Document:

Confidential	Executed Version

 

SETTLEMENT
AGREEMENT*

 

This Settlement
Agreement (this “Agreement”) is made and entered into effective as of August
31, 2013 (the “Effective Date”) by and between
Lazare Kaplan International Inc., a New York corporation (“Plaintiff”),
and Gemological Institute of America, Inc., a California non-profit
corporation (“Defendant”). Plaintiff and
Defendant are individually referred to herein as a “Party”
and collectively as the “Parties.”

 

A.           Plaintiff
has filed an action against Defendant for patent infringement and other claims in a case styled Lazare Kaplan International,
Inc., v. Photoscribe Technologies, Inc. and Gemological Institute of America, currently pending in the United States District
Court for the Southern District of New York (together with related appeals proceedings, the “Litigation”).

 

B.           The
Parties now desire to settle and resolve the Litigation on the terms and conditions, and otherwise agree, as set forth in this
Agreement.

 

C.           Simultaneously
with the execution of this Agreement the Parties will enter into a license agreement with respect to the Subject Patents on the
terms and conditions set forth therein (the “License Agreement”).

 

Therefore, in consideration of the mutual
releases, covenants, and agreements set forth herein, the Parties agree as follows:

 

Article
I

DEFINITIONS

 

As used in this Agreement, capitalized terms
shall have the meaning ascribed thereto in this Article I or elsewhere in this Agreement:

 

“’351
Ex-U.S. Family Patents” means any and all foreign counterparts of the ’351 U.S.
Family Patents. 

 

“’351
U.S. Family Patents” means (a) U.S. Patent 6,476,351;
(b) any and all existing and future continuations in whole or continuations in part of U.S.
Patent 6,476,351 or any application that claims priority to U.S. Patent 6,476,351 and any and
all patents and patent applications that claim priority to any patent application to which U.S. Patent 6,476,351 claims
priority; and (c) any and all existing or future reissues, reexaminations, extensions, divisions, renewals,
revivals, and substitutions of or to any of the foregoing patents or patent applications described in (a) and
(b) above.

 

“Affiliate” means with
respect to a Party, any Person that is, as of the Effective Date, directly or indirectly through one or more intermediaries, controlling,
controlled by, or under common control with such Party, where for purposes of this definition, the term “control”
(including, with correlative meanings, the terms “controlled by” and “under common control with”)
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or by contract or otherwise. Notwithstanding the foregoing, in no event
will Photoscribe be considered an Affiliate of Defendant.

 

 

 

*Certain portions of this Agreement have been omitted pursuant
to a request for confidential treatment.

 

    	1

    	 

    

 

“Change of Control Transaction”
shall mean, with respect to a Party or Affiliate of a Party any of: (i) a merger of such Party or Affiliate with or into a Third
Party (regardless of which entity is the surviving entity), (ii) a transaction as a result of which a Third Party acquires control
(as such term is used in the definition of “Affiliate”) of such Party or Affiliate, (iii) a consolidation of such Party
or Affiliate and a Third Party, or (iv) a sale of all or substantially all of such Party’s or Affiliate’s business
assets to a Third Party. For purposes of this Agreement, “Acquiror” shall mean the Third Party referenced in
clauses (i) – (iv) above.

 

“Equipment” means any and
all equipment that can be used to perform inscriptions on diamonds and/or other gemstones.

 

“GIA Services” means the
services provided by Defendant or any Affiliate of Defendant performing inscriptions on diamonds and/or other gemstones.

 

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

 

“Photoscribe” means Photoscribe
Technologies, Inc.

 

“Subject
Patents” means (a) U.S. Patent 6,476,351; (b) any
and all existing and future continuations in whole or continuations in part of U.S. Patent 6,476,351
or any application that claims priority to U.S. Patent 6,476,351 and any and all patents and
patent applications that claim priority to any patent application to which U.S. Patent 6,476,351 claims
priority; (c) any and all other patents and patent applications claiming inventions owned as
of the Effective Date by Plaintiff or any of its Affiliates
that have a first effective filing date or priority date that is prior to the Effective Date
and that claim inventions related to the inscription of diamonds or other gemstones; (d) any
and all existing or future reissues, reexaminations, extensions, divisions, renewals, revivals, and
substitutions of or to any of the foregoing patents or patent applications described in (a) – (c) above;
and (e) any and all foreign counterparts of any of the foregoing patents or patent applications
described in (a) – (d) above. Notwithstanding the foregoing, “Subject
Patents” excludes (i) U.S. Patent 8,319,145; (ii) any
and all existing and future continuations in whole or continuations in part of any application
that claims priority to U.S. Patent 8,319,145 and any and all patents and patent applications that claim priority to any patent
application to which U.S. Patent 8,319,145 claims priority; (iii) any and all existing or
future reissues, reexaminations, extensions, divisions, renewals, and substitutions of or to any of
the foregoing patents or patent applications described in (i) and (ii) above;
and (iv) any and all foreign counterparts of any of the foregoing patents or patent applications
described in (i) – (iii) above. 

 

“Third
Party” means a Person other than the Parties and
their respective Affiliates.

 

    	2

    	 

    

 

Article
II

RELEASES

 

2.1.          Release
by Plaintiff. Upon Plaintiff’s receipt of the Settlement Payment pursuant
to Section 3.1 (Payment Amounts and Dates), Plaintiff, on behalf of itself and its Affiliates,
hereby irrevocably releases and discharges (a) Defendant, (b) Defendant’s
Affiliates, (c) Defendant’s and its Affiliates’
officers, directors, employees, agents, attorneys, and other representatives, but only insofar as they were acting in their
capacities as such on behalf of Defendant or any of Defendant’s Affiliates, and (d) all
recipients of GIA Services, but only with respect to their receipt of GIA Services,
in each case from all actions, causes of action, claims, counterclaims, demands, losses, damages, debts, costs, expenses,
attorneys’ fees and liabilities for (i) infringement of the Subject Patents based on, related to or arising out of (x) the
provision of any GIA Services by Defendant or its Affiliates on or prior to August 31, 2013, (y) any improvement, modification,
maintenance or repair of any Equipment by Defendant or its Affiliates on or prior to August 31, 2013 or (z) any move or transfer
of Equipment solely between and among Defendant and its Affiliates and not, at any time, sold or offered for sale to any Third
Party, and (ii) any other cause of action that was actually asserted by Plaintiff in the Litigation or otherwise arising out of
or relating to the Litigation, in each case based on any act or omission of Defendant or Defendant’s Affiliates occurring
on or prior to August 31, 2013, in all cases under (i) or (ii) above at law or in equity, whether known or unknown, suspected
or unsuspected, disclosed or undisclosed.

 

2.2.          Release
by Defendant. Upon Plaintiff’s receipt of the Settlement Payment pursuant
to Section 3.1 (Payment Amounts and Dates), Defendant, on behalf of itself and its Affiliates,
hereby irrevocably releases and discharges (a) Plaintiff, (b) Plaintiff’s
Affiliates, and (c) Plaintiff’s and its Affiliates’
officers, directors, employees, agents, attorneys, and other representatives, but only insofar as they were acting in their capacities
as such on behalf of Plaintiff or its Affiliates, in each case
from all actions, causes of action, claims, counterclaims, demands, losses, damages, debts, costs, expenses, attorneys’
fees and liabilities asserted in the Litigation, or otherwise arising out of or relating to the Litigation or Plaintiff’s
assertions of patent infringement against Defendant (including, for malicious prosecution or attorneys’ fees), to the extent
such actions, causes of action, claims, counterclaims, demands, losses, damages, debts, costs, expenses, attorneys’ fees
and liabilities are based on any act or omission of Plaintiff or Plaintiff’s Affiliates occurring on or prior to August 31,
2013, in all cases at law or in equity, whether known or unknown, suspected or unsuspected, disclosed or undisclosed.

