Document:

Exhibit 10.8

 

LEGG
MASON, INC. 1996 EQUITY INCENTIVE PLAN

 

RESTRICTED
STOCK AWARD AGREEMENT

 

Legg Mason, Inc.
(the “Company”) hereby grants to you (the “Participant”),
pursuant to the Legg Mason, Inc. 1996 Equity Incentive Plan, as amended
(the “Plan”), an award of restricted shares of the Company’s Common
Stock (the “Award”), upon and subject to the restrictions, terms and
conditions set forth below.  This
document constitutes Participant’s “Award Notification”. By electronically
accepting the Award, you are acknowledging your acceptance of the Award subject
to the restrictions and upon the terms and conditions set forth in this
Agreement and the Plan. The number of shares of restricted stock included in
the Award shall be as set forth on the third party website pursuant to which
this Award Notification is electronically delivered to Participant and in the
books and records of the Company, which shall control, absent manifest error,
in the event of a discrepancy.  The Grant
Date for this Award shall for all purposes by May 18, 2009.

 

This Award is subject in
all respects to the applicable provisions of the Plan.  Such provisions are incorporated herein by
reference and made a part hereof. 
Capitalized terms that are not defined in Section 5.7 below are
defined in the Plan and shall have the meanings specified in the Plan.

 

In addition to the terms,
conditions and restrictions set forth in the Plan, all terms, conditions and
restrictions set forth in this Agreement are applicable to the Award granted
hereby.

 

1.                                      RIGHTS
AS A STOCKHOLDER.

 

Until the Shares subject
to this Award have vested under Section 3, Participant shall have no
ordinary rights as a stockholder with respect to such Shares other than the
right to receive dividends or distributions on the Shares as set out
below.  Therefore, until the Shares
subject to this Award have vested, Participant shall have no rights to vote the
underlying Shares or to take physical possession of or transfer the Shares.  Notwithstanding the foregoing, the Company,
in its sole discretion, may elect to permit Participant to vote unvested Shares
subject to this Award at one or more meetings of stockholders of the
Company.  Commencing on the Grant Date,
Participant shall have the right to receive dividends and other distributions
on the Shares that are the subject of this Award unless and until such Shares
are forfeited pursuant to Section 3 hereof; provided, however,
that any dividend or other distribution (including, without limitation, a stock
dividend or stock split) that is not a cash dividend or distribution shall be
delivered to the Company, shall be held by the Company in accordance with Section 2
below and shall be subject to the same vesting schedule and other restrictions
as the Shares with respect to which such dividend or other distribution was
made.  In connection with the payment of
such dividends or other distributions, the Company may deduct any taxes or
other amounts required by any governmental authority to be withheld and paid
over to such authority for the account of Participant or may include such
dividend or distribution in the payroll of Participant’s employer so that such
dividend or distribution is included within the compensation of Participant for
withholding and other taxation purposes. 
Participant shall be entitled to retain cash dividends 

 

 

and distributions
received regardless of whether the Shares with respect to which such dividends
or distributions were made are subsequently forfeited pursuant to Section 3
hereof.  Notwithstanding anything to the
contrary, prior to the date on which the Shares subject to this Award vest
pursuant to Section 3 hereof, such Shares shall be subject to the
restrictions on transferability contained in Section 4.1 hereof.

 

2.                                      CUSTODY
AND DELIVERY OF SHARES.

 

Shares subject to this
Award (and any related property received under Section 1 hereof) shall be
issued in street name to an account of the Company and held in such account
until the Shares have vested under Section 3 hereof.  Participant may not receive or take possession
of any unvested Shares subject to this Award, either through physical share
certificates or through book-entry accounts held by, or in the name of,
Participant.  The Company may commingle
the unvested Shares subject to this Award with other shares of restricted stock
or other equity awards granted to other employees under the Plan.  The Company shall not allow any transfers of
unvested Shares subject to this Award from its account, other than transfers to
another account of the Company.  The
Company may hold unvested Shares subject to this Award at any financial
institution or other custodian that it from time to time chooses, in its sole
discretion, and shall not be responsible to Participant for any losses or
damages resulting from the choice of, or actions or omissions of, any financial
institution or other custodian that holds unvested Shares on behalf of the
Company.  The Company shall deliver
Shares subject to this Award that have vested pursuant to Section 3 below
to Participant through book entry transfer to an account in Participant’s name
at a financial institution, which may, but is not required to be, the
institution or other custodian that holds the unvested Shares on behalf of the
Company.  Share certificates representing
vested Shares shall not be issued by the Company until such Shares have been
delivered to Participant’s account as specified above.  Participant hereby authorizes the Company,
and any financial institution or other custodian at which the Company
establishes an account in which the Shares subject to this Award are held, to
hold all unvested shares as discussed above, to transfer any vested shares to
Participant’s account as discussed above and to transfer to the Company and
cancel any Shares subject to this Award that are forfeited pursuant to Section 3
below.  The Company shall pay all
original issue or transfer taxes and all fees and expenses incident to the
delivery of any Shares hereunder; provided that the Company shall not pay the
expenses related to any sale of vested Shares subject to this Award, regardless
of whether such sale is made to satisfy expenses or withholding or other taxes.

 

3.                                      VESTING
AND FORFEITURE.

 

(a)                                  Except
as otherwise provided in the Plan or in Section 3(b) of this
Agreement, twenty-five percent (25%) of the Shares subject to Participant’s
Award shall vest, shall be delivered to an account of Participant, shall become
transferable and shall cease to be subject to forfeiture on each of April 30,
2010, April 2011, April 30, 2012 and April 30, 2013 (each, a “Vesting
Date”).  In the event that a Vesting
Date is not a trading day, then vesting shall occur on the previous trading
day.

 

(b)                                 Participant’s right to vest in this Award is conditioned upon
Participant’s continuous employment with the Firm, except to the limited extent
to which vesting may continue following a termination of Participant’s
employment as provided below.  

 

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If Participant’s continuous employment with
the Firm terminates or is interrupted for any reason stated below, Participant’s
rights with respect to the Award shall be affected as follows:

 

(1)                                  Resignation.  Except as otherwise provided below, if
Participant resigns or otherwise terminates his or her employment with the Firm
for any reason, Participant’s unvested Award shall be forfeited and Participant’s
vested but undistributed Award (if any) shall be distributed to Participant in
accordance with Section 2 hereof.

 

(2)                                  Disability.  Upon termination of
Participant’s employment with the Firm by reason of his or her Disability, on
the date of such termination, Participant’s unvested Award shall be 100% vested
and all restrictions upon the Shares subject to Participant’s Award shall
lapse.  Participant’s vested Award shall
be distributed to Participant in accordance with Section 2 hereof.

 

(3)                                  Death.  Upon termination of Participant’s employment
with the Firm due to death, on the date of such termination, Participant’s
unvested Award shall be 100% vested and all restrictions upon the Shares
subject to Participant’s Award shall lapse. 
Participant’s vested Award shall be distributed to his or her
beneficiaries in accordance with Section 4.2 hereof.

 

(4)                                  Termination for Cause.  Upon termination of Participant’s employment
by the Firm for Cause, Participant’s unvested Award shall be immediately
forfeited.

 

(5)                                  Change
of Control.  In the event of a Change
of Control, then, as of the date of such Change of Control, Participant’s
unvested Award shall be 100% vested and all restrictions upon the Shares
subject to Participant’s Award shall lapse. 
Participant’s vested Award shall
be distributed to Participant in accordance with Section 4.2 hereof.

 

(6)                                  Termination without Cause.  Except as otherwise specified in this Section 3(b),
upon a termination of Participant’s employment by the Firm without Cause,
Participant’s unvested Award shall be immediately forfeited.

 

(7)                                  Termination of Employment when
Satisfying the “Rule of 15.” 
If Participant’s employment with the Firm terminates before the date on
which all Shares subject to Participant’s Award have vested and (i) Participant,
at the time of such termination, has completed 15 years of service with the
Firm and (ii) such termination of employment is without Cause, then the
unvested portion of Participant’s Award shall continue to vest in accordance
with Section 3(a) as long as Participant does not engage in
Competitive Activity.  If Participant
engages in Competitive Activity, then the

 

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portion of Participant’s
Award that is unvested at the time Participant engages in such activity shall
be immediately forfeited.  In the event
of Participant’s death during the period in which unvested Awards are
continuing to vest under this clause (7), then, as of the date the Company
becomes aware of such death, Participant’s unvested Award shall be 100% vested
and all restrictions upon the Shares subject to Participant’s Award shall
lapse.  Participant’s vested Award shall
be distributed in accordance with Section 4.2 hereof.

 

(8)                                  Termination of Employment Due to
Retirement.  If Participant’s employment
with the Firm terminates before the date on which all Shares subject to
Participant’s Award have vested and (i) the reason for such termination is
Participant’s retirement pursuant to Section 7.1 (or any successor
retirement provision) of the Legg Mason Profit Sharing Plan and (ii) such
termination of employment is without Cause, then the unvested portion of
Participant’s Award shall continue to vest in accordance with Section 3(a) as
long as Participant does not engage in Competitive Activity.  If Participant engages in Competitive
Activity, then the portion of Participant’s Award that is unvested at the time
Participant engages in such activity shall be immediately forfeited.  In the event of Participant’s death during
the period in which unvested Awards are continuing to vest under this clause
(8), then, as of the date the Company becomes aware of such death, Participant’s
unvested Award shall be 100% vested and all restrictions upon the Shares
subject to Participant’s Award shall lapse. 
Participant’s vested Award shall be distributed in accordance with Section 4.2
hereof.

