Contract
Exhibit 4.1
THE INDEBTEDNESS EVIDENCED BY THIS NOTE (AS DEFINED BELOW) IS SUBORDINATE TO THE INDEBTEDNESS OF SANUWAVE HEALTH, INC. (OR ANY SUCCESSOR THERETO) TO NH EXPANSION CREDIT FUND HOLDINGS LP, TO THE EXTENT AND PURSUANT TO THE TERMS OF THAT CERTAIN SUBORDINATION AGREEMENT, DATED AS OF JUNE 18, 2024, BY AND AMONG NH EXPANSION CREDIT FUND HOLDINGS LP AND THE PARTIES IDENTIFIED ON THE SIGNATURE PAGES THERETO, AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME (OR ANY SUCCESSOR AGREEMENT WHICH REPLACES AND REFERENCES SUCH AGREEMENT).
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL SELECTED BY THE HOLDER, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT, OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS
NOTE. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF.
FUTURE ADVANCE CONVERTIBLE PROMISSORY NOTE
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Issuance Date: June 18, 2024
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Principal Amount: Up to U.S. $[β’]
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FOR VALUE RECEIVED, SANUWAVE
Health, Inc., a corporation organized under the laws of Nevada (the βCompanyβ), pursuant to this Future Advance Convertible Promissory Note (this βNoteβ) hereby promises to pay to [β’], [its/their] designee or registered assigns (the βHolderβ) in cash and/or in shares of Common Stock (as defined in Section 26) the principal amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the βPrincipalβ) as may be advanced in disbursements (each, a βDisbursementβ and together, the βDisbursementsβ with total principal of outstanding Disbursements equaling Principal), and to pay interest at a rate of fifteen percent (15%) per annum (βInterestβ)
on any outstanding Principal at the applicable Interest Rate from the date of this Note until the Note is accelerated, converted, redeemed or otherwise (in each case in accordance with the terms hereof). Certain capitalized terms used herein are
defined in Section 26. This Note is issued pursuant to that certain Securities Purchase Agreement, dated June 18, 2024, by and among the Company and the parties identified on the signature pages
thereto (the βPurchase Agreementβ), and capitalized terms not defined herein will have the meanings set forth in the Purchase Agreement.
(1) PAYMENTS OF PRINCIPAL; PREPAYMENT. On the Disbursement Maturity Date, the Company
shall pay to the Holder the applicable principal amount of the Disbursement in cash and/or shares of Common Stock and accrued and unpaid Interest on such Disbursementβs Principal and Interest.
(2) INTEREST. Interest for each of the Disbursements under this Note shall commence
accruing on the date hereof at the Interest Rate and shall be computed on the basis of a 360-day year and twelve 30-day months.Β Accrued and unpaid Interest shall be payable on the Disbursement Maturity Date in cash by wire transfer of immediately
available funds pursuant to wire instructions provided by the Holder in writing to the Company, shares of Common Stock or a combination thereof at the Holderβs discretion and if such date falls on a Holiday, the next day that is not a Holiday, to
the record holder of this Note. Prior to the payment of Interest, Interest on this Note shall accrue at the Interest Rate and be payable by way of inclusion of the Interest in the Conversion Amount (as defined in Section 3(b)(i)).
(3) CONVERSION OF NOTE. Following the Issuance Date, as set out above, this Note shall
be convertible into shares of Common Stock on the terms and conditions set forth in this Section 3.
(a) Optional Conversion Right. Subject to the provisions of Section 3(d), at any time
or times on or after the Issuance Date of this Note, the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount into fully paid and nonassessable shares of Common Stock in accordance with Section 3(c), at
the Conversion Rate (as defined below). The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such
fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion
Amount. The Holder shall have the right to deliver an effective conversion notice in the form attached hereto as Exhibit I (each, a βConversion
Noticeβ) at any time until 11:59 p.m. (EST) on the chosen date and it shall be immediately effective.
(b) Conversion Rate. The number of shares of Common Stock issuable upon conversion of
any Conversion Amount pursuant to Section 3(a) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the βConversion Rateβ).
(i) βConversion Amountβ means the sum of (A) the portion
of the Principal to be converted, redeemed or otherwise with respect to which this determination is being made and (B) accrued and unpaid Interest with respect to such Principal.
(ii) βConversion Priceβ shall be equal to $0.04, as
adjusted pursuant to the terms of this Note.
