ASSOCIATION AGREEMENT
Santiago, Chile on March 14, 1994 between "CENTRO DE ESTUDIOS CIENTIFICOS ▇▇
▇▇▇▇▇▇▇▇" a non-profit corporation represented by its Executive Director Claudio
Teitelboim ▇▇▇▇▇▇▇▇▇, address in Ave. President ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇; called "CECS", and TEPUAL S.A. represented by ▇▇▇ ▇▇▇▇▇▇ Soubotnik,
address in General Ekdhal 159, ▇▇▇▇▇▇▇▇; called "TEPUAL"; they have agreed on
the following Association Agreement.
FIRST: Two years ago the CECS began researching a system to obtain an antidote
to the Red Tide toxin through an immunology test. This research has achieved the
production of an antitoxin called Saxitoxina that when linked with a Bovine
Seroalbumina protein enables the development of an antitoxin test system. The
intellectual property of the antitoxin belongs exclusively to CECS.
SECOND: By the present agreement CECS and TEPUAL have agreed to jointly research
and work on this project to obtain a system to detect the "Red Tide Toxin".
Later they will develop a commercial system and bring it to the market.
THIRD: CECS will supply to this Association the antitoxin-Saxitoxina in order to
develop the product, including the necessary technical and scientific assistance
for the complete development of the product.
FOURTH: TEPUAL will supply its facilities, laboratory, equipment, and all
necessary personnel to complete the development of the product.
FIFTH: The intellectual and commercial property of the final product will be the
common property of CECS and TEPUAL at 50% each. Any intellectual or commercial
rights will be registered in respect to this percentage, for any and all
products, originated from this product.
SIXTH: TEPUAL has the exclusive right to the marketing of the products
originated in this project.
SEVENTH: All the profit and economic benefit from the sales, royalties,
technical assistance, in any way related with the products of the project will
be divided 60% for TEPUAL and 40% for CECS.
EIGHTH: Both parties agree that they will seek additional funds from third
parties to complete the project including "FONTC" and other corporations linked
with TEPUAL's agreements related with this program. For this particular case
TEPUAL will be committed to design the project for FONTC contacting with any
company for the purpose of the project. The parties by common agreement can find
funds for the project through different sources besides the above-mentioned
source. However, it is not CECS's responsibility to
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look for financing for the project, CEC's primary responsibility is to supply
the antitoxin named in the first clause and give any scientific and technical
assistance to develop the project. Furthermore, it is clearly understood between
the parties that any and all intellectual properties belong to them and won't be
shared with any other companies even if those companies participate in any way
to achieve the project's success.
NINTH: The parties agree to include US$14,000 already spent by CECS for the
project as part of the funds to be raised for the present project.
TENTH: If by an circumstance the project is not successful, any and all the
intellectual property regarding the antitoxin mentioned in the first clause
shall remain exclusively to CECS. The last statement doesn't exclude the parties
pursuing on the project jointly or separately.
ELEVENTH: This Agreement governs general and specific stipulations and
agreements, in case of specific situations related with commercial production
and marketing this Agreement will be implemented. By a common agreement the
parties will write, sign and implement the Agreement.
TWELFTH: Any controversy or discrepancy of this Agreement will be resolved in
any instance by arbitor, other methods are not acceptable. The parties
designated Mr. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, and as his replacement ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tocornal as arbiter; in case of absence a new arbiter will be designated by the
Court. The arbiter needs to be a lawyer or ex-member of the Supreme Court of
Court of Appeals of ▇▇▇▇▇▇▇▇.
THIRTEENTH: This Agreement recognizes Santiago as proper venue.
FOURTEENTH: ▇▇. ▇▇▇▇▇▇▇ Teitelboim's representation of Estudios Cientificos ▇▇
▇▇▇▇▇▇▇▇ is legally certified by Notarized Register document of January 2, 1992.
▇▇. ▇▇▇ ▇▇▇▇▇▇ Soubotnik's representation of Tepual is legally certified by
Notarized Register documents of September 8, 1999.
