Document:

exv10w3

 

Exhibit 10.3

CONFIDENTIAL

 

PATENT LICENSE AGREEMENT

     This Patent License Agreement (“Agreement”) is entered into on July 19, 2007 (the
“Effective Date”) by and between, on the one hand, Broadcom Corporation, a California
corporation with a principal place of business at 5300 California Avenue, Irvine, CA 92617
(“Broadcom”) and, on the other hand, Cellco Partnership d/b/a Verizon Wireless, a Delaware
partnership, with offices located at One Verizon Way, Basking Ridge, New Jersey 07920
(“Verizon”) together with its parent Verizon Communications Inc., a Delaware corporation
(“Verizon Communications”) (together, the “Verizon Parties”) (Broadcom and the
Verizon Parties, collectively the “Parties” and each individually a “Party”).

     WHEREAS, Broadcom and QUALCOMM Incorporated (“Qualcomm”) are litigating certain
actions regarding infringement of Broadcom patents by Qualcomm (the “Litigation”),
including (i) In the Matter of Certain Baseband Processor Chips and Chipsets, Transmitter and
Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular
Telephone Handsets, United States International Trade Commission (“ITC”), Inv. No.
337-TA-543 (the “ITC Action”); and (ii) Broadcom Corporation v. QUALCOMM
Incorporated, United States District Court for the Central District of California, Case No.
SACV05-467 (JVS) and Broadcom Corporation v. QUALCOMM Incorporated, United States District
Court for the Central District of California, Case No. SACV05-468 (JVS) (the “District Court
Actions”);

     WHEREAS, Qualcomm products, including certain Qualcomm components used in 1xEV-DO cellular
telephone handsets, have been found to infringe certain Broadcom patents; and

     WHEREAS, Verizon imports and sells cellular telephone handsets compliant with the 1xEV-DO
standard for the Verizon Network (as defined below) and desires to obtain a royalty-bearing license
from Broadcom under the Licensed Patents (as defined below) for such handsets, on the terms and
conditions set forth below.

     NOW, THEREFORE, in consideration of the mutual promises, conditions and covenants set forth
below, the Parties hereto agree as follows:

1. Definitions. As used in this Agreement, the following terms shall have the following
meanings:

     1.1 “Affiliate” means, with respect to a given Person (the “Subject Person”),
any other Person who controls, is controlled by or is under common control with the Subject Person.
For purposes of this Section 1.1, control means direct or indirect ownership of more than fifty
percent (50%) of the voting power of a respective Person with respect to the election of directors
or similar managing authority. A Person shall be deemed to be an Affiliate under this Agreement
only so long as such control exists. Notwithstanding the foregoing, in no event shall Qualcomm or
[****] or any of their Affiliates or successors be considered an Affiliate of Verizon under this
Agreement.

     1.2 “Authorized Distributor” means authorized agents, resellers and distributors of
services on the Verizon Network under a written agreement with Verizon (specifically excluding
Qualcomm, [****] and each of their Affiliates and successors).

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

CONFIDENTIAL

 

     1.3 “EV-DO” means revisions A, B and C of the 1xEV-DO standard (also known as
“cdma2000 High Rate Packet Data Air Interface Specification”), provided that under no circumstances
shall “EV-DO” be
construed as including the standards commonly referred to as “3GPP LTE”, “WiMAX”, “WiFi” or
successors thereto.

     1.4 “Licensed Patents” means only (i) United States Patent Nos. 5,657,317; 6,374,311;
6,389,010; 6,583,675; 6,714,983; and 6,847,686, and (ii) any reissue, reexamination or extension of
an issued patent enumerated in (i) above, and (iii) any claim found in any issued patent that is a
divisional or continuation of an issued patent enumerated in (i) or (ii) above, where such claim is
an obvious variation of any claim found in an issued patent enumerated in (i) or (ii) above; and
(iv) any claim found in any corresponding issued foreign patent claiming priority from an issued
patent enumerated in (i) or (ii) or (iii) above where such claim is substantially the same or an
obvious variation of any claim found in an issued patent enumerated in (i) or (ii) or (iii) above.
The “Licensed Patents” do not include any other patents, patent rights or intellectual property
rights.

     1.5 “Licensed Products” means fully assembled, finished and packaged units of existing
and new cellular telephone handsets, personal digital assistants, data cards for laptop computers
and other finished end user wireless devices that (i) are compliant with at least the EV-DO
standard; and (ii) are used primarily on the Verizon Network under a Service Contract.

     1.6 “Person” shall mean an individual, trust, corporation, partnership, joint venture,
limited liability company, association, unincorporated organization or other legal or governmental
entity.

     1.7 “Service Contract” means service contract for use of a Verizon certified cellular
telephone handset, personal digital assistant, data card or other finished end user wireless device
primarily on the Verizon Network that is entered into by the subscriber with Verizon or its
Affiliate or any of their Authorized Distributors (specifically excluding Qualcomm, [****] and each
of their Affiliates and successors).

     1.8 “Sold,” “Sale,” “Sell” means sold, leased or otherwise transferred
and a sale shall be deemed to have occurred upon first shipment or invoicing, to a third party
whichever shall first occur.

     1.9 [****].

     1.10 “Subsidiary” means, with respect to a given Party, any other Person where such
Party directly or indirectly owns or controls more than fifty percent (50%) of the voting power of
such other Person with respect to the election of directors or similar managing authority. A
Person shall be deemed to be a Subsidiary under this Agreement only so long as such ownership or
control exists. Notwithstanding the foregoing, in no event shall Qualcomm or [****] or any of
their Affiliates or successors be considered a Subsidiary of Verizon under this Agreement.

     1.11 “Verizon Network” means the EV-DO wireless telecommunications network managed or
operated by or for Verizon or its Subsidiaries in the United States and offered under the Verizon
name and which may also be offered by Authorized Distributors under their respective names
(specifically excluding Qualcomm, [****] and each of their Affiliates and successors).

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

2

 

CONFIDENTIAL

 

2. License.

     2.1 Grant.

          (a) Commencing upon the Effective Date, and subject to the per unit royalty payments set forth
in Section 3.1 and other terms and conditions of this Agreement (including the restrictions set
forth in Sections 2.1(b) and (c) below), Broadcom hereby grants to Verizon and its Subsidiaries
(and Verizon Communications and its Subsidiaries to the extent Verizon remains a Subsidiary of
Verizon Communications) a non-exclusive, non-transferable (other than to a successor in interest as
set forth in Section 11.6) license, without the right to sublicense (except solely to Authorized
Distributors in accordance with Section 2.1(d) below), solely under the Licensed Patents, to
import, have imported, make and have made Licensed Products for which per unit royalties are paid
under Section 3.1 and to use, rent, sell and offer to rent or sell such Licensed Products under a
trademark of Verizon or a trademark of Verizon’s Authorized Distributor or other mutually agreed
method of identification to facilitate entry through United States Customs (specifically excluding
Qualcomm, [****] and each of their Affiliates and successors). No rights or licenses are granted
under any patents of Broadcom other than the Licensed Patents.

          (b) Subject to the payment of royalties under Section 3.1, no additional license or royalties
under the Licensed Patents shall be required when such Licensed Products roam on other networks on
a temporary basis while under a Service Contract for the Verizon Network.

          (c) The right to “have made” Licensed Products under the license set forth in Section 2.1(a)
shall apply only when the specifications for such Licensed Products are provided to the
manufacturer by the respective Verizon Party or its Subsidiary and shall be limited to Licensed
Products manufactured on behalf of the respective Verizon Party or its Subsidiary under a written
agreement with the respective Verizon Party or its Subsidiary. The right to “have imported”
Licensed Products under the license set forth in Section 2.1(a) shall be limited to Licensed
Products imported on behalf of the respective Verizon Party or its Subsidiary under a written
agreement with the respective Verizon Party or its Subsidiary and which requires the respective
importer to provide a customs certification to the United States Customs Service that such units of
Licensed Products are imported solely for and on behalf of the respective Verizon Party or its
Subsidiary. Upon written request of Broadcom, Verizon shall, within thirty (30) days of
receiving such request, use all commercially reasonable efforts to inform Broadcom in writing
whether, and if so to what extent, any Person identified by Broadcom is exercising such “have made”
or “have imported” rights on behalf of the Verizon Parties or their Subsidiaries or an Authorized
Distributor under this Agreement.

          (d) The Parties will use all commercially reasonable efforts to agree prior to August 7, 2007
upon a form of sublicense for Authorized Distributors to be granted have made and have imported
Licensed Products that are certified by Verizon for use on the Verizon Network. The right to “have
imported” Licensed Products by Authorized Distributors under the license set forth in Section
2.1(a) shall be limited to Licensed Products imported on behalf of such Authorized Distributors
under a written agreement with Verizon or its Subsidiary which requires the respective importer to
provide a customs certification to the United States Customs Service that such units of Licensed
Products are imported primarily for use on the Verizon Network. Upon written

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

3

 

CONFIDENTIAL

 

request of Broadcom, Verizon shall, within thirty (30) days of receiving such request, use all
commercially reasonable efforts to inform Broadcom in writing of Authorized Distributors who enter
into the mutually agreed form of sublicense. Such Authorized Distributors shall not be required to
pay an additional per unit royalty under the respective sublicense, it being understood that the
royalty under Section 3.1 will be paid by Verizon when service is initiated on the Verizon Network
for Licensed Products of such Authorized Distributors as set forth in Section 3.1.

          (e) The license under the Licensed Patents set forth in Section 2.1(a) will become
royalty-free, fully-paid, and perpetual (subject to Section 9.5) upon the payment of the Aggregate
Amount of royalties set forth in Section 3.1 below.

     2.2 No Implied Rights. The license to Verizon and its Affiliates for the Licensed
Patents is limited to the rights expressly set forth above and no releases or other rights or
licenses are conveyed by implication, estoppel or otherwise, all of which are specifically
disclaimed. Notwithstanding anything to the contrary, no rights, licenses or releases are granted
by Broadcom to any third party, directly or indirectly, whether expressly or by implication,
estoppel, reliance, inducement or otherwise. Without limiting the foregoing, Verizon agrees that
this Agreement does not impair the right of Broadcom to seek or recover damages or any other
remedies available at law or in equity from Qualcomm, including injunctive relief (other than
injunctive relief against Licensed Products), in the Litigation with Qualcomm. Without limiting
the foregoing, each Party agrees that this Agreement does not impair the right of the other Party
to seek or recover damages or any other remedies available at law or in equity from third parties
(other than Broadcom seeking injunctive relief against Licensed Products).

3. Payments by Verizon.

     3.1 Per Unit Royalty Payments. Verizon shall make a non-refundable per unit royalty
payment to Broadcom in the amount of Six U.S. Dollars ($6.00) for each unit of Licensed Product (i)
Sold by or for Verizon, its Affiliates or their authorized agents, resellers or distributors on or
after the Effective Date of this Agreement (net of any returns of such Licensed Products in such
calendar quarter) or (ii) for which service is initiated on the Verizon Network on or after the
Effective Date and prior to the end of the term of this Agreement. Such per unit royalties shall
be due and payable within sixty (60) days after the end of each calendar quarter, commencing with
the calendar quarter ending September 30, 2007. The above per unit royalty payments shall be
non-refundable and shall not be credited or offset against any other payments. The aggregate of
all such royalty payments shall not exceed Two Hundred Million U.S. Dollars ($200,000,000.00) (the
“Aggregate Amount”). The total amount of such royalties to be paid by Verizon to Broadcom
in a respective calendar quarter shall not exceed Forty Million U.S. Dollars ($40,000,000). To the
extent that any royalties accrue for a calendar quarter in excess of such payment of Forty Million
U.S. Dollars ($40,000,000) (“Royalty Accrual”), the Royalty Accrual shall be carried
forward to each subsequent calendar quarter until paid and shall be paid in each such subsequent
calendar quarter to the extent that the royalty payment in such subsequent calendar quarter will
not exceed Forty Million U.S. Dollars ($40,000,000). Verizon shall remain obligated to pay the
amount of the Royalty Accrual in such subsequent calendar quarters unless and until the Aggregate
Amount has been paid by Verizon.