(c) Mechanics of Optional Conversion and Adjustment:
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(i) Registration; Book-Entry. The Company shall maintain a register (the βRegisterβ) for the recordation of the holder
of the Note and the Principal amount of the Note (and stated interest thereon) held by the Holder (the βRegistered Noteβ). The entries in the Register, made in good
faith, shall be conclusive and binding for all purposes absent manifest error. The Company and the Holder shall treat each Person whose name is recorded in the Register as the owner of the Note for all purposes, including, without limitation,
the right to receive payments of Principal and Interest, if any, hereunder, notwithstanding notice to the contrary. Upon its receipt of a request to assign or sell all or part of the Registered Note by the Holder, the Company shall record the
information contained therein in the Register and issue one or more new Registered Notes in the same aggregate Principal amount as the Principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to
Section 14. Notwithstanding anything to the contrary in this Section 3(c)(i), the Holder may assign any Note or any portion thereof to an Affiliate of such Holder or a Related Fund of such Holder without delivering a request to assign or sell
such Note to the Company and the recordation of such assignment or sale in the Register; provided, that (x) the Company may continue to deal solely with such assigning or selling
Holder unless and until such Holder has delivered a request to assign or sell such Note or portion thereof to the Company for recordation in the Register; (y) the failure of such assigning or selling Holder to deliver a request to assign or
sell such Note or portion thereof to the Company shall not affect the legality, validity, or binding effect of such assignment or sale and (z) such assigning or selling Holder shall, acting solely for this purpose as a non-fiduciary agent of
the Company, maintain a register (the βRelated Party Registerβ) comparable to the Register on behalf of the Company, and any such assignment or sale shall be effective
upon recordation of such assignment or sale in the Related Party Register. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be
required to physically surrender this Note to the Company unless the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of
this Note. The Holder and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to
require physical surrender of this Note upon conversion.
(ii) Registration Rights. This Note is issued pursuant to the terms
of that certain Registration Rights Agreement dated June 18, 2024, by and among the Company, the Holder and the other parties thereto (the βRegistration Rights Agreementβ).
(iii) Optional Repayment (βOptional Redemptionβ). At the Companyβs option and upon thirty (30) daysβ notice to the Holder (the βOptional Redemption Noticeβ), the Note may be redeemed at any time at an amount equal to one hundred and twenty-five percent (125%) of the outstanding Principal and accrued and
unpaid Interest (the βOptional Redemption Priceβ). Such notice shall specify the date of such Optional Redemption (the βOptional Redemption Dateβ). The foregoing notwithstanding, the Holder may convert any or all of this Note into shares of Common Stock pursuant to the terms of this Section 3 at any time the Note remains outstanding.
(d) Limitations on Conversions.
(i) Beneficial Ownership. Notwithstanding anything to the contrary
contained in this Note, this Note shall not be convertible by the Holder hereof, and the Company shall not effect any conversion of this Note or otherwise issue any shares of Common Stock pursuant hereto, to the extent (but only to the extent) that
after giving effect to such conversion or other share issuance hereunder the Holder (together with the Holderβs Affiliates, and any other Persons acting as a Group together with the Holder or any of the Holderβs Affiliates (such Persons, βAttribution Partiesβ)) would beneficially own in excess of 4.99% (or upon election of the Holder, 9.99%) (the βMaximum
Percentageβ) of the Common Stock. To the extent the above limitation applies, the determination of whether this Note shall be convertible (vis-Γ -vis other convertible, exercisable or exchangeable securities owned by the Holder and its
Affiliates and Attribution Parties) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior inability to convert
this Note, or to issue shares of Common Stock, pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. For purposes of this paragraph,
beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in
this paragraph shall apply to a successor Holder of this Note. The holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without the consent of holders of a majority of its Common
Stock. For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding, including by virtue
of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including, without limitation, pursuant to this Note or securities issued pursuant to the Purchase Agreement.
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(ii) Principal Market Regulation. Unless permitted by the
applicable rules and regulations of the Principal Market, the Company shall not issue any shares of Common Stock upon conversion of this Note if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock
which the Company may issue upon exercise or conversion (as the case may be) of the Note without breaching the Companyβs obligations under the rules or regulations of the Principal Market (the number of shares which may be issued without violating
such rules and regulations, the βExchange Capβ). Notwithstanding the foregoing, such limitation shall not apply in the event that the Company (A) obtains the approval of its
stockholders as required by the applicable rules of the Principal Market for issuances of shares of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which
opinion shall be reasonably satisfactory to the Holder. In the event that any Holder shall sell or otherwise transfer any of such Holderβs Note, the Exchange Cap restrictions set forth herein shall continue to apply to the Note and such transferee.
(iii) No Conversion until Sufficient Authorized and Unissued Shares Available.Β
Notwithstanding anything herein to the contrary, this Note shall not be convertible into shares of Common Stock of the Company until such time as the Companyβs authorized and unissued shares of Common Stock are at a number sufficient to permit the
conversion of this Note and the conversion or exercise, as applicable, of all other outstanding securities of the Company convertible into or exercisable for shares of Common Stock of the Company.
