Document:

EX-10.1

  Exhibit 10.1

  HYPERFINE EXECUTIVE SEVERANCE PLAN 

  PLAN DOCUMENT AND SUMMARY PLAN DESCRIPTION

  Effective as of December 5, 2022

  1.Establishment of Plan.  Hyperfine Operations, Inc., Liminal Sciences, Inc., and Hyperfine, Inc. (collectively, the “Company”), hereby establishes an unfunded severance benefits plan (this “Plan”) that is intended to be a welfare benefit plan within the meaning of Section 3(1) of ERISA.  This Plan is in effect for Participants who experience certain terminations of employment occurring after the Effective Date and before the termination of this Plan.  This Plan supersedes any and all (i) severance plans and separation policies applying to Participants that may have been in effect before the Effective Date with respect to any termination that would, under the terms of this Plan, constitute a termination by the Company without Cause or by Participant for Good Reason, and (ii) the provisions of any agreements between any Participant and the Company that provide for severance payments and benefits.

  2.Purpose.  The purpose of this Plan is to establish the conditions under which Participants will receive the severance payments and benefits described herein if their employment with the Company (or its successor in a Change in Control (as defined below)) terminates under the circumstances specified herein.  The severance payments and benefits paid under this Plan are intended to assist employees in making a transition to new employment and are not intended to be a reward for prior service with the Company.

  3.Definitions.  For purposes of this Plan:

  (a)“Base Salary” shall mean, for any Participant, such Participant’s base salary as in effect immediately before a Participant’s termination of employment (or immediately prior to the effective date of a Change in Control, if greater) and exclusive of any bonuses, “adders,” any other form of premium pay, or other forms of compensation.

  (b)“Board” shall mean the Board of Directors of the Company.

  (c) “Cause” shall mean Participant’s:  (i) willful misconduct or gross negligence in the performance of Participant’s duties; (ii) refusal to follow the lawful directions of the Company employee to whom the Participant reports or, in the case of the Chief Executive Officer, the Board of Directors; (iii) breach of a fiduciary duty owed to the Company; (iv) fraud, embezzlement or other material dishonesty with respect to the Company; (v) violation of applicable federal, state or local law or regulation governing the Company’s business; (vi) commission, conviction, plea of nolo contendere, guilty plea, or confession to a crime based upon an act of fraud, embezzlement or dishonesty or to a felony; (vii) habitual abuse of alcohol or any controlled substance or reporting to work under the influence of alcohol or any controlled substance (other than a controlled substance that Participant is properly taking under a current prescription); (viii) misappropriation (or attempted misappropriation) by Participant any material assets or business opportunities of the Company or any of its subsidiaries or affiliates; (ix) a material failure to comply with the Company’s written policies or rules, as they may be in effect from time to time during Participant’s employment, including policies and rules prohibiting discrimination or harassment; or (x) a material breach of Participant’s employment agreement or offer letter, the Non-Competition, Confidentiality and Intellectual Property Agreement or any other written agreement between the Company or one of its subsidiaries and Participant, 

   

  

   

  provided that Participant will have 30 days after notice from the Company to cure a failure or a breach under (ii), (ix) or (x), if curable. 

  (d)“Change in Control” shall mean the occurrence of any of the following events:

  1.any person or group of persons (other than the Company or its affiliates) becomes the owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding voting securities (the “Outstanding Company Voting Securities”) (but excluding any bona fide financing event in which securities are acquired directly from the Company); or 

  2.the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation (i) that results in the Outstanding Company Voting Securities immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the Outstanding Company Voting Securities (or such surviving entity or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof) outstanding immediately after such merger or consolidation, or (ii) immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the Board of the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof; or

  3.the sale or disposition by the Company of all or substantially all of the Company’s assets, other than (i) a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned directly or indirectly by stockholders of the Company following the completion of such transaction in substantially the same proportions as their ownership of the Company immediately prior to such sale or (ii) a sale or disposition of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof;

  4.provided that with respect to Sections (i), (ii) and (iii) above, a transaction or series of integrated transactions will not be deemed a Change in Control (A) unless the transaction qualifies as a change in control within the meaning of Section 409A of the Code, or (B) if following the conclusion of the transaction or series of integrated transactions, the holders of the Company’s Class B Common Stock immediately prior to such transaction or series of transactions continue to have substantially the same proportionate voting power in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

  (e)“Change in Control Period” means: (i) the twelve (12) month period beginning on the date of a Change in Control.

  (f)“COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act.

  (g)“Code” shall mean the Internal Revenue Code of 1986, as amended.

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  (h)“Company” shall mean Hyperfine, Inc. or, following a Change in Control, any successor thereto.

  (i)“Effective Date” shall mean December 5, 2022.

  (j)“Eligible Employee” shall mean the Chief Executive Officer, Alok Gupta, Khan Siddiqui, and Tom Teisseyre.

  (k)“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

  (l)“Good Reason” shall mean the occurrence of any of the following events without Participant’s consent: (i) a material reduction of Participant’s Base Salary as in effect immediately prior to the reduction; (ii) a material reduction in Participant’s authority, duties or responsibilities, provided however, following a Change in Control, a change in job title or reporting relationship without a reduction in Participant’s Base Salary will not constitute Good Reason; (iii) relocation of the offices at which Participant is required to work to a location that would increase Participant’s one-way commute by more than 50 miles; provided that, within 30 days of the first occurrence of the event that Participant believes constitutes Good Reason, Participant notifies the Company in a writing of the event, the Company fails to correct the act or omission within 30 days after receiving Participant’s written notice and Participant actually terminates his or her employment within 60 days after the date the Company receives Participant’s notice.

  (m)“Participant” shall mean the Eligible Employees employed by the Company from time to time.

  (n)“Plan Administrator” shall have the meaning set forth in Section 14 hereof.

  4.Severance Not in Connection with a Change in Control.  If the Company terminates Participant’s employment without Cause at any time other than during a Change in Control Period, subject to the provisions of Section 6 and 7, Participant shall be eligible to receive the following payments and benefits (collectively, the “Severance Package”):

  (a)Participant shall be entitled to receive an amount equal to the product of (the “Normal Severance”):  (i) the Normal Multiplier, as determined under Exhibit A; and (ii) the Participant’s then-current Base Salary.  The Normal Severance shall be payable in the form of salary continuation in accordance with the Company’s regular payroll schedule over the Severance Period, commencing on such date determined in accordance with Section 6 or as a lump sum at the Company’s sole discretion.  The “Severance Period” will equal the period of months equal to the product of (A) Participant’s Normal Multiplier and (B) 12. 

  (b)Participant shall be entitled to continue participating in the Company’s health benefits for the Severance Period (the “Severance Benefits”), as follows:  (i) such continued benefits shall be subject to Participant’s timely election of continuation coverage under COBRA; (ii) the Company will pay the Company contribution and Participant shall be required to pay the employee contribution directly or as a reimbursement to Participant at the Company’s sole discretion, (iii) Participant’s right to receive further Severance Benefits shall terminate if and when Participant secures alternative health benefits from a new employer, of which Participant shall promptly notify the Company, or if and when Participant otherwise becomes ineligible for further coverage under COBRA; and (iv) the 

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  Company shall be required to provide the Severance Benefits only to the extent that the Company continues offering an employee health benefits plan and to extent that the Company is not required to provide and pay for such post-termination coverage to other employees to avoid a violation of applicable nondiscrimination requirements.

  (c)The payments and benefits described in this Section 4 shall be in lieu of any other benefits or payments under any severance or similar plan, policy or arrangement of the Company.