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

4

 

CONFIDENTIAL

 

3.2 [****]

3.3 [****]

     3.4 Wire Transfer. The payments under Section 3.1 shall be made in US Dollars by wire
transfer in immediately available funds to such bank account as Broadcom may designate in writing.
Unless otherwise notified by Broadcom, such wire transfers shall be made to:

          Bank Name: [****]

          SWIFT code: [****]

          ABA #: [****]

          Account Name: [****]

          Account Number: [****]

     3.5 Taxes. Amounts payable to Broadcom under this Agreement are payable in full to
Broadcom without reduction for taxes (including any withholding tax unless such withholding tax is
due to an assignment by Broadcom) or customs duties. In addition, Verizon shall be responsible for
any and all taxes (including, without limitation, consumption sales, use, value-added and similar
taxes) and customs duties paid or payable on Licensed Products, however designated, levied, or
based on amounts payable to Broadcom hereunder and any associated penalties, fines and attorneys’
fees, but exclusive of United States federal, state and local taxes based solely on Broadcom’s net
income.

     3.6 Convenience of the Parties. The Parties acknowledge and agree that it is mutually
in their best interests, including being most convenient and efficient, for Broadcom to grant
Verizon a license based on the above per unit royalty payments. Both parties acknowledge that the
other has offered to negotiate other methods of calculating compensation for the license granted
herein, and that the above payments are freely chosen and agreed to by the Parties, as a
convenience to the Parties, and each of them, and represent a convenient and fair means of
measuring the value of the license granted to under this Agreement.

4. Reports. During the term of this Agreement and prior to making the Aggregate Payment,
Verizon shall provide Broadcom with a calendar quarterly report (commencing with the calendar
quarter ending September 30, 2007) within thirty (30) days of the end of each calendar quarter
setting forth (i) the number of Licensed Products manufactured by or on behalf of Verizon and its
Affiliates in the respective calendar quarter; (ii) the number of Licensed Products imported into
the United States by or on behalf of Verizon and its Affiliates in the respective calendar quarter;
(iii) the number of Licensed Products Sold by Verizon and its Affiliates in the respective month
net of returns, and (iv) the number of Licensed Products for which service on the Verizon Network
is first initiated during the respective calendar quarter net of returns within ninety (90) days
after service is first initiated.

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

5

 

CONFIDENTIAL

 

5. Records and Audits.

     5.1 Records. During the term of this Agreement and for all periods prior to payment
of the Aggregate Amount, Verizon and its Affiliates shall keep accurate and complete books and
records concerning all Licensed Products Sold by Verizon and its Affiliates, all Licensed Products
Sold and put into service on the Verizon Network or used by Verizon or its Affiliates and other
information reasonably necessary to confirm the payments and reports under this Agreement. Verizon
and its Affiliates shall preserve and maintain all such books and records for a period of two (2)
years after the calendar quarter for which the books and records apply. Requirements for records
and audits regarding Authorized Distributors will be set forth in the form of sublicense pursuant
to Section 2.1(d).

     5.2 Audits. No more than once each calendar year, and during the term of this
Agreement but prior to Verizon making the Aggregate Payment, Broadcom may retain a third party,
reasonably acceptable to Verizon, to conduct an audit of Verizon’s applicable books and records to
confirm that Verizon has not underpaid the royalties payable to Broadcom pursuant to Section 3.1
and to confirm the accuracy of the reports provided by Verizon pursuant to Section 4. Such third
party shall enter into a confidentiality agreement with Verizon, on terms reasonably acceptable to
Verizon, which shall permit the third party to disclose only to Broadcom if any underpayment of
royalties or inaccuracy in reporting has occurred and if so, then the amount and basis of such
underpayment or inaccuracy.

6. Additional Covenants.

     6.1 Cessation of Efforts to Overturn. Verizon and its Affiliates shall withdraw its
opposition to Broadcom in the following actions involving Qualcomm by promptly: (i) ceasing and
desisting from further efforts to obtain a Presidential/USTR disapproval of the order issued in the
action styled In the Matter of Certain Baseband Processor Chips and Chipsets, Transmitter and
Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular
Telephone Handsets, United States International Trade Commission (“ITC”), No. 337-TA-543
(such order, the “ITC Order”) or actively assisting any third party to do so; (ii)
withdrawing its Motion for Stay of the ITC Order filed with the United States Court of Appeals for
the Federal Circuit; and (iii) refraining from participation in any opposition to Broadcom in
Broadcom Corp. v. Qualcomm, Inc., Case No. SACV 05-0467-JVS (C.D. Cal.) or Broadcom Corp. v.
Qualcomm, Inc., Case No. SACV 05-0468-JVS (C.D. Cal.) or actively assisting any third party to do
so. In addition, Verizon and its Affiliates shall not initiate any new opposition to Broadcom in
any actions involving the Licensed Patents or reexaminations of the Licensed Patents or actively
assist any third party to do so. Notwithstanding the foregoing, Verizon and its Affiliates may
respond to subpoenas and other lawful process to the extent required by law. In the event Broadcom
asserts a patent(s) against Qualcomm other than the Licensed Patents, Broadcom may (in its sole
discretion) add such patent(s) to the Licensed Patents under this Agreement upon written notice to
Verizon without requiring additional payments for the inclusion of such patent(s), in which case
the obligations of Verizon under this Section 6.1 shall apply to such additional patent(s),
provided that Broadcom shall have no obligation to do so.

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

6

 

CONFIDENTIAL

 

     6.2 Strategic Alliance Discussions. Verizon Communications, Verizon and Broadcom
shall establish a joint task force [****] to discuss a potential strategic alliance regarding items
of mutual interest relating primarily to: (i) opportunities to enhance the use by Verizon
Communications, Verizon and their Affiliates of Broadcom products in equipment and devices used and
sold by Verizon Communications, Verizon and their Affiliates; (ii) the possibility for Broadcom to
develop products that specifically address the needs of Verizon Communications, Verizon and their
Affiliates, vendors and suppliers, (iii) payments to Verizon as a result of licenses under Verizon
intellectual property, or (iv) incremental (i.e., new) business between Broadcom on the one hand
and Verizon and its suppliers on the other hand . Any such discussions regarding the
matters set forth above shall be non-binding and shall not be construed as modifying or amending
this Agreement in any way. Any modification or amendment to this Agreement may only be made in a
writing signed by authorized representatives of both Parties as set forth in Section 11.11 below.

     6.3 Cooperation with Customs. Broadcom will promptly provide notice to the United
States Customs Service that the Parties have entered into a license agreement relating to the ‘983
patent. Broadcom will use all commercially reasonable efforts to participate in any meetings with
United States Customs and to take all necessary actions to ensure the unimpeded importation of
Licensed Products as permitted under this Agreement, including using all commercially reasonable
efforts to make filings with the ITC or United States Customs so that no bond is required for
Licensed Products as of and after the Effective Date during the term of the license for the
Licensed Patents under this Agreement. The Parties will reasonably cooperate as necessary to
obtain a refund of any bond that is posted as a result of the ITC Order for Licensed Products
imported into the United States on or after the Effective Date under the license set forth in
Section 2.1.

7. [****]

8. Press Release; Confidentiality of Terms. Upon the Effective Date, the Parties shall
issue a press release in the form set forth in Exhibit A announcing the fact that Verizon has taken
a license from Broadcom and that it is withdrawing its opposition to the ITC Order. Except as set
forth in such press release or as publicly disclosed as permitted below, neither Party shall
disclose the terms of this Agreement without the prior written consent of the other Party, except:
(a) to any governmental body having jurisdiction and specifically requiring such disclosure; (b) in
response to a valid subpoena or as otherwise may be required by any law or regulation; (c) for the
purposes of disclosure in connection with the Securities and Exchange Act of 1934, as amended, the
Securities Act of 1933, as amended, and any other reports filed with the Securities and Exchange
Commission or Stock Exchange Rules; (d) to a Party’s accountants, legal counsel and other financial
and legal advisors, subject to obligations of confidentiality; (e) as required during the course of
litigation, subject to protective order or other similar protections as applicable; (f) as required
for enforcement of this Agreement; and/or (g) with respect to the material financial terms, as
necessary to obtain indemnification or insurance coverage with respect to the payments made by
Verizon under this Agreement; provided, however, that prior to any such disclosure pursuant to
paragraphs (a), (b), (c) and/or (e) hereof, the Party seeking disclosure shall notify the other
Party and take reasonable actions in an effort to minimize the nature and extent of such
disclosure. Notwithstanding the foregoing, Broadcom shall have the right to disclose this
Agreement in the Litigation subject to a protective order.

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

7

 

CONFIDENTIAL

 

9. Term and Termination.

     9.1 Term. The term of this Agreement shall commence upon the Effective Date and
continue for a period of five (5) years from the Effective Date, unless earlier terminated as set
forth below; provided, however, that, except as otherwise specified under Section 9.5 below, the
license granted under the Licensed Patents herein shall continue until the expiration of the last
to expire of the Licensed Patents.

     9.2 Termination for Settlement with Qualcomm. This Agreement may be terminated by
Verizon upon written notice from Verizon (in its sole discretion) if Broadcom and Qualcomm enter
into a definitive written agreement providing a final settlement of all Litigation with respect to
all of the Licensed Patents.

     9.3 Termination by Verizon. [****] In addition, Verizon may terminate the Agreement
(in its sole discretion) on: (1) the date (if any) on which all of the claims of the Licensed
Patents are found invalid by a final, nonappealable judgment, or (2) Broadcom breaching any
material provision of this Agreement, provided that Broadcom shall have a cure period of [****]
after receipt of written notice of any such material breach.

     9.4 Termination by Broadcom. Broadcom shall have the right to terminate this
Agreement (in its sole discretion) at any time if:

          (a) a Verizon Party breaches any material provision of this Agreement, provided that such
Verizon Party shall have a cure period of thirty (30) days after receipt of written notice of any
such material breach, provided that Broadcom may terminate immediately without providing a cure
period in the event of a material breach by a Verizon Party of Section 6.1 (i), (ii) or (iii); or

          (b) Verizon or any of its Affiliates challenges or attempts to challenge the validity or
enforceability of the Licensed Patents, including through any declaratory judgment action or
re-examination (each, a “Patent Challenge”) or, except as required by law, participates in
or actively assists (“Support”) any Patent Challenge by a third party, provided that this
termination right will not apply with respect to Verizon or any of its Affiliates asserting a
defense of invalidity or unenforceability if Broadcom asserts the Licensed Patents against Verizon
or its Affiliates for products other than Licensed Products.

     9.5 Effect of Termination and Expiration. Upon any termination or expiration of the
Agreement, those units of Licensed Products sold prior to such termination or expiration for which
per unit royalty payments have been made pursuant to Section 3.1 of this Agreement through the date
of termination/expiration shall be deemed fully licensed under Section 2.1, and fully paid and
royalty-free pursuant to such license, with respect to those units of Licensed Products for which
such royalties have been paid prior to termination. Except in the event of termination under
Section 9.2 or 9.4 or the first sentence of Section 9.3, and subject to Verizon’s continued
compliance with the surviving terms and conditions of this Agreement, upon payment of the Aggregate
Amount, the license under Section 2.1 to the Licensed Patents shall be deemed non-exclusive,
royalty-free, fully-paid, perpetual, and non-transferable (other than to a successor in interest as
set forth in Section 11.6) and shall survive any termination or expiration of the Agreement (unless
an event that would have given rise to termination under Section 9.4 occurs after such termination
or expiration, in which event

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

8

 

CONFIDENTIAL

 

the right and licenses granted to Verizon shall terminate). Upon termination of this
Agreement prior to the payment of the Aggregate Amount or in the event of termination under Section
9.2 or 9.4 or the first sentence of Section 9.3, all rights and licenses granted to Verizon shall
immediately terminate. Notwithstanding expiration or termination of this Agreement for any reason,
Broadcom shall have the right to retain the full amount of all payments that have been made prior
to termination and to receive payment for all unpaid amounts that have accrued prior to
termination. In addition, Verizon’s obligation to pay per unit royalties under Section 3.1 shall
survive with respect to all Licensed Products imported into the United States prior to the
effective date of termination or expiration and with respect to all Royalty Accruals under Section
3.1 (unless and until the Aggregate Amount has been paid by Verizon to Broadcom). Sections 2.2;
Sections 3, 4, 5 (for payments accruing prior to or surviving termination as set forth above),
Section 6.1 (with respect to the ITC Order and pending Litigation as of the Effective Date), 7 (if
all of the payments pursuant to Section 3.1 payable through the date of termination have been or
are made in accordance with the terms hereof and the Verizon Parties have not breached Section
6.1), 8, 9.5 and 11 shall survive the termination of this Agreement for any reason. Sections 2.2;
Sections 3, 4, 5 (for payments accruing prior to or surviving expiration as set forth above),
Section 6.1 (with respect to the ITC Order and pending Litigation as of the Effective Date), 7, 8,
9.5 and 11 shall survive the expiration of this Agreement.

