Document:

EXHIBIT 10.1

 

LICENSE AGREEMENT

 

This License Agreement is made as of October 17, 2014 (the “Effective Date”), by and between, Life Medical Technologies, Inc., a Delaware corporation ("LMT" or “Licensor”), and Efil Sub of ECG Inc., a Delaware corporation ("Efil” or “Licensee”).

 

R E C I T A L S:

 

Licensor owns or controls certain proprietary rights, including, but not limited to, patents, trademarks, copyrights, United States Food and Drug Administration ("FDA") filings, clinical studies, data, techniques, trade secrets, contract rights, concepts and know-how, relating to a product referred to as BreastCare DTSTM referred to herein as the “Product.” The Product has been cleared by the FDA to be marketed as an adjunct to mammography and other procedures for the detection of breast disease, including breast cancer. Licensor also owns or controls or has contracted to obtain the benefits of certain apparatus and methods for making the Product.

 

Licensee desires to acquire a license, exclusive as to the United States, Canada, and Asia (as defined below) and non-exclusive as to the balance of the world, other than Latin America, including (without limitation) Mexico and The Caribbean Sea including (without limitation) the Bahamas, as to which the Licensee acquires no rights other than to receive “Reverse Royalties” as provided herein, to develop, manufacture and commercialize the Product and derivative products (collectively with the Product, the “Products”) for, among other purposes, the detection of disease, including breast cancer, incorporating certain of the proprietary rights held by Licensor and Licensor is willing to grant such license to Licensee under the terms and conditions of this Agreement.

 

	 
	
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NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

As used throughout this Agreement, the following terms, whether used in the singular or the plural, shall have the following meanings:

 

1.01 "Affiliate" shall mean any corporation, partnership or other business entity which owns or controls, is owned or controlled by or is under common ownership or control with a party to this Agreement. A corporation, partnership or other business entity shall be regarded as in control of another corporation if it owns or directly or indirectly controls at least thirty percent (30%) of the voting stock of said other corporation, or in the absence of such ownership, it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of said other corporation.

 

1.02 “Asia” means China, Vietnam, Cambodia, Japan, Taiwan, North and South Korea, Thailand, Malaysia and the Philippines.

 

1.03 “Effective Date” shall mean the date hereof.

 

1.04 "Product" or “Products” shall mean BreastCare/BreastAlert DTSTM identified in Exhibit A, a device that has FDA 510K clearance for marketing in the United States to be used by physicians as an adjunct to routine physical examination including palpation, mammography and other established procedures for the detection of breast disease including breast cancer and such other Products as Licensee may develop based upon the Licensed Technology.

 

1.05 "Licensed Copyrights" shall mean those copyrights relating to Products listed in Exhibit A attached hereto.

 

1.06 "Licensed Patent Rights" shall mean:

 

(a) the United States patents and patent applications identified in Exhibit B, any foreign counterparts thereof, as well as any and all divisions, continuations, continuations-in-part, extensions, substitutions, renewals, revalidations, reexaminations, reissues, additions or patents of addition or patents of importation thereof whether filed before or after the date hereof;

 

(b) any patents or patent applications owned or controlled by LMT, which contain claims, the practice of which is encompassed by the claims of any patent or patent applications of subparagraph (a) above, or which employ Product Related Technology; and

 

(c) any future patents or patent applications owned or controlled by LMT which relate to Products and the Licensed Technology.

 

	 
	
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1.07 "Licensed Technology" shall mean all know-how, concepts, data, information, trade secrets, transferable rights under FDA filings, clinical data, clinical studies, techniques, or special ability on the part of LMT, which are related to Products and methods and apparatus for making the same and which are proprietary to LMT, and with respect to which LMT, now and subsequently, has the power and right to grant the license provided for herein.

 

1.08 "Licensed Trademarks" shall mean those trademarks listed in Exhibit C attached hereto.

 

1.09 "Licensed Intellectual Property" shall mean, collectively, the Licensed Patent Rights, the Licensed Copyrights, the Licensed Technology, the licensed manufacturing process, and the Licensed Trademarks.

 

1.10 "Net Sales" shall mean the revenue received by Licensee or Licensor or their respective sublicensees (including revenue in the form of including royalties received by Licensee or Licensor from their respective sublicensees) from the sale of Products to Third Parties less the following amounts: (i) discounts, including cash discounts or rebates actually allowed or granted; (ii) credits or allowances actually granted upon claims or returns regardless of the party requesting the return; (iii) freight charges paid for delivery; and (iv) taxes or other governmental charges levied on or measured by the amount invoiced by the seller. Net Sales shall not include revenues on sales to sublicensed, but shall include the revenues received by sublicensed Affiliates on subsequent sales to an independent Third Party. For the avoidance of doubt, if either Licensee or Licensor enters into a sublicense, the Net Sales on which the other is to receive Running Royalties or Reverse Royalties includes the Net Sales of the sublicensee and, if the royalty is paid in respect of such Net Sales at the rates provided herein, no royalty shall be paid on any additional royalty received by Licensor or Licensee from the sublicensee or on the sale of Product by Licensor or Licensee to such sublicensee. If a royalty is not paid on the Net Sales of a sublicensee, Running Royalties or Reverse Running Royalties shall be paid on any royalty received by Licensor or Licensee from the sublicensee or on the sale of Product by Licensor or Licensee to such sublicensee.

 

1.11 “Open Territory” shall mean all countries, other than United States, Canada, Asia, the Retained Territory and the Joint Venture Territory.

 

1.12 "Quarter" shall mean a period of three consecutive calendar months ending on March 31, June 30, September 30 or December 31 during each year.

 

1.13 “Retained Territory” shall mean Latin America (including, without limitation, all countries located in South America, Central America, and Mexico) and The Caribbean Sea (including, without limitation, The Bahamas).

 

	 
	
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1.14 "Third Party" shall mean parties other than LMT, Licensee or their respective Affiliates.

 

1.15 "Valid Claim" shall mean a claim of an issued and unexpired patent included within the Licensed Patent Rights which has not been held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, or which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.

 

1.16 “Joint Venture Territory” shall mean India and any country in which the parties have agreed to enter into a Joint Venture with respect to the distribution of Products.

 

ARTICLE 2

 

GRANT OF LICENSE

 

2.01 License.

 

(a) LMT hereby grants and agrees to grant to Licensee a license, with the right to grant sublicenses, to use the Licensed Patent Rights, the Licensed Copyrights, the Licensed Technology, and the Licensed Trademarks, to make, have made, use and sell, during the term of this Agreement, Products employing the Licensed Intellectual Property.

 

 (b) The license granted herein is limited to the United States, Canada, Asia and, subject to Licensor’s Right of First Refusal, the Open Territory and is exclusive within the United States, Canada and Asia (the “Exclusive Territory”) as to all parties including the Licensor and non-exclusive as to the Open Territory except to the extent that Licensor does not exercise its Right of First Refusal.

 

2.02 Sublicense. Licensee may sublicense the rights granted to it hereunder provided, however, that concurrently with entering into a sublicense, each sublicensee shall agree, by a written instrument, to be bound by the terms of this Agreement and jointly and severally liable with Licensee for the obligations of Licensee hereunder related to the rights granted in such sublicense. A copy of such written instrument shall be provided to LMT.

 

2.03 Manufacture.

 

(a) The right being granted herein includes the right to distribute Products under such FDA rights as are currently held by Licensor. To enable Licensor to ensure that all Products distributed by Licensee within the United States comply with FDA requirements (including FDA Good Manufacturing Practice) from time to time, upon request of Licensor, Licensee shall make samples of the Products manufactured by it or at its request available to Licensor for its review. At the expense of Licensee, LMT will review the procedures of any prospective manufacturer proposed by Licensee to determine whether Products to be produced by such manufacturer will meet applicable FDA requirements.

 

	 
	
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(b) Licensor has engaged Fala Technologies, Inc. (“Fala”) to manufacture Products. Licensor, at the expense of Licensee, shall exercise reasonable efforts to cause Fala to consult with Licensee with respect to the manufacture of products. Solely to the extent that the same has been or hereafter are disclosed to, and are or hereafter become in the possession of Licensor by Fala, and to the extent that Licensor has a valid legal right to make available, all intellectual property developed by Fala related to the manufacture of Products, as between Licensor and Licensee, shall be available to Licensee for the use in the manufacture of Products and such other devices and products as may be developed by Licensee.

 

(c) Licensor, at the expense of Licensee, shall provide Licensee with copies of all materials in the possession of Licensor related to the Products. In addition, Licensor will introduce Licensee to Sam Mousa.

 

2.04 Licensed Trademarks.

 

(a) LMT hereby grants to Licensee the exclusive right to use the trademarks set forth on Exhibit C -1 within the Exclusive Territory, the non-exclusive right to use the trademarks set forth on Exhibit C-1 in the Open Territory, subject to Licensor’s Right of First Refusal, and the non-exclusive right to use the trademarks set forth on Exhibit C-2 within the Exclusive Territory and, subject to Licensor’s Right of First Refusal, the Open Territory.

 

(b) Licensee agrees that, with respect to any product for which Licensee may employ a trademark licensed hereunder, such product will be manufactured and packed by Licensee strictly in accordance with the standards and specifications agreed to between the parties. LMT hereby agrees to accept such mutually agreed standards as its own for purposes of this license. Licensee shall, upon request of LMT, submit to LMT samples of such products for the purpose of ascertaining or determining compliance with this requirement.

 

(c) Upon mutual agreement of Licensee and Licensor, Licensee may make additions to, deletions from, and changes to, any or all of the trademarks licensed hereunder (“Changed TM”). Any such Changed TM shall be deemed a part of the Licensed Trademarks under this Agreement.

 

2.05 Licensed Copyrights.

 

(a) LMT hereby grants to Licensee the exclusive right to use the Licensed Copyrights within the Exclusive Territory and, subject to Licensor’s Right of First Refusal, the non-exclusive right to use the Licensed Copyrights in the Open Territory.

 

	 
	
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(b) Upon mutual agreement of Licensee and Licensor, Licensee may make additions to, deletions from, and changes to, any or all of the copyrights licensed provided the additions to, deletions from, and changes to adhere to FDA regulations or the regulations of other regulatory bodies governing these documents (“Changed Copyrights”). Any Changed Copyrights shall be jointly owned by Licensee and Licensor, subject to the terms and condition of this Agreement relating jointly owned intellectual property.