(e) Disputes. In the event of a dispute as to the number of shares of Common Stock
issuable to the Holder in connection with a conversion of this Note, the Company shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 19.
(4) [RESERVED.]
(5) RIGHTS UPON EVENT OF DEFAULT.
(a) Event of Default. Each of the following events shall constitute an βEvent of Defaultβ; provided, however, that, except in the case of the Events of Default listed in Sections
5(a)(i), 5(a)(ix) or 5(a)(xxiv) below, the Company shall have five (5) Business Days after notice of default from the Holder to cure such Event of Default unless a lesser number of days is required pursuant to the provisions of this Section 5.
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(i) Failure to Pay Principal or Interest. The Company fails to pay
the Principal or Interest due at the Disbursement Maturity Date, liquidated damages and other amounts thereon when due on the Note whether at maturity, upon acceleration or otherwise.
(ii) Conversion and the Shares. The Company (i) fails to issue
Conversion Shares to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of the Note, (ii) fails to
transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to the Note as and when required by the
Note, or (iii) the Company directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for the Conversion Shares issuable to
the Holder upon conversion of or otherwise pursuant to the Note as and when required by the Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Holder upon conversion of or otherwise pursuant to the Note as and when required by the Note (or makes any written
announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be
rescinded in writing) for five (5) Business Days after the Holder shall have delivered a Conversion Notice. It is an obligation of the Company to remain current in its obligations to its transfer agent. It shall be an Event of Default of the Note,
if a conversion of the Note is delayed, hindered or frustrated due to a balance owed by the Company to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Companyβs transfer agent in order to process a
conversion, such advanced funds shall be paid by the Company to the Holder within forty-eight (48) hours of a demand from the Holder. If Xxxxxxxx is unable to do so, they shall have an opportunity to cure within five (5) Business Days.
(iii) Breach of Agreements and Covenants. The Company breaches any
material agreement, covenant or other material term or condition contained in the Transaction Documents, and such breach results in a Material Adverse Effect on the business or assets of the Company; for the avoidance of doubt a failure of the
Company to file a registration statement by theΒ βFiling Dateβ and have the same declared effective by the βEffectiveness Dateβ as provided in the Registration Rights Agreement will constitute a breach of a material agreement that results in a
Material Adverse Effect on the business of the Company for purposes of this Note and the Purchase Agreement.
(iv) Breach of Representations and Warranties. Any representation
or warranty of the Company made in the Purchase Agreement or the Note, or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or therewith shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will have) a Material Adverse Effect on the rights of the Holder with respect to the Note or the Purchase Agreement. In the event of such a breach, the Company shall have an opportunity
to cure within five (5) Business Days.
(v) Receiver or Trustee. The Company or any subsidiary of the
Company shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be
appointed. Under such circumstances, the Company shall have an opportunity to cure within sixty (60) calendar days.
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(vi) Judgments. Any money judgment, writ or similar process shall
be entered or filed against the Company or any subsidiary of the Company or any of its property or other assets for more than $1,000,000 and shall remain unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless otherwise
consented to by the Holder, which consent will not be unreasonably withheld, conditioned or delayed.
(vii) Bankruptcy. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company or any subsidiary of the Company. Under such
circumstances, the Company shall have an opportunity to cure within sixty (60) calendar days.
(viii) Delisting or Trading of Common Stock. The Company shall fail
to maintain the listing or quotation of its Common Stock minimally on a Trading Market, which shall include the OTC pink sheets pro-rata based on the entire amount raised.
(ix) Failure to Comply with the Exchange Act.Β
After the date hereof, the Company shall (a) fail to file all Form 10-Qs and Form 10-Ks within the time periods required by the Exchange Act or (b) cease to be subject to the reporting requirements of the Exchange Act.
(x) Liquidation. Any dissolution, liquidation, or winding up of the
Company or any substantial portion of its business or assets.
(xi) Cessation of Operations. Any cessation of operations by the
Company or the Company admits it is otherwise generally unable to pay its debts as such debts become due; provided, however, that any disclosure of the Companyβs ability to continue as a βgoing concernβ shall not be an admission that the Company
cannot pay its debts as they become due.
(xii) Reverse Stock Split. The Company fails to reduce its
outstanding shares via a reverse stock split to provide a number of authorized and unissued shares of Common Stock sufficient to permit the conversion of this Note and the conversion or exercise, as applicable, of all other outstanding securities
of the Company convertible into or exercisable for shares of Common Stock of the Company on or before December 31, 2023.