10. [****]

11. General Provisions.

     11.1 Authority. Each Party represents it has the power and authority to enter into
this Agreement and to perform all of its duties and obligations set forth herein. Additionally,
Broadcom warrants and represents that it owns the Licensed Patents and that it has the right to
grant the rights and licenses to Verizon pursuant to this Agreement.

     11.2 Representation. Each Party declares and represents it is executing this Agreement
after consultation with its own legal counsel.

     11.3 Disclaimers. This Agreement and the license granted herein do not and shall not
be interpreted or construed to include: (1) any representation, warranty or admission as to the
validity, enforceability or scope of any Licensed Patent or any other patent or patent application,
(2) any requirement or obligation to file, maintain or enforce any Licensed Patent or any other
patent or patent application, (3) any obligation to furnish any technical or support information,
(4) any release or waiver of any claims, counterclaims or liabilities of any Party or any third
party, or (5) any license or rights by implication or estoppel. Except for the express
representations set forth in Sections 11.1 and 11.2, THE LICENSED PATENTS ARE LICENSED “AS IS, WITH
ALL FAULTS,” AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER, AND BROADCOM DISCLAIMS ALL
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY AS TO ANY MATTER WHATSOEVER, INCLUDING ALL IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

9

 

CONFIDENTIAL

 

     11.4 Notices. All notices required or permitted to be given hereunder shall be in
writing and shall be delivered by hand, or if dispatched by prepaid air courier or by registered or
certified airmail, postage prepaid, addressed as follows:

	 	 	 
	If to Verizon:

	 	Vice President — Legal and External Affairs and General Counsel
	 

	 	Verizon Wireless
	 

	 	1 Verizon Way, VC43E024
	 

	 	Basking Ridge, New Jersey 07920-1097
	 

	 	Fax: [****]
	 
	 	 
	If to Verizon
	 	 
	Communications:

	 	Senior Vice President and Deputy General Counsel (Intellectual Property)
	 

	 	Verizon Communications Inc.
	 

	 	1 Verizon Way
	 

	 	Basking Ridge, New Jersey 07920-1097
	 

	 	Fax: [****]
	 
	 	 
	If to Broadcom:

	 	Senior Vice President, Business Affairs & General Counsel
	 

	 	Broadcom Corporation
	 

	 	5300 California Avenue
	 

	 	Irvine, California 92617
	 

	 	Fax: [****]

Such notices shall be deemed to have been served when received by addressee or, if delivery is not
accomplished by reason of some fault of the addressee, when tendered for delivery. Either Party
may give written notice of a change of address and, after notice of such change has been received,
any notice or request shall thereafter be given to such Party as above provided at such changed
address.

     11.5 Attorneys’ Fees. Each Party shall be responsible for and shall pay its own
attorneys’ fees and costs incurred in connection with this Agreement.

     11.6 Assignment, Acquisition and Change of Control. 

     (a) Neither Party shall assign or otherwise transfer this Agreement or any rights
under this Agreement to any third party, whether by assignment, operation of law or otherwise,
except that each of Verizon Communications, Verizon and Broadcom shall have the right to assign
this Agreement and its rights under this Agreement in their entirety to a successor in interest in
connection with a sale or transfer of all or substantially all of the business or assets of Verizon
Communications, Verizon or Broadcom, as the case may be, whether by assignment, operation of law or
otherwise, provided that the assignee agrees in writing to comply with all of the terms and
condition of this Agreement; and provided however, that if Verizon or Verizon Communications shall
engage in a sale or transfer of all or substantially all of its business or assets to

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

10

 

CONFIDENTIAL

 

Qualcomm or any of its Affiliates or undergoes a Change of Control involving Qualcomm or any
of its Affiliates, then the licenses granted to Verizon and its Affiliates under Section 2.1 of
this Agreement shall terminate. Upon any assignment by Verizon to a third party or Change of
Control of Verizon, the licenses granted to Verizon Communications and its Subsidiaries (other than
Verizon and its Subsidiaries) shall terminate. Broadcom may also assign its right to receive
payments under this Agreement.

     (b) Notwithstanding anything to the contrary, in the event of any Business Combination which
results in Additional Subscribers, then, (x) the license set forth in Section 2.1 and royalties
under Section 3.1 will apply to Licensed Products for Additional Subscribers added to the Verizon
Network where the number of Additional Subscribers resulting from such Business Combination is
[****] or fewer subscribers in the aggregate without the payment of any additional royalty beyond
the Aggregate Amount as set forth in Section 3.1, and (y) in the event the aggregate number of
Additional Subscribers on the Verizon Network resulting from the Business Combination exceeds
[****] and is less than [****], unless Verizon provides written notice within thirty (30) days
after the closing of such Business Combination electing not to obtain a license under this
Agreement with respect to such Additional Subscribers, then the license set forth in Section 2.1
and royalties under Section 3.1 will apply to Licensed Products for such Additional Subscribers and
the Aggregate Amount under Section 3.1 shall be increased by an additional amount equal to the
product of [****] times the fraction determined by dividing (i) the number of Additional
Subscribers by (ii) the number of subscribers on the Verizon Network immediately prior to the
Business Combination (“Existing Subscribers”), which amount shall be due and payable within
sixty (60) days after the end of the quarter in which the Business Combination closes. If the
aggregate number of Additional Subscribers would be more than [****] subscribers, then the license
granted to Verizon under Section 2.1 of this Agreement shall be limited to Licensed Products for
Existing Subscribers and the Licensed Products for Additional Subscribers will not be licensed or
subject to the other rights or benefits granted under this Agreement (including Sections 7 and 10).
In such event, on a going forward basis after the closing of such Business Combination, the
license set forth in Section 2.1 will apply only to a pro rata portion of Licensed Products for new
subscribers on the Verizon Network (beyond the Existing Subscribers and Additional Subscribers)
based on the ratio of the number of Existing Subscribers to the number of Additional Subscribers.
The number of Additional Subscribers and Existing Subscribers, respectively, shall be determined by
reference to the net number of subscribers assuming the completion of any divestures required as a
condition to any such Business Combination or pursuant to any consent decree or to be transferred
pursuant to any agreement signed upon or prior to the effective time of the Business Combination.
As used above, “Additional Subscribers” means additional subscribers added to the Verizon
Network as a result of a Business Combination where the wireless devices used by such subscribers
are not already covered by a license under the Licensed Patents.

     (c) If a Business Combination results in Additional Subscribers being added to the Verizon
Network that are not licensed pursuant to 11.6(b), Verizon and Broadcom shall discuss in good faith
terms under which licenses may be granted for such Additional Subscribers.

     (d) If Verizon assigns this Agreement to a Carrier or undergoes a Change of Control with a
Carrier, then Section 10 shall terminate.

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

11

 

CONFIDENTIAL

 

     (e) If a Subsidiary of the Verizon Parties (other than Verizon) ceases to be a Subsidiary of
the Verizon Parties (“Former Subsidiary”), the licenses and rights set forth in this
Agreement (including under Sections 2, 7 and 10) shall cease to apply to such Former Subsidiary as
of the date the Former Subsidiary ceases to be a Subsidiary under this Agreement. If a Person
becomes a Subsidiary of the Verizon Parties after the Effective Date (“New Subsidiary”), such New
Subsidiary shall only be entitled to the licenses and benefits granted under this Agreement
(including under Sections 2, 7 and 10) with respect to Licensed Products that become licensed under
this Agreement pursuant to Section 11.6(b).

     (f) As used above, a “Business Combination” means a transaction or series of related
transactions in which either (i) all or substantially all of the business or assets of Verizon are
sold or otherwise transferred to a third party, whether by assignment, operation of law or
otherwise; or (ii) Verizon undergoes a Change of Control; or (iii) Verizon or its Affiliate
acquires any business or assets from a Carrier, whether by assignment, operation of law or
otherwise; or (iv) Verizon or its Affiliates acquires directly or indirectly, more than fifty (50%)
of the of voting power with respect to the election of directors or similar managing authority of
any Carrier.

     (g) As used above, “Carrier” means Sprint, T-Mobile, AT&T or any other U.S. carrier or
operator, manager or reseller of a wireless services or any Affiliates of any of the foregoing
(other than Affiliates or Authorized Distributors of Verizon immediately prior to a respective
Business Combination).

     (h) As used above, a “Change of Control” means a transaction or series of related
transactions in which either (i) Verizon consolidates or merges with or into another Person, or any
Person consolidates with, or merges with or into, Verizon, in each case unless the direct holders
of voting power with respect to the election of directors or similar managing authority of the
Party immediately prior to the transaction or series of related transactions will hold, directly or
indirectly, more than fifty (50%) of the of voting power with respect to the election of directors
or similar managing authority of the surviving entity immediately after the transaction or series
of related transactions; or (ii) any Person (other than Verizon Communications) or “group” (as such
term is used in Rule 13d-5 under the United States Securities Exchange Act of 1934) becomes, or has
the right to become, the beneficial owner, directly or indirectly, of more than fifty (50%) of the
of the voting power with respect to the election of directors or similar managing authority of
Verizon.

     (i) Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the Parties and their permitted successors and assigns.

     11.7 Governing Law. This Agreement and matters connected with the performance, breach
or termination thereof shall be construed, interpreted, applied and governed in all respects in
accordance with the laws of the State of New York, without reference to conflict of laws
principles. In the event of a dispute between the Verizon Parties and Broadcom regarding the
interpretation, breach or termination of this Agreement (“Dispute”), prior to either Party
commencing litigation with respect to such Dispute, each Party shall make available its senior
management to meet to attempt to resolve such Dispute within thirty (30) days after notice of such
Dispute has been provided by either Party to the other Party. If such Dispute is not resolved
during such thirty (30) day period, then either Party may litigate such Dispute. Notwithstanding

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

12

 

CONFIDENTIAL

 

anything to the contrary, and consistent with the terms of Section 2.2, nothing in this
Agreement shall be construed as restricting or limiting the jurisdiction or venue in which Broadcom
may assert or otherwise enforce the Licensed Patents or any other patents or intellectual property
rights against Qualcomm or any of its Affiliates or any other third party in any jurisdiction or
venue, including in any court or the ITC.

     11.8 Severability. If any provision of this Agreement is held to be illegal or
unenforceable, such provision shall be limited or eliminated to the minimum extent necessary so
that the remainder of this Agreement will continue in full force and effect and be enforceable. The
Parties agree to negotiate in good faith an enforceable substitute provision for any invalid or
unenforceable provision that most nearly achieves the intent of such provision.

     11.9 No Third Party Beneficiaries. This Agreement is solely for the benefit of
Broadcom and Verizon. No other person or entity shall be entitled to rely on this Agreement or to
anticipate the benefits of this Agreement or otherwise assert or be entitled to any rights or
licenses as a third party beneficiary hereof. Notwithstanding anything to the contrary, nothing in
this Agreement shall be construed as a release of or license or grant of other rights to or for the
benefit of Qualcomm or any of its Affiliates or any other third party, whether directly or
indirectly.

     11.10 Entire Agreement. This Agreement embodies the entire understanding of the
Parties with respect to the subject matter hereof, and merges all prior discussions between them,
and neither of the Parties shall be bound by any conditions, definitions, warranties,
understandings, or representations with respect to the subject matter hereof other than as
expressly provided herein; except for the Mutual Non-Disclosure and FRE 408 Agreement between
Broadcom and Verizon dated July 10, 2007 which remains in full force and effect in accordance with
its own terms with respect to information disclosed under the Mutual Non-Disclosure and FRE 408
Agreement that is not disclosed in this Agreement. In the event of a conflict between such Mutual
Non-Disclosure and FRE 408 Agreement and this Agreement with respect to the subject matter of this
Agreement, then the terms of this Agreement shall prevail. No oral explanation or oral information
by either Party hereto shall alter the meaning or interpretation of this Agreement.

