CONSENT, LIMITED WAIVER AND FIFTH AMENDMENT TO NOTE AND WARRANT PURCHASE AND SECURITY AGREEMENT
This Consent, Limited Waiver and Fifth Amendment to Note and Warrant Purchase and Security Agreement (this “Amendment”) is entered into as of March 6, 2024, by and among NH EXPANSION CREDIT FUND
HOLDINGS LP (“North Haven Expansion”), as agent (in such capacity, together with its successors or permitted assigns, “Agent”), the Holders from time to time signatory to the NPA (as hereinafter defined), including North Haven
Expansion (each, a “Holder” and collectively, the “Holders”), and SANUWAVE HEALTH, INC., a Nevada corporation (“Issuer”).
WHEREAS, Issuer, Agent and the Holders are parties to that certain Note and Warrant Purchase and Security Agreement dated as of
August 6, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, including but not limited to that certain Second Amendment to Note and Warrant Purchase and Security Agreement dated as of
February 25, 2022 (the “Second Amendment”), that certain Third Amendment to Note and Warrant Purchase and Security Agreement dated as of June 30, 2022 (the “Third Amendment”) and that certain Fourth Amendment to Note and Warrant Purchase Agreement dated as of June 23, 2023 (the “Fourth Amendment”), the “Existing NPA”
and as amended by this Amendment, the “NPA”);
WHEREAS, the Issuer plans to enter into that certain Exclusive License and Option Agreement (as the same may be amended, amended
and restated, restated, supplemented or otherwise modified from time to time, the “License Agreement”) with Vascular Wave LLC, a New York limited liability
company (“Licensee”) pursuant to which Issuer will grant to Licensee (a) an exclusive license under the Excluded Patents as defined on Exhibit A hereto, and (b) an exclusive option to acquire all right, title and interest in and to the Excluded Patents and to otherwise license and/or assert the Excluded Patents, in each case on the
terms and conditions set forth in the License Agreement (the transactions described above together with the consummation of any transaction and actions incidental thereto or contemplated thereby, the “IP Transaction”);
WHEREAS, Issuer is in default of the Existing NPA as described in the Second Amendment, Third Amendment and Fourth Amendment
(the “Existing Defaults”);
WHEREAS, Issuer has requested that Agent and the Holders consent to the IP Transaction and waive any Event of Default that would
have otherwise arisen under the Existing NPA in connection with the IP Transaction, including, without limitation, any Event of Default that would have arisen under Section 7.2 of the NPA as a result of a failure to comply with (i) Section 5.3
(Collateral), (ii) Section 5.8 (Intellectual Property) and (iii) Section 6.1 (Dispositions) upon giving effect to the IP Transaction (collectively, the “Specified
Defaults”);
WHEREAS, Agent and Holders have agreed to consent to the IP Transaction, waive the Specified Defaults that would have otherwise
arisen therefrom and amend the Existing NPA as more particularly described herein;
WHEREAS, Agent and the Holders have agreed to so amend certain provisions of the Existing NPA, and to continue to forbear from
exercising Agent’s and the Holders’ rights and remedies during the Forbearance Period (as defined in the Second Amendment), but only to the extent in accordance with the terms, subject to the conditions and in reliance upon the representations
and warranties set forth therein and below; and
WHEREAS, all terms not otherwise defined herein and defined in the Existing NPA shall have the same meanings herein as in the
Existing NPA.
NOW, THEREFORE, in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:
1. The Existing Defaults,
as defined in the Second Amendment, continue uncured and unwaived. Subject to the terms of the Second Amendment, the Third Amendment, the Fourth Amendment and this Amendment, Agent and the Holders shall forbear from exercising their remedies
arising out of the Existing Defaults from the date hereof (including, for the avoidance of doubt, the collection in cash or payment in kind of the Default Rate on the outstanding Obligations under the NPA and the other Note Documents), until
the earlier to occur of (x) the occurrence of an Event of Default after the date hereof, at which time Agent and the Holders may exercise any and all rights available to them without notice to Issuer; or (y) April 30, 2024. Agent and the
Holders do not forbear from exercising their remedies arising out of any other Events of Default that have occurred, are continuing or may occur on or after the Second Amendment Effective Date. Issuer shall comply with all other provisions of
the NPA and the other Note Documents.
2. The
Agent and Holders hereby (i) consent to the (a) execution of the License Agreement in the form and substance presented to Agent as of the date hereof and (b) consummation of the IP Transaction and (ii) agree to waive the Specified Defaults
that would have otherwise arisen therefrom and that the consummation of the IP Transaction shall not constitute an Event of Default under the NPA or violation of any other Note Document, notwithstanding anything in any of the Note Documents
to the contrary. Subject to and effective upon the delivery by the Company of an executed counterpart hereof, the Agent and the Holders agree and authorizes the Company, their counsel or their designee (at the sole expense of the Company) to
file all documentation necessary to evidence the release of the Excluded Patents and to effectuate the IP Transaction, including, without limitation, the filing of the UCC-3 amendment attached as Exhibit B hereto (the “UCC Amendment”) and the filing of this Agreement with the Patent and Trademark Office to evidence the release of any Liens on the Excluded Patents (the “Filings”).
