FORBEARANCE AGREEMENT AND GENERAL RELEASE
Exhibit
10.1
FORBEARANCE AGREEMENT AND
GENERAL RELEASE
THIS FORBEARANCE AGREEMENT AND
GENERAL RELEASE (“Agreement”),
dated as of July 6th, 2009,
is entered by and among FIDEsprit AG, a Swiss corporation (“Borrower”),
Xxxx X. Xxxxxxxx (“Guarantor”)
and Proteo, Inc., a Nevada corporation (“Proteo”
and together with Borrower and Guarantor, the “Parties”),
with reference to the facts as set forth in the Recitals:
RECITALS
A. WHEREAS, pursuant to that certain
Preferred Stock Purchase Agreement dated June 9, 2008 (the “Stock Purchase
Agreement”), Borrower purchased 600,000 shares of Proteo’s Series A
Preferred Stock in consideration of Borrower’s delivering to Proteo a promissory
note of even date therewith in the original principal amount of $3,600,000 (as
amended and modified from time to time, the “Note”, the
original of which is attached hereto as Exhibit
A). Capitalized terms used but not defined herein shall have
the meanings given to such terms in the Stock Purchase Agreement.
B. WHEREAS, Borrowers obligations
under the Note have been guaranteed (the “Guaranty”) by the Guarantor, the
original of which is attached hereto as Exhibit B.
C. WHEREAS, Borrower is currently
in default under the Note for failing to make all of the scheduled principal and
interest payments under the Note and for not paying the Note in full by its due
date of March 31, 2009 (collectively, the “Events of
Default”).
D. WHEREAS, Proteo, Borrower and
Guarantor desire to enter into this Forbearance Agreement to set forth the terms
and conditions upon which Proteo agrees to forbear from enforcing its rights
under the Note as a result of the Events of Default.
AGREEMENT
1. RECITALS. The
Recitals are incorporated herein by and through this reference, and the Parties
agree that the facts recited above are true and correct.
2. ACKNOWLEDGMENT OF
DEBT. Borrower and Guarantor hereby acknowledge and agree
that, as of July 6th, 2009,
Borrower is obligated to Proteo under the Note for the aggregate sum of
$1,940,208 (representing the unpaid principal balance plus all other amounts due
under the Note as of July 6th, 2009)
(the “Indebtedness”).
3. CONFIRMATIONS OF NOTE AND
GUARANTEE. Borrower and Guarantor hereby confirm the validity
and effectiveness of the Note and Guaranty, as modified hereby. This
acknowledgment and confirmation shall in no way be deemed to constitute a
requirement or admission by Proteo that any such acknowledgment or confirmation
is required to maintain the effectiveness of the Note and Guaranty, no such
acknowledgment and confirmation being so required. Except as may be expressly
modified herein, each of the Note and Guaranty shall remain in full force and
effect.
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4. ACKNOWLEDGMENT OF DEFAULTS AND
WAIVERS. Borrower and Guarantor hereby acknowledge and agree
that Borrower is currently in default under the Note, among other reasons, by
reason of those Events of Default described in Paragraph C of the Recitals (all
of such Events of Default shall collectively be referred to as "Defaults”) hereinabove.
Borrower and Guarantor hereby knowingly and voluntarily waive any and all rights
they may have, if any, to contest or dispute the validity of, or to cure, the
Defaults or the exercise of any rights of Proteo. Borrower and Guarantor hereby
further acknowledge and agree that in entering into this Agreement, Proteo is
relying upon the acknowledgment by Borrower and Guarantor of the existence of
the Defaults and their waiver of any right to dispute the existence thereof or
to contest any enforcement of Proteo’s rights based thereon.
5. LIMITED SUFFERANCE OF DEFAULTS;
FORBEARANCE. Borrower has requested that Proteo enter into
this Agreement and forbear from exercising its rights under the Note and
Guaranty as to afford Borrower limited additional time to pay the outstanding
Indebtedness. Subject to Borrower’s prompt and continual compliance with the
payment requirements set forth in Paragraph 6 below, Proteo hereby agrees to
allow the Defaults under the Note existing as of the date hereof to continue to
exist and further agrees to forebear from relying thereon to enforce any of
its rights and
remedies under the Note and Guaranty, all subject to the terms and conditions of
this Agreement, until the Indebtedness is paid in full (“Forbearance Period”), at which
time the Forbearance Period shall automatically terminate. As long as Borrower
does not breach any term or condition of this Agreement or no additional default
occurs or exists under the Note or Guaranty during the Forbearance Period,
Lender agrees to forbear from exercising any and all of its remedies under the
Note and Guaranty and this Agreement; provided however, if a breach of this
Agreement occurs or an event of default (other than the Defaults) occurs or
exists under the Note or Guaranty, then, without notice by Proteo to Borrower or
Guarantors and at Proteo’s option, the Forbearance Period shall terminate and
Proteo shall have the right to enforce its remedies under the Note and Guaranty,
this Agreement, any agreement executed concurrently herewith, or at law or
equity; and provided, further, that upon the failure of Borrower to satisfy any
of the terms and conditions of this Agreement, or upon the occurrence of any
subsequent event of default hereunder, under any agreement executed concurrently
herewith, or, under the Note or Guaranty, the foregoing agreement to forbear by
Proteo shall be of no further force and effect, shall be deemed rescinded,
revoked and terminated and the Defaults shall be revived and reinstated, and
shall be deemed to have occurred and to exist as if such forbearance had not
been granted, with all rights and remedies of Proteo under the Note and
Guaranty, as hereinafter modified, based upon the Defaults, revived as if Proteo
had never forborne from enforcement. Proteo may thereafter enforce its rights
pursuant to the terms of the Note, Guaranty, and pursuant to applicable law, and
exercise such other rights and remedies as may be available to Proteo at law, in
equity, or otherwise.