     11.11 Modification; Waiver. No modification or amendment to this Agreement may be
made except in a writing signed by authorized representatives of both Parties. No waiver of any
rights will be effective unless assented to in writing by the Party to be charged, and the waiver
of any breach or default will not constitute a waiver of any other right hereunder or any
subsequent breach or default.

     11.12 Counterparts. This Agreement may be executed in any number of original, fax or
copied counterparts, each of which shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument.

     11.13 Bankruptcy. Each Party acknowledges that all rights and licenses granted by it
under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”), licenses of
rights to “intellectual property” as defined under Section 101(35A) of the Bankruptcy Code. Each
Party acknowledges that if such Party, as a debtor in

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

13

 

CONFIDENTIAL

 

possession or a trustee-in-bankruptcy in a case under the Bankruptcy Code, rejects this
Agreement, the other party may elect to retain its rights under this Agreement as provided in
Section 365(n) of the Bankruptcy Code. Each Party irrevocably waives all arguments and defenses
arising under 11 U.S.C. 365(c)(1) or successor provisions to the effect that applicable law excuses
the party, other than the debtor, from accepting performance from or rendering performance to an
entity other than the debtor or debtor in possession as a basis for opposing assumption of the
Agreements by the other party in a case under Chapter 11 of the Bankruptcy Code to the extent that
such consent is required under 11 U.S.C. § 365(c)(1) or any successor statute; provided that such
Party, as a debtor in possession or a trustee-in-bankruptcy, agrees in writing (with approval of
the court) that any assumption, assignment or Change of Control of Verizon resulting from or
subsequent to any such bankruptcy proceeding shall be subject to Section 11.6.

[Remainder of Page Intentionally Blank]

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

14

 

CONFIDENTIAL

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed below by their
respective duly authorized officers.

	 	 	 	 	 	 	 	 	 
	BROADCOM CORPORATION	 	 	 	CELLCO PARTNERSHIP
	 	 	 	 	 	 	d/b/a VERIZON WIRELESS
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ David Dull
	 	 	 	By:
	 	/s/ Steven E. Zipperstein
	 

	 	 
	 	 	 	 	 	 
	Print:

	 	David Dull
	 	 	 	Print:
	 	Steven E. Zipperstein
	Title:

	 	Senior Vice President & General Counsel
	 	 	 	Title:
	 	Vice President & General Counsel
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	VERIZON COMMUNICATIONS INC.
	 

	 	 	 	 	 	By:
	 	/s/ John Thorne
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Print:
	 	John Thorne
	 

	 	 	 	 	 	Title:
	 	Senior Vice President and Deputy
	 

	 	 	 	 	 	 	 	General Counsel

 

[****] Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

15EXHIBIT 5.1  

RESPONSE BIOMEDICAL CORP.

2005 STOCK OPTION PLAN

Effective Date:  May 3, 2005

Approved by the Board of Directors on May 3, 2005.

Approved by the Shareholders on June 21, 2005.

Amended June 22, 2006

Extended and Amended by the board of Directors on April 3, 2007

Approved by Shareholders on June 14, 2007

 

 

TABLE OF CONTENTS

	
             
 	
            Page 
 

	
            SECTION 1 DEFINITIONS AND INTERPRETATION
 	
            1
 

	
             
 	
            1.1   Definitions
 	
            1 
 

	
             
 	
            1.2   Choice of Law
 	
            5 
 

	
             
 	
            1.3   Headings
 	
            5 
 

	
            SECTION 2 GRANT OF OPTIONS
 	
            5
 

	
             
 	
            2.1   Grant of Options
 	
            5 
 

	
             
 	
            2.2   Record of Option Grants
 	
            5  
 

	
             
 	
            2.3   Effect of Plan
 	
            5 
 

	
            SECTION 3 PURPOSE AND PARTICIPATION 
 	
            5
 

	
             
 	
            3.1   Purpose of Plan
 	
            5 
 

	
             
 	
            3.2   Participation in Plan
 	
            6 
 

	
             
 	
            3.3   Limits on Option Grants - Tier 1 Issuer
 	
            6 
 

	
             
 	
            3.4   Limits on Option Grants - Tier 2 Issuer
 	
            6 
 

	
             
 	
            3.5   Notification of Grant
 	
            6 
 

	
             
 	
            3.6   Copy of Plan
 	
            7 
 

	
             
 	
            3.7   Limitation on Service
 	
            7 
 

	
             
 	
            3.8   No Obligation to Exercise
 	
            7 
 

	
             
 	
            3.9   Agreement
 	
            7 
 

	
             
 	
            3.10  Notice
 	
            7 
 

	
             
 	
            3.11  Representation to TSX-VN
 	
            7 
 

	
            SECTION 4 NUMBER OF SHARES UNDER PLAN 
 	
            7
 

	
             
 	
            4.1   Board to Approve Issuance of Shares
 	
            7 
 

	
             
 	
            4.2   Number of Shares
 	
            8 
 

	
             
 	
            4.3   Fractional Shares
 	
            8 
 

	
            SECTION 5 TERMS AND CONDITIONS OF OPTIONS 
 	
            8
 

	
             
 	
            5.1   Exercise Period of Option
 	
            8 
 

	
             
 	
            5.2   Number of Shares Under Option
 	
            8 
 

	
             
 	
            5.3   Exercise Price of Option
 	
            8 
 

	
             
 	
            5.4   Termination of Option
 	
            9 
 

	
             
 	
            5.5   Vesting of Option and Acceleration
 	
            10 
 

	
             
 	
            5.6   Additional Terms
 	
            10 
 

	
             
 	
            5.7   U.S. Option Holders
 	
            10 
 

	
            SECTION 6 TRANSFERABILITY OF OPTIONS 
 	
            11
 

	
             
 	
            6.1   Non-transferable
 	
            11 
 

	
             
 	
            6.2   Death of Option Holder
 	
            11 
 

	
             
 	
            6.3   Disability of Option Holder
 	
            11 
 

	
             
 	
            6.4   Disability and Death of Option Holder
 	
            11 
 

	
             
 	
            6.5   Vesting
 	
            12 
 

	
             
 	
            6.6   Deemed Non-Interruption of Engagement
 	
            12 
 

	
            SECTION 7 EXERCISE OF OPTION 
 	
            12
 

	
             
 	
            7.1   Exercise of Option
 	
            12 
 

	
             
 	
            7.2   Issue of Share Certificates
 	
            12 
 

	
             
 	
            7.3   No Rights as Shareholder
 	
            12 
 

	
            SECTION 8 ADMINISTRATION 
 	
            12
 

	
             
 	
            8.1   Board or Committee
 	
            12 
 

 

	
             
 	
            - ii -
 

 

	
             
 	
            8.2   Appointment of Committee
 	
            13 
 

	
             
 	
            8.3   Quorum and Voting
 	
            13 
 

	
             
 	
            8.4   Powers of Committee
 	
            13 
 

	
             
 	
            8.5   Administration by Committee
 	
            14 
 

	
             
 	
            8.6   Interpretation
 	
            14 
 

	
            SECTION 9 APPROVALS AND AMENDMENT 
 	
            14
 

	
             
 	
            9.1   Shareholder Approval of Plan
 	
            14 
 

	
             
 	
            9.2   Amendment of Option or Plan
 	
            14 
 

	
            SECTION 10 CONDITIONS PRECEDENT TO ISSUANCE OF OPTIONS AND SHARES
 	
            14
 

	
             
 	
            10.1  Compliance with Laws
 	
            14 
 

	
             
 	
            10.2  Obligation to Obtain Regulatory Approvals
 	
            15 
 

	
             
 	
            10.3  Inability to Obtain Regulatory Approvals
 	
            15 
 

	
             
 	
            10.4  U.S. Regulatory Approvals
 	
            15 
 

	
            SECTION 11 ADJUSTMENTS AND TERMINATION
 	
            15
 

	
             
 	
            11.1  Termination of Plan
 	
            15 
 

	
             
 	
            11.2  No Grant During Suspension of Plan
 	
            15 
 

	
             
 	
            11.3  Alteration in Capital Structure
 	
            15 
 

	
             
 	
            11.4  Triggering Events
 	
            16 
 

	
             
 	
            11.5  Notice of Termination by Triggering Event
 	
            16 
 

	
             
 	
            11.6  Determinations to be Made By Committee
 	
            16 
 

	
            SECTION 12 CALIFORNIA OPTION GRANTS
 	
            17
 

	
             
 	
            12.1  Application of this Section
 	
            17 
 

	
             
 	
            12.2  Minimum Exercise Price
 	
            17 
 

	
             
 	
            12.3  Minimum Vesting Schedule
 	
            17 
 

	
             
 	
            12.4  Maximum Exercise Period
 	
            17 
 

	
             
 	
            12.5  Minimum Post-Termination Exercise Period
 	
            17 
 

	
             
 	
            12.6  Additional Shareholder Approval
 	
            17 
 

STOCK OPTION PLAN

SECTION 1 

DEFINITIONS AND INTERPRETATION

	
            1.1
 	
            Definitions
 

As used herein, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the meanings set forth below:

	
             
  	
            (a)
 	
            "Administrator" means such Executive or Employee of the Company as may be designated as Administrator by the Committee from time to time, if any.
 

	
             
  	
            (b)
 	
            "Associate" means, where used to indicate a relationship with any person:
 

	
             
  	
            (i)
 	
            any relative, including the spouse of that person or a relative of that person's spouse, where the relative has the same home as the person;
 

	
             
  	
            (ii)
 	
            any partner, other than a limited partner, of that person;
 

	
             
  	
            (iii)
 	
            any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity; and
 

	
             
  	
            (iv)
 	
            any corporation of which such person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the corporation.
 

	
             
  	
            (c)
 	
            "Black-Out" means a restriction imposed by the Company on all or any of its directors, officers, employees, insiders or persons in a special relationship whereby they are to refrain from trading in the Company's securities until the restriction has been lifted by the Company.
 

	
             
  	
            (d)
 	
            "Board" means the board of directors of the Company.
 

	
             
  	
            (e)
 	
            "Change of Control" means an occurrence when either:
 

	
             
  	
            (i)
 	
            a Person or Entity, other than the current "control person" of the Company (as that term is defined in the Securities Act), becomes a "control person" of the Company; or
 

	
             
  	
            (ii)
 	
            a majority of the directors elected at any annual or extraordinary general meeting of shareholders of the Company are not individuals nominated by the Company's then-incumbent Board.
 

	
             
  	
            (f)
 	
            "Committee" means a committee of the Board appointed in accordance with this Plan or if no such committee is appointed, the Board itself.
 

	
             
  	
            (g)
 	
            "Company" means Response Biomedical Corp.
 

	
             
  	
            (h)
 	
            "Consultant" means an individual who:
 

	
             
  	
            (i)
 	
            is engaged to provide, on an ongoing bona fide basis, consulting, technical, management or other services to the Company or any Subsidiary other than services provided in relation to a "distribution" (as that term is described in the Securities Act); 
 

 

	
             
 	
            - 2 -
 

 

	
             
  	
            (ii)
 	
            provides the services under a written contract between the Company or any Subsidiary and the individual or a Consultant Entity (as defined in clause (h)(v) below); 
 

	
             
  	
            (iii)
 	
            in the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the affairs and business of the Company or any Subsidiary; and
 

	
             
  	
            (iv)
 	
            has a relationship with the Company or any Subsidiary that enables the individual to be knowledgeable about the business and affairs of the Company or is otherwise permitted by applicable Regulatory Rules to be granted Options as a Consultant or as an equivalent thereof,
 

and includes:

	
             
  	
            (v)
 	
            a corporation of which the individual is an employee or shareholder or a partnership of which the individual is an employee or partner (a "Consultant Entity"); or
 

	
             
  	
            (vi)
 	
            an RRSP or RRIF established by or for the individual under which he or she is the beneficiary.
 

	
             
  	
            (i)
 	
            "Disability" means a medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less than 12 months, and which causes an individual to be unable to engage in any substantial gainful activity, or any other condition of impairment that the Committee, acting reasonably, determines constitutes a disability.
 

