EXHIBIT 10.1 RESEARCH AND LICENSE AGREEMENT

 

 

                                                                    EXHIBIT 10.1

 

 

                         RESEARCH AND LICENSE AGREEMENT

 

      This License Agreement is entered into as of this ___ day of July, 2004

(the "Effective Date"), by and between Golden Hand Resources, Inc., a company

formed under the laws of the State of Washington, having a place of business at

36 Derech Bait Lechem, Jerusalem, Israel ("Licensee") and Ramot at Tel Aviv

University Ltd., a company formed under the laws of Israel, having a place of

business at Tel Aviv University in Ramot-Aviv, Tel Aviv 61392, Israel ("Ramot").

 

      WHEREAS, Tel Aviv University ("TAU") owns exclusive rights to certain

technology developed by Professor Eldad Melamed, Dr. Daniel Offen and Yossef

Levy at the Felsenstein Medical Research Center of Tel Aviv University relating

to processes for the transformation of bone marrow and cord blood stem cells

into neuron-like and glial-like cells; and

 

      WHEREAS, pursuant to agreement between TAU and Ramot, all rights, title

and interest in and to any and all inventions and other results arrived at by

scientists of TAU are owned solely and exclusively by Ramot; and

 

      WHEREAS, Licensee wishes to continue funding research at TAU through Ramot

for the purpose of furthering research related to processes for the

transformation of bone marrow and cord blood stem cells into neuron-like and

glial-like cells; and

 

      WHEREAS, Licensee wishes to obtain a license with respect to such

technology and the results of such research, in order to develop, obtain

regulatory approval for and commercialize products based on such technology and

the results of such funded research, and Ramot wishes to grant Licensee a

license with respect to such technology and the results of such research, all in

accordance with the terms and conditions of this Agreement.

 

      NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby

agree as follows:

 

1.     DEFINITIONS.

 

      Whenever used in this Agreement with an initial capital letter, the terms

defined in this Section 1, whether used in the singular or the plural, shall

have the meanings specified below.

 

      1.1.   "AFFILIATE" shall mean, with respect to either party, any person,

organization or entity controlling, controlled by or under common control with,

such party. For purposes of this definition only, "control" of another person,

organization or entity shall mean the possession, directly or indirectly, of the

power to direct or cause the direction of the activities, management or policies

of such person, organization or entity, whether through the ownership of voting

securities, by contract or otherwise. Without limiting the foregoing, control

shall be presumed to exist when a person, organization or entity (i) owns or

directly controls twenty percent (20%) or more of the outstanding voting stock

or other ownership interest of the other organization or entity, or (ii)

possesses, directly or indirectly the power to elect or appoint twenty percent

(20%) or more of the members of the governing body of the organization or other

entity.

 

 

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      1.2.   "CALENDAR QUARTER" shall mean the respective periods of three (3)

consecutive calendar months ending on March 31, June 30, September 30 or

December 31, for so long as this Agreement is in effect.

 

      1.3    "DEVELOPMENT MILESTONES" shall mean the development milestones set

forth in Exhibit 1.3 hereto.

 

      1.4    "FIRST COMMERCIAL SALE" shall mean the first sale of a Product by

Licensee, an Affiliate of Licensee or a Sublicensee to an unaffiliated third

party after Regulatory Approval has been achieved in the country in which such

Product is sold. Sales for test marketing, sampling and promotional uses,

clinical trial purposes or compassionate or similar use shall not be considered

to constitute a First Commercial Sale.

 

      1.5.   "FDA" shall mean the United States Food and Drug Administration.

 

      1.6    "NDA" means a New Drug Application or Product License Application

(or Biologics License Application), as appropriate, and all supplements filed

pursuant to the requirements of the FDA, including all documents, data and other

information concerning Products that are necessary for or included in FDA

approval to market a Product, or the equivalent application in any other country

or jurisdiction.

 

      1.8    "NET SALES" shall mean the gross amount billed or invoiced by or on

behalf of Licensee, its Affiliates and its Sublicensees on sales of Products

(whether made before or after the First Commercial Sale of the Product), less

the following: (a) customary trade, quantity, or cash discounts to the extent

actually allowed and taken; (b) amounts repaid or credited by reason of

rejection or return; and (c) to the extent separately stated on purchase orders,

invoices, or other documents of sale, any taxes or other governmental charges

levied on the production, sale, transportation, delivery, or use of a Product

which is paid by or on behalf of Licensee or such Sublicensee; provided that:

 

