Document:

Unassociated Document

 

Exhibit 10.11

 

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 ”), 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 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 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.

 

 

  

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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.

 

	
If to Proteo: 

	
PROTEO, INC.

Birge Bargmann

Proteo Biotech AG

Am Kiel-Kanal 44

D-24106 Kiel

Germany

	  	  
	
If to Borrower: 

	
FID Esprit AG

ATT: Juergen Muetzlitz

Rosengartenstr. 4

CH-8608 Bubikon

Switzerland

	  	  
	
If to Guarantor: 

	
Axel Kutscher

Oetwilerstrasse 29

CH-8634 Hombrechtikon

Switzerland

 

  

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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.

 

	 
"PROTEO"

 

PROTEO, INC.

A Nevada corporation

	 	 	 
"BORROWER"

 

FIDESPRIT AG

	 
	 	 	 	 	 
	 	 	 	 	 
	
 
/s/ BIRGE BARGMANN                           

	 	 	
 
/s/ JURGEN AUGUST MUTZLITZ                       

	 
	
 
Birge Bargmann

	 	 	
 
Jürgen August Mützlitz

	 
	
 
President

	 	 	
 
President

	 

 

 

	 
"GUARANTOR"

 

	 	 	 	 
	
 
/s/ AXEL J. KUTSCHER                                            

	 	 	 	 
	
 
Axel J. Kutscher

	 	 	 	 
	
 
an Individual

	 	 	 	 

 

 

 

 

  

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Exhibit A

PROMISSORY NOTE

US $3,600,000.00

BUBIKON, SWITZERLAND

JUNE 9, 2008

FOR VALUED RECEIVED, the undersigned, a corporation duly organized under the laws of Switzerland, with its principal place of business at Rosengartenstr. 4, CH-8608 Bubikon, Switzerland, (the "Maker"), unconditionally promises to pay to the order of Proteo, Inc., a Nevada corporation, (the "Holder"), at its principal place of business at 2102 Business Center Drive, Suite 130, Irvine, CA 92612 or at such other place as may be designated in writing by the Holder, the principal sum of $3,600,000.00, with no interest.

Principal shall be payable in four installments as follows:

	
  

	
○

	
First installment of $900,000 falling due upon execution;

	
  

	
○

	
Second installment of $450,000 falling due on or before August 30, 2008;

	
  

	
○

	
Third installment of $900,000 falling due on or before November 30, 2008;

	
  

	
○

	
Fourth and final installment of $1,350,000 falling due on or before March 31, 2009

All payments under this Note shall be in lawful money of the United States.

In no event shall the interest and other charges in the nature of interest hereunder, if any, exceed the maximum amount of interest permitted by law. Any amount collected in excess of the maximum legal rate shall be applied to reduce the principal balance.

All payments under this Note shall be applied first to the late fees and costs, if any, and second to interest then due, if any, and to balance the principal.

The Maker agrees to pay to the holder all costs, expenses and reasonable attorney's fees incurred in the collection of sums due hereunder, whether through legal proceedings or otherwise, to the extent permitted by law.

This Note may be prepaid at any time, in whole or in part, without penalty or premium.

If any installment hereunder is not paid within ten (10) days of the date the same is due, the Maker shall pay to the holder a late charge equal to three percent (3%) of the overdue payment as liquidated damages, and not as a penalty.

After the maturity of this Note, or upon any default, this Note shall bear interest at the rate of ten percent (10%) per annum, at the option of the Holder.

  

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At the option of the Holder, this entire Note shall become immediately due and payable, without demand and notice, upon the occurrence of any one of the following events:

	
  

	
 (a)

	
failure of the Maker to pay any installment hereunder when due, which shall continue for ten (10) days;

	
  

	
 (b)

	
any misrepresentation or omission of or on behalf of Maker  made to the holder in connection with this loan;

	
  

	
 (c)

	
insolvency or failure of the Maker or any guarantor to  generally pay its debts as they become due;

	
  

	
 (d)

	
assignment for the benefit of creditors of, or appointment of  a receiver or other officer for, all or any part of Maker's or  any guarantor's property;

	
  

	
 (e)

	
adjudication of bankruptcy, or filing of a petition under any  bankruptcy or debtor's relief law by or against Maker or any guarantor;

	
  

	
 (f)

	
death of Maker or any guarantor;

	
  

	
 (g)

	
sale or transfer, whether voluntary or involuntary, of all or any interest in the property which is security for this Note;  or

	
  

	
 (h)

	
default under any mortgage, trust deed, security agreement or other instrument securing this note, if any.