	
             
  	
            (j)
 	
            "Employee" means:
 

	
             
  	
            (i)
 	
            an individual who works full-time or part-time for the Company or any Subsidiary and such other individual as may, from time to time, be permitted by applicable Regulatory Rules to be granted Options as an employee or as an equivalent thereto; or
 

	
             
  	
            (ii)
 	
            an individual who works for the Company or any Subsidiary either full-time or on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Company or any Subsidiary over the details and methods of work as an employee of the Company or any Subsidiary, but for whom income tax deductions are not made at source,
 

and includes:

	
             
  	
            (iii)
 	
            a corporation wholly-owned by such individual; and
 

	
             
  	
            (iv)
 	
            any RRSP or RRIF established by or for such individual under which he or she is the beneficiary.
 

	
             
  	
            (k)
 	
            "Executive" means an individual who is a director or officer of the Company or a Subsidiary, and includes:
 

	
             
  	
            (i)
 	
            a corporation wholly-owned by such individual; and
 

	
             
  	
            (ii)
 	
            any RRSP or RRIF established by or for such individual under which he or she is the beneficiary.
 

	
             
  	
            (l)
 	
            "Exercise Notice" means the written notice of the exercise of an Option, in the form set out as Schedule "B" hereto, duly executed by the Option Holder.
 

	
             
  	
            (m)
 	
            "Exercise Period" means the period during which a particular Option may be exercised and is the period from and including the Grant Date through to and including the Expiry Time on the Expiry Date provided, however, that no Option can be exercised unless and until all necessary Regulatory Approvals have been obtained.
 

 

	
             
 	
            - 3 -
 

 

	
             
  	
            (n)
 	
            "Exercise Price" means the price at which an Option is exercisable as determined in accordance with section 5.3.
 

	
             
  	
            (o)
 	
            "Expiry Date" means the date the Option expires as set out in the Option Certificate or as otherwise determined in accordance with sections 5.4, 6.2, 6.3, 6.4 or 11.4.
 

	
             
  	
            (p)
 	
            "Expiry Time" means the time the Option expires on the Expiry Date, which is 5:00 p.m. local time in Vancouver, British Columbia on the Expiry Date.
 

	
             
  	
            (q)
 	
            "Grant Date" means the date on which the Committee grants a particular Option, which is the date the Option comes into effect provided however that no Option can be exercised unless and until all necessary Regulatory Approvals have been obtained.
 

	
             
  	
            (r)
 	
            "Insider" means an insider as that term is defined in the Securities Act; 
 

	
             
  	
            (s)
 	
            "Market Value" means the market value of the Shares as determined in accordance with section 5.3.
 

	
             
  	
            (t)
 	
            "Option" means an incentive share purchase option granted pursuant to this Plan entitling the Option Holder to purchase Shares of the Company.
 

	
             
  	
            (u)
 	
            "Option Certificate" means the certificate, in substantially the form set out as Schedule "A" hereto, or in such other form or forms as may be adopted by the Committee from time to time, evidencing the Option.
 

	
             
  	
            (v)
 	
            "Option Holder" means a Person or Entity who holds an unexercised and unexpired Option or, where applicable, the Personal Representative of such person.
 

	
             
  	
            (w)
 	
            "Outstanding Issue" means the number of Shares that are outstanding (on a non-diluted basis) immediately prior to the Share issuance or grant of Option in question.
 

	
             
  	
            (x)
 	
            "Person or Entity" means an individual, natural person, corporation, government or political subdivision or agency of a government, and where two or more persons act as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of securities of an issuer, such partnership, limited partnership, syndicate or group shall be deemed to be a Person or Entity.
 

	
             
  	
            (y)
 	
            "Personal Representative" means:
 

	
             
  	
            (i)
 	
            in the case of a deceased Option Holder, the executor or administrator of the deceased duly appointed by a court or public authority having jurisdiction to do so; and
 

	
             
  	
            (ii)
 	
            in the case of an Option Holder who for any reason is unable to manage his or her affairs, the person entitled by law to act on behalf of such Option Holder.
 

	
             
  	
            (z)
 	
            "Plan" means this stock option plan as from time to time amended.
 

	
             
  	
            (aa)
 	
            "Regulatory Approvals" means any necessary approvals of the Regulatory Authorities as may be required from time to time for the implementation, operation or amendment of this Plan or for the Options granted from time to time hereunder.
 

	
             
  	
            (bb)
 	
            "Regulatory Authorities" means all organized trading facilities on which the Shares are listed, and all securities commissions or similar securities regulatory bodies having jurisdiction over the Company, this Plan or the Options granted from time to time hereunder.
 

	
             
  	
            (cc)
 	
            "Regulatory Rules" means all corporate and securities laws, regulations, rules, policies, notices, instruments and other orders of any kind whatsoever which may, from time to time, apply to the implementation, 
 

 

	
             
 	
            - 4 -
 

 

operation or amendment of this Plan or the Options granted from time to time hereunder including, without limitation, those of the applicable Regulatory Authorities.

	
             
  	
            (dd)
 	
            "Securities Act" means the Securities Act (British Columbia), RSBC 1996, c.418 as from time to time amended.
 

	
             
  	
            (ee)
 	
            "Share" or "Shares" means, as the case may be, one or more common shares without par value in the capital stock of the Company.
 

	
             
  	
            (ff)
 	
            "Subsidiary" means a wholly-owned or controlled subsidiary corporation of the Company.
 

	
             
  	
            (gg)
 	
            "Triggering Event" means:
 

	
             
  	
            (i)
 	
            the proposed dissolution, liquidation or wind-up of the Company;
 

	
             
  	
            (ii)
 	
            a proposed merger, amalgamation, arrangement or reorganization of the Company with one or more corporations as a result of which, immediately following such event, the shareholders of the Company as a group, as they were immediately prior to such event, are expected to hold less than a majority of the outstanding capital stock of the surviving corporation;
 

	
             
  	
            (iii)
 	
            the proposed acquisition of all or substantially all of the issued and outstanding shares of the Company by one or more Persons or Entities;
 

	
             
  	
            (iv)
 	
            a proposed Change of Control of the Company;
 

	
             
  	
            (v)
 	
            the proposed sale or other disposition of all or substantially all of the assets of the Company; or
 

	
             
  	
            (vi)
 	
            a proposed material alteration of the capital structure of the Company which, in the opinion of the Committee, is of such a nature that it is not practical or feasible to make adjustments to this Plan or to the Options granted hereunder to permit the Plan and Options granted hereunder to stay in effect.
 

	
             
  	
            (hh)
 	
            "TSX-VN" means the TSX Venture Exchange Inc.
 

	
             
  	
            (ii)
 	
            "United States" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia.
 

	
             
  	
            (jj)
 	
            "U.S. Eligible Consultant" means a Consultant that is a natural person that provides bona fide services to the Company, and such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities.
 

	
             
  	
            (kk)
 	
            "U.S. Person" means a U.S. person within the meaning of Regulation S adopted pursuant to the U.S. Securities Act, which definition includes, but is not limited to, a natural person resident in the United States, a partnership or corporation organized or incorporated under the laws of the United States, or an estate or trust of which any executor, administrator or trustee is a U.S. person.
 

	
             
  	
            (ll)
 	
            "U.S. Securities Act" means the United States Securities Act of 1933, as amended.
 

	
             
  	
            (mm)
 	
            "Vest" or "Vesting" means that portion of the Option granted to the Option Holder which is available to be exercised by the Option Holder at any time and from time to time.
 

	
             
 	
            - 5 -
 

 

	
            1.2
 	
            Choice of Law
 

The Plan is established under, and the provisions of the Plan shall be subject to and interpreted and construed in accordance with, the laws of the Province of British Columbia.  The Company and each Option Holder hereby attorn to the jurisdiction of the Courts of British Columbia.

	
            1.3
 	
            Headings
 

The headings used herein are for convenience only and are not to affect the interpretation of the Plan.

SECTION 2 

GRANT OF OPTIONS

	
            2.1
 	
            Grant of Options
 

The Committee shall, from time to time in its sole discretion, grant Options to such Persons or Entities and on such terms and conditions as are permitted under this Plan.

	
            2.2
 	
            Record of Option Grants
 

The Committee shall be responsible to maintain a record of all Options granted under this Plan and such record shall contain, in respect of each Option:

	
            (a)
 	
            the name and address of the Option Holder;
 

	
            (b)
 	
            the category (Executive, Employee or Consultant) under which the Option was granted to him, her or it;
 

	
            (c)
 	
            the Grant Date and Expiry Date of the Option;
 

	
            (d)
 	
            the number of Shares which may be acquired on the exercise of the Option and the Exercise Price of the Option;
 

	
            (e)
 	
            the vesting and other additional terms, if any, attached to the Option; and
 

	
            (f)
 	
            the particulars of each and every time the Option is exercised.
 

	
            2.3
 	
            Effect of Plan
 

All Options granted pursuant to the Plan shall be subject to the terms and conditions of the Plan notwithstanding the fact that the Option Certificates issued in respect thereof do not expressly contain such terms and conditions but instead incorporate them by reference to the Plan.  The Option Certificates will be issued for convenience only and in the case of a dispute with regard to any matter in respect thereof, the provisions of the Plan and the records of the Company shall prevail over the terms and conditions in the Option Certificate, save and except as noted below. 

SECTION 3 

PURPOSE AND PARTICIPATION

	
            3.1
 	
            Purpose of Plan
 

The purpose of the Plan is to provide the Company with a share-related mechanism to attract, retain and motivate qualified Executives, Employees and Consultants, to incent such individuals to contribute toward the long term goals of the Company, and to encourage such individuals to acquire Shares of the Company as long term investments.

	
             
 	
            - 6 -
 

 

	
            3.2
 	
            Participation in Plan
 

The Committee shall, from time to time and in its sole discretion, determine those Executives, Employees and Consultants, if any, to whom Options are to be granted; provided, however, that no Option may be granted to a Consultant that is in the United States or that is a U.S. Person unless such Consultant is a U.S. Eligible Consultant.

	
            3.3
 	
            Limits on Option Grants - Tier 1 Issuer
 

If the Company is listed on TSX-VN as a Tier 1 issuer, the following limitations shall apply to the Plan and all Options thereunder so long as such limitations are required by the TSX-VN:

	
            (a)
 	
            the maximum number of Options which may be granted to any one Option Holder under the Plan within any 12 month period shall be 5% of the Outstanding Issue;
 

	
            (b)
 	
            with respect to section 5.1, the Expiry Date of an Option shall be no later than the tenth anniversary of the Grant Date of such Option;
 

	
            (c)
 	
            the maximum number of Options which may be granted to any one Consultant within any 12 month period must not exceed 2% of the Outstanding Issue; and
 

	
            (d)
 	
            the maximum number of Options which may be granted within any 12 month period to Employees or Consultants engaged in investor relations activities must not exceed 2% of the Outstanding Issue and such options must vest in stages over 12 months with no more than 25% of the Options vesting in any three month period,
 

and such limitation will not be an amendment to this Plan requiring the Option Holders consent under section 9.2 of this Plan.

	
            3.4
 	
            Limits on Option Grants - Tier 2 Issuer
 

If the Company is listed on TSX-VN as a Tier 2 issuer, the following limitations shall apply to the Plan and all Options thereunder so long as such limitations are required by the TSX-VN:

	
            (a)
 	
            the maximum number of Options which may be granted to any one Option Holder under the Plan within any 12 month period shall be 5% of the Outstanding Issue;
 

	
            (b)
 	
            with respect to section 5.1, the Expiry Date of an Option shall be no later than the fifth anniversary of the Grant Date of such Option;
 

	
            (c)
 	
            the maximum number of Options which may be granted to any one Consultant within any 12 month period must not exceed 2% of the Outstanding Issue; and
 

	
            (d)
 	
            the maximum number of Options which may be granted within any 12 month period to Employees or Consultants engaged in investor relations activities must not exceed 2% of the Outstanding Issue and such options must vest in stages over 12 months with no more than 25% of the Options vesting in any three month period,
 

and such limitation will not be an amendment to this Plan requiring the Option Holders consent under section 9.2 of this Plan.

	
            3.5
 	
            Notification of Grant
 

Following the granting of an Option, the Administrator shall, within a reasonable period of time, notify the Option Holder in writing of the grant and shall enclose with such notice the Option Certificate representing the Option so 

 

	
             
 	
            - 7 -
 

 

granted.  In no case will the Company be required to deliver an Option Certificate to an Option Holder until such time as the Company has obtained all necessary Regulatory Approvals for the grant of the Option.