  5.Severance in Connection with a Change in Control.  If during the Change in Control Period, the Company terminates Participant’s employment without Cause or Participant resigns Participant’s employment with Good Reason, subject to the provisions of Section 6 and 7, Participant shall be eligible to receive the following payments and benefits (collectively, the “CIC Severance Package”): 

  (a)Participant shall be entitled to receive an amount equal to the product of (the “CIC Severance”):  (A) the CIC Multiplier, as determined under Exhibit A; and (B) the sum of Participant’s then-current Base Salary and the full amount of the Participant’s then-current target annual bonus opportunity.  The CIC Severance shall be payable in a single lump sum, on such date in determined accordance with Section 6.

  (b)Participant shall be entitled to continue participating in the Company’s health benefits for the CIC Severance Period (the “CIC Severance Benefits”), as follows:  (i) such continued benefits shall be subject to Participant’s timely election of continuation coverage under COBRA; (ii) the Company will pay the company contribution directly or as a reimbursement to Participant at the Company’s sole discretion and Participant shall be required to pay the employee contribution; (iii) Participant’s right to receive further CIC Severance Benefits shall terminate if and when Participant secures alternative health benefits from a new employer, of which Participant shall promptly notify the Company, or if and when Participant otherwise becomes ineligible for further coverage under COBRA, whichever occurs first; and (iv) the Company shall be required to provide the CIC Severance Benefits only to the extent that the Company continues offering an employee health benefits plan and to extent that the Company is not required to provide and pay for such post-termination coverage to other employees to avoid a violation of applicable nondiscrimination requirements. The “CIC Severance Period” will equal the period of months equal to the product of (A) Participant’s CIC Multiplier and (B) 12.

  (c)Any outstanding unvested equity awards held by Participant under the Company’s then-current outstanding equity incentive plan(s) will become fully vested as of the date the termination of Participant’s employment becomes effective.

  (d)The payments and benefits described in this Section 5 shall be in lieu of any other benefits or payments under any severance or similar plan, policy or arrangement of the Company, and shall be in lieu of any benefits set forth in Section 5 of this Agreement.

  6.Release. A Participant’s rights to the Severance Package or the CIC Severance Package, as applicable, is conditioned upon Participant executing and not revoking a valid separation and general release agreement in a form provided by the Company (the “Release”), and provided such release becomes effective and irrevocable within 60 days following termination or such shorter time period set forth therein, releasing the Company, its subsidiaries, other affiliates and shareholders from any and all liability. Any payments or benefits due for the period after termination and before the Release becomes effective shall be paid with the first payment 

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  after the Release becomes effective. Notwithstanding any other provision herein, if the period during which Participant has discretion to execute or revoke the Release straddles two calendar years, the Company shall make payments conditioned on the Release no earlier than January 1st of the second calendar year, regardless of which year the Release becomes effective.

  7.Restrictive Covenants. A Participant’s rights to the Severance Package or the CIC Severance Package, as applicable, is conditioned on Participant’s compliance with Participant’s obligations under, as applicable: (a) Participant’s Non-Disclosure, Non-Solicitation and Assignment Agreement; and (b) any other applicable confidentiality, invention, work product, non-disparagement, non-competition, non-solicitation, non-interference, and/or other restrictive covenant obligations contained in any written agreement between the Participant and the Company. In the event that Participant fails to comply with any of these obligations, the Participant’s right to receive any additional Severance Package or CIC Severance Package payments or benefits shall cease immediately and Participant shall promptly refund any such payments or benefits previously paid by the Company. The Company’s rights under this Section 7 shall be full recourse. The Company shall have the right to offset Participant’s obligations under this Section 7 against any amounts otherwise owed to Participant from the Company or its affiliates.

  8.Accrued Obligations.  Notwithstanding anything to the contrary contained herein, a Participant shall be entitled to all Accrued Obligations as of his or her termination of employment, regardless of whether he or she is eligible for severance payments or benefits under this Plan. “Accrued Obligations” shall mean, for any Participant: (i) the portion of such Participant’s Base Salary that has accrued prior to any termination of such Participant’s employment with the Company and has not yet been paid; (ii) the portion of such Participant’s prior-year annual bonus that has been earned prior to any termination of such Participant’s employment with the Company and has not yet been paid; (iii) the amount of any expenses properly incurred by such Participant on behalf of the Company in accordance with Company policy prior to any such termination and not yet reimbursed; and (iv) the amount of such Participant’s vacation time that has accrued prior to any such termination that has not yet been used.  A Participant’s entitlement to any other compensation or benefit under any plan of Company shall be governed by and determined in accordance with the terms of such plans, except as otherwise specified in this Plan.

  9.Non-Duplication of Benefits.  Nothing in this Plan will entitle any Participant to receive duplicate benefits in connection with any voluntary or involuntary termination of employment. A Participant’s right to receive any payments under this Plan will be expressly conditioned upon such Participant not receiving severance payments or benefits under any other agreement, program or arrangement. 

  10.Death.  If a Participant dies after the date Participant commences receiving benefits and payments under the Severance Package or the CIC Severance Package, as applicable, but before all such payments or benefits have been paid or provided, payments will be made to any beneficiary designated by Participant prior to or in connection with such Participant’s termination or, if no such beneficiary has been designated, to Participant’s estate.

  11.Withholding.  The Company may withhold from any payment or benefit under this Plan: (a) any federal, state, or local income or payroll taxes required by law to be withheld with respect to such payment; (b) such sum as the Company may reasonably estimate is necessary to cover any taxes for which the Company may be liable and which may be assessed with regard 

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  to such payment; and (c) such other amounts as appropriately may be withheld under the Company’s payroll policies and procedures from time to time in effect.

  12.Section 409A.  It is expected that the payments and benefits provided under this Plan will be exempt from the application of Section 409A of the Code, and the guidance issued thereunder (“Section 409A”).  This Plan shall be interpreted consistent with this intent to the maximum extent permitted and generally, with the provisions of Section 409A.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits upon or following a termination of employment (which amounts or benefits constitute nonqualified deferred compensation within the meaning of Section 409A) unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Plan, references to a “termination,” “termination of employment” or like terms shall mean “separation from service”.  Neither Participant nor the Company shall have the right to accelerate or defer the delivery of any payment or benefit except to the extent specifically permitted or required by Section 409A. Notwithstanding the foregoing, to the extent the severance payments or benefits under this Plan are subject to Section 409A, the following rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to Participants under this Plan:

  (a)Each installment of the payments and benefits provided under this Plan will be treated as a separate “payment” for purposes of Section 409A.  Whenever a payment under this Plan specifies a payment period with reference to a number of days (e.g., “payment shall be made within 10 days following the date of termination”), the actual date of payment within the specified period shall be in the Company’s sole discretion.  Notwithstanding any other provision of this Plan to the contrary, in no event shall any payment under this Plan that constitutes “non-qualified deferred compensation” for purposes of Section 409A be subject to transfer, offset, counterclaim or recoupment by any other amount unless otherwise permitted by Section 409A.

  (b)Notwithstanding any other payment provision herein to the contrary, if the Company or appropriately-related affiliates is publicly-traded and a Participant is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B) with respect to such entity, then each of the following shall apply:

  (i)With regard to any payment that is considered “non-qualified deferred compensation” under Section 409A payable on account of a “separation from service,” such payment shall be made on the date which is the earlier of (A) the day following the expiration of the six month period measured from the date of such “separation from service” of Participant, and (B) the date of Participant’s death (the “Delay Period”) to the extent required under Section 409A.  Upon the expiration of the Delay Period, all payments delayed pursuant to this provision (whether otherwise payable in a single sum or in installments in the absence of such delay) shall be paid to or for Participant in a lump sum, and all remaining payments due under this Plan shall be paid or provided for in accordance with the normal payment dates specified herein; and

  (ii)To the extent that any benefits to be provided during the Delay Period are considered “non-qualified deferred compensation” under Section 409A payable on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A, Participant shall pay the cost of such benefits during the Delay Period, and the Company shall reimburse Participant, to the extent that such costs would otherwise 

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  have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to Participant, the Company’s share of the cost of such benefits upon expiration of the Delay Period.  Any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified in this Plan.