6. TERMS AND
CONDITIONS. In consideration of Proteo’s forbearance pursuant
to Paragraph 5 above, Borrower agrees to and shall pay the Indebtedness to
Proteo by making monthly payments in the amount of $140,000 commencing on the
first business day of September 2009 and continuing on the first business day of
each succeeding month thereafter until the entire Indebtedness is paid in
full.
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All payments must be in lawful money of
the United States of America, free from any offset, deduction or
counterclaim. Checks constitute payment only when collected,
deposited and credited to Proteo’s bank account.
Nothing contained herein is intended
to, nor shall it be deemed to, relieve Borrower or Guarantor of any of their
respective obligations under the Note or Guaranty, nor shall it modify the legal
relationship of Borrower and Guarantor with respect to Proteo.
7. NO NOVATION. The
Parties further agree that in no event shall the effect of this Agreement be
deemed to be a novation of the Note or Guaranty, the intent of the Parties
hereunder being to amend the Note and Guaranty and to confirm the obligations
(including the Indebtedness) of Borrower and Guarantor under the Note and
Guaranty, as amended hereby, with all of the terms and provisions of the Note
and Guaranty in full force and effect save and except those modified by this
Agreement.
8. CROSS
DEFAULTS. Borrower and Guarantor hereby agree and confirm
that, at Proteo’s option, the occurrence of an event of default under and set
forth in this Agreement shall be a default under each of the Note and Guaranty
and, to the extent necessary, the Note and Guaranty are hereby irrevocably
amended to effect such cross defaults. Borrower and Guarantor additionally agree
and confirm that, at Proteo’s option, the occurrence of an event of default
(other than the Defaults) under the Note and Guaranty shall be a default under
this Agreement.
9. EVENTS OF
DEFAULT. Any failure by Borrower or Guarantors or Pledgors to
comply with any terms and conditions of this Agreement, together with each of
the events of default contained within the Note and Guaranty (other than the
Defaults), shall constitute an event of default hereunder.
10. REMEDIES. Upon the
occurrence of an event of default (as set forth in Paragraph 9, above), or the
termination of the Forbearance Period Proteo shall have the right to enforce its
remedies under the Note, Guaranty, this Agreement, or under any of the documents
executed concurrently herewith, at law or in equity, and, at its election,
exercise any and all rights and remedies provided for under the Note, Guaranty
or herein, and terminate its obligations under this Agreement.
11. GOVERNING LAW. This
Agreement and the Note and Guaranty shall be deemed to have been made in the
State of California and the validity, enforceability, construction,
interpretation and enforcement of this Agreement and the Note and Guaranty and
the rights of the Parties thereto shall be determined under, governed by and
construed in accordance with the laws of the State of California, without regard
to the principles of conflicts of law. If any provision of this Agreement or its
exhibits shall be determined to be invalid, void or illegal, such provision
shall be construed and amended in a manner which would permit its enforcement,
but in no event shall such provision affect, impair or invalidate any other
provision hereof. In the event that any interest rate set forth in the Note shall be in
excess of the maximum rate allowed by law, the Note Documents shall be deemed to
be modified to provide for the maximum interest rate allowed by
law.
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12. COMPLETE AGREEMENT; INTEGRATION;
MERGER. This Agreement and the Note, Guaranty and Stock
Purchase Agreement are intended by the Parties as the complete, integrated and
final expression of their agreement. All prior understandings, whether oral or
written, other than the Note, Guaranty and Stock Purchase Agreement, are hereby
merged into this
Agreement. This Agreement may only be amended by a writing executed by the
Parties. No oral amendment, waiver or other understanding with respect to the
subject matter of this Agreement shall be enforceable.
