will have to be negotiated independently of this
Agreement.

 

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REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

ARTICLE 12 - Designation of Personnel

 

12.1 Each Party designates for its performance the personnel necessary for the
proper execution of the tasks devolving upon it. In the event of the personnel
being designated by name in this Agreement, each Party shall have the right,
with the prior approval of the other Party to replace them by others possessing
equivalent qualifications.

ARTICLE 13 - Royalties

 

13.1 In consideration for the granting of the licence, the Licensee shall pay
royalties to the Union for the exploitation of the Technology, the Software and
the Patents, in accordance with the mechanisms and principles described in the
following paragraphs.

 

13.2 [**] royalty-free Products. Without prejudice to Article 13.4., the
Licensee has the right to sell the first [***********] Products on a
royalty-free basis, in consideration for the investments made prior to the
Effective Date by SOFAR, which was initially granted an exclusive license on the
Patents and which has asked that its license be terminated and that a new
license be granted to VULCANOS, in which SOFAR has, on the Effective Date,
financial interests.

 

13.3 Royalty-bearing Products. Following sale of the first [********] Products,
the Licensee undertakes to pay the Union an annual royalty fee calculated on the
Sales price of the Product, as follows:

- [**]on Sales price from the [**********] Products. It is agreed that (1) the
first [*********] of Products made through any distributor, while triggering
royalties, will not be considered in the calculation of this target
([**********]) and (2), for this calculation, any sales of Products outside the
Territory only count as [********] (e.g. [**] Products sold outside the
Territory count as [**]Products);

- [***] on Sales price from the [**********]Products. It is agreed that (1) the
first [***]sales of Products made through any distributor, while triggering
royalties, will not be considered in the calculation of this target
([**********]) and (2), for this calculation, any sales of Products outside the
Territory only count as [********] (e.g. [**]Products sold outside the Territory
count as [**]Products);

[****] on Sales price from the [****] Product onwards.

 

13.4 Minimum royalties. The Licensee shall pay to the Union the following
minimum royalties, regardless of the number of Products actually sold and/or
commercialised and notwithstanding the mechanism of 30 royalty-free Products:

- in 2015: [**********] EUR;

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

- in 2016: [**********] EUR;

- in 2017: [**********] EUR;

- in 2018 and every year thereafter until the termination of the Agreement:
[**********] EUR.

However, the Licensee is entitled to off-set such minimum royalty payments from
the annual royalty payments due from sales of the Product established in Article
13.3.

The minimum annual royalty is due entirely for each year started even in the
case where the Agreement is terminated at the initiative of the Licensee as
foreseen in Article 3. It is due at the end of each corresponding calendar year
(e.g. [*******] EUR by December 31, 2017), being understood that the Union shall
send an invoice corresponding to the amount to be paid.

 

13.5 Calculation of royalties. The amount taken as a basis to calculate the
Sales price and royalties due by the Licensee is the amount of Net sales on a
yearly basis, starting on the anniversary date of the Effective Date, as such
Net sales are reflected via the Sale price.

Except for the first year of the Agreement, calculations are made on a calendar
basis (i.e. from January 1 to December 31).

If the Products are not sold via a transfer of ownership to the buyer but rather
made available via operative leasing (noleggio, with the right to acquire the
ownership of the Product at the end of the leasing period against payment of a
nominal amount),
the amount to take into account shall be [*******************************************************************
****************************************************************************************************
****************************************************************************************************
****************************************************************************************************
********************]. It is understood that if the customer pays through the
operative leasing immediately the entire price, VULCANOS shall pay the Union the
whole amount of the royalties at the end of the relating year.

If the Products are neither sold nor made available via leasing but via renting
(temporary right to use the Product against payment of a periodical fee, for a
determined or undetermined period of time, with no contractual mechanism
foreseen to acquire the ownership of the Product at the end of the contractual
period), or if the Products are made available via any other
form of commercialisation of the Products, the amount to take into account shall be [*******************************
****************************************************************************************************
****************************************************************************************************
****************************************************************************************************
********************************************************]. It is

 

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REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

understood that if the customer pays through the renting immediately the entire
price, VULCANOS shall pay to the Union the whole amount of the royalties at the
end of relating year.

