LICENSE AGREEMENT (this “License”) is entered into as of August 20, 2008 (the “Effective Date”) by
LICENSE
AGREEMENT (this “License”)
is
entered into as of
August 20, 2008 (the “Effective
Date”)
by
Xxxxxxxx Atlantic, a company
incorporated under the laws of the Cayman Islands, (Registration No. 209852) and
having its registered office at c/o The Harbour Trust Co. Ltd., One Capital
Place, XX Xxx 000, Xxxxxx Xxxx, Xxxxx Xxxxxx, XX0-0000, Cayman Islands, British
West Indies (“Xxxxxxxx”);
to
Sunburst Acquisitions III, Inc.,
a Colorado corporation having its principal place of business at 00000
Xxxxxxxx Xxxx., Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000, Xxxxxx Xxxxxx of
America (“Sunburst”)
(Xxxxxxxx
and Sunburst hereinafter to be collectively referred to as the “Parties” and
singularly as a “Party”)
WHEREAS:
(A)
|
Xxxxxxxx
is the owner of the Xxxxxxxx IP (as defined
below);
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(B)
|
Sunburst
is willing to become the licensee of the Xxxxxxxx IP, on the terms and
conditions set out in this License.
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(C)
|
On
the following terms and conditions, Xxxxxxxx has agreed to grant to
Sunburst an exclusive license to undertake further research and
development, and to market and sell products using the Xxxxxxxx
IP.
|
|
NOW,
THEREFORE:
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For and
in consideration of the foregoing premises and the mutual covenants set forth
herein and other valuable consideration;
1
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THE PARTIES AGREE as
follows:
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1 |
DEFINITIONS
AND INTERPRETATION
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1.1 |
In
this License (including the Recitals), unless the context otherwise
requires:
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Act means the Federal Food,
Drug and Cosmetic Act, 21 U.S.C. §§ 301 et seq., as such may be amended from
time to time.
Affiliate means any
corporation or other business entity, which controls, is controlled by or is
under common control with a Party. For purposes of this definition, “control”
means, as of or subsequent to the Effective Date, direct or indirect ownership
of more than fifty percent (50%) of the voting interest or income interest
in a corporation or business entity;
FDA means the United States
Food and Drug Administration;
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Xxxxxxxx IP means the
Know-How and Materials, and any and all intellectual property rights
including but not limited to, patents and patent applications set out in
Schedule A and Schedule B hereto which are held, as at the Effective Date,
in the name of Xxxxxxxx, VSL or Viragen, or in the joint names of VSL and
Viragen, together with any related pending patent applications, issued
patents, reissue patents, extensions, substitutions, continuations,
divisional applications, divisions, continuation-in-part applications and
supplementary protection certificates in any part of the world which are
based on the Know-How and Materials, patents or patent applications set
out in Schedule A or Schedule B
hereto;
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Know-How and Materials
means the laboratory note books, clinical trials and other research
results, cell lines, and other data, all as are set out in Schedule
B;
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Licensed Product means any
Restricted Product or Unrestricted Product.
NDA means a New Drug
Application (as described in 21 C.F.R. § 314.50 et. seq.) filed with the FDA for
marketing approval for a drug pursuant to the Act and the regulations
promulgated thereunder, including any amendments or supplements
thereto.
Net Sales means the invoiced
amount actually received for sales of Licensed Products to a Third Party trade
purchaser (the “Customer”) by Sunburst or its Affiliates, or, to the extent
permitted in this License, through Sublicenses, less the following items to the
extent they are paid or incurred or allowed and included in the invoice price:
(i) quantity, trade, and/or cash discounts or rebates actually granted or
accrued; (ii) amounts repaid or credited and allowances including cash, credit
or free goods allowances given by reason of billing errors and rebates actually
allowed or paid or accrued; (iii) amounts refunded or credited for Licensed
Products which were rejected or damaged or recalled; and (iv) taxes, tariffs,
customs duties and surcharges and other governmental charges incurred in
connection with the sale, exportation or importation of Licensed
Products;
2
Party or Parties has the meaning set
forth in the Preamble above.
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Product Registration
means, with respect to a Licensed Product, a NDA approved by the
FDA in the United States or any other government approval required by a
government or regulatory authority of a country in the Territory necessary
to permit the marketing, import, use and sale of a Licensed Product in
such country. Product Registration shall include governmental approval of
pricing and/or reimbursement in jurisdictions where such approval is
required (either legally or commercially) for commercial sale of a
Licensed Product.