13. GENERAL RELEASE IN FAVOR OF
LENDER. In consideration of the covenants and agreements
contained herein and for other good and valuable consideration, Borrower and
Guarantor agree as follows:
Borrower and Guarantor, and each of
them, together with all of their affiliates, including without limitation their
affiliates, trusts, corporations, partnerships, agents, attorneys, heirs,
executors, administrators, successors, assigns, representatives, employees,
trustees, beneficiaries, officers, directors, partners, owners, members and
shareholders (collectively the “Releasors”) hereby release and
discharge Proteo and its affiliated corporations, agents, attorneys, heirs,
executors, administrators, successors, assigns, representatives, employees,
trustees, beneficiaries, officers, directors, owners, partners, members and
shareholders, with respect to any rights, claims, charges, demands, obligations,
damages, liabilities, costs, attorneys’ fees, expenses, or causes of action of
any nature, character and description, whatsoever, whether arising from or in
any way related to, the loan evidenced by the Note, the Guaranty and Stock
Purchase Agreement, the business of Releasors, and any and all transactions or
other matters in any way related to any of the foregoing, or otherwise arising
prior to the date hereof, whether known or unknown, anticipated or
unanticipated, sounding in tort, contract or any other theory, law or equity,
suspected or unsuspected, past or present.
14. WAIVER OF CALIFORNIA CIVIL CODE,
SECTION 1542. The foregoing release extends to all claims
whether or not claimed or suspected and constitute a waiver of each and all the
provisions of the California Civil Code, Section 1542 (to the extent it would be
applicable), which reads as follows:
A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMSWHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXISTIN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,WHICH IF KNOWN
BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
RELEASORS HAVE READ AND UNDERSTOOD THE
FOREGOING AND INDICATE THAT FACT BY PLACING THEIR INITIALS, OR THE INITIALS OF
AN AUTHORIZED AGENT, BELOW:
/s/
JAM /s/
AJK
(Borrower) (Guarantor)
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RELEASORS, AND EACH OF THEM, UNDERSTAND
AND ACKNOWLEDGE THAT THE SIGNIFICANCE AND CONSEQUENCE OF THIS WAIVER OF
CALIFORNIA CIVIL CODE, SECTION 1542, IS THAT EVEN IF THEY SHOULD EVENTUALLY
SUFFER ADDITIONAL DAMAGES ARISING OUT OF THE FACTS REFERRED TO ABOVE, THEY WILL
NOT BE ABLE TO MAKE ANY CLAIM FOR THOSE DAMAGES. FURTHERMORE, RELEASORS, AND
EACH OF THEM, ACKNOWLEDGE THAT THEY WILL NOT BE ABLE TO MAKE ANY CLAIM FOR
DAMAGES EVEN AS TO CLAIMS FOR DAMAGES THAT MAY EXIST AS OF THE DATE OF THIS
RELEASE BUT WHICH THEY DO NOT KNOW EXIST, AND WHICH, IF KNOWN, WOULD MATERIALLY
AFFECT THEIR DECISIONS TO EXECUTE THIS AGREEMENT, REGARDLESS OF WHETHER THEIR
LACK OF KNOWLEDGE IS THE RESULT OF IGNORANCE, OVERSIGHT, ERROR, NEGLIGENCE, OR
ANY OTHER CAUSE. RELEASORS COVENANT AND AGREE THAT THEY WILL FOREVER REFRAIN AND
FOREBEAR FROM BRINGING, COMMENCING OR PROSECUTING ANY AND ALL ACTIONS, LAWSUITS,
CLAIMS OR PROCEEDINGS WITH RESPECT TO ANY MATTER THAT HAS BEEN RELEASED HEREIN.
FURTHER, IT IS EXPRESSLY UNDERSTOOD AND AGREED
BY RELEASORS, THAT THE FACTS WITH RESPECT TO WHICH THIS AGREEMENT IS GIVEN MAY
HEREINAFTER TURN OUT TO BE OTHER THAN OR DIFFERENT FROM THE FACTS IN THAT
CONNECTION NOW KNOWN OR BELIEVED BY SAID PARTY TO BE TRUE, AND SAID PARTY
EXPRESSLY ASSUMES A RISK OF THE FACTS TURNING OUT TO BE SO DIFFERENT, AND AGREES
THAT THIS AGREEMENT SHALL BE IN ALL RESPECTS EFFECTIVE AND NOT SUBJECT TO
TERMINATION OR RESCISSION BY REASON OF ANY DIFFERENCE IN THE FACTS.
15. TOLLING OF STATUTE OF
LIMITATIONS. Any and all statutes of limitations applicable to
any and all rights, causes of action, claims and
remedies, or equitable claim of laches, which Proteo has or might have against
Borrower and/or Guarantor arising out of or relating to the circumstances and
events described in the Recitals shall be and hereby are tolled and suspended
effective at all times on and after the date of this Agreement.
