License Agreement - University of California and Digirad Corp.
LICENSE AGREEMENT
FOR
DETECTOR
BETWEEN
DIGIRAD CORPORATION
AND
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
THROUGH THE
ERNEST ORLANDO LAWRENCE
BERKELEY NATIONAL LABORATORY
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TABLE OF CONTENTS
1. BACKGROUND 1
2. DEFINITIONS 1
3. LICENSE GRANT 3
4. LICENSE ISSUE FEE 4
5. ROYALTIES AND PAYMENTS 4
6 PERFORMANCE REQUIREMENTS 6
7 PROGRESS AND ROYALTY REPORTS 7
8. BOOKS AND RECORDS 8
9. LIFE OF THE AGREEMENT 8
10. TERMINATION BY BERKELEY LAB 9
11. TERMINATION BY DIGIRAD 9
12. DISPOSITION OF LICENSED PRODUCTS 9
13. USE OF NAMES AND TRADEMARKS AND NONDISCLOSURE OF AGREEMENT 9
14. LIMITED WARRANTY 10
15. PATENT PROSECUTION AND MAINTENANCE 11
16. PATENT INFRINGEMENT 13
17 WAIVER 13
18. ASSIGNMENT 13
19. INDEMNIFICATION 13
20. LATE PAYMENTS 15
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21. NOTICES 15
22. U.S. MANUFACTURE 15
23. PATENT MARKING 16
24. GOVERNMENT APPROVAL OR REGISTRATION 16
25. EXPORT CONTROL LAWS 16
26. FORCE MAJEURE 16
27 MISCELLANEOUS 16
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LICENSE AGREEMENT FOR DETECTOR
This license agreement (the "Agreement") is entered into by The Regents of the
University of California ("The Regents"), Department of Energy
contract-operators of the Ernest Orlando Lawrence Berkeley National Laboratory,
1 Cyclotron Road, Berkeley, CA 94720, (jointly, "Berkeley Lab"), and Digirad
Corporation, ("Digirad") a Delaware corporation, having as its principle place
of business, 9350 Trade Place San Diego, California 92126-6330.
1. BACKGROUND
1.1 A certain invention, ***
***
(the "Invention"), was made under U.S. Department of Energy contract
DE-AC03-76SF00098 at the University of California, Ernest Orlando
Lawrence Berkeley National Laboratory by Steven Edward Holland.
1.2 As DOE sponsored development of the Invention, this Agreement and the
resulting license are subject to overriding obligations to the federal
government pursuant to the provisions of the applicable law or
regulations.
1.3 Berkeley Lab wants the Invention developed and used to the fullest
extent so that the general public enjoys the benefits of the
government-sponsored research.
1.4 Digirad wants to obtain certain rights from Berkeley Lab for the
commercial development, manufacture, use, and sale of the Invention.
1.5 Digirad entered into an Option Agreement with Berkeley Lab to license
the above referenced invention on June 3, 1998.
1.6 Digirad is a "small business firm" as defined at Section 2 of Public
Law 85-536 (15 U.S.C. 632).
Therefore the parties agree as follows:
2. DEFINITIONS
2.1 "Effective Date" means the date of execution by the last signing party.
2.2 "Field of Use" means the development, production and use ***
***
***
***. The Field of Use specifically
excludes the use for *** as well as *** of all kinds.
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2.3 "Highly Inflationary Currency" means the currency of any economy with a
cumulative inflation rate of 100% or more over the most recent three
calendar years, as measured by consumer price indices published by the
International Monetary Fund (International Financial Statistics),
Washington, D.C.
2.4 "Licensed Patents" means patent rights to any subject matter claimed in
or covered by
***
***
*** or any corresponding foreign patent application or patent, for
which Digirad has met the requirements of Section 15.2 herein; any
division, reexamination, continuation, continuation-in-part (excluding
new matter contained and claimed in that continuation-in-part), or of
which such application is a successor; any patents issuing on any of
the foregoing, and all renewals, reissues and extensions thereof, or
other equivalents of a renewal, reissues and extension thereof.
2.5 "Licensed Product" means any product, service or process that employs
or is produced by the practice of any invention claimed in Licensed
Patents and whose manufacture, use, practice, sale, or lease would
constitute, but for the license Berkeley Lab grants to Digirad under
this Agreement, an infringement of any claim in Licensed Patents.
2.6 "Selling Price" for the purpose of computing royalties means the price
at which Digirad or its sublicensee sells the Licensed Product in an
arms-length transaction, less the sum of the following deductions that
are customary and actually taken: (i) cash, trade or quantity
discounts; (ii) sales, use, tariff, import/export duties or other
excise taxes imposed upon particular sales; and (iii) transportation
(and insurance charges associated with transportation) and allowances
or credits to customers because of rejections or returns. When a
Licensed Product is not sold, but is otherwise disposed of, the Selling
Price of that Licensed Product for the purposes of computing royalties
is the selling price at which products of similar kind and quality,
sold in similar quantities, are currently being offered for sale by
Digirad. When such products are not currently being offered for sale by
Digirad, the Selling Price of a Licensed Product otherwise disposed of,
for the purpose of computing royalties, is the average selling price at
which products of similar kind and quality, sold in similar quantities,
are then currently being offered for sale by other manufacturers. When
such products are not currently sold or offered for sale by Digirad or
others, then the Selling Price, for the purpose of computing royalties,
shall be Digirad's cost of manufacture, determined by generally
accepted accounting procedures, plus Digirad's standard mark-up. For
sales of Licensed Products to a Joint
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Venture or Affiliate (as defined in Paragraphs 2.7 and 2.8
below) that are provided by Digirad to the Joint Venture or
Affiliate (directly or indirectly for resale by said Joint Venture
or Affiliate) at a reduced price from that customarily charged to
an unrelated third party, then the royalty paid to Berkeley Lab
will be based on the Selling Price of Licensed Products of the
Joint Venture or Affiliate to the Joint Venture's or Affiliate's
customers and subject to payment under Article 5. For sales of
Licensed Products to a Joint Venture or Affiliate (as defined in
Paragraphs 2.7 and 2.8 below) that are provided directly or
indirectly by Digirad to the Joint Venture or Affiliate as an end
user at a reduced price from that customarily charged to an
unrelated third party, then the royalty paid to Berkeley Lab will
be based on the customary charge to an unrelated third party in an
arms length transaction and subject to payment under Article 5.
2.7 "Affiliate(s)" of a party means any entity which, directly or
indirectly, controls such party, is controlled by such party or is
under common control with such party, "control" for these purposes
being defined as the actual, present capacity to elect a majority of
the directors of such Affiliate.
2.8 "Joint Venture" means any separate entity established pursuant to an
agreement between a third party and Digirad to constitute a vehicle for
a joint venture, which separate entity purchases, sells or acquires
Licensed Products from Digirad at prices substantially different from
those at which Digirad would have charged other purchasers that deal at
arms length with Digirad. If such separate entity is established, then
Berkeley Lab shall collect from Digirad royalties on the Selling Price
of Licensed Products by the entity and shall not collect royalties on
the Selling Price of Licensed Products by Digirad.