            (i)    In any transfers of Products between Licensee or a Sublicensee

to an Affiliate of Licensee or such Sublicensee, Net Sales shall be equal to the

higher of: (x) the fair market value of the Products so transferred, assuming an

arm's length transaction made in the ordinary course of business and (y) the

total amount invoiced by such Affiliate on resale to an independent third party

purchaser, in each case, after deducting the amounts referred to in clauses (a),

(b) and (c) above, to the extent applicable; and

 

 

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            (ii)   In the event that Licensee or a Sublicensee, or the Affiliate

of Licensee or such Sublicensee, receives non-monetary consideration for any

Products or in the case of transactions not at arm's length with a non-Affiliate

of Licensee or such Sublicensee, Net Sales shall be calculated based on the fair

market value of such consideration or transaction, assuming an arm's length

transaction made in the ordinary course of business.

 

      1.10. "ORPHAN DRUG" shall mean a Product that is protected (a) by "Orphan

Drug" status under the U.S. Orphan Drug Act, (b) by a Supplementary Protection

Certificate, as such term is defined in Council Regulation (EU) No. 1768/92, or

(c) by a similar status granted under similar statutory provisions of another

jurisdiction granting exclusive marketing rights in such jurisdiction.

 

      1.11. "PATENT RIGHTS" shall mean any and all (a) patents, (b) pending

patent applications, including, without limitation, all provisional

applications, continuations, continuations-in-part, divisions, reissues,

renewals, and all patents granted thereon, and (c) all patents-of-addition,

reissue patents, reexaminations and extensions or restorations by existing or

future extension or restoration mechanisms, including, without limitation,

supplementary protection certificates or the equivalent thereof.

 

      1.12. "PRINCIPAL INVESTIGATORS" shall mean Professor Eldad Melamed and Dr.

Daniel Offen, or such other principal investigator who may replace either or

both of them pursuant to Section 2.

 

      1.13. "PRODUCT" shall mean: (i) any product that incorporates

differentiation factors and other materials which is capable of inducing bone

marrow or cord blood stem cells to differentiate into neuron-like or glial-like

cells that can be transplanted into patients for the treatment of neurological

diseases in humans; (ii) any neuron-like or glial-like cell generated through

use of a product described in clause (i) of this Section 1.12; and (iii) any

service that makes use of any of the products described in clause (i) or (ii) of

this Section 1.12.

 

      1.14. "RAMOT RESULTS" shall mean (a) any and all inventions, materials,

methods, processes, know-how and results made, created, developed, discovered,

conceived or acquired by, or on behalf of, members of the TAU Team (including,

without limitation, the Principal Investigators) in the course of the

performance of the Research and/or (b) any and all inventions, materials,

methods, processes, know-how and results made, created, developed, discovered or

conceived by either of the Principal Investigators, either alone or together

with one or more third parties, in the performance of services for, or as an

employee of, the Company.

 

      1.15. "RAMOT PATENT RIGHTS" shall mean (i) the Patent Rights described in

Exhibit 1.15(a) attached hereto, (ii) any other Patent Rights owned by Ramot

which claim, and only to the extent they so claim, the invention disclosed in

the Patent Rights described in Exhibit 1.15(a) and (iii) all Patent Rights owned

by Ramot, to the extent they claim any of the Ramot Results. Exhibit 1.15(b)

shall set forth and shall be updated from time to time to include new Ramot

Patent Rights.

 

 

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      1.16. "RAMOT TECHNOLOGY" shall mean the Ramot Patent Rights, the invention

disclosed in Exhibit 1.15(a) and the Ramot Results.

 

      1.17. "REGULATORY AGENCY" shall mean the FDA or equivalent agency or

government body of another country.

 

      1.18. "REGULATORY APPROVAL" shall mean (i) approval of an NDA by the FDA

permitting commercial sale of a Product or (ii) any comparable approval

permitting commercial sale of a Product granted by the applicable Regulatory

Agency in any other country or jurisdiction.

 

      1.19. "RESEARCH" shall mean the research actually conducted by the TAU

Team under the terms of this Agreement in accordance with the Research Plan.

 

      1.20. "RESEARCH PLAN" shall mean the research plan attached hereto as

Exhibit 1.20, as amended from time to time in accordance with the provisions of

this Agreement, which sets forth the research to be undertaken by the TAU Team

under the direction of the Principal Investigator during the Research Period.

 

      1.21. "RESEARCH PERIOD" shall mean an initial term of two years commencing

on the Effective Date, and in the event the TAU Team meets the milestones set

forth in the Research Plan in accordance with Section 2.2.1, a total term of

four years ending on June 30, 2008.