  (c)The Company makes no representations or warranties and shall have no liability to any Participant or any other person, other than with respect to payments made by the Company in violation of the provisions of this Plan, if any provisions of or payments under this Plan are determined to constitute deferred compensation subject to Section 409A of the Code but not to satisfy the conditions of that section.

  13.Modified 280G Cutback.

  (a)To the extent that any payment, benefit or distribution of any type to or for a Participant’s benefit by the Company or any of its affiliates, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Plan or otherwise (including, without limitation, any accelerated vesting of stock options or other equity-based awards) (collectively, the “Total Payments”) would be subject to the excise tax imposed under Section 4999 of the Code, then the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to be subject to the excise tax imposed by Section 4999 of the Code, but only if the Total Payments so reduced result in Participant receiving a net after tax amount that exceeds the net after tax amount Participant would receive if the Total Payments were not reduced and were instead subject to the excise tax imposed on excess parachute payments by Section 4999 of the Code.  Unless Participant shall have given prior written notice to the Company to effectuate a reduction in the Total Payments if such a reduction is required, any such notice consistent with the requirements of Section 409A to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating any cash severance benefits (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of stock options or similar awards, then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating any other remaining Total Payments.  The preceding provisions of this Section shall take precedence over the provisions of any other plan, arrangement or agreement governing Participant’s rights and entitlements to any benefits or compensation.

  (b)If the Total Payments to a Participant are reduced in accordance with Section 14(a), as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial reduction under Section 14(a), it is possible that Total Payments to a Participant which will not have been made by the Company should have been made (“Underpayment”) or that Total Payments to a Participant which were made should not have been made (“Overpayment”).  If an Underpayment has occurred, the amount of any such Underpayment shall be promptly paid by the Company to or for the benefit of such Participant.  In the event of an Overpayment, then Participant shall promptly repay to the Company the amount of any such Overpayment together with interest on such amount (at the same rate as is applied to determine the present value of payments under Section 280G of the Code or any successor thereto), from the date the reimbursable payment was received by such Participant to the date the same is repaid to the Company.

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  14.Plan Administration.

  (a)Plan Administrator.  The Plan Administrator shall be the Board or a committee thereof designated by the Board (the “Committee”); provided, however, that the Board or such Committee (as constituted prior to the closing of a Change in Control) may in its sole discretion appoint a new Plan Administrator to administer this Plan following a Change in Control, which such Plan Administrator shall not be removed or modified following a Change in Control other than at its own initiative. If such Plan Administrator designated by the Board or Committee prior to a Change in Control ceases to serve as Plan Administrator at any point after a Change in Control but prior to the later to occur of the first (1st) anniversary of the Change in Control or the final payment of benefits under this Plan to any Participant, then until the later to occur of the first (1st) anniversary of the Change in Control or the final payment of benefits under this Plan to any Participant, any such successor Plan Administrator appointed by the Board or the Committee shall be a qualified independent third party, such as a retired judge selected by the head of the American Arbitration Association in Manhattan, an independent compensation consultant or a law firm.  The Plan Administrator shall also serve as the Named Fiduciary of this Plan under ERISA.  The Plan Administrator shall be the “administrator” within the meaning of Section 3(16) of ERISA and shall have all the responsibilities and duties contained therein. Notwithstanding any provision of this Plan to the contrary, any employee(s) appointed to serve as Plan Administrator (whether individually or as members of a committee) shall serve as such only for so long as he or she is an employee of the Company and shall be deemed to resign his or her position effective as of his or her termination of employment (whether voluntary or involuntary).  The Plan Administrator can be contacted at the following address:

  Hyperfine, Inc.

  351 New Whitfield Street 

  Guilford, CT 06437 

  Attention:  Chief People Officer

  administrator@hyperfine.io

   

  (b)Decisions, Powers and Duties.  The general administration of this Plan and the responsibility for carrying out its provisions shall be vested in the Plan Administrator.  The Plan Administrator shall have such powers and authority as are necessary to discharge such duties and responsibilities which also include, but are not limited to, interpretation and construction of this Plan, the determination of all questions of fact, including, without limit, eligibility, participation and benefits, the resolution of any ambiguities and all other related or incidental matters, and such duties and powers of the plan administration which are not assumed from time to time by any other appropriate entity, individual or institution.  The Plan Administrator may determine from time to time, in its discretion, whether an employee of the Company who is not an Eligible Employee shall become a Participant in this Plan, provided the Plan Administrator delivers written notice to such employee that the employee will be a Participant in the Plan.  The Plan Administrator may adopt rules and regulations of uniform applicability in its interpretation and implementation of this Plan.  The Plan Administrator may delegate any of its duties hereunder to such person or persons from time to time as it may designate.

  (c)The Plan Administrator shall discharge its duties and responsibilities and exercise its powers and authority in its sole discretion and in accordance with the terms of the controlling legal documents and applicable law, and its actions and decisions that are not 

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  arbitrary and capricious shall be binding on any employee, and employee’s spouse or other dependent or beneficiary and any other interested parties whether or not in being or under a disability.  The Plan Administrator is empowered, on behalf of this Plan, to engage accountants, legal counsel and such other personnel as it deems necessary or advisable to assist it in the performance of its duties under this Plan.  The functions of any such persons engaged by the Plan Administrator shall be limited to the specified services and duties for which they are engaged, and such persons shall have no other duties, obligations or responsibilities under this Plan.  Such persons shall exercise no discretionary authority or discretionary control respecting the management of this Plan.

  (d)The Company shall promptly reimburse the Plan Administrator or the Committee for any expenses incurred in good faith in the course of carrying out its obligations under this Plan, including, but not limited to, attorney’s fees, claims, fines, judgments, taxes, causes of action or liability and amounts paid in settlement, actually and reasonably incurred by such Committee or Plan Administrator, unless such expense, claim, fine, judgment, taxes, cause of action, liability or amount arose from his or her negligence, fraud or willful breach of his or her fiduciary responsibilities under ERISA.

  15.Claims, Inquiries and Appeals.

  (a)Applications for Benefits and Inquiries.  Any application for benefits under or inquiries about this Plan or inquiries about present or future rights under this Plan must be submitted to the Plan Administrator in writing, as follows:

  Plan Administrator

  Hyperfine, Inc.

  351 New Whitfield Street 

  Guilford, CT 06437 

  (b)Denial of Claims.  In the event that any application for benefits is denied in whole or in part, the Plan Administrator must notify the applicant, in writing, of the denial of the application, and of the applicant’s right to review the denial.  The written notice of denial will be set forth in a manner designed to be understood by the applicant, and will include specific reasons for the denial, specific references to this Plan provision upon which the denial is based, a description of any information or material that the Plan Administrator needs to complete the review and an explanation of this Plan’s review procedure.  This written notice will be given to the applicant within 15 days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional 15 days for processing the application.  If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial 15-day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render his or her decision on the application.  If written notice of denial of the application for benefits is not furnished within the specified time, the application shall be deemed to be denied.  The applicant will then be permitted to appeal the denial in accordance with the review procedure described below.

  (c)Request for a Review.  Any person (or that person’s authorized representative) for whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting a request for a review to the Plan Administrator within 30 days after the 

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  application is denied (or deemed denied).  The Plan Administrator will give the applicant (or his or her representative) an opportunity to review pertinent documents in preparing a request for a review and submit written comments, documents, records and other information relating to the claim.  A request for a review shall be in writing and shall be addressed to:

  Plan Administrator

  Hyperfine, Inc.

  351 New Whitfield Street 

  Guilford, CT 06437

  A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent.  The Plan Administrator may require the applicant to submit additional facts, documents or other material as he or she may find necessary or appropriate in making his or her review.