(xiii) Depository Trust Company (βDTCβ) βChillβ. The DTC places a
βchillβ (i.e., a restriction placed by DTC on one or more of DTCβs services, such as limiting a DTC participantβs ability to make a deposit or withdrawal of the security at DTC) on any of the Companyβs securities. In the event of such a breach, the
Company shall have an opportunity to cure within twenty (20) Business Days.
(xiv) [Reserved.]
(xv) Default under Transaction Documents or Other Material Agreement.
Other than those defaults or events of default previously disclosed by the Company in its SEC Reports (including any defaults and events of default that are continuing on and after the date hereof), including information contained or incorporated
by reference therein as of the date hereof, a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under any Transaction Document or material agreement (which
shall include, without limitation, all agreements filed with the SEC Reports), lease, document or instrument to which the Company or any Subsidiary is obligated and is identified in the Companyβs Form 10-K or other Exchange Act filings, which
results in a Material Adverse Effect.
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(xvi) [Reserved.]
(xvii) [Reserved.]
(xviii) Failure to Meet the Requirements under Rule 144. The
Company does not meet the current public information requirements under Rule 144.
(xix) Failure to Maintain Intellectual Property. The failure by the
Company or any material Subsidiary to maintain any material intellectual property rights, personal, real property, equipment, leases or other assets which are necessary to conduct its business (whether now or in the future) and such breach is not
cured with twenty (20) calendar days after written notice to the Company from the Holder.
(xx) Trading Suspension. An SEC or judicial stop trade order or
suspension from a Trading Market.
(xxi) Restatement of Financial Statements. The restatement after
the date hereof of any financial statements filed by the Company with the SEC for any date or period from two years prior to the Issuance Date and until this Note is no longer outstanding, if the result of such restatement would, by comparison to
the unrestated financial statements, have constituted a Material Adverse Effect. For the avoidance of doubt, any restatement related to new accounting pronouncements shall not constitute a default under this Section.
(xxii) [Reserved.]
(xxiii) Invalidity or Unenforceability of Transaction Documents.
Any material provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the Company, or the validity or enforceability thereof
shall be contested by the Company, or a proceeding shall be commenced by the Company or any governmental authority having jurisdiction over the Company or the Holder, seeking to establish the invalidity or unenforceability thereof, or the Company
shall deny in writing that it has any liability or obligation purported to be created under any Transaction Document.
(xxiv) Effective Registration Statement. Failure to comply with the
Registration Rights Agreement or Purchase Agreement.
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(b) Redemption Right. At any time after the Holder
becoming aware of an Event of Default, the Holder may require the Company to redeem (an βEvent of Default Redemptionβ) all or any portion of this Note by delivering written
notice thereof (the βEvent of Default Redemption Noticeβ) to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is
electing to require the Company to redeem and the date of such Event of Default Redemption (the βEvent of Default Redemption Dateβ). Each portion of this Note subject to
redemption by the Company pursuant to this Section 5(b) shall be redeemed by the Company in cash by wire transfer of immediately available funds at a price equal to Principal plus accrued and unpaid Interest calculated from the Event of Default
at the Default Interest Rate (the βEvent of DefaultΒ Redemption Priceβ) together with liquidated
damages of $250,000 pro-rata based on the entire amount raised plus an amount in cash equal to 1% of the Event of Default Redemption Price for each 30 day period during which redemptions fail to be made with a cap at 5%. Redemptions required by
this Section 5(b) shall be made in accordance with the provisions of Section 10. To the extent an Event of Default Redemption is deemed or determined by a court of competent jurisdiction to be a prepayment of the Note by the Company, such
redemption shall be deemed to be a voluntary prepayment. Notwithstanding anything to the contrary in this Section 5, but subject to Section 3(b)(ii) and 3(d), until the Event of Default Redemption Price (together with any interest thereon) is
paid in full, the Conversion Amount submitted for redemption under this Section 5(b) (together with any interest thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. The parties hereto agree that
in the event of the Companyβs redemption of any portion of the Note under this Section 5(b), the Holderβs damages would be uncertain and difficult to estimate because of the partiesβ inability to predict future interest rates and the uncertainty
of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any Event of Default Redemption Price due under this Section 5(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the
Holderβs actual loss of its investment opportunity and not as a penalty.
(6) RIGHTS UPON FUNDAMENTAL TRANSACTION. If, at any time while
this Note is outstanding, the Company effects a Fundamental Transaction, then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately
prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the βAlternate Considerationβ). For purposes of any such conversion, the determination of the Conversion
Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the
Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any Successor Entity or Successor Entities to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new Note consistent with the foregoing provisions and evidencing the
Holderβs right to convert such Note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such Successor Entity or Successor Entities to comply with the
provisions of this Section 6 and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
(7) DISTRIBUTION OF ASSETS; RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.