 

2.06 Admission of Validity; Legal Fees Licensee acknowledges that it has had an opportunity to review the patents issued as of the date of execution of this Agreement (the “Current Patents”) licensed hereby and that it has determined to enter into this agreement due to the apparent validity thereof. Further, Licensee hereby agrees not to commence an action to contest the validity of the Current Patents. In the event Licensee brings an action to invalidate a Current Patent of Licensor, Licensee shall not be allowed to continue to operate under the License. If during the term of this Agreement Licensee elects to question the validity, enforceability, or applicability of any patent applications hereafter filed by Licensor or any of the patents which may issue as a result of any of such applications, or any patent acquired by Licensor, by way of a proceeding or litigation, this Agreement shall remain in effect. During the course of any such proceeding or litigation Licensee shall continue to pay Running Royalties on a timely basis and shall reimburse Licensor for its legal fees incurred in defending such proceeding within forty-five days of a demand therefor, provided that Licensee receives from Licensor an undertaking to pay such amounts back to Licensee in the event that Licensee’s challenge, on final adjudication, shall be upheld.

 

2.07 Covenant not to Sue. Licensor agrees that during the term of this Agreement it will not assert against Licensee or its Affiliate sublicensees any patent not included in the Licensed Patent Rights that is or might be infringed by reason of Licensee’s or its Affiliate sublicensees’ exercise of the rights granted hereunder.

 

2.08 Compliance with Applicable Laws. Licensee agrees that all products manufactured and distributed by it, the manufacture of such Products and all sales literature used by it, shall be in compliance with all applicable laws and regulations, including applicable laws and regulations of the United States FDA and the applicable laws and regulations of the respective countries in which the Product is distributed.

 

	 
	
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ARTICLE 3

 

ROYALTIES AND FEES

 

3.01 Running Royalties. Licensee shall pay to LMT running royalties ("Running Royalties") of 5% on its aggregate Net Sales during each calendar year in the Exclusive Territory and in any country of the Open Territory in which Licensee is not paying Licensor 1⁄2 of its operating profits in accordance with Section 3.02(b).

 

3.02 Open Territory. (a) If Licensee desires to distribute directly or indirectly (such as through a sublicensee) Products in any country (a “Designated Country”) in the Open Territory it shall advise Licensor. Within thirty (30) days after receipt of such notice from Licensee, Licensor shall notify Licensee whether Licensor desires to exercise its Right of First Refusal with respect to the Designated Country, and, if so exercised, Licensor shall have the exclusive right to market, sell and distribute, directly or indirectly, Products within such Designated Country. If Licensor notifies Licensee that it does not exercise such Right of First Refusal or fails to exercise such right within such thirty (30) day period, Licensee shall have the exclusive right to market, sell and distribute, directly or indirectly, Products within the Designated Country, and Licensor shall not market, sell or distribute the Products within such Designated Country. The party (that is Licensor or Licensee) which has the exclusive right to market, sell and distribute Products in a Designated Country is referred to herein as the “Moving Party,” the other party is referred to as the “Non-moving Party,” and the date on which (i) the Licensor advises the Licensee that it is exercising or not exercising its Right of First Refusal, or (ii) if Licensor fails to deliver an exercise or non-exercise notice within such thirty (30) day period, is referred to as the “Claiming Date”. The Moving Party shall have the exclusive rights (as between Licensor and Licensee) to sell Products in the Designated Country; provided that, if within one-hundred eighty (180) days of the Claiming Date, the Moving Party has not, directly or indirectly through the Contracting Party, expended at least $100,000 towards the sales effort or had Net Sales of at least $10,000 in the Designated Country, the Moving Party shall (i) pay to the Non-moving Party as liquidated damages an amount equal to $1.00 per 100 people in the Designated Country but in no event more than $150,000 per Designated Country and (ii) the Non-moving Party shall have the exclusive rights (as between Licensor and Licensee) to sell Products in the Designated Country; provided that if within one year of the Claiming Date the Non-moving Party has not, directly or indirectly through the Contracting Party, expended at least $100,000 towards the sales effort or had at least $10,000 of Net Sales in the Designated Country, the Designated Country shall revert to Open Territory.

 

	 
	
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If at any time prior to receiving a notice from Licensee that it intends to commence distribution of Products in a country in the Open Territory, Licensor determines to commence sales in a country, either directly or through a sublicensee, Licensor shall prompty advise Licensee.

 

(b) At any time prior to the Claiming Date in respect of a Designated Country either Licensor or Licensee may approach the other with a view to the joint exploitation of any country in the Open Territory. Should the parties agree to do so, neither party shall pay Running Royalties on sales in such country; instead they shall each receive 1⁄2 of the operating profits derived from sales in such country. Further, if a party shall determine that due to legal or regulatory hurdles it will take more than six months to commence sales of Products in a country in the Open Territory, it can request of the other party that it enter into discussions with a view towards extending the six month period provided above to such period as the parties deem appropriate.

 

(c) The parties have determined to enter into a Joint Venture with respect to the distribution of Products in the country of India. Promptly after the execution and delivery of this agreement, the parties shall commence discussions with a view towards confirming the terms of the Joint Venture. If the parties fail to agree upon terms each party shall have the right to distribute Products in India, subject to an obligation to pay one-half (1/2) of its operating profits in respect of such sales to the other party.

 

3.03 Milestone Payments. If Licensee shall grant a sublicense and such sublicense shall contain a provision for an upfront payment, milestone payment or advance payment of royalties, upon receipt of any such amount Licensee shall pay 1⁄2 thereof to Licensor. Licensee shall be entitled to deduct any amount so paid from Running Royalties due Licensor on the sales covered by such sublicense, provided that the deduction taken any quarter pursuant to this subparagraph shall not exceed one-third (1/3) of the amount that would otherwise be paid to the Licensor in respect of such quarter.

 

3.04 Minimum Royalties.

 

(a) Beginning with calendar year 2015, Licensee shall pay minimum annual royalties (the "Minimum Annual Royalties"). The minimum annual royalty shall be $100,000 for 2015 and $200,000 per annum each year thereafter.

 

	 
	
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(b) If the Running Royalties payable to LMT with respect to any calendar year are less than the Minimum Annual Royalties for such year, then, either: (i) Licensee, to maintain the exclusivity of the license granted hereunder, shall remit to LMT, together with its report of Running Royalties for the fourth Quarter of such year in accordance with Section 4.01(b) hereof, a sum of money equal to the difference between the applicable Minimum Royalty and the Running Royalty for such year; or (ii) Licensee’s license shall become non-exclusive forty-five (45) days after the end of such calendar year.

 

(c) If this agreement shall terminate or expire, then a pro rata portion of the Minimum Royalty payable with respect to the year in which such termination occurs shall apply, based upon the number of days elapsed during such year prior to termination.

 

(d) If Licensee should lend any monies to Licensor or pay any amounts to creditors of Licensor, the FDA or other governmental authorities, reasonably necessary to protect the rights granted to Licensee hereunder, Licensee shall have the right to deduct such amounts from Running Royalties payable to Licensor, provided that the deduction taken any quarter pursuant to this subparagraph shall not exceed one-third (1/3) of the amount that would otherwise be paid to the Licensor in respect of such quarter.

 

3.05 Reverse Running Royalties. The parties anticipate that Licensee will expend significant amounts and substantial effort to establish a manufacturing facility and commence distribution of Products. In recognition of the contribution Licensee will make to the development of the Product, Licensor agrees to pay Licensee “Reverse Running Royalties” in the same percentages, at the same times, on the same terms and subject to the reporting and accounting procedures provided for herein with respect to the payment of Running Royalties payable by Licensee. Such Reverse Running Royalties shall be payable by Licensor on all sales of Licensed Products directly or indirectly made in the Open Territory, Latin America, including (without limitation) Mexico and The Caribbean Sea including (without limitation) the Bahamas, other than countries in the Open Territory from which Licensee is receiving 1⁄2 of the operating profit from the sale of Products. No later than December 31, 2015, the parties shall exercise reasonable efforts to agree upon an appropriate definition of operating profits and, if they should fail to agree, shall submit the issue to mediation and arbitration in accordance with Section 10.09.

 

	 
	
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3.06 Time. Running Royalties and Reverse Running Royalties payable by Licensee or Licensor, as the case may be, are payable on all sales by Licensee, Licensor and their respective sublicensees within a given country until the later of (i) the expiration of the last to expire patent in respect of which there is a Valid Claim in such country and (ii) fifteen years from the date as of which Licensee (or one of its sublicensees) first has Net Sales. In addition, until the tenth anniversary of the date as of which Licensee first has Net Sales, Licensee shall pay Running Royalties on any product it may distribute for the detection of disease in the breast and prostate even if such product does not emply Licensed Technology or violate a Valid Claim.

 

3.07 Provision of Product. If prior to such time as Licensor is manufacturing Product or has arranged to acquire Products from a third party, provided Licensee is then manufacturing Product, it will provide up to 1⁄2 of its monthly output to Licensor, provided Licensor pays for the same within thirty days of delivery. The cost of products sold by Licensee to Licensor shall be equal to Licensee’s manufacturing costs, inclusive of amortization of capitalized expenses, plus ten (10%) percent thereof. The parties shall endeavor to more precisely define Licensee’s costs once a manufacturing plant is established and if they are unable to agree upon such costs the matter shall be submitted to arbitration in accordance with Section 10.09.The failure of Licensor to timely pay for Product sold by Licensee shall relieve Licensee of any obligation under this section.

 

ARTICLE 4

 

ROYALTY REPORTS AND ACCOUNTING

 

4.01 Royalty Reports; Records.

 

(a) Within forty-five (45) days after each Quarter, Licensee shall furnish or cause to be furnished to LMT a written report covering such Quarter showing: (i) the Net Sales of all Licensed Products during such period; (ii) the royalties, payable in Dollars, which have accrued hereunder in favor of LMT in respect of such sales with a summary computation of such royalties; and (iii) withholding taxes, if any, required by law to be deducted in respect of such royalties. The report shall be accompanied by the payment of royalty monies due at that time.

 

(b) The parties shall agree upon a form of royalty report within ninety (90) days of the date hereof.