 

2.3.          Nature
of Release. The releases in Sections 2.1 (Release by Plaintiff) and 2.2 (Release by Defendant) are personal to the Persons
released in such Sections and are non-assignable by the Persons released in such Sections (subject to the terms below in this Section 2.3
with respect to Change of Control Transactions) and do not extend to the acts and omissions of any Person not expressly released
in Sections 2.1 (Release by Plaintiff) and 2.2 (Release by Defendant) (subject to the terms below in this Section 2.3 with respect
to Change of Control Transactions), including for clarity, Photoscribe. Without limiting the generality of the foregoing, and for
the avoidance of doubt, nothing in Section 2.1 (Release by Plaintiff) shall constitute or be deemed to constitute a release with
respect to (i) the sale or offer for sale of any Equipment by Defendant or its Affiliate to any Third Party or (ii) the manufacture,
sale or offer for sale of any Equipment by any Third Party.  Notwithstanding the foregoing, in the event
of a Change of Control Transaction with respect to or involving either Party or its Affiliate, the releases under Sections
2.1 (Release by Plaintiff) and 2.2 (Release by Defendant) shall remain in effect following such Change of Control Transaction,
but, for the avoidance of doubt, shall not extend to any acts or omissions of the Acquiror occurring prior to August 31, 2013 (or
any actions, causes of action, claims, counterclaims, demands, losses, damages, debts, costs, expenses, attorneys’ fees and
liabilities based on such acts or omissions). Also, for the avoidance of doubt, if an Affiliate of a Party ceases to be an Affiliate
after the Effective Date, the releases of such Affiliate under Sections 2.1 (Release by Plaintiff) and 2.2 (Release by Defendant)
shall remain in effect (but shall not extend to any Third Party that may acquire control of such former Affiliate).

 

    	3

    	 

    

 

2.4.          No
Challenge. The Parties have had an opportunity to conduct, and have conducted, discovery
on validity issues related to the Subject Patents asserted by Plaintiff in the Litigation, and have elected to voluntarily dismiss
the Litigation pursuant to this Agreement. In light of that, Defendant agrees that it will not, and that it will require its Affiliates
not to, challenge or materially and knowingly encourage, direct, support, or otherwise materially and knowingly aid or assist any
Person in any challenge to, the validity, scope, or enforceability of any Subject Patent, whether in any court, patent office,
or other forum, including, by way of opposition, reexamination, supplemental examination, and other review procedures (including,
ex parte reexamination, inter partes review, post grant review, and covered business method (CBM) review) (a “Challenge”).
For the avoidance of doubt and without limitation, the term “Challenge” shall not include (i) responding to
subpoenas or other court or government requests for information or (ii) providing information to any Person about GIA Services
or the operation of the Equipment to the extent such information does not address the validity, scope, or enforceability of any
Subject Patent. For the avoidance of doubt, the facts that (1) Defendant was a co-defendant with Photoscribe in the Litigation,
(2) Defendant and Photoscribe were represented by the same counsel for part of the Litigation, and (3) Defendant took
positions in the Litigation that may be identical or similar to positions taken by any subsequent challenger of a Subject Patent,
shall not, individually or collectively, in and of themselves constitute a basis for any allegation that Defendant has Challenged
a Subject Patent. In the event Defendant or any of its Affiliates Challenges or attempts to Challenge a Subject Patent, then Defendant
will be required to pay for all of Plaintiff’s reasonable, documented, out-of-pockets costs, expenses, attorneys’ fees,
and damages that Plaintiff incurs in connection with any such Challenge, without limiting any other rights, remedies, and defenses
that Plaintiff may have (including, a defense of estoppel).

 

If Plaintiff or any of its Affiliates brings a lawsuit or other
action or proceeding against Defendant or any of its Affiliates for infringement of a Subject Patent (a) in violation of the release
granted in Section 2.1, or (b) following the termination of the License Agreement under a Subject Patent which was not asserted
by Plaintiff in the Litigation, then the foregoing provisions of Section 2.4 (No Challenge) shall not apply with respect to such
Subject Patent.

 

2.5.          No
Other Rights. Nothing in this Agreement grants any release, immunity or other rights to Defendant or any other Person under
the Subject Patents or any other patents of Plaintiff, whether express, by implication, by reason of estoppel or otherwise, with
respect to any services or other activities of Defendant or its Affiliates performed after August 31, 2013. The foregoing does
not limit any rights expressly granted to Defendant pursuant to the License Agreement.

 

    	4

    	 

    

 

 

Article
III

Payment to Plaintiff

 

3.1.          Payment
Amounts and Dates. Defendant shall pay or cause to be paid to
Plaintiff a non-refundable amount of fifteen million U.S. Dollars ($15,000,000)
(the “Settlement Payment”) within five (5) business days after the execution and delivery of this Agreement
by each Party. 

 

3.2.          Method
of Payment. Payments to Plaintiff shall be made to the following account:

 

	Bank Name:	[*]
	Bank Address:	[*]
	ABA No.:	[*]
	Account No.:  	[*]
	Swift Code:  	[*]
	Account Name:	Lazare Kaplan International Inc.

 

3.3.          Taxes.
All taxes shall be the financial responsibility of the Party obligated to pay such taxes as determined by applicable law,
and neither Party is or shall be liable at any time for any of the other Party’s taxes incurred in connection with or related
to amounts paid under this Agreement.

 

Article
IV

DISMISSAL OF LITIGATION

 

4.1.          Dismissal.
Within five (5) days after receipt of the Settlement Payment set forth in Section 3.1 (Payment of Amounts and Dates), the
Parties shall cause their respective counsel to execute and file the stipulated motion in the form set forth in Exhibit A
for an order dismissing all claims and counterclaims asserted by the Parties against each other in the Litigation. Plaintiff will
not dismiss any claims asserted against any other defendant in the Litigation. Each Party shall also promptly execute such other
documents and take such other steps as may be reasonably requested by the other Party to effect the dismissal and the other agreements
contemplated by this Agreement. The Parties thereafter shall proceed promptly to effect any and all other procedures necessary
to dismiss all claims and counterclaims asserted by the Parties against each other in the Litigation in accordance with the foregoing.

 

4.2.          Effect
of Dismissal. The dismissal of Plaintiff’s claims shall be with prejudice, without
limiting Plaintiff’s rights to assert any claim for alleged breach of this Agreement
or the License Agreement. The dismissal of Defendant’s
claims and counterclaims, including counterclaims alleging invalidity or unenforceability
of the Subject Patents, shall be with prejudice, without limiting Defendant’s rights to assert any claim for alleged breach
of this Agreement or the License Agreement.

 

    	5

    	 

    

 

4.3.          Costs.
The Parties agree that they shall each bear their own costs and attorneys’ fees relating
to the Litigation and the negotiation of this Agreement.

 

Article
V

Waiver

 

5.1.          Waiver.
Each Party hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California
and any similar provision of the statutory or non-statutory law of any other jurisdiction (including, the state of New York). Each
Party understands that the facts in respect of which the releases are made in this Agreement may hereinafter turn out to be other
than or different from the facts now known or believed by either Party to be true, and each Party hereby accepts and assumes the
risk of the facts turning out to be different and agrees that this Agreement will be and remain in all respects effective and not
subject to termination or rescission by virtue of any such differences in facts. Section 1542 of the Civil Code of the State of
California reads as follows:

 

“A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

Article
VI

Full settlement

 

6.1.          Full
Settlement. The Parties agree that this Agreement is in full and complete settlement of the claims released under Sections
2.1 (Release by Plaintiff) and 2.2 (Release by Defendant). This Agreement may be pleaded as a full and complete defense to any
action, suit or claim or other proceeding of any type, and may be used as a basis for an injunction against any action, suit, claim,
or other proceeding of any type, which may be prosecuted, initiated or attempted in violation of the terms hereof. The prevailing
Party is entitled to recover from the other Party reasonable attorneys’ fees and other related legal expenses incurred in
defending against any suit, action or claim brought or attempted by such other Party in violation of the terms of this Agreement.

 

6.2.          Not
an Admission. It is understood that this Agreement does not constitute an admission of any infringement or non-infringement
or liability by any Party, but is a compromise of disputed claims. 

 

6.3.          Irrevocability.
The releases and dismissals in this Agreement are, upon making the Settlement Payment under Section 3.1 (Payment of Amounts and
Dates), irrevocable and non-terminable, and will survive any expiration of this Agreement for any reason and any termination or
expiration of the License Agreement for any reason. 

 

    	6

    	 

    

 

Article
VII

Representations and Warranties

 

7.1.         Plaintiff’s
Representations. 

 

7.1.1.          Plaintiff
represents and warrants that (i) it has all requisite legal right, power, and authority to execute,
deliver, and perform this Agreement; (ii) it is duly incorporated or organized, validly
existing and in good standing; (iii) the execution, delivery and performance of this Agreement have been duly authorized by all
requisite corporate action on the part of Plaintiff or its Affiliates; and (iv) this Agreement constitutes the legal, valid and
binding agreement of Plaintiff and its Affiliates and is enforceable against Plaintiff and its Affiliates in accordance with its
terms.