(a) Distribution of Assets. If the Company shall declare or make any dividend or other
distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property,
options, evidence of Indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the βDistributionsβ), then the Holder will be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations or
restrictions on the convertibility of this Note) immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for such
Distribution and the portion of such Distribution shall be held in abeyance for the Holder until such time or times as its right thereto would not result in the Holder and its Affiliates and Attribution Parties exceeding the Maximum Percentage, at
which time or times the Holder shall be granted such rights (and any rights under this Section 7(a) on such initial rights or on any subsequent such rights to be held similarly in abeyance) to the same extent as if there had been no such
limitation.
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(b) Purchase Rights. If at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the βPurchase Rightsβ),
then the Holder will be entitled to acquire or receive, as applicable, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock
acquirable upon complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior to the date on which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, that to the extent that the Holderβs right to participate in any such Purchase Right would result in the Holder and its Affiliates and Attribution Parties exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership)
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time or times as its right thereto would not result in the Holder and its Affiliates and Attribution Parties exceeding the Maximum
Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right to be held similarly in abeyance) to the same extent as if
there had been no such limitation).
(c) Other Corporate Events. In addition to and not in substitution for any other rights
hereunder, prior to the occurrence or consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities, cash, assets or other property with respect to or in exchange for shares of
Common Stock (a βCorporate Eventβ), the Company shall make appropriate provision to ensure that, and any applicable Successor Entity or Successor Entities shall ensure that,
and it shall be a required condition to the occurrence or consummation of such Corporate Event that, the Holder will thereafter have the right to receive upon conversion of this Note at any time after the occurrence or consummation of the Corporate
Event, shares of Common Stock or capital stock of the applicable Successor Entity or Successor Entities or, if so elected by the Holder, cash in lieu of the shares of Common Stock (or other securities, cash, assets or other property) purchasable
upon the conversion of this Note prior to such Corporate Event, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights and any shares of Common Stock) which the
Holder would have been entitled to receive upon the occurrence or consummation of such Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event, had this Note been converted immediately
prior to such Corporate Event or the record, eligibility or other determination date for the event resulting in such Corporate Event (without regard to any limitations on conversion of this Note). Provision made pursuant to the preceding sentence
shall be in a form and substance satisfactory to the Holder. The provisions of this Section 7 shall apply similarly and equally to successive Corporate Events.
(8) RIGHTS UPON ISSUANCE OF OTHER SECURITIES.
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(a) Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. If
the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise), one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion
Price in effect immediately prior to such subdivision will be proportionately reduced; provided, however, that the Conversion Price pursuant to this Section 8(a) shall never be less than $0.01. If the Company at any time on or after the Issuance
Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be
proportionately increased.
(b) Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the
date hereof, the Company issues or sells, or in accordance with this Section 8(b) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the
Company, but excluding any Exempt Issuance issued or sold or deemed to have been issued or sold) for a consideration per share (the βNew Issuance Priceβ) less than a price
equal to the Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale (such Conversion Price then in effect is referred to as the βApplicable
Priceβ) (the foregoing a βDilutive Issuanceβ), then immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to the New Issuance
Price; provided, however, that the Conversion Price pursuant to this Section 8(b) shall never be less than $0.01. For all purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price and consideration per
share under this Section 8(b)), the following shall be applicable:
(i) Issuance of Options. If the Company in any manner grants or
sells any Options (other than Options that qualify as Exempt Issuances) and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such
Option for such price per share. For purposes of this Section 8(b)(i), the βlowest price per share for which one share of Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Optionβ shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the
granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option and (y) the lowest exercise price set forth in such Option for which one share
of Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option minus (2) the sum of all amounts paid or payable to the holder of
such Option (or any other Person) upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option plus the value of any other
consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such shares of
Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
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(ii) Issuance of Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities (other than Convertible Securities that qualify as Exempt Issuances) and the lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange
thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per
share. For the purposes of this Section 8(b)(ii), the βlowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereofβ shall be equal to (1) the lower of (x) the sum of the lowest amounts
of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security and (y) the
lowest conversion price set forth in such Convertible Security for which one share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable to the holder of such Convertible
Security (or any other Person) upon the issuance or sale of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or any other Person).
Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale
of such Convertible Securities is made upon exercise for which adjustment of this Note has been or is to be made pursuant to other provisions of this Section 8(b)(ii), except as contemplated below, no further adjustment of the Conversion Price
shall be made by reason of such issue or sale.