 

	 
	
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4.02 Inspection of Books. LMT shall have the right, at its own expense, for the period during which Running Royalties are due to LMT and for one (1) year thereafter, to examine or have an independent accountant to whom Licensee has no reasonable objection, examine the relevant books and records of account of Licensee during normal business hours and no more than once during each calendar year, to verify the accuracy of the reports and to determine whether appropriate payment has been made by Licensee hereunder. Licensee shall include in each sublicense granted by it pursuant hereto a provision requiring the sublicensee to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records to LMT. If the report of LMT or of its independent accountant shows an underpayment of royalties, Licensee shall remit to LMT the amount of such underpayment, together with interest on the amount of such underpayment at the rate of 6% per annum, within forty-five (45) days after Licensee’s receipt of such report. If the report of LMT's independent accountant shows an underpayment of more than ten percent (10%) of the amounts due during the period covered thereby, Licensee shall pay LMT's reasonable fees and expenses related to such audit.

 

As noted above, once it commences sales, Licensor shall provide similar quarterly reports to Licensee and shall be subject to a right of inspection identical to that provided to Licensor.

 

4.03 Disputes as to Royalties Owed. In the event Licensee disputes the report of LMT’s independent accountant, the amount of the underpayment will be placed in escrow and the dispute will be resolved by (1) mediation, or, if such mediation is unsuccessful, (2) by binding arbitration as provided in Section 10.09 below.

 

4.04 Sales to Sublicensees. No Running Royalties or Reverse Running Royalties shall be payable on sales of any Licensed Product between Licensee, Licensor and any of their respective sublicensees provided Running Royalties or Reverse Running Royalties are paid on the Net Sales of the sublicensee. If a royalty is not paid on the Net Sales of a sublicensee, Running Royalties or Reverse Running Royalties shall be paid on any royalty received by Licensor or Licensee from the sublicensee or on the sale of Product by Licensor or Licensee to such sublicensee. As noted, Licensor will be subject to the provisions of Sections 4.01, 4.02, 4.03 and 4.04 in respect of its sales.

 

4.05 Payments on Sales outside the United States. Except as otherwise provided, any payments due hereunder on sales made outside the United States shall be payable in the United States and in United States Dollars at the prevailing rate of exchange of the currency of the country in which the sales are made (said exchange rate being taken as the rates published in the Wall Street Journal under the caption "Currency Trading -- Exchange Rates" on the last business day of the calendar Quarter for which the royalties are payable).

 

	 
	
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4.06 Withheld Payment. Any sum required under United States tax laws or the tax laws of any other country, to be withheld by from payments to be made hereunder, shall be promptly paid by to the appropriate tax authorities and the paying party shall furnish LMT or Licensee, as the case may be, with official tax receipts or other appropriate evidence issued by the appropriate tax authorities evidencing such payments, sufficient to enable a claim for income tax credit in respect of any sum so withheld.

 

4.07 Exchange Rate not Ascertainable. During any period in which the exchange rate between the foreign currency in question and the United States Dollar cannot be ascertained in accordance with this Article, payment of the applicable royalties shall be made at the last ascertainable rate; provided, however, that within thirty (30) days after the rate of exchange is ascertainable, an adjustment shall be made and either party, in its discretion, may elect to receive payment in the foreign currency in question or in any other currency for which an exchange rate can be ascertained.

 

4.08 No Set-Offs. Except as otherwise expressly provided herein, no royalty or other amount payable to LMT under this Agreement shall be reduced, whether by set-off, adjustment or otherwise by virtue of any claim of Licensee or any of its sublicensees or assignees against LMT which is disputed by LMT. For purposes of the foregoing, a judgment of a court of competent jurisdiction holding LMT liable, which judgment is unappealable or unappealed by LMT within the time allowed therefore, shall not be considered a "disputed claim."

 

ARTICLE 5

 

INFRINGEMENT

 

5.01 Third Party Infringement.

 

(a) If either party becomes aware of a substantial (annual sales greater than five percent (5%) of Licensee's annual sales of Licensed Products within a given jurisdiction (the "Subject Territory")) infringement of the Licensed Patent Rights by a Third Party in any country, such party shall promptly advise the other of the relevant facts and circumstances known in connection therewith and, in the case of an infringement of Licensed Patent Rights, Licensee and LMT shall confer and attempt to agree on what action should be taken. Should LMT and Licensee agree that suit should be brought in any such country, LMT shall have the right to control, bear the cost of, and retain any recovery from any such suit arising out of an infringement of Licensed Patent Rights and Licensee, at its own expense, shall reasonably cooperate in the effort and any recovery from such suit, less Licensor’s costs and expenses, shall be deemed “Net Sales” for which Reverse Running Royalties shall be calculated and payable to Licensee. If such infringement occurs in any country in which Licensee has the exclusive license granted in Article 2, and, if Licensor shall fail, within six (6) months after receiving notice from Licensee of a substantial infringement of Licensed Patent Rights, either; (i) to terminate such infringement; or (ii) to institute an action to prevent continuation thereof and, thereafter, to prosecute such action diligently, then Licensee shall have the option to do so, in which case Licensee shall control, bear the cost of such suit, and Licensor at its sole cost and expense, shall reasonably cooperate in the effort, e.g. if necessary, Licensor shall become a named party, and any recovery from such suit, less Licensee’s costs and expenses, shall be deemed “Net Sales” for which Running Royalties shall be calculated and payable to Licensor. Should Licensee provide Licensor with reasonable evidence of substantial patent infringement in any country in which Licensee has the exclusive license granted in ARTICLE 2 and the parties are unsuccessful in abating the infringement within the Abatement Period after Licensor has promptly notified the infringer of the infringement, and should Licensor have failed to file suit for infringement at the end of such Abatement Period (or before Licensee has instituted suit under Section 5.01(b)), Licensee shall pay a reduced royalty rate in such country for Net Sales, in an amount of two-thirds of the royalty rate defined herein. Said reduced royalty rate shall continue to be the prevailing royalty rate until said substantial infringement ceases and, thereafter, the royalty rate shall revert to the full royalty rate defined herein. For the purposes of this Section 5.01, the Abatement Period, with respect to infringement occurring in the countries of Asia (as defined herein), Canada and the United States, shall be one hundred eighty (180) days and, for all other countries, two hundred seventy (270) days. The parties recognize that the prior sentence provides abatement periods for countries outside the scope of this License, such periods are provided in case Licensee hereafter acquires the right to distribute Licensed Products in any of such countries.

 

	 
	
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(b) The above notwithstanding, Licensee shall have the right to have suit brought against an infringer of Licensed Patent Rights in any country in which Licensee has the exclusive right granted in Article 2 even if such infringement is less than ten (10%) of Licensee's annual sales of Licensed Product in the Subject Territory. Licensor shall reasonably cooperate in such suit and, if necessary, shall become a named party. In no event, however, shall the royalty reduction referenced in Section 5.01(a) hereof go into effect until such infringement amounts to annual sales of greater than ten percent (10%) of Licensee Licensee's sales of Licensed Product within said Subject Territory. Any recovery of such suit, less Licensee’s costs and expenses, shall be deemed “Net Sales” for which Running Royalties shall be calculated and payable to Licensor.

 

5.02 Other Infringement.

 

(a) In the event that Licensee's employment of any of the Licensed Intellectual Property in making, having made, using or selling Licensed Products infringes, will infringe, or is alleged by a Third Party to infringe said Third Party's patent, the party becoming aware of same shall promptly notify the other. The parties shall thereafter attempt to agree upon a course of action which may include: (i) modification of the Licensed Product or its use and manufacture so as to be non-infringing; or (ii) obtaining a license or assignment from the Third Party.

 

(b) In the event that the parties agree to obtain a license or assignment from a Third Party in accordance with Sub­paragraph (a)(ii) of this Section, then Licensor shall, in the first instance, have the right to negotiate with the Third Party for such license or assignment. If Licensor's negotiation with the Third Party results in a consummated agreement, Licensor shall be responsible for any payments to be made thereunder. If Licensor fails to consummate an agreement with the Third Party within one hundred fifty (150) days after notice has been made in accordance with this Section, then Licensee shall have the right to negotiate with the Third Party for such license or assignment. If Licensee's negotiation with the Third Party results in a consummated agreement, then: (i) any lump sum payments made thereunder shall be offset royalties due to Licensor on Net Sales generated in the Territory covered by the Third Party's patent (the "Subject Infringing Territory") provided that the Running Royalties payable to LMT in respect of Net Sales in the Subject Infringing Territory during any calendar quarter shall be reduced by no more than 50% of the amount payable in the absence of this paragraph, provided that any portion of the lump sum payment not applied shall be carried forward and applied against future Running Royalties payable to LMT in respect of Net Sales generated in the Subject Infringing Territory; and (ii) should such agreement require the payment of royalties, such royalties shall offset any royalties to be paid by Licensee hereunder in respect of Net Sales generated in the Subject Territory, but in no event shall the reduction taken any calendar quarter pursuant to this clause and the immediately preceding clause reduce the royalties payable to LMT in respect of sales generated in the Subject Territory by more than fifty percent (50%). Licensor’s sole recourse against Licensor for any such payments made by Licensee to Third Parties as contemplated above shall be offset rights against Running Royalties as above provided.

 

	 
	
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(c) In the event that a Third Party sues Licensee alleging that Licensee's employment of any of the Licensed Intellectual Property in making, having made, using or selling Licensed Products infringes or will infringe said Third Party's patent, trademark and/or copyright, then Licensee shall have the right, at its own expense, to defend such action. If Licensee elects to defend such action, its reasonable costs, including legal fees and expenses, in connection with such defense shall be offset against future Running Royalties payable hereunder, provided that in no event shall the reduction taken any calendar quarter pursuant to this clause exceed twenty-five per cent (25%) of the Running Royalties otherwise payable hereunder.

 

ARTICLE 6

 

CONFIDENTIALITY

 

6.01 Treatment of Confidential Information. With respect to all confidential information (the "Confidential Information") transmitted by either party to the other including all information developed pursuant to this Agreement, the receiving party shall, while this Agreement is in effect and thereafter, make no use of this information other than in furtherance of this Agreement and shall use the same efforts to keep secret and prevent the disclosure of such information to parties other than its agents, officers, employees and representatives authorized to receive such information as it would its own confidential information. A receiving party's obligation of non-use and non-disclosure shall not apply, however, to information which;

 

(a) was known to the receiving party at the time of its disclosure and not previously subject to any obligation of confidentiality at the time of its disclosure;

 

(b) was generally available to the public or was otherwise part of the public domain at the time of its disclosure;

 

(c) became generally available to the public or became otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this Agreement; or

 

(d) became known to the receiving party after its disclosure; (i) from a source other than the disclosing party (including from independent development by the receiving party);other than from a Third Party who had an obligation to the disclosing party not to disclose such information to others, and other than under an obligation of confidentiality.