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Restricted Product means a
human therapeutic product developed by Sunburst within the scope of a Xxxxxxxx
Patent or which contains or was developed using Xxxxxxxx IP for the treatment of
methicillin-resistant Staphylococcus aureus and
Clostridium difficile,
which are two distinct types of bacterial infections.
Restricted Territory means,
with respect to each Restricted Product, all countries of the world and their
respective territories and possessions, excluding countries that are members of
the European Union as of the Effective Date and their respective territories and
possessions.
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Sub-license means any
agreement with a Third Party (the “Sub-licensee”) in which Sunburst has
granted (i) the right to make or sell a Licensed Product in the
Territory, with respect to Licensed Products made and sold by such Third
Party or (ii) the right to distribute a Licensed Product made by or
for Sunburst in the Territory, provided that such Third Party is
responsible for the marketing and promotion of such Licensed Product in
the applicable territory and has the right to record sales of such
Licensed Product for its account.
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Sub-license Fees means all gross
consideration (including upfront and milestone payments) other than
royalty payments that accrue to Sunburst under any
Sub-license.
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Territory means, with respect
to each Unrestricted Product, the Unrestricted Territory, and with respect to
each Restricted Product, the Restricted Territory.
3
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Third Party means any
person or entity other than Xxxxxxxx, Sunburst, or any of their
Affiliates.
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Unrestricted Product means any
item, thing, or process developed by Sunburst that falls within the scope of a
Xxxxxxxx Patent or which contains or was developed using Xxxxxxxx IP, and which
is not a Restricted Product.
Unrestricted Territory means,
with respect to each Unrestricted Product, all countries of the world and their
respective territories and possessions.
1.2 |
Words
denoting the singular include the plural and vice versa, words denoting a
gender include all genders, and words denoting persons include
corporations and all other legal
entities.
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1.3 |
Unless
the context otherwise requires, references in this License to any Clause
will be deemed to be a reference to the relevant clause of this
License.
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1.4 |
The
headings are inserted for ease of reference only and will not affect the
interpretation or construction of this
License.
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2 |
LICENSE
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2.1 |
Xxxxxxxx
hereby grants Sunburst an exclusive right and license under all of its
rights in the Xxxxxxxx IP in the Territory to research, develop, use,
keep, make, have made, market, distribute, sell, offer to sell, advertise
or otherwise dispose of Licensed
Products.
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2.2 |
The
license granted in Clause 2.1 shall, in relation to a particular country
in the Territory, terminate on the expiry of the relevant Xxxxxxxx IP in
the relevant country.
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2.3 |
Sunburst
shall have the independent right to grant Sub-licenses of any or all of
the rights granted to it pursuant to Clause 2.1 to Third Parties or
Affiliates if, in respect of each Sub-license, Sunburst ensures that
Xxxxxxxx’x rights under this License are maintained and that Sunburst
meets the material terms and conditions of the
License. Sunburst shall also have the independent right to
enter into sub-contract manufacturing, co-marketing or distribution
agreements with Third Parties under which Sunburst appoints such Third
Party as its agent to manufacture, promote or sell Licensed
Products. Within thirty (30) business days of the grant of any
Sub-license to a Third Party, Sunburst shall provide Xxxxxxxx with a true
copy of the Sub-license signed by Sunburst and such Third
Party. Any Sub-license that is granted in breach of this Clause
2.3 shall be void but shall not otherwise affect this
License.
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4
3 |
COMMERCIAL
DEVELOPMENT AND PATENT RIGHTS
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3.1 |
Sunburst
shall, and shall cause its Affiliates and Sub-licensees to, at its own
cost and expense, use their commercially reasonable efforts to: (i) obtain
all necessary and desirable Product Registrations, and (ii) commercialize
the Licensed Products in the Territory to the maximum extent practicable
and desirable.