3. The consent set forth herein is limited to the matter described herein and shall not be deemed to be a consent or agreement to, or waiver or modification with respect
to, any other action, event or condition, whether similar or dissimilar, nor obligate Agent or any Holder to grant or agree to any future consent as to any other action, event or condition, whether similar or dissimilar. Other than the
Specified Defaults, Agent and Holders do not waive Issuer’s obligations under the NPA and Agent and Holders do not waive any other failure by Issuer to perform the obligations under the NPA. This waiver is not a continuing waiver
with respect to any failure to perform any other obligations under the NPA.
4. The first sentence of the second paragraph of Section 5.8 of the Existing NPA hereby is amended and restated in its entirety to read as follows:
“If Issuer or any Subsidiary (i) obtains any patent, registered trademark or servicemark, registered copyright, registered mask
work, or any pending application for any of the foregoing (other than any Excluded Patents), or (ii) applies for any patent or the registration of any trademark or servicemark, then Issuer shall provide written notice thereof in the Compliance
Certificate delivered to Agent pursuant to Section 5.2(b) and shall execute such IP Agreements and other documents and take such other actions as Agent shall reasonably
request to perfect and maintain a perfected security interest (subject to Permitted Liens) in favor of Agent for the ratable benefit of the Holders in such property.”
5. The definition of Collateral in the Existing NPA hereby is amended and restated in its entirety to read as follows:
“Collateral” is any and all properties, rights and assets of
Issuer described on Exhibit A, other than any Excluded Patents (as defined in Exhibit A to that certain Consent, Limited Waiver and Fifth Amendment to Note and Warrant
Purchase Agreement dated as of March 6, 2024 by and among Issuer, Agent and the Holders (the “Excluded Patents”)).
6. The following
definition hereby is added to the Existing NPA to read as follows:
“Fifth Amendment Effective Date” means March 6, 2024.
7. The Holders hereby
authorize Agent, and Agent hereby does, permanently and irrevocably release Agent’s Lien in the Excluded Patents. Agent will release and execute any termination of any IP Agreements required to evidence the release of, its Lien in the
Excluded Patents and permit the Issuer (or its designee) to make the Filings and any other filings to evidence or document the release and/or termination of Agent’s Lien on and to the Excluded Patents and to effectuate the IP Transaction.
8. No
course of dealing on the part of Agent or the Holders or their respective officers, nor any failure or delay in the exercise of any right by Agent or the Holders, shall operate as a waiver thereof, and any single or partial exercise of any
such right shall not preclude any later exercise of any such right except as specifically waived herein. Except as specifically set forth herein, Agent’s or any Holder’s failure at any time to require strict compliance by Issuer of any
provision under the NPA, shall not affect any right of Agent or the Holders under the NPA thereafter to demand strict compliance. Any suspension or waiver of a right must be in writing signed by an officer of Agent or the Holders, as
applicable.
9. The
NPA, as amended hereby, and each of the other Note Documents shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects. Except as expressly set forth herein,
the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Agent or the Holders under the NPA, as in effect prior to the date hereof.
10. Issuer hereby represents and warrants that (a) the representations and warranties in the NPA, shall be true, accurate, and complete in all material respects immediately after giving effect
to this Amendment; provided, that such materiality qualifier
shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof, which representations and warranties shall be true, accurate and complete immediately after giving
effect to this Amendment in all respects subject to such qualification; and provided, further, that those representations and
warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (b) other than the Existing Defaults and Specified Defaults, no Default or Event of Default shall have occurred
and be continuing immediately after giving effect to this Amendment, (c) Issuer has the power and authority to execute and deliver this Amendment and to perform its obligations under the NPA, as amended by this Amendment, (d) the execution
and delivery by Issuer of this Amendment and the performance by Issuer of its obligations under the NPA, as amended by this Amendment, have been duly authorized by Issuer, (e) the execution and delivery by Issuer of this Amendment and the
performance by Issuer of its obligations under the NPA, as amended by this Amendment, do not and will not contravene (i) any law or regulation binding on or affecting Issuer, (ii) any material contractual restriction with a Person binding
on Issuer, (iii) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Issuer, or (iv) the organizational documents of Issuer, (f) the execution and delivery by
Issuer of this Amendment and the performance by Issuer of its obligations under the NPA, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Issuer, except as already has been obtained or made, and (g) this Amendment has been duly executed and delivered by Issuer
and is the binding obligation of Issuer, enforceable against Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of
general application and equitable principles relating to or affecting creditors’ rights.
11. Release
by Issuer.