 

(9)                                  Reduction in Workforce.  If
Participant’s employment with the Firm terminates before the date on which all
Shares subject to Participant’s Award have vested and (i) such termination
is due to the elimination of Participant’s position in connection with a
reduction in workforce by the Firm and (ii) such termination of employment
is without Cause, then, as of the date of such termination, Participant’s
unvested Award shall be 100% vested and all restrictions upon the Shares
subject to Participant’s Award shall lapse. 
Participant’s vested Award shall be distributed to Participant in
accordance with Section 4.2 hereof.

 

To the extent that Section 409A
of the Code applies to the vesting or distribution of any shares hereunder,
then any vesting or distribution made in connection with or following the
Participant’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of
the Code and the regulations issued thereunder) shall not be made earlier than
the first business day of the seventh month following the Participant’s
Separation from Service, or if earlier the date of death of the Participant.  Any vesting or distribution that is delayed
in accordance with the foregoing 

 

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sentence shall be made on
the first business day  following the
expiration of such six (6) month period.

 

4.                                      ADDITIONAL
TERMS AND CONDITIONS OF THE AWARD.

 

4.1.                            NONTRANSFERABILITY
OF SHARES.

 

Prior to the date on
which Shares subject to this Award vest pursuant to Section 3 hereof, such
Shares may not be sold, transferred, assigned, pledged, hypothecated,
encumbered or otherwise disposed of (whether by operation of law or otherwise)
or be subject to execution, attachment or similar process.  Any such attempted sale, transfer,
assignment, pledge, hypothecation or encumbrance, or other disposition of such
Shares shall be null and void.

 

4.2.                            BENEFICIARIES.

 

Participant may designate
in writing, on a form to be prescribed by and filed with the Committee, a
beneficiary to receive all or part of the Shares to be distributed under the
Plan in the event of Participant’s death.  A designation of a beneficiary may be replaced
by a new designation or may be revoked by Participant at any time and in
accordance with such rules and procedures established by the Committee on
a form prescribed by and filed with the Committee.  In the event of Participant’s death, Shares
due under the Plan with respect to which a designation of a beneficiary has
been made (to the extent it is valid and enforceable under applicable law)
shall be distributed in accordance with the Plan to the designated beneficiary.  Distributions due under the Plan and not
subject to a beneficiary designation shall be distributed to Participant’s
estate.  If there is any question as to
the legal right of any beneficiary to receive any distribution under the Plan,
the distribution in question may be made in the sole discretion of the
Committee to the estate of Participant, in which event the Firm shall have no
further liability to anyone with respect to such distribution.  Distribution to the executors or
administrators of the estate of Participant may be conditioned on the delivery
to the Committee of such tax waivers, letters testamentary and other documents
as the Committee may reasonably request.

 

4.3.                            RIGHT
OF SET OFF.

 

Notwithstanding
any provisions of this Agreement to the contrary, the Committee, the Firm and
the Company may offset any amounts that Participant may owe to the Firm against
the shares subject to a Participant’s Award and any distributions that would
have otherwise been made to Participant under the Plan.

 

4.4.                            CONSENT
TO ELECTRONIC DELIVERY.

 

In lieu of receiving
documents in paper format, Participant hereby agrees, to the fullest extent
permitted by law, to accept electronic delivery of any documents that the Firm
elects to or is required to deliver (including, but not limited to, the
Prospectus related to Participant’s Award, any supplements to that Prospectus,
award notifications and agreements, account statements, monthly or annual
reports, and all other forms or communications) in connection with Participant’s
Award.  Electronic delivery of a document
to Participant may be via a Firm e-mail system or by reference to a location on
a Firm intranet site or a third-party’s Internet site to which Participant has
access.

 

5

 

4.5.                            SECURITIES
LAWS.

 

Participant hereby
represents and covenants that if in the future Participant decides to offer or
dispose of any Shares subject to this Award or interest therein, Participant
shall do so only in compliance with this Agreement, the Securities Act of 1933,
as amended, and all applicable state and local national securities laws as
appropriate.  As a condition precedent to
the delivery to Participant of any Shares subject to this Award, Participant
shall comply with all regulations and requirements of any regulatory authority
having control of or supervision over the issuance of the Shares and, in
connection therewith, shall execute any documents and make any representation
and warranty to the Company which the Committee shall in its sole discretion
deem necessary or advisable.

 

4.6.                            ADJUSTMENT.

 

In the event that there
occurs (a) any change in the number of outstanding shares of Common Stock
through the declaration of dividends, stock splits or the like or through any
change in the capital account of the Company or any other transaction referred
to in Section 424(a) of the Code or (b) any other change in the
capital structure of the Company or in the Common Stock, then, if applicable,
the number and class of shares subject to this Award shall be adjusted as
provided in the Plan.  Any decision of
the Committee regarding the amount and timing of any adjustment shall be final
and conclusive.

 

4.7.                            COMPLIANCE
WITH APPLICABLE LAW.

 

This Award is subject to
the condition that if the listing, registration or qualification of the Shares
subject to this Award upon any securities exchange or under any law, or the
consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the vesting
or delivery of shares hereunder, the Shares subject to this Award may not be
delivered, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained.  The Company agrees to make every reasonable
effort to effect or obtain any such listing, registration, qualification,
consent or approval.

 

By signing the Award
Notification, however, the Participant acknowledges and agrees that he or she
is and remains responsible for any local compliance requirements or regulations
in relation to the receipt, ownership and possible subsequent sale of the
Company’s Common Stock.  The Participant
also agrees that he or she is responsible for any local compliance requirements
or regulations in relation to the opening and use of a U.S. brokerage account.

 

4.8.                            WITHHOLDING;
TAX MATTERS

 

(a)                                  The
Company may, and the Participant hereby authorizes the Company to, deduct an
amount sufficient to satisfy all federal, state and local withholding tax
requirements arising in connection with this Award, from payments of any kind
by the Company or its subsidiaries to which the Participant would otherwise be
entitled, including without limitation, salary, bonus and other compensation.  Alternatively the Participant may elect to
remit to the

 

6

 

Company by check an
amount sufficient to satisfy any federal, state or local withholding tax
requirements, prior to the delivery of Shares pursuant to Section 2
hereof.  As another alternative, the
Participant may, with respect to withholding taxes that are due upon vesting of
Shares, elect, prior to the vesting of any Shares subject to this Award, to
irrevocably instruct the financial institution that holds such Shares, or as
applicable, the financial institution to which such Shares shall be delivered upon
vesting, prior to vesting (x) to sell on behalf of Participant immediately
on vesting a sufficient number of vested Shares to produce funds to satisfy any
federal, state or local withholding tax requirements and (y) to pay such
funds over to the Company to satisfy such taxes and provide the Company, prior
to the applicable vesting date, with notice of such election (including a copy
of such instructions).  Notwithstanding
the foregoing, if Participant fails to either provide the check described in
the prior sentence or, if applicable, provide the irrevocable sale instructions
described in the preceding sentence, in each case by the date any withholding
tax with respect to any Shares granted hereunder is due, the Company shall, and
Participant hereby authorizes the Company to, either (i) withhold delivery
of Shares or deduct amounts required to be withheld from payments of any kind
by the Company or its subsidiaries to which Participant would otherwise be
entitled, including without limitation salary, bonus and other compensation or (ii) to
irrevocably instruct the financial institution that will hold such Shares
immediately after vesting (x) to sell on behalf of Participant immediately
on vesting a sufficient number of vested Shares to produce funds to satisfy any
federal, state or local withholding tax requirements and (y) to pay such
funds over to the Company to satisfy such taxes.  Participant acknowledges that in the event
the preceding sentence applies, the Company shall elect either option contained
therein in its sole discretion without any liability to the Participant
resulting from the option the Company selects or the timing under which the
Company makes and carries out the election.

 

(b)                                 If Participant makes the election
provided under Section 83(b) of the Code to be taxed currently on the
value of any Shares subject to this Award notwithstanding the restrictions
placed upon such Shares (the “Section 83(b) Election”),
Participant shall promptly notify the Company, shall complete, sign and return
to the Company the Section 83(b) Election Form which was
distributed to Participant and shall remit to the Company with such form a
check in an amount sufficient to satisfy any federal, state or local
withholding tax requirements. 
Participant acknowledges that if he or she elects to make a Section 83(b) election,
Participant shall be responsible for filing the appropriate form with the IRS
and notifying the Compensation department within the Company’s Finance
Department within 30 days of the date of the award that Participant made a Section 83(b) election.

 

(c)                                  The Company reserves the right to make
whatever further arrangements it deems appropriate for the withholding of taxes
in connection with any transaction contemplated by this Agreement or the Plan,
including, without limitation, providing for payments of withholding taxes by
deducting amounts required to be withheld, plus interest thereon, from payments
of any kind by the Company or any of its subsidiaries to which Participant
would otherwise be entitled.

 

4.9.                            AWARD CONFERS NO RIGHTS TO
CONTINUED EMPLOYMENT OR FUTURE AWARDS.

 

Nothing in the Plan or in
this Agreement shall confer upon Participant any right to continue in the
employ of the Company or any subsidiary of the Company for a specified period 

 

7

 

of time or interfere with
the right of the Company and its subsidiaries to terminate such employment at
any time.  In addition, neither the Plan
nor this Agreement confers any right upon the Participant to receive future
awards under the Plan.  All future
awards, if any, are completely at the discretion of the Company.  Moreover, any awards granted under the Plan
are not part of the Participant’s ordinary compensation, employment agreement,
if any, or working relationship with the Company or any of its affiliates and
will therefore not be considered as part of such compensation, agreement or
relationship in the event of severance, redundancy or resignation, unless
otherwise required by applicable law.

