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EXHIBIT 10.65
ROYALTY AGREEMENT
This agreement (hereinafter "Agreement") is entered into this 1st day of
May, 1997 (hereinafter "Effective Date") by and between SPACEHAB,
Incorporated, a Washington State corporation, located at 0000 Xxxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxx, XX 00000, and University of Maryland Biotechnology
Institute (hereinafter "UMBI")located at 0000 Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx Xxxx, XX 00000.
RECITALS
WHEREAS, SPACEHAB will fly the Commercial Refrigerator/Incubator Module
(XXXX) containing the Crystals by Vapor Diffusion Apparatus (CVDA) aboard its
SPACEHAB Module during National Aeronautics and Space Administration (NASA)
space shuttle mission, STS-84, currently scheduled to be flown May 15, 1997,
and
WHEREAS, UMBI desires to reserve and use eight (8) xxxxxxxx in the CVDA
during STS-84 to fly eight (8) Protein Crystal Growth Solutions, and
WHEREAS, it is foreseeable that UMBI may, subsequent to the STS-84 mission,
develop any Products as defined in Section 1.1 below, for which UMBI will
license and receive royalty payments, and
WHEREAS, SPACEHAB desires to receive royalties on all future sales of
Products as defined in Section 1.1, rather than require UMBI pay SPACEHAB the
customary $220,000 fair market value for flying the Protein Crystal Growth
Solutions aboard the CVDA, and
WHEREAS, both parties desire that UMBI pay SPACEHAB royalties on all future
payments it receives for the sale of the Protein Crystal Growth Solutions, or
derivative products thereof, in exchange, and as consideration for SPACEHAB's
foregoing the $220,000 otherwise payable by UMBI to SPACEHAB for flying the
Protein Crystal Growth Solutions aboard the CVDA.
NOW THEREFORE, in consideration of the promises, mutual covenants, and
warranties herein contained, the parties agree as follows:
1.0 DEFINITIONS
1.1 Products. The term "Products", referred to herein, shall mean all
derivative products and derived applications of the eight (8) Protein
Crystal Growth Solutions licensed or sublicensed by UMBI, including but
not limited to, crystals developed from flying the Protein Crystal
Growth Solutions aboard the CVDA during STS-84; other solutions using
one or more elements of the original Protein Crystal Growth Solutions;
other formulations, used independently or in conjunction with other
compounds or substances; and pharmaceuticals, developed from the Protein
Crystal Growth Solutions. The term Products shall also include further
insight as to the true nature and character of the Protein Crystal
Growth Solutions or the crystals produced thereby; discoveries of new
methods; inventions of new formulations; discoveries of new approaches;
and all
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intellectual property developed or created as a result of flying the
Protein Crystal Growth solutions aboard the CVDA during STS-84. Products
shall also include discoveries arising as a direct or indirect result of
examining, testing, and otherwise working with the Protein Crystal Growth
solutions.
1.2 Net Sales. The term "Net Sales", referred to herein, shall mean the
payment received by UMBI from licensees (or sublicensee) in all
transactions, minus expenses, directly or indirectly involving the sale
of Products defined in Section 1.1 above.
2.0 DESCRIPTION OF SPECIMENS
2.1 UMBI shall provide SPACEHAB with a description of the specimens, the
solvents, and precipitants to be flown, and derived from the
experimental flight aboard the CVDA during STS-84. UMBI shall also
provide SPACEHAB with a description of the reasonably foreseeable areas
of application for which these Products could feasibly be developed to
commercial usefulness. The descriptions provided by UMBI, hereunder,
shall become exhibits and shall be incorporated into this agreement.
SPACEHAB shall keep confidential all descriptions provided by UMBI,
hereunder, and shall not disclose said descriptions without UMBI's prior
consent.
3.0 CONSIDERATION
3.1 As consideration, and in exchange for SPACEHAB foregoing the $220,000
fair market value otherwise payable to fly the eight (8) Protein Crystal
Growth Solutions aboard the CVDA during shuttle mission STS-84, UMBI
shall pay SPACEHAB a royalty on the sale of Products, as herein set
forth.
4.0 ROVALTIES
4.1 UMBI shall pay to SPACEHAB for the sale of Products sold by licensees or
sub-licensees an earned royalty of two percent (2%) of Net Sales until
SPACEHAB receives $440,000in royalties, and one (1%) of Net Sales
thereafter.
4.2 Royalties accruing to SPACEHAB shall be paid to SPACEHAB on an annual
basis. Each such payment will be for royalties which accrued within the
most recently completed calendar yearend payment shall be made by UMBI
within two months of the end of such calendar year.