/s/ ▇▇▇ ▇▇▇▇▇▇ Soubotnik /s/ Claudio Teitelboim ▇▇▇▇▇▇▇▇▇
------------------------ --------------------------------
▇▇▇ ▇▇▇▇▇▇ Soubotnik Claudio Teitelboim ▇▇▇▇▇▇▇▇▇
By: TEPUAL S.A. By: CECS
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IMPLEMENTED ASSOCIATION AGREEMENT
Santiago, Chile on October 2, 1996 between "CENTRO DE ESTUDIOS CIENTIFICOS ▇▇
▇▇▇▇▇▇▇▇" a non-profit corporation represented by its Executive Director ▇▇▇▇▇
▇▇▇▇▇▇▇ De La ▇▇▇▇, with address in Avenue President ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇; called "CECS" and TEPUAL S.A. represented by ▇▇▇ ▇▇▇▇▇▇
Soubotnik with address in General Ekdahal NO. 159 called "TEPUAL". They have
agreed to the Association Agreement between them dated March 14, 1994 for the
research and production of a system for the detection of Red Tide Toxins.
FIRST: The parties agreed that any profit or economic benefit coming from the
sales of the Red Tide Toxins detection system will be, after deducting all
development costs of CECS and TEPUAL and any and all other costs that TEPUAL
will have after October 2, 1996 related to the development of the project.
The costs regarding the program development are the following:
Profits = Sales Income - Development costs:
Development cost = CECS Cost and TEPUAL Cost
CECS Cost = US$ 19,000
TEPUAL Cost = Present Cost + Future Cost
Present Cost = US$ 340,000
Future Cost = All the necessary marketing
expenses that TEPUAL will have after
October 2, 1996 related to the
program.
It is stated that TEPUAL had already spend US$ 140,000 plus US$ 200,000 as
alternate capital expended by TEPUAL for the present project.
The future cost is related to all the necessary expenses to be spent in the
development of a marketing program for the project, which will be approved by
both parties. The revenue generated by the marketing of the system should first
cover all the above-mentioned costs. Secondly, they agreed to divide the profit
according to the percentages of the Seventh clause, meaning 60% for TEPUAL and
40% for CECS.
As an example we include a table with projections of potential program profit.
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EXAMPLE
(Assumed) Sales Income 500 100 1500 2000 2500 3000 3500 4000
(Assumed) TEPUAL Future Cost -▇▇ -▇▇▇ -▇▇▇ -▇▇▇ -▇▇▇ -▇▇▇ -▇▇▇ -▇▇▇
(Assumed) Net Income 450 700 1350 1800 2250 2700 3150 3600
(Assumed) CECS Cost -▇▇ -▇▇ -▇▇ -▇▇ -▇▇ -▇▇ -▇▇ -▇▇
(Assumed) TEPUAL Present Cost -▇▇▇ -▇▇▇ -▇▇▇ -▇▇▇ -▇▇▇ -▇▇▇ -▇▇▇ -▇▇▇
(Assumed) Profit 91 541 991 1441 1891 2341 2791 3241
CECS Cost Recovery 19 19 19 19 19 19 19 19
CECS Profit Share 36 216 396 396 756 836 1116 1236
TEPUAL Cost Recovery 370 440 490 540 590 640 690 740
TEPUAL Profit Share 55 325 595 865 1135 1405 1675 1945
SECOND: The parties agree to coordinate their public and private communications
in order to obtain public image and corporate good image of TEPUAL and CECS.
THIRD: The parties agree to maintain constant communication regarding the
situation of the project and they are committed to share analysis, options,
decisions and alternatives regarding the development and marketing of the
system.
FOURTH: The parties agree that complement agreement is part of the original
Agreement signed on March 14, 1994. All the clauses of the Agreement will be
respected.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ De La ▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇ Soubotnick
---------------------------- -------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ De La ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ Soubotnick
CECS TEPUAL S.A.
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