 

7.1.2.          Plaintiff
further represents and warrants, on behalf of itself and its Affiliates, that as of the Effective Date (a) Plaintiff or its Affiliates
are the sole owners of all rights, title and interest in and to the ’351 U.S. Family Patents and, subject to mandatory rights
of inventors under applicable law that may not be assigned by the inventors under applicable law, the ’351 Ex-U.S. Family
Patents, and (b) Plaintiff and its Affiliates have not heretofore assigned or transferred to any Person any right, title or interest
in the claims released under Section 2.1 (Release by Plaintiff) or the right to enforce any of the ’351 U.S. Family Patents
or the ’351 Ex-U.S. Family Patents.

 

7.2.          Defendant’s
Representations. Defendant represents and warrants that
(i) it has all requisite legal right, power, and authority to execute, deliver, and perform
this Agreement, (ii) it is duly incorporated or organized, validly existing and in good
standing, (iii) the execution, delivery and performance of this Agreement have been duly authorized by all requisite corporate
action on the part of Defendant or its Affiliates, and (iv) this Agreement constitutes the legal, valid and binding agreement of
Defendant and its Affiliates and is enforceable against Defendant and its Affiliates in accordance with its terms.

 

7.3.          No
Other Representations. Nothing contained in this Agreement shall be construed as (a) an agreement by any Party to bring or
prosecute actions or suits against Third Parties for infringement, (b) conferring any right on the other Party to bring or prosecute
actions or suits against Third Parties for infringement, (c) an obligation to maintain, enforce, defend, or prosecute any patent;
(d) a warranty or representation that the practice of any Subject Patent is free of infringement of any other patent; or (e) conferring
any right to use in advertising, publicity, or otherwise, any trademark, trade name or names of any Party,
or any contraction, abbreviation or simulation thereof.

 

Article
VIII

ASSIGNMENT

 

8.1.          Assignment.
Neither Party may assign this Agreement or any of its rights
under this Agreement without the express prior written consent of
the other Party, provided that if a Change of Control Transaction constitutes
an assignment of this Agreement, no prior written consent of
the other Party shall be required in connection with such assignment, but such assignment will
be subject to the provisions of Section 2.3 (Nature of Release).

 

    	7

    	 

    

 

8.2.          Successors
and Assigns. Subject to the foregoing and Section 2.3 (Nature of Releases), this Agreement
shall be binding upon and inure to the benefit of the Parties and
their successors and permitted assigns. Plaintiff agrees, on behalf of itself and its Affiliates, that any sale, assignment,
transfer, exclusive license, or similar conveyance of any right or interest in any Subject Patent shall be subject to the releases
granted under such Subject Patent pursuant to this Agreement.

 

Article
IX

MISCELLANEOUS PROVISIONS

 

9.1.          Voluntary
Settlement. The Parties, after having partaken in the Litigation and after having investigated issues of infringement, validity
and enforceability of the Subject Patents asserted in the Litigation, have decided to pursue settlement and have agreed to enter
into this Agreement. The Parties acknowledge that commercial aspects of the transactions pursuant to this settlement of the Litigation
are different from those of a license grant under other circumstances, whether in settlement of litigation or otherwise.

 

9.2.          Confidentiality.
From and after the Effective Date, no Party shall disclose
the existence or terms of this Agreement (other than to its Affiliates in
confidence) except:

 

(a)          to
any governmental body having jurisdiction and specifically requiring such disclosure;

 

(b)          to
the extent required in response to a valid subpoena or as otherwise may be required by law;

 

(c)          to
the extent required to satisfy disclosure requirements in connection with the Securities and Exchange Act of 1934,
as amended, the Securities Act of 1933, as amended, and any other reports required to be filed
with the Securities and Exchange Commission, or any other filings, reports or disclosures that
may be required under applicable laws or regulations;

 

(d)          in
confidence, to a Party’s accountants, legal counsel, tax advisors and other financial and
legal advisors, subject to obligations of confidentiality at least as stringent as those contained herein;

 

(e)          as
required during the course of litigation or other legal proceeding and, to the extent granted
by the applicable authority, subject to a protective order; provided, however, that, to the extent granted by the applicable authority,
any production under a protective order would be protected under an “Outside Attorneys’ Eyes Only” or higher
confidentiality designation;

 

(f)          with
obligations of confidentiality at least as stringent as those contained herein, to a counterparty in connection with a proposed
Change of Control Transaction of such Party involving such
Person or a proposed license, sale, or transfer of rights involving the Subject Patents;
and

 

    	8

    	 

    

 

(g)          with
the prior written consent of an authorized representative of the other Party;

 

provided, however, that (i)
the Party making or seeking any disclosure shall take commercially reasonable actions to minimize the nature and extent of such
disclosure; and (ii) prior to any disclosure pursuant to paragraphs (a), (b), or (e) above, the Party seeking to make any
such disclosure shall (1) provide reasonable advance written notice to the other Party, (2) permit such other Party the opportunity
to object, to seek a court-entered protective order or comparable court-ordered restriction, and (3) shall take commercially reasonable
actions to minimize the nature and extent of such disclosure by, among other things, as applicable, seeking confidential treatment
of the Agreement and seeking a protective order that limits disclosure to “Outside Attorneys’
Eyes Only.” Where a disclosure is nevertheless made, the Party will further take
commercially reasonable actions not to disclose, if possible, the amount of the payment(s) required
to be made hereunder. 

 

In the case of Section 9.2(c)
above, any disclosures pursuant to such disclosure requirement referenced in such Section shall not
redact all or any part of Section 2.1 (Release by Plaintiff),
Section 6.2 (Not An Admission), Section 9.1
(Voluntary Settlement), or the definition of the defined terms used in such Sections. 

 

9.3.          Publicity.
Notwithstanding Section 9.2 (Confidentiality), each Party may
state, in individual discussions with attorneys and accountants (who are bound by obligations of confidentiality no less restrictive
than the confidentiality provisions under this Agreement), that the Plaintiff and
Defendant have entered into this Agreement, provided that,
except as permitted by Section 9.2 (Confidentiality) and in accordance with such Section 9.2
(Confidentiality), neither Party will (a) disclose any terms
of this Agreement, or (b) issue any press release, make any
public statement, engage in any communications with the press, bloggers, or other public conduits for information, or otherwise
make any statement regarding this Agreement or the entering into of this Agreement.
Defendant may disclose this Agreement to any other defendants
named at any time in the Litigation to the extent necessary to comply with any contractual obligations
related to defense and indemnity of Defendant for third party infringement
claims, provided that any such defendants are bound by obligations of confidentiality no less restrictive than the confidentiality
provisions under this Agreement. 

 

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

 

If to Plaintiff:

 

Lazare Kaplan International
Inc. 

19 West 44th St.

New York, New York, 10036

Attn: Leon Tempelsman

    	9

    	 

    

 

Copy to:

 

Morrison & Foerster LLP

425
Market Street

San Francisco, CA 94105-2482

Attn: Harold J. McElhinny

 

If
to Defendant:

 

Gemological Institute of America,
Inc. 

The Robert Mouawad Campus

5345 Armada Drive

Carlsbad, California 92008

Attn: President 

 

Copy to:

 

DLA Piper LLP (US)

401
B Street

Suite 1700

San Diego, CA 92101-4297

Attn: John Allcock

 

Such notices shall be deemed to have
been served when received by the addressee. Any Party may give written notice of a change of
address and, after notice of such change has been received, any notice or request shall thereafter be given to such Party
as above provided at such changed address.

 

9.5.          Governing
Law. This Agreement and matters connected with the performance thereof shall be construed, interpreted, and governed
in all respects in accordance with the laws of the State of New York and the federal laws of the United States of America, without
reference to conflict of laws principles.

 

9.6.          Jurisdiction
and Venue. The Parties agree (a) that any disputes (including any litigation) regarding this Agreement or the subject matter
hereof shall be subject to the exclusive jurisdiction of the U.S. District Court for the Southern District of New York (or, if
there is no federal jurisdiction of such dispute, the courts of the State of New York sitting in Manhattan, New York), and (b)
to submit any disputes, including matters of interpretation or enforcement actions, relating
to this Agreement or the subject matter hereof exclusively to such court. The Parties hereby waive any challenge to the jurisdiction
or venue of such courts over these matters.

 

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

 

    	10

    	 

    

 

9.8.          Entire
Agreement. Together with the License Agreement,
this Agreement embodies the entire understanding of the Parties with
respect to the subject matter hereof, and merges all prior discussions among them, and none of
the Parties shall be bound by any conditions, definitions, warranties, understandings, or representations
with respect to the subject matter hereof other than as expressly provided herein or in the License
Agreement. No oral explanation or oral information by any Party hereto
shall alter the meaning or interpretation of this Agreement.