  (d)Decision on Review.  The Plan Administrator will act on each request for review within 15 days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional 15 days), for processing the request for a review.  If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial 15-day period.  The Plan Administrator will give prompt, written notice of his or her decision to the applicant.  In the event that the Plan Administrator confirms the denial of the application for benefits in whole or in part, the notice will outline, in a manner calculated to be understood by the applicant, the specific Plan provisions upon which the decision is based.

  (e)Rules and Procedures.  The Plan Administrator may establish rules and procedures, consistent with this Plan and with ERISA, as necessary and appropriate in carrying out his or her responsibilities in reviewing benefit claims.  The Plan Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial (or deemed denial) of benefits to do so at the applicant’s own expense.

  (f)Exhaustion of Remedies.  No legal action for benefits under this Plan may be brought until the claimant (i) has submitted a written application for benefits in accordance with the procedures described by Section 15(a) above, (ii) has been notified by the Plan Administrator that the application is denied (or the application is deemed denied due to the Plan Administrator’s failure to act on it within the established time period), (iii) has filed a written request for a review of the application in accordance with the appeal procedure described in Section 15(c) above and (iv) has been notified in writing that the Plan Administrator has denied the appeal (or the appeal is deemed to be denied due to the Plan Administrator’s failure to take any action on the claim within the time prescribed by Section 15(d) above).

  16.Indemnification.  To the extent permitted by law, the Plan Administrator and all employees, officers, directors, agents and representatives of the Company shall be indemnified by the Company and held harmless against any claims and all associated expenses of defending against such claims, resulting from any action or conduct relating to the administration of this Plan, whether as a member of the Committee or otherwise, except to the extent that such claims arise from gross negligence, willful neglect, or willful misconduct.  The Company shall advance all expenses for which a party is indemnified under this Section 16 to such indemnified party or shall arrange for direct payment of any such expenses by the Company.

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  17.Plan Not an Employment Contract.  This Plan is not a contract between the Company and any employee, nor is it a condition of employment of any employee.  Nothing contained in this Plan gives, or is intended to give, any employee the right to be retained in the service of the Company, or to interfere with the right of the Company to discharge or terminate the employment of any employee at any time and for any reason.  No employee shall have the right or claim to benefits beyond those expressly provided in this Plan, if any.  All rights and claims are limited as set forth in this Plan.

  18.Severability.  In case any one or more of the provisions of this Plan (or part thereof) shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions hereof, and this Plan shall be construed as if such invalid, illegal or unenforceable provisions (or part thereof) never had been contained herein.

  19.Non Assignability.  No right or interest of any Participant in this Plan shall be assignable or transferable in whole or in part either directly or by operation of law or otherwise, including, but not limited to, execution, levy, garnishment, attachment, pledge or bankruptcy.

  20.Integration With Other Pay or Benefits Requirements.  The severance payments and benefits provided for in this Plan are the maximum benefits that the Company will pay to Participants on a termination of employment, except to the extent otherwise required by applicable law.  To the extent that any federal, state or local law, including, without limitation, so called “plant closing” laws, requires the Company to give advance notice or make a payment of any kind to an employee because of that employee’s involuntary termination due to a layoff, reduction in force, plant or facility closing, sale of business, or similar event, the benefits provided under this Plan or the other arrangement shall either be reduced or eliminated to avoid any duplication of payment.  The Company intends for the benefits provided under this Plan to partially or fully satisfy any and all statutory obligations that may arise out of an employee’s involuntary termination for the foregoing reasons and the Company shall so construe and implement the terms of this Plan.

  21.Amendment or Termination.  The Board may amend, modify, or terminate this Plan at any time in its sole discretion; provided, however, that: (a) any such amendment, modification or termination made prior to a Change in Control that adversely affects the rights of any Participant shall be approved by the Company’s Board of Directors; (b) no such amendment, modification or termination may adversely affect the rights of a Participant then receiving payments or benefits under this Plan without the consent of such person; and (c) no such amendment, modification or termination made after a Change in Control shall be effective until after the later to occur of the first (1st) anniversary of the Change in Control or the final payment of benefits under this Plan to any Participant.  The Board intends to review this Plan at least annually.

  22.Source of Benefit.  The Company will pay benefits under the Plan from its general assets to the extent available.  The benefits are not funded through a trust fund or insurance contracts.  No employee shall have any right to, or interest in, any assets of the Company upon termination of employment or otherwise.

  23.Statement of ERISA Rights.  Participants are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  ERISA provides that Participants are entitled to the following rights:

  11

   

  

   

  (a)Receive Information About the Plan and Benefits.  A Participant may examine, without charge, at the Plan Administrator’s office all documents governing the Plan and, if applicable, a copy of the latest annual report (Form 5500) filed with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.  A Participant may also obtain copies of these documents upon written request to the Plan Administrator.  There may be a reasonable charge for the cost of copying.  A Participant is also entitled to receive a summary of the Plan’s annual financial report.  The Plan Administrator is required by law to furnish each Participant with a copy of this summary annual report.

  (b)Prudent Actions by Plan Fiduciaries.  In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan.  The people who operate the Plan, called “fiduciaries,” have a duty to do so prudently and in the interest of the Plan’s Participants and their beneficiaries.  No one, including the Company, may fire a Participant or otherwise discriminate against a Participant in any way to prevent the Participant from obtaining a welfare benefit or exercising the Participant’s rights under ERISA.

  (c)Enforce Participant Rights.  If a Participant’s claim for a welfare benefit is denied or ignored, in whole or in part, the Participant has the right to know the reason and to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain timeframes as set forth in this Plan.  Under ERISA, there are steps a Participant can take to enforce the above rights.  For instance, if a Participant requests a copy of Plan documents, or the latest annual report from the Plan and the Participant does not receive them within 30 days, the Participant may file suit in a federal court.  In such a case, the court may require the Plan Administrator to provide the materials to the Participant and pay the Participant up to $110 per day until the Participant receives the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.  If the Participant has a claim for benefits that is denied or ignored, in whole or in part, the Participant may file suit in federal or state court, provided the Participant has exhausted the Plan’s administrative remedies (i.e. claims procedures).  If it should happen that the Plan fiduciaries misuse the Plan’s money, or if a Participant is discriminated against for asserting the Participant’s rights under this Plan or under ERISA, the Participant may seek assistance from the U.S. Department of Labor, or may file suit in federal court.  The court will decide who should pay court costs and legal fees.  If a Participant is successful, the court may order the person that the Participant sued to pay these costs and fees.  If a Participant loses, the court may order the Participant to pay these costs and fees if it finds the Participant’s claim is frivolous.

  (d)Assistance With Questions.  If a Participant has any questions about the Plan, the Participant should contact the Plan Administrator.  If a Participant has questions about this statement or about the Participant’s rights under ERISA, the Participant should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Participant Assistance and Communications, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210.  The Participant may obtain publications about the Participant’s rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.  A Participant may also access the Employee Benefits Security Administration’s website at www.dol.gov/ebsa.

  12

   

  

   

  24.Type of Plan.  This Plan is a severance pay Plan.

  25.Plan Sponsor.  The sponsor of this Plan is Hyperfine, Inc. (referred to in this Plan as the “Company”).  The Plan sponsor’s address is:

  Hyperfine, Inc.

  351 New Whitfield Street 

  Guilford, CT 06437 

  Attention:  Chief People Officer

  administrator@hyperfine.io 

  26.Agent for Legal Process.  A Participant or beneficiary may serve legal process on the Plan Administrator, c/o:

  Hyperfine, Inc.

  351 New Whitfield Street 

  Guilford, CT 06437 

  Attention:  Chief People Officer 

   

  With a copy to:

  Hyperfine, Inc.