3. LICENSE GRANT
3.1 Subject to the limitations set forth in this Agreement, Berkeley Lab
grants to Digirad a nontransferable (subject to Section 18.1), limited
(by the terms of Sections 3.2 and 3.7) worldwide exclusive,
royalty-bearing license, under Licensed Patents, only in the Field of
Use, to develop, make, have made, use, practice, sell, have sold, and
lease the Licensed Products.
3.2 Any license under this Agreement is subject to the following: (a) DOE's
royalty-free license for federal government practice only, and (b)
DOE's option to grant licenses either if reasonable steps to
commercialize the Invention are not carried out or in order to meet
federal regulations. Digirad shall use best efforts to commercialize
Licensed Patents.
3.3 Berkeley Lab also grants to Digirad the right to issue royalty-bearing
sublicenses only in the Field of Use to make, use, practice and sell
Licensed Products, so long as Digirad has current exclusive rights in
the Field of Use.
3.4 Any sublicense Digirad grants must be consistent with all the rights
and obligations due Berkeley Lab and the United States Government under
this Agreement, including, without limitation, the obligations under
Section 3.2 above.
3.5 Digirad shall provide Berkeley Lab with a copy of each sublicense
issued under this Agreement; collect payment of all royalties due
Berkeley Lab from sublicensees; and summarize and deliver all reports
due Berkeley Lab from sublicensees under Article 7 (PROGRESS AND
ROYALTY REPORTS).
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3.6 If this Agreement terminates for any reason, Berkeley Lab, at its sole
discretion, shall determine whether Digirad must cancel or assign to
Berkeley Lab any or all sublicenses.
3.7 Berkeley Lab expressly reserves the right to use the Invention and
associated technology for educational and research purposes subject to
the limitations of Section 13.2.
4. LICENSE ISSUE FEE
4.1 Digirad shall pay Berkeley Lab a license issue fee of *** dollars
($***) of which *** dollars ($***) has been previously paid under the
Option Agreement. The remaining *** dollars ($***) shall be paid in
equal installments as follows: *** dollars ($***) within fifteen (15)
days of the Effective Date and *** dollars ($***) on the first
anniversary of this Agreement.
4.2 This fee is ***
5. ROYALTIES AND PAYMENTS
5.1 Digirad shall pay to Berkeley Lab an earned royalty ***
*** of the Selling Price of each Licensed Product Digirad sells.
5.2 Under this Agreement a Licensed Product is considered to be sold when
invoiced, or if not invoiced, when delivered to a third party. But when
the last patent covering a Licensed Product expires or when the license
terminates, any shipment made on or before the day of that expiration
or termination that has not been billed out before is considered as
sold (and therefore subject to royalty) unless returned to Digirad
within ninety (90) days. Berkeley Lab shall credit royalties that
Digirad pays on a Licensed Product that the customer does not accept or
returns.
5.3 For each sublicense, Digirad shall pay Berkeley Lab the same royalties
it would pay if Digirad was making, using, or selling Licensed Products
under this Agreement. Royalties shall be calculated by applying the
percentages due on the sale of Licensed Product (see Section 5.1.
above) hereunder against the Selling Price for which the Sublicensee
has sold Licensed Product. The royalties paid to Digirad may exceed the
royalties paid to Berkeley Lab.
5.4 Digirad shall pay to Berkeley Lab by August 31 of each year the
difference between the earned royalties for that calendar year Digirad
has already paid to Berkeley Lab and the minimum annual royalty set
forth in the following schedule. Berkeley Lab shall credit that
minimum annual royalty paid against the earned royalty due and owing
for the calendar year in which Digirad made the minimum payment
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CALENDAR YEAR MINIMUM ANNUAL ROYALTY
------------- ----------------------
1999 $ ***
2000 $ ***
2001 $ ***
2002 and each year thereafter $ ***
5.5 Digirad shall send payment for royalties accruing to Berkeley Lab
quarterly together with its royalty report under paragraph 7.4. Digirad
shall be entitled to credit interference and opposition expenses
against the earned royalty income due Berkeley Lab so long as such
expenses do not arise from any opposition or interference raised by
Digirad, its Affiliates, or Joint Ventures or Joint Venture members.
5.6 Digirad shall make checks payable to "The Regents of the University of
California (Berkeley Lab/L-99-1261.)" Digirad shall pay Berkeley Lab
only in United States dollars. If a Licensed Product is sold for moneys
other than United States dollars (not including Highly Inflationary
Currency), Digirad shall first determine the earned royalties in the
foreign currency of the country in which the Licensed Product was sold
and then convert them into equivalent United States dollars at the
closing exchange rate published by THE WALL STREET JOURNAL on the last
business day of the reporting period. If a Licensed Product is sold for
a Highly Inflationary Currency, Digirad shall convert the sales subject
to royalties into equivalent United States funds using the closing
exchange rates in effect on the date of invoicing (or if no invoicing,
of delivery) as published by THE WALL STREET JOURNAL. Digirad shall
quote the exchange rate in the Continental method (local currency per
U.S. dollar).
5.7 Digirad may not reduce royalties payable by any value-added taxes,
fees, or other charges imposed on the remittance of royalty income
imposed by the government of any State of the United States or the
government of any country. Digirad is also responsible for all bank
transfer charges.
5.8 If Digirad cannot promptly remit any royalties for sales in any country
where a Licensed Product is sold because of legal restrictions, Digirad
may deposit in United States funds royalties due Berkeley Lab to
Berkeley Lab's account in a bank or other depository in that country.
If Digirad is not permitted to deposit those payments in U.S. funds
under the laws of that country, Digirad may deposit those payments in
the local currency to Berkeley Lab's account in a bank or other
depository in that country.
5.9 If a court of competent jurisdiction and last resort holds invalid any
patent or any of the patent claims within Licensed Patent in a final
decision from which no appeal has or can be taken, Digirad's obligation
to pay royalties based on that patent or claim will cease as of the
date of that final decision. Digirad, however, shall pay any royalties
that accrued before that decision or that are based on another patent
or claim not involved in that decision.
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5.10 Digirad has no duty to pay Berkeley Lab royalties under this Agreement
on a Licensed Product Digirad sells to the United States Government
including any United States Government agency. Digirad shall reduce the
amount charged for a Licensed Product sold to the United States
Government by an amount equal to the royalty otherwise due Berkeley
Lab. Such royalty otherwise due Berkeley Lab will count towards the
minimum annual royalty payments per Section 5.4.
6. PERFORMANCE REQUIREMENTS
6.1 Digirad shall proceed with the development, manufacture and sale of
Licensed Products and shall use diligent commercial efforts to endeavor
to market them within a reasonable time after the Effective Date in
quantities sufficient to meet the market demand.
6.2 Digirad shall use diligent commercial efforts to obtain all necessary
governmental approvals for the manufacture, use and sale of Licensed
Products.
6.3 Digirad is entitled to exercise prudent and reasonable business
judgment in meeting its performance requirements under this Agreement.