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3.2 |
Sunburst
shall independently undertake or procure the filing, prosecution, and
maintenance of the Xxxxxxxx IP, in the name of the patent holder, and be
responsible for any enforcement proceedings relating to them (including
any interference or opposition proceedings); provided, however, that the
Parties agree that Sunburst’s obligations hereunder shall extend only as
such undertakings relate to the Licensed Products and Clause
3.1. Sunburst shall use their independent judgment to determine
which actions are desirable for satisfaction of Clauses of 3.1 and 3.2 and
is not required to consult with or obtain consent from Xxxxxxxx with
respect to these actions.
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3.3 |
Each
Party shall give the other immediate notice of any actual or suspected
infringement of the Xxxxxxxx IP or any actual or suspected misuse or
misapplication of the Xxxxxxxx IP by a Third Party which comes to that
Party’s attention during the term of this
License.
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3.4 |
If
either Party receives any notice, claim, or proceedings from any Third
Party alleging infringement of that Third Party’s intellectual property by
reason of either Party’s activities in relation to this License or the use
and exploitation of the Xxxxxxxx IP, the Party receiving that notice shall
notify the other Party of the notice, claim, or proceeding within three
(3) business days.
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4 |
CONSIDERATION
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4.1 |
Sunburst
shall pay to Xxxxxxxx:
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4.1.1
Royalties of one percent of Net Sales of Licensed Products (“Direct
Royalties”).
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4.1.2 Two
percent of all payments received by Sunburst through Sub-license Fees
(“Indirect Royalties”).
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5
4.2 |
The
Direct Royalties and Indirect Royalties shall be paid quarterly in arrears
within thirty (30) business days at the end of the calendar quarter in
which relevant sales of Licensed Products occur. Within thirty
(30) business days of the end of each calendar quarter, Sunburst shall
provide to Xxxxxxxx a written report detailing the sales of Licensed
Products on a country-by-country basis, if any, made by Sunburst and the
calculation of Net Sales and the royalty payable to Xxxxxxxx in respect of
such Net Sales together with any Sub-license
Fees.
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4.3 |
Where
Xxxxxxxx does not receive payment of any sums due to it within thirty (30)
business days of the relevant date set out in Clause 4.2 (the “Due Date”),
interest shall accrue on the sum due and owing to Xxxxxxxx at the rate
equivalent to an annual rate of six percent (6%), without prejudice to
Xxxxxxxx’x right to receive payment on the Due
Date.
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4.4 |
Sunburst
shall keep true and accurate records and books of account, and shall
require in its contracts with Sub-licensees that its Sub-licensees shall
keep true and accurate records and books of account, containing all data
necessary for the calculation of the amounts payable by Sunburst to
Xxxxxxxx pursuant to Clause 4.1. Such records and books of
account shall be kept for six (6) years following the end of the calendar
year to which they relate and Sunburst’s records and books of account
shall, upon reasonable notice having been given by Xxxxxxxx, be open at
reasonable times on business days for inspection by an independent firm of
accountants appointed by agreement between the
Parties.
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5 |
WARRANTIES
AND LIABILITY
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5.1 |
Sunburst
represents and warrants that it has legal power, authority and right to
enter into this License and to perform its obligations hereunder and this
License is valid, binding and enforceable against Sunburst in accordance
with its terms.
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5.2 |
Xxxxxxxx
represents and warrants
that:
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|
5.2.1 It
is the sole owner of the Xxxxxxxx IP existing as of the Effective Date and
has all right, title, claims, interest, and privilege arising from such
ownership, free and clear of any liens, security interests, encumbrances,
rights, or restrictions;
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5.2.2 The
Xxxxxxxx IP existing as of the Effective Date and the subject matter of
the Xxxxxxxx IP existing as of the Effective Date (a) are not the product
or subject of any joint development activity or agreement with any Third
Party, (b) are not the product or subject of any joint research activity
or agreement with a Third Party, (c) are not the subject of any consortia
agreement or cross-license, and (d) have not been financed in whole or in
part by any Third Party; and any Xxxxxxxx IP which comes to exist after
the Effective Date and the subject matter of any Xxxxxxxx IP which comes
to exist after the Effective Date shall (w) not be the product or subject
of any joint development activity or agreement with any Third Party, (x)
not be the product or subject of any joint research activity or agreement
with a Third Party, (y) not be the subject of any consortia agreement or
cross-license, and (z) not have been financed in whole or in part by any
Third Party;
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|
5.2.3
The Xxxxxxxx IP are enforceable as of the Effective
Date;
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|
5.2.4
It has not assigned, licensed, or granted to any other person or
entity any rights, title, claims, interest, or privilege in the Xxxxxxxx
IP;
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6
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5.2.5
The Xxxxxxxx IP are not now and have not been subject to any action
related to validity, enforceability, inventorship, or
ownership.