(iii) Change in Option Price or Rate of Conversion. If the purchase
or exercise price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or
exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been in effect at such
time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For
purposes of this Section 8(b)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance of this Note are increased or decreased in the manner described in the immediately preceding sentence, then such
Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 8(b)
shall be made if such adjustment would result in an increase of the Conversion Price then in effect.
(iv) Calculation of Consideration Received. If any Option and/or
Convertible Security is issued in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the βPrimary Security,β
and such Option and/or Convertible Security, the βSecondary Securitiesβ), together comprising one integrated transaction, the consideration per share of Common Stock with respect to such
Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common Stock was issued in such integrated transaction (or was deemed to be issued pursuant to Section 8(b)(i) or 8(b)(ii)
above, as applicable) solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the fair market value of such Secondary Securities as agreed to by the Company and the Holder and absent such agreement by an
independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the
Company.
(c) Company Conversion Right and Adjustment of Conversion Price Upon Listing.Β
If the Company lists its shares of Common Stock on the Nasdaq Capital Market, then, upon the approval of the Board of Directors, all Principal and accrued
and unpaid Interest under this Note shall automatically convert into Common Stock at the then effective Conversion Price.Β Notwithstanding the foregoing, if, for the five (5) Trading Day period immediately
prior to such approval by the Board of Directors, the average VWAP of the listed Common Stock (the βPost-Listing Threshold Priceβ) is less than $0.04 per share (as adjusted for any reverse
stock split, stock split, dividend or other distribution, recapitalization or similar event with respect to the Common Stock that occurs after the date hereof), then the Conversion Price then in effect shall be reduced to the greater of
(i) the Post-Listing Threshold Price and (ii) $0.01.
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(d) Calculations. All calculations under this Section 8 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 8, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock
(excluding any treasury shares of Company) issued and outstanding.
(e) Notice to the Holder.
(i) Adjustment to Conversion Price. Whenever the Conversion Price
is adjusted pursuant to any provision of this Section 8, the Company shall provide to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment within
two (2) Business Days of such event.
(ii) Notice to Allow Conversion by Xxxxxx. If (A) Company shall
declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all
holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such
notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the SEC pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set
forth herein.
(f) Voluntary Adjustment by Company. The Company may at any time during the term of
this Note, with the prior written consent of each Holder so affected, reduce the then current Conversion Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
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(9) NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will
not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note.
(10) REDEMPTIONS. In the case of a redemption, the Company shall deliver the Event of
Default Redemption Price or the Optional Redemption Price to the Holder on or prior to the Event of Default Redemption Date or the Optional Redemption Date, respectively. The Company shall pay the applicable Event of Default Redemption Price or
Optional Redemption Price to the Holder in cash by wire transfer of immediately available funds pursuant to wire instructions provided by the Holder in writing to the Company on the applicable due date. In the event of a redemption of less than all
of the Conversion Amount of this Note, the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 14(d)) representing the outstanding Principal which has not been redeemed and any accrued
Interest on such Principal which shall be calculated as if no Redemption Notice had been delivered. In the event that the Company does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter and
until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all or any portion of this Note representing the Conversion Amount that
was submitted for redemption and for which the applicable Redemption Price has not been paid. Upon the Companyβs receipt of such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the
Company shall immediately return this Note, or issue a new Note (in accordance with Section 14(d)) to the Holder representing such Conversion Amount to be redeemed and (z) the Conversion Price of this Note or such new Notes shall be adjusted to the
lesser of (A) the Conversion Price as in effect on the date on which the applicable Redemption Notice is voided and (B) the lowest Closing Bid Price of the Common Stock during the period beginning on and including the date on which the applicable
Redemption Notice is delivered to the Company and ending on and including the date on which the applicable Redemption Notice is voided; provided, however, that in no event shall the Conversion Price be a price less than the Market Price.
(11) VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note,
except as required by law and as expressly provided in this Note.
(12) COVENANTS.
(a) Incurrence of Indebtedness. So long as this Note is outstanding, the Company shall
not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness, other than Permitted Indebtedness.
(b) Existence of Liens. So long as this Note is outstanding, the Company shall not, and
the Company shall not permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any Liens other than Permitted Liens.
(c) Change in Nature of Business. The Company shall not make, or permit any of its
Subsidiaries to make, any change in the nature of its business as described in the Company's most recent Annual Report filed on Form 10-K with the SEC. The Company shall not modify its corporate structure or purpose.
(d) [Reserved.]
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(e) Preservation of Existence, Etc. The Company shall maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which the character
of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.
(f) Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted, and comply, and cause each of its
Subsidiaries to comply, at all times with the provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(g) Maintenance of Insurance. The Company shall maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption insurance) with respect to its properties
(including all real properties leased or owned by it) and business, in such amounts and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally in accordance with sound
business practice by companies in similar businesses similarly situated.