Where necessary, the amount will be established by comparison with similar
market situations where the Product has actually been sold to customers.

It is understood that no royalties will be due for 
[***********************************************************
******************************************************************************]
decided in good faith by VULCANOS.

In case of revenues generated via sublicenses granted by the Licensee, the
amounts to be taken into account for the calculation of the royalties due to the
Union will be based on the turnover of the sublicensee related to the sale and
commercialization of the Product.

In case of revenues generated by sales via a distributor, since the royalties
payable to the Union per Product are likely to be inferior when the Product is
sold to a final customer via a distributor, the following principles shall
apply:

[**************************************************************************************************
***************************************************************************************************
******************************************]; and

[***************************************************************************************************
****************************************************************************************************
****************************************************************************************************
****************].

For the avoidance of doubt and as per article 2.3., for Products sold outside
the Territory, VULCANOS shall pay [***] of the royalties it would pay for
Products sold in the Territory, to compensate for the use of the Intellectual
Property Rights in the Territory.

 

13.6 The payment shall be made in Euro, all costs of the payment being borne by
the Licensee. Late or non-payment by the Licensee’s customers has no influence
on the amount of the royalties due. All payments will be made to a bank account
of the Union to be advised by the Commission.

Each statement will, as is the case, bear the following references:

- ‘payment due under Article 13 of the contract

[***************] period of reference from ….to ….’

 

13.7 The Licensee shall submit to the Commission, by the 31st January of each
year, a report for the preceding calendar year detailing the Net sales during
that calendar year, including the first 30 Products royalty-free and the Sales
price per Product.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Said report shall enclose a list of the customers and their country of
residence, the number of each invoice, the date and the related amount so
invoiced. The report shall also specify if the Products were made available via
a sales contract, a leasing contract or otherwise. The report shall show the
quantity, description and price of the Products sold and be sufficiently
detailed to ascertain payments due under this Agreement, including mechanisms
used to come to the amount of royalties due in function of the number of
machines previously sold on a royalty-free basis and the different percentages
used in function of the number of machines previously sold (calculated
cumulatively) and taking into consideration the minimum royalties which have
already been paid for the corresponding year.

The Licensee shall keep separate records relating to the Sales of the Product
showing the quantity, description and price of the Products sold and being
sufficiently detailed to ascertain payments due under this Agreement. The
Commission shall have the right, once a year, to inspect and determine the
correctness of the bookkeeping and its consistency with the general bookkeeping
of the Licensee either by its own services or through a licensed auditor. The
costs for such an audit shall be borne by the Union, but in case of discovery of
discrepancies of more than 5%, they shall be borne by the Licensee.

Payments due under the present Article shall be made within thirty (30) days of
receipt of the Commission’s invoice.

ARTICLE 14 - Intellectual property rights

 

14.1 Intellectual property rights related to the Product as described in Annex B
are the exclusive property of the Union. The Licensee shall not at any time and
under any circumstances use the copyright, save to exercise the rights granted
by this Agreement, to grant licences on the Product within the scope of this
Agreement and save any use expressly authorised by the Union.

The Licensee shall only use any logo of the Communities, the Commission, the JRC
or any of JRC’s research institutes subject to prior written consent of the
Union.

 

14.2 The Licensee acknowledges the Intellectual property rights on the Product
as described in Annex B to belong to the Union and shall not acquire any
Intellectual property right on the Product with the exception of the rights
granted by this Agreement.

 

14.3 The Union declares that it is not aware of any legal deficiencies of the
Product. The Union particularly declares that it is aware of neither any third
party’s prior rights to use, nor of a dependency of the licensed Patents on
third party’s rights. Without prejudice to Article 14(2), the Union assumes no
liability for possible deficiencies mentioned above.