 

	 
	
14

	

 

With the exception noted below, this Section 6.01 shall survive termination of this Agreement for a period of three (3) years from the date of such termination. To the extent any trade secrets are disclosed, the confidentiality obligations shall continue in perpetuity.

 

6.02 Obligation upon Termination. If this Agreement shall be terminated or otherwise expires, Licensee, at the request of Licensor, shall destroy or return to Licensor all copies and other embodiments of Confidential Information theretofore delivered to Licensee or any of its affiliates/ sublicensees, by Licensor, as well as all summaries of such Confidential Information prepared by Licensee or its agents, except that a single copy of said Confidential Information and said summaries may be retained by counsel to Licensee for archival purposes. In addition, within ninety (90) days after Licensor's request that Licensee destroy all such Confidential Information, an officer of Licensee shall deliver to Licensor a certificate stating that Licensee has complied with such request. Upon termination of this Agreement, Licensor, at the request Licensee, shall destroy or return to Licensee all copies and other embodiments of Licensee’s Confidential Information theretofore delivered to LMT by Licensee or its affiliates, as well as summaries of such Confidential Information prepared by Licensor or its Affiliates, except that a single copy of said Confidential Information and said summaries may be retained by counsel to Licensor for archival purposes. In addition, within ninety (90) days after Licensee's request that Licensor destroy all such Confidential Information, an officer of LMT shall deliver to Licensee a certificate stating that LMT has complied with such request.

 

6.03 Right to Disclose. To the extent it is reasonably necessary or appropriate to fulfill its obligations or exercise its rights under this Agreement, each party may disclose Confidential Information to its Affiliates, sublicensees, consultants and outside contractors; provided, however, that prior to the release by either party of any Confidential Information of the other, the disclosing party shall cause the recipient to execute a Confidentiality Agreement (the "Confidentiality Agreement") in favor of the other party hereto. In any such Confidentiality Agreement, the parties must agree (i) to keep the Confidential Information confidential for the same time periods and to the same extent as each party herein is required to keep such information confidential and (ii) to use the Confidential Information only for such purposes as each party herein is entitled to use the Confidential Information. Each party or its sublicensees may also disclose Confidential Information to governmental or other regulatory authorities to the extent that such disclosure is reasonably necessary to comply with applicable laws or regulations.

 

	 
	
15

	

 

ARTICLE 7

 

INTELLECTUAL PROPERTY RIGHTS AND PROTECTION

 

7.01 Treatment of Intellectual Property

 

(a) All rights arising from or relating to intellectual property (the intellectual Property") such as patents, patent applications, inventions, know-how, trademarks, copyrights and the like, owned or controlled by either party prior to the Effective Date of this Agreement, shall remain the property of such party, subject only to the rights and licenses granted herein. As between Licensor and Licensee, any and all improvements, modifications, enhancements, derivatives of any Licensed Intellectual Property conceived, developed, created or reduced to practice by Licensee, solely or jointly with others (collectively “Improved IP”) will be owned by Licensee, and Licensee shall and hereby does grant to Licensor a right to use such Improved IP subject to the terms and conditions of this Agreement. Further, Licensee shall promptly notify Licensor of any Improved IP conceived, developed, created or reduced to practice by Licensee and, upon request therefor from Licensor, provide any and all information and know-how regarding such Improved IP.

 

(b) Subject to Section 7.01(a), all Intellectual Property developed during the term of this Agreement by personnel employed solely by or in behalf of either party shall remain the property of such party, subject only to the rights and licenses granted herein.

 

(c) All patents, patent applications and know-how relating to the detection of disease in breasts made during the term of this Agreement jointly by personnel employed by or in behalf of both parties shall be deemed Improved IP which is jointly owned by Licensor and Licensee.

 

(d) In the event that the parties agree to file patent applications with respect to any joint inventions, then they shall do so, employing an attorney or agent mutually agreed upon to act in their joint behalf, and shall share the cost related thereto equally. In the event that only one party seeks patent protection, then that party shall bear all costs and the other party shall cooperate fully in the prosecution and enforcement of any patent application or patent resulting therefrom. Each party shall be entitled to exploit any jointly owned Intellectual Property subject to royalties and other payments due in accordance with this Agreement with respect thereto.

 

	 
	
16

	

 

7.02 Patent and Trademark Prosecution; Enforcement of Licensed Rights.

 

(a) Licensor shall use reasonable efforts to prosecute any patent applications and applications for trademark registrations, licensed hereunder and not yet assigned to Licensee, to obtain patents and registered trademarks thereon and to maintain any such patents and registered trademarks; provided, however, that Licensor shall have the right to discontinue the prosecution of any such patent application or application for trademark registration or to abandon any such patent or trademark registration. If Licensor decides to abandon or allow to lapse any such patent application or patent or application for trademark registration or registered trademark in any country, Licensor shall inform Licensee. and Licensee shall be given the right to prosecute such patent application or application for trademark registration and/or maintain such patent or trademark registration at its expense, and shall be entitled to deduct from royalties due Licensor, in respect of sales in such country, Licensee's out-of-pocket expenses in prosecuting and/or maintaining patent or trademark protection in such country; provided that in no event shall the amount deducted with respect to any Calendar Quarter exceed more than 50% of the running Royalties payable in respect of net Sales in such country during such quarter. Licensee’s sole recourse against Licensor for Licensor’s decision to abandon or lapse any such patent application or patent or application for trademark registration or registered trademark in any country shall be offset rights against Running Royalties as above provided.

 

(b) LMT shall provide Licensee with all correspondence and reports of communications had in connection with the prosecution of the Licensed Intellectual Property in such a timely matter as to permit Licensee to provide comment in the course of prosecution. LMT shall have the continuing obligation to promptly update Exhibits A and B.

 

ARTICLE 8

 

TERMINATION

 

8.01 Term. The term of this Agreement shall extend from the Effective Date until that date which is the later of (i) fifteen years from the date as of which Licensee (or one of its sublicensees) first has Net Sales and (ii) with respect to each country in which Licensee is directly or indirectly distributing Products, the last to expire of the Valid Claims in respect of such country. If Licensee has not directly or indirectly had any Net Sales prior to December 31, 2016, this agreement shall terminate.

 

8.02 Default; Bankruptcy; Uncured Breach.

 

(a) Either party may terminate this Agreement upon sixty (60) days' written notice for any material breach or material default of the other party hereto. Said notice shall become effective at the end of said period unless during said period the party in breach or default shall cure such breach or default or, in the event of a default or breach which cannot be cured within such sixty days, such notice shall not become effective if the defaulting party shall commence the cure during such sixty days and thereafter diligently prosecute the same.

 

	 
	
17

	

 

(b) Either party may terminate this Agreement in the event that the other party shall (i) become insolvent, (ii) be unable, or admit in writing its inability, to pay its debts as they mature, (iii) make a general assignment for the benefit of, or enter into any composition or arrangement with, creditors, (iv) apply for or consent (by admission of material allegations of a petition or otherwise) to the appointment of a receiver or trustee, (v) authorize or file or have filed against it a petition under Chapter 7 or 11 of the United States Bankruptcy Code unless such petition is dismissed within sixty (60) days of filing.

 

8.03 Licensee’s Obligations Upon Termination. In the event of termination of any license granted hereunder, Licensee shall have the right to sell off its inventory of Licensed Products existing as of the date of termination; provided, however, that Licensee shall be obliged to pay the Running Royalties on such sales in accordance with Section 3.01 hereof and shall be obligated to return all Intellectual Property subject to the License granted under this Agreement..

 

8.05 Right of First Refusal. If Licensor shall file a petition seeking protection under the Bankruptcy Code or to have a receiver appointed for all or any portion of its assets or a third party shall file a petition against Licensor under the Bankruptcy Code or seeking to have a receiver appointed for its assets, and all or any portion of the assets of Licensor shall be auctioned or otherwise offered for sale, Licensee shall have a right of first refusal exercisable for a period of thirty days commencing as of the purported sale of any of Licensor’s assets to purchase the same for a price equal to the price offered by the third party and to have credited as a portion of such price any amount then due Licensee form Licensor.

 

ARTICLE 9

 

REPRESENTATIONS, WARRANTIES AND DISCLAIMERS

 

9.01 Each party hereto acknowledges and agrees:

 

(a) that no representation or promise not expressly contained in this Agreement has been made by the other party hereto or by any of its agents, employees, representatives or attorneys;

 

	 
	
18

	

 

(b) that this Agreement is not being entered into on the basis of, or in reliance on, any promise or representation, expressed or implied, covering the subject matter hereof, other than those which are set forth expressly in this Agreement; and

 

(c) that each party has had the opportunity to be represented by counsel of its own choice in this matter, including the negotiations which preceded the execution of this Agreement.

 

9.02 Each party warrants, as of the date hereof, that, based upon its actual knowledge without any investigation, it is unaware of any Third Party patent containing claims or a pending application containing claims which, if issued, are or would be infringed by either party in operating under the terms of this Agreement. Each party agrees to make the other aware of such Third Party patents and applications promptly upon becoming aware (based upon its actual knowledge without any investigation) of same.

 

9.03 Each party warrants and represents that it has the full right and power to make the promises and grant the licenses set forth in this Agreement and that there are no outstanding agreements, assignments or encumbrances in existence inconsistent with the provisions of this Agreement.

 

9.04 Licensor Representations and Warranties

 

(a) Licensor hereby represents and warrants that, except as otherwise provided in Schedule 9.04(a):

 

(i) it is the true owner of all right, title and interest in and to the Licensed Intellectual Property, and Licensor does not actually know without any investigation of any asserted or unasserted claims of ownership of the Licensed Intellectual Property by any party other than Licensor

 

(ii) Licensor does not know without any investigation of any inventors of the Licensed Patent Rights other than the named inventors of the Licensed Patent Rights, and does not know without any investigation of any asserted or unasserted claims of inventorship of the Licensed Patent Rights by any person other than the named inventors of the Licensed Patent Rights; and

 

	 
	
19

	

 

(iii) Licensor does not know without any investigation of any asserted claims of prior invention of the Licensed Patent Rights by any third party, including any interferences or requests for interferences involving the Patent Rights, except as appear in the USPTO record.

