FORBEARANCE AGREEMENT AND
GENERAL RELEASE
THIS
FORBEARANCE AGREEMENT AND GENERAL RELEASE (“ Agreement ”), dated
as of July 6 th ,
2009, is entered by and among FIDEsprit AG, a Swiss corporation
(“ Borrower ”), Axel J. Kutscher (“
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 6
th , 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 6 th ,
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.
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.
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
