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EXHIBIT 10.1
L-99-1261
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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L-99-1261
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
***
*** 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 ***
***
***
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2.3 "Highly Inflationary Currency" means the currency of any economy with a
cumulative inflation rate of *** or more over the most recent *** , as
measured by consumer price indices published by the ***
***
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: ***
***
***
***
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 ***
***
*** 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 ***
***
*** 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
***
*** For sales of Licensed Products to a Joint 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 ***
***
*** 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 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 *** ***
2.7 "Affiliate(s)" of a party means ***
***
***
***
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, ***
***
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 ***
***
***
***
***
***
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 *** . 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 ***
***
***
***
***
***
5.4 Digirad shall pay to Berkeley Lab by *** 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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<Table>
<Caption>
CALENDAR YEAR MINIMUM ANNUAL ROYALTY
------------- ----------------------
1999 $ ***
2000 $ ***
2001 $ ***
2002 and each year thereafter $ ***
</Table>
5.5 Digirad shall send payment for royalties accruing to Berkeley Lab ***
together with its royalty report under paragraph 7.4. Digirad shall be
entitled to credit ***
***
***
***
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 ***
***
***
***
If a Licensed Product is sold for a Highly Inflationary Currency,
Digirad shall ***
***
***
***
***
5.7 Digirad may not reduce royalties payable by ***
***
***
***
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 ***
*** or
6.4.2 ***
***
***
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 *** 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 ***
***
***
***
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 *** 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 *** royalty reports to Berkeley Lab on or ***
*** Each royalty report must cover the most recently completed *** 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 *** from
the date of the royalty payment to which they pertain and shall open
them to inspection by representatives or agents of Berkeley Lab ***
***
***
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
*** 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 *** after its
notice. If that termination is without cause within *** years of the
Effective Date, Digirad shall ***
***
***
12. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION
12.1 Within *** 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 *** of
termination. The sale of any Licensed Product within *** is subject to
the terms of this Agreement. Digirad shall cease sales of ***
*** 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) ***
(ii) ***
(iii) ***
(iv) ***
(v) ***
(vi) ***
(vii) ***
(viii) ***
(ix) ***
(x) ***
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(xi) ***
(xii) ***
(b) ***
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 *** 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 *** , upon the day of execution of
this Agreement, for the foreign patent counterparts to the U.S.
application for the following countries: ***
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 *** 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 ***
***
***
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 *** *** 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, ***
***
*** Both parties
shall use their best efforts in cooperation with each other to
terminate such infringement without litigation.
16.2 ***
***
***
16.3 ***
***
***
16.4 ***
***
***
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). ***
***
***
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 $ ***
19.2.2 Products/Completed Operations Aggregate $ ***
19.2.3 Personal and Advertising Injury $ ***
19.2.4 General Aggregate (commercial form only) $ ***
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 *** 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 *** 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 ***
***
***
***
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.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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L-99-1261
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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L-99-1261
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 ***
***
***
2.2.2 "Non-Exclusive Field of Use" means the development,
production and use of ***
***
***
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
<Page>
***
***
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 ***
***
***
4.1.2 within the Non-Exclusive Field of Use, Digirad shall
pay Berkeley Lab a license issue fee of ***
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
pg 2
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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 *** 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.
<Table>
<Caption>
------------------------------------ ----------------------------------- -------------------------------
CALENDAR YEAR MINIMUM ANNUAL ROVALTY FOR FIELD MINIMUM ANNUAL ROYALTY FOR
OF USE NON-EXCLUSIVE FIELD OF USE
------------------------------------ ----------------------------------- -------------------------------
1999 *** N/A
------------------------------------ ----------------------------------- -------------------------------
2000 *** N/A
------------------------------------ ----------------------------------- -------------------------------
2001 *** ***
------------------------------------ ----------------------------------- -------------------------------
2002 *** ***
------------------------------------ ----------------------------------- -------------------------------
2003 *** ***
------------------------------------ ----------------------------------- -------------------------------
2004 *** ***
------------------------------------ ----------------------------------- -------------------------------
2005 and each year thereafter *** ***
------------------------------------ ----------------------------------- -------------------------------
</Table>
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.
pg 3
<Page>
6.4.1.1 ***
***
6.4.1.2 ***
***
6.4.2 With regard to the Non-Exclusive Field of Use:
6.4.2.1 ***
6.4.2.2 ***
6.4.2.3 ***
6.4.2.4 ***
6.4.2.5 ***
6.4.2.6 ***
***
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 ***
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 ***
***
***
***
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 *** 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.
pg 4
<Page>
of this Agreement will be effective *** days after its notice.
If that termination pertains to the Field of Use and is
without cause within *** years of the Effective Date, Digirad
shall ***
***
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 ***
***
***
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
*** 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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<Page>
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
----------------------------------- ---------------------------
(Signature) (Signature)
By PIERMARIA ODDONE By SCOTT HUENNEKENS
----------------------------------- --------------------
Title DEPUTY LABORATORY DIRECTOR Title PRESIDENT AND CEO
-------------------------------- ---------------------
Date 5-24-01 Date 5-11-01
--------------------------------- -----------
Approved as to form
/S/ GLENN R. WOODS
-------------------------------------
GLENN R. WOODS
LAWRENCE BERKELEY NATIONAL LABORATORY
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