  351 New Whitfield Street

  Guilford, CT 06437

  Attention:  legal@hyperfine.io

  27.Identification Number.  The Plan’s number for purposes of discussion with a federal government agency is 501.  

  28.Summary Plan Description.  This Plan constitutes both the governing document and the summary plan description for the Plan.

  29.Governing Law.  This Plan and the rights of all persons under this Plan shall be construed in accordance with and under applicable provisions of ERISA, and the regulations thereunder, and the laws of the State of Delaware (without regard to conflict of law provisions) to the extent not preempted by federal law.

   

  13

   

  

   

  EXHIBIT A

  MULTIPLIERS

  			
	Participant
	Normal Multiplier
	CIC Multiplier

	Chief Executive Officer
	1.5
	1.5

	Alok Gupta, Khan Siddiqui, and Tom Teisseyre
	0.5
	0.5

   

   

   

  14Exhibit 10.1

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.

 

CONFIDENTIAL SETTLEMENT AND LICENSE AGREEMENT

 

              This Confidential Settlement and License Agreement ("Agreement") is entered into December 9, 2022, (the "Effective Date") by and between Shure Incorporated, an Illinois corporation having a principal place of business located at 5800 W. Touhy Ave., Niles, Illinois 60714 ("Shure"), and ClearOne, Inc., a Delaware corporation having a principal place of business located at 5225 Wiley Post Way, Suite 500, Salt Lake City, UT 84116 ("ClearOne").  Shure and ClearOne are collectively referred to in this Agreement as the "Parties" and each singly as a "Party."

 

RECITALS

 

              WHEREAS, Shure brought a lawsuit against ClearOne in the United States District Court for the Northern District of Illinois, Civil Action No. 1:17-cv-03078, initially seeking declaratory judgment with respect to ClearOne's United States Patent Nos. 9,635,186 (the "'186 Patent") and 9,264,553 (the "553 Patent"), and later ClearOne's United States Patent No. 9,813,806 (the "'806 Patent"), in which the claims relative to the '553 Patent were dismissed without prejudice; and in which ClearOne counterclaimed against Shure alleging that Shure and its products infringe certain claims of the '186 Patent and the '806 Patent (the "First NDIL Litigation");

 

              WHEREAS, ClearOne brought a lawsuit against Shure in the United States District Court for the District of Utah, Civil Action No. 2:17-cv-00322, alleging that Shure and its products infringe certain claims of the '186 Patent (the "UT Litigation");

 

              WHEREAS, ClearOne brought a lawsuit against Shure in the United States District Court for the Northern District of Illinois, Civil Action No. 1:19-cv-02421, alleging that (i) Shure and its products infringe certain claims of the '553 Patent and (ii) Shure misappropriated certain ClearOne trade secrets; and in which Shure counterclaimed seeking declaratory judgment with respect to the '553 Patent (the "Second NDIL Litigation");

 

              WHEREAS, ClearOne brought a lawsuit against Shure in the United States District Court for the Northern District of Illinois, Civil Action No. 1:19-cv-07285, seeking declaratory judgment of non-infringement with respect to Shure’s United States Design Patent No. D865,723 (the "'723 Patent") (the "Third NDIL Litigation");

 

              WHEREAS, Shure (along with its Affiliate Shure Acquisition Holdings, Inc.) brought a lawsuit against ClearOne in the United States District Court for the District of Delaware, Civil Action No. 1:19-cv-01343, alleging that (i) ClearOne and its products infringe certain claims of Shure's United States Patent No. 9,565,493 (the "'493 Patent") and the '723 Patent, and (ii) ClearOne made certain false or misleading statements; and in which ClearOne counterclaimed (i) seeking declaratory judgment with respect to the '493 Patent and the '723 Patent and (ii) alleging Shure made certain false or misleading statements (the "DE Litigation");

	1

 

              WHEREAS, Shure filed an appeal in the United States Court of Appeals for the Federal Circuit, Case No. 22-1498, appealing the decision of the U.S. Patent Trial and Appeal Board in a certain post grant review proceeding between Shure and ClearOne, Case No. PGR2020-0079, relating to ClearOne's United States Patent No. 10,728,653 (the "'653 Patent") (the "'653 Appeal");

 

              WHEREAS, the First NDIL Litigation, the UT Litigation, the Second NDIL Litigation, the Third NDIL Litigation, the DE Litigation and the '653 Appeal are collectively referred to herein as the "Litigations";

 

WHEREAS, the Parties deny any merit to or liability from the claims, counterclaims, and defenses asserted against them in the Litigations;

 

              WHEREAS, the Parties desire to avoid further litigation risks and expenses and therefore seek to settle, resolve, and compromise all claims, counterclaims, and other requests for relief in the Litigations, to release each other and their Affiliates (as defined herein) from all claims, counterclaims, and other requests for relief described herein, and to enter a license agreement relating to various patents owned by the Parties, all as described below;

 

              NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged by both Parties, the Parties, intending to be legally bound, agree as follows:

 

ARTICLE I - DEFINITIONS

              The following terms, when used with initial capital letters, shall have the meanings set forth below:

 

1.01          “Affiliate” means, with respect to any Party hereto, any corporation or other entity presently or in the future that directly or indirectly controls, is controlled by, or is under common control with, that Party.  As used in this definition and Sections 1.02 and 1.07, the term “control” (and derivations thereof) shall mean direct or indirect ownership of fifty percent (50%) or more of the voting equity, stock, or other ownership interest or the power to direct or cause the direction of the management and policies (by contract, stock ownership, or otherwise) of such corporation or other entity and shall include any subsidiary of a Party where more than 50% of the voting interest is owned or controlled directly or indirectly by that Party.

1.02          "Controlled Affiliates" means only those Affiliates of a Party that the Party directly or indirectly controls.  Controlled Affiliates do not include those Affiliates of a Party that the Party is controlled by or is under common control with.

	2

1.03          "ClearOne Accused Products" means (i) ClearOne models BMA-CT, BMA-CTH, and all past, present, and future variants of such products; (ii) ClearOne model BMA360 and all past, present and future variants of such product, and (iii) any other product or service of ClearOne or any of its Affiliates that was or could have been accused by Shure of infringement in the DE Litigation, regardless of whether by direct infringement, contributory infringement, inducement, or under a joint-enterprise theory of infringement liability. 

1.04          "ClearOne BMA Patents" means (i) the '553 Patent, (ii) the '186 Patent, (iii) the '806 Patent, and (iv) any and all Related Patents to such patents.

1.05          "ClearOne Licensed Products" means the ClearOne Accused Products and any other products or services of ClearOne and its Controlled Affiliates for which the manufacture, making, use, sale, offer for sale, or import would infringe a claim of any of the Shure MXA910 Patents or Shure Additional Patents.

1.06          "ClearOne Remaining Patents" means (i) all patents and patent applications owned by or exclusively licensed to ClearOne or any of its Affiliates as of the Effective Date hereof; (ii) all patents and patent applications filed as of the Effective Date hereof by an applicant or inventor who was employed by ClearOne or any of its Affiliates or who was under a duty to assign or exclusively license such already filed patents or patent applications to ClearOne or any of its Affiliates on or before the Effective Date hereof; and (iii) any Related Patents to such patents and patent applications; other than the ClearOne BMA Patents.

1.07          [***]

1.08          "Related Patents" means, with respect to a patent or patent application, all other patents and patent applications from which priority is claimed by, sharing a priority claim with, or claiming priority to, such patent or patent application, anywhere in the world, including any and all continuation, continuation-in-part, divisional, reissue, reexamination, inter partes review, covered business method review, and post grant review patents or applications, as well as any foreign counterparts or extensions of such patent or patent application.