6.4 If Digirad is unable to perform any of the following, then Berkeley Lab
may either terminate this Agreement or reduce this limited exclusive
license to a nonexclusive license:
6.4.1 complete marketing preparation and product
introduction of the Licensed Products to the
marketplace by June 30, 1999; or
6.4.2 at any time during the exclusive period of this
Agreement, reasonably fill the market demand for
Licensed Products following commencement of
marketing.
It is the understanding of the parties hereto that any termination of
the Agreement or reduction of this license to a nonexclusive license as
a result of Digirad's failure to meet the specifications of Section
6.4, shall be subject to the sixty (60) day cure period set forth in
Section 10.1 below.
6.5 If Berkeley Lab grants a non-exclusive license to any other party upon
royalty rates more favorable than those of this Agreement after
reducing this license to a non-exclusive license, then Digirad is
entitled to the benefit of the more favorable rates. Digirad must agree
in writing to accept all terms of that third party license in whole and
not in part in order to enjoy the benefit of the more favorable rates
which shall commence upon delivery to Berkeley Lab of that written
agreement.
6.6 Digirad and Berkeley Lab by mutual written consent may amend or extend
the requirements of Sections 6.4.1-6.4.2 at the written request of
Digirad in response to legitimate business reasons.
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7. PROGRESS AND ROYALTY REPORTS
7.1 Beginning June 1, 1999 and semi-annually thereafter, Digirad shall
submit to Berkeley Lab a progress report covering Digirad's activities
related to the development and testing of all Licensed Products and the
obtaining of the governmental approvals necessary for marketing.
Digirad shall make these progress reports for each Licensed Product
until the first commercial sale of that Licensed Product occurs
anywhere in the world.
7.2 The progress reports Digirad submits under Section 7.1 must include,
but not be limited to, the following topics:
7.2.1 summary of work completed related to the requirements of
Section 6.4;
7.2.2 key scientific discoveries;
7.2.3 summary of work in progress;
7.2.4 current schedule of anticipated milestones;
7.2.5 market plans for introduction of Licensed Products; and
7.2.6 number of full-time equivalent (FTEs) employees or agents
working on the development of Licensed Products.
7.3 Digirad shall also report to Berkeley Lab in its immediately subsequent
royalty report on the date of first commercial sale of each Licensed
Product in the U.S. and in each other country.
7.4 After the first commercial sale of a Licensed Product anywhere in the
world, Digirad shall make quarterly royalty reports to Berkeley Lab on
or before February 28, May 31, August 31 and November 30 of each year.
Each royalty report must cover the most recently completed calendar
quarter and must show:
7.4.1 the Selling Price of each type of Licensed Product sold by
Digirad;
7.4.2 the number of each type of Licensed Product sold;
7.4.3 the royalties, in U.S. dollars, payable under this Agreement
on those sales;
7.4.4 the exchange rates used in calculating the royalty due;
7.4.5 the royalties on government sales that otherwise would have
been due under Section 5.10; and
7.4.6 for each sublicense, if any:
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7.4.6.1 the sublicensee;
7.4.6.2 the number, description, and aggregate Selling Prices
of Licensed Products that the sublicensee sold or
otherwise disposed of;
7.4.6.3 the exchange rates used in calculating the royalties
due Berkeley Lab from the sublicensee's sales.
7.5 If no sales of Licensed Products have been made during any reporting
period, Digirad shall make a statement to this effect.
8. BOOKS AND RECORDS
8.1 Digirad shall keep books and records accurately showing all Licensed
Products manufactured, used, or sold under the terms of this Agreement.
Digirad shall preserve those books and records for at least five (5)
years from the date of the royalty payment to which they pertain and
shall open them to inspection by representatives or agents of Berkeley
Lab at reasonable times. Digirad shall provide an audited statement to
Berkeley Lab annually at such time as Digirad completes its corporate
audited financial statements.
8.2 Berkeley Lab shall bear the fees and expenses of Berkeley Lab's
representatives performing the examination of the books and records.
But if the representatives discover an error resulting in a deficiency
in royalties of more than *** of the total royalties due for any year,
then Digirad shall bear the fees and expenses of these representatives
and the difference between the earned royalties and the reported
royalties (which shall be subject to the provisions of Article 20 (LATE
PAYMENTS)).
9. LIFE OF THE AGREEMENT
9.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this Agreement
is in force from the Effective Date and expires concurrently with the
last-to-expire Licensed Patent.
9.2 Any termination of this Agreement shall not affect the rights and
obligations set forth in the following Articles:
Article 8 Books and Records
Article 12 Disposition of Licensed Products on Hand
upon Termination
Article 13 Use of Names and Trademarks and
Nondisclosure of Agreement
Article 14 Limited Warranty
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Article 19 Indemnification
Article 25 Export Control Laws
9.3 Termination does not affect in any manner any rights of Berkeley Lab or
Digirad arising under this Agreement before the termination.
10. TERMINATION BY BERKELEY LAB
10.1 If Digirad violates or fails to perform any material term of this
Agreement, then Berkeley Lab may give written notice of such default
("Default Notice") to Digirad. If Digirad fails to cure that default
and provide Berkeley Lab with reasonable evidence of the cure within
sixty (60) days of the Default Notice, Berkeley Lab may terminate this
Agreement and the licenses granted by a second written notice
("Termination Notice") to Digirad. If Berkeley Lab sends a Termination
Notice to Digirad, this Agreement automatically terminates on the
effective date of the Termination Notice.
11. TERMINATION BY DIGIRAD
11.1 Digirad at any time may terminate this Agreement in whole or as to any
portion of Licensed Patents by giving written notice to Berkeley Lab.
Digirad's termination of this Agreement will be effective ninety (90)
days after its notice. If that termination is without cause within
three years of the Effective Date, Digirad shall pay Berkeley Lab as
liquidated damages *** with the notice of termination before that
notice is effective.
12. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION
12.1 Within forty-five (45) days of termination of this Agreement for any
reason, Digirad shall provide Berkeley Lab with a written
inventory of all Licensed Products in process of manufacture or in
stock. Digirad shall make diligent efforts to dispose of those
Licensed Products within one hundred twenty (120) days Licensed
Product of termination. The sale of any Licensed Product within
one hundred twenty (120) days is subject to the terms of this
Agreement. Digirad shall cease sales of Licensed Product one hundred
twenty (120) days after termination.
13. USE OF NAMES AND TRADEMARKS AND NONDISCLOSURE OF AGREEMENT
13.1 In accordance with California Education Code Section 92000, Digirad
shall not use in advertising, publicity or other promotional activities
any name, trade name, trademark, or other designation of the University
of California, nor shall Digirad so use "Berkeley Lab" (including any
contraction, abbreviation, or simulation of any of the foregoing)
without
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Berkeley Lab's prior written consent. As the sole exception to the
above prohibition, Digirad shall give appropriate credit to the
inventor(s) and Berkeley Lab at scientific symposia, and in technical
publications in scientific journals where the licensed technology is
referenced. Berkeley Lab shall not use in advertising, publicity or
other promotional activities any name, trade name, or other designation
of Digirad without its prior written consent except as set forth in
Section 13.2 below.