The Maker expressly waives presentment, demand, notice, protest, and all other demands and notices in connection with this Note. No renewal or extension of this Note, or release of any collateral or party liable hereunder, will release the liability of the Maker.

Failure of the Holder to exercise any right or option shall not constitute a waiver, nor shall it be a bar to the exercise of any right or any option at nay future time.

If any provision of this Note shall be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

This Note shall be governed by the laws of the state of California.

IN WHITNESS WHEREOF, this Promissory Note is executed under seal on the day and year first above written.

 

	Executed:     	 	FIDEsprit AG:	 
	 	 	 	 
	 	 	/s/ Joerg Alte	 
	 	 	Joerg Alte	 
	 	 	Managing Director	 
	 	 	 	 

  

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Exhibit B

GUARANTY

FOR VALUE RECEIVED, the undersigned Axel J. Kutscher, living at Oetwilerstr. 29, CH-8634 Hombrechtikon, Switzerland, as primary obligor, hereby unconditionally guarantees the prompt payment of principal and interest when due and all other obligations contained in the Promissory Note as of June 9, 2008 given by FIDESprit AG to Proteo, Inc. The undersigned accepts and agrees to be bound by all terms, conditions and waivers contained in the Note. The undersigned waives notice of acceptance of this guarantee and suretyship defenses of all kinds. The Holder may extend the time of payment, release any collateral or party reliable on the Note, or grant any indulgence to any party without releasing the liability of the undersigned. The Holder need not proceed against Maker or any other party or collateral prior to proceeding against the undersigned. The undersigned agrees to pay all costs, expenses and attorney's fees incurred by the Holder in enforcing the Note and this Guaranty.

Dated June 9, 2008.

	Executed:    	 	Guarantor	 
	 	 	 	 
	
 

	
By: 

	/s/ Axel J. Kutscher	 
	 	 	Axel J. Kutscher	 
	 	 	 	 
	 	 	 	 

 

 

 

 

 

 

 

B-1proteo_10q-ex1015.htm

 

EXHIBIT 10.15

LICENSE AGREEMENT

This agreement, entered into effective as of December 30, 2000, by and between Proteo, Inc., a Nevada Corporation having its principal place of business at 2775 Mesa Verde Drive East, #F101, Costa Mesa, California 92626 (hereinafter the "Licensee"), and Professor Dr. med. Oliver Wiedow, MD, living at Forstweg 55, D-24105 Kiel, Germany,(hereinafter the "Licensor").

WITNESSETH:

WHEREAS, Licensor is the owner, co-inventor and/or licensee of several patents and patent rights (the “Patents”) and related technologies as described in the patents referred to in Exhibit “A”;

WHERAS, Licensee wishes to obtain an exclusive license worldwide under these patents, patent rights and technologies;

WHERAS; Licensor is willing to grant an exclusive, royalty-bearing license under this patents, patents rights and technologies.

NOW, THEREFORE, the parties intending to be legally bound agree as follows:

ARTICLE 1                      DEFINITIONS

1.1           Technology Rights   “Technology Rights” shall mean patents granted, patents pending and patent applications listed in Exhibit “A”, or as later amended by written agreement of the parties, and related technologies, including but not limited to alterations, improvements or new technologies derived from or based on all or part of such technologies.

1.2           Product   “Products” shall mean any product, raw material or other services (including but not limited to licenses or other rights granted) based on “Technology Rights”.

1.3           Subsidiary    “Subsidiary” shall mean any person or other legal entity which, directly or indirectly, is controlled by either party, where control shall mean the (direct or indirect) power to vote more than 50 % of the voting shares, general partnership interests or other voting interest of a person or legal entity.