 

5.                                      MISCELLANEOUS PROVISIONS.

 

5.1.                            SUCCESSORS; ASSIGNMENTS AND
TRANSFERS.

 

This Agreement shall be
binding upon and inure to the benefit of any successor or successors of the
Company and any person or persons who shall, upon the death of Participant,
acquire any rights hereunder.  The rights
and interests of Participant under this Agreement may not be sold, assigned,
encumbered or otherwise transferred except in the event of death of
Participant, by will or by the laws of descent and distribution.  This Agreement may be assigned by the Company
without Participant’s consent.

 

5.2.                            NOTICES.

 

All notices, requests or
other communications provided for in this Agreement shall be made in writing
either (a) by actual delivery to the party entitled thereto, or (b) by
mailing in the mails of the United States or, for Participants who reside in
another country, of the other country to the address of the party entitled
thereto as set forth below, via certified or registered mail, return receipt
requested.  The notice shall be deemed to
be received in case of delivery, on the date of its actual receipt by the party
entitled thereto, and in case of mailing, five days following the date of such
mailing.  Any notice mailed to the
Company shall be addressed to the Restricted Stock Administrator of the Company
at 100 Light Street, Baltimore, Maryland 21202. 
Any notice mailed to Participant shall be addressed to Participant at
Participant’s address as reflected in the personnel records of the
Company.  Either party hereto may designate
a different address for notices than the one provided herein by notice to the
other.

 

5.3.                            CONSENT AND DISCLOSURE REGARDING
USE OF PERSONAL INFORMATION.

 

In connection with the
grant of the Award, and any other award under the Plan, and the implementation
and administration of the Plan, including, without limitation, Participant’s
actual participation, or consideration by the Committee for potential future
participation in the Plan at any time, it is or may become necessary for the
Firm to collect, transfer, use, and hold certain personal information regarding
Participant in and/or outside of Participant’s home country.  By accepting the Award, Participant
explicitly consents (i) to the use of such information for the purpose of
being considered for participation in future awards under the Plan (to the
extent he/she is eligible under the Plan, and without any guarantee that any
award shall be made); and (ii) to the use, transfer, processing and
storage, electronically or 

 

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otherwise, of his/her
personal information, as such use has occurred to date, and as such use may
occur in the future, in connection with this Award or any other award under the
Plan, as further described below.

 

Use, transfer, storage and processing of personal
information, electronically or otherwise, may be in connection with the Company’s
internal administration of the Plan, or in connection with tax or other
governmental and regulatory compliance activities directly or indirectly related
to the Award or any other award under the Plan. 
For such purposes only, personal information may be used by third
parties retained by the Company to assist with the administration and
compliance activities of the Plan, and may be transferred by the company that
employs (or any company that has employed) Participant from Participant’s home
country to other members of the Company and third parties located in the United
States and in other countries. 
Specifically, those parties that may have access to Participant’s
information for the purposes described herein include, but are not limited to, (i) human
resources personnel responsible for administering the Plan; (ii) Participant’s
U.S., regional and local employing entity and business unit management, including
Participant’s supervisor and his/her superiors; (iii) the Committee or its
designee, which is responsible for administering the Plan; (iv) the
Company’s technology systems support team (but only to the extent necessary to
maintain the proper operation of electronic information systems that support
the Plan); and (v) internal and external legal, tax and accounting
advisors (but only to the extent necessary for them to advise the Company on
compliance and other issues affecting the awards under the Plan in their
respective fields of expertise).

 

At all times, Company personnel and third parties
shall be obligated to maintain the confidentiality of Participant’s personal
information except to the extent the Company is required to provide such
information to governmental agencies or other parties.  Such action shall always be undertaken only
in accordance with applicable law.  The
personal information that the Company may collect, process, store and transfer
for the purposes outlined above may include Participant’s name, nationality,
citizenship, work authorization, date of birth, age, government/tax
identification number, passport number, brokerage account information, or other
internal identifying information, home address, work address, job and location
history, compensation, business unit, employing entity, and Participant’s
beneficiaries and contact information. 
Participant may obtain more details regarding the access and use of
his/her personal information, and may correct or update such information, by
contacting his/her human resources representative.

 

5.4                               MARKET FLUCTUATIONS.

 

The Company is not responsible for any
foreign exchange fluctuations between the Participant’s local currency, if the
Participant is not located in the U.S., and the U.S. dollar nor is the Company
responsible or liable for any decrease in the value of the Company’s Common
Stock at any time, all of which shall be solely the risk and responsibility of
the Participant.

 

9

 

5.5.                            CONFLICT; GOVERNING LAW.

 

In the event of a
conflict between this Agreement and the Plan, the Plan shall control.  This Agreement shall be governed by, and
interpreted in accordance with, the internal laws of the State of New York  (without regard to conflicts of laws rules thereof).

 

5.6                               COUNTERPARTS.

 

This Agreement may be
executed in two or more counterparts each of which shall be deemed an original
and all of which together shall constitute one and the same instrument.

 

5.7                               DEFINITIONS.

 

Unless otherwise defined herein, the following terms have
the meanings set forth below.

 

“Cause” means any one or more of the following
types of behavior by Participant which the Firm in its sole discretion finds to
be sufficient reason to terminate the Participant’s employment with the
Firm:  (i) any conduct (a) that
constitutes Competitive Activity, (b) that breaches any obligation to the Firm or
Participant’s duty of loyalty to the Firm, or (c) that is materially
injurious to the Firm, monetarily or otherwise; (ii) material violation of, or an act taken by the failure to act
which causes the Firm to be in violation of any government statue or
regulation, or of the constitution, by-laws, rules or regulations of any
securities or commodities exchange or a self-regulatory organization, or of the
policies of the Firm; (iii) the entering of an order or decree or the
taking of any similar action with respect to Participant which substantially
impairs such Participant from performing his or her duties or makes him or her
ineligible from being associated with the Company pursuant to Section 9 of
the Investment Company Act of 1940, as amended, or Section 203(f) of
the Investment Advisors Act of 1940, as amended; (iv) malfeasance,
disloyalty or dishonesty in any material respect; (v) any conviction for a
felony: (vi) any failure to devote all professional time to assigned
duties and to the business of the Firm; (vii) failure to satisfactorily
perform duties, as determined by the Firm’s management in its sole discretion,
or gross misconduct or gross negligence in the performance of duties; or (viii) failure
to remain licensed to perform duties or other act, conduct or circumstance
which renders the Participant ineligible for employment with the Firm.

 

“Change of Control” means any of the following
events: (i) any person, including a “person” as such term is used in Section 14(d)(2) of
the Securities Exchange Act of 1934, as amended, acquires, directly or
indirectly, beneficial  ownership of
securities representing 50.1% or more of the combined voting power of the
outstanding equity securities of the Company; (ii) the closing of any
merger, consolidation or other reorganization involving the Company with
respect to which the stockholders of the Company immediately prior to such
reorganization do not hold, directly or indirectly, more than 50% of the
combined voting power of the outstanding equity securities of such successor
entity immediately following such transaction; (iii) the closing of any
transaction involving a sale of assets of the Company that have a total gross
fair market value equal to or more than 40% of the total gross fair market
value of all of the assets of the Company; (iv) the adoption of any plan
or proposal for the liquidation or dissolution of the Company; or (v) within
any 

 

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12-month period, individuals who, as of May 15,
2009, constitute the board of directors of the Company (the “Incumbent Board”)
cease for any reason to constitute at least a majority of such board; provided,
however, that any individual becoming a director subsequent to such date whose
election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Company’s board of directors shall be considered as though such individual were
a member of the Incumbent Board.

 

“Code” means the Internal Revenue Code of 1986,
as amended.

 

“Committee” means the Compensation Committee of
the Company’s Board of Directors or such committee or persons designated by
that Compensation Committee to act on its behalf.

 

“Common Stock” means Legg Mason, Inc.
common stock, par value $.10 per share.

 

“Competitive Activity” means Participant’s
engagement in any activity that competes with any of the Firm’s business
operations, as determined by the Committee, in its sole discretion, and shall
include, without limitation, representing in any capacity, other than as an
outside director, a company that competes with the Company and its
subsidiaries.

 

“Disability” means a medically determinable
physical or mental impairment which qualifies the Participant for total
disability benefits under the Social Security Act; or which, in the opinion of
the Committee (based upon such evidence as it deems satisfactory):  (i) can be expected to result in death
or to last at least 12 months and (ii) will prevent the Participant from
performing his usual duties or any other similar duties available in the Firm’s
employ.

 

“Firm” means, except as otherwise provided
under Section 409A of the Code and the regulations promulgated thereunder,
the employing entity of any individual determined by the Committee to be a
participant in the Plan and, if the employing entity of any Participant should
change to another affiliate of the Company, such other affiliate.

 

“Grant Date” means the “Grant Date” set forth
in the Participant’s Award Notification.

 

“Legg Mason Profit Sharing Plan” means the Legg
Mason & Co., LLC Profit Sharing and 401(k) Plan and Trust, as
such plan may be amended from time to time.

 

11

 

 “Share”
means a share of Common Stock.

 

	
   

  	
  LEGG MASON, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Thomas C.
  Merchant

  
	
   

  	
  Title:  Secretary

  

 

12Filed by sedaredgar.com - Neovasc Medical Ltd. - Exhibit 4.2

REDACTED 

CONFIDENTIAL TREATMENT 

ADDENDUM TO OCTOBER 24, 2005 DISTRIBUTION AGREEMENT

between ITOCHU International Inc. and PM Devices, Inc. 