13.2 Neither party may disclose the terms or existence of this Agreement to
a third patty without express written permission of the other party,
except when required under either the California Public Records Act or
other applicable law or court order or by Berkeley Lab's contracts with
the DOE or any other Federal or State entity. Notwithstanding the
foregoing, Berkeley Lab may disclose the existence of this Agreement
and the extent of the grant in Article 3, but shall not otherwise
disclose the terms of this Agreement, except to the DOE.
13.3 The Proprietary Information Exchange Agreement between Digirad and the
Regents of the University of California as Managers of the Lawrence
Berkeley National Laboratory, as attached hereto as Exhibit A, shall
remain in effect through the term outlined in the Proprietary
Information Exchange Agreement.
14. LIMITED WARRANTY
14.1 Berkeley Lab warrants to Digirad that it has the lawful right to grant
this license.
14.2 Except as set forth above, this license and the associated Invention(s)
are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. BERKELEY
LAB MAKES NO REPRESENTATION OR WARRANTY THAT LICENSED PRODUCTS WILL NOT
INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.
14.3 IN NO EVENT WILL BERKELEY LAB OR DIGIRAD BE LIABLE FOR ANY INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES INCURRED BY THE OTHER PARTY HERETO
RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTION(S)
OR LICENSED PRODUCTS UNDER THIS AGREEMENT. THIS PROVISION, 14.3, DOES
NOT APPLY TO INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES AWARDED IN A
JUDGEMENT FOR A THIRD PARTY AGAINST A PARTY OR THE PARTIES HERETO.
14.4 Except as set forth above, nothing in this Agreement may be construed
as:
14.4.1 a warranty or representation by Berkeley Lab as to the
validity or scope of any of Berkeley Lab's rights in Licensed
Patents;
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14.4.2 a warranty or representation that anything made, used, sold or
otherwise disposed of under any license granted in this
Agreement is or will be free from infringement of patents of
third parties;
14.4.3 an obligation to bring or prosecute actions or suits against
third parties for patent infringement, except as specifically
provided for in Article 16 (Patent Infringement);
14.4.4 a grant by implication, estoppel or otherwise of any license
or rights under any patents of Berkeley Lab other than
Licensed Patents, regardless of whether such patents are
dominant or subordinate to Licensed Patents; or
14.4.5 an obligation to furnish any know-how not provided in Licensed
Patents.
15. PATENT PROSECUTION AND MAINTENANCE
15.1 Berkeley Lab shall diligently maintain the United States patents for
Licensed Patents (including any future patent rights provided for in
Section 2.4) using counsel of its choice that is reasonably acceptable
to Digirad. Berkeley Lab shall bear the cost of pre-paring, filing,
prosecuting and maintaining any United States patent covered by this
Agreement.
15.2 Berkeley Lab has filed foreign patent applications corresponding to the
PCT Application referred to in Section 2.4 (namely US 97/20173) as
follows:
(a) European Patent Office (EPO), designating
(i) Austria
(ii) Belgium
(iii) Switzerland
(iv) Germany
(v) Denmark
(vi) Spain
(vii) France
(viii) United Kingdom
(ix) Ireland
(x) Italy
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(xi) Netherlands
(xii) Sweden
(b) Japan.
Berkeley Lab has no obligation to take action to file or prosecute foreign
patent applications on behalf of Digirad until the following occurs:
15.2.1 (With the exception of the three countries listed in 15.3
below) Digirad makes that request in writing to Berkeley Lab
within thirty (30) days after the Effective Date. The absence
of the required notice from Digirad to Berkeley Lab acts as
an election not to proceed on protecting foreign rights.
15.2.2 That notice also identifies the countries Digirad desires.
15.2.3 Digirad pays Berkeley Lab the foreign license fee as set forth
in paragraph 15.4
15.3 Digirad agrees to pay Berkeley Lab *** dollars ($***), upon the day
of execution of this Agreement, for the foreign patent counterparts
to the U.S. application for the following countries: Germany, France
and Japan.
15.4 The foreign license fee for each foreign counterpart in addition to
those listed in Section 15.3 to a United States patent application
shall be *** dollars ($***) for each national filing or for each
country designated in the PCT filing for entry into the national
phase, European Patent Convention ("EPC") filing, or similar regional
filing.
15.5 Berkeley Lab shall bear the expense of preparing, filing, prosecuting
and securing all foreign patent applications that Berkeley Lab files at
Digirad's request (pursuant to 15.2 above). Digirad shall bear the
expense of any interference or oppositions and maintaining all
resulting patents. Berkeley Lab will hold those patents in its name and
obtain them using counsel of its choice that is reasonably acceptable
to Digirad.
15.6 Berkeley Lab shall promptly provide Digirad with copies of all relevant
documentation so that Digirad is informed of the continuing prosecution
of Licensed Patents and any foreign patent applications Berkeley Lab
files under Section 15.2. Additionally, Berkeley Lab shall provide
Digirad a quarterly report at the end of March, June, September, and
December of each year summarizing the status of the Licensed Patents
and any foreign patent applications Berkeley Lab files under Section
15.2. Digirad shall keep this documentation confidential. Berkeley Lab
shall use all reasonable efforts to amend any patent application to
include claims reasonably requested by Digirad to protect the products
contemplated to be sold under this Agreement.
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16. PATENT INFRINGEMENT
16.1 If either party learns of the substantial infringement of any of
Licensed Patents, the party shall so inform the other party in writing
and shall provide the other party with reasonable evidence of the
infringement. During the period and in a jurisdiction where Digirad has
exclusive rights under this Agreement, neither party may notify a third
party of the infringement of any of Licensed Patents without first
obtaining written consent of the other party, which consent shall not
be unreasonably denied or delayed. Both parties shall use their best
efforts in cooperation with each other to terminate such infringement
without litigation.
16.2 Digirad may request that Berkeley Lab take legal action against the
infringement of Licensed Patents. Digirad shall make that request in
writing and include reasonable evidence of the infringement and damages
to Digirad. If the infringing activity has not been abated within
ninety (90) days of that request, Berkeley Lab may elect to: (a)
commence suit on its own account; or (b) refuse to participate in the
suit. Berkeley Lab shall give written notice of its election to Digirad
by the end of the ninetieth (90th) day after receiving notice of the
request from Digirad. Digirad may thereafter bring suit for patent
infringement only if Berkeley Lab elects not to commence suit (other
than as nominal party plaintiff) and if the infringement occurred
during the period and in a jurisdiction where Digirad has exclusive
rights under this Agreement. In such event, Digirad shall have the sole
control and sole decision making authority with respect to defending
and enforcing the Licensed Patents solely in connection with such suit
and further provided that Berkeley Lab does not thereafter join such
suit. If, however, Digirad elects to bring suit in accordance with this
paragraph, Berkeley Lab may thereafter join such suit at its own
expense.
16.3 Such legal action as is decided upon must be at the expense of the
party on account of whom suit is brought and all consequent recoveries
belong to that party. But if Berkeley Lab and Digirad jointly bring
legal action and fully participate in it, the parties must jointly
share both the expense and all recoveries in proportion to the share of
expense each party pays.
