License Agreement for Detector [Amendment No. 2] - University of California and Digirad Corp.
AMENDMENT #2
TO
LICENSE AGREEMENT FOR DETECTOR
This Amendment (the "Amendment #2"), effective as of October 1, 2003, is entered
into by The Regents of the University of California, Department of Energy
contract-operators of the Ernest Orlando Lawrence Berkeley National Laboratory,
1 Cyclotron Road, Berkeley, CA 94720, ("Berkeley Lab"), and Digirad Corporation
("Digirad"), a Delaware corporation having its principal place of business at
13950 Stowe Drive, San Diego, CA 92064 (collectively, "the parties").
A. THE PARTIES ENTERED INTO A LICENSE AGREEMENT FOR DETECTOR (LBNL
REFERENCE NUMBER L-99-1261) HAVING AN EFFECTIVE DATE OF MAY 19, 1999
(THE "ORIGINAL AGREEMENT"). THE ORIGINAL AGREEMENT WAS MODIFIED BY
AMENDMENT #1 HAVING AN EFFECTIVE DATE OF MAY 24, 2001("AMENDMENT #1").
THE ORIGINAL AGREEMENT AS MODIFIED BY AMENDMENT #1 SHALL HEREINAFTER BE
REFERRED TO AS THE "AGREEMENT".
B. BEGINNING IN OCTOBER 2003, THE PARTIES HAVE BEEN IN DISCUSSIONS TO
RESOLVE CERTAIN MATTERS RELATING TO THE AGREEMENT. THIS AMENDMENT #2 IS
INTENDED TO FULLY RESOLVE SUCH MATTERS.
C. THE PARTIES NOW DESIRE TO MODIFY THE AGREEMENT AS STATED HEREIN.
CAPITALIZED TERMS HEREIN SHALL HAVE THE MEANING AS SET FORTH IN THE
AGREEMENT EXCEPT AS OTHERWISE DEFINED IN THIS AMENDMENT #2.
The parties agree as follows:
1. The parties acknowledge that the non-exclusive license granted by
Berkeley Lab to Digirad pursuant to Amendment #1 has been terminated by
Digirad. Accordingly, Amendment #1 is hereby rescinded, except as
stated below:
(a) Section 4.1 of the Original 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 for the license originally granted pursuant
to Amendment #1 which has since been
terminated by Digirad, Digirad shall pay
Berkeley Lab a license issue fee of ***
dollars *** of which *** dollars *** has
been previously paid under this Agreement,
and the remaining *** dollars *** shall be
paid on or before July 30, 2004.
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(b) The modifications to the Original Agreement pursuant to
Paragraphs 2, 10, 11, and 12 of Amendment #1 are hereby
retained, ratified and confirmed.
2. The parties agree as follows:
(a) 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 *** *** percent *** of the Selling Price of each
Licensed Product Digirad sells.
(b) 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 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.
CALENDAR YEAR MINIMUM ANNUAL ROYALTY
------------- ----------------------
1999 *** (paid)
2000 *** (paid)
2001 *** (paid)
2002 *** (paid)
2003 ***
2004 ***
2005 ***
2006 ***
2007 ***
2008 ***
2009 ***
2010 and each year thereafter ***
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3. Pursuant to Article 21 (Notices), the parties desire to update their
address for notice purposes as follows:
In the case of Berkeley Lab (for payments and all other notices): In
the case of Digirad:
Lawrence Berkeley National Laboratory Digirad Corporation
Technology Transfer Department 13950 Stowe Drive
One Cyclotron Road, Bldg. 90R1070 San Diego, CA 92064
Berkeley, CA 94720-8125
Attn: Licensing Manager Attn: General Counsel
Tel: (510) 486-6467 Tel: (858) 726-1530
Fax: (510) 486-6457 Fax: (858) 726-1700
4. Pursuant to paragraphs 5.5 and 7.4 of the Agreement, Digirad shall
provide to Berkeley Lab on or before July 30, 2004, the following:
(a) for the period from April 1, 2003 - June 30, 2003:
(i) quarterly royalty report;
(ii) payment of royalties calculated using an earned royalty
rate of ***
***
(b) for the period from July 1, 2003 - September 30, 2003:
(i) quarterly royalty report;
(ii) payment of royalties calculated using an earned royalty
rate of ***
***
(c) for the period from October 1, 2003 - December 31, 2003:
(i) quarterly royalty report;
(ii) payment of royalties calculated using an earned royalty
rate of ***
***
(d) for the period from January 1, 2004 - March 31, 2004:
(i) quarterly royalty report;
(ii) payment of royalties calculated using an earned royalty
rate of ***
***
5. Pursuant to paragraph 1(a) of this Amendment #2, Digirad shall pay to
Berkeley Lab, on or before July 30, 2004, *** as the final installment
of the license issue fee.
6. Digirad shall pay to Berkeley Lab, on or before July 30, 2004, *** in
underpaid royalties for the period from January 1, 2000 - December 31,
2002.
7. Digirad shall pay to Berkeley Lab, on or before July 30, 2004, *** as
reimbursement of the maintenance fee for European Patent Convention
Application
***
***
8. Settlement and Release.
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(a) Digirad claims that the *** made or sold by, or made or sold
on behalf of, Digirad are not covered by the Licensed Patents
because such *** do not have an *** *** Berkeley Lab disputes
Digirad's claim. Digirad's claim, and Berkeley Lab's dispute
thereof, is hereinafter referred to as the "Patent Dispute."