This Addendum is made effective this 17th day of July 2007, by
and between ITOCHU International Inc. of 335 Madison Ave, New York, New York,
USA (“Distributor”); and PM Devices Inc., Unit 2135 – 13700 Mayfield Place,
Richmond, British Columbia, Canada, ("Manufacturer")

WITNESSETH 

WHEREAS, the above-named parties have performed certain
activities pursuant to a Distribution Agreement dated October 24, 2005 (the
“Distribution Agreement”); and

WHEREAS, the parties desire to revise said Agreement in
accordance with their mutual agreement as to activities and rights that are to
be applicable in the future; and 

WHEREAS, said revisions are incorporated into this Addendum,
which shall govern the relationship of the parties until expiration of the
Distribution Agreement. 

NOW, THEREFORE, in consideration of the premises and
performance of the covenants herein contained, it is agreed that: 

	1. 	
      This instrument, together with the Distribution
      Agreement, contains the entire agreement of the parties relating to the
      subject matter hereof and may not be changed, modified or amended, except
      by writing signed by both parties.

	 	 
	2. 	
      The Parties hereby agree to change Exhibit A. DESCRIPTION
      OF PRODUCTS; Exhibit B. DESCRIPTION OF TERRITIORY and Exhibit C. PRICE
      LIST.

	 	 
	3. 	
      The Parties hereby agree to extend the duration of the
      agreement for an additional two (2) year period as per article 1. b.) (1)
      of the Distribution Agreement.

	 	 
	4. 	
      No terms of the Distribution Agreement, other than those
      specified herein, shall be affected by this
Addendum.

IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and year first above written.

PM Devices, Inc. 

	By: 	/s/ Kevin McKim 	 
	  	Kevin McKim, Vice President Sales
      & Marketing 	 

ITOCHU International Inc.

	By: 	/s/ William Rutan 	 
	  	William Rutan, President ITOCHU
      Healthcare 	 

EXHIBIT A 

DESCRIPTION OF PRODUCTS 

Products shall mean:

PM Devices PeriPatch Sheets 

	Product Code 	Product 
	  	 
	0.8P8 	0.8 cm x 8 cm
      PeriPatch Sheet 
	1P6 	1 cm x 6 cm PeriPatch Sheet
    
	1.5P8 	1.5 cm x 8 cm
      PeriPatch Sheet 
	2P9 	2 cm x 9 cm PeriPatch Sheet
    
	4P4 	4 cm x 4 cm
      PeriPatch Sheet 
	4P6 	4 cm x 6 cm PeriPatch Sheet
    
	6P8 	6 cm x 8 cm
      PeriPatch Sheet 
	8P14 	8 cm x 14 cm PeriPatch Sheet
      
	10P16 	10 cm x 16 cm
      PeriPatch Sheet 
	  	 
	AE45-1 	45 mm PeriPatch
      Aegis – 1 firing 
	AE45-2 	45 mm PeriPatch Aegis – 2 firing
      
	AE45-4 	45 mm PeriPatch
      Aegis – 4 firing 
	AE60-1 	60 mm PeriPatch Aegis – 1 firing
      
	AE60-2 	60 mm PeriPatch
      Aegis – 2 firing 
	AE60-4 	60 mm PeriPatch Aegis – 4 firing
      
	AG45-1 	45 mm PeriPatch
      Aegis – 1 firing 
	AG45-2 	45 mm PeriPatch Aegis – 2 firing
      
	AG45-4 	45 mm PeriPatch
      Aegis – 4 firing 
	AG60-1 	60 mm PeriPatch Aegis – 1 firing
      
	AG60-2 	60 mm PeriPatch
      Aegis – 2 firing 
	AG60-4 	60 mm PeriPatch Aegis – 4 firing
      

And such additional products as the parties shall in writing
agree from time to time.

Page 2 of 3 

EXHIBIT B 

DESCRIPTION OF TERRITORY 

For purposes of this Agreement, the “Territory” shall include
the following country: 

	United States of America 

Page 3 of 3 

EXHIBIT C 

PRICE LIST 

PM Devices PeriPatch Sheet 

	Model 	Description 	    1-2491 	250-499 	500+ 
	0.8P8 	0.8 cm x 8 cm PeriPatch Sheet
    	 	  	  
	1P6 	1 cm x 6 cm PeriPatch Sheet 	 	  	  
	1.5P8 	1.5 cm x 8 cm PeriPatch Sheet
    	 	  	  
	2P9 	2 cm x 9 cm PeriPatch Sheet 	 	  	  
	4P4 	4 cm x 4 cm PeriPatch Sheet 	[Redacted
      Information] 
	4P6 	4 cm x 6 cm PeriPatch Sheet 	 	  	  
	6P8 	6 cm x 8 cm PeriPatch Sheet 	 	  	  
	8P14 	8 cm x 14 cm PeriPatch Sheet 	 	  	  
	10P162 	10 cm x 16 cm PeriPatch Sheet
    	 	  	  
	  	 	 	  	  
	AE45-1 	45 mm PeriPatch Aegis – 1
      firing 	 	  	  
	AE45-2 	45 mm PeriPatch Aegis – 2 firing 	 	  	  
	AE45-4 	45 mm PeriPatch Aegis – 4
      firing 	 	  	  
	AE60-1 	60 mm PeriPatch Aegis – 1 firing 	 	  	  
	AE60-2 	60 mm PeriPatch Aegis – 2
      firing 	 	  	  
	AE60-4 	60 mm PeriPatch Aegis – 4 firing 	 	  	  
	AG45-1 	45 mm PeriPatch Aegis – 1
      firing 	 	  	  
	AG45-2 	45 mm PeriPatch Aegis – 2 firing 	 	  	  
	AG45-4 	45 mm PeriPatch Aegis – 4
      firing 	 	  	  
	AG60-1 	60 mm PeriPatch Aegis – 1 firing 	 	  	  
	AG60-2 	60 mm PeriPatch Aegis – 2
      firing 	 	  	  
	AG60-4 	60 mm PeriPatch Aegis – 4 firing 	 	  	  

DISTRIBUTION AGREEMENT 

THIS DISTRIBUTION AGREEMENT (this ”Agreement”) is made as
October 24, 2005.

	BETWEEN: 	
      ITOCHU International Inc. of 335 Madison Ave. in the City
      of New York, in the State of New York, United States of America
      (”Distributor”) 

	  	
       

	AND: 	
      PM Devices Inc., a Company incorporated under the laws of
      British Columbia under Certificate No. 564428, of Unit 2135, 13700
      Mayfield Place, in the City of Richmond, in the Province of British
      Columbia, Canada ("Manufacturer" or “PM Devices”) 

BACKGROUND

A. PM Devices manufactures (or causes to be manufactured) and
markets certain products and devices described in the attached Exhibit A (such
products and devices are referred to as the ”Products”);

B. Distributor possesses the facilities, personnel, ability and
capacity to promote the sale and use of the Products in the geographic area
described in the attached Exhibit B (such area is referred to as the
”Territory”); and

C. PM Devices wishes to sell the Products to Distributor, and
Distributor wishes to purchase the Products for resale in the Territory. 

AGREEMENT

In consideration of the foregoing and of the mutual covenants
contained herein, and intending to be legally bound, PM Devices and Distributor
agree as follows:

1. Distribution.

a.) Appointment.

Subject to the terms of this Agreement,
PM Devices hereby appoints Distributor, and Distributor hereby accepts its
appointment, as the exclusive distributor of the Products in the Territory.

b.) Duration and
Termination.

(1) This Agreement shall begin on the
date written above and shall continue in full force and effect for an initial
two-year term. At the end of this initial term or any extension term, this
Agreement shall automatically be renewed for a further successive period of two
years, unless either party gives the other party notice of its intention not to
renew this Agreement upon the expiration of the then-current term at least 90
days prior to the expiration of such term. In the event of non-renewal of this
Agreement, upon expiration of the current term, Distributor may continue to sell
and purchase Product for an additional 90 days following the effective date of
termination. During the additional 90 day period, Distributor will not have
exclusive distribution rights in the Territory and Manufacturer shall be free to
enter into distribution agreements with third parties for the Territory and any
Product purchased by Distributor during this 90 day period can not be returned
for refund as described in section 2. e.) (5). Any such notice of non-renewal
shall be provided as required by Section 14 of this Agreement. 

(2) Each of the following circumstances
shall constitute an ”Event of Default” under this Agreement:

	 	i) 	
      The material breach of any term or condition of this
      Agreement

Page 1 of 20 

	 	ii) 	
      The repeated failure of a party to perform one or more of
      its obligations under this Agreement, whether or not this repeated failure
      constitutes a material breach;

	 	iii) 	
      The filing by or against a party of any insolvency or
      bankruptcy proceeding, proceedings for reorganization, receivership,
      dissolution or any arrangement under bankruptcy law,

	 	iv) 	
      The existence of a condition of force majeure that
      continues for longer than six (6) months;

	 	v) 	
      Any change in a party’s ownership which shall impair its
      ability to perform its obligations under this Agreement; and

	 	vi) 	
      The failure or inability of Distributor to meet sales
      objectives outlined in Section 2(d)(2).

Upon the occurrence of an Event of
Default by a party, the other party may terminate this Agreement upon thirty
(30) days prior written notice to the defaulting party, specifying the default;
provided that the defaulting party shall not have cured the default within such
thirty (30) day period. Therefore, if an Event of Default is not cured within
that thirty (30) day period, this Agreement may be immediately terminated at the
discretion of the non-defaulting party by giving written notice, in accordance
with section 14, to the defaulting party.