16.4 Each party shall cooperate with the other in litigation proceedings,
including without limitation, signing and arranging for the signature
on documents, joining actions as nominal party and similar actions,
instituted under this Agreement but at the expense of the party on
account of whom suit is brought. The party bringing the suit will
control that litigation, except that Berkeley Lab may elect to be
represented by counsel of its choice, at its sole expense, in any suit
brought by Digirad.
17. WAIVER
17.1 The waiver of any breach of any term of this Agreement does not waive
any other breach of that or any other term.
18. ASSIGNMENT
18.1 This Agreement is binding upon and shall inure to the benefit of
Berkeley Lab, its successors and assigns. Upon written notice to
Berkeley Lab, Digirad may assign this Agreement to a Digirad wholly
owned subsidiary or to a purchaser or acquirer of all or substantially
all of the business or assets of Digirad. Any other attempt by Digirad
to assign this Agreement is void unless Digirad obtains the prior
written consent of Berkeley Lab. Berkeley Lab shall not unreasonably
withhold or delay that consent.
19. INDEMNIFICATION
19.1 Digirad shall indemnify, hold harmless and defend Berkeley Lab and the
U.S. Government and their officers, employees, and agents; the sponsors
of the research that led to the Invention; and the inventors of the
patents and patent applications in Licensed Patents against any and all
claims, suits, losses, damage, costs, fees, and expenses resulting from
or arising out of exercise of this license or any sublicense. Berkeley
Lab shall promptly notify Digirad in writing of any claim or suit
brought against Berkeley Lab in respect of which Berkeley Lab intends
to invoke the provisions of this Article 19
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(INDEMNIFICATION). No settlement of any claim, suit or perceived
threat thereof received by Berkeley Lab shall be made without the
approval of Digirad if indemnification is sought by Berkeley Lab
hereunder unless require by final decree of a court of competent
jurisdiction. Digirad shall pay all reasonable costs incurred by
Berkeley Lab in enforcing this indemnification, including
reasonable attorney fees.
19.2 Digirad, at its sole expense, shall insure its activities in connection
with the work under this Agreement and obtain and keep in force
Comprehensive or Commercial Form General Liability Insurance
(contractual liability and products liability included) or equivalent
program of self-insurance with limits as follows:
19.2.1 Each Occurrence $1,000,000
19.2.2 Products/Completed Operations Aggregate $5,000,000
19.2.3 Personal and Advertising Injury $1,000,000
19.2.4 General Aggregate (commercial form only) $5,000,000
19.3 The coverages and limits referred to in this Article 19 do not in any
way limit the liability of Digirad. Digirad shall furnish Berkeley Lab
with certificates of insurance, including renewals, evidencing
compliance with all requirements at least thirty (30) days prior to
the first commercial sale, use, practice or distribution of a Licensed
Product.
19.3.1 If such insurance is written on a claims-made form, coverage
shall provide for a retroactive date of placement on or before
the Effective Date.
19.3.2 Digirad shall maintain the general liability insurance
specified during: (a) the period that the Licensed Product is
being commercially distributed or sold (other than for the
purpose of obtaining regulatory approvals) by Digirad or by a
sublicensee or agent of Digirad, and (b) a reasonable period
thereafter, but in no event less than five years.
19.4 The insurance coverage of Section 19.2 must:
19.4.1 Provide for thirty (30) day advance written notice to
Berkeley Lab of any modification of any such coverage and
provide immediate notice of cancellation of such coverage.
19.4.2 Indicate that DOE and "The Regents of the University of
California" are endorsed as additional insureds, but only with
respect to the subject matter of this Agreement.
19.4.3 Include a provision that the coverages are primary and do not
participate with, nor are excess over, any valid and
collectible insurance or program of self-insurance carried or
maintained by Berkeley Lab.
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20. LATE PAYMENTS
20.1 Excepting issues arising from Section 26.1, if Digirad does not make a
payment to Berkeley Lab when due, Digirad shall pay to Berkeley Lab
such reasonable administrative fees and interest as Berkeley Lab
generally charges third parties on overdue accounts, such interest not
to exceed eight percent (8%) simple interest per annum.
21. NOTICES
21.1 Any payment, notice or other communication this Agreement requires or
permits either party to give must be in writing to the appropriate
address given below, or to such other address as one party designates
by written notice to the other party. The parties deem payment, notice
or other communication to have been properly given and to be effective
(a) on the date of delivery if delivered in person; (b) on the fourth
day after mailing if mailed by first-class mail, postage paid; (c) on
the second day after delivery to an overnight courier service such as
Federal Express, if sent by such a service; or (d) upon confirmed
transmission by telecopier. The parties addresses are as follows:
For payments to Berkeley Lab: For all other notices to
Berkeley Lab:
Ernest Orlando Lawrence Ernest Orlando Lawrence
Berkeley National Laboratory Berkeley National Laboratory
Accounting/Financial Management Technology Transfer Department
P.O. Box 528 Mailstop 90-1070
Berkeley, California 94701 One Cyclotron Road
Attention: Licensing Accountant Berkeley, California 94720
Fax: 510/486-5995 Attention: Licensing Manager
Telephone: 510/486-7113 Fax: 510/486-6457
Telephone: 510/486-6467
In the case of Digirad:
Digirad Corporation
9350 Trade Place
San Diego, California 92126-6334
Attention: President
Fax: 619-549-7714
Telephone: 619-578-5300
22. U.S. MANUFACTURE
22.1 Digirad shall have Licensed Products produced for sale in the United
States manufactured substantially in the United States so long as
Digirad has current exclusive rights in the Field of Use.
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23. PATENT MARKING
23.1 Digirad shall mark all Licensed Products made, used or sold under this
Agreement, or their containers, in accordance with the applicable
patent marking laws.
24. GOVERNMENT APPROVAL OR REGISTRATION
24.1 If the law of any nation requires that any governmental agency either
approve or register this Agreement or any associated transaction,
Digirad shall assume all legal obligations to do so. Digirad shall
notify Berkeley Lab if it becomes aware that this Agreement is subject
to a U.S. or foreign government reporting or approval requirement.
Digirad shall make all necessary filings and pay all costs, including
fees, penalties, and all other costs associated with such reporting or
approval process. Berkeley Lab shall fully cooperate with Digirad, to
the extent it is able to do so within the law and established Berkeley
Lab policy, to provide documentation and testimony to obtain such
approval or registration, at Digirad's sole expense.
25. EXPORT CONTROL LAWS
25.1 Digirad shall observe all applicable United States and foreign laws and
regulations with respect to the transfer of Licensed Products and
related technical data, including, with-out limitation, the
International Traffic in Arms Regulations (ITAR) and the Export
Administration Regulations.
26. FORCE MAJEURE
26.1 If a party's performance required under this Agreement is rendered
impossible or unfeasible due to any catastrophes or other major events
beyond its reasonable control, including, without limitation, the
following, the parties are excused from performance, war, riot, and
insurrection; laws, proclamations, edicts, ordinances or regulations;
strikes, lockouts or other serious labor disputes; and floods, fires,
explosions, or other natural disasters. When such events abate, the
parties' respective obligations under this Agreement must resume.