 

9.9.          Modification;
Waiver. No modification or amendment to this Agreement, nor any waiver of any rights, will
be effective unless assented to in writing by the Party to be charged, and the waiver of any
breach or default will not constitute a waiver of any other right hereunder or any subsequent breach or default.

 

9.10.         Construction;
Language. Any rule of construction to the effect that ambiguities are to be resolved against the drafting Party will
not be applied in the construction or interpretation of this Agreement. As used in this Agreement,
the words “include” and “including”
and variations thereof will not be deemed to be terms of limitation, but rather will be deemed to be followed by the words “without
limitation.” The headings in this Agreement will not be referred to in connection with
the construction or interpretation of this Agreement. This Agreement is
in the English language only, which language shall be controlling in all respects, and all notices under this Agreement
shall be in the English language.

 

9.11.         Counterparts.
This Agreement may be executed in counterparts or duplicate originals, all of which shall be
regarded as one and the same instrument, and which shall be the official and governing version in the interpretation of this Agreement.
This Agreement may be executed by facsimile signatures or other electronic transmission of signature
pages (e.g., email exchange of PDF signature pages) and such signatures shall be deemed to bind each Party as
if they were original signatures.

 

9.12.         Attorneys’
Fees. Each Party will bear its own attorneys’ fees and related expenses incurred by
or on behalf of that Party in connection with the Litigation and
the preparation, review and negotiation of this Agreement. In the event of any litigation
in connection with this Agreement, the prevailing Party is
entitled to receive its costs, expert witness fees and reasonable attorneys’ fees, including costs
and fees on appeal.

 

[This remainder of the page is intentionally
blank]

 

    	11

    	 

    

 

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

 

	Lazare Kaplan International Inc.	 	GEMOLOGICAL INSTITUTE OF AMERICA, INC.
	 	 	 	 	 
	By:	 	 	By:	 
	 	 	 	 	 
	Name:	 	 	Name:	 
	 	 	 	 	 
	Title:	 	 	Title:	 
	 	 	 	 	 

 

    	 

    	 

    

 

EXHIBIT A

STIPULATED MOTION FOR DISMISSAL

 

    	 

    	 

    

 

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

 

	
         

        LAZARE KAPLAN
        INTERNATIONAL INC., a Delaware Corporation,

         

        Plaintiff-Counter-Defendant,

        -v.-

         

        PHOTOSCRIBE TECHNOLOGIES,
        INC., a New York Corporation, and GEMOLOGICAL INSTITUTE OF AMERICA, a California Corporation,

         

        Defendants-Counterclaimants.

         
	
        ECF CASE

         

        CASE NO.: 06 CV 4005 (TPG)(GWG)

         

        STIPULATION, ORDER AND JUDGMENT PURSUANT TO FEDERAL
        RULE OF CIVIL PROCEDURE 54(b)

         

         

 

It is hereby stipulated
and agreed by and between the parties, through their undersigned counsel, that all claims and counterclaims asserted by Plaintiff-Counterclaim
Defendant Lazare Kaplan International, Inc. (“LKI”) and Defendant-Counterclaimant
Gemological Institute of America, Inc. (“GIA”) against each other in the above-captioned action shall
be dismissed with prejudice, with each party bearing its own attorneys’ fees, costs and expenses related thereto. For clarity,
nothing in this Stipulation, Order and Judgment dismisses any claim or counterclaim by LKI against Photoscribe Technologies, Inc.
or by Photoscribe Technologies, Inc. against LKI.

 

Pursuant to Federal Rule of Civil Procedure
54(b), the Court hereby directs that this Stipulation, Order and Judgment be entered immediately as a final judgment, dismissing
the claims and counterclaims by LKI against GIA, and by GIA against LKI, with prejudice. GIA and LKI waive or have waived their
rights to appeal from this Stipulation, Order and Judgment, and there is no just reason for delay.

 

    	 

    	 

    

 

IT IS SO STIPULATED.

 

Dated:New York, New York

September ___, 2013

 

	MORRISON & FOERSTER, LLP	 	DLA PIPER LLP (US)
	 	 	 
	By:  	 	 	By:  	 
	James E. Hough, Esq.	 	John Allcock, Esq., pro hac vice
	1290 Avenue of the Americas	 	Nancy Dix, Esq., pro hac vice
	New York, New York  10104-0050	 	Capricci Barush, Esq.
	Tel:  (212) 468-8000	 	1251 Avenue of the Americas
	 	 	New York, New York 10020-1104
	Attorneys for Plaintiff-Counterclaim Defendant Lazare Kaplan International, Inc.	 	Tel. (212) 335-4500
	 	 	Fax (212) 335-4501
	 	 	 
	 	 	Attorneys for Defendant-Counterclaimant Gemological Institute of America, Inc.

 

	IT IS SO ORDERED.	 
	 	 
	Dated:  September _____, 2013	 
	New York, New York	HON. THOMAS P. GRIESA, USDJConfidential	Execution Version

 

License
AGREEMENT*

 

This License Agreement
(this “Agreement”) is made and entered into effective as of August
31, 2013 (the “Effective Date”) by and between
Lazare Kaplan International Inc., a New York corporation (“Licensor”),
and Gemological Institute of America, Inc., a California non-profit
corporation (“Licensee”). Licensor and Licensee
are individually referred to herein as a “Party”
and collectively as the “Parties.”

 

A.           The
Parties, simultaneously with the execution of this Agreement, have executed a settlement agreement (the “Settlement Agreement”)
to settle pending litigation with respect to Licensor’s allegation that Licensee has, prior to the Effective Date, infringed
the Licensed Patents and this Agreement is entered into in connection with the compromise of disputed claims between the Parties.

 

B.           The
Parties wish to enter into this licensing relationship on the terms and conditions set forth herein.

 

Therefore, in consideration of the license,
covenants, and agreements set forth herein, the Parties agree as follows:

 

Article
I

DEFINITIONS

 

As used in this Agreement, capitalized terms
shall have the meaning ascribed thereto in this Article I or elsewhere in this Agreement:

 

“’351
Ex-U.S. Family Patents” means any and all foreign counterparts of the ’351 U.S.
Family Patents. 

 

“’351
U.S. Family Patents” means (a) U.S. Patent 6,476,351;
(b) any and all existing and future continuations in whole or continuations in part of U.S.
Patent 6,476,351 or any application that claims priority to U.S. Patent 6,476,351 and any and
all patents and patent applications that claim priority to any patent application to which U.S. Patent 6,476,351 claims
priority; and (c) any and all existing or future reissues, reexaminations, extensions, divisions, renewals,
revivals, and substitutions of or to any of the foregoing patents or patent applications described in (a) –
(b) above.

 

 

 

* Certain portions of this Agreement have
been omitted pursuant to a request for confidential treatment.

 

    	 

    	 

    

 

“Affiliate” means with
respect to a Party, any Person, now or hereafter during the Term, directly or indirectly through
one or more intermediaries, controlling, controlled by, or under common control with such Party, where for purposes of this definition,
the term “control” (including, with correlative meanings, the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting securities or by contract or otherwise; provided
that such Person shall be deemed an “Affiliate” only for so long as such control exists. A “Subsidiary”
of a Party is an Affiliate that is controlled, directly or indirectly, by such Party in accordance with the foregoing. Notwithstanding
the foregoing, in no event will Photoscribe be considered an Affiliate of Licensee.

 

“Challenge of the Licensed Patents”
means the challenge of, or material and knowing encouragement, direction, support, or other material and knowing aid or assistance
to any Person in any challenge to, the validity, scope, or enforceability of any Licensed Patent, whether in any court, patent
office, or other forum, including, by way of opposition, reexamination, supplemental examination, and other review procedures (including,
ex parte reexamination, inter partes review, post grant review, and covered business method (CBM) review). For the avoidance of
doubt and without limitation, a “Challenge of the Licensed Patents” shall not include (i) responding to subpoenas
or other court or government requests for information or (ii) providing information to any Person about Licensed Services
or the operation of the Equipment to the extent such information does not address the validity, scope, or enforceability of any
Licensed Patent. For the avoidance of doubt, the facts that (1) Licensee was a co-defendant with Photoscribe in the Litigation,
(2) Licensee and Photoscribe were represented by the same counsel for part of the Litigation, and (3) Licensee took positions
in the Litigation that may be identical or similar to positions taken by any subsequent challenger of a Licensed Patent, shall
not, individually or collectively, in and of themselves constitute a basis for any allegation that Licensee has made a Challenge
of the Licensed Patents.