|
|
5.2.6
It has no knowledge of any fact that could give rise to a claim or
allegation that any portion of the Xxxxxxxx IP is invalid or
unenforceable, and it has not engaged in any conduct or omitted to perform
any necessary act, and will not engage in any conduct or omit to perform
any necessary act, that would be the grounds for invalidation of any of
the Xxxxxxxx IP or preclude their
enforceability;
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5.2.7 It
has all requisite legal and corporate power and authority to enter into
this License, to consummate the transactions contemplated in this License,
and to carry out and perform its obligations under the terms of this
License; and
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5.2.8
The execution, delivery, and performance of and compliance with
this License has not resulted and will not result in any violation of,
conflict with, constitute a default, or give rise to a right of
termination, cancellation, or acceleration of any obligation or loss of
any benefit under any agreement to which it is a
party.
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5.3 |
Neither
Party shall be liable to the other Party, its Affiliates or Sub-licensees
in contract, tort, negligence, breach of statutory duty or otherwise for
any loss, damage, cost or expense of an indirect or consequential nature
(including any economic loss or other loss of revenue, profits, business
or goodwill) arising out of or in connection with this License or the
subject matter of this License.
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5.4 |
Nothing
in this License shall be construed as a representation made or warranty
given by either Party that any patent will issue based upon the Xxxxxxxx
IP, that any patent included in the Xxxxxxxx IP which issues will be
valid, or that the use of any Xxxxxxxx IP will not infringe the patent or
proprietary rights of any other person. Furthermore, neither
Party makes any representation or warranty, express or implied, with
respect to the Xxxxxxxx IP, including without limitation, any warranty of
merchantability or fitness for a particular purpose.
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5.5 |
All
Xxxxxxxx IP, including Know How and Materials, provided by or on behalf of
either Party and data generated by or on behalf of either Party under this
License are provided “as is” and without any representation or warranty,
express or implied, including without limitation any implied warranty of
merchantability or fitness for any particular purpose or any warranty that
the use of the Know How and Materials will not infringe or violate any
patent or other proprietary rights of any other
person.
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7
5.6 |
Subject
to Clause 5.3, Sunburst shall be responsible for, indemnify and hold
harmless Xxxxxxxx, its Affiliates and their officers, servants, and agents
against any and all liability, loss, damage, cost or expense (including
reasonable attorney’s fees and court and other expenses of litigation)
(“Losses”) arising out of or in connection with Third Party claims
relating to the discovery, research, development, manufacture, marketing,
selling and disposal of Licensed Products by Sunburst, its Affiliates
and/or any Sub-licensees, provided always that no
such Losses arise or have arisen as a consequence of any breach of this
License, breach of statutory duty, gross negligence, willfull omission or
willful misconduct of or by Xxxxxxxx or its Affiliates or their officers,
servants or agents.
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5.7 |
Subject
to Clause 5.3, Xxxxxxxx shall be responsible for, indemnify and hold
harmless Sunburst, its affiliates and their officers, servants and agents
against any and all Losses, arising out of or in connection with Third
Party claims that arise or have arisen as a consequence of any breach,
whether actual, apparent, real, or perceived, of this License, breach of
statutory duty, gross negligence, willfull omission or willful misconduct
of or by Xxxxxxxx or its Affiliates or their officers, servants or
agents.
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5.8 |
In
the event that a Party intends to seek indemnification under Clause 5.6 or
5.7, as applicable, it shall promptly inform the indemnifying Party of a
claim after receiving notice of the claim and shall permit the
indemnifying Party to direct and control the defense of the claim and
shall provide such reasonable assistance as reasonably requested by the
indemnifying Party.
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8
6 |
INFRINGEMENT
CLAIMS
|
6.1
|
Infringement
— Should it become necessary, in Sunburst’s sole discretion, to enforce
the Xxxxxxxx IP against a Third Party infringement of any Xxxxxxxx IP,
then the Parties agree that Sunburst shall take all reasonable steps
toward abating the infringement and resolving all outstanding infringement
claims at Sunburst’s sole expense. Xxxxxxxx agrees to assign to Sunburst
any infringement damage claims that Xxxxxxxx may
have.