27. MISCELLANEOUS
27.1 The headings of the several sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement.
27.2 This Agreement is not binding upon the parties until it is signed below
on behalf of each party.
27.3 No amendment or modification hereof shall be valid or binding upon the
parties unless made in writing and signed on behalf of each party.
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27.4 This Agreement embodies the entire and final understanding of the
parties on this subject. It supersedes any previous representations,
agreements, or understandings, whether oral or written.
27.5 If a court of competent jurisdiction holds any provision of this
Agreement invalid, illegal or unenforceable in any respect, this
Agreement must be construed as if that invalid or illegal or
unenforceable provision is severed from the Agreement, provided,
however, that the parties shall negotiate in good faith substitute
enforceable provisions that most nearly effect the parties' intent in
entering into this Agreement.
27.6 This Agreement must be interpreted under California law without regard
to principles of conflicts of laws.
Berkeley Lab and Digirad execute this Agreement in duplicate originals through
their duly authorized respective officers in one or more counterparts, that
taken together, are but one instrument.
THE REGENTS OF THE UNIVERSITY DIGIRAD CORPORATION
OF CALIFORNIA, THROUGH THE
ERNEST ORLANDO LAWRENCE
BERKELEY NATIONAL LABORATORY
By /S/ PIERMARIA T. ODDONE By /S/ SCOTT HUENNEKENS
----------------------------- ---------------------------------
(signature) (signature)
By PIERMARIA T. ODDONE By SCOTT HUENNEKENS
------------------------------ ---------------------------------
(Please Print) (Please Print)
Title DEPUTY DIRECTOR Title PERS. & COO
--------------------------- -----------------------------
Date MAY 16, 1999 Date 5-19, 1999
---------------------------- -------------------------------
Approved as to form
/S/ GLENN R. WOODS
----------------------------------------
GLENN R. WOODS
LAWRENCE BERKELEY NATIONAL LABORATORY
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Exhibit A to License Agreement
PROPRIETARY INFORMATION EXCHANGE AGREEMENT
This AGREEMENT made and entered into as of this 23rd day of April 1,
1999 by and between DIGIRAD, a Delaware corporation, whose address is 9350 Trade
Place, San Diego, California 92126-6334 and The Regents of the University of
California as Managers of the Lawrence Berkeley National Laboratory, whose
address is 1 Cyclotron Road, Berkeley, CA 94720.
WHEREAS, the parties hereto are undertaking negotiations towards the
development of a license agreement between them, and
WHEREAS, in furtherance of such license, each undersigned party (the
"Receiving Party") understands that the other party (the "Disclosing Party") has
disclosed or may disclose information relating to the Disclosing Party's
business and/or intellectual property (including, without limitation, chemical
formulas, computer programs, software, technical drawings, names and expertise
of employees and consultants, know-how, formulas processes, ideas, inventions
(whether patentable or not), schematics and other technical business, financial,
customer and product development plans, forecasts, strategies and information,
and any and all information, technical or otherwise related to describing
Digirad's ***
***
***
sub-assemblies and related assemblies for use in medical imaging systems and
other applications), information which to the extent previously, presently, or
subsequently disclosed to the Receiving Party is hereinafter referred to as
"Proprietary Information" of the Disclosing Party.
NOW, THEREFORE, in consideration of the parties' discussions and any
access the Receiving Party may have to Proprietary Information of the Disclosing
Party, the parties agree that any information received by one party from the
other shall be governed by the following terms and conditions:
Definition:
"Proprietary Information" shall not include information which:
(a) was rightfully in possession of or known to the Receiving
Party prior to receiving it from the Disclosing Party; or
(b) is or becomes part of the public knowledge or literature by
acts other than those of the Receiving Party and without fault of the receiving
Party; or
(c) was rightfully disclosed to the Receiving Party by a third
party provided the Receiving Party complies with restrictions imposed by the
third party; or
(d) is transmitted after the expiration of this Agreement; or
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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(e) is disclosed by the Receiving Party under a valid order
created by a court or government agency, provided that the Receiving Party
provides prior written notice to the Disclosing Party of such obligation and the
opportunity to oppose such disclosure.
(f) the Receiving Party develops independently, subsequent to
receipt of Proprietary Information and for which Receiving Party can demonstrate
by written records that independent development occurred without knowledge or
use of Proprietary Information.
HANDLING OF PROPRIETARY INFORMATION:
The Receiving Party agrees to (i) hold the Disclosing Party's
Proprietary Information in strict confidence as a fiduciary and to take
reasonable precautions to protect such Proprietary Information and (ii) handle
the Proprietary Information in the same manner that it handles its own
proprietary information of like importance, but with at least reasonable degree
of care, for a period of five (5) years after the date of disclosure.
LIMITATION ON DISCLOSURE:
The Receiving Party shall not disclose, in whole or in part, such
Proprietary Information to any third party without the prior written consent of
the Disclosing Party for the period that such information is to be handled as
proprietary. The Receiving Party may disclose Proprietary Information only to
those of its employees who would require knowledge of such Proprietary
Information for the purposes contemplated by this Agreement and who is similarly
bound in writing.
LIMITATION OF USE:
The Receiving Party shall make no use, in whole or in part, of any such
Proprietary Information other than in furtherance of the purpose of this
Agreement without the prior written consent of the Disclosing Party.
If the purpose of the information exchange is the preparation of a
proposal to the United States Government, Proprietary Information of either
party may be incorporated into the proposal to the United States Government,
provided that the proposal document bears the restrictive legend contained in
Federal Acquisition Regulation 52.215-12 or a substantially similar successor
provision.
TERM:
This Agreement shall expire one (1) year from the date recited in the
first paragraph of this Agreement. With the exception of information disclosed
in accordance with the provisions of the License Agreement for Detector between
Digirad Corporation and the Regents of the University of California through the
Ernest Orlando Lawrence Berkeley Laboratory, immediately upon a request by the
Disclosing Party at any time (which will be effective if actually received or
three days after mailed first class postage prepaid to the Receiving Party's
address herein), the Receiving Party will turn over to the Disclosing Party all
Proprietary Information of the Disclosing Party and all documents or media
containing any such Proprietary Information and any and all copies or extracts
thereof. The Receiving Party understands that
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nothing herein (i) requires the disclosure of any Proprietary Information of the
Disclosing Party, which shall be disclosed if at all solely at the option of the
Disclosing Party (in particular, but without limitation, any disclosure is
subject to compliance with expert control laws and regulations), or (ii)
requires the Disclosing Party to proceed with any proposed transaction or
relationship in connection with which Proprietary Information may be disclosed.
The party's obligations with respect to Proprietary Information disclosed to it
prior to expiration/termination shall survive expiration/termination.
RELATIONSHIP OF PARTIES:
This Agreement is intended to provide only for the handling and
protection of Proprietary Information exchanged or disclosed hereunder, and
shall not be construed as a Teaming, Joint Venture, Partnership, or other
similar arrangement. Specifically, this Agreement shall not be construed in any
manner to be an obligation to enter into a contract, nor shall it result in any
claim whatsoever for reimbursement of costs.