(3) During the 30-day notice period
described in subsection (2) above, the party giving notice may withhold its own
performance (except with respect to payment of any amount due to the other
party), unless the other party cures or acts with due diligence to cure the
Event of Default within the notice period or otherwise gives the notifying party
sufficient security. Notwithstanding the foregoing, in the case of an Event of
Default arising under section 1.(b) (2) (iii) as a result of voluntary petition
in bankruptcy filed by Distributor, this Agreement will automatically
terminate.

c.) Sub-Distributors.

Distributor shall have the right to
appoint sub-distributors for the Products in the Territory; provided, however,
that if Distributor appoints any sub-distributor (other than an ITOCHU Group
entity) for the Products during the term of this Agreement, Distributor
shall:

	 	i) 	
      Cause such sub-distributor to comply fully with all
      obligations imposed hereunder upon Distributor applicable to resale of the
      Products within the Territory;

	 	ii) 	
      Obtain a guarantee from such sub-distributor that it will
      not represent itself as an employee, agent or representative of PM
      Devices;

	 	iii) 	
      Obtain such sub-distributor’s commitment to indemnify PM
      Devices and defend and to hold PM Devices harmless from all claims,
      damages and liabilities which it may incur in connection with the
      appointment or termination of such sub- distributor and the sale of the
      Products by such sub-distributor;

	 	iv) 	
      Submit to PM Devices a list of the sub-distributors
      including addresses, fax and phone numbers.

d.) Conflicts of lnterest. 

Distributor expressly agrees not to
engage in any activity relating to a product that competes directly with the
Products. These competing products are outlined in Exhibit E. 

e.) Independent Contractor.

Distributor is an independent
contractor authorized only to purchase products from PM Devices for resale
within the Territory. Nothing in this Agreement creates a relationship of
employer-employee, principal-agent, franchiser-franchisee, joint venture or
partnership between Distributor and PM Devices. Distributor has no power or
authority to bind PM Devices in any way for any purpose, nor to give any
representation on PM Devices’ behalf, nor to create any liability against 

Page 2 of 20 

PM Devices. Distributor agrees to
indemnify and to hold harmless PM Devices from and against any and all claims,
damages or liabilities arising from any act of Distributor outside of its scope
of authority under this Agreement.

2. Products.

a.) Price.

(1) PM Devices shall have the absolute
right to establish the prices of the Products purchased by Distributor under
this Agreement. The initial Price for each of the Products is set forth in the
attached Exhibit C. Distributor shall have the absolute right to establish the
prices of the Products sold by Distributor as contemplated by this Agreement.

(2) Prices may be modified by PM
Devices upon sixty (60) days written notice to Distributor. The prices in such
modified Price List shall be effective for all Products ordered by Distributor
after the effective date of such modification, which date shall be set forth in
the notice. No change in the Price List shall be effective before the first
anniversary of this Agreement. A maximum of two (2) price increases are
permitted in any one (1) calendar year period. 

(3) The modified price will not apply
to orders received and accepted by PM Devices prior to the effective date of
such price change. 

(4) All prices and shipments to
Distributor shall be F.O.B. PM Devices’ plant in Vancouver, Canada. To such
prices shall be added all shipment costs, transit insurance costs and applicable
duties or taxes and other related costs and expenses incurred by PM Devices and
relating to the sale and shipment of the Products to Distributor.

b.) Purchase Orders.

(1) Distributor agrees to purchase the
Products from PM Devices, solely from PM Devices and not from any other source,
and Distributor agrees that purchase of the Products is for resale on
Distributor’s own account.

(2) Distributor shall issue purchase
orders for the Products to PM Devices from time to time. All purchase orders
shall be in a writing (including an email or fax) and specify the Product type,
quantity, desired shipping date, unit price (from the Price List), unique
purchase order number, shipping destination and any special shipping
instructions. All purchase orders shall be subject to the terms and conditions
of this Agreement and in the event of a conflict or inconsistency between the
terms of this Agreement and the terms of any purchase order or other document
submitted by Distributor to PM Devices, this Agreement shall control unless the
parties specifically otherwise agree in writing. 

(3) PM Devices may impose, as a
prerequisite to its acceptance of a purchase order, the payment of outstanding
delinquent invoices.

(4) PM Devices will acknowledge the
acceptance of a purchase order by a written order confirmation. Distributor
acknowledges and understands that PM Devices’ obligation to sell any Products is
subject to availability of the Products. No purchase order shall be binding upon
PM Devices until the same is accepted in writing by PM Devices.

(5) PM Devices shall make reasonable
efforts to fill each purchase order that is accepted, but PM Devices shall not
be liable for damages caused by failure to ship or delay in shipment resulting
from conditions beyond the control of PM Devices, including but not limited to
the inability of its suppliers to obtain material and supplies or to produce
sufficient components to meet Product sales demand.

Page 3 of 20 

c.) Payment. 

(1) All amounts due to PM Devices shall
be for the net invoice amount paid in U.S. Dollars without discount or rebate.
Payment terms are thirty (30) days, which shall be stated on each invoice. PM
Devices may at its sole discretion require wire transfer prior to shipment or
irrevocable standby letter of credit payable by sight draft from Distributor in
the event Distributor is in payment default under this Agreement. If Distributor
is prohibited from making payment in U.S. Dollars because of any applicable law
or regulation, PM Devices may elect to designate a non-prohibited currency or
mode of payment.

(2) If Distributor is delinquent in
remitting payments to PM Devices under the terms of any invoice in a timely
fashion, PM Devices may: i) decline to accept purchase orders or make shipments
against accepted purchase orders; ii) charge Distributor interest on past due
amounts at a rate of 1.5 percent per calendar month; and/or iii) require advance
payment, payment on delivery or bank-guaranteed method of payment for further
shipments. Distributor shall comply with the modified payment terms. The
foregoing remedies of PM Devices are not exclusive, but in addition to any and
all remedies available to PM Devices under this Agreement and applicable
law.

d.) Sales.

(1) Distributor shall restrict to the
Territory its active promotion and marketing of the Products. Distributor shall
not actively pursue sales of the Products outside the Territory.

(2) Minimum purchase requirements are
as set out in Exhibit D. There shall be no minimum purchase obligations for the
period from the effective date through December 31, 2005, and thereafter minimum
purchase obligations shall be established by mutual agreement of the parties. If
PM Devices and Distributor cannot mutually agree on sales minimums through
negotiation, then minimums will be set at the previous years sales minimum plus
20 percent. If minimum cannot be negotiated for 2006, then the minimum will be
set using the following formula: average 2005 monthly sales multiplied by 12
plus 20 percent. The Failure of Distributor in any one-year period to purchase
the annual commitment shall result in a ninety (90) day probationary period.
During this period, Distributor must increase purchases to reasonable levels
specified by PM Devices. If Distributor fails to meet the probationary purchase
requirements, PM Devices may terminate this Agreement immediately upon written
notice to Distributor.

(3) Distributor shall submit detailed
sales and inventory reports to PM Devices on request. Annual sales forecasts for
the Territory shall be submitted no later than sixty (60) days prior to the
beginning of the calendar year. The annual forecast shall be updated not later
than one hundred twenty (120) days after the beginning of the year for the last
half of the forecast year. The reports shall be in a form and substance as
reasonably required by PM Devices.

e.) Shipment, Delivery and
Inventory.

(1) All risk of loss or damage to the
Products shipped will pass from PM Devices to Distributor at the time the
shipment is delivered to the carrier.

(2) Delivery schedules set forth in PM
Devices’ order confirmations reflect PM Devices’ reasonable estimate of actual
shipping dates. PM Devices will use its reasonable best efforts to meet such
dates. Partial shipments will constitute independent transactions for which
payment is due according to the terms of this Agreement. Distributor shall be
solely responsible for obtaining whatever licenses, permits or the like may be
required to allow it to receive the Product.

(3) Distributor shall inspect the
Products promptly upon their arrival at their shipping destination. All defects
or other nonconformities of the Products to the terms of the purchase order
discoverable upon receiving inspection, must be reported in writing to PM
Devices within thirty (30) days after the date of receipt of the Products, or
Distributor’s rights for redress for any defect 

Page 4 of 20 

or nonconformity in said shipment that
are visually observable shall be forever waived. All other defects or
nonconformities must be reported in writing within thirty (30) days after their
discovery or Distributor’s rights for redress shall be forever waived.

(4) Subject to PM Devices ability to
supply, Distributor shall at all times maintain sufficient inventory of Products
to meet customer demand and established sales objectives for the Territory.
Products consigned to Distributor’s customers are part of Distributor’s
inventory until purchased by the customer. Distributor shall maintain the right
to withdraw consigned inventory at any time prior to purchase by the
customer.

(5) Distributor may not return
inventory to PM Devices or transfer inventory to any other distributor without
PM Devices’ express written consent. Product can be returned to PM Devices only
in the event of termination of this Agreement. Product with a minimum of six (6)
months shelf life remaining can be returned for a refund of the purchase price.
Product with less than six (6) months remaining shelf life cannot be returned.
Distributor will bear all risks of loss or damage to returned Products occurring
before receipt of the Products by PM Devices. Distributor shall have the right,
one time per calendar year, to return Products to PM Devices with a total value
of up to five percent (5%) of annual purchases. The restocking fee for returned
products will be 25%. All returned product must have a remaining shelf-life of
12 months.

(6) PM Devices’ Products will have a
minimum one-year shelf life upon leaving plant.