1.4           Knowledge    “Knowledge” shall mean actual knowledge, after reasonable investigation.

ARTICLE 2                      License Grant

2.1           License    Licensor herby grants to the Licensee the exclusive right and license under the Technology Rights to develop, manufacture, test, sell and service any of the Products world wide (the “License Rights”). Without the prior written consent of Licensor, the License Rights shall not be assignable and Licensee shall not be entitled to grant sublicenses.

2.2           Alteration  Licensee shall be entitled to alter, to amend, to modify or develop further such Products under Technology Rights and any portion thereof.

2.3           Knowledge  Licensee confirms that it has Knowledge with respect to each patent and patent application as listed in Exhibit “A”, and has Knowledge and is aware of the Patent Assignment as of 4/10/1999 between Licensor and Zeneca Ltd. And acknowledges to be bound to any and all of Licensor’s obligations thereunder.

ARTICLE 3                      LICENSING FEES AND ROYALTIES

3.1           Licensing Fee  Licensee shall pay to Licensor a license fee of 110,000 € per year for a term of six years, payable in quarterly installments of 27,000 €. The first installment shall fall due on April 1, 2001, each following installment shall fall due within 10 days after the end of each quarter. The last installment shall be due January 10, 2007. Any such installment of Licensing Fees shall be reduced by the amount equivalent to any Royalties (as defined in 3.2), and by the amount equivalent to
50% of any salary, or other professional fee with respect to the Technology Rights, which Licensor receives from Licensee or its Subsidiaries during the same period.

  

 

  

3.2           Royalties   Licensee shall pay to Licensor running royalties in the amount of 3% of gross revenues earned with Products based on the Technology Rights by Licensee or Licensee’s Subsidiaries. Royalties shall be paid for each quarter falling due within forty-five (45) days after the end of each quarter.

3.3           Other payments    If Licensee assigns the License Rights or any portion thereof to any third party (where third party shall include any Subsidiaries of Licensee) with prior written consent of Licensor, Licensor shall be entitled to a maximum of 25% of such payments, which Licensee receives with respect to such assignment or to which Licensee is entitled, in each case regardless of Licensee’s gross revenues (“lump sum”).

3.4           Accounting and Audit   With respect to the running royalties set forth above, Licensee shall keep full, clear and accurate records and accounts for sales of Products based on the Technology Rights subject to royalty for a period of three (3) years. Licensor shall have the right through a certified public accountant appointed by Licensor to audit, not more than once in each calendar year and during normal business hours, all such records and accounts to the extent necessary to verify that no underpayment
has been made by Licensee hereunder. Such audit shall be conducted at Licensor’s own expense, provided that if any discrepancy or error exceeding five percent (5%) of the money actually due is found through the audit, the cost of the audit shall be born by the Licensee.

3.5           Third Party Royalties   Licensee shall also pay all license fees and royalties to which Licensor is obliged to any third party under the Patent Assignment as of 4/10/1999 between Licensor and Zeneca Ltd. or any applicable law.

3.6.           Maintenance and No-Contest   Licensee shall obliged to maintain, enforce and defend the License Rights any of the Patents and related intellectual property rights at its own costs. Throughout the duration of this License Agreement, Licensee shall neither challenge the validity of the Technology Rights nor support third parties in such challenge.

3.7.           New patents   Any new patents based on claims of existing patents and patent applications shall be enforced on behalf and in the name of the Licensor at the expenses of the Licensee. Such new patent shall be covered by this agreement.

ARTICLE 4                      CONFIDENTIAL INFORMATION

Neither party shall disclose any confidential information received by the other party without the prior written consent of such party.

ARTICLE 5                      WARRANTY

Licensor represents and warrants to the Licensee that the Licensor, otherwise than disclosed herein: (i) is not aware of any third parties rights, title, and interest in the Technology Rights, (ii) has not assigned transferred, licensed, pledged or otherwise encumbered the Technology Rights or agreed to do so, (iii) has full power and authority to enter into this Agreement as provided in Section 2, (iv) is not aware of any violation, infringement or misappropriation of any third party’s rights (or any claim thereof) by the Technology Rights and (v) is not aware of violation of employer rights.