4.3 All moneys due SPACEHAB from UMBI, its licensee or sublicensee shall be
payable in United States dollars collectible in Vienna, Virginia. When
Products are sold for moneys other than United States dollars, the
earned royalties will first be determined in foreign currency of the
country in which such Products are sold and then converted into
equivalent United States funds. The exchange rate will be that
established by the Bank of America in San Francisco, California.
5.0 DUE DILIGENCE
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5.1 Upon execution of this Agreement, UMBI shall diligently proceed with the
research plan utilizing the Protein Crystal Growth solutions. Upon
completion of the research, UMBI shall diligently proceed to market and
seek commercial licenses for Products in order to further develop,
manufacture or sell Products. UMBI shall notify SPACEHAB of its progress
in licensing on an annual basis.
5.2 UMBI agrees that any license agreement entered into by UMBI for the
development, manufacture, or sale of Product(s) shall include the
requirement:
a) That any licensee (or sublicensee) develop a commercialization plan under
which licensee (or sublicensee) intends to bring the Products into
commercial use;
b) That licensee (or sublicensee) provide written annual reports on its
product development progress or efforts to commercialize on an annual
basis;
c) That licensee (or sublicensee) shall use its reasonable best efforts to
introduce into the commercial market or apply the license processes to
commercial use as soon as practicable. "Reasonable best efforts", for the
purpose of this provision shall include, but not be limited to, adherence
to the commercialization plan and established benchmarks in the license
(or sublicense) agreement;
d) That licensee (or sublicensee) shall obtain all necessary governmental
approvals for the manufacture, use and sale of Products; and
e) That licensee (or sublicensee) use its reasonable best efforts to keep
licensed products or licensed processes reasonably accessible to the
public.
5.3 UMBI shall have the sole discretion for making all decisions as to how
to commercialize, market and sell Products.
5.4 All such licenses (or sublicenses) shall include all of the rights of
and obligations due to SPACEHAB that are contained in this Agreement.
UMBI shall provide SPACEHAB with a copy of each license (or sublicense)
issued hereunder and summarize and deliver all reports due under any
license (or sublicense).
5.5 Upon termination of this Agreement for any reason, SPACEHAB shall have
the option to require that all licenses (or sublicenses), hereunder, be
assigned to SPACEHAB, and remain in force and effect under the terms and
conditions thereof with SPACEHAB as the licenser, but the duties of
SPACEHAB shall only extend to SPACEHAB's duties under this Agreement.
6.0 PROGRESS AND ROYALTY REPORTS
6.1 Beginning January 1, 1998 and annually thereafter, UMBI shall submit to
SPACEHAB a progress report covering UMBI's activities related to the
research.
6.2 After the First Commercial Sale of a Product anywhere in the world by
licensee (or sublicensee), UMBI will make annual royalty reports to
SPACEHAB on or before each February 28 of each year (i.e. within two (2)
months from the end of each calendar year). Each such royalty report
will cover UMBI's most recently completed calendar year and will show
(a) the gross sales and net sales of Products sold by licensees, or
sub-licensees during the most recently completed calendar year; (b) the
number of each
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type of Product sold; (c) the royalties, in U. S. dollars, payable
hereunder with respect to such sales; (d) the exchange rates used.
6.3 If no sales of Products have been made during any reporting period, a
statement to this effect shall be required.
7.0 BOOKS AND RECORDS
7.1 UMBI shall require its licensee (or sublicensee) to make available books
and records accurately showing all Products developed, manufactured,
used and/or sold under the terms of this Agreement. Such books and
records shall be preserved for at least five (5) years from the date of
the royalty payment to which they pertain and shall be open to
inspection by representatives or agents of SPACEHAB at reasonable times
upon reasonable advance notice to UMBI.
7.2 The fees and expenses of SPACEHAB representatives performing such
examination shall be borne by SPACEHAB. However, if an error in
royalties of more than ten percent (5) of the total royalties due for
any year is discovered, then the fees and expenses of these
representatives shall be borne by UMBI.
8.0 LIFE OF THE AGREEMENT
8.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this Agreement
shall be in force from the Effective Date and shall remain in effect for
fifteen (15) years, until both mutually agree to terminate due to a lack
of commercial success of the research or until UMBI elects to buyout
this Agreement, as set forth in Article 11.0, the Termination and Buyout
provisions set forth herein.