(h) Transactions with Affiliates. The Company shall not, nor shall it permit any of its
Subsidiaries to, enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of
services of any kind) with any Affiliate, except for Permitted Indebtedness or in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of its business, for
fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable armβs length transaction with a Person that is not an Affiliate thereof.
(i) Corporate Changes. The Company shall not change its corporate name, legal form or
jurisdiction of formation without twenty (20) calendar daysβ prior written notice to Holder. The Company shall not enter into or be party to a Fundamental Transaction unless in accordance with Section 6 hereof. The Company shall not relocate its
chief executive office or its principal place of business unless it has provided prior written notice to the Holder.
(j) [Reserved.]
(k) Charter Amendments.Β The Company shall not amend its
charter documents, including, without limitation, its Articles of Incorporation and Bylaws, in any manner that materially and adversely affects any rights of the Holder.
(l) Repurchase. The Company shall not repay, repurchase or offer to repay, repurchase
or otherwise acquire more than a deΒ minimis number of shares of its Common Stock or common stock equivalents other than as to
the Conversion Shares as permitted or required under the Transaction Documents.
(m) Redemption. The Company shall not redeem, defease, repurchase, repay or make any
payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other than the Note if on a
pro-rata basis), whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness; the foregoing restriction shall not apply to Permitted Indebtedness except upon the occurrence of an Event of Default.
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(n) Declaration. The Company shall not declare or make any dividend or other
distribution of its assets or rights to acquire its assets to holders of shares of Common Stock, by way of return of capital or otherwise including, without limitation, any distribution of cash, stock or other securities, property or options by way
of a dividend, spin-off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction.
(13) TRANSFER. This Note and any shares of Common Stock issued upon conversion of this
Note may be offered, sold, assigned or transferred according to the Purchase Agreement.
(14) REISSUANCE OF THIS NOTE.
(a) Transfer. If this Note is to be transferred, the Holder shall instruct the Company
who the new Holder will be, and this Note will be automatically cancelled.Β Β The Company will issue and deliver the new Note within two (2) Business Days of such notice.
(b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of
mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 14(d)) representing the then outstanding Principal amount of the Note.
(c) Note Exchangeable for Different Denominations. This Note is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 14(d)) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such
portion of such outstanding Principal as is designated by the Holder at the time of such surrender.
(d) Issuance of New Notes. Whenever the Company is required to issue a new Note
pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to
Section 14(a) or Section 14(c), the Principal designated by the Holder which, when added to the Principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining outstanding under this
Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note,
and (v) shall represent accrued and unpaid Interest on the Principal and Interest of this Note, from the Issuance Date.
(15) REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the Holderβs right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein with respect to
payments, conversion, redemption and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any
such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being
required.
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(16) PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in
the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there
occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditorsβ rights and involving a claim under this Note, then the Company shall pay the reasonable and documented out-of-pocket costs and
expenses incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, attorneysβ fees and disbursements.
(17) CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the
Company and the Holder and shall not be construed against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.
(18) FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in
the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or
privilege.
(19) DISPUTE RESOLUTION. In the case of a dispute as to the determination of the
arithmetic calculation of the Conversion Rate, the Conversion Price or any Redemption Price, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within one (1) Business Day of receipt, or
deemed receipt, of the Conversion Notice or Redemption Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation within two (2)
Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile or electronic mail the disputed arithmetic calculation of the Conversion
Rate, Conversion Price or any Redemption Price to an independent, outside accountant, selected by the Holder and approved by the Company, such approval not to be unreasonably withheld, conditioned or delayed. The Company, at the Companyβs expense,
shall cause the accountant to perform the determinations or calculations and notify the Company and the Holder of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such
accountantβs determination or calculation shall be binding upon all parties absent demonstrable error.
(20) NOTICES; PAYMENTS.
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(a) Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, facsimile, or electronic mail, addressed as set forth below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a Business Day during normal business hours where such notice is to be received), or the first Business Day following such delivery (if delivered other than on a Business Day during normal
business hours where such notice is to be received), or (b) upon receipt, when sent by electronic mail (provided confirmation of transmission is electronically generated and keep on file by the sending party), or (c) on the second Business Day
following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Company, to:
SANUWAVE Health, Inc., 00000 Xxxxxx Xxxx Xxxx, Xxxx Xxxxxxx, XX 00000, Attn: Xxxxxx X. Xxxxx, Email: xxxxxx.xxxxx@xxxxxxxx.xxx, and (ii) if to the Holder, to the address and email address indicated in the Purchase Agreement. Without limiting the
generality of the foregoing, the Company shall give written notice to the Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least
twenty (20) calendar days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any pro rata subscription offer to holders of Common
Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being
provided to the Holder.