 

      1.22. "SUBLICENSE RECEIPTS" shall mean any payments or other consideration

that Licensee or an Affiliate receives, other than amounts received on account

of Net Sales, in consideration of the sublicense or other grant of rights with

respect to some or all of the rights granted to Licensee under Section 5.2, or

the grant of an option to obtain a sublicense or such other rights, including

without limitation license fees, milestone payments, license maintenance fees

and reimbursement for research and development and patent related expenses;

provided that in the event that Licensee or an Affiliate of Licensee receives

non-monetary consideration for any such sublicense or other grant of rights or

in the case of transactions not at arm's length, Sublicense Receipts shall be

calculated based on the fair market value of such consideration or transaction,

assuming an arm's length transaction made in the ordinary course of business.

For the avoidance of doubt, "Sublicense Receipts" shall not include payments

made in consideration for the issuance of equity or debt securities of the

Licensee at fair market value and not as direct or indirect consideration (in

whole or in part) for the sublicense, or the grant of an option to obtain a

sublicense, of some or all of the rights granted Licensee under Section 5.2.

 

 

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      1.23. "SUBLICENSEE" shall mean any permitted sublicensee of all or part of

the rights granted Licensee under Section 5.1, as further described in Section

5.2.

 

      1.24. "TAU TEAM" shall mean the Principal Investigators and those

students, scientists and technicians working under their direction at the

Felsenstein Medical Research Center of Tel Aviv University on the Research.

 

2.     RESEARCH PROJECT.

 

      2.1    PERFORMANCE.

 

            2.1.1. Ramot shall cause TAU, under the direction of the Principal

Investigators, to use reasonable efforts to perform the Research in accordance

with the Research Plan; however, Ramot and TAU make no warranties regarding the

completion of the Research or the achievement of any particular results.

 

            2.1.2. The Research will be directed and supervised by the Principal

Investigators, who shall have primary responsibility for the performance of the

Research. If both of the Principal Investigators cease to supervise the Research

for any reason, Ramot will so notify Licensee, and Ramot shall endeavor to find

among the scientists at TAU a scientist or scientists acceptable to Licensee to

continue the supervision of the Research in place of the Principal

Investigators. If Ramot is unable to find such a scientist acceptable to

Licensee, within sixty (60) days after such notice to Licensee, Licensee shall

have the option to terminate the funding of the Research. Licensee shall

promptly advise Ramot in writing if Licensee so elects. Such termination of

funding shall terminate Ramot's and TAU's obligations pursuant to Section 2.1.1

above, but shall not terminate this Agreement or any of the other rights or

obligations of the parties under this Agreement. Nothing contained in this

Section 2.1.2, shall be deemed to impose an obligation on Ramot or TAU to

successfully find a replacement for the Principal Investigators who is

acceptable to Licensee.

 

             2.1.3. The Principal Investigators shall provide Licensee, within

thirty (30) days after the end of every six-month period during the Research

Period, a written report summarizing the Ramot Results obtained during the

preceding six-month period.

 

      2.2    FUNDING OF THE RESEARCH PROJECT.

 

            2.2.1. Licensee shall fund the Research during the initial term of

the Research Period in accordance with the schedule set forth in Section 1 of

Exhibit 2.2.1 hereto. In addition, in the event the TAU Team meets the

milestones set forth in Section (b) of Exhibit 1.20, Licensee shall fund the

second phase of the Research during the additional term of the Research Period

in accordance with the schedule set forth in Section 2 of Exhibit 2.2.1. Any and

all funding provided by the Licensee pursuant to this Section 2.2.1 shall be

applied by Ramot exclusively in support of the Research, including salaries and

overhead, in accordance with the procedures established at TAU.

 

 

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            2.2.2. Nothing in this Agreement shall be interpreted to prohibit

Ramot, TAU or the Principal Investigators from seeking and receiving funding

from non-commercial sources, including government agencies and foundations, or

from commercial entities for non-commercial purposes, to further support the

Research; provided that such funding shall not be on terms that give such

entity(ies) any rights to any invention made or to any Ramot Technology

developed in the performance of the Research (subject to any non-exclusive

license for governmental purposes or other governmental rights required as a

condition for such non-commercial funding). Ramot shall notify Licensee upon the

Principal Investigators' or TAU's applying for and receiving any such funding,

which notice shall include a copy of any notices awarding such funding.

 

3.     TITLE.

 

      Subject to the licenses granted to Licensee pursuant to Section 5 below,

all rights, title and interest in and to the Ramot Technology, and in and to any

drawings, plans, diagrams, specifications and other documents containing any of

the Ramot Technology shall be owned solely and exclusively by Ramot.