9.0 TERMINATION BY SPACEHAB
9.1 Subject to Article 5.0, the Due Diligence provisions located herein, if
UMBI should violate or fail to perform any material term or covenant of
this Agreement, then SPACEHAB may give written notice of such default
(Notice of Default) to UMBI. If UMBI should fail to repair such default
within ninety (90) days of the effective date of such notice, SPACEHAB
shall have the right to terminate this Agreement and invoke the Buyout
provisions located in Article 11.0, by second notice (Notice of
Termination) to UMBI. If a Notice of Termination is sent to UMBI, this
Agreement shall automatically terminate on the effective date of such
notice, and all moneys payable to SPACEHAB, hereunder, shall immediately
become due. Such termination shall not relieve UMBI of its obligation to
pay any royalty or fees owed at the time of such termination.
9.2 If, at any time, either party is dissolved or reorganized the other
party shall have the right to terminate this Agreement.
10.0 TERMINATION BY UMBI
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10.1 UMBI shall have the right at any time to terminate this Agreement by
giving notice in writing to SPACEHAB. Such notice shall be subject to
the Notice provisions located in Article 13.0 (Notices) and termination
of this Agreement shall be effective sixty (60) days from the effective
date of such notices. Termination by UMBI shall activate the Buyout
provisions located in Article 11.0 below.
10.2 Any termination pursuant to the above paragraph shall not relieve UMBI
of any obligation accrued prior to such termination or any payments made
to SPACEHAB due prior to the effective date of termination.
11.0 BUYOUT
11.1 If UMBI chooses to terminate this Agreement, or if this Agreement is
terminated by SPACEHAB in accordance with the default provisions set
forth herein, then UMBI shall pay SPACEHAB a buyout fee. The buyout fee
shall be an amount mutually established by SPACEHAB and UMBI, and shall
be a function of and based upon projected future Net Sales of Products
beginning at the time the Buyout provision is invoked.
11.2 UMBI's payment of the buyout fee, hereunder, shall be known as the
"Buyout" provision, and shall not relieve UMBI of its obligation to pay
any royalties or fees accrued and owed to SPACEHAB up through the time
of the mutually established Buyout fee.
12.0 COSTS
12.1 Each party agrees to pay its own costs and expenses incurred in
connection with performing and complying with this Agreement, and neither
party shall be liable for the costs incurred by the other party in
complying with this agreement, except as herein set forth. It is
expressly understood by the parties that SPACEHAB shall not liable for
the costs incurred by UMBI if the STS-84, the CVDA, or the Protein
Crystal Growth Solutions are not otherwise flown; and UMBI shall not be
liable for the costs incurred by SPACEHAB if the Protein Crystal Growth
Solutions are not flown aboard the CVDA during STS-84.
13.0 NOTICES
13.1 Any notice or payment required to be given to either party shall be
deemed to have been properly given and to be effective (a) on the date of
delivery if delivered in person or (b) five (5) days after mailing if
mailed by first-class certified mail, postage, pre-paid to the respective
addresses given below, or to such other addresses as it shall designate
by written notice given to the other party.
In the case of UMBI: University of Maryland
Biotechnology Institute
0000 Xxxxxxxx Xxxx, Xxxxx 000
0
Xxxxxxx Xxxx, XX 00000
Attention: ORATD
In the case of SPACEHAB: SPACEHAB, Inc.
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention:Xxxxx Xxxxxxxx, Contracts Administrator
14.0 ASSIGNABILITY
14.1 This Agreement is binding upon and shall inure to the benefit of
SPACEHAB, its successors and assigns, but shall be personal to UMBI and
assignable by UMBI only with the written consent of SPACEHAB, which
consent shall not be unreasonably withheld.
15.0 LATE PAYMENTS
15.1 In the event royalty payments or fees are not received by SPACEHAB when
due, UMBI shall pay to SPACEHAB annual interest charges equal to the
projected inflation rate published by the United States government. Late
fees shall be waived in the event there is a legitimate dispute
concerning payments due to UMBI from its licensee(s).
16.0 WAIVER
16.1 It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be
deemed a waiver as to any subsequent and/or similar breach or default.
17.0 GOVERNMENT LAWS
17.1 This Agreement shall be interpreted and construed in accordance with the
laws of the State of Virginia.
18.0 EXPORT CONTROL LAWS
18.1 UMBI shall observe all applicable United States and foreign laws with
respect to the transfer of Products and related technical data, to
foreign countries, including, without limitation, the International
Traffic in Arms Regulations (ITAR) and the Export Administration
Regulations.
18.2 UMBI shall impose upon any licensees or sublicensees the requirement to
observe all applicable United States and foreign laws with respect to
the transfer of Products and related technical data, to foreign
countries, including without limitation, the International Traffic in
Arms Regulations (ITAR) and Export Administration Regulations.