 

“Change of Control Transaction”
shall mean, with respect to a Party or a Subsidiary of a Party any of: (i) a merger of such Party or Subsidiary with or into
a Third Party (regardless of which entity is the surviving entity), (ii) a transaction as a result of which a Third Party acquires
control (as such term is used in the definition of “Affiliate”) of such Party or Subsidiary, (iii) a consolidation
of such Party or Subsidiary and a Third Party, or (iv) a sale of all or substantially all of such Party’s or Subsidiaries’
business assets to a Third Party. For purposes of this Agreement, “Acquiror” shall mean the Third Party referenced
in clauses (i) - (iv) above.

 

“Equipment” means any and
all equipment that can be used to perform Inscriptions on gemstones. For clarity, as used in this Agreement, the term “gemstones”
includes, without limitation, diamonds, synthetic diamonds and other synthetic gemstones.

 

“Inscription” means an
etching of characters (e.g., text, logos or other items) on a gemstone. Inscriptions may include any number of characters, provided
that each set of up to fifteen (15) characters shall be deemed one (1) Inscription for purposes of the royalty calculation under
this Agreement.

 

“Internal Inscriptions”
means Inscriptions done by Licensee and its Subsidiaries for Licensee’s and its Subsidiaries’ internal, non-commercial
training, testing, evaluation, educational and research purposes.

 

    	2

    	 

    

 

“Large Stones” means gemstones
which are [*].

 

“Licensed
Patents” means (a) U.S. Patent 6,476,351; (b) any
and all existing and future continuations in whole or continuations in part of U.S. Patent 6,476,351
or any application that claims priority to U.S. Patent 6,476,351 and any and all patents and
patent applications that claim priority to any patent application to which U.S. Patent 6,476,351 claims
priority; (c) any and all other patents and patent applications claiming inventions owned as
of the Effective Date by Licensor or any of its current Subsidiaries
that have a first effective filing date or priority date that is prior to the Effective Date and
that claim inventions related to the inscription of diamonds or other gemstones;
(d) any and all existing or future reissues, reexaminations, extensions, divisions, renewals,
revivals, and substitutions of or to any of the foregoing patents or patent applications described in (a) – (c) above;
and (e) any and all foreign counterparts of any of the foregoing patents or patent
applications described in (a) – (d) above. Notwithstanding the foregoing, “Licensed
Patents” excludes (i) U.S. Patent 8,319,145; (ii) any
and all existing and future continuations in whole or continuations in part of any application
that claims priority to U.S. Patent 8,319,145 and any and all patents and patent applications that claim priority to any patent
application to which U.S. Patent 8,319,145 claims priority; (iii) any and all existing or future
reissues, reexaminations, extensions, divisions, renewals, and substitutions of or to any of
the foregoing patents or patent applications described in (i) and (ii) above;
and (iv) any and all foreign counterparts of any of the foregoing patents or patent
applications described in (i) – (iii) above. 

 

“Licensed Services” means
any Inscription services provided by Licensee or any Subsidiary of Licensee.

 

“Litigation” shall have
the meaning given to such term in the Settlement Agreement.

 

“Medium Stones” means gemstones
which are [*].

 

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

 

“Photoscribe” means Photoscribe
Technologies, Inc.

 

“Royalty
Term” means the period of time from September 1, 2013 until
July 31, 2016.

 

“Small Stones” means gemstones
which are [*].

 

 

 

* Certain portions of this Agreement have
been omitted pursuant to a request for confidential treatment.

 

    	3

    	 

    

 

“Third
Party” means a Person other than a Party to
this Agreement or such Party’s Subsidiaries. 

 

Article
II

License

 

2.1.          License
Grant. Subject to Licensor’s receipt of payment under Section 3.1 (Payment Amounts and Dates) of the Settlement
Agreement and Licensee’s compliance with the terms and conditions of this Agreement, specifically including the payment of
Royalties pursuant to Section 3.1 (Royalties) of this Agreement, Licensor,
on behalf of itself and its Subsidiaries, hereby grants to Licensee and
its Subsidiaries a personal, perpetual (unless terminated pursuant to Section 6.2 (Termination)),
worldwide, non-exclusive, non-transferable (except pursuant to Section 5.1 (Assignment)
and subject to Section 2.5 (Divested Subsidiaries)), royalty-bearing
during the Royalty Term, non-sublicensable license, solely under the Licensed Patents,
to (i) sell, offer to sell, perform and provide the Licensed Services and import and export gemstones that include an Inscription
resulting from the performance of such Licensed Services, and (ii) use (including maintaining, modifying, improving and repairing)
any Equipment used by Licensee or its Subsidiaries in connection with the performance of the Licensed Services. Notwithstanding
the rights of modification and improvement granted above, no license is granted by Licensor or its Subsidiaries under the Licensed
Patents to modify or improve Equipment that does not practice any invention in the Licensed Patents prior to such modification
or improvement such that, after the modification or improvement, the Equipment does practice an invention in the Licensed Patents.

 

2.2.          Clarification
of Rights Under the Licensed Patents. For the avoidance of doubt, nothing in this Agreement grants Licensee or its Subsidiaries
any right or license under the Licensed Patents to (a) sell or offer for sale (including renting, leasing or making available
for use) any Equipment to a Third Party, provided that Licensee may return (but not resell) defective Equipment to the supplier
of the Equipment, (b) transfer (except pursuant to Section 5.1 (Assignment)
and subject to Section 2.5 (Divested Subsidiaries)) or
sublicense any rights granted under Section 2.1 (License Grant) to any Third Party, or (c) use the Equipment to perform
Inscriptions for the purpose of permitting Third Party gem grading laboratories to benefit in a commercial manner from the license
granted under Section 2.1 (License Grant) (i.e., no patent “laundering”). For the avoidance of doubt, Licensor
agrees, on behalf of itself and its Subsidiaries, that Licensee and Licensee’s Subsidiaries shall be treated as a single
licensee for purposes of this sentence and Licensee and its Subsidiaries may move and transfer Equipment solely between and among
Licensee and Licensee’s Subsidiaries, provided that Licensee, on behalf of itself and its Subsidiaries acknowledges and agrees
that neither Licensee nor its Subsidiaries are licensed under the Licensed Patents to sell or offer for sale Equipment to a Third
Party.

 

    	4

    	 

    

 

2.3.         No
Implied License; Personal License.

 

2.3.1.          This
Agreement does not grant any right or license to Licensee or
any other Person under any intellectual property rights of Licensor except
as specifically granted in Section 2.1 (License Grant) and no other right or license is
to be implied or inferred from any provision of this Agreement or by the conduct of the Parties,
whether by implication, by reason of estoppel, or otherwise. 

 

2.3.2.          Nothing
in this Agreement grants a license or other authority to Licensee or
any other Person under the Licensed Patents or any other patents
of Licensor to make, have made, sell, or offer to sell any equipment (including
any Equipment), whether express, by implication, by reason of estoppel,
or otherwise. The foregoing does not limit Licensee’s and its Subsidiaries’ right
to (i) maintain, modify, improve and repair the Equipment used by Licensee or
its Subsidiaries in connection with the performance of the Licensed Services, or (ii) move and
transfer Equipment solely between and among Licensee and its
Subsidiaries, as expressly permitted in, and subject to the limitations on such rights as set forth in, Section 2.1 (License
Grant) and Section 2.2 (Clarification of Rights Under the
Licensed Patents), respectively. 

 

2.4.         Subsidiaries.
Licensee shall cause its Subsidiaries to comply with the applicable terms and conditions in this
Agreement and Licensee remains liable (jointly with its Subsidiaries)
for its Subsidiaries’ compliance with the applicable terms and conditions of this Agreement.