ARTICLE 15 - Indemnification

 

15.1

Subject to Article 15(2), the Licensee shall defend at its own expenses any
claim, suit or proceeding brought against the Licensee, insofar as it arises
from the Licensee’s use of

 

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REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

  the Product and shall indemnify and hold the Union harmless for all claims,
damages, costs and expenses awarded to the Licensee or third parties against the
Union arising from any such claim, suit or proceeding.

 

15.2 In the event any claim, suit or proceeding is brought against the Licensee
based on a claim that any portion of the Product constitutes an infringement of
patent or copyright, or other intellectual property rights of any third party
arising under the applicable law, the Union shall have the right, at its option,
to assume the defence of such action or to cooperate with the Licensee in
assuming such defence.

 

15.3 The Union shall have no liability, if the alleged infringement is based on
a modification of the Product by anyone other than the Union, including the
Licensee, or on use of the Product other than in accordance with the Union’s
specifications and documentation.

 

15.4 The Licensee shall use due diligence in order to prevent the infringement
of any Intellectual property rights during its marketing and distribution
activities. In the event that the distribution activities of the Licensee lead
to an infringement of the Intellectual property rights, the Licensee shall be
fully liable to the Union for any damages resulting from such infringement.

 

15.5 The Union shall have, in addition to any other remedies available to it,
the right to injunctive relief to enjoin breaches of this Agreement.

ARTICLE 16 - Confidentiality obligations

 

16.1 Irrespective of the provisions of laws relating to know-how, patents and
other intellectual property rights, the Licensee undertakes during the term of
this Agreement and thereafter to keep secret all facts, Confidential
Information, knowledge, documents or other matters communicated to him or which
come into its possession during the performance of this Agreement.

 

16.2 The access rights of the Commission and the Licensee to the Confidential
Information shall be limited to the scope of this Agreement.

All the Confidential Information that shall consist of technical details,
business and manufacturing secrets and in particular research, development,
production and market data as well as other business information and any other
information is communicated under strict confidence. Neither the Commission nor
the Licensee shall disclose to any third parties any Technology or other
Confidential Information received by them.

 

16.3 The Union and the Licensee may only pass on the Confidential Information to
their employees if such Confidential Information is required for evaluation. The
Union and the Licensee must ensure that such employees having access to the
Confidential Information are committed to confidentiality in the same way they
have committed themselves and that they will not divulge Confidential
Information and/or Know-how to any third party even after completion of their
assignment.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Licensee warrants that its employees, consultants and contractors are bound by
confidentiality.

 

16.4 The Parties have the joint understanding that valuable confidential
Know-how might be exchanged or created in the course of the performance of this
Agreement and that the commercial value of such confidential Know-how is
fundamentally put at stake if any divulgation of such Know-how occurs.

 

16.5 Any loss or damage, caused to one of the Parties and arising out of the
breach of this Article shall be borne exclusively by the Party responsible for
such breach; the breaching Party shall be responsible for making compensation
thereof and shall indemnify and hold harmless the other Party in respect of any
such loss, damage or injury, including but not limited to reasonable attorneys’
fees.

 

16.6 At the termination of this Agreement, the Commission and the Licensee shall
return all Confidential Information to the disclosing Party, or destroy the
same, as instructed by the disclosing Party, without retaining any copies of the
documents. However, this clause shall not require the return of Confidential
Information recorded in laboratory notebooks kept in the ordinary course of
business, nor of records required by law to be maintained.

ARTICLE 17 - Taxes and governmental charges, permits

 

17.1 All turnover taxes and indirect or direct taxes, which have to be paid for
the royalty payments, shall be borne by the Licensee.

 

17.2 Pursuant to Articles 3 and 4 of the Protocol on the Privileges and
Immunities of the European Communities, the Union is, in respect of its
financial interests in this Agreement, exempt from all duties and taxes,
including value-added tax.