19.0 FORCE MAJEURE
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19.1 The parties to this Agreement shall be excused from any performance
required hereunder if such performance is rendered impossible or
unfeasible due to any catastrophes or other major event beyond their
reasonable control, including, without limitation, 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 have been
abated, the parties' respective obligations hereunder shall resume.
20.0 MISCELLANEOUS
20.1 The headings of the sections of this agreement are for convenience of
reference only and are not intended to be part of or to affect the
meaning or interpretation of this Agreement.
20.2 This Agreement will not be binding upon the parties until it has been
signed below on behalf of each party, in which event, it shall be
effective as of the date recited on page one.
20.3 No amendment or modification hereof shall be valid or binding upon the
parties unless made in writing and signed on behalf of each party.
20.4 This Agreement embodies the entire understanding of the parties and
shall supersede all previous representations or understandings, either
oral or written, between the parties relating to the subject matter
hereof.
20.5 If any provision(s) contained in this Agreement are or become invalid,
are ruled illegal by any court of competent jurisdiction or are deemed
unenforceable under then current applicable law from time to time in
effect during the term hereof, it is the intention of the parties that
the remainder of this Agreement shall not be affected thereby, provided
that a party's rights under this Agreement are not materially affected.
It is further the intention of the parties that in lieu of each such
provision which is invalid, illegal, or unenforceable, there be
substituted or added as part of this Agreement a provision which shall
be as similar as possible in economic and business objectives as
intended by the parties to such invalid, illegal, or unenforceable
provision, but shall be valid, legal and enforceable.
IN WITNESS WHEREOF, both SPACEHAB and UMBI have executed this Agreement in
duplicate originals, by their respective officers hereunto duly authorized, on
the day and year hereafter written.
UMBI SPACEHAB, INC.
BY: /s/ S. Xxxxxx Xxxxxxx BY: /s/ Xxxxxxx X. Xxx
---------------------
Title: Vice President Acad. Affairs Title: President
Date: 1 May 1997 Date:
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SpaceHab/University of Maryland Agreement
Exhibit A (Xxxx)
Description of Specimens
Amersham Life Science, Inc. specializes in reagents, enzymes, and kits for
Nucleic Acid Sequencing and Detection. The Amersham line of DNA polymerases
for sequencing is the best currently available, and continues to expand with
its most recent addition, Thermo Sequenase. In order to continue to provide
new DNA polymerases with improved features, one focus of current research is
mutagenesis of archaeal thermostable DNA polymerases (confidential
information relating to our current grant from the ATP). Protein engineering
is currently underway on such a polyrnerase, based on the primary and
proposed secondary structure of the enzyme. Having tertiary structure
information from crystal analysis would provide key information on the
structure to be modified. However, despite efforts by several labs in the
past few years, these proteins have proven refractory to ordinary
crystallization techniques, and there is no crystal structure data available
for any thermostable archaeal Type II DNA polymerase.
Amersham proposes to produce sufficient quantities of modified DNA polymerase
from the hyperthermophile Pyrococcus furiosus for experiments to attempt
crystallization with the Commercial Vapour Diffusion Apparatus. Our
colleagues at the University of Maryland Biotechnology Institute have
received funding from us under the NIST ATP program. Under this agreement,
Amersham retains exclusive patent rights to the University's intellectual
property developed under the agreement. UMBI researchers will collaborate
with us to prepare the samples in a format most amenable to crystallization.
Data obtained will enhance understanding of the protein structures that
contribute to thermos/ability (by comparison with homologous mesophilic
structures), and lead to further modifications of polymerase active sites.
The potential commercial benefits include improved stability and performance
of enzymes for DNA sequencing and PCR research.
The University of Maryland is conducting basic studies into the determination
of exceptional thermos/ability in enzymes. The approach they have taken is
the mutagenesis of moderately thermostable enzymes, based on comparative
structural predictions dictated by the crystal structures of homologous,
exceptionally thermostable enzymes. Currently, they have constructed five
fully active glutamate dehydrogenase variants of the hyperthermophile
Thermococcus litoralis, which have a five-fold range of thermos/abilities.
The midpoint of denaturation (Tm) of the most thermostable variant is 111C,
which is within 2c of the most thermostable dehydrogenase recorded by us,
that of Pyrococcus furiosus, and is 1 8C higher than the least thermostable
mutant enzyme in the study. This range represents the effects of only five
altered residues in a polypeptide of 321 residues.
Detailed structural studies based on the crystallization of the enzyme under
microgravity conditions, will allow us to confirm the data from modeling
studies that led to the choice of these mutations sites. The overall goal of
the study is to devise robust predictive strategies for altering enzyme
thermos/ability.