Licensor undertakes no liability for (i) the patentability or validity of any claims of any existing patents or patent application relating to the Technology Rights (ii) the commercial exploitability of the Technology Rights and (iii) the readiness of Technology Rights for manufacturing or plant use purposes.

Any claims of Licensee against Licensor for breach of representations or warranties hereunder or any other claims, licensor may have under or in the context of this Licensee Agreement shall not exceed the amount of royalties paid under this License Agreement by Licensee to Licensor.

ARTICLE 6                      FURTHER ASSURANCES; MORAL RIGHTS;

6.1           Assurances    Licensor agrees to assist the Licensee in every legal way to evidence, record and perfect the Section 2 License Rights and defend the License Rights, provided, however, that the Licensor will be held harmless from any costs, expenses and liabilities which might occur thereof.

  

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6.2           Moral Rights   To this extent allowed by applicable laws, Section 2 includes the rights to make use of all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as “moral rights”, “artist’s rights”, “droit moral” or the like (collectively the “Moral Rights”) as defined hereinafter. Licensor hereby ratifies and consents to, and provides all necessary ratifications and consents to, any action that may be taken
with respect to such Moral Rights by or authorized by the Licensee against third Parties; Licensor agrees not to assert any Moral Rights with respect thereto unless agreed to by and between the Parties of this License Agreement. Licensor will conform any such ratification, consents and agreements from time to time as requested by the Licensee.

ARTICLE 7                      COMPETITION; FURTHER COOPRATION

7.1           Competition  Licensor will not engage in any competition, or cooperate with or participate in any competitor with respect to the Technology Rights. However, any shareholding that does not grant the power to control any competitor, shall not be deemed as such participation, where power to control shall mean the (direct or indirect) power to vote more than 50% of voting shares, general partnership interests or other voting interests of a person or legal entity.

7.2           Further Cooperation  Licensor will provide Licensee any information and data necessary, which are available to Licensor, to maintain and develop the assigned Technology Rights, provided, however, that Licensor will be held harmless from any costs, expenses and liabilities which might occur thereof.

ARTICLE 8                      TERM AND TERMINATION

8.1           Term     This Agreement shall remain in effect for thirty (30) years.

8.2           Termination    In the event of a material breach of this Agreement by one party hereto, and if such breach is not corrected within ninety (90) days after written notice complaining thereof is received by such party, the other party may terminate this Agreement forthwith by written notice to that effect to such party.

8.3           Termination by Licensor    Licensor shall also have the right to terminate this Agreement forthwith by giving written notice of termination to the Licensee within ninety (90) days upon after (i) the filing by Licensee of a petition in bankruptcy or insolvency, (ii) any adjudication that Licensee is bankrupt or insolvent, (iii) the filing by Licensee of any legal action or document seeking reorganization, readjustment or arrangement of Licensee’s business under any law relating to bankruptcy or
insolvency, (iv) the appointment of receiver for all or substantially all of the property of Licensee, (v) the making of Licensee of any material assignment for the benefit of creditors,(vi) the institution of any proceedings for the liquidation or winding up of Licensee’s business or for the termination of its corporate charter or (vii) the assignment to third party of all or substantially all of the assets of Licensee (viii) the Licensee shall discontinue development and marketing of Products based upon the Technology Rights finally, (ix) the Licensee shall not use reasonable efforts to develop and market Products based upon the Technology Rights for a term no less than six (6) months, (x) Licensee is or becomes unable to rise sufficient funds to finance the development and marketing of such Products for a period no less than six (6) months or (xi) Licensee is coming or
threatened to come under the control of any Licensee’s competitors.

After any termination – to extent permitted by applicable law, Licensee shall return all documents, information and data received by Licensor and shall immediately cease to develop, manufacture or sell Products.

ARTICLE 9                      TRANSFER OF RIGHTS

This Agreement, or any of the rights, titles and interests provided hereunder, are not assignable or transferable by either party without the prior written consent of the other party; any attempt to do so shall be void.