 

2.5.         Divested
Subsidiaries. In the event of a Change of Control Transaction with
respect to a Subsidiary of Licensee (a “Divested Subsidiary”), subject to
the modifications set forth below in this Section 2.5, and subject to Licensor’s
termination right pursuant to Section 5.1 if Photoscribe is
the Acquiror, the licenses granted hereunder will continue to extend to such Divested
Subsidiary (in the event of a transaction contemplated in subsection (ii) in the definition of “Change
of Control Transaction”) or to the Acquiror (in the event of
a transaction contemplated in subsections (i), (iii), and (iv) in the definition of “Change of Control Transaction”),
provided that such Divested Subsidiary or Acquiror (as applicable)
agrees in writing to be bound by the terms and conditions of this Agreement (including
the payment obligations hereunder, as applicable), but, for the avoidance of doubt, such licenses shall
not extend to any business or activities of the Acquiror prior to the consummation of the Change
of Control Transaction. Upon the satisfaction of the conditions in the prior sentence, the terms of
this Agreement will apply to such Divested Subsidiary or Acquiror
(as applicable) as if this Agreement was a separate identical agreement
between Licensor and such Divested Subsidiary or
Acquiror (as applicable) as “Licensee,” except
that, notwithstanding anything to the contrary in this Agreement,
as between Licensor and such Divested Subsidiary or Acquiror
(as applicable) (a) such Divested Subsidiary or
Acquiror (as applicable) may not assign or further extend any rights pursuant hereto without
the express prior written consent of Licensor (including,
for clarity to its Affiliates), (b) this Section 2.5
shall be deemed omitted from this Agreement with respect to such Divested
Subsidiary or Acquiror (as applicable), (c) in
lieu of Section 6.2, Licensor may terminate such Divested
Subsidiary’s or Acquiror’s (as applicable) license and
other rights under this Agreement upon written notice in the event of any material breach by
such Divested Subsidiary or Acquiror (as applicable) of the
terms of this Agreement or any Challenge of the Licensed
Patents by such Divested Subsidiary or Acquiror (as
applicable) or its Affiliates which breach is not cured, or which Challenge of the Licensed
Patents is not fully and finally withdrawn, within thirty (30) days after Licensor provides
written notice thereof to the Divested Subsidiary or Acquiror (as
applicable), (d) Section 8.1 shall be updated to reflect the
Divested Subsidiary’s or Acquiror’s (as applicable)
contact information, and (e) Section 8.2 shall be deemed omitted
from this Agreement. 

 

    	5

    	 

    

 

Article
III

Royalties

 

3.1.        Royalties.
During the Royalty Term, Licensee shall, subject to the terms in this Article III (Royalties), pay to Licensor non-refundable
(except as expressly provided in Section 3.6 (Audits)), non-creditable royalties (“Royalties”) equal to the
sum of:

 

3.1.1.          the
Small Stone Rate (as defined below) multiplied by [*];

 

3.1.2.          the
Medium Stone Rate (as defined below) multiplied by [*]; and

 

3.1.3.          the
Large Stone Rate (as defined below) multiplied by [*].

 

For the purposes of this Section, the following applies:

 

	“Small Stone Rate” means:	[*]
	“Medium Stone Rate” means:	[*]
	“Large Stone Rate” means:	[*]

 

For clarity and by way of example, if a Medium Stone is Inscribed
[*].

 

3.2.        Exceptions
to Royalty Obligation. For the avoidance of doubt, [*].

 

3.3.        Royalty
Reports and Payments. Within [*] days following [*] period during the Royalty
Term (the first such [*] period commencing on [*]
and the second such [*]), Licensee shall
provide Licensor with a written report containing the following information for each such
[*] period: (i) [*]; (ii) [*]
(b) [*] (c) [*], and (iii) an
itemized calculation of Royalties due for the applicable [*] period.
Concurrent with the delivery of the applicable report, Licensee shall pay in United States
Dollars all Royalty amounts due to Licensor pursuant to Section 3.1
(Royalties) for such [*] period.
During the Royalty Term, Licensee will provide the above report
for each [*] period, regardless of the amount of Royalties and/or
the number of Inscriptions in a particular [*] period.
All such royalty reports and the information in such reports are Licensee’s confidential
information and (x) may only be used by Licensor in connection
with the exercise or enforcement of rights under this Agreement, and (y) may
not be distributed or provided by Licensor to any other Person other
than (1) to Licensor’s attorneys and accountants and the auditor conducting the audit under
Section 3.6 (Audits), subject to written obligations of confidentiality by such attorneys, accountants
and the auditor, (2) to any governmental body having jurisdiction and specifically requiring
such disclosure in writing; (3) to the extent required in response to a valid subpoena or
as otherwise may be required by law; and (4) as required during the course of litigation or other
legal proceeding, provided that with respect to subsections (2), (3) and
(4), the requirements set forth in the proviso in Section 7.1 shall
apply with respect to such disclosures. 

 

    	6

    	 

    

 

3.4.         Payment
Method; Late Payments. 

 

3.4.1.          All
Royalty payments due to Licensor shall be made in U.S.
Dollars by wire transfer of immediately available funds to the following account:

 

	Bank Name:	[*]
	Bank Address:	[*]
	ABA No.:	[*]
	Account No.:  	[*]
	Swift Code:  	[*]
	Account Name:	Lazare Kaplan International Inc.

 

3.4.2.          If
Licensor does not receive payment of any Royalty due to it
on or before the due date, Licensor shall send written notice to Licensee and
simple interest shall thereafter accrue on the sum due from the original due date until the date of payment at the per annum rate
of two percent (2%) over the then-current prime rate reported in The Wall Street Journal or
the maximum rate allowable by applicable laws, whichever is lower.

 

3.5.         Records.
Licensee shall maintain complete and accurate records in sufficient detail to permit Licensor to confirm the accuracy of the Royalty
reports and the calculation of Royalty payments. Licensor shall have the right to audit such records in accordance with Section 3.6
(Audits).

 

3.6.         Audits.
From the date a Royalty payment was due hereunder until the time that is two (2) years from the end of the applicable [*]
period in which a Royalty payment was due hereunder (subject to the terms set forth below regarding a final audit), upon thirty
(30) days prior written notice, Licensee shall make such records relating to applicable Royalty reports and payments available
in Licensee’s Carlsbad, CA and New York, NY offices, during regular business hours and not more often than once in any twelve
(12) month period (unless a prior audit revealed a discrepancy of more than [*] percent, in which case Licensor may conduct
audits not more than once in any six (6) month period), for examination by a nationally recognized and independent certified public
accountant selected by Licensor and reasonably acceptable to Licensee, for the purposes of verifying the accuracy of the Royalty
reports furnished pursuant to this Agreement. Licensee may require the auditor sign a customary confidentiality agreement reasonably
acceptable to each Party prior to undertaking an audit. All written audit results prepared by the auditor, audit reports prepared
by the auditor, and the final results of any such audit prepared by the auditor shall be shared by the auditor with both Parties
at the same time and such results shall be considered confidential information of Licensee and Licensor may not use such results
except in connection with the enforcement of the terms of this Agreement and may not disclose such results to any Person other
than its lawyers and accountants or as is otherwise necessary to enforce the terms of this Agreement or as would be permitted with
respect to reports pursuant to Section 3.3, but subject to the terms in Section 3.3 (including the protections in Section 7.1).
Any amounts shown to be owed by Licensee to Licensor as a result of any such audit shall be paid within [*] days from the
auditor’s final audit report, plus interest (as set forth in Section 3.4.2 but without requirement for Licensor to provide
written notice under Section 3.4.2) from the original due date. Licensor shall bear the costs of such audits, unless such audit
discloses a deficiency in Licensee’s payments of greater than [*], in which case Licensee shall bear all of the reasonable
and documented cost of the auditor. If such audit reveals an overpayment of Royalties, then Licensor shall refund to Licensee the
overpayment within [*] days from the auditor’s report. Notwithstanding anything to the contrary in this Section, Licensor’s
right to request an audit under this Section shall expire on [*]. [*] Licensee represents and warrants that this
method (or any other method Licensee may adopt) for calculating the number of Inscriptions will accurately reflect the actual number
of all Inscriptions (other than Internal Inscriptions) made by Licensee or its Subsidiaries.

 

    	7

    	 

    

 

3.7.          Taxes.
All taxes shall be the financial responsibility of the Party obligated to pay such taxes as determined by applicable law, and neither
Party is or shall be liable at any time for any of the other Party’s taxes incurred in connection with or related to amounts
paid under this Agreement. If Licensee is required by [*] law to withhold any taxes from the Royalty payments due under
this Agreement, Licensee shall (i) withhold such taxes, (ii) pay such withheld taxes to the applicable taxing authority, (iii)
provide to Licensor evidence of such payment to the taxing authority, and (iv) reasonably cooperate with Licensor in Licensor’s
efforts to obtain a refund or credit of such withheld taxes.