 

4.     PATENT FILING, PROSECUTION AND MAINTENANCE.

 

      4.1.   RESPONSIBILITY. Ramot shall be responsible for the preparation,

filing, prosecution, protection and maintenance of all Ramot Patent Rights,

using patent counsel reasonably acceptable to Licensee. Ramot shall consult with

Licensee as to the preparation, filing, prosecution, protection and maintenance

of the Ramot Patent Rights reasonably prior to any deadline or action with the

U.S. Patent & Trademark Office or any other patent office and shall furnish

Licensee with copies of all relevant documents reasonably in advance of such

consultation.

 

      4.2.   EXPENSES. Subject to Section 4.3 below, Licensee shall reimburse

Ramot for all documented patent-related expenses incurred by Ramot pursuant to

this Section 6 within thirty (30) days after Ramot invoices Licensee. In

addition, within forty-five (45) days following the execution of this Agreement,

Licensee shall pay Ramot a total amount of $16,908 (sixteen thousand, nine

hundred and eight US Dollars) as a reimbursement for expenses incurred by Ramot

prior to the execution of this Agreement with respect to the filing and

prosecution of Ramot Patent Rights.

 

      4.3.   ABANDONMENT. Should Licensee elect not to reimburse or fail to

reimburse Ramot for the filing, prosecution or maintenance of a patent

application in any country, on any invention included in the Ramot Technology or

to cease reimbursing Ramot for the prosecution, protection and/or maintenance of

any Ramot Patent Right in any such country (an "Abandoned Country"), Licensee

 

 

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shall provide Ramot with prompt written notice of such election. Upon written

receipt of such notice by Ramot, Licensee shall be released from its obligations

to reimburse Ramot for the expenses incurred thereafter as to such Abandoned

Country in conjunction with such Ramot Patent Rights. In such event, such Ramot

Patent Rights shall be deleted from the definition of Ramot Technology with

respect to such Abandoned Country, any license with respect thereto will

terminate with respect to such Abandoned Country, and Licensee shall have no

rights whatsoever to exploit such Ramot Patent Rights in such Abandoned Country.

Ramot shall then be free, without further notice or obligation to Licensee, to

grant rights in and to such Ramot Patent Rights with respect to such Abandoned

Country to third parties, which rights shall not include the right to offer,

sell or market the resulting Product(s) in, or to export such Product(s) to, any

country which is not an Abandoned Country

 

      4.4.   NO WARRANTY. Nothing contained herein shall be deemed to be a

warranty that: (a) Ramot can or will be able to obtain patents on patent

applications included within the Ramot Patent Rights or on patent applications

relating to the Ramot Results, or that any of the Ramot Patent Rights will

afford adequate or commercially worthwhile protection, or (b) the manufacture,

use or sale of any element of the Ramot Technology or any Product will not

infringe any patent(s) of any third party.

 

5.     LICENSE GRANT.

 

      5.1.   LICENSE. Subject to the terms and conditions set forth in this

Agreement, Ramot hereby grants to Licensee an exclusive, worldwide,

royalty-bearing license under Ramot's rights in the Ramot Technology solely to

develop, make, have made, use, offer for sale, sell, have sold and import

Products. For purposes of this Section 5.1, the term "exclusive" means that

Ramot shall not have any right to grant such licenses or rights to any third

party, subject, however, to Ramot's right to license TAU, the Principal

Investigators and the other members of the TAU Team to practice or utilize such

rights and licenses to conduct the Research.

 

      5.2    SUBLICENSE.

 

            5.2.1. SUBLICENSE GRANT. Licensee shall be entitled to grant

sublicenses to third parties under the license granted pursuant to Section 5.1

on terms and conditions in compliance with and not inconsistent with the terms

of this Agreement (except that the royalty rates may be higher than those set

forth in this Agreement). Such sublicenses shall only be made for consideration

and in bona-fide arm's length transactions.