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If
Sunburst has not substantially abated the infringement or filed suit against the
infringer(s) within 180 days after receiving notice of the infringement from
Xxxxxxxx, Xxxxxxxx shall have the right, upon 30 day’s written notice to
Sunburst, to file suit for infringement in Xxxxxxxx’x own name and at Xxxxxxxx’x
sole expense and it shall have the sole right to settle or recover on all
infringement claims.
6.2
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Other
Actions — Xxxxxxxx agrees to pay all reasonable costs and expenses for any
reasonable action necessary to defend the validity of any Xxxxxxxx IP,
including but not limited to, bringing an infringement suit, declaratory
judgment actions and reexamination proceedings. Xxxxxxxx shall be entitled
to any award resulting from the defense of such an action. Xxxxxxxx shall
have the right to decline to defend the validity of any Xxxxxxxx IP if,
after reviewing the merits of the action, Xxxxxxxx, in its sole
discretion, decides that a reasonable likelihood of success does not exist
or the defense is imprudent.
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7 |
TERM
AND TERMINATION
|
7.1 |
This
License shall come into effect on the Effective Date and, unless sooner
terminated as provided hereunder, shall continue in full force and effect
until the termination of all licenses granted to Sunburst pursuant to
Clause 2.1 above. Sunburst’s obligations to make royalty
payments to Xxxxxxxx pursuant to Clause 4.1 shall expire with respect to a
country upon the termination of the license in such country pursuant to
Clause 2.2.
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7.2 |
If
for any reason Sunburst or its Sub-licensees no longer wish to develop,
make, market, sell and/or otherwise dispose of Licensed Products in the
Territory, or in a particular country within the Territory, Sunburst shall
so notify Xxxxxxxx in writing and this License shall terminate in the
country or Territory, as may be applicable, ninety (90) business days from
receipt of such notice.
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9
7.3 |
Either
Xxxxxxxx on the one hand or Sunburst on the other hand (the “Terminating
Party”) shall have the right to terminate this License forthwith upon
giving written notice of termination to Sunburst on the one hand or
Xxxxxxxx on the other hand as the case may be (the “Defaulting Party”),
upon the occurrence of any of the following events at any time during this
License:
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7.3.1
The Defaulting Party commits a material breach of this License which in
the case of a breach capable of remedy has not been remedied ninety (90)
days after the receipt by the Defaulting Party from the Terminating Party
of written notice identifying the breach and requiring its
remedy;
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7.3.2
The Defaulting Party for a period of longer than ninety (90) days suspends
payment of its debts or otherwise ceases or threatens to cease to carry on
its business or becomes bankrupt or insolvent (including without
limitation being deemed to be unable to pay its
debts);
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7.3.3
The
Defaulting Party applies for a trustee, receiver or other custodian for it
or a substantial part of its
property;
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7.3.4
A
trustee, receiver or other custodian is appointed for the Defaulting Party
or for a substantial part of its
property;
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7.3.5
Any
bankruptcy, reorganization, debt arrangement, or other case of proceeding,
is commenced in respect of the Defaulting
Party.
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8 |
CONSEQUENCES
OF TERMINATION
|
8.1 |
Subject
to Clause 8.2, upon termination of this
License:
|
8.1.1The
license rights granted to Sunburst by Xxxxxxxx pursuant to Clause 2 shall
terminate and any Sub-licenses granted by Sunburst pursuant to Clause 2.3
shall terminate;
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8.1.2
Sunburst shall pay to Xxxxxxxx within ninety (90) days all sums due to
Xxxxxxxx hereunder which have accrued prior to the date of
termination;
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8.1.3
Upon written request by Xxxxxxxx, Sunburst shall within thirty (30) days
of receipt of said notice, return to Xxxxxxxx, or, at Xxxxxxxx’x option,
destroy Know-How and Materials held by Sunburst. Nothing herein
shall require Sunburst to return publicly available
materials.
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8.2 |
In
the event of expiry of this License or the termination of this License by
Sunburst pursuant to Clause 7.3, Xxxxxxxx shall grant to Sunburst an
exclusive, perpetual, fully paid up, royalty-free license to the Xxxxxxxx
IP to research, develop, use, keep, make, have made, market, distribute,
sell, offer to sell, advertise or otherwise dispose of the Licensed
Products in the Territory.