 

(iv) the Intellectual Property being licensed to Licensee hereunder includes all of the Intellectual Property (A) which Licensor believes without any investigation it owns or to which Licensor has the right to use pursuant to a valid and enforceable, written license, sublicense, agreement, or permission, and (B) which is reasonably necessary or desirable for the manufacture, sale, distribution, and use by ultimate purchasers of, the Products.

 

(iv) LMT is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation, and duly qualified to do business in each jurisdiction in which it maintains and office or the nature of its business requires it to qualify.

 

(v) LMT has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of LMT, enforceable in accordance with its terms and conditions, except as limited by (x) applicable bankruptcy insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditrs’ rights generally, and (y) laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

(vi) Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) to the knowledge of Licensor, violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which LMT is subject or any provision of the charter or bylaws of LMT or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, franchise, lease, license, instrument, or other arrangement to which LMT is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets). To the knowledge of Licensor, Licensor does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the parties to consummate the transactions contemplated by this Agreement.

 

	 
	
20

	

 

9.05 Licensee Representations and Warranties

 

(i) Licensee is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

 

(ii) Licensee has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Licensee, enforceable in accordance with its terms and conditions, except as limited by (x) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, and (y) laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

(iii) Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (x) to the knowledge of Licensee, violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Licensee is subject or any provision of the charter or bylaws of Licensee or (y) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, franchise, lease, license, instrument, or other arrangement to which Licensee is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any lien upon any of its assets). To its knowledge, Licensee does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the parties to consummate the transactions contemplated by this Agreement.

 

	 
	
21

	

 

ARTICLE 10

 

MISCELLANEOUS

 

10.01 Assignment. Neither party shall assign its rights or obligations under this Agreement without the prior written consent of the other party, provided however, either party may assign, upon prior notice to the other party, its rights and obligations to Affiliates or to any purchaser or successor in interest to substantially all of such assigning party’s business. Notwithstanding the foregoing, LMTor Licensee may assign as collateral the right to receive the payments to be made to it under this Agreement provided that no such assignment shall relieve LMT or Licensee of its obligations hereunder or alter the rights and obligations of LMT or Licensee hereunder. Upon written request of LMT, Licensee shall pay all amounts due and owing to LMT hereunder to such assignee, at such address as LMT may designate. No such assignee shall have liability to Licensee with respect to LMT's duties and obligations hereunder.

 

10.02 Not Agents. LMT and Licensee shall not be deemed to be partners, joint venturers or each other's agents, and neither shall have the right to act on behalf of the other except as expressly provided hereunder or otherwise expressly agreed to in writing.

 

10.03 Force Majeure. Neither party shall be liable for failure to perform as required by any provision of this Agreement where such failure results from a force majeure beyond such party's control. In the event of any delay attributable to a force majeure, the time for performance affected thereby shall be extended for a period equal to the time lost by reason of the delay.

 

10.04 Costs. LMT and Licensee shall each bear and pay for their respective costs and expenses regarding the negotiation and preparation of this Agreement and all documents, instruments and agreements related thereto.

 

10.05 Notices. Services of all notices and payments to be made as provided herein shall be deemed duly given and made if sent by certified or registered mail, postage prepaid, to the addresses below; the date of giving such notices shall be the date of mailing.

 

If to LICENSEE:

Efil Sub of ECG Inc.

2798 Thamesgate Dr.

Mississauga, Ontario, Canada L4T 4E8

With a copy to:

Nocholas Bozza

Suite 3129-3350 Fairview Street

Burlington, Ontario, Canada L7N 3L5

 

	 
	
22

	

 

If to LMT:

c/o Updike, Kelly & Spellacy, P.C.

100 Pearl Street, 17th Floor

Hartford, CT 06123

Attn: Gregg J. Lallier

 

With a copy to:

Carol Fitzgerald

4438 Chubb Hollow Road

Dundee, New York 14837

 

10.06 Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York.

 

10.07 Entire Agreement; Modification. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified or extended except by a written document signed by a duly authorized executive officer of each party.

 

10.08 Severability. Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. The parties shall replace such ineffective provision for such jurisdiction with a valid and enforceable provision which most closely approaches the idea, intent, and purpose of this Agreement and, in particular, the provision to be replaced.

 

10.09 Remedies. Any controversy or claim arising out of or relating to this Agreement, or the parties' decision to enter into this Agreement, or the breach thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of JAMS. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall be held in New York, New York and the arbitrators shall apply the substantive law of New York except that the interpretation and enforcement of this arbitration provision shall be governed by the Federal Arbitration Act. The arbitrators shall not award any of the parties punitive damages and the parties shall be deemed to have waived any right to such damages.

 

	 
	
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10.10 Waiver. The failure of a party to enforce at any time for any period any of the provisions hereof shall not be construed as a waiver of such provision or the rights of such party thereafter to enforce each such provision.

 

10.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same documents.

 

10.12 Captions. The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely guides or labels to assist in locating the several Articles and Sections.

 

WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers as of the day and year set forth above.

 

 

	LIFE MEDICAL TECHNOLOGIES, INC.		EFIL SUB of ECG INC.	
		 	 	 	 	 
	By:	/s/ Carol Fitzgerald 	 	By:	/s/ John Bentivoglio	 
	 	An Authorized officer	 	 	An Authorized Officer	 

 

	 
	
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EXHIBIT A

 

PRODUCTS

 

PRODUCT KNOWN AS BREASTCARE DTSTM /BREASTALERTTM

 

Notwithstanding the following more specific description of the Product, the Products shall include any temperature sensing product manufactured by or on behalf of the Licensor using the patented technology or improvements thereto. The BreastCare DTSTM is an early diagnostic direct reading, digital product to screen the breast for abnormalities, including cancer.

 

The BreastCare DTSTM measures underlying breast tissue temperature and not skin surface temperature by retaining the emitted heat when BreastCareTM DTS is placed against the breast for 15 minutes. The averaged and recorded reading on the BreastCare DTSTM has taken into consideration that the temperature patterns of a woman's breasts are closely symmetrical. This method detects abnormalities by comparing the temperature differences in the corresponding areas of a woman's breasts.

 

The BreastCare DTSTM product consists of a pair of non-woven pads made of spun-fiber or foam material, each of which has three wafer-thin, pliant, aluminum foil, and temperature responsive segments attached to its inner surface. Each segment is wedge-shaped and contains 18 columns or bars of thermal dots. These dots contain chemical heat sensors that change color when exposed to a specific temperature.

 

	 
	
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EXHIBIT B

 

PATENTS

 

United States Patents: U.S. Patent 6,086,247 as well as all related applications and/or issued patents. Related applications includes any related foreign or U.S. issued or pending applications, continuation applications, continuation-in-part applications, divisional applications, reissue applications, and provisional application.

 

U.S. Patent 6135968 – Differential temperature measuring device and method; Prostate Screening Device.

 

RE 32,000

 

RE 4,624264

 

Patent 4651749

 

	 
	
26

	

 

EXHIBIT C

 

EXCLUSIVE AND NON-EXCLUSIVE TRADEMARKS

 

C-1

 

Trademarks

 

BreastCare DTSTM BreastAlertTM Differential Temperature Sensor

 

C-2

 

All Other Foreign/International Intellectual Property

 

Life Medical Technologies, Inc.

Scantek Medical, Inc.

 

 

27EX-4.2

 Exhibit 4.2 

NQ MOBILE INC. 
 2011 SHARE INCENTIVE PLAN 
 (as amended on April 13, 2013)

 ARTICLE 1 
 PURPOSE 
 The purpose of the NQ Mobile Inc. 2011 Share Incentive Plan (the
“Plan”) is to promote the success and enhance the value of NQ Mobile Inc., a company formed under the laws of the Cayman Islands (the “Company”), by linking the personal interests of the members of the Board,
Employees, and Consultants to those of the Company’s shareholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to the Company’s shareholders. The Plan is further intended to
provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s
operation is largely dependent. 
 ARTICLE 2 
 DEFINITIONS AND CONSTRUCTION 
 Wherever the following terms are used in the
Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates. 

2.1 “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable
provisions of the corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system, of any jurisdiction applicable to Awards granted to residents therein.

 2.2 “Award” means an Option, Restricted Share or Restricted Share Unit award granted to a
Participant pursuant to the Plan. 
 2.3 “Award Agreement” means any written agreement,
contract, or other instrument or document evidencing an Award, including through electronic medium. 
 2.4
“Board” means the Board of Directors of the Company. 
 2.5 “Cause” with
respect to a Participant means (unless otherwise expressly provided in the applicable Award Agreement, or another applicable contract with the Participant that defines such term for purposes of determining the effect that a “for cause”
termination has on the Participant’s Awards) a termination of employment or service based upon a finding by the Service Recipient, acting in good faith and based on its reasonable belief at the time, that the Participant: 

        (a) has been negligent in the discharge of his or her duties to the
Service Recipient, has refused to perform stated or assigned duties or is incompetent in or (other than by reason of a disability or analogous condition) incapable of performing those duties; 

  
 1 

         (b) has been dishonest or
committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information; 

        (c) has breached a fiduciary duty, or willfully and materially violated
any other duty, law, rule, regulation or policy of the Service Recipient; or has been convicted of, or plead guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic violations or similar offenses); 

        (d) has materially breached any of the provisions of any agreement with
the Service Recipient; 
         (e) has engaged in unfair competition
with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Service Recipient; or 
         (f) has improperly induced a vendor or customer to break or terminate any contract with the Service Recipient or induced a principal for whom the Service
Recipient acts as agent to terminate such agency relationship. 
 A termination for Cause shall be deemed to occur (subject to
reinstatement upon a contrary final determination by the Committee) on the date on which the Service Recipient first delivers written notice to the Participant of a finding of termination for Cause. 

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

2.7 “Committee” means the Board or a committee of the Board described in Article 10. 