	
            3.6
 	
            Copy of Plan
 

Each Option Holder, concurrently with the notice of the grant of the Option, shall be provided with a copy of the Plan.  A copy of any amendment to the Plan shall be promptly provided by the Administrator to each Option Holder.

	
            3.7
 	
            Limitation on Service
 

The Plan does not give any Option Holder that is an Executive the right to serve or continue to serve as an Executive of the Company or any Subsidiary, nor does it give any Option Holder that is an Employee or Consultant the right to be or to continue to be employed or engaged by the Company or any Subsidiary.

	
            3.8
 	
            No Obligation to Exercise
 

Option Holders shall be under no obligation to exercise Options granted under this Plan.

	
            3.9
 	
            Agreement
 

The Company and every Option Holder granted an Option hereunder shall be bound by and subject to the terms and conditions of this Plan.  By accepting an Option granted hereunder, the Option Holder has expressly agreed with the Company to be bound by the terms and conditions of this Plan.  In the event that the Option Holder receives his, her or its Options pursuant to an oral or written agreement with the Company or a Subsidiary, whether such agreement is an employment agreement, consulting agreement or any other kind of agreement of any kind whatsoever, the Option Holder acknowledges that in the event of any inconsistency between the terms relating to the grant of such Options in that agreement and the terms attaching to the Options as provided for in this Plan, the terms provided for in this Plan shall prevail and the other agreement shall be deemed to have been amended accordingly.

	
            3.10
 	
            Notice
 

Any notice, delivery or other correspondence of any kind whatsoever to be provided by the Company to an Option Holder will be deemed to have been provided if provided to the last home address, fax number or email address of the Option Holder in the records of the Company and the Company shall be under no obligation to confirm receipt or delivery.

	
            3.11
 	
            Representation to TSX-VN
 

As a condition precedent to the issuance of an Option, the Company must be able to represent to TSX-VN as of the Grant Date that the Option Holder is a bona fide Executive, Employee or Consultant of the Company or any Subsidiary.

SECTION 4 

NUMBER OF SHARES UNDER PLAN

	
            4.1
 	
            Board to Approve Issuance of Shares
 

The Board shall approve by resolution the issuance of all Shares to be issued to Option Holders upon the exercise of Options, such authorization to be deemed effective as of the Grant Date of such Options regardless of when it is actually done.  The Board shall be entitled to approve the issuance of Shares in advance of the Grant Date, retroactively after the Grant Date, or by a general approval of this Plan.

	
             
 	
            - 8 -
 

 

	
            4.2
 	
            Number of Shares
 

Subject to adjustment as provided for herein, the number of Shares which will be available for purchase pursuant to Options granted pursuant to this Plan will not exceed 17,000,000 Shares, including 2,123,100 Shares as at June 14, 2007 which are currently subject to stock options under the Company’s 1996 Stock Option Plan dated April 19, 1996, as amended on June 21, 1999, June 1, 2000, June 7, 2001, June 17, 2003 and June 21, 2004 (the “1996 Plan”).  If any Option expires or otherwise terminates for any reason without having been exercised in full, or any stock option under the 1996 Plan expires or otherwise terminates for any reason without having been exercised in full, the number of Shares in respect of such expired or terminated Option or stock option shall again be available for the purposes of granting Options pursuant to this Plan.

	
            4.3
 	
            Fractional Shares
 

No fractional shares shall be issued upon the exercise of any Option and, if as a result of any adjustment, an Option Holder would become entitled to a fractional share, such Option Holder shall have the right to purchase only the next lowest whole number of Shares and no payment or other adjustment will be made for the fractional interest.

SECTION 5 

TERMS AND CONDITIONS OF OPTIONS

	
            5.1
 	
            Exercise Period of Option
 

Subject to sections 5.4, 6.2, 6.3, 6.4 and 11.4, the Grant Date and the Expiry Date of an Option shall be the dates fixed by the Committee at the time the Option is granted and shall be set out in the Option Certificate issued in respect of such Option.

	
            5.2
 	
            Number of Shares Under Option
 

The number of Shares which may be purchased pursuant to an Option shall be determined by the Committee and shall be set out in the Option Certificate issued in respect of the Option.

	
            5.3
 	
            Exercise Price of Option
 

The Exercise Price at which an Option Holder may purchase a Share upon the exercise of an Option shall be determined by the Committee and shall be set out in the Option Certificate issued in respect of the Option.  The Exercise Price shall not be less than the Market Value of the Shares as of the Grant Date. The Market Value of the Shares for a particular Grant Date shall be determined as follows:

	
            (a)
 	
            for each organized trading facility on which the Shares are listed, Market Value will be the closing trading price of the Shares on the day immediately preceding the Grant Date, and may be less than this price if it is within the discounts permitted by the applicable Regulatory Authorities;
 

	
            (b)
 	
            if the Company's Shares are listed on more than one organized trading facility, the Market Value shall be the Market Value as determined in accordance with subparagraph (a) above for the primary organized trading facility on which the Shares are listed, as determined by the Committee, subject to any adjustments as may be required to secure all necessary Regulatory Approvals; 
 

	
            (c)
 	
            if the Company's Shares are listed on one or more organized trading facilities but have not traded during the ten trading days immediately preceding the Grant Date, then the Market Value will be, subject to any adjustments as may be required to secure all necessary Regulatory Approvals, such value as is determined by the Committee; and
 

	
            (d)
 	
            if the Company's Shares are not listed on any organized trading facility, then the Market Value will be, subject to any adjustments as may be required to secure all necessary Regulatory Approvals, such value as 
 

 

	
             
 	
            - 9 -
 

 

is determined by the Committee to be the fair value of the Shares, taking into consideration all factors that the Committee deems appropriate, including, without limitation, recent sale and offer prices of the Shares in private transactions negotiated at arms' length.

Notwithstanding anything else contained herein, in no case will the Market Value be less than the minimum prescribed by each of the organized trading facilities that would apply to the Company on the Grant Date in question.

	
            5.4
 	
            Termination of Option
 

Subject to such other terms or conditions that may be attached to Options granted hereunder, an Option Holder may exercise an Option in whole or in part at any time and from time to time during the Exercise Period.  Any Option or part thereof not exercised within the Exercise Period shall terminate and become null, void and of no effect as of the Expiry Time on the Expiry Date. The Expiry Date of an Option shall be the earlier of the date so fixed by the Committee at the time the Option is granted as set out in the Option Certificate and the date established, if applicable, in paragraphs (a) or (b) below or sections 6.2, 6.3, 6.4, or 11.4 of this Plan:

	
            (a)
 	
            Ceasing to Hold Office - In the event that the Option Holder holds his or her Option as an Executive and such Option Holder ceases to hold such position other than by reason of death or Disability, the Expiry Date of the Option shall be, unless otherwise expressly provided for in the Option Certificate, the 90th day following the date the Option Holder ceases to hold such position unless the Option Holder ceases to hold such position as a result of:
 

	
             
  	
            (i)
 	
            ceasing to meet the qualifications set forth in the corporate legislation applicable to the Company;
 

	
             
  	
            (ii)
 	
            a special resolution having been passed by the shareholders of the Company removing the Option Holder as a director of the Company or any Subsidiary; or
 

	
             
  	
            (iii)
 	
            an order made by any Regulatory Authority having jurisdiction to so order;
 

in which case the Expiry Date shall be the date the Option Holder ceases to hold such position; OR

	
            (b)
 	
            Ceasing to be Employed or Engaged - In the event that the Option Holder holds his or her Option as an Employee or Consultant, other than an Option Holder who is engaged in investor relations activities, and such Option Holder ceases to hold such position other than by reason of death or Disability, the Expiry Date of the Option shall be, unless otherwise expressly provided for in the Option Certificate, the 90th day following the date the Option Holder ceases to hold such position, or, in the case of an Option Holder that is engaged in investor relations activities while the Company is classified as a Tier 2 issuer on the TSX-VN, the 30th day after the date such Option Holder ceases to hold such position, unless the Option Holder ceases to hold such position as a result of:
 

	
             
  	
            (i)
 	
            termination for cause;
 

	
             
  	
            (ii)
 	
            resigning or terminating his or her position; or
 

	
             
  	
            (iii)
 	
            an order made by any Regulatory Authority having jurisdiction to so order;
 

in which case the Expiry Date shall be the date the Option Holder ceases to hold such position.

In the event that the Option Holder ceases to hold the position of Executive, Employee or Consultant for which the Option was originally granted, but comes to hold a different position as an Executive, Employee or Consultant prior to the expiry of the Option, the Committee may, in its sole discretion, choose to permit the Option to stay in place for that Option Holder with such Option then to be treated as being held by that Option Holder in his or her new position and such will not be considered to be an amendment to the Option in question requiring the consent of the Option 

 

	
             
 	
            - 10 -
 

 

Holder under section 9.2 of this Plan.  Notwithstanding anything else contained herein, in no case will an Option be exercisable later than the Expiry Date of the Option.

	
            5.5
 	
            Vesting of Option and Acceleration
 

The vesting schedule for an Option, if any, shall be determined by the Committee and shall be set out in the Option Certificate issued in respect of the Option.  The Committee may elect, at any time, to accelerate the vesting schedule of one or more Options including, without limitation, on a Triggering Event, and such acceleration will not be considered an amendment to the Option in question requiring the consent of the Option Holder under section 9.2 of this Plan.

	
            5.6
 	
            Additional Terms
 

Subject to all applicable Regulatory Rules and all necessary Regulatory Approvals, the Committee may attach additional terms and conditions to the grant of a particular Option, such terms and conditions to be set out in the Option Certificate.  The Option Certificates will be issued for convenience only, and in the case of a dispute with regard to any matter in respect thereof, the provisions of this Plan and the records of the Company shall prevail over the terms and conditions in the Option Certificate, save and except as noted below.

	
            5.7
 	
            U.S. Option Holders
 

Any Option granted under the Plan to an Option Holder who is a citizen or resident of the United States (a "U.S. Option Holder") within the meaning of the U.S. Internal Revenue Code of 1986, as amended, (the “Code”), will be an incentive stock option (an "ISO") within the meaning of Section 422 of the Code if so designated by the Company in the Option Certificate evidencing such Option.  No provision of this Plan, as it may be applied to a U.S. Option Holder with respect to Options which are designated as ISOs, shall be construed so as to be inconsistent with any provision of Section 422 of the Code.  Grants of Options to U.S. Option Holders which are not designated as an ISO in the Option Certificate evidencing such Option or otherwise do not qualify as ISOs will be treated as nonstatutory stock options for U.S. federal tax purposes.  Notwithstanding anything in this Plan contained to the
contrary, the following provisions shall apply to ISOs granted to each U.S. Option Holder:

	
            (a)
 	
            subject to adjustment as provided for in this Plan, the number of Shares which will be available for granting ISOs will not exceed the number of Shares available for purchase pursuant to Options granted pursuant to the Plan set out in Section 4.2;
 

	
            (b)
 	
            ISOs shall only be granted to individual U.S. Option Holders who are, at the time of grant, “employees” of the Company within the meaning of the Code (or of any “subsidiary” of the Company within the meaning of section 424(f) of the Code);
 

	
            (c)
 	
            the aggregate fair market value (determined as of the time an ISO is granted) of the Shares subject to ISOs exercisable for the first time by a U.S. Option Holder during any calendar year under this Plan (and all other plans of the Company, any “subsidiary” of the Company within the meaning of Section 424(f) of the Code and any “parent” of the Company within the meaning of Section 424(e) of the Code) shall not exceed One Hundred Thousand Dollars in U.S. funds (U.S.$100,000);
 

	
            (d)
 	
            the Exercise Price per Share for each ISO granted to a U.S. Option Holder pursuant to this Plan shall be not less than fair market value of  one Share on the Grant Date, as determined in good faith by the Committee at such time ;
 

	
            (e)
 	
            the Exercise Period of an ISO shall not exceed ten (10) years from the Grant Date;
 

	
            (f)
 	
            if a U.S. Option Holder who has been granted an ISO ceases to be an “employee” of the Company within the meaning of the Code (or of any “subsidiary” of the Company within the meaning of section 424(f) of the Code) for any reason other than the death, Disability or a reason described in clause (i), (ii), or (iii) of 
 

 

	
             
 	
            - 11 -
 

 

Section 5.4(a) or 5.4(b), such ISO may be exercised (to the extent such ISO was exercisable on the date of termination) by such U.S. Option Holder for a period of three (3) months after the date of termination (but in no event beyond the term of such ISO);

	
            (g)
 	
            if any U.S. Option Holder to whom an ISO is to be granted under the Plan at the time of the grant of such ISO is the owner, directly or constructively, of shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company, then the following special provisions shall be applicable to the ISO granted to such Option Holder:
 

	
             
  	
            (i)
 	
            the Exercise Price per Share with respect to such ISO shall not be less than one hundred ten percent (110%) of the fair market value of one Share on the Grant Date, as determined in good faith by the Committee at such time; and
 

	
             
  	
            (ii)
 	
            the Exercise Period of such ISO shall not exceed five (5) years from the Grant Date;
 

	
            (h)
 	
            no ISO may be granted hereunder to a U.S. Option Holder following the expiration of ten (10) years after the date on which this Plan is adopted by the Board or the date on which the Plan is approved by the shareholders of the Company, whichever is earlier; and
 

	
            (i)
 	
            no ISO granted to a U.S. Option Holder under the Plan shall become exercisable unless and until the Plan shall have been approved by the shareholders of the Company.  In the event that this Plan is not approved by the shareholders of the Company within twelve (12) months before or after the date on which this Plan is adopted by the Board, any ISO will automatically be deemed to be a nonstatutory stock option.
 