(7) The Products will be shipped via
the carrier or freight forwarder designated by Distributor. 

f.) Product Modifications.

(1) PM Devices reserves the right to
modify the design, specifications and/or method of manufacture of the Products
at any time without notice, and to substitute the modified Products for those
originally ordered by Distributor, provided there is no material alteration of
the Products’ form, fit, function or quality. PM Devices may also discontinue
manufacture of any of the Products without notice. PM Devices will not
compensate Distributor for any change or discontinuation of Products.

3. Distributor’s Obligations.

In addition to Distributor’s other
agreements herein, Distributor further agrees to:

a.) Exercise its reasonable best
efforts to (1) promote the sale of the Products at its own expense throughout
the Territory using such means as advertising, customer contact, distribution of
printed materials, attendance at trade shows and conventions, support of local
surgeons at trade shows and conventions and the like; (2) promote the good will
of PM Devices; and (3) meet or exceed the sales objectives established in
Section 2;

b.) Provide and maintain at its own
expense, one or more suitable places of business in the Territory staffed with
an adequate force of competent sales personnel who are thoroughly familiar with
the Products and shall contact customers throughout the Territory; pay all
expenses incurred by its personnel relating to attendance at PM Devices’
training or other presentations regarding the Products;

c.) Cooperate with PM Devices in the
sponsorship and planning of technical seminars on the Products, without charge
to PM Devices;

d.) Provide PM Devices with prompt
written notice of all changes in management or sales personnel responsible for
the promotion and sale of the Products in the Territory;

Page 5 of 20 

e.) When appropriate, assist PM Devices
in collecting clinical data from designated clinical centers within the
Territory;

f.) Maintain, in accordance with PM
Devices’ requirements as provided to Distributor, complete, accurate and current
records on Product shipments so that quarterly reports may be sent to PM Devices
indicating location, by serial number or lot number, of all Products sold to
Distributor by PM Devices; and

g.) Assist PM Devices in any recall of
Products sold in the Territory. 

4. Surviving Obligations.

Upon the expiration or termination of
this Agreement, all rights of Distributor under this Agreement shall immediately
cease, and PM Devices may appoint a new distributor(s) of the Products in the
Territory. The following obligations of Distributor shall survive and continue
after expiration or termination:

a.) To sell its inventory of the
Products back to PM Devices at the purchase price originally paid by
Distributor, less any credits and allowances applied to Distributor’s account
for the Products. PM Devices shall be obliged to repurchase such Products,
provided they are in their original packaging, form and condition, with a least
six-months shelf life remaining, in accordance with section 2. e) (5). 

b.) To immediately return to PM Devices
all Product samples, information, literature and other documents supplied to
Distributor by PM Devices;

c.) To continue to make payments owed
to PM Devices promptly when due;

d.) To provide a final, current and
accurate record of the location of all Products not returned to PM Devices under
section (a) above;

e.) To cease trading in the Products
and give prompt notice to all sub-distributors, agents and employees in the
Territory of the cessation of Distributor’s rights to distribute the Products in
the Territory;

f.) To continue to indemnify PM Devices
with respect to all matters to which indemnification by Distributor is
covenanted herein for a period of five-years from the effective date of
termination; 

g.) To continue to keep information
confidential and protect PM Devices’ Intellectual Property as provided under
Section 8; and

h.) To continue to observe any and all
obligations of Distributor herein which are to survive expiration of this
Agreement according to express terms of this Agreement.

5. PM Devices’ Obligations.

In addition to PM Devices’ other
agreements herein, PM Devices further agrees to:

a.) Furnish to Distributor reasonable
quantities of promotional materials and marketing literature as sales aids for
the Products. All such promotional materials shall be and remain the exclusive
property of PM Devices; 

b.) Provide to Distributor in writing,
or by oral or other presentation, information and training concerning the
technical specifications of the Products;

Page 6 of 20 

c.) Cooperate with Distributor in the
planning of technical and educational seminars on the Products

d.) Respond to inquiries from
Distributor regarding the Products, their use and application, the status of
shipments on accepted purchase orders, new or improved versions of the Products
and the like;

e.) Assist Distributor in responding to
any questions, concerns, complaints or the like raised by any customer of
Distributor, any governmental agency or other authority or any other third
party, and bear the costs and responsibility therefore; and

f.) Refrain from soliciting employees,
subsidiaries or third party sub-distributors (excluding third-party
sub-distributors that developed through PM Devices contacts) of Distributor for
employment by PM Devices during the term of this Agreement, as extended, and for
one (1) year following the termination or expiration of this Agreement. This
obligation shall survive the termination or expiration of this Agreement unless
such termination results from an Event of Default by Distributor under this
Agreement.

6. Compliance with Law.

a.) PM Devices will comply with all
pertinent provisions of the United States Food and Drug Administration laws
applicable to the manufacturing and marketing of the Products.

b.) Distributor shall be responsible
for compliance in the Territory with all applicable United States or local laws
and regulations relating to the Products and the marketing and sale thereof by
Distributor. PM Devices and Distributor will cooperate where appropriate in
order to assure compliance of both parties with such laws and regulations.

c.) Annually on the anniversary of the
Agreement, an officer of Distributor shall certify to PM Devices in writing by
providing a certificate in the form attached hereto as Exhibit F, Distributor’s
compliance with the requirements of this Section 6. 

7. Limited Warranty and Limitation of Remedies.

(a) PM Devices warrants to Distributor
only that the Products, at the time of shipment to Distributor under this
Agreement, shall be: 

(1) Free from material defects in
design, materials and workmanship; and 

(2) In compliance with all United
States laws and regulations pertaining to the design, materials and workmanship
of such products.

In order to receive the exclusive
remedies specified in this Section 7(a) below, claims by Distributor concerning
any non-compliance with the above express warranties shall be made in writing
and shall be received by PM Devices within the stated Shelf-Life of the Products
by PM Devices to Distributor. THE EXPRESS WARRANTIES ABOVE ARE EXCLUSIVE AND ARE
GIVEN IN LIEU OF ALL OTHER WARRANTIES, REPRESENTATIONS, GUARANTEES AND
CONDITIONS, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, WARRANTIES AND CONDITIONS OF MERCHANTABILITY, DURABILITY AND FITNESS
FOR PURPOSE (INCLUDING FITNESS FOR A PARTICULAR PURPOSE) AND WARRANTIES ARISING
FROM USAGE OF TRADE OR COURSE OF DEALING. Other than the express warranties
specified above and any express written warranties provided directly to end
users by PM Devices, any description of the Products, whether in writing or made
orally by PM Devices, and any specifications, samples, models, bulletins,
drawing, diagrams, or similar material provided by PM Devices and used in
connection 

Page 7 of 20 

with the Products are for the sole
purpose of identifying the Products and shall not be construed as a warranty or
representation in favour of Distributor. PM DEVICES AND DISTRIBUTOR SPECIFICALLY
EXCLUDE THE APPLICATION OF THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE
INTERNATIONAL SALE OF GOODS TO THIS AGREEMENT AND TO THE PURCHASE AND SALE OF
THE PRODUCTS HEREUNDER.DISTRIBUTOR’S EXCLUSIVE REMEDY AND PM DEVICES’
SOLE LIABILITY FOR ANY BREACH OF THE EXPRESS WARRANTIES DESCRIBED IN THIS
SECTION 7.(a) SHALL BE, AT PM DEVICES’ ELECTION, REPLACEMENT OF SUCH PRODUCTS BY
PM DEVICES OR A REFUND OF THE INITIAL PURCHASE PRICE RECEIVED BY PM DEVICES FOR
SUCH PRODUCTS. PM DEVICES SHALL NOT BE SUBJECT TO AND EXPRESSLY DISCLAIMS ANY
OTHER OBLIGATIONS OR LIABILITIES ARISING OUT OF BREACH OF WARRANTY.

NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, AGGRAVATED, PUNITIVE
OR CONTINGENT DAMAGES; AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EACH PARTY SPECIFICALLY DISCLAIMS ANY LIABILITY FOR DAMAGES FOR LOST PROFITS OR
REVENUES, LOSS OF REPUTATION OR GOODWILL OR ANY OTHER ECONOMIC LOSS.

(b) The cumulative aggregate liability
of PM Devices to Distributor for all claims relating to the Products or
otherwise in respect of this Agreement or any transactions contemplated by this
Agreement, shall in no event exceed the lesser of: 

(1) the total proven direct damages
actually suffered by Distributor which PM Devices is liable for hereunder;
or

(2) the sum of $2,000,000 (Cdn.
Funds). 

The above limitation on liability
applies regardless of the cause of action, including contract (including
fundamental breach), tort (including negligence), product liability, strict
liability, infringement of third party intellectual property rights or other
third party claims against Distributor. 

PM Devices shall not be liable to
Distributor for any Products damaged, mishandled or improperly shipped or stored
by Distributor or any person acting under direction or authorization of
Distributor, or for any Products tampered with or to which Distributor or any
person acting under direction or authorization of Distributor made changes in
fabrication, assembly or otherwise. 