 

            5.2.2. SUBLICENSE AGREEMENTS. Sublicenses shall only be granted

pursuant to written agreements, which shall be in compliance and not

inconsistent with and shall be subject and subordinate to the terms and

conditions of this Agreement. Such sublicense agreements shall contain, among

other things, provisions to the following effect:

 

 

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                  5.2.2.1. All provisions necessary to ensure Licensee's ability

to perform its obligations under this Agreement, including without limitation

its obligations under Sections 6.1, 8.5, 8.6 and 13.4.3;

 

                  5.2.2.2. In the event of termination of the license (in whole

or in part - e.g. termination in a particular country) set forth in Section 5.1

above, any existing agreements that contain a sublicense of the Ramot Technology

shall terminate to the extent of such sublicense; provided, however, that, for

each Sublicensee, upon termination of the sublicense agreement with such

Sublicensee, if the Sublicensee is not then in breach of its sublicense

agreement with Licensee such that Licensee would have the right to terminate

such sublicense, Ramot shall be obligated, at the request of such Sublicensee,

to enter into a new license agreement with such Sublicensee on substantially the

same terms as those contained in such sublicense agreement, provided that such

terms shall be amended, if necessary, to the extent required to ensure that such

Sublicense Agreement does not impose any obligations or liabilities on Ramot

which are not included in this Agreement;

 

                  5.2.2.3. The Sublicensee shall not be entitled to sublicense

its rights under such sublicense agreement; and

 

                  5.2.2.4. The sublicense agreement may not be assigned by

Sublicensee without the prior written consent of Ramot, except that Sublicensee

may assign the sublicense agreement to a successor in connection with the

merger, consolidation, or sale of all or substantially all of its assets or that

portion of its business to which the sublicense agreement relates; provided that

any such assignee agrees in writing in a manner reasonably satisfactory to Ramot

to be bound by the terms of such sublicense agreement. The consent contemplated

herein shall not be unreasonably withheld or delayed.

 

            5.2.3. DELIVERY OF SUBLICENSE AGREEMENT. Licensee shall furnish

Ramot with a fully executed copy of any such sublicense agreement, promptly

after its execution.

 

            5.2.4. BREACH BY SUBLICENSEE. Any act or omission by a Sublicensee,

which would have constituted a breach of this Agreement had it been an act or

omission by Licensee, shall constitute a breach of this Agreement. Licensee

shall indemnify Ramot for, and hold it harmless from, any and all damages or

losses caused to Ramot as a result of any such breach by a Sublicensee. In the

event of a breach by a Sublicensee, the cure of such breach or the termination

by Licensee of the sublicense agreement with such Sublicensee within Licensee's

cure period, as set forth in Section 13.3.3.1, shall constitute a cure of

Licensee's breach under this Agreement for purposes of Section 13.3.3.1.

 

 

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6.     DEVELOPMENT AND COMMERCIALIZATION.

 

      6.1.   DILIGENCE. Licensee shall use its best efforts, and/or shall cause

its Affiliates or Sublicensees to use their best efforts: (i) to develop

Products, (ii) to introduce Products into the commercial market and (iii) to

market Products following such introduction into the market. Specifically,

Licensee and/or its Affiliates and/or Sublicensees shall fulfill the following

obligations:

 

            6.1.1. Licensee, by itself or through Affiliates or Sublicensees,

shall meet each of the Development Milestones.

 

            6.1.2. Licensee, by itself or through Affiliates or Sublicensees,

undertakes to employ its best efforts, including funding consistent with such

efforts, to carry out all efficacy, pharmaceutical, safety, toxicological and

clinical tests, trials and studies and all other activities necessary in order

to obtain Regulatory Approval for the production, use and sale of Products in

each country in which Licensee, its Affiliates or Sublicensees intend to

produce, use, offer to sell and sell Products and in any case, in the United

States, the European Union and Japan.

 

            6.1.3. During the period commencing with the receipt of Regulatory

Approval in a given country, Licensee and its Affiliate shall, and shall ensure

that Sublicensees shall, use its or their best efforts, including funding

consistent with such efforts, to promote, market and sell Products in such

country. Licensee and/or its Affiliates and/or Sublicensees activities shall

include but not be limited to:

 

                  6.1.3.1. Using their best efforts to establish and maintain

good business relationships with hospitals, health care systems, doctors and

other medical professionals in accordance with standard and customary practices;

 

                  6.1.3.2. Establishing and maintaining a sales force consisting

of reasonably qualified personnel to promote and market the Products;

 

                  6.1.3.3. Advertising the Products in professional journals and

publications and sponsoring or attending appropriate symposia, trade exhibitions

and medical education programs; and

 

                  6.1.3.4. Formulating and using their best efforts to implement

annual sales and marketing plans for the Products.

 

            6.1.4. The Principal Investigators, a Licensee representative and a

Ramot representative shall meet no less than once every six (6) months during

the term commencing with the Effective Date and ending upon the First Commercial

Sale of a Product, at locations and times to be mutually agreed upon by the

parties, (i) to review the progress being made under the research and

development activities conducted by Licensee relating to Products, (ii) to

review the progress being made towards fulfilling the Development Milestones and

(iii) to discuss intended efforts for fulfilling such milestones.

 

 

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