2.8 “Consultant” means any consultant or adviser if: (a) the consultant or adviser renders bona fide
services to a Service Recipient; (b) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market
for the Company’s securities; and (c) the consultant or adviser is a natural person who has contracted directly with the Service Recipient to render such services. 

2.9 “Corporate Transaction”, unless otherwise defined in an Award Agreement, means any of the following
transactions, provided, however, that the Committee shall determine under (d) and (e) whether multiple transactions are related, and its determination shall be final, binding and conclusive: 

        (a) an amalgamation, arrangement or consolidation or scheme of arrangement
(i) in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated or (ii) following which the holders of the voting securities
of the Company do not continue to hold more than 50% of the combined voting power of the voting securities of the surviving entity; 

  
 2 

         (b) the sale, transfer or
other disposition of all or substantially all of the assets of the Company; 

        (c) the complete liquidation or dissolution of the Company; 

        (d) any reverse takeover or series of related transactions culminating in
a reverse takeover (including, but not limited to, a tender offer followed by a reverse takeover) in which the Company is the surviving entity but (A) the Company’s equity securities outstanding immediately prior to such takeover are
converted or exchanged by virtue of the takeover into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the
Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such takeover or the initial transaction culminating in such takeover, but excluding any such transaction
or series of related transactions that the Committee determines shall not be a Corporate Transaction; or 

        (e) acquisition in a single or series of related transactions by any
person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Committee determines shall not be a Corporate Transaction. 

2.10 “Disability”, unless otherwise defined in an Award Agreement, means that the Participant qualifies
to receive long-term disability payments under the Service Recipient’s long-term disability insurance program, as it may be amended from time to time, to which the Participant provides services regardless of whether the Participant is covered
by such policy. If the Service Recipient to which the Participant provides service does not have a long-term disability plan in place, “Disability” means that a Participant is unable to carry out the responsibilities and functions of the
position held by the Participant by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive days. A Participant will not be considered to have incurred a Disability unless he or
she furnishes proof of such impairment sufficient to satisfy the Committee in its discretion. 
 2.11
“Effective Date” shall have the meaning set forth in Section 11.1. 
 2.12
“Employee” means any person, including an officer or a member of the Board of the Company or any Parent or Subsidiary of the Company, who is in the employment of a Service Recipient, subject to the control and direction of the
Service Recipient as to both the work to be performed and the manner and method of performance. The payment of a director’s fee by a Service Recipient shall not be sufficient to constitute “employment” by the Service Recipient.

 2.13 “Exchange Act” means the Securities Exchange Act of 1934 of the United States, as
amended. 

  
 3 

 2.14 “Fair Market Value” means, as of any date, the value
of Shares determined as follows: 
         (a) If the Shares are listed
on one or more established stock exchanges or national market systems, including without limitation, The New York Stock Exchange and The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such shares (or the closing bid,
if no sales were reported) as quoted on the principal exchange or system on which the Shares are listed (as determined by the Committee) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as
applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable; 

        (b) If the Shares are regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such shares as quoted on such system or by such securities dealer on the date of determination, but if selling prices
are not reported, the Fair Market Value of a Share shall be the mean between the high bid and low asked prices for the Shares on the date of determination (or, if no such prices were reported on that date, on the last date such prices were
reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable; or 

        (c) In the absence of an established market for the Shares of the type
described in (a) and (b), above, the Fair Market Value thereof shall be determined by the Committee in good faith and in its discretion by reference to (i) the placing price of the latest private placement of the Shares and the development
of the Company’s business operations and the general economic and market conditions since such latest private placement, (ii) other third party transactions involving the Shares and the development of the Company’s business operation
and the general economic and market conditions since such sale, (iii) an independent valuation of the Shares, or (iv) such other methodologies or information as the Committee determines to be indicative of Fair Market Value and relevant.

 2.15 “Incentive Share Option” means an Option that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto. 
 2.16 “Independent Director”
means (i) before the Shares or other securities representing the Shares are listed on a stock exchange, a member of the Board who is a Non-Employee Director; and (ii) after the Shares or other securities representing the Shares are listed
on a stock exchange, a member of the Board who meets the independence standards under the applicable corporate governance rules of the stock exchange. 
 2.17 “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor
definition adopted by the Board. 
 2.18 “Non-Qualified Share Option” means an Option that is
not intended to be an Incentive Share Option. 
 2.19 “Option” means a right granted to a
Participant pursuant to Article 5 of the Plan to purchase a specified number of Shares at a specified price during specified time periods. An Option may be either an Incentive Share Option or a Non-Qualified Share Option. 

  
 4 

 2.20 “Participant” means a person who, as a member of the
Board, Consultant or Employee, has been granted an Award pursuant to the Plan. 
 2.21 “Parent”
means a parent corporation under Section 424(e) of the Code. 
 2.22 “Plan” means this NQ
Mobile Inc. 2011 Share Incentive Plan, as it may be amended from time to time. 
 2.23 “Related
Entity” means any business, corporation, partnership, limited liability company or other entity in which the Company, a Parent or Subsidiary of the Company holds a substantial ownership interest, directly or indirectly, but which is not a
Subsidiary and which the Board designates as a Related Entity for purposes of the Plan. 
 2.24
“Restricted Share” means a Share awarded to a Participant pursuant to Article 6 that is subject to certain restrictions and may be subject to risk of forfeiture. 

2.25 “Restricted Share Unit” means the right granted to a Participant pursuant to Article 7 to receive a
Share at a future date. 
 2.26 “Securities Act” means the Securities Act of 1933 of the United
States, as amended. 
 2.27 “Service Recipient” means the Company, any Parent or Subsidiary of
the Company and any Related Entity to which a Participant provides services as an Employee, a Consultant or a Director. 
 2.28 “Share” means Class A Common Shares of the Company, and such other securities of the Company that may be substituted for Shares pursuant to Article 9. 

2.29 “Subsidiary” means any corporation or other entity of which a majority of the outstanding voting
shares or voting power is beneficially owned directly or indirectly by the Company. 
 2.30 “Trading
Date” means the closing of the first sale to the general public of the Shares pursuant to a registration statement filed with and declared effective by the U.S. Securities and Exchange Commission under the Securities Act. 

ARTICLE 3 

SHARES SUBJECT TO THE PLAN 
 3.1 Number of Shares. 

        (a) Subject to the provisions of Article 9 and Section 3.1(b), the maximum
aggregate number of Shares which may be issued pursuant to all Awards (including Incentive Share Options) shall be 13,000,000 plus an annual increase on the first day of each fiscal year, beginning in 2012, equal to the total number of shares
underlying the options or other awards granted in the preceding year that remain outstanding, or such lesser amount of Shares as determined by the Board. 

  
 5 

         (b) To the extent that an
Award terminates, expires, or lapses for any reason, any Shares subject to the Award shall again be available for the grant of an Award pursuant to the Plan. To the extent permitted by Applicable Laws, Shares issued in assumption of, or in
substitution for, any outstanding awards of any entity acquired in any form or combination by the Company or any Parent or Subsidiary of the Company shall not be counted against Shares available for grant pursuant to the Plan. Shares delivered by
the Participant or withheld by the Company upon the exercise of any Award under the Plan, in payment of the exercise price thereof or tax withholding thereon, may again be optioned, granted or awarded hereunder, subject to the limitations of
Section 3.1(a). If any Restricted Shares are forfeited by the Participant or repurchased by the Company, such Shares may again be optioned, granted or awarded hereunder, subject to the limitations of Section 3.1(a). Notwithstanding the
provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Share Option to fail to qualify as an incentive Share option under Section 422 of the Code. 

3.2 Shares Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized
and unissued Shares, treasury shares (subject to Applicable Laws) or Shares purchased on the open market. Additionally, in the discretion of the Committee, American Depository Shares in an amount equal to the number of Shares which otherwise would
be distributed pursuant to an Award may be distributed in lieu of Shares in settlement of any Award. If the number of Shares represented by an American Depository Share is other than on a one-to-one basis, the limitations of Section 3.1 shall
be adjusted to reflect the distribution of American Depository Shares in lieu of Shares. 
 ARTICLE 4 

ELIGIBILITY AND PARTICIPATION 
 4.1 Eligibility. Persons eligible to participate in this Plan include Employees, Consultants, and all members of the Board, as determined by the Committee. 

4.2 Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select from among
all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to be granted an Award pursuant to this Plan. 

4.3 Jurisdictions. In order to assure the viability of Awards granted to Participants employed in various
jurisdictions, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom applicable in the jurisdiction in which the Participant resides or is
employed. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in
effect for any other purpose; provided, however, that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Section 3.1 of the Plan. Notwithstanding the foregoing, the
Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any Applicable Laws. 

  
 6 

 ARTICLE 5 
 OPTIONS 
 5.1 General. The Committee is authorized to
grant Options to Participants on the following terms and conditions: 

        (a) Exercise Price. The exercise price per Share subject to an
Option shall be determined by the Committee and set forth in the Award Agreement which may be a fixed or variable price related to the Fair Market Value of the Shares. The exercise price per Share subject to an Option may be amended or adjusted in
the absolute discretion of the Committee, the determination of which shall be final, binding and conclusive. For the avoidance of doubt, to the extent not prohibited by Applicable Laws or any exchange rule, a downward adjustment of the exercise
prices of Options mentioned in the preceding sentence shall be effective without the approval of the Company’s shareholders or the approval of the affected Participants. 

        (b) Time and Conditions of Exercise. The Committee shall determine
the time or times at which an Option may be exercised in whole or in part, including exercise prior to vesting; provided that the term of any Option granted under the Plan shall not exceed ten years, except as provided in Section 12.1. The
Committee shall also determine any conditions, if any, that must be satisfied before all or part of an Option may be exercised. 
         (c) Payment. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, including, without
limitation (i) cash or check denominated in U.S. Dollars, (ii) to the extent permissible under the Applicable Laws, cash or check in Chinese Renminbi, (iii) cash or check denominated in any other local currency as approved by the
Committee, (iv) Shares held for such period of time as may be required by the Committee in order to avoid adverse financial accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof, (v) after the Trading Date the delivery of a notice that the Participant has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker
has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company upon settlement of such sale,
(vi) other property acceptable to the Committee with a Fair Market Value equal to the exercise price, or (vii) any combination of the foregoing. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a
member of the Board or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option in any method which would violate Section 13(k) of the
Exchange Act. 