A. FOR GOOD AND VALUABLE CONSIDERATION, Issuer hereby forever relieves, releases, and discharges Agent, the Holders and their respective present or former employees, officers, directors, agents,
representatives, attorneys, and each of them, from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses, actions and causes of action, of every type, kind, nature, description or
character whatsoever, whether known or unknown, suspected or unsuspected, absolute or contingent, arising out of or in any manner whatsoever connected with or related to facts, circumstances, issues, controversies or claims existing or
arising from the beginning of time through and including the date of execution of this Amendment (collectively, the “Released Claims”). Without limiting the
foregoing, the Released Claims shall include any and all liabilities or claims arising out of or in any manner whatsoever connected with or related to the Note Documents, the recitals hereto, any instruments, agreements or documents
executed in connection with any of the foregoing or the origination, negotiation, administration, servicing and/or enforcement of any of the foregoing, in each case existing or arising on or prior to the date of this Amendment.
B. In furtherance of
this release, Issuer expressly acknowledges and waives any and all rights under Section 1542 of the California Civil Code (or its equivalent under New York law), which provides as follows:
“A general release does not extend to claims that the creditor or releasing party does not know or suspect to
exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”
C. By entering into this release, Issuer recognizes that no facts or representations are ever absolutely certain and it may hereafter discover facts in addition to or different from those which it presently
knows or believes to be true, but that it is the intention of Issuer hereby to fully, finally and forever settle and release all matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if Issuer should
subsequently discover that any fact that it relied upon in entering into this release was untrue, or that any understanding of the facts was incorrect, Issuer shall not be entitled to set aside this release by reason thereof, regardless of
any claim of mistake of fact or law or any other circumstances whatsoever. Issuer acknowledges that it is not relying upon and has not relied upon any representation or statement made by Agent or the Holders with respect to the facts
underlying this release or with regard to any of such party’s rights or asserted rights.
D. This release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against any action, suit, or other proceeding that may be instituted, prosecuted or attempted in
breach of this release. Issuer acknowledges that the release contained herein constitutes a material inducement to Agent and the Holders to enter into this Amendment, and that Agent and the Holders would not have done so but for their
expectation that such release is valid and enforceable in all events.
E. Issuer hereby represents and warrants to Agent and the Holders, and Agent and the Holders are relying thereon, as follows:
i. Except as expressly stated in this Amendment, neither Agent or the Holders nor any agent, employee or representative of Agent or the Holders has made any statement or representation to Issuer
regarding any fact relied upon by Issuer in entering into this Amendment.
ii. Issuer has made such investigation of the facts pertaining to this Amendment and all of the matters appertaining thereto, as it deems necessary.
iii. The terms of this Amendment are contractual and not a mere recital.
iv. This Amendment has been carefully read by Issuer, the contents hereof are known and understood by Issuer, and this Amendment is signed freely, and without duress, by Issuer.
v. Issuer hereby represents and warrants that it is the sole and lawful owner of all right, title and interest in and to every claim and every other matter which it releases herein, and that it has not
heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or entity any claims or other matters herein released. Issuer shall indemnify, defend and hold harmless Agent and Holders from and against all
claims based upon or arising in connection with prior assignments or purported assignments or transfers of any claims or matters released herein.
12. As a condition to the
effectiveness of this Amendment, Agent shall have received, in form and substance reasonably satisfactory to Agent, the following:
(a) this Amendment, duly
executed by Issuer;
(b) a Termination and
Release of Intellectual Property Collateral, duly executed by Agent;
(c) a supplement to that
certain Intellectual Property Security Agreement, dated as of August 6, 2020, by and between Holder and Sanuwave, Inc., a Delaware corporation;
(d) a completed Issuer
Resolutions and Incumbency, with all exhibits, as of the date of this Amendment, in substantially the form attached hereto;
(e) all Holder Expenses
incurred through the date of this Amendment, which shall be wired to Agent’s and Holder’s counsel on the date hereof in accordance with the wire instructions attached hereto as Supplement I; and
(f) such other documents,
and completion of such other matters, as Agent or Holder may reasonably deem necessary or appropriate.
13. Section 10 of the NPA hereby
is incorporated herein by this reference as though fully set forth herein.
14. This
Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, are an original, and all taken together, constitute one Amendment.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
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ISSUER:
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SANUWAVE HEALTH, INC.
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By:
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/s/ Morgan Frank
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Name:
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Morgan Frank
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Title:
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Chief Executive Officer
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[Signature Page to Consent, Limited Waiver
and Fifth Amendment to Note and Warrant Purchase and Security Agreement]
[Signatures Continued, Next Page]
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
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AGENT AND HOLDER:
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NH EXPANSION CREDIT FUND HOLDINGS LP
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By:
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MS Expansion Credit GP, L.P.
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Its:
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General Partner
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By:
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MS Expansion Credit GP Inc.
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Its:
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General Partner
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By:
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/s/ William Reiland
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Name:
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William Reiland
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Title:
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Managing Director
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[Signature Page to Consent, Limited Waiver
and Fifth Amendment to Note and Warrant Purchase and Security Agreement]
[Signatures Continued, Next Page]