(b) For and in consideration of the parties' execution of this
Amendment #2:
Digirad, its parents, subsidiaries, affiliates, divisions, officers,
directors, shareholders, joint venturers, agents, partners, attorneys,
heirs, servants, representatives, employees, assigns, predecessors, and
successors, forever discharge and release Berkeley Lab, The Regents of
the University of California, the U.S. Department of Energy, and their
respective affiliates, divisions, officers, directors, joint venturers,
agents, parents, attorneys, heirs, servants, representatives,
employees, assigns, predecessors, and successors, from any and all
claims, debts, costs, expenses, damages, injuries, liabilities,
demands, and causes of action of any kind, nature and description,
whether known or unknown, suspected or unsuspected, fixed or
contingent, which Digirad now has, owns or claims to have or own, or at
any time heretofore had, owned, or claimed to have or own, upon or by
reason of any matter, cause or thing, arising out of or in any way
related to the Patent Dispute. Digirad covenants that at no time will
it, its successors, or its assigns make any claim or commence or
prosecute against Berkeley Lab, its directors, officers, successors,
assigns, customers, or other transferees, any suit, action, or
proceeding of any kind based on the Patent Dispute, nor assert the
Patent Dispute as a defense of non-payment of royalties to Berkeley
Lab.
Berkeley Lab, its affiliates, divisions, officers, directors, joint
venturers, agents, parents, partners, attorneys, heirs, servants,
representatives, employees, assigns, predecessors, and successors,
forever discharge and release Digirad, its affiliates, divisions,
officers, directors, shareholders, agents, parents, attorneys, heirs,
servants, representatives, employees, assigns, predecessors, and
successors, from any and all claims, debts, costs, expenses, damages,
injuries, liabilities, demands, and causes of action of any kind,
nature and description, whether known or unknown, suspected or
unsuspected, fixed or contingent, which Berkeley Lab now has, owns or
claims to have or own, or at any time heretofore had, owned, or claimed
to have or own, upon or by reason of any matter, cause or thing,
arising out of or in any way related to the Patent Dispute. Berkeley
Lab covenants that at no time will it, its successors, or its assigns
make any claim or commence or prosecute against Digirad, its directors,
officers, successors, assigns, customers, or other transferees, any
suit, action, or proceeding of any kind based on the Patent Dispute.
Notwithstanding anything to the contrary in this Amendment #2, nothing
herein shall prevent, or otherwise limit in any way, the right and
ability of Berkeley Lab, The Regents of the University of California,
the U.S. Department of Energy, or their respective affiliates,
divisions, officers, directors, joint venturers, agents, parents,
attorneys, heirs, servants, representatives, employees, assigns,
predecessors, and successors from making any claim or commencing or
prosecuting against Digirad, its directors, officers, successors,
assigns, customers, or other transferees any suit, action, or
proceeding of any kind based on:
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(i) non-payment of royalties that are payable after July
30, 2004; or
(ii) infringement of the Licensed Patents, if this
Agreement is terminated.
For the avoidance of doubt, notwithstanding anything to the contrary in
this Amendment #2, nothing herein shall prevent, or otherwise limit in
any way, the right and ability of Berkeley Lab, pursuant to Article 8
(Books and Records) of the Agreement, to inspect and examine Digirad's
books and records to ascertain the accuracy of Digirad's reporting of
Licensed Products manufactured, used, or sold under the terms of the
Agreement and to collect any deficiencies in royalties based on such
examination.
(c) Each party hereby acknowledges that it has been advised by its
attorneys concerning, and is familiar with, the provisions of
section 1542 of the California Civil Code, which reads as
follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
Each party hereby acknowledges that it may have sustained
damages, losses, costs or expenses that are presently unknown
or unexpected, that may have materially affected such party's
decision to enter into this Amendment #2 and that said
damages, losses, costs or expenses may give rise to additional
damages, losses, costs or expenses in the future. Both Digirad
and Berkeley Lab acknowledge that this Amendment #2 has been
entered into with the knowledge that said damages, losses,
costs or expenses may exist, and both Digirad and Berkeley Lab
hereby waive any and all rights each party may have had under
section 1542, or under any other statute or rule or similar
effect.
(d) This settlement is made solely as a compromise of disputed
claims made by the parties. Neither party makes any admission
of any kind as part of entering into this Agreement.
9. Except as specifically amended herein, the Agreement is hereby ratified
and confirmed.
10. Both Berkeley Lab and Digirad represent that neither has relied on any
promise, inducement, representation or other statement made in
connection with or with respect to this Amendment #2 that is not
expressly contained in this Amendment #2 and that this Amendment #2
embodies the entire and final understanding of the parties on this
subject. This Amendment #2 supersedes any previous representations,
agreements, or understandings, whether oral or written.
11. If any term of this Agreement is deemed to be illegal or unenforceable,
then this Agreement shall be treated as though that illegal or
unenforceable term were excised, and the remainder of this Agreement
shall be enforced to the exclusion of that illegal or unenforceable
term; provided, however, that the parties shall negotiate in good faith
to substitute legal and enforceable provisions that more clearly effect
the parties' intent in entering into this Agreement.
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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/ DAVID M. SHEEHAN
-------------------------------- --------------------------------
(Signature) (Signature)
By PIERMARIA ODDONE By DAVID M. SHEEHAN
-------------------------------- --------------------------------
Title DEPUTY DIRECTOR Title PRESIDENT AND CEO
-------------------------------- --------------------------------
Date 7/26/04 Date 7/26/04
-------------------------------- --------------------------------
Approved as to form
/S/ GLENN R. WOODS
----------------------------------------------------------
GLENN R. WOODS
LAWRENCE BERKELEY NATIONAL LABORATORY
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