1.09          "Shure Accused Products" means (i) Shure models MXA910, MXA910-W, MXA910-A, MXA910-US, MXA310 and all past, present, and future variants of such products (including all 60-cm versions); (ii) Shure model P300 and all past, present and future variants of such product, and (iii) any other product or service of Shure or any of its Affiliates that was or could have been accused by ClearOne of infringement in the First NDIL Litigation or the Second NDIL Litigation, regardless of whether by direct infringement, contributory infringement, inducement, or under a joint-enterprise theory of infringement liability. 

1.10          "Shure Additional Patents" means (i) U.S. Patent No. 11,310,596, (ii) U.S. Patent Application No. 16/887,790, which recently published as Publication No. 2021/0120335, and (iii) any and all Related Patents to such patents or applications.

1.11          "Shure MXA910 Patents" means (i) the '493 Patent, (ii) the '723 Patent, (iii) United States Design Patent No. D784,299, (iv) United States Design Patent No. D940,116, and (v) any and all Related Patents to such patents.

1.12          "Shure Licensed Products" means the Shure Accused Products and any other past, present or future products or services of Shure and its Controlled Affiliates for which the manufacture, making, use, sale, offer for sale, or import would infringe a claim of any of the ClearOne BMA Patents or the ClearOne Remaining Patents.

 

	3

ARTICLE II - RELEASES

2.01          Mutual Releases Between Shure and ClearOne.

(a)                In consideration of the mutual covenants and agreements herein, and subject to the Payment in accordance with Section 4.01, ClearOne, on behalf of itself and its Affiliates, their respective successors and assigns, and their respective past, present, and future officers, directors, shareholders, members, employees, agents, consultants, experts, representatives, and attorneys (the "ClearOne Releasors"), fully and forever irrevocably and unconditionally releases, acquits and discharges Shure and its Controlled Affiliates, their respective successors and assigns, and their respective officers, directors, shareholders, members, employees, agents, consultants, experts, representatives, attorneys, subcontractors, suppliers, customers, distributors, sales representatives, manufacturer representatives, installers, integrators, resellers, service providers, and end users (the "Shure Patent Releasees"), from any and all past and present causes of action, demands, suits, judgments, and other claims and any and all debts, damages and other liabilities of any kind and nature, at law, in equity, or otherwise, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, existing and contingent, direct or derivative, based on (in whole or in part): (1) the manufacture, making, installation, use, sale, offer for sale, promotion or import of any Shure Licensed Products; (2) infringement (whether direct, indirect, contributory, inducement, or any other kind) of any of the ClearOne BMA Patents and ClearOne Remaining Patents; and/or (3) alleged or actual violations of the preliminary injunction and contempt orders entered in the First NDIL Litigation, including any harm stemming therefrom or any sanctions or other remedies sought in relation thereto.

(b)               In consideration of the mutual covenants and agreements herein, and subject to the Payment in accordance with Section 4.01, the ClearOne Releasors fully and forever irrevocably and unconditionally release, acquit and discharge Shure and its Controlled Affiliates, their respective successors and assigns, and their respective officers, directors, shareholders, members, employees, agents, consultants, experts, representatives, sales representatives, manufacturer representatives, and attorneys, (the "Shure Other Releasees"), from any and all past and present causes of action, demands, suits, judgments, and other claims and any and all debts, damages and other liabilities of any kind and nature, at law, in equity, or otherwise, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, existing and contingent, direct or derivative, based on (in whole or in part): (1) misappropriation of any trade secrets or alleged trade secrets of ClearOne or any of its Affiliates occurring or commencing prior to October 1, 2022 (as well as any such misappropriation first occurring prior to such date but alleged to continue after such date); and/or (2) allegedly false or misleading statements made prior to October 1, 2022; and/or (3) any other claims that were or could have been asserted against Shure and/or any of the other Shure Other Releasees in the Litigations.

 

(c)                In consideration of the mutual covenants and agreements herein, and subject to the dismissals as described in Section 5.01 below, Shure, on behalf of itself and its Affiliates, their respective successors and assigns, and their respective past, present and future officers, directors, shareholders, members, employees, agents, consultants, experts, representatives, and attorneys (the "Shure Releasors"), fully and forever irrevocably and unconditionally releases, acquits, and discharges ClearOne and its Controlled Affiliates, their respective successors and assigns, and their respective officers, directors, shareholders, members, employees, agents, consultants, experts, representatives, attorneys, suppliers, customers, distributors, sales representatives, manufacturer representatives, installers, integrators, resellers, service providers, and end users (the "ClearOne Patent Releasees"), from any and all past and present causes of action, demands, judgments, suits, and other claims and any and all debts, damages and other liabilities of any kind and nature, at law, in equity, or otherwise, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, existing and contingent, direct or derivative, based on (in whole or in part): (1) the manufacture, making, installation, use, sale, offer for sale, promotion or import of any ClearOne Licensed Products; and/or (2) infringement (whether direct, indirect, contributory, inducement, or any other kind) of any of the Shure MXA910 Patents and Shure Additional Patents.

(d)               In consideration of the mutual covenants and agreements herein, and subject to the dismissals as described in Section 5.01 below, the Shure Releasors fully and forever irrevocably and unconditionally release, acquit, and discharge ClearOne and its Controlled Affiliates, their respective successors and assigns, and their respective officers, directors, shareholders, members, employees, agents, consultants, experts, representatives, sales representatives, manufacturer’s representatives, and attorneys (the "ClearOne Other Releasees"), from any and all past and present causes of action, demands, judgments, suits, and other claims and any and all debts, damages and other liabilities of any kind and nature, at law, in equity, or otherwise, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, existing and contingent, direct or derivative, based on (in whole or in part): (1) allegedly false or misleading statements made prior to October 1, 2022; and/or (2) any other claims that were or could have been asserted against ClearOne and/or any of the other ClearOne Other Releasees in the Litigations.  

(e)                [***] 

	4

2.02          Unknown Claims. Shure and ClearOne expressly acknowledge and agree that this Agreement resolves all of the Litigations, as well as all actual or potential claims among the Parties, the Shure Patent Releasees, and the ClearOne Patent Releasees that are unknown, unanticipated, or unsuspected.  The Parties acknowledge and understand the significance and potential consequences of this release of unknown claims. In this connection, the Parties acknowledge that they may have sustained damages, losses, costs, or expenses that are presently unknown and unsuspected and that such damages, losses, costs, or expenses that may have been sustained may give rise to additional damages, losses, costs, or expenses in the future.  The Parties further acknowledge that they have negotiated this Agreement taking into account presently unsuspected and unknown claims, counterclaims, causes of action, damages, losses, costs and expenses, and the Parties, on behalf of themselves and their Affiliates, voluntarily and with full knowledge of its significance, expressly waive and relinquish any and all rights they may have under any state, federal or other statute, rule or common law principle, in law or equity, relating to limitations on general releases.  For example, with respect to any and all claims released by a Party to this Agreement, for good and valuable consideration, such Party agrees to and shall be deemed to have fully, finally, and forever expressly waived and relinquished, to the fullest extent permitted by law, any and all provisions, rights, and benefits of Section 1542 of the California Civil Code and any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States or principle of common law that is similar, comparable, equivalent, or identical to Section 1542 of the California Civil Code, which states as follows:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

Such Party may hereafter discover facts other than or different from those that it knows or believes to be true with respect to the claims and disputes released by this Agreement, but each Party hereby expressly waives and fully, finally, and forever settles and releases, upon the execution of this Agreement, any known or unknown, suspected or unsuspected, contingent or non-contingent claim that is released by this Agreement, without regard to the subsequent discovery or existence of such different or additional facts.