 

Article
IV

Representations and Warranties

 

4.1.         Licensor’s
Representations. 

 

4.1.1.          Licensor
represents and warrants that (i) it has all requisite legal right, power, and authority to execute,
deliver, and perform this Agreement, (ii) it is duly incorporated or organized, validly existing
and in good standing, (iii) the execution, delivery and performance of this Agreement have
been duly authorized by all requisite corporate action on the part of Licensor and its Subsidiaries,
(iv) this Agreement constitutes the legal, valid and binding agreement of
Licensor and its Subsidiaries and is enforceable against Licensor and
its Subsidiaries in accordance with its terms, and (v) Licensor has the right, on behalf
of itself and its Subsidiaries, to grant to Licensee and its Subsidiaries
the licenses granted in this Agreement and to grant such licenses on behalf of its Subsidiaries.

 

4.1.2.          Licensor
further represents and warrants, on behalf of itself and its Subsidiaries, that as of the Effective Date (a) Licensor or its Subsidiaries
are the sole owners of all rights, title and interest in and to the ’351 U.S. Family Patents and, subject to mandatory rights
of inventors under applicable law that may not be assigned by the inventors under applicable law, the ’351 Ex-U.S. Family
Patents, and (b) Licensor and its Subsidiaries have not heretofore assigned or transferred to any Person any right, title or interest
in, or the right to enforce, any of the ’351 U.S. Family Patents or the ’351 Ex-U.S. Family Patents.

 

    	8

    	 

    

 

4.2.          Licensee’s
Representations. Licensee represents and warrants that
(i) it has all requisite legal
right, power, and authority to execute, deliver, and perform this Agreement, (ii) it is duly incorporated or organized, validly
existing and in good standing, (iii) the execution, delivery and performance of this Agreement have been duly authorized by
all requisite corporate action on the part of Licensee, and (iv) this Agreement constitutes the legal, valid and binding agreement
of Licensee and is enforceable against Licensee in accordance with its terms.

 

4.3.          No
Other Representations. Nothing contained in this Agreement shall be construed as (a) an agreement by any Party to bring or
prosecute actions or suits against Third Parties for infringement, (b) conferring any right on the other Party to bring or prosecute
actions or suits against Third Parties for infringement, (c) an obligation to maintain, enforce, defend, or prosecute any patent;
(d) a warranty or representation that the practice of any Licensed Patent is free of infringement of any other patent; or (e) conferring
any right to use in advertising, publicity, or otherwise, any trademark, trade name or names of any Party,
or any contraction, abbreviation or simulation thereof.

 

Article
V

ASSIGNMENT

 

5.1.          Assignment.
Neither Party may assign this Agreement or any of its rights
or obligations under this Agreement without the express prior written consent of
the other Party, provided that a Party may assign this Agreement
without such consent to the Acquiror in the event of a Change
of Control Transaction involving such Party, provided that such Acquiror
assumes and agrees to be bound by this Agreement, but, for the avoidance
of doubt, no licenses or other rights hereunder shall extend to any business or activities of the Acquiror prior
to the consummation of the Change of Control Transaction. Nothing herein shall restrict Licensor’s
right to sell, assign, or otherwise transfer any right, title, or interest in or to the Licensed Patents,
subject to Licensee’s and its Subsidiaries’ licenses granted hereunder. Notwithstanding
anything to the contrary in this Agreement, Licensee may
not assign or otherwise transfer this Agreement or any of its rights under this Agreement
to Photoscribe without the express prior written consent of
Licensor. Licensor may immediately terminate this Agreement
as to Licensee or the applicable Subsidiary of Licensee,
as the case may be, if Photoscribe is the Acquiror in any Change
of Control Transaction involving Licensee or such Subsidiary, respectively.
In the event this Agreement is assigned, consistent with this Section 5.1 (Assignment), to an Acquiror, the terms of this
Agreement will apply to such Acquiror as if it were the assignor Party. Any purported or attempted assignment, delegation or other
transfer of any rights or obligations under this Agreement in contravention of the foregoing shall be null and void.

 

5.2.          Successors
and Assigns. Subject to the foregoing, this Agreement shall be binding upon and inure to
the benefit of the Parties and their permitted successors and assigns.

 

    	9

    	 

    

 

Article
VI

Term and Termination

 

6.1.         Term.
The term of this Agreement shall commence on the Effective
Date and, unless earlier terminated pursuant to this Article VI (Term
and Termination), shall continue until the expiration of the last-to-expire of the Licensed Patents
(the “Term”). 

 

6.2.         Termination.

 

6.2.1.          Subject
to the terms in this Section 6.2, Licensor shall have the right
in its sole option to terminate this Agreement in its entirety upon written notice to the Licensee
if (i) Licensee materially breaches its payment obligations under
this Agreement and fails to cure such material breach within thirty (30) days from the
date of such notice; (ii) Licensee or its Affiliates make a
Challenge of the Licensed Patents, after fifteen (15) days of such notice if Licensee
does not dispute Licensor’s claim pursuant to Section 6.2.2,
or which Challenge of the Licensed Patents is not fully and finally withdrawn, within
thirty (30) days after Licensor provides written notice thereof to Licensee or
immediately if the arbitrator determines pursuant to Section 6.2.2 that Licensee
or its Affiliates have made a Challenge of the Licensed Patents
and such Challenge of the Licensed Patents has not been so withdrawn
within the cure period set forth above; or (iii) as provided in Section 5.1 (Assignment) if Photoscribe
is the Acquiror in any Change of Control Transaction involving
Licensee or any Subsidiary of Licensee. If Licensor
or any of its Affiliates brings a lawsuit or other action or proceeding
against Licensee or any of its Subsidiaries for infringement of a Licensed Patent in
violation of the license granted in Section 2.1, then the foregoing termination right under clause
(ii) above relating to a Challenge of the Licensed Patents shall
not apply with respect to such Licensed Patent.

 

6.2.2.          If
the Licensee disputes in good faith the existence or materiality of a breach of its payment obligations
or Challenge of the Licensed Patents specified in a notice provided by the Licensor in
accordance with Section 6.2.1, and Licensee provides Licensor notice
of and the basis for such good faith dispute within the applicable cure period, then Licensor shall
not have the right to terminate this Agreement under Section 6.2.1 unless and until an arbitrator
pursuant to Section 8.2 (Dispute Resolution)
has determined that (i) Licensee has materially breached its payment obligations or (ii) made
a Challenge of the Licensed Patents and in either case, Licensee fails
to cure such breach, as applicable, within the applicable cure period (measured as commencing after the arbitrator’s
decision pursuant to Section 8.2 (Dispute Resolution)). It is understood and agreed that during
the pendency of such dispute and the cure period, all of the terms and conditions of this Agreement shall
remain in effect and the Parties shall continue to perform all of their respective obligations
hereunder.

 

6.3.         Effect
of Termination. Upon the termination of this Agreement:

 

6.3.1.          All
licenses hereunder will terminate and Licensee will have no further right to practice the Licensed
Patents.

 

    	10

    	 

    

 

6.3.2.          All
Royalties accrued as of the time of termination shall be immediately due and payable.

 

6.4.         Survival.
Termination or expiration of this Agreement shall not affect any payment rights or obligations of the Parties under this Agreement
that have accrued prior to the date of termination or expiration. Notwithstanding anything to the contrary, the following provisions
shall survive any expiration or termination of this Agreement: Sections 3.3 (Royalty Reports and Payments) (to the extent the Royalties
accrued prior to the termination or expiration of this Agreement), 3.4 (Payment Method; Late Payments), 3.5 (Records), 3.6 (Audits),
3.7 (Taxes), and Article VI (Term and Termination), Article VII (Confidentiality and Publicity), and Article VIII (Miscellaneous
Provisions).