  

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ARTICLE 10                                NOTICE

All notices, consents, assignments and other communications under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered by hand, (b) sent by telex or facsimile (with receipt confirmed), provided that a copy is mailed by registered mail, return receipt requested, or (c) received by the delivery service (receipt requested), in each case to the appropriate addresses, telex numbers and facsimile numbers set forth below (or to such other addresses, telex numbers and facsimile numbers as a party may designate as to itself by notice to the other party).

If to Licensee:       Proteo, Inc.

                                2775 Mesa Verde Drive East, #F101

                                Costa Mesa, CA 92626, USA

                                Fax: +1 (714) 979-7080

 

 

If to Licensor:        Prof. Dr. med. Oliver Wiedow

                                 Forstweg 55

                                 D-24105 Kiel

                                 Germany

                                  Fax: +49 (0)431-8888463

ARITCLE 11                                 GOVERNING LAW; LITIGATION

11.1           Governing Law  This Agreement shall be construed under the laws of the Federal Republic of Germany.

11.2           Litigation  Any dispute, controversy or claim arising out of, or relating to this Agreement, or the termination or validity thereof shall be settled through bona fide negotiations between the parties, but should the parties be unable to resolve such disputes then the matter shall be referred to proceed to litigation at the appropriate court in Kiel, Germany.

ARTICLE 12                                MISCELLANEOUS

12.1           Exclusive Agreement    This document and those other documents referenced herein and made a part hereto as Exhibits or Amendments, constitute the entire agreement of the Parties with respect to the subject matter hereof, and supersede any and all prior agreements whether in writing or verbal, and neither of the parties is relying upon warranties, representations, or inducements not expressly set forth herein.

12.2           Representation   Neither party shall not act as an agent of the other party or make any representation on behalf of the other party, if not agreed otherwise from time to time.

12.3           Alteration   The provisions of this Agreement shall not be waived, altered, modified, amended or repealed, in whole or in part, unless by instruments in writing, which expressly refers to this Agreement, duly executed by the parties hereto.

12.4           Validity   If any term or condition of this Agreement is null and void or will become null and void during its course, then the validity and effectiveness of all other terms and conditions shall not be impaired thereby. In such event, invalid terms or conditions shall be suitable amended to maintain the economic intention of the parties hereto. All terms and conditions of this Agreement shall be deemed to be separable. The failure of a Party to insist upon strict performance of any provision hereof
shall not constitute a waiver of, or estoppel against asserting the right to require such performance in the future, nor shall a waiver or estoppel in one instance constitute a waiver or estoppel with respect to a later breach of a similar nature or otherwise.

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and entered into as of the date first above written

LICENSOR:  

 

 Prof. Dr. med. Oliver Wiedow

By: /s/ Oliver Wiedow

Oliver Wiedow

LICENSEE:  

 

 PROTEO, Inc.

A Nevada Corporation

By: /s/ Joerg Alte

Joerg Alte, President

  

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EXHIBIT A

	
Patent Number

	
Country

	
Status

	  	  	  
	
0402068

	
Europe

	
Granted Patent

	  	
Austria

	  
	  	
Belgium

	  
	  	
Switzerland

	  
	  	
Liechtenstein

	  
	  	
Germany

	  
	  	
Denmark

	  
	  	
Spain

	  
	  	
France

	  
	  	
United Kingdom

	  
	  	
Greece

	  
	  	
Italy

	  
	  	
Luxembourg

	  
	  	
Netherlands

	  
	  	
Sweden

	  
	  	  	  
	
5464822

	
USA

	
Granted Patent

	
08/427170

	
USA

	
Patent Application

	
636148

	
Australia

	
Granted Patent

	
2018592

	
Canada

	
Patent Application

	
902880

	
Finland

	
Patent Application

	
70520

	
Ireland

	
Granted Patent

	
94602

	
Israel

	
Granted Patent

	
148816/90

	
Japan

	
Patent Application

	
177716

	
Norway

	
Granted Patent

	
233974

	
New Zealand

	
Granted Patent

	
94326

	
Portugal

	
Granted Patent

	
90/4461

	
South Africa

	
Granted Patent

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