 

17.3 The necessary steps for obtaining all permits and licences required for the
implementation of this Agreement under the laws and regulations in force at the
place where the services are to be provided shall be the exclusive
responsibility of the Licensee.

If the Licensee is unable, whether or not by reason of its own default, to
obtain any permit or licence as referred to above, it shall forthwith inform the
Commission, who, after consultation with the Licensee and with due regard to the
effect of this situation upon the work, shall decide whether all or any part of
it is to be discontinued.

ARTICLE 18 - Law and Jurisdiction

 

18.1 This Agreement shall be governed by and construed in accordance with the
law of the European Union, complemented where necessary by the substantive laws
of Belgium.

 

18.2 Any dispute between the Parties resulting from the interpretation or
application of this Agreement which it has not been possible to settle amicably
shall be submitted to the jurisdiction of the General Court of the European
Union in Luxembourg.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

ARTICLE 19 - Administrative provisions

 

19.1 Any communication with reference to the performance of this Agreement, all
notifications of payment and any relevant correspondence shall be made in
writing and addressed to the following addresses:

For the UNION:

European Commission, Joint Research Centre

Intellectual Property and Technology Transfer

To the attention of the [**********]

[***************]

[************]

[********]

For the LICENSEE:

Vulcanos S.r.l.

[*************]

[****************]

[*****]

[****************]

[*****************]

 

19.2 The Agreement reference is [***********************]. It shall be quoted in
all correspondence with the Union.

ARTICLE 20 - Non-transferability

 

20.1 Without prejudice to the provisions of Article 5 on sub-licensing, the
Licensee may not assign this Agreement to any third party without the prior
written consent of the Union.

 

20.2 It is however understood that any changes in the shareholding structure of
VULCANOS (resulting e.g. from finding one or several new partners, be they
industrial or purely financial) will be allowed and will not need the prior
written consent of the Union.

ARTICLE 21 - Miscellaneous provisions

 

21.1 This Agreement, including the Annexes attached hereto, is the entire
Agreement among the Parties relating to the subject matter hereof and may only
be modified by a written amendment signed by the authorised representatives of
each Party. In case of conflict between a provision in an Annex and a provision
in this Agreement, the provision in this Agreement will prevail.

 

21.2 If any term or provision of this Agreement shall be found to be illegal or
unenforceable then, notwithstanding that term, all other terms of this Agreement
shall remain in full force and effect.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

ARTICLE 22 - Annexes

The following are appended to and are an integral part of this Agreement:

 

Annex A    Description of the Product Annex B    Portfolio of relevant Union’s
Patents Annex C    Licensee’s Market & Business Plan (to be appended later)

ARTICLE 23 - Condition precedent

This Agreement shall be effective subject to the condition precedent of the
execution of the public notarial deed, relating to the transfer of the 100% of
the shares of VULCANOS to TransEnterix International, Inc., a U.S. company duly
incorporated, such deed to be executed by SOFAR and by TransEnterix
International, Inc. The name of TransEnterix International, Inc. is to be
considered a Confidential Information not to be disclosed to any third party
before the execution of the public notarial deed and even after save as the
disclosure will be required by the law or agreed by the Parties.

Should the condition precedent not materialise within 60 calendar days from the
signature of this Agreement, the Agreement will become null and void.

ARTICLE 24 - Parent guarantee letter

VULCANOS shall, at the latest within 90 calendar days from the execution of this
Agreement, submit a parent company guarantee letter to the Union, valid under
Belgian law and duly signed by TransEnterix, Inc., a U.S. company duly
incorporated or, with the Union’s prior consent, by another legal entity
presented by VULCANOS and having at least an equivalent financial solidity and
good reputation. The name of TransEnterix, Inc. is to be considered a
Confidential Information not to be disclosed to any third party before the
execution of the public notarial deed and even after save as the disclosure will
be required by the law or agreed by the Parties. The draft of the parent
guarantee letter is attached as ANNEX D to this Agreement.