(c) Subject as set out in Section 7(b),
PM Devices shall defend and hold Distributor and its affiliates harmless from
any and all claims, demands, actions, liabilities, damages, judgments, liens,
costs, losses and expenses (including reasonable legal expenses) (collectively
“Claims”) which may be suffered or incurred by Distributor or its affiliates
arising from or related to any non-frivolous investigation or proceeding made by
a third party (including any governmental authority) alleging any defect in the
Products, including its design, materials or workmanship, any breach of warranty
made by PM Devices to Distributor or to a third party or any material failure of
PM 

Devices to perform and observe its
obligations under this Agreement, provided that Distributor gives PM Devices
written notice of the Claim with sufficient promptness to avoid any adverse
effect on PM Devices’ ability to defend the Claim; allows PM Devices to assume
control of the defence and settlement of the Claim; reasonably assists and
cooperates with PM Devices in connection with the defence and settlement of the
Claim at PM Devices’ expense; and does not settle the Claim without PM Devices’
prior written consent. This paragraph shall not apply to any Claims arising out
of: 

(1) any intentional wrongful act or
omission or gross negligence of Distributor or any third party; 

Page 8 of 20 

(2) any failure to transport, store,
install, use, operate or maintain the Products in accordance with the reasonable
applicable specifications, instructions, manuals and other documentation
provided by PM Devices or any Products damaged, tampered with or changed in
fabrication or assembly or otherwise by any person other than PM Devices or any
person doing so with the express authorization of PM Devices ; or 

(3) any representation or warranty made
by Distributor or any employee, agent or other representative (e.g., any sales
representative, service representative, dealer or distributor) of Distributor
with respect to any Products, which representation or warranty is not within the
scope of PM Devices’ warranties set forth in any applicable documentation,
promotional literature and other materials published by PM Devices or
incorporated from such materials.

PM Devices shall, during the term of
this Agreement, maintain at its own expense a reasonably sufficient amount of
general commercial and product liability insurance, and PM Devices shall request
that its insurer add Distributor as an “additional insured” to its policies as
its interest may appear.

(d) Distributor shall not make any oral
or written representations, warranties, conditions or guarantees which vary from
the written representations, warranties, conditions or guarantees given or made
by PM Devices to Distributor or Distributor’s employees with respect to the
Products. 

(e) Subject as set out in Section 7(f),
  Distributor shall defend and hold harmless PM Devices and its affiliates from
  and against any and all Claims which may be suffered or incurred by PM Devices
  or its affiliates arising from or related to any non-frivolous investigation
  or proceeding made by a third party (including any governmental authority) based
  upon any allegation of wrongdoing by Distributor in the importation, storage,
  transport, handling, use, marketing, advertising, sale and distribution of the
  Products by Distributor, any unauthorised warranty made by Distributor to a
  third party or any material failure of Distributor to perform and observe its
  obligations under this Agreement; provided that PM Devices gives Distributor
  written notice of the Claim with sufficient promptness to avoid any adverse
  effect on Distributor’s ability to defend the Claim; allows Distributor
  to assume control of the defence and settlement of the Claim; reasonably assists
  and cooperates with Distributor in connection with the defence and settlement
  of the Claim at Distributor’s expense; and does not settle the Claim without
  Distributor’s prior written consent. This paragraph shall not apply to
  any Claim arising out of the intentional wrongful act or omission or gross negligence
  of PM Devices or any third party. 

Distributor shall, during the term of
this Agreement, maintain at its own expense a reasonably sufficient amount of
general commercial and product liability insurance and shall request that its
insurer add PM Devices as an “additional insured” to its policies as its
interest may appear. 

(f) The cumulative aggregate liability
of Distributor to PM Devices for all claims in respect of this Agreement or any
transactions contemplated by this Agreement shall in no event exceed the lesser
of: 

(1) the total proven direct damages
actually suffered by PM Devices which Distributor is liable for hereunder;
or

(2) the sum of $2,000,000 (Cdn.
Funds).

The above limitation on liability
applies regardless of the cause of action, including contract (including
fundamental breach), tort (including negligence), product liability, strict
liability, infringement of third party intellectual property rights or other
third party claims against PM Devices. 

Page 9 of 20 

Distributor shall not be liable to PM
Devices for any Products not in compliance with the express warranties in
paragraph 7(a) above. 

8. Confidentiality, Intellectual Property and
Non-Solicitation.

a.) PM Devices represents to
Distributor that PM Devices has the exclusive right, title and interest in the
Territory to PM Devices’ patents, trademarks, trade names, emblems, designs,
models and methods of presentation relating to the Products (referred to in the
aggregate as ”Intellectual Property”). Distributor shall not do or cause to be
done anything that directly or indirectly challenges or intentionally impairs PM
Devices’ rights to the Intellectual Property.

b.) Except as expressly provided
herein, this Agreement does not give Distributor any right, title, license or
interest to the Intellectual Property and Distributor will not describe or
represent itself as having any such rights, except the right to distribute
Manufacturer’s Products hereunder.

c.) Distributor may use PM Devices’
Intellectual Property only in connection with the promotion, marketing and sale
of the Products. During the term of this Agreement, Distributor may refer to
itself on its letterhead and in advertisements as the exclusive authorized
distributor of the Products in the Territory and put PM Devices’ company logo in
promotional materials relating to the Products. In no event is Distributor
granted the right to use PM Devices’ Intellectual Property in connection with
other goods distributed by Distributor, or to use or adapt such Intellectual
Property or any confusingly similar words or symbols as part of its commercial
name.

d) Each party acknowledges that it will
obtain confidential information from the other party and that the public
disclosure of this information by the receiving would inflict irreparable harm
upon the disclosing party. Each party agrees to maintain in confidence aII
confidential information it may receive under this Agreement concerning the
Products or the business of PM Devices or Distributor, and neither party will
disclose or disseminate such information to others without the prior written
consent of the disclosing party. Each party specifically agrees: (1) not to
disclose to any unauthorized person any information concerning the negotiations,
terms and conditions of this Agreement; (2) to take all reasonable steps to
prevent unauthorized disclosure of confidential information by its agents,
representatives and employees; and (3) to safeguard and protect all confidential
documents from theft, loss or perusal by unauthorized persons.

e) If this Agreement expires without
renewal or is otherwise terminated, Manufacturer agrees that it will not,
without the consent of Distributor, contact or solicit any of the parties listed
on Exhibit G which Distributor represents form a part of Distributor's network.

9. Force Majeure and Other Contingencies.

Neither PM Devices nor Distributor
shall have any liability to the other for any failure or delay in the
performance of any obligation under this Agreement (except the obligation to
make payments as and when due) if directly or indirectly caused by or resulting
from force majeure beyond the reasonable control and without fault or negligence
of the party claiming force majeure. The party claiming force majeure will give
the other party written notice of the cause within fifteen (15) days after the
occurrence, and will exercise reasonable diligence to remove the cause and
resume performance. If PM Devices is the affected party, it may equitably
allocate production and delivery of affected Products among its customers and
its distributors. If any performance is suspended or delayed because of force
majeure, the period for performance will be correspondingly extended; provided
however, if the performance is suspended or delayed for more than six (6) months
the party not claiming force majeure may at any time after such six (6) month
period, and while the performance remains suspended or delayed, terminate this
Agreement by written notice to the other party, as provided in Section 14
below.

Page 10 of 20 

10. Equitable Relief.

Distributor acknowledges and agrees
that, in the event of a breach by Distributor of any of the provisions of
Sections 1(d) (Conflicts of Interest) or 8(d) (Confidentiality) of this
Agreement, PM Devices’ remedies at law may be inadequate and such breach may
cause PM Devices substantial and irreparable injury and damages. Distributor
agrees that PM Devices will be entitled to the remedies of injunction, specific
performance and other equitable relief to prevent a breach of such provisions of
this Agreement. The exercise by PM Devices of its rights under this Section 10
shall not be construed as a waiver of any rights which PM Devices may have for
damages or otherwise in the event of a breach of the provisions of Sections 1(d)
and 8(d), or any other provision of this Agreement.

11. No Liability for Termination.

No party terminating this Agreement in
accordance with its terms shall, because of such termination, be liable to the
other for compensation, reimbursement or damages on account of loss of profits
on sales or estimated profits on anticipated sales or on account of
expenditures, investments or commitments made in connection with the business or
goodwill of the other party and neither party shall have such claim upon the
expiration of this Agreement. Termination of this Agreement will not release
either party from any debt owed to the other party prior to termination. 

12. Setoff.

PM Devices reserves the right to set
off any amounts Distributor owes to PM Devices against any amount PM Devices
owes to Distributor

13. Severability.

If any one or more of the provisions
contained in this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement.

14. Notices.

All notices or consents required by
this Agreement shall be in writing in English. Notices shall be deemed delivered
if: a) delivered in person, b) sent by certified mail, return receipt requested,
correct postage prepaid, c) by telecopy, or d) by recognized international,
commercial, overnight courier, to the address and/or telecopier number listed
below, unless such address or telecopier number is changed by written notice
hereunder:

If to PM Devices:

	 	PM Devices 	  
	 	Unit 2135, 13700 Mayfield Place 
	 	Richmond, BC Canada 
	 	V6V 2E4 	  
	 	  	  
	 	Telecopy: 	(604) 270-4384 
	 	  	  
	 	Attention: 	Mr. Carlos Vonderwalde 
	 	  	President, PM Devices Inc. 
	 	  	  
	 	If to Distributor: 	  
	 	  	  
	 	ITOCHU International Inc. 

Page 11 of 20 

	 	335 Madison Ave. 
	 	New York, New York 10017 
	 	United States of America 
	 	  	  
	 	Telecopy: 	(212) 818-8597 
	 	  	  
	 	Attention: 	Mr. William Rutan 
	 	  	President, ITOCHU Healthcare

Any notice or consent delivered (a) in
person shall be deemed delivered when delivered and signed for by any person at
the address above; (b) by certified mail, postage prepaid, return receipt
requested, shall be deemed delivered on the seventh business day after the date
deposited in the mail; (c) by telecopier transmission shall be deemed delivered
on the date sent, if sent before 5:00 p.m. on a business day in the recipient’s
location, and in any event only when a transmission report is retained by the
sender which indicates the telecopy has been duly received; and (d) by courier
service shall be deemed delivered on the next business day after the date
sent.