NO LICENSE:
Neither the execution of this agreement nor the furnishing of any
Proprietary Information hereunder shall be construed as granting either
expressly, by implication, estoppel or otherwise, any license other than as
expressly set forth herein under any invention, patent, copyright, trade secret,
mask work right, or any other intellectual property right, now or hereafter
owned or controlled by the party furnishing same.
U.S. GOVERNMENT REGULATIONS:
A party receiving Proprietary Information shall comply with all
relevant United States Government regulations, including the International
Traffic in Arms Regulations and the Export Administration Act.
MISCELLANEOUS:
Each party shall perform its respective obligations hereunder without
charge to the other.
Except to the extent permitted by the License Agreement for Detector
between Digirad Corporation and the Regents of the University of California
through the Ernest Orlando Lawrence Berkeley Laboratory, neither party will
refer to this Agreement or use the other party's name in any form of publicity
or advertising directly or indirectly, without the prior written consent of the
party whose name is proposed for use.
Except as to a sale of the business to which this Agreement relates or
transfer of the management of the Ernest Orlando Lawrence Berkley Laboratory,
the rights and obligations of each party under this Agreement may not be
assigned or transferred to any person, firm or corporation, without the express
prior written consent of the other party, which consent will not be unreasonably
withheld.
Neither party makes any representations regarding the accuracy,
completeness, or freedom from defects of the information disclosed, or with
respect to infringement of the rights of others.
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The Receiving Party acknowledges and agrees that due to the unique
nature of the Disclosing Party's Proprietary Information, there may be no
adequate remedy at law for any breach of its obligations hereunder, that any
such breach may allow the Receiving Party or third parties to unfairly compete
with the Disclosing Party resulting in irreparable harm to the Disclosing Party,
and therefore, that upon any such breach or any threat thereof, the Disclosing
Party may be entitled to appropriate equitable relief in addition to whatever
remedies it might have at law. The Receiving Party will notify the Disclosing
Party in writing immediately upon the occurrence of any such unauthorized
release or other breach of which it is aware. In the event that any of the
provisions of this Agreement shall be held by a court or other tribunal of
competent jurisdiction to be illegal, invalid or unenforceable, such provisions
shall be limited or eliminated to the minimum extent necessary so that this
Agreement shall otherwise remain in full force and effect.
ENTIRE AGREEMENT:
This Agreement represents the entire agreement of the parties
pertaining to the subject matter of the Agreement, and supersedes any and all
prior oral discussions and/or written correspondence or agreements between the
parties with respect thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate original copies by their respective duly authorized
representatives.
DIGIRAD The Regents of the University of
California Acting as Manager of the
Lawrence Berkeley Laboratory
By: By:
------------------------------ -----------------------------
Name: Name:
---------------------------- ---------------------------
Title: Title:
--------------------------- --------------------------
Date: Date:
---------------------------- ---------------------------
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AMENDMENT #1
TO
LICENSE AGREEMENT FOR DETECTOR
This Amendment (the "Amendment"), effective as of the signing date of the last
party to sign below, is entered into by The Regents of the University of
California ("The Regents"), Department of Energy contract-operators of the
Ernest Orlando Lawrence Berkeley National Laboratory ("LBNL"), 1 Cyclotron Road,
Berkeley, CA 94720, (jointly, "Berkeley Lab"), and Digirad Corporation
("Digirad"), a Delaware corporation having its principal place of business at
9350 Trade Place, San Diego, CA 92126-6330.
THE PARTIES ENTERED INTO A LICENSE AGREEMENT FOR DETECTOR, REFERENCE
NUMBER L-90-1261 (THE "AGREEMENT"), EFFECTIVE DATE OF MAY 19, 1999. THE
PARTIES NOW DESIRE TO AMEND THE AGREEMENT BY EXPANDING THE LICENSE TO
INCLUDE A NON-EXCLUSIVE FIELD OF USE (AS DEFINED BELOW) PURSUANT TO THE
TERMS AND CONDITIONS HEREIN. CAPITALIZED TERMS HEREIN SHALL HAVE THE
MEANING AS SET FORTH IN THE AGREEMENT EXCEPT AS OTHERWISE DEFINED IN
THIS AMENDMENT.
The parties agree as follows:
1. Section 2.2 of the Agreement is hereby deleted in its entirety and
replaced with the following:
2.2 "Field of Use" and "Non-Exclusive Field of Use":
2.2.1 "Field of Use" means the development, production and
use of ***
***
***
The Field of Use specifically excludes the use of
***, the Non-Exclusive Field of Use and all other
kinds of ***.
2.2.2 "Non-Exclusive Field of Use" means the development,
production and use of ***. Non-Exclusive Field
of Use specifically excludes the Field of Use, the
use of ***, as well as all kinds of *** other
than ***.
2. Section 2.4 of the Agreement is hereby deleted in its entirety and
replaced with the following:
2.4 "Licensed Patents" means patent rights to any subject matter
claimed in or covered by any of the following:
2.4.1 US Patent Number ***
***
***
2.4.2 Any resulting patent issued in Germany or France
arising from European Patent Convention Application
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
pg 1
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***
***
2.4.3 Japan Patent Application ***
***
***
2.4.4 with respect to Sections 2.4.1 to 2.4.3, any
division, reexamination, continuation,
continuation-in-part (excluding new matter contained
and claimed in that continuation-in-part), or of
which such application is a successor; any patents
issuing on any of the foregoing, and all renewals,
reissues and extensions thereof, or other equivalents
of a renewal, reissues, and extensions thereof.
3. Section 3.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:
3.1 Subject to the limitations set forth in this Agreement,
Berkeley Lab grants to Digirad:
3.1.1 a nontransferable (subject to Section 18.1), limited
(by the terms of Sections 3.2 and 3.7) worldwide
exclusive, royalty-bearing license, under Licensed
Patents, only in the Field of Use, to develop, make,
have made, use, practice, sell, have sold, and lease
the Licensed Products.
3.1.2 a nontransferable (subject to Section 18.1),
nonexclusive worldwide, royalty-bearing license,
under Licensed Patents, only within the Non-Exclusive
Field of Use, to develop, make, have made, use,
practice, sell, and lease the Licensed Products.
4. Section 4.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:
4.1 As consideration for the licenses granted hereunder:
4.1.1 within the Field of Use, Digirad shall pay Berkeley
Lab a license issue fee of ***
dollars ($***) of which *** dollars
($***) has been previously paid under the Option
Agreement, and the remaining *** dollars
($***) has been paid to Berkeley Lab under this
Agreement.