SECTION 6 

TRANSFERABILITY OF OPTIONS

	
            6.1
 	
            Non-transferable
 

Except as provided otherwise in this Section 6, Options are non-assignable and non-transferable.

	
            6.2
 	
            Death of Option Holder
 

In the event of the Option Holder's death, any Options held by such Option Holder shall pass to the Personal Representative of the Option Holder and shall be exercisable by the Personal Representative on or before the date which is the earlier of six months following the date of death and the applicable Expiry Date.

	
            6.3
 	
            Disability of Option Holder
 

If the employment or engagement of an Option Holder as an Employee or Consultant or the position of an Option Holder as a director or officer of the Company or a Subsidiary is terminated by the Company by reason of such Option Holder's Disability, any Options held by such Option Holder shall be exercisable by such Option Holder or by the Personal Representative on or before the date which is the earlier of six months following the termination of employment, engagement or appointment as a director or officer and the applicable Expiry Date.

	
            6.4
 	
            Disability and Death of Option Holder
 

If an Option Holder has ceased to be employed, engaged or appointed as a director or officer of the Company or a Subsidiary by reason of such Option Holder's Disability and such Option Holder dies within six months after the termination of such engagement, any Options held by such Option Holder that could have been exercised immediately prior to his or her death shall pass to the Personal Representative of such Option Holder and shall be exercisable by the Personal Representative on or before the date which is the earlier of six months following the death of such Option Holder and the applicable Expiry Date.

	
             
 	
            - 12 -
 

 

	
            6.5
 	
            Vesting
 

Unless the Committee determines otherwise, Options held by or exercisable by a Personal Representative shall, during the period prior to their termination, continue to vest in accordance with any vesting schedule to which such Options are subject.

	
            6.6
 	
            Deemed Non-Interruption of Engagement
 

Employment or engagement by the Company shall be deemed to continue intact during any military or sick leave or other bona fide leave of absence if the period of such leave does not exceed 90 days or, if longer, for so long as the Option Holder's right to re-employment or re-engagement by the Company is guaranteed either by statute or by contract.  If the period of such leave exceeds 90 days and the Option Holder's re-employment or re-engagement is not so guaranteed, then his or her employment or engagement shall be deemed to have terminated on the ninety-first day of such leave.

SECTION 7 

EXERCISE OF OPTION

	
            7.1
 	
            Exercise of Option
 

An Option may be exercised only by the Option Holder or the Personal Representative of any Option Holder.  An Option Holder or the Personal Representative of any Option Holder may exercise an Option in whole or in part at any time and from time to time during the Exercise Period up to the Expiry Time on the Expiry Date by delivering to the Administrator the required Exercise Notice, the applicable Option Certificate and a certified cheque or bank draft payable to the Company in an amount equal to the aggregate Exercise Price of the Shares then being purchased pursuant to the exercise of the Option.  Notwithstanding anything else contained herein, Options may not be exercised during Black-Out unless the Committee determines otherwise.

	
            7.2
 	
            Issue of Share Certificates
 

As soon as reasonably practicable following the receipt of the Exercise Notice, the Administrator shall cause to be delivered to the Option Holder a certificate for the Shares so purchased.  If the number of Shares so purchased is less than the number of Shares subject to the Option Certificate surrendered, the Administrator shall also provide a new Option Certificate for the balance of Shares available under the Option to the Option Holder concurrent with delivery of the Share Certificate.

	
            7.3
 	
            No Rights as Shareholder
 

Until the date of the issuance of the certificate for the Shares purchased pursuant to the exercise of an Option, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to such Shares, notwithstanding the exercise of the Option, unless the Committee determines otherwise.  In the event of any dispute over the date of the issuance of the certificates, the decision of the Committee shall be final, conclusive and binding.

SECTION 8 

ADMINISTRATION

	
            8.1
 	
            Board or Committee  
 

The Plan shall be administered by the Board, by a Committee of the Board appointed in accordance with section 8.2 below, or by an Administrator appointed in accordance with subsection 8.4(b).

	
             
 	
            - 13 -
 

 

	
            8.2
 	
            Appointment of Committee
 

The Board may at any time appoint a Committee, consisting of not less than two of its members, to administer the Plan on behalf of the Board in accordance with such terms and conditions as the Board may prescribe, consistent with this Plan. Once appointed, the Committee shall continue to serve until otherwise directed by the Board. From time to time, the Board may increase the size of the Committee and appoint additional members, remove members (with or without cause) and appoint new members in their place, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan.

	
            8.3
 	
            Quorum and Voting
 

A majority of the members of the Committee shall constitute a quorum and, subject to the limitations in this Section 8, all actions of the Committee shall require the affirmative vote of members who constitute a majority of such quorum.  Members of the Committee may vote on any matters affecting the administration of the Plan or the grant of Options pursuant to the Plan, except that no such member shall act upon the granting of an Option to himself or herself (but any such member may be counted in determining the existence of a quorum at any meeting of the Committee during which action is taken with respect to the granting of Options to that member).  The Committee may approve matters by written resolution signed by a majority of the quorum.

	
            8.4
 	
            Powers of Committee
 

The Committee (or the Board if no Committee is in place) shall have the authority to do the following:

	
            (a)
 	
            administer the Plan in accordance with its terms;
 

	
            (b)
 	
            appoint or replace the Administrator from time to time;
 

	
            (c)
 	
            determine all questions arising in connection with the administration, interpretation and application of the Plan, including all questions relating to the Market Value of the Shares;
 

	
            (d)
 	
            correct any defect, supply any information or reconcile any inconsistency in the Plan in such manner and to such extent as shall be deemed necessary or advisable to carry out the purposes of the Plan;
 

	
            (e)
 	
            prescribe, amend, and rescind rules and regulations relating to the administration of the Plan;
 

	
            (f)
 	
            determine the duration and purposes of leaves of absence from employment or engagement by the Company which may be granted to Option Holders without constituting a termination of employment or engagement for purposes of the Plan;
 

	
            (g)
 	
            do the following with respect to the granting of Options:
 

	
             
  	
            (i)
 	
            determine the Executives, Employees or Consultants to whom Options shall be granted, based on the eligibility criteria set out in this Plan;
 

	
             
  	
            (ii)
 	
            determine the terms of the Option to be granted to an Option Holder including, without limitation, the Grant Date, Expiry Date, Exercise Price and vesting schedule (which need not be identical with the terms of any other Option);
 

	
             
  	
            (iii)
 	
            subject to any necessary Regulatory Approvals and section 9.2, amend the terms of any Options;
 

	
             
  	
            (iv)
 	
            determine when Options shall be granted; and
 

	
             
  	
            (v)
 	
            determine the number of Shares subject to each Option;
 

 

	
             
 	
            - 14 -
 

 

	
            (h)
 	
            accelerate the vesting schedule of any Option previously granted; and
 

	
            (i)
 	
            make all other determinations necessary or advisable, in its sole discretion, for the administration of the Plan.
 

	
            8.5
 	
            Administration by Committee  
 

All determinations made by the Committee in good faith shall be final, conclusive and binding upon all persons.  The Committee shall have all powers necessary or appropriate to accomplish its duties under this Plan. 

	
            8.6
 	
            Interpretation
 

The interpretation by the Committee of any of the provisions of the Plan and any determination by it pursuant thereto shall be final, conclusive and binding and shall not be subject to dispute by any Option Holder.  No member of the Committee or any person acting pursuant to authority delegated by it hereunder shall be personally liable for any action or determination in connection with the Plan made or taken in good faith and each member of the Committee and each such person shall be entitled to indemnification with respect to any such action or determination in the manner provided for by the Company.

SECTION 9 

APPROVALS AND AMENDMENT

	
            9.1
 	
            Shareholder Approval of Plan
 

If required by a Regulatory Authority or by the Committee, this Plan may be made subject to the approval of a majority of the votes cast at a meeting of the shareholders of the Company or by a majority of votes cast by disinterested shareholders at a meeting of shareholders of the Company.  Any Options granted under this Plan prior to such time will not be exercisable or binding on the Company unless and until such shareholder approval is obtained.

	
            9.2
 	
            Amendment of Option or Plan
 

Subject to any required Regulatory Approvals, the Committee may from time to time amend any existing Option or the Plan or the terms and conditions of any Option thereafter to be granted provided that where such amendment relates to an existing Option and it would:

	
            (a)
 	
            materially decrease the rights or benefits accruing to an Option Holder; or
 

	
            (b)
 	
            materially increase the obligations of an Option Holder;
 

then, unless otherwise excepted out by a provision of this Plan, the Committee must also obtain the written consent of the Option Holder in question to such amendment.  If at the time the Exercise Price of an Option is reduced the Option Holder is an Insider of the Company, the Insider must not exercise the option at the reduced Exercise Price until the reduction in Exercise Price has been approved by the disinterested shareholders of the Company.

SECTION 10 

CONDITIONS PRECEDENT TO ISSUANCE OF OPTIONS AND SHARES

	
            10.1
 	
            Compliance with Laws
 

An Option shall not be granted or exercised, and Shares shall not be issued pursuant to the exercise of any Option, unless the grant and exercise of such Option and the issuance and delivery of such Shares comply with all applicable Regulatory Rules, and such Options and Shares will be subject to all applicable trading restrictions in effect pursuant 

 

	
             
 	
            - 15 -
 

 

to such Regulatory Rules and the Company shall be entitled to legend the Option Certificates and the certificates representing such Shares accordingly.

	
            10.2
 	
            Obligation to Obtain Regulatory Approvals
 

In administering this Plan, the Committee will seek any Regulatory Approvals which may be required.  The Committee will not permit any Options to be granted without first obtaining the necessary Regulatory Approvals unless such Options are granted conditional upon such Regulatory Approvals being obtained.  The Committee will make all filings required with the Regulatory Authorities in respect of the Plan and each grant of Options hereunder.  

No Option granted will be exercisable or binding on the Company unless and until all necessary Regulatory Approvals have been obtained.  The Committee shall be entitled to amend this Plan and the Options granted hereunder in order to secure any necessary Regulatory Approvals and such amendments will not require the consent of the Option Holders under section 9.2 of this Plan.

	
            10.3
 	
            Inability to Obtain Regulatory Approvals
 

The Company's inability to obtain Regulatory Approval from any applicable Regulatory Authority, which Regulatory Approval is deemed by the Committee to be necessary to complete the grant of Options hereunder, the exercise of those Options or the lawful issuance and sale of any Shares pursuant to such Options, shall relieve the Company of any liability with respect to the failure to complete such transaction.

	
            10.4
 	
            U.S. Regulatory Approvals
 

Section 10.2 of this Plan shall not be interpreted to require the Company to register the Shares issuable pursuant to this Plan under the U.S. Securities Act or under the securities laws of any state of the United States; provided, however, that no Options to purchase Shares may be granted in the United States or to or for the benefit of a U.S. Person, and no Options to purchase Shares may be exercised in the United States or by or on behalf of a U.S. Person, unless such Shares have been registered under the U.S. Securities Act and the securities laws of all applicable states of the United States, or exemptions from such registration requirements are available.  The Company may require such additional information, representations, warranties and covenants from an Option Holder, in the Option Certificate, exercise form or otherwise, as the Company deems necessary or appropriate in order to establish
compliance with all applicable provisions of the U.S. Securities Act and the securities laws of any state of the United States.