  
 7 

         (d) Evidence of
Grant. All Options shall be evidenced by an Award Agreement between the Company and the Participant. The Award Agreement shall include such additional provisions as may be specified by the Committee. 

        (e) Effects of Termination of Employment or Service on Options.
Termination of employment or service shall have the following effects on Options granted to the Participants: 

            (i) Dismissal for Cause. Unless otherwise
provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient is terminated by the Service Recipient for Cause, the Participant’s Options will terminate upon such termination, whether or not the
Option is then vested and/or exercisable; 

            (ii) Death or Disability. Unless otherwise
provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient terminates as a result of the Participant’s death or Disability: 

        (a) the Participant (or his or her legal representative or beneficiary, in
the case of the Participant’s Disability or death, respectively), will have until the date that is 12 months after the Participant’s termination of Employment to exercise the Participant’s Options (or portion thereof) to the extent
that such Options were vested and exercisable on the date of the Participant’s termination of Employment on account of death or Disability; 
         (b) the Options, to the extent not vested and exercisable on the date of the Participant’s termination of Employment or service, shall terminate upon
the Participant’s termination of Employment or service on account of death or Disability; and 

        (c) the Options, to the extent exercisable for the 12-month period
following the Participant’s termination of Employment or service and not exercised during such period, shall terminate at the close of business on the last day of the 12-month period. 

            (iii) Other Terminations of Employment or
Service. Unless otherwise provided in the Award Agreement, if a Participant’s employment by or service to the Service Recipient terminates for any reason other than a termination by the Service Recipient for Cause or because of the
Participant’s death or Disability: 
         (a) the Participant
will have until the date that is 90 days after the Participant’s termination of Employment or service to exercise his or her Options (or portion thereof) to the extent that such Options were vested and exercisable on the date of the
Participant’s termination of Employment or service; 
         (b)
the Options, to the extent not vested and exercisable on the date of the Participant’s termination of Employment or service, shall terminate upon the Participant’s termination of Employment or service; and 

  
 8 

         (c) the Options, to the
extent exercisable for the 90-day period following the Participant’s termination of Employment or service and not exercised during such period, shall terminate at the close of business on the last day of the 90- day period. 

5.2 Incentive Share Options. Incentive Share Options may be granted to Employees of the Company, a Parent or
Subsidiary of the Company. Incentive Share Options may not be granted to Employees of a Related Entity or to Independent Directors or Consultants. The terms of any Incentive Share Options granted pursuant to the Plan, in addition to the requirements
of Section 5.1, must comply with the following additional provisions of this Section 5.2: 

        (a) Individual Dollar Limitation. The aggregate Fair Market Value
(determined as of the time the Option is granted) of all Shares with respect to which Incentive Share Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by
Section 422(d) of the Code, or any successor provision. To the extent that Incentive Share Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Share Options. 

        (b) Exercise Price. The exercise price of an Incentive Share Option
shall be equal to the Fair Market Value on the date of grant. However, the exercise price of any Incentive Share Option granted to any individual who, at the date of grant, owns Shares possessing more than ten percent of the total combined voting
power of all classes of shares of the Company may not be less than 110% of Fair Market Value on the date of grant and such Option may not be exercisable for more than five years from the date of grant. 

        (c) Transfer Restriction. The Participant shall give the Company
prompt notice of any disposition of Shares acquired by exercise of an Incentive Share Option within (i) two years from the date of grant of such Incentive Share Option or (ii) one year after the transfer of such Shares to the Participant. (d)
Expiration of Incentive Share Options. No Award of an Incentive Share Option may be made pursuant to this Plan after the tenth anniversary of the Effective Date. 

        (e) Right to Exercise. During a Participant’s lifetime, an
Incentive Share Option may be exercised only by the Participant. 
 ARTICLE 6 

RESTRICTED SHARES 
 6.1 Grant of Restricted Shares. The Committee, at any time and from time to time, may grant Restricted Shares to Participants as the Committee, in its sole discretion, shall determine. The
Committee, in its sole discretion, shall determine the number of Restricted Shares to be granted to each Participant. 
 6.2 Restricted Shares Award Agreement. Each Award of Restricted Shares shall be evidenced by an Award Agreement that shall specify the period of restriction, the number of Restricted Shares
granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine. Unless the Committee determines otherwise, Restricted Shares shall be held by the Company as escrow agent until the restrictions on such
Restricted Shares have lapsed. 

  
 9 

 6.3 Issuance and Restrictions. Restricted Shares shall be
subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Shares or the right to receive dividends on the Restricted Share). These
restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter. 

6.4 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of the Award or
thereafter, upon termination of employment or service during the applicable restriction period, Restricted Shares that are at that time subject to restrictions shall be forfeited or repurchased in accordance with the Award Agreement; provided,
however, the Committee may (a) provide in any Restricted Share Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Shares will be waived in whole or in part in the event of terminations resulting
from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Shares. 
 6.5 Certificates for Restricted Shares. Restricted Shares granted pursuant to the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted
Shares are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Shares, and the Company may, at its discretion, retain physical
possession of the certificate until such time as all applicable restrictions lapse. 
 6.6 Removal of
Restrictions. Except as otherwise provided in this Article 6, Restricted Shares granted under the Plan shall be released from escrow as soon as practicable after the last day of the period of restriction. The Committee, in its discretion, may
accelerate the time at which any restrictions shall lapse or be removed. After the restrictions have lapsed, the Participant shall be entitled to have any legend or legends under Section 6.5 removed from his or her Share certificate, and the
Shares shall be freely transferable by the Participant, subject to applicable legal restrictions. The Committee (in its discretion) may establish procedures regarding the release of Shares from escrow and the removal of legends, as necessary or
appropriate to minimize administrative burdens on the Company. 
 ARTICLE 7 

RESTRICTED SHARE UNITS 
 7.1 Grant of Restricted Share Units. The Committee, at any time and from time to time, may grant Restricted Share Units to Participants as the Committee, in its sole discretion, shall determine.
The Committee, in its sole discretion, shall determine the number of Restricted Share Units to be granted to each Participant. 

  
 10 

 7.2 Restricted Share Units Award Agreement. Each Award of Restricted
Share Units shall be evidenced by an Award Agreement that shall specify any vesting conditions, the number of Restricted Share Units granted, and such other terms and conditions as the Committee, in its sole discretion, shall determine. 

7.3 Performance Objectives and Other Terms. The Committee, in its discretion, may set performance objectives or
other vesting criteria which, depending on the extent to which they are met, will determine the number or value of Restricted Share Units that will be paid out to the Participants. 

7.4 Form and Timing of Payment of Restricted Share Units. At the time of grant, the Committee shall specify the
date or dates on which the Restricted Share Units shall become fully vested and nonforfeitable. Upon vesting, the Committee, in its sole discretion, may pay Restricted Share Units in the form of cash, in Shares or in a combination thereof.

 7.5 Forfeiture/Repurchase. Except as otherwise determined by the Committee at the time of the grant of
the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Share Units that are at that time unvested shall be forfeited or repurchased in accordance with the Award Agreement; provided,
however, the Committee may (a) provide in any Restricted Share Unit Award Agreement that restrictions or forfeiture and repurchase conditions relating to Restricted Share Units will be waived in whole or in part in the event of terminations
resulting from specified causes, and (b) in other cases waive in whole or in part restrictions or forfeiture and repurchase conditions relating to Restricted Share Units. 
 ARTICLE 8 
 PROVISIONS APPLICABLE TO AWARDS 

8.1 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set forth the terms,
conditions and limitations for each Award which may include the term of an Award, the provisions applicable in the event the Participant’s employment or service terminates, and the Company’s authority to unilaterally or bilaterally amend,
modify, suspend, cancel or rescind an Award. 
 8.2 No Transferability; Limited Exception to Transfer
Restrictions. 
         8.2.1 Limits on Transfer. Unless
otherwise expressly provided in (or pursuant to) this Section 8.2, by applicable law and by the Award Agreement, as the same may be amended: 
         (a) all Awards are non-transferable and will not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or
charge; 
         (b) Awards will be exercised only by the Participant;
and 

  
 11 

         (c) amounts payable or
shares issuable pursuant to an Award will be delivered only to (or for the account of), and, in the case of Shares, registered in the name of, the Participant. 
 In addition, the shares shall be subject to the restrictions set forth in the applicable Award Agreement. 
 8.2.2 Further Exceptions to Limits on Transfer. The exercise and transfer restrictions in Section 8.2.1 will not apply to: 

        (a) transfers to the Company or a Subsidiary; 

        (b) transfers by gift to “immediate family” as that term is
defined in SEC Rule 16a-1(e) promulgated under the Exchange Act; 

        (c) the designation of a beneficiary to receive benefits if the
Participant dies or, if the Participant has died, transfers to or exercises by the Participant’s beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution; or 

        (d) if the Participant has suffered a disability, permitted transfers or
exercises on behalf of the Participant by the Participant’s duly authorized legal representative; or 

        (e) subject to the prior approval of the Committee or an executive officer
or director of the Company authorized by the Committee, transfer to one or more natural persons who are the Participant’s family members or entities owned and controlled by the Participant and/or the Participant’s family members, including
but not limited to trusts or other entities whose beneficiaries or beneficial owners are the Participant and/or the Participant’s family members, or to such other persons or entities as may be expressly approved by the Committee, pursuant to
such conditions and procedures as the Committee or may establish. Any permitted transfer shall be subject to the condition that the Committee receives evidence satisfactory to it that the transfer is being made for estate and/or tax planning
purposes and on a basis consistent with the Company’s lawful issue of securities. 
 Notwithstanding
anything else in this Section 8.2.2 to the contrary, but subject to compliance with all applicable laws, Incentive Share Options, Restricted Shares and Restricted Share Units will be subject to any and all transfer restrictions under the Code
applicable to such Awards or necessary to maintain the intended tax consequences of such Awards. Notwithstanding clause (b) above but subject to compliance with all applicable laws, any contemplated transfer by gift to “immediate
family” as referenced in clause (b) above is subject to the condition precedent that the transfer be approved by the Administrator in order for it to be effective. 

8.3 Beneficiaries. Notwithstanding Section 8.2, a Participant may, in the manner determined by the
Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming
any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed
necessary or appropriate by the Committee. If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary with respect to more than 50% of the
Participant’s interest in the Award shall not be effective without the prior written consent of the Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled
thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the
Committee. 