 

ARTICLE III - LICENSE GRANTS AND COVENANTS NOT TO SUE

3.01          ClearOne License Grant.  Subject to the Payment in accordance with Section 4.01, ClearOne, on behalf of itself and its Affiliates and their respective successors and assigns, hereby grants to Shure and its Controlled Affiliates a fully paid-up, royalty-free, irrevocable and perpetual, non-exclusive, non-sublicensable, non-transferable, worldwide license to the ClearOne BMA Patents and the ClearOne Remaining Patents to make, have made, use, install, have installed, sell, have sold, offer for sale, import, have imported, and otherwise dispose of the Shure Licensed Products worldwide. For the avoidance of doubt, the license granted in this Section 3.01 is personal to Shure and its Controlled Affiliates and does not extend to any third parties who may in the future acquire any interest in Shure or its Controlled Affiliates.

3.02          ClearOne Covenant Not to Sue.  Subject to the Payment in accordance with Section 4.01, ClearOne, on behalf of itself and its Affiliates, and their respective successors and assigns, covenants not to sue, in any court, agency, or other tribunal, (i) Shure or any of its Controlled Affiliates for infringement of any of the ClearOne BMA Patents or the ClearOne Remaining Patents based on the manufacture, use, sale, offer for sale, or import of any of the Shure Licensed Products, or (ii) Shure or any of its Controlled Affiliates, or any of their respective subcontractors, suppliers, customers, distributors, sales representatives, manufacturer representatives, installers, integrators, resellers, service providers, or end users for infringement of any of the BMA Patents or the ClearOne Remaining Patents based upon any Shure product or service that was directly or indirectly purchased from or provided by Shure or its Controlled Affiliates.

3.03          Shure License Grant.  Subject to the dismissals as described in Section 5.01 below, Shure, on behalf of itself and its Affiliates, and their respective successors and assigns, hereby grants to ClearOne and its Controlled Affiliates a fully paid-up, royalty-free, irrevocable and perpetual, non-exclusive, non-sublicensable, non-transferable, worldwide license to the Shure MXA910 Patents and the Shure Additional Patents to make, have made, use, install, have installed, sell, have sold, offer for sale, import, have imported, and otherwise dispose of the ClearOne Licensed Products worldwide.  For the avoidance of doubt, the license granted in this Section 3.03 is personal to ClearOne and its Controlled Affiliates and does not extend to any third parties who may in the future acquire any interest in ClearOne or its Controlled Affiliates.

	5

3.04          Shure Covenant Not to Sue.  Subject to the dismissals as described in Section 5.01 below, Shure, on behalf of itself and its Affiliates, and their respective successors and assigns, covenants not to sue, in any court, agency, or other tribunal, (i) ClearOne or any of its Controlled Affiliates for infringement of any of the Shure MXA910 Patents or the Shure Additional Patents based on the manufacture, use, sale, offer for sale, or import of any of the ClearOne Licensed Products, or (ii) ClearOne or any of its Controlled Affiliates, or any of their respective subcontractors, suppliers, customers, distributors, sales representatives, manufacturer representatives, installers, integrators, resellers, service providers, or end users for infringement of any of the Shure MXA910 Patents or the Shure Additional Patents based upon any ClearOne product or service that was directly or indirectly purchased from or provided by ClearOne or its Controlled Affiliates.

3.05          Controlled Affiliates.  Except with respect to a Controlled Affiliate to whom a Party has assigned this Agreement and such Party's rights under this Agreement in accordance with Section 9.01 herein, all licenses and covenants granted under this Article III to any Controlled Affiliate of either Party shall terminate and be immediately extinguished from and after the time such Controlled Affiliate ceases to be a Controlled Affiliate of such Party. 

3.06          [***]

 

ARTICLE IV - CONSIDERATION

4.01          Payment.  In full settlement and consideration for the releases, licenses, and covenants herein, Shure shall make a one-time, non-refundable payment (the “Payment”) to ClearOne in the amount of Fifty-Five Million Dollars ($55,000,000.00) by wire transfer to the account identified by ClearOne below, such payment to be made within five (5) days after the dismissal of the Litigations in accordance with Section 5.01 herein.  This payment is the total amount paid to ClearOne, and is full, final, and non-negotiable for purposes of this Agreement.  [***]  

 

ARTICLE V - DISMISSAL OF LITIGATIONS

5.01          Dismissal of Litigations. The Parties shall jointly (i) move to vacate the Preliminary Injunction entered in the First NDIL Litigation (ECF Nos. 550-551), the related Opinion and Order addressing the Injunction Bond and Shure Notice compliance (ECF No. 590), and the related Contempt Opinion and Order entered in the First NDIL Litigation on September 1, 2020 (ECF No. 912), along with withdrawal and waiver of all contempt sanctions or remedies sought in relation thereto, and (ii) dismiss the Litigations with prejudice including all claims and counterclaims as set forth herein.  [***]

5.02          Costs, Expenses and Fees. Except as provided herein, the Parties shall bear their own costs, expenses and fees, and those of their agents, advisors, attorneys and accountants arising directly or indirectly from the Litigations, including the negotiation of this Agreement, and neither Party shall seek any award of costs, expenses and/or attorneys’ fees in any of the Litigations, either pursuant to Rule 54 of the Federal Rules of Civil Procedure, Rules 38 or 39 of the Federal Rules of Appellate Procedure, or any other rule or statute.

	6

5.03          Disposition of Documents.   Within sixty (60) days of  the dismissal of the Litigations in accordance with Section 5.01 herein, each Party shall (a) destroy all materials in its possession or control which have been designated as confidential material of the other Party under the protective orders entered in the Litigations; (b) cause such Party's attorneys, expert witnesses, and other professionals permitted to possess highly confidential information of the other Party under such protective orders to destroy all such materials of the other Party which are in the professional's possession or control, including confidential information of the other Party contained in any court filings; and (c) certify in writing to the other Party such Party's completion of its obligations contained in this Section 5.03.  Each Party also agrees to permit the tribunal in each of the Litigations to dispose of all Sealed filings (i.e., documents filed under seal and containing confidential information of one or both of the Parties) and shall cooperate to provide notice to the tribunal to facilitate such disposition of the sealed documents.  [***]

5.04          Remedies.  [***]

5.05          [***]

 

ARTICLE VI - PUBLICITY

6.01          Joint Press Release.  The Parties agree that they each may issue a joint press release in a form substantially identical to Exhibit F.  ClearOne shall notify Shure, by email in accordance with this Agreement, concurrently with its filing of the Form 8-K with the SEC or its issuance of such press release, whichever occurs first.  Following such email notice, Shure shall be permitted to issue such joint press release.

6.02          Permitted Shure Statements.  Shure shall be free to make statements and communications disclosing to third parties (i) the existence and scope of the licenses and covenants not to sue under Article III, including any limitations to the scope of such licenses; (ii) if and when vacated in accordance with the filing of Exhibit A, that the Memorandum Opinion and Order (ECF Nos. 550-551) of August 5, 2019, and the Memorandum Opinion and Order (ECF No. 912) of September 1, 2020 entered in the First NDIL Litigation have been vacated; (iii) the existence and scope of the releases set forth in Sections 2.01(a) and 2.01(b); (iv) that third parties are free to install and use the Shure Accused Products in any of their mounting configurations; (v) that all disputes between the Parties, including the Litigations, are fully and finally resolved; and (vi) any other matters specifically addressed in the provisions of the redacted form of Agreement filed with the SEC (Exhibit G, hereto) along with the Form 8-K as described below, provided that such disclosures shall truly and accurately reflect such provisions.