SECTION 11 

ADJUSTMENTS AND TERMINATION

	
            11.1
 	
            Termination of Plan
 

Subject to any necessary Regulatory Approvals, the Committee may terminate or suspend the Plan.

	
            11.2
 	
            No Grant During Suspension of Plan
 

No Option may be granted during any suspension, or after termination, of the Plan.  Suspension or termination of the Plan shall not, without the consent of the Option Holder, alter or impair any rights or obligations under any Option previously granted.

	
            11.3
 	
            Alteration in Capital Structure
 

If there is a material alteration in the capital structure of the Company and the Shares are consolidated, subdivided, converted, exchanged, reclassified or in any way substituted for, the Committee shall make such adjustments to this Plan and to the Options then outstanding under this Plan as the Committee determines to be appropriate and 

 

	
             
 	
            - 16 -
 

 

equitable under the circumstances, so that the proportionate interest of each Option Holder shall, to the extent practicable, be maintained as before the occurrence of such event. Such adjustments may include, without limitation:

	
            (a)
 	
            a change in the number or kind of shares of the Company covered by such Options; and
 

	
            (b)
 	
            a change in the Exercise Price payable per Share provided, however, that the aggregate Exercise Price applicable to the unexercised portion of existing Options shall not be altered, it being intended that any adjustments made with respect to such Options shall apply only to the Exercise Price per Share and the number of Shares subject thereto.
 

For purposes of this section 11.3, and without limitation, neither:

	
            (c)
 	
            the issuance of additional securities of the Company in exchange for adequate consideration (including services); nor
 

	
            (d)
 	
            the conversion of outstanding securities of the Company into Shares shall be deemed to be material alterations of the capital structure of the Company.
 

Any adjustment made to any Options pursuant to this section 11.3 shall not be considered an amendment requiring the Option Holder's consent for the purposes of Section 9.2 of this Plan.

	
            11.4
 	
            Triggering Events
 

Subject to the Company complying with section 11.5 and any necessary Regulatory Approvals and notwithstanding any other provisions of this Plan or any Option Certificate, the Committee may, without the consent of the Option Holder or Holders in question:

	
            (a)
 	
            cause all or a portion of any of the Options granted under the Plan to terminate upon the occurrence of a Triggering Event; or
 

	
            (b)
 	
            cause all or a portion of any of the Options granted under the Plan to be exchanged for incentive stock options of another corporation upon the occurrence of a Triggering Event in such ratio and at such exercise price as the Committee deems appropriate, acting reasonably.
 

Such termination or exchange shall not be considered an amendment requiring the Option Holder's consent for the purpose of section 9.2 of the Plan.

	
            11.5
 	
            Notice of Termination by Triggering Event
 

In the event that the Committee wishes to cause all or a portion of any of the Options granted under this Plan to terminate on the occurrence of a Triggering Event, it must give written notice to the Option Holders in question not less than 30 days prior to the consummation of a Triggering Event so as to permit the Option Holder the opportunity to exercise the vested portion of the Options prior to such termination.  Upon the giving of such notice and subject to any necessary Regulatory Approvals, all Options or portions thereof granted under the Plan which the Company proposes to terminate shall become immediately exercisable notwithstanding any contingent vesting provision to which such Options may have otherwise been subject.

	
            11.6
 	
            Determinations to be Made By Committee
 

Adjustments and determinations under this SECTION 11 shall be made by the Committee, whose decisions as to what adjustments or determination shall be made, and the extent thereof, shall be final, binding, and conclusive.

 

	
             
 	
            - 17 -
 

 

SECTION 12 

CALIFORNIA OPTION GRANTS

	
            12.1
 	
            Application of this Section
 

Notwithstanding any other provision of this Plan, the provisions of sections 12.2 through 12.6 of this Plan shall apply to any Option granted to a resident of the State of California if, on the Grant Date, (i) the Shares are not listed on the New York Stock Exchange or the American Stock Exchange or quoted on the Nasdaq National Market System, and (ii) such Option is not otherwise exempt from the registration requirements of the California securities laws.

	
            12.2
 	
            Minimum Exercise Price
 

If the Option is granted to an Option Holder that owns securities possessing more than 10% of the total combined voting power of all classes of securities of the Company or its parent or subsidiaries possessing voting power, the Exercise Price of the Option shall not be less than 110% of the Market Value of the Shares as of the Grant Date.

	
            12.3
 	
            Minimum Vesting Schedule
 

The Option must become vested and exercisable at a rate of at least 20% of the number of Shares underlying the Option per year, with the first 20% becoming vested not later than one year after the Grant Date.

	
            12.4
 	
            Maximum Exercise Period
 

The Expiry Date of the Option shall not be later than the tenth anniversary of the Grant Date.

	
            12.5
 	
            Minimum Post-Termination Exercise Period
 

If the Option Holder ceases to hold the position of Executive, Employee or Consultant, the Option shall continue to be exercisable until at least the earlier of the Expiry Date originally provided for in the Option, or the applicable date set forth below:

	
            (a)
 	
            if the Option Holder is terminated for cause as defined by applicable law, the date of termination ;
 

	
            (b)
 	
            if the Option Holder’s termination is caused by the Option Holder’s death or Disability, six months from the date of termination; or
 

	
            (c)
 	
            in all other cases, thirty days from the date of termination.
 

	
            12.6
 	
            Additional Shareholder Approval
 

Unless the holders of a majority of the Company’s outstanding securities entitled to vote have approved this Plan within 12 months before or after the date this Plan is adopted, any Option granted to a resident of the State of California that is subject to the provisions of this SECTION 12 shall automatically be rescinded, without any liability to the Company.  No Option granted subject to the provisions of this SECTION 12 shall be exercisable until such shareholder approval has been obtained.

 

SCHEDULE "A"

Without prior written approval of the TSX Venture Exchange and compliance with
all applicable securities legislation, the securities represented by this
certificate may not be sold, transferred, hypothecated or otherwise traded on or
through the facilities of the TSX Venture Exchange or otherwise in Canada or to
or for the benefit of a Canadian resident until  • [date
four months and one day after Grant Date]. 

RESPONSE BIOMEDICAL CORP

2005 STOCK OPTION PLAN - OPTION CERTIFICATE

This Option Certificate is issued pursuant to the provisions of the Stock Option
Plan (the "Plan") of Response  Biomedical  Corp.  (the  "Company") and evidences
that  • [Name of Option  Holder] is the holder (the  "Option  Holder") of an option
(the  "Option")  to purchase up to  •  common  shares (the  "Shares") in the capital
stock of the  Company  at a  purchase  price of Cdn.$ •  per Share  (the  "Exercise
Price"). This Option may be exercised at any time and from time to time from and
including  the  following  Grant Date  through to and  including up to 5:00 p.m.
local time in Vancouver,  British  Columbia (the "Expiry Time") on the following
Expiry Date:

	
             
 	
            (a)
 	
            
the Grant Date of this Option is  • , 200 • ; and
 

	
             
 	
            (b)
 	
            
subject to sections 5.4, 6.2, 6.3, 6.4 and 11.4 of the Plan, the Expiry Date of this Option is  • , 20 • .
 

This Option will not be exercisable unless and until it has vested and then only to the extent that it has vested.  The Option will vest in accordance with the following: 

	
             
 	
            (a)
 	
             • Shares ( • %) will vest and be exercisable on or after the Grant Date;
 

	
             
 	
            (b)
 	
            
 •  additional  Shares
( •  %) will vest and be
exercisable on or after  • [date];
 

	
             
 	
            (c)
 	
            
 • additional   Shares   ( • %)   will   vest   and  be   exercisable   on  or   after
 • [date];
 

	
             
 	
            (d)
 	
            
 • additional   Shares   ( • %)   will   vest   and  be   exercisable   on  or   after
 • [date];
 

[ • Insert any additional terms here – check to ensure they comply with Exchange policies and applicable securities laws]

To exercise this Option, the Option Holder must deliver to the Administrator of the Plan, prior to the Expiry Time on the Expiry Date, an Exercise Notice, in the form provided in the Plan, which is incorporated by reference herein, together with the original of this Option Certificate and a certified cheque or bank draft payable to the Company in an amount equal to the aggregate of the Exercise Price of the Shares in respect of which this Option is being exercised.

This Option Certificate and the Option evidenced hereby is not assignable, transferable or negotiable and is subject to the detailed terms and conditions contained in the Plan.  This Option Certificate is issued for convenience only and in the case of any dispute with regard to any matter in respect hereof, the provisions of the Plan and the records of the Company shall prevail.

  • [The following MUST be included if is an ISO option] [This Option is an ISO within the meaning of the Code.]

Any share  certificates  issued  pursuant to an  exercise  of the Option  before
 • [date   four   months   and  one  day  after   Grant
Date] will contain the following legend:

"Without prior written  approval of the TSX Venture Exchange and compliance with
all  applicable  securities  legislation,  the  securities  represented  by this
certificate may not be sold, transferred, 

 

	
             
 	
            - 2 -
 

 

hypothecated or otherwise traded on or through the facilities of the TSX Venture
Exchange or otherwise in Canada or to or for the benefit of a Canadian  resident
until   • [date  four  months  and one day  after  Grant
Date]."

This Option was granted to the Option  Holder in his or her  capacity as a  • [pick
one:  Director,  Officer,  Employee,  Consultant]  of the  Company   • [, and shall
continue in effect  should his or her status  change and he or she continue in a
new  capacity  as  a  Director,   Officer,   Employee  or   Consultant   of  the
Company].

 

RESPONSE BIOMEDICAL CORP.

 

Per:  

	
             
 	
            
              
               

Authorized Signatory 
 

The Option Holder acknowledges receipt of a copy of the Plan and represents to the Company that the Option Holder is familiar with the terms and conditions of the Plan, and hereby accepts this Option subject to all of the terms and conditions of the Plan.  The Option Holder agrees to execute, deliver, file and otherwise assist the Company in filing any report, undertaking or document with respect to the awarding of the Option and exercise of the Option, as may be required by the Regulatory Authorities.  The Option Holder further acknowledges that if the Plan has not been approved by the shareholders of the Company on the Grant Date, this Option is not exercisable until such approval has been obtained.

Signature of Optionee:

	
            
               
              
                   
 	
            Date signed:
                    
                   
  
 

Signature

               
              
                 

 

Print Name
               
              
                 

 

Address
               
              
                 

 

SCHEDULE "B"

RESPONSE BIOMEDICAL CORP.

2005 STOCK OPTION PLAN

NOTICE OF EXERCISE OF OPTION

	
            TO:
 	
            The Administrator, Stock Option Plan
 

Response Biomedical Corporation

100-8900 Glenlyon Parkway

Burnaby, B.C. Canada V5J 5J8

	
             
 	
            (or such other address as the Company may advise)
 

 

The undersigned hereby irrevocably gives notice, pursuant to the Stock Option Plan (the "Plan") of Response Biomedical Corp. (the "Company"), of the exercise of the Option to acquire and hereby subscribes for (cross out inapplicable item):

	
            (a)
 	
            all of the Shares; or
 

	
            (b)
 	
            
               
              
                  of the Shares;
 

which are the subject of the Option Certificate attached hereto (attach your original Option Certificate).

The undersigned tenders herewith a certified cheque or bank draft (circle one) payable to "Response Biomedical Corp." in an amount equal to the aggregate Exercise Price of the aforesaid Shares and directs the Company to issue the certificate evidencing said Shares in the name of the undersigned to be mailed to the undersigned at the following address (provide full complete address):

	
             
 	
            ___________________________________
 

	
             
 	
            ___________________________________
 

	
             
 	
            ___________________________________
 

	
             
 	
            ___________________________________
 

The undersigned acknowledges the Option is not validly exercised unless this Notice is completed in strict compliance with this form and delivered to the required address with the required payment prior to 5:00 p.m. local time in Vancouver, B.C. on the Expiry Date of the Option.

DATED the          day
of                     
                
                , 20    .  

 

	
             
 	
            
               
              
                 
Signature of Option Holder

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