  
 12 

 8.4 Share Certificates. Notwithstanding anything herein to the
contrary, the Company shall not be required to issue or deliver any certificates evidencing the Shares pursuant to the exercise of any Award, unless and until the Committee has determined, with advice of counsel, that the issuance and delivery of
such certificates is in compliance with all Applicable Laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded. All Share certificates delivered pursuant to the Plan
are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply all Applicable Laws, and the rules of any national securities exchange or automated quotation system on which the Shares are
listed, quoted, or traded. The Committee may place legends on any Share certificate to reference restrictions applicable to the Shares. In addition to the terms and conditions provided herein, the Committee may require that a Participant make such
reasonable covenants, agreements, and representations as the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. The Committee shall have the right to require any Participant to comply
with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Committee. 

8.5 Paperless Administration. Subject to Applicable Laws, the Committee may make Awards, provide applicable
disclosure and procedures for exercise of Awards by an internet website or interactive voice response system for the paperless administration of Awards. 
 8.6 Foreign Currency. A Participant may be required to provide evidence that any currency used to pay the exercise price of any Award were acquired and taken out of the jurisdiction in which the
Participant resides in accordance with Applicable Laws, including foreign exchange control laws and regulations. In the event the exercise price for an Award is paid in Chinese Renminbi or other foreign currency, as permitted by the Committee, the
amount payable will be determined by conversion from U.S. dollars at the official rate promulgated by the People’s Bank of China for Chinese Renminbi, or for jurisdictions other than the Peoples Republic of China, the exchange rate as selected
by the Committee on the date of exercise. 

  
 13 

 ARTICLE 9 
 CHANGES IN CAPITAL STRUCTURE 
 9.1 Adjustments. In
the event of any dividend, share split, combination or exchange of Shares, amalgamation, arrangement or consolidation, spin-off, recapitalization or other distribution (other than normal cash dividends) of Company assets to its shareholders, or any
other change affecting the shares of Shares or the share price of a Share, the Committee shall make such proportionate adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change with respect to (a) the
aggregate number and type of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Section 3.1); (b) the terms and conditions of any outstanding Awards (including, without limitation,
any applicable performance targets or criteria with respect thereto); and (c) the grant or exercise price per share for any outstanding Awards under the Plan. 

9.2 Corporate Transactions. Except as may otherwise be provided in any Award Agreement or any other written
agreement entered into by and between the Company and a Participant, if the Committee anticipates the occurrence, or upon the occurrence, of a Corporate Transaction, the Committee may, in its sole discretion, provide for (i) any and all Awards
outstanding hereunder to terminate at a specific time in the future and shall give each Participant the right to exercise the vested portion of such Awards during a period of time as the Committee shall determine, or (ii) the purchase of any Award
for an amount of cash equal to the amount that could have been attained upon the exercise of such Award (and, for the avoidance of doubt, if as of such date the Committee determines in good faith that no amount would have been attained upon the
exercise of such Award, then such Award may be terminated by the Company without payment), or (iii) the replacement of such Award with other rights or property selected by the Committee in its sole discretion or the assumption of or
substitution of such Award by the successor or surviving corporation, or a Parent or Subsidiary thereof, with appropriate adjustments as to the number and kind of Shares and prices, or (iv) payment of Award in cash based on the value of Shares
on the date of the Corporate Transaction plus reasonable interest on the Award through the date when such Award would otherwise be vested or have been paid in accordance with its original terms, if necessary to comply with Section 409A of the
Code. 
 9.3 Outstanding Awards — Other Changes. In the event of any other change in the
capitalization of the Company or corporate change other than those specifically referred to in this Article 9, the Committee may, in its absolute discretion, make such adjustments in the number and class of shares subject to Awards outstanding on
the date on which such change occurs and in the per share grant or exercise price of each Award as the Committee may consider appropriate to prevent dilution or enlargement of rights. 

9.4 No Other Rights. Except as expressly provided in the Plan, no Participant shall have any rights by reason of
any subdivision or consolidation of Shares of any class, the payment of any dividend, any increase or decrease in the number of shares of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number of shares subject to an Award or the grant or exercise price of any Award. 

  
 14 

 ARTICLE 10 
 ADMINISTRATION 
 10.1 Committee. The Plan shall be
administered by the Board or a committee of one or more members of the Board to whom the Board shall delegate the authority to grant or amend Awards to Participants other than any of the Committee members. Any grant or amendment of Awards to any
Committee member shall then require an affirmative vote of a majority of the Board members who are not on the Committee. 
 10.2 Action by the Committee. A majority of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in
writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any
officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the
Plan. 
 10.3 Authority of the Committee. Subject to any specific designation in the Plan, the Committee
has the exclusive power, authority and discretion to: 
         (a)
designate Participants to receive Awards; 
         (b) determine the
type or types of Awards to be granted to each Participant; 
         (c)
determine the number of Awards to be granted and the number of Shares to which an Award will relate; 

        (d) determine the terms and conditions of any Award granted pursuant to
the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines; 

        (e) determine whether, to what extent, and pursuant to what circumstances
an Award may be settled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered; 

        (f) prescribe the form of each Award Agreement, which need not be
identical for each Participant; 
         (g) decide all other matters
that must be determined in connection with an Award; 

  
 15 

         (h) establish, adopt, or
revise any rules and regulations as it may deem necessary or advisable to administer the Plan; 

        (i) interpret the terms of, and any matter arising pursuant to, the Plan
or any Award Agreement; and 
         (j) make all other decisions and
determinations that may be required pursuant to the Plan or as the Committee deems necessary or advisable to administer the Plan. 
 10.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee with
respect to the Plan are final, binding, and conclusive on all parties. 
 ARTICLE 11 

EFFECTIVE AND EXPIRATION DATE 
 11.1 Effective Date. The Plan is effective as of the date the Plan is adopted and approved by the Board (the “Effective Date”). The Plan will be deemed to be approved by the
shareholders if it receives the affirmative vote of the holders of a majority of the share capital of the Company present or represented and entitled to vote at a meeting duly held in accordance with the applicable provisions of the Company’s
Memorandum of Association and Articles of Association. 
 11.2 Expiration Date. The Plan will expire on,
and no Award may be granted pursuant to the Plan after, the tenth anniversary of the Effective Date. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the
applicable Award Agreement. 
 ARTICLE 12 
 AMENDMENT, MODIFICATION, AND TERMINATION 
 12.1
Amendment, Modification, And Termination. With the approval of the Board, at any time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that (a) to the extent necessary and desirable to
comply with Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required, unless the Company decides to follow home country practice, and (b) unless the Company decides
to follow home country practice, shareholder approval is required for any amendment to the Plan that (i) increases the number of Shares available under the Plan (other than any adjustment as provided by Article 9), (ii) permits the
Committee to extend the term of the Plan or the exercise period for an Option beyond ten years from the date of grant, or (iii) results in a material increase in benefits or a change in eligibility requirements. 

12.2 Awards Previously Granted. Except with respect to amendments made pursuant to Section 12.1, no
termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant. 

  
 16 

 ARTICLE 13 
 GENERAL PROVISIONS 
 13.1 No Rights to Awards. No
Participant, employee, or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly. 

13.2 No Shareholders Rights. No Award gives the Participant any of the rights of a Shareholder of the Company
unless and until Shares are in fact issued to such person in connection with such Award. 
 13.3 Taxes. No
Shares shall be delivered under the Plan to any Participant until such Participant has made arrangements acceptable to the Committee for the satisfaction of any income and employment tax withholding obligations under Applicable Laws. The Company or
any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy all applicable taxes (including the Participant’s payroll tax obligations) required
or permitted by Applicable Laws to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. The Committee may in its discretion and in satisfaction of the foregoing requirement allow a Participant to
elect to have the Company withhold Shares otherwise issuable under an Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of Shares
which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award after such Shares were acquired by the Participant from the Company) in order to satisfy
any income and payroll tax liabilities applicable to the Participant with respect to the issuance, vesting, exercise or payment of the Award shall, unless specifically approved by the Committee, be limited to the number of Shares which have a Fair
Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for the applicable income and payroll tax purposes that are applicable to such supplemental
taxable income. 
 13.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Service Recipient to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employment or services of any Service
Recipient. 
 13.5 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of
the Company or any Subsidiary. 

  
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 13.6 Indemnification. To the extent allowable pursuant to Applicable
Laws, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction
of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Memorandum of Association and Articles of Association, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. 
 13.7
Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder. 
 13.8 Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries. 
 13.9 Titles and Headings. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles
or headings, shall control. 
 13.10 Fractional Shares. No fractional Shares shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down as appropriate. 

13.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan,
and any Award granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by the Applicable Laws, the Plan and Awards granted or awarded hereunder shall be deemed amended to
the extent necessary to conform to such applicable exemptive rule. 
 13.12 Government and Other
Regulations. The obligation of the Company to make payment of awards in Shares or otherwise shall be subject to all Applicable Laws, and to such approvals by government agencies as may be required. The Company shall be under no obligation to
register any of the Shares paid pursuant to the Plan under the Securities Act or any other similar law in any applicable jurisdiction. If the Shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the
Securities Act or other Applicable Laws, the Company may restrict the transfer of such Shares in such manner as it deems advisable to ensure the availability of any such exemption. 

  
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 13.13 Governing Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of New York. 
 13.14
Section 409A. To the extent that the Committee determines that any Award granted under the Plan is or may become subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and
conditions required by Section 409A of the Code. To the extent applicable, the Plan and the Award Agreements shall be interpreted in accordance with Section 409A of the Code and the U.S. Department of Treasury regulations and other
interpretative guidance issued thereunder, including without limitation any such regulation or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the
Effective Date the Committee determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the
Committee may adopt such amendments to the Plan and the applicable Award agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee
determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of
Section 409A of the Code and related U.S. Department of Treasury guidance. 
 13.15 Appendices. The
Committee may approve such supplements, amendments or appendices to the Plan as it may consider necessary or appropriate for purposes of compliance with Applicable Laws or otherwise and such supplements, amendments or appendices shall be considered
a part of the Plan; provided, however, that no such supplements shall increase the share limitation contained in Section 3.1 of the Plan without the approval of the Board. 

  
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