6.03          Permitted ClearOne Statements.  ClearOne warrants and represents that as a public company with reporting obligations under Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, this Agreement constitutes a material definitive agreement not in the ordinary course of ClearOne’s business that must be disclosed by ClearOne in a Current Report on Form 8-K (the “Form 8-K”) to be publicly filed with the U.S. Securities and Exchange Commission (the “SEC”) within four (4) business days of the Effective Date of this Agreement, and that such Form 8-K must include as an exhibit thereto a redacted version of this Agreement in the form attached to this Agreement as Exhibit G.  As such, and in reliance upon ClearOne’s warranties and representations herein, Shure agrees that ClearOne may attach a copy of Exhibit G as an exhibit to the Form 8-K filing described in the preceding sentence.  In addition, ClearOne shall be free to make statements and communications disclosing to third parties (i) the existence and scope of the licenses and covenants not to sue under Article III, including any limitations to the scope of such licenses; (ii) the existence and scope the releases set forth in Section 2.01(c), (d), and (e); (iii) that all disputes between the Parties, including the Litigations, are fully and finally resolved; and (iv) any other matters specifically addressed in the provisions of the redacted form of Agreement filed with the SEC (Exhibit G, hereto) along with the Form 8-K as described above, provided that such disclosures shall truly and accurately reflect such provisions. 

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6.04          Limitations on Publicity and Confidentiality.  Other than the agreed upon statements and communications described in Sections 6.01, 6.02 and 6.03 of this Article VI, no Party (including such Party and its Affiliates' respective employees, officers, directors, shareholders, attorneys and agents) shall issue any other press release, public announcement, news media response or other form of release of information concerning the terms of this Agreement without the prior consent of the other Party.  Further, except as disclosed or permitted to be disclosed pursuant to the foregoing provisions of this Article VI, the Parties agree that the terms of this Agreement are confidential and that the Parties will not disclose, directly or indirectly, the terms of this Agreement, other than (a) to their attorneys, accountants, tax preparers, financial advisors, employees or agents who need to know in the course and scope of performing their normal job functions, and lawful taxing authorities, (b) as a Party may be required under applicable law, rule, or regulation, including securities laws and rules of any applicable stock exchange (in which case the other Party shall have the right to review any proposed public version of the Agreement and to make any appropriate redactions before the Agreement or its contents are disclosed), (c) in response to a valid subpoena or as otherwise may be required by law, provided that the Party required to make such a disclosure gives as much notice as is reasonably possible to the other Party such that the other Party may contest such order or requirement and shall undertake efforts to limit any disclosure to the amount minimally required to comply, or (d) with the other Party’s written consent, which may only be given by an executive officer of the Party.

 

ARTICLE VII - PROTECTIVE ORDERS

7.01          Except as otherwise expressly stated herein, nothing herein shall affect or limit the terms of any of the protective orders in any of the Litigations nor any of the provisions or obligations therein which survive the Effective Date herein.

 

ARTICLE VIII - REPRESENTATIONS AND WARRANTIES

8.01          Each Party and each person signing this Agreement on behalf of a Party represents and warrants to the other that it has the full right and power to enter into this Agreement, and the person executing this Agreement has the full right and authority to enter into this Agreement on behalf of such Party and the full right and authority to bind such Party and its Affiliates to the terms and obligations of this Agreement.

8.02          [***]

8.03          [***]

8.04          Each Party further represents and warrants that there are no liens, conveyances, mortgages, assignments, encumbrances, or other agreements to which the Party is a signatory or by which it, any of its Affiliates or any of their respective properties are bound that would prevent or impair the full and complete exercise of the terms of this Agreement.

8.05          Neither Party has entered this Agreement in reliance upon any promise, inducement, agreement, statement, or representation other than those contained in this Agreement.

8.06          EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, OR ASSUMES ANY RESPONSIBILITIES WHATSOEVER WITH RESPECT TO THE COMMERCIAL SUCCESS, USE, SALE, OR OTHER DISPOSITION BY OR FOR ANY OTHER PARTY (OR ITS AFFILIATES) OR THEIR DISTRIBUTORS, USERS, OTHER CUSTOMERS, OR SUPPLIERS OF PRODUCTS INCORPORATING OR MADE BY THE USE OF INVENTIONS LICENSED HEREIN, AND ALL SUCH REPRESENTATIONS AND WARRANTIES ARE HEREBY DISCLAIMED. 

8.07          [***]

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 ARTICLE IX - MISCELLANEOUS

9.01          Assignability. This Agreement may not be assigned by any Party without the prior written consent of the other Party (which consent may not be unreasonably withheld).  Notwithstanding the foregoing, a Party may assign, without prior consent of any other Party, this Agreement and the releases, licenses, and covenants granted hereunder to a Controlled Affiliate.  In the case of any assignment of this Agreement, (i) the assignee shall be subject to and bound by, and shall agree in writing with the assignor to be subject to and bound by, all of the terms and conditions of this Agreement, and (ii) the licenses and covenants not to sue under this Agreement will transfer entirely to the assignee, with the assignor and its other Controlled Affiliates (other than Controlled Affiliates of the assignee) holding no further such rights from and after the effective date of such assignment. 

9.02          Binding Effect. This Agreement shall inure to the benefit of and is binding upon the Parties and their Affiliates (or Controlled Affiliates, as the case may be), officers, agents and employees in their capacities as such, and successors and permitted assigns of the Parties and their Affiliates (or Controlled Affiliates, as the case may be). 

9.03          Notices.  [***]

9.04          Integration.  Except as set forth herein, this Agreement constitutes the entire agreement and understanding between the Parties with respect to the matters contained herein and supersedes and terminates all prior agreements between the parties hereto respecting the subject matter hereof. 

9.05          Amendment; Waiver.  No amendment or modification of this Agreement shall be valid or binding upon the Parties unless made in writing and signed by all of the Parties.  The failure of a Party to enforce any provision of this Agreement shall not prevent the subsequent enforcement of such provision.  No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver unless expressly stated in writing by the Party making the waiver.  No waiver of any provision shall be binding in any event unless executed in writing by the Party making the waiver.

9.06          Governing Law and Forum.  The validity and interpretation of this Agreement and the legal relations of the Parties to it shall be governed by the law of the State of Illinois without regard to any state’s conflicts of law rules.  The Parties (a) agree that any action or proceeding against a Party to this Agreement based on an alleged breach of this Agreement or concerning the interpretation of this Agreement shall be brought in the United States District Court for the Northern District of Illinois, unless no federal subject matter jurisdiction exists, in which case the action or proceeding shall be brought only in courts of the state of Illinois, and (b) irrevocably consent to the exclusive jurisdiction and venue of such courts for the purpose of any action or proceeding arising out of or relating in any way to this Agreement. 

9.07          Headings. The inclusion of headings or titles in this Agreement is for convenience only and shall not affect the construction or interpretation of this Agreement.

9.08           Unenforceability. Should any part or provision of this Agreement be held unenforceable or in conflict with the law of any jurisdiction, the remainder shall remain valid and in full force.  In the event a part or provision of this Agreement is held unenforceable or in conflict with the law, the Parties agree to negotiate in good faith to amend such part or provision in a manner consistent with the intention of the parties as expressed in this Agreement.

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9.09          Joint Preparation. This Agreement, and each document relating hereto, has been jointly prepared by the Parties and their respective counsel, and the provisions hereof or thereof will not be construed more strictly against one Party than another as a result of its participation in such preparation.

9.10          Further Assistance.  In addition to the other obligations each Party may have under this Agreement, both Parties agree to execute and deliver any other documents and perform any other acts necessary to carry out the intent of this Agreement.

9.11          Execution of Agreement in Counterparts.  This Agreement may be executed in any number of counterparts, including by electronic means, and execution by each of the Parties of any one of such counterparts will constitute due execution of this Agreement. Each such counterpart hereof shall be deemed to be an original instrument, and all such counterparts together shall constitute but one agreement. 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed with intent to be bound as of the Effective Date.

 

 

	
/s/ Christine  Schyvinck

	
 

	
/s/ Derek Graham

	
Christine Schyvinck

	
 

	
Derek Graham

	
President & CEO

	
 

	
Interim Chief Executive Officer

	
December 9, 2022

	
 

	
December 9, 2022

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