4.1.2 within the Non-Exclusive Field of Use, Digirad shall
pay Berkeley Lab a license issue fee of ***
dollars ($***) of which ***
dollars ($***) shall be payable within fifteen
(15) days of the effective date of this Amendment,
and the remaining *** dollars ($***)
shall be paid within one year of the effective date
of this Amendment.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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5. Section 5.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:
5.1 Digirad shall pay to Berkeley Lab an earned royalty of:
5.1.1 *** of the Selling Price of each Licensed Product
Digirad sells within the Field of Use;
5.1.2 *** of the Selling Price of each Licensed Product
Digirad sells within the Non-Exclusive Field of Use;
6. Section 5.4 of the Agreement is hereby deleted in its entirety and
replaced with the following:
5.4 Digirad shall pay to Berkeley Lab by August 31 of each year
the difference between the earned royalties for that
calendar year Digirad has already paid to Berkeley Lab
for the Field of Use and Non-Exclusive Field of Use and
the minimum annual royalty set forth in the following
schedules for the Field of Use and Non-Exclusive Field
of Use. Berkeley Lab shall credit that minimum annual
royalty paid against the earned royalty due and owing
for the calendar year in which Digirad made the minimum
payment; provided that the earned royalties and minimum
annual royalties for the Field of Use shall be treated
separately from and independent of the earned royalties
and minimum annual royalties for the Non-Exclusive Field
of Use.
------------------------------------ ----------------------------------- -------------------------------
CALENDAR YEAR MINIMUM ANNUAL ROVALTY FOR FIELD MINIMUM ANNUAL ROYALTY FOR
OF USE NON-EXCLUSIVE FIELD OF USE
------------------------------------ ----------------------------------- -------------------------------
1999 *** (paid) N/A
------------------------------------ ----------------------------------- -------------------------------
2000 *** (paid) N/A
------------------------------------ ----------------------------------- -------------------------------
2001 *** ***
------------------------------------ ----------------------------------- -------------------------------
2002 *** ***
------------------------------------ ----------------------------------- -------------------------------
2003 *** ***
------------------------------------ ----------------------------------- -------------------------------
2004 *** ***
------------------------------------ ----------------------------------- -------------------------------
2005 and each year thereafter *** ***
------------------------------------ ----------------------------------- -------------------------------
7. Sections 6.4 and 6.5 of the Agreement are hereby deleted in their
entirety and replaced with the following:
6.4 If Digirad is unable to perform any of the following, then
Berkeley Lab may either terminate this Agreement or reduce the
limited exclusive license within the Field of Use to a
non-exclusive license within the Field of Use:
6.4.1 With regard to the Field of Use:
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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6.4.1.1 complete market preparation and product
introduction of the Licensed Products to the
marketplace by *** (done); or
6.4.1.2 at any time during the exclusive period of
this Agreement, reasonably fill the market
demand for Licensed Products following
commencement of marketing.
6.4.2 With regard to the Non-Exclusive Field of Use:
6.4.2.1 complete design of prototype photodiode(s)
by ***;
6.4.2.2 fabricate prototype photodiode(s) by ***;
6.4.2.3 complete design of production photodiode by
***;
6.4.2.4 fabricate production photodiode by ***;
6.4.2.5 complete assembly of production module of
Licensed Product by ***; or
6.4.2.6 complete market preparation and product
introduction of the Licensed Products to the
marketplace by ***;
It is the understanding of the parties hereto that any
termination of the Agreement or reduction of this license to a
non-exclusive license as a result of Digirad's failure to meet
the specifications of Section 6.4 shall be subject to the
sixty (60) day cure period set forth in Section 10.1 below.
6.5 If Berkeley Lab grants a non-exclusive license to any other
party within the Field of Use upon royalty rates more
favorable than those of this Agreement after reducing the this
license within the Field of Use to a non-exclusive license
within the Field of Use, then Digirad is entitled to the
benefit of the more favorable rates. Digirad must agree in
writing to accept all terms of that third party license in
whole and not in part in order to enjoy the benefit of the
more favorable rates which shall commence upon delivery to
Berkeley Lab of that written agreement.
8. The reporting obligations of Section 7 shall apply to both the Field
of Use and Non-Exclusive Field of Use, separately and independently.
Beginning December 1, 2001 and semi-annually thereafter, Digirad
shall submit to Berkeley Lab a progress reports covering Digirad's
activities related to the development and testing of all Licensed
Products within the Non-Exclusive Field of Use and obtaining of the
government approvals necessary for marketing as required pursuant to
Section 7.1 ET. SEQ.
9. Section 11.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:
11.1 Digirad at any time may terminate this Agreement in whole or
as to any portion of Licensed Patents by giving written notice
to Berkeley Lab. Digirad's termination
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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of this Agreement will be effective ninety (90) days after
its notice. If that termination pertains to the Field of Use
and is without cause within three (3) years of the Effective
Date, Digirad shall pay Berkeley Lab as liquidated damages
*** dollars ($***) with the notice of termination before that
notice is effective.
10. Section 15.2 of the Agreement is hereby deleted in its entirety.
11. Section 15.5 of the Agreement is hereby deleted in its entirety and
replaced with the following:
15.5 Berkeley Lab shall bear the expense of preparing, filing,
prosecuting and securing all foreign patent applications that
Berkeley Lab files at Digirad's request (pursuant to Section
15.3 above). Digirad shall bear the expense of any
interference or oppositions and maintaining all resulting
patents. Berkeley Lab will hold these patents in its name and
obtain them using counsel of its choice that is reasonably
acceptable to Digirad.
12. Section 15.6 of the Agreement is hereby deleted in its entirety and
replaced with the following:
15.6 Berkeley Lab shall promptly provide Digirad with copies of all
relevant documentation so that Digirad is informed of the
continuing prosecution of Licensed Patents. Additionally, upon
Digirad's request but no more than quarterly, Berkeley Lab
shall provide Digirad with a report summarizing the
status of the Licensed Patents. Digirad shall keep this
documentation confidential. Berkeley Lab shall use all
reasonable efforts to amend any patent application to
include claims reasonably requested by Digirad to
protect the products contemplated to be sold under this
Agreement.
13. Digirad acknowledges and agrees that Section 16 applies, other than the
first sentence of Section 16.1, only to jurisdictions in which Digirad
has exclusive rights under the Agreement. Thus, except for that first
sentence of Section 16.1, the entirety of Section 16 will not apply to
the Licensed Products insofar as they are within the Non-Exclusive
Field of Use.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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14. Except as specifically amended herein, the Agreement is hereby ratified
and confirmed.
Berkeley Lab and Digirad execute this Agreement in duplicate originals through
their authorized respective officers in one or more counterparts that, taken
together, are but one instrument.
THE REGENTS OF THE UNIVERSITY DIGIRAD CORPORATION
OF CALIFORNIA, THROUGH THE
ERNEST ORLANDO LAWRENCE
BERKELEY NATIONAL LABORATORY
By /S/ PIERMARIA ODDONE By /S/ SCOTT HUENNEKENS
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(Signature) (Signature)
By PIERMARIA ODDONE By SCOTT HUENNEKENS
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Title DEPUTY LABORATORY DIRECTOR Title PRESIDENT AND CEO
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Date 5-24-01 Date 5-11-01
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Approved as to form
/S/ GLENN R. WOODS
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GLENN R. WOODS
LAWRENCE BERKELEY NATIONAL LABORATORY
pg 6