Should such guarantee letter not be provided with 90 days from the execution of
this Agreement, VULCANOS will be in breach of its contractual obligations, with
all contractual and legal consequences attached thereto, including as the case
may be regarding possible damages for the Union in accordance with the
applicable law.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Done in Brussels,

In two originals in the English language

 

For the LICENSEE,   For the UNION, Date: 16 September, 2015   Date: 18
September, 2015 Andrea Biffi   Vladimir Šucha Sole Director   Director-General
VULCANOS s.r.l.   Joint Research Centre

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Annex A to the Agreement [****************************]

Description of the Product

The Product consists of:

 

  - [*****] patents altogether describing a tele-medical robotics system with
[********************];

 

  - the source code of the JRC- GENERIS software motion control system platform.

Patents description:

[*************************************************************************************]

[**********************************************************************************************************

***********************************************].

[***************************************************************************************]
[**********************************************************************************************************

***********************************************************************************************************

*******************************].

[***************************************************************************************]
[**********************************************************************************************************
***********************************************************************************************************

******************].

Description of the JRC-GENERIS software motion control system ([********]):

[**********************************************************************************************************

***********************************************************************************************************

***********************************************************************************************************

***********************************************************************************************************

****************************************************************].

[**********************************************************************************************************

***********************************************************************************************************

***********************************************************************************************************

***********************************************************************************************************

**********************].

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Annex B to the Agreement [**************************]

Portfolio of the relevant Communities Patents and Software

 

[***]  

[*********]

 

[**********]

[**********

***********

***********

********** ]

  [**]   [************* ************** ************* ************]   [**********
************ ************ *************]  

[************ ************** ************** *************

********]

[***]  

[*********]

 

[**********]

[**********

***********

***********

********** ]

  [**]   [************* ************** ************* ************]   [**********
************ ************ *************]  

[************ ************** ************** *************

********]

[***]  

[*********]

 

[**********]

[**********

***********

***********

********** ]

  [**]   [************* ************** ************* ************]   [**********
************ ************ *************]  

[************ ************** ************** *************

********]

[**
****]      

[************ *********** *************

*******]

   

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

[****************************************]

[*************************]

[***************]

 

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REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Annex D to the Agreement [***********************]

Irrevocable Parent Company Guarantee

On Parent Company’s head letter

            , 2015

European Commission

Joint Research Centre (JRC)

Mr. Vladimir ŠUCHA, Director-General

SDME 06162

1049 Brussels

Belgium

- by registered letter anticipated by e-mail

                    @ec.europa.eu-

 

Re: Contract n. JRC            - irrevocable parent company guarantee

Dear Sirs,

With reference to the contract n.                     (the “Contract”) signed
between the Union and Vulcanos s.r.l. on September     , 2015, the undersigned
                    with registered office in                     at
                    , no                     personally and irrevocably
guarantee with all its assets the fulfillment of the obligations of the
Licensee, as defined in and provided by the Contract.

More in particular, the undersigned:

a) guarantees the due performance of the payment by the Licensee of all
royalties due to the Union (minimum royalties and any other royalties) pursuant
to the Contract, as and when such royalties become due;

b) agrees to be jointly and severally liable for the due respect of the above
payment obligation, should the Licensee fail to perform in accordance with its
payment obligations, including if such failure originates from insolvency,
liquidation, bankruptcy, administration or any equivalent form of dissolution,
composition or incapacity of the Licensee.

This guarantee is valid until the expiration of the Contract and in any case
until all the obligations provided by the Contract will be duly fulfilled by the
Licensee.

This guarantee shall be governed by and construed in accordance with the law of
the European Union, complemented where necessary by the substantive laws of
Belgium.

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Any dispute resulting from the interpretation or application of this guarantee
which it has not been possible to settle amicably shall be submitted to the
jurisdiction of the General Court of the European Union in Luxembourg.

Best regards,

 

                                                                          

Name of the Company

Name of the Person who signed

Title and reference to authorization

(board resolution - by-laws)

 

23