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10
9 |
NOTICES
|
9.1 |
Any
notice required to be given under this License shall be served personally
or by first class recorded delivery post addressed to the relevant party
at its registered office. Any notice so given shall be deemed
to have been duly served if personally delivered, on the day of delivery
or if posted, two (2) days after posting and in proving posting it shall
be sufficient to produce a copy of the notice properly addressed with the
relevant post office receipt for dispatch by first class recorded
delivery.
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10 |
GOVERNING
LAW AND PRESUMPTIONS
|
10.1 |
10.2 |
This
License shall be deemed to be jointly created and drafted, and no
presumption shall arise, and no provision shall be construed, against the
drafter of a particular section or provision, when interpreting this
License.
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10.3 |
Severability
- If one or more provisions of this License are held to be
unenforceable under applicable law, such provision(s) shall be excluded
from this License and the balance of the License shall be interpreted as
if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
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11
|
IN WITNESS WHEREOF these presents
consisting of this and the preceding eleven (11) pages together with the
Schedules annexed have been executed as
follows:
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SIGNED by | |||
XXXXXXXX ATLANTIC | |||
August
21, 2008
|
By:
|
/s/ Xxx Xxxx | |
Xxx Xxxx | |||
Director | |||
SIGNED by | |||
SUNBURST ACQUISITIONS III, INC. | |||
August
21, 2008
|
By:
|
/s/ Xxxxxx Xxxxxx | |
Xxxxxx Xxxxxx | |||
Chief Executive Officer | |||
12
SCHEDULE
A
|
The
Patents
Title
|
Applicant
(Xxxxxxxx Atlantic)
|
Priority
Date and Number
|
VSL
Reference / comment
|
[redacted]
for use as an immunological adjuvant
|
Xxxxxxxx
Atlantic
|
GB
No. 0812442.2
Priority
date 7th
July 2008
|
VG108
|
13
SCHEDULE
B
A. The
following books and records, currently stored at the premises of PWC
Scotland:
Box
Number
|
|
Contents
|
334314713
|
[redacted] as
an Immunological Adjuvant VG108
|
|
334314717 |
Patent
Info [redacted]
|
|
334314732
|
VG108
Book 1
|
|
334314746
|
[redacted]
|
|
334314748
|
Lab
Books
|
Dev
100 - [redacted]
Work 3
|
Dev
101 - [redacted]
Comparison Book 7 C Haslam
|
||
Dev
125 - [redacted]
Comparison 8
|
||
334314749
|
Lab
Books
|
Dev 76
- [redacted]
1
|
Dev
79 - [redacted] Comparison 3
|
||
Dev
83 - [redacted] Comparison 6
|
||
Dev
86 - [redacted] Work 2
|
||
Dev
89 - General Cell Culture 1
|
||
Dev
90 - Recombinant Interferon 3
|
||
Dev
93 - [redacted] Comparison 4
|
||
Dev
96 - Bioassay Cell Lines 1
|
||
Dev
96a - [redacted] Work 1
|
||
334314750
|
Lab
Books
|
Dev
49 - Dev of IFN Elisa Based Assay Bk 1
|
Dev
61 - [redacted] Research Bk 1
|
||
Dev
62 - Molecular Science Bk 4
|
||
Dev
66 - Recombinant [redacted] Bk 1
|
||
Dev
67 - [redacted] Research Bk 2
|
||
Dev
72 - [redacted] Comparison Bk 5
|
||
334314752
|
Lab
Books
|
Dev
216 - Real Time PCR Book 1 C Haslam
|
334314753
|
Lab
Books
|
Dev
167 - [redacted] Subtypes Purification 1 J Xxxxx
|
334314799
|
VG108
|
|
[redacted]
Exploitation
|
B.
|
The
following cell line currently preserved in liquid nitrogen and stored in
standard freezers at the premises of Biobest
Laboratories:
|
|
(i)
|
Chinese
Hamster Ovary (CHO) cell line producing the biological protein referred to
as VG108.
|
* The
above redacted information is confidential in nature and, as a result, the
company has intentionally omitted this information from this
filing. The Company will file the omitted portion with the Securities
and Exchange Commission requesting confidential treatment.
14