15. Applicable Law.

a.) This Agreement shall be governed by
the law of the Province of British Columbia, without regard to its principles of
choice of laws.

b.) Any and all disputes, controversies
or differences in connection with or arising out of this Agreement or any
alleged breach hereof, which cannot be amicably settled, shall be submitted to
and settled by arbitration. Arbitration shall be held in Vancouver, British
Columbia, Canada in accordance with the rules of the British Columbia
Arbitration Centre. The award resulting therefrom shall be final and binding
upon the parties hereto. 

16. Entire Agreement.

This Agreement constitutes the entire
understanding between the parties with respect to the subject matter hereof; no
other representations or covenants have induced either party to enter into this
Agreement.

17. Construction.

The paragraph headings of this
Agreement are for convenience of reference only and do not form a part of the
terms of this Agreement. As used in this Agreement, the masculine, feminine or
neuter pronoun shall include each the masculine, feminine and neuter genders. A
reference to a person or entity shall mean a natural person, a trustee, a
corporation, a partnership or any other form of legal entity. All references
(including pronouns) in the singular or plural number shall be deemed to have
been made, respectively, in the plural or singular number as well, as the
context may require.

18. Benefit.

This Agreement shall be binding on, and
inure to the benefit of, the parties hereto and their respective heirs,
executors, administrators, successors and assigns.

19. Counterparts.

This Agreement may be executed in
counterparts which when taken together shall constitute one agreement which is
binding on all the parties, even though all the parties are not signatories to
the same counterpart.

Page 12 of 20 

20. Amendment and Modification.

This Agreement may be amended or
modified, or any provision hereof may be waived, only by a written amendment or
waiver executed by PM Devices and Distributor.

21. No Waiver.

Waiver of any default shall not be
considered a waiver of any other default or of the same default occurring
subsequently. No delay or failure by any party to exercise any right or remedy
shall be a waiver of such right or remedy, and no single or partial exercise of
any right or remedy shall preclude the further exercise thereof, or the exercise
at any time of any other right or remedy.

22. Exhibits.

The Exhibits, which are attached and
made a part hereof, are a part of this Agreement as if fully set forth herein.
All references herein to sections, subsections, clauses and exhibits shall be
deemed references to such parts of this Agreement, unless the context shall
otherwise require.

24. Third Party Beneficiary. 

This Agreement is not intended as and
shall not be construed to make any third party a beneficiary hereof, except that
PM Devices’ warranty may be passed along by Distributor. No creditor of
Distributor shall have or receive any direct or indirect benefits hereunder and
this Agreement may be enforced only by the parties hereto.

IN WITNESS WHEREOF, the parties have
executed this Agreement on the date first above written.

	PM Devices
      Incorporated, 	 	ITOCHU International
      Inc. 
	a division of Medical
      Ventures 	 	 	  
	 	  	 	 	  
	 	  	 	 	  
	 	  	 	 	  
	 	/s/ Carlos Vonderwalde 	 	 	/s/ Akira Hoshino 
	By:  	         	 	By: 	
	 	Carlos Vonderwalde, President 	 	 	Akira Hoshino, Senior Vice 
	 	  	 	 	President and General 
	 	  	 	 	Manager, Machinery Division

Page 13 of 20 

EXHIBIT A 

DESCRIPTION OF PRODUCTS 

Products shall mean:

PM Devices PeriPatch Sheets 

	Product
      Code 	Product 
	  	 
	1P6 	1 cm x 6 cm PeriPatch Sheet
  
	1.5P8 	1.5 cm x 8 cm PeriPatch Sheet 
	1.5P10 	1.5 cm x 10 cm PeriPatch Sheet
    
	4P4 	4 cm x 4 cm PeriPatch Sheet 
	4P6 	4 cm x 6 cm PeriPatch Sheet
  
	6P8 	6 cm x 8 cm PeriPatch Sheet 
	8P14 	8 cm x 14 cm PeriPatch Sheet
  
	10P162 	10 cm x 16 cm PeriPatch Sheet 
	  	 
	G45-23 	45 mm Endoscopic Sleeve – Two 
	G45-5 	45 mm Endoscopic Sleeve – Five
    
	G60-2 	60 mm Endoscopic Sleeve – Two 
	G60-5 	60 mm Endoscopic Sleeve – Five
    
	G60T-2 	60 mm Endoscopic Sleeve – Two 
	G60T-5 	60 mm Endoscopic Sleeve – Five
    
	E45T-2 	45 mm Endoscopic Sleeve – Two 
	E45T-5 	45 mm Endoscopic Sleeve – Five
    

And such additional products as the parties shall in writing
agree from time to time.

Page 14 of 20 

EXHIBIT B 

DESCRIPTION OF TERRITORY 

For purposes of this Agreement, the “Territory” shall include
the following state(s): 

	Texas
  
	Oklahoma
  
	Arizona
  
	New Mexico
  
	Colorado
  
	Nevada
  
	Wyoming
  
	Utah
  
	Montana
  
	Idaho
  
	Louisiana
  
	Mississippi
  
	Arkansas
  
	Tennessee
  
	Alabama
  
	Western Missouri
  
	Southern Illinois
  
	Southwestern Kentucky 

Additional states shall be added at the discretion of Itochu
Healthcare..

The Distributor guarantees that it currently has adequate sales
representation in the territories listed in Exhibit B in order to properly
represent the Products in those Territories 

.

Page 15 of 20 

EXHIBIT C 

PRICE LIST 

PM Devices PeriPatch Sheet 

	Model 	Description 	    1-2491	250-499 	500+ 
	1P6 	1 cm x 6 cm PeriPatch Sheet 	 	  	  
	1.5P8 	1.5 cm x 8 cm PeriPatch Sheet 	 	  	  
	1.5P10 	1.5 cm x 10 cm PeriPatch Sheet
    	 	  	  
	4P4 	4 cm x 4 cm PeriPatch Sheet 	[Redacted
      Information] 
	4P6 	4 cm x 6 cm PeriPatch Sheet 	 	  	  
	6P8 	6 cm x 8 cm PeriPatch Sheet 	 	  	  
	8P14 	8 cm x 14 cm PeriPatch Sheet
	 	  	  
	10P162 	10 cm x 16 cm PeriPatch Sheet 	 	  	  
	  	 	 	  	  
	G45-23 	45 mm Endoscopic Sleeve – Two 	 	  	  
	G45-5 	45 mm Endoscopic Sleeve – Five
    	 	  	  
	G60-2 	60 mm Endoscopic Sleeve – Two 	 	  	  
	G60-5 	60 mm Endoscopic Sleeve – Five
    	 	  	  
	G60T-2 	60 mm Endoscopic Sleeve – Two 	 	  	  
	G60T-5 	60 mm Endoscopic Sleeve – Five
    	 	  	  
	E45T-2 	45 mm Endoscopic Sleeve – Two 	 	  	  
	E45T-5 	45 mm Endoscopic Sleeve – Five
    	 	  	  

The Handling Fee will be $15 per 12 units or multiples thereof,
up to a maximum of $100. Prices adjusted at PM Devices’ discretion in accordance
with the Agreement’s provisions. When ordering, please use the Model number
shown above. 

* Price discounts are based on units purchased during the
contract-year. Aggregate totals of all products purchased from PMD regardless of
type or description entitle distributor to additional discounts, i.e. 1-249 is
at column 1 prices, 250-499 are at column 2 prices, 500 and above at column 3
prices. 

1 - All prices in U.S. dollars. Prices may vary depending on
economic and product market factors. 
2 – 10P16 PeriPatchTM
sheets are special order only. Please allow up to 12 weeks for delivery. 
3 -
G model numbers are compatible with U.S. Surgical Endoscopic staplers 
4 – E
model numbers are compatible with J&J Ethicon Staplers 

Page 16 of 20 

EXHIBIT D 

SALES OBJECTIVES 

To be established as per section 2. b) (2) of this
agreement 

Page 17 of 20 

EXHIBIT E 

COMPETING PRODUCTS 

1. Bovine Pericardial or synthetic surgical patches or staple
line buttresses 

Page 18 of 20 

EXHIBIT F 

CERTIFICATE OF OFFICER OF DISTRIBUTOR 

[Letterhead of Distributor] 

CERTIFICATE 

[Date] 

PM Devices Inc. 
Unit 2135, 13700 Mayfield Place

Richmond, British Columbia, Canada 
V6V 2E4 

Attn: President 

Re: Distribution Agreement made as of June 1, 2005 (the
"Agreement") between ITOCHU International Inc. (the "Distributor") and PM
Devices Inc.(the "Manufacturer") 

Pursuant to section 6 of the Agreement, the undersigned, in his
capacity as an officer of ITOCHU and not in his personal capacity, hereby
certifies to the Manufacturer to the best of his information and belief that
ITOCHU has complied with all applicable United States and local laws and
regulations in the Territory (as defined in the Agreement) relating to the
Products (as defined in the Agreement) and the marketing and sale thereof by the
Distributor. 

ITOCHU International Inc. 

Per: 

_______________________________
Authorized Signatory 

Page 19 of 20 

EXHIBIT G 

DISTRIBUTOR’S NETWORK 

	Product for Surgery Inc.
  
	Flanagan Instruments
  
	Additional Sub-Distributors 

Page 20 of 20

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