15.1 Except
for the tolling of the statute of limitations applicable to Proteo’s rights,
causes of action, claims and remedies against each party set forth above,
nothing in this paragraph is intended to modify or amend the obligations of
Borrower and Guarantor to Proteo, including but not limited to, any other
agreement existing by, between or amongst the Borrower and Guarantor and Proteo,
or to be any waiver,
estoppel or election as any right claim, defense or objection of Proteo.
Any and all substantive rights of Proteo are hereby expressly
preserved.
15.2. It
is expressly
understood and agreed that nothing in this paragraph shall operate or be
construed to defeat or diminish Proteo’s right to file actions or prosecute
actions or any other claims against Borrower and Guarantor (in conformance with
the terms of this Agreement), without prior verbal or written notice, on any
issue, including but not limited to the matters discussed
hereinabove.
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16. ADVICE OF
COUNSEL. Each Party hereto represents that it/he has been
advised of the effect of the Agreement by its/his own attorneys, has
investigated the facts and is not relying upon any representation or
acknowledgment, whether oral or in writing, of any other Party hereto except as
contained herein.
17. RESCISSION. Except as provided
herein, each of the Parties hereto expressly waives any right to rescind the
Agreement.
18 REIMBURSEMENT OF PROTEO’S LEGAL
FEES. Borrower and Guarantor jointly and severally agree to
reimburse Proteo for the legal fees and expenses it has incurred in preparation
of this Agreement and related documents required as a result thereof in an
amount not to exceed $2,500.
19. GENERAL
PROVISIONS.
19.1.
Time is of the
Essence. In all dealings hereunder or under the Note or
Guaranty, time is of the essence,
19.2.
Counterparts. This
Agreement may be executed in counterparts and by different Parties on separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original. All such counterparts, taken together, shall constitute but one and
the same Agreement. Signatures to this Agreement may be transmitted by
facsimile, each of which shall have the same effect as and be deemed an original
signature for purposes of this Agreement. This Agreement shall become effective
upon the execution of a counterpart of this Agreement by each of the Parties
hereto ("Effective
Date”).
19.3.
Successors and Third
Parties. Each covenant set forth in this Agreement shall inure
to the benefit of and be binding upon the Parties to this Agreement together
with all of the affiliates, and each of them, and their successors and
assigns.
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19.4.
Meaning of Pronouns and Effect
of Captions. As used in this Agreement and the attached
exhibits, the masculine, feminine and/or neuter gender, in the singular or
plural, shall be deemed to include the others whenever the text so requires.
Captions and paragraph headings are inserted solely for convenience and shall
not be deemed to restrict or limit the meaning of text.
19.5.
Construction. Neither
this Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved against any Party, whether under any rule of construction or otherwise.
On the contrary, this Agreement is the product of extensive negotiation among
the Parties hereto, has been reviewed by all Parties and their counsel, and
shall be construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of all
Parties.
19.6.
Attorneys Fees and
Costs. If any legal action or other proceeding is brought for
the enforcement of this Agreement, the Note or the Guaranty, or because of an
alleged dispute in connection with any of the provisions of this Agreement, the
successful or prevailing Party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it/he/she may be entitled.
19.7.
Notice. Any
notices which may be required hereunder may be served personally, by overnight
delivery service which routinely obtains a signed receipt (e.g., DHL, Federal
Express or UPS), or by United States mail, postage pre-paid, to the addresses
set forth below. Notice shall be deemed effective on the date actually received
by the Parties, or three days after the same were deposited in the United States
mail.
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If
to Proteo:
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PROTEO,
INC.
Xxxxx
Xxxxxxxx
Proteo
Biotech AG
Am
Kiel-Kanal 44
D-24106
Kiel
Germany
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If
to Borrower:
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FID
Esprit AG
ATT:
Juergen Muetzlitz
Xxxxxxxxxxxxxx.
0
XX-0000
Xxxxxxx
Xxxxxxxxxxx
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If
to Guarantor:
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Xxxx
Xxxxxxxx
Xxxxxxxxxxxxxxx
00
XX-0000
Xxxxxxxxxxxxx
Xxxxxxxxxxx
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IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be entered into as of the date first set
forth hereinabove.
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"PROTEO"
PROTEO,
INC.
A
Nevada corporation
/s/
XXXXX
XXXXXXXX
Xxxxx
Xxxxxxxx
President
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"BORROWER"
FIDESPRIT
AG
/s/ JURGEN AUGUST
MUTZLITZ
Jürgen
August Mützlitz
President
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"GUARANTOR"
/s/
XXXX X.
XXXXXXXX
Xxxx
X. Xxxxxxxx
an
Individual
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