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SPACEHAB/UNIVERSITY OF MARYLAND AGREEMENT
EXHIBIT B (DiGATE)
DESCRIPTION OF SPECIMENS
DNA topoisomerases have been the subject of intense study in recent years.
These enzymes play a crucial role in cellular DNA metabolism. The importance
of this role has been reinforced by the finding that certain antibiotics and
antineoplastic agents specifically target and inhibit these enzymes. For
example, the coumarin and quinolone antibiotics specifically inhibit
bacterial DNA gyrase and acridines, anthracyclines, ellipticines,
epipodophyllotoxins, and alkaloids specifically target and inhibit eucaryotic
topoisomerases.
DNA topoisomerases act by altering the topoligical state of DNA. This is
accomplished by the transient breakage of one (type I topoisomerase) or both
(type II topoisomerase) strands(s) of the helix, a strand passing event, and
the subsequent resealing of the strand(s). It is the ability of
topoisomerases to link and unlink DNA, that defines their role in cellular
DNA metabolism. Topoisomerases have not only been implicated in the
maintenance of the superhelical density of DNA, but also in the separation
(or decatenation) of chromosomes during DNA replication.
My laboratory is particularly interested in Escherichia cold DNA
topoisomerase I (Topo I) and III (Topo III), the two type I enzymes of this
well characterized bacteria. These two topoisomerases show extensive protein
sequence homology within the first 600 amino acids of the two proteins;
however, they diverge rapidly in the carboxyl-terminal domains of the
proteins. Our laboratory has been able to show that although these proteins
show extensive protein sequence homology, they catalyze distinct reaction in
vitro. Topo I is an efficient relaxation activity, catalyzing the removal of
negative supercoils from circular DNA molecules, but Topo III is a poor
relaxation activity. Topo III, on the other hand, is a potent decatenase
capable of efficiently resolving interlinked chromosomes. Topo I is a poor
decatenase. In an attempt to understand the differences between these two
enzymes we have used a combined molecular biology and biophysical analysis
of these two enzymes. Molecular biology studies have implicated the
heterologous carboxyl-terminus of Topo III as essential for its unique
biochemical properties. In addition, these studies have indicated that there
must be amino acid residues within the homologous regions of both proteins
that are responsible for the unique biochemical properties of these enzymes.
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EXHIBIT B
The X-xxx xxxxxxx structure has been determined in the laboratory of Xxxxxxx
Xxxxxxxxx for a genetically engineered truncation of Topo I (containing
residues through amino acid 590). This truncation, however, is not an active
enzyme. We have collaborated with Xx. Xxxxxxxxx to elucidate the X-xxx
xxxxxxx structure of E. cold Topo III. We have been able to generate a 3
structure of Topo III that contains amino acids 1-609. Our laboratory has
shown that Topo III truncated to 609 amino acids, is a fully active
topoisomerase. In addition, we are attempting to explain the catalytic
differences of the two enzymes within the context of their physical
structure. The structural determination of Topo III to higher resolution has
been hampered by the small size of the crystals. Xx. Xxxxxxxxx and myself are
extremely interested in the possibility of growing bigger crystals in the low
gravity environment of SPACEHAB.
Xx. Xxxxxxxxx and myself have recently entered a collaborative research
agreement with SmithKline Xxxxxxx Pharmaceuticals to perform studies to
elucidate the catalytic mechanism of type 1 topoisomerases. The agreement
grants to Xxxxx-Xxxxx Xxxxxxx an option to negotiate an exclusive worldwide
royalty bearing license to UMBI developed intellectual property and to UMBI's
share of any jointly developed intellectual. The ultimate goal of the
research would be to rationally design inhibitors of these enzymes. Recently,
there has been a increasing occurrence of antibiotic resistant strains of
bacteria. It is clear that new antibiotics must be produced. Unfortunately,
the current list of antibiotics target a very limited set of enzymes. It is
therefore essential to develop antibiotics to new targets. Type 1
topoisomerases are potential targets since inhibition of these enzymes during
catalysis would result in chromosomal breaks in much the same way that the
quinolone antibiotics result in chromosomal breaks by inhibiting type II
topoisomerases. The availability of the crystal structures of the two type 1
enzymes in combination with the arsenal of molecular biology techniques
currently available makes this an unparalleled opportunity to rationally
design a new antibiotic to a new target. The ability to generate high quality
crystals is essential to the refinement of the current X-xxx xxxxxxx
structure of Topo III and would greatly enhance the possibility of success of
this project.