 

Article
VII

Confidentiality and Publicity

 

7.1.          Confidentiality.
From and after the Effective Date, no Party shall disclose
the existence or terms of this Agreement (other than to its Affiliates in
confidence) except: 

 

(a)          to
any governmental body having jurisdiction and specifically requiring such disclosure; 

 

(b)          to
the extent required in response to a valid subpoena or as otherwise may be required by law;

 

(c)          to
the extent required to satisfy disclosure requirements in connection with the Securities and Exchange Act of 1934,
as amended, the Securities Act of 1933, as amended, and any other reports required to be filed
with the Securities and Exchange Commission, or any other filings, reports or disclosures that
may be required under applicable laws or regulations;

 

(d)          in
confidence, to a Party’s accountants, legal counsel, tax advisors and other financial and
legal advisors, subject to obligations of confidentiality at least as stringent as those contained herein;

 

(e)          as
required during the course of litigation or other legal proceeding and, to the extent granted by the applicable authority, subject
to a protective order; provided, however, that to the extent granted by the applicable authority, any production under a protective
order would be protected under an “Outside Attorneys’ Eyes Only” or higher confidentiality designation;

 

(f)          with
obligations of confidentiality at least as stringent as those contained herein, to a counterparty in connection with a proposed
Change of Control Transaction of such Party involving such
Person or a proposed license, sale, or transfer of rights involving the Licensed Patents;
and 

 

    	11

    	 

    

 

(g)          with
the prior written consent of an authorized representative of the other Party;

 

provided, however, that (i)
the Party making or seeking any disclosure shall take commercially reasonable actions to minimize the nature and extent of such
disclosure; and (ii) prior to any disclosure pursuant to paragraphs (a), (b), or (e) above, the Party seeking to make any such
disclosure shall (1) provide reasonable advance written notice to the other Party, (2) permit such other Party the opportunity
to object, to seek a court-entered protective order or comparable court-ordered restriction, and (3) shall take commercially reasonable
actions to minimize the nature and extent of such disclosure by, among other things, as applicable, seeking confidential treatment
of the Agreement and seeking a protective order that limits disclosure to “Outside Attorneys’
Eyes Only.” Where a disclosure is nevertheless made, the Party will further take
commercially reasonable actions not to disclose, if possible, the amount of the payment(s) required
to be made hereunder. 

 

In the case of Section 7.1(c)
above, any disclosures pursuant to any such disclosure requirement referenced in such Section (i) shall
redact the Small Stone Rate, Medium Stone Rate and the Large
Stone Rate in Section 3.1 (Royalties),
provided such redaction is consistent with applicable law (including rules and regulations of
the Securities and Exchange Commission), and (ii) shall not redact all or any part of Section 2.1
(License Grant), Section 8.10 (Not An Admission), or the definition
of the defined terms used in such Sections. 

 

7.2.          Publicity.
Notwithstanding Section 7.1 (Confidentiality), each Party may
state, in individual discussions with attorneys and accountants (who are bound by obligations of confidentiality no less
restrictive than the confidentiality provisions under this Agreement), that the Licensor and
Licensee have entered into this Agreement, provided that, except
as permitted by Section 7.1 (Confidentiality) and in accordance with such Section 7.1 (Confidentiality),
neither Party will (i) disclose any terms of this Agreement,
or (ii) issue any press release, make any public statement, engage in any communications with
the press, bloggers, or other public conduits for information, or otherwise make any statement regarding this Agreement
or the entering into of this Agreement. Licensee may
disclose this Agreement to any Person that supplies Equipment
to Licensee or its Affiliates and
that is bound by obligations of confidentiality no less restrictive than the confidentiality provisions under this Agreement,
provided that the following shall be redacted from any such disclosures: Section 3.1 (Payment
Amount and Dates) and Section 3.2 (Exceptions
to Royalty Obligation). In addition, Licensee may disclose
this Agreement to any other defendants named at any time in the Litigation to the extent necessary
to comply with any contractual obligations related to defense and indemnity of Licensee for third
party infringement claims, provided that any such defendants are bound by obligations of confidentiality
no less restrictive than the confidentiality provisions under this Agreement. 

 

    	12

    	 

    

 

Article
VIII

MISCELLANEOUS PROVISIONS

 

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

 

If to Licensor:

 

Lazare Kaplan International Inc.

19 West 44th St.

New York, New York, 10036

Attn: Leon Tempelsman

 

Copy to:

 

Morrison & Foerster LLP

425 Market Street

San Francisco, CA 94105-2482

Attn: Harold J. McElhinny

 

If
to Licensee:

 

Gemological Institute of America,
Inc. 

The Robert Mouawad Campus

5345 Armada Drive

Carlsbad, California 92008

Attn: President 

 

Copy to:

 

DLA Piper LLP (US)

401
B Street

Suite 1700

San Diego, CA 92101-4297

Attn: John Allcock

 

Such notices shall be deemed to have
been served when received by the addressee. Any Party may give written notice of a change of
address and, after notice of such change has been received, any notice or request shall thereafter be given to such Party
as above provided at such changed address.

 

8.2.         Dispute
Resolution.  

 

8.2.1.          Agreement
to Arbitrate Disputes Relating to Termination Right. Any dispute relating to the existence or materiality of a breach
of Licensee’s payment obligations or whether Licensee or its Affiliates have made a Challenge of the Licensed Patents shall
be determined by arbitration. The arbitration shall be administered by JAMS pursuant to JAMS’ Streamlined Arbitration Rules
and Procedures. Judgment on the Award may be entered in any court having jurisdiction. 

 

    	13

    	 

    

 

8.2.2.          Venue,
Language, and Number of Arbitrators. All arbitration proceedings shall take place
in San Francisco, California, USA, shall be conducted in English,
and shall be presided over by one arbitrator. 

 

8.2.3.          Arbitrator
Selection. The Parties agree to appoint [*] to serve as the sole arbitrator
(the “Arbitrator”). If, for any reason, [*] is unable to fulfill the Arbitrator’s duties, a successor
arbitrator shall be chosen in accordance with Rule 12 of JAMS’ Streamlined Arbitration Rules and
Procedures.

 

8.3.          Governing
Law. This Agreement and matters connected with the performance thereof shall be construed, interpreted, and governed
in all respects in accordance with the laws of the State of New York and the federal laws of the United States of America, without
reference to conflict of laws principles.

 

8.4.          Jurisdiction
and Venue. The Parties agree (a) that any disputes (including any litigation) regarding this Agreement or the subject matter
hereof shall be subject to the exclusive jurisdiction of the U.S. District Court for the Southern District of New York (or, if
there is no federal jurisdiction of such dispute, the courts of the State of New York sitting in Manhattan, New York), and (b)
to submit any disputes, including matters of interpretation or enforcement actions, relating
to this Agreement or the subject matter hereof exclusively to such court. The Parties hereby waive any challenge to the jurisdiction
or venue of such courts over these matters.

 

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

 

8.6.          Entire
Agreement. Together with the Settlement Agreement,
this Agreement embodies the entire understanding of the Parties with
respect to the subject matter hereof, and merges all prior discussions among them, and none of
the Parties shall be bound by any conditions, definitions, warranties, understandings, or representations
with respect to the subject matter hereof other than as expressly provided herein or in the Settlement
Agreement. No oral explanation or oral information by any Party hereto
shall alter the meaning or interpretation of this Agreement.

 

8.7.          Modification;
Waiver. No modification or amendment to this Agreement, nor any waiver of any rights, will
be effective unless assented to in writing by the Party to be charged, and the waiver of any
breach or default will not constitute a waiver of any other right hereunder or any subsequent breach or default.

 

    	14

    	 

    

 

8.8.          Construction;
Language. Any rule of construction to the effect that ambiguities are to be resolved against the drafting Party will
not be applied in the construction or interpretation of this Agreement. As used in this Agreement,
the words “include” and “including”
and variations thereof will not be deemed to be terms of limitation, but rather will be deemed to be followed by the words “without
limitation.” The headings in this Agreement will not be referred to in connection with
the construction or interpretation of this Agreement. This Agreement is
in the English language only, which language shall be controlling in all respects, and all notices under this Agreement
shall be in the English language.

 

8.9.          Counterparts.
This Agreement may be executed in counterparts or duplicate originals, all of which shall be
regarded as one and the same instrument, and which shall be the official and governing version in the interpretation of this Agreement.
This Agreement may be executed by facsimile signatures or other electronic transmission of signature
pages (e.g., email exchange of PDF signature pages) and such signatures shall be deemed to bind each Party as
if they were original signatures.

 

8.10.         Attorneys’
Fees. Each Party will bear its own attorneys’ fees and related expenses incurred by
or on behalf of that Party in connection with the Litigation and the preparation, review and
negotiation of this Agreement. In the event of any litigation or arbitration in connection with
this Agreement (including under Section 8.2 (Dispute
Resolution)), the prevailing Party is entitled to receive its costs, expert witness fees and
reasonable attorneys’ fees, including costs and fees on appeal.

 

8.11.         Not
an Admission. It is understood that this Agreement does not constitute an admission by either
Party of any infringement or non-infringement of the Licensed Patents,
but is a compromise of disputed claims.

 

[This remainder of the page is intentionally
blank]

 

    	15

    	 

    

 

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

 

	Lazare Kaplan International Inc.	 	GEMOLOGICAL INSTITUTE OF AMERICA, INC.
	 	 	 	 	 
	By:	 	 	By:	 
	 	 	 	 	 
	Name:	 	 	Name:	 
	 	 	 	 	 
	Title:	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}]]