(b) Payments. Whenever any payment of cash is to be made by the Company to any Person
pursuant to this Note, such payment shall be made in lawful money of the United States of America by a check drawn on the account of the Company and sent via overnight courier service to such Person at such address as previously provided to the
Company in writing; provided, that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with prior written notice
setting out such request and the Holderβs wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any day, which is not a Business Day, the same shall instead be due on the next succeeding day, which
is a Business Day.
(21) CANCELLATION. After all Principal, accrued Interest and other amounts at any time
owed on this Note have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.
(22) WAIVER OF NOTICE. To the extent permitted by law, the Company hereby waives
demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.
(23) GOVERNING LAW; JURISDICTION; JURY TRIAL. All questions concerning the
construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. The
Company agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Note (whether brought against the Company, the Holder or their respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, County of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. The Company hereby
irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to it at the
address in effect for notices to it under the Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law. If the Company or a Holder shall commence an action or proceeding to enforce any provisions of the Note, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable and documented out-of-pocket attorneysβ fees and other reasonable and documented out-of-pocket costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE COMPANY KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
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(24) SEVERABILITY. If any provision of this Note is prohibited by law or otherwise
determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and
enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material change, the original intentions
of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the
practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
(25) DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance
with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries, the Company shall within one (1)
Business Day after any such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic information
relating to the Company or its Subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to
such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.
(26) CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the
following meanings:
(a) βAffiliateβ means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that βcontrolβ of a Person means the power directly or indirectly either to vote 10% or more of the
stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(b) βAttribution Partiesβ means, collectively, the following Persons and
entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holderβs investment manager or any of its
Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other
Persons whose beneficial ownership of the Common Stock would or could be aggregated with the Holder and the other Attribution Parties for purposes of Section 13(d) of the Exchange Act. For clarity, the purpose of the foregoing is to subject
collectively the Holder and all other Attribution Parties to the Maximum Percentage.
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(c) βBloombergβ means Bloomberg L.P.
(d) βClosing Dateβ shall have the meaning ascribed to such term in the
Purchase Agreement.
(e) βClosing Bid Priceβ means, for any security as of any date, the last
closing bid price for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price, then the last bid price of such security
prior to 4:00 p.m., New York Time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price of such security on the principal securities exchange
or trading market where such security is listed or quoted for trading as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the OTC Link or βpink
sheetsβ by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the
fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 19. All such
determinations shall be appropriately adjusted for any stock dividend, reverse stock split, stock split, stock combination, reclassification or similar transaction during the applicable calculation period.
(f) βCommon Stockβ the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may hereafter be reclassified or changed.
(g) βConvertible Securitiesβ means any stock or securities (other than
Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.
(h) βDefaultΒ InterestΒ Rateβ means 20.0% per annum.
(i) βDisbursement Maturity Dateβ means the date that is twelve (12) months
from the date hereof.
(j) βEquity Interestsβ means (a) all shares of capital stock (whether
denominated as common capital stock or preferred capital stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how
designated) of or in a Person (other than an individual), whether voting or non-voting and (b) all securities convertible into or exchangeable for any of the foregoing and all warrants, options or other rights to purchase, subscribe for or
otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable or exercisable.
(k) βExchange Actβ means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
19
(l) βFundamental Transactionβ means (A) that the Company shall, directly or
indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign,
transfer, convey or otherwise dispose of in excess of 30% of the properties or assets of the Company or any of its βsignificant subsidiariesβ (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one
or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or
party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender
or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the
outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party
to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange
Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or
more related transactions allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the βbeneficial ownerβ (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition,
purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or
otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock not held by all such Subject Entities as of the date hereof calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by
issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender
their shares of Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any
other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms
of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(m) βGAAPβ means United States generally accepted accounting principles,
consistently applied.
(n) βGroupβ means a βgroupβ as that term is used in Section 13(d) of the
Exchange Act and as defined in Rule 13d-5 thereunder.
(o) βHolidayβ means a day other than a Business Day or on which trading does
not take place on the Principal Market.
(p) βInterestΒ Rateβ means 15.0% per annum.
(q) βMarket Priceβ shall mean the lowest Closing Bid Price on the Closing
Date.
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(r) βNorth Haven Note Purchase Agreementβ means that certain Note and
Warrant Purchase and Security Agreement, dated as of August 6, 2020, by and among NH Expansion Credit Fund Holdings LP, as agent, the holders from time to time party thereto, and the Company, as amended.
(s) βOptionsβ means any rights, warrants or options to subscribe for or
purchase shares of Common Stock or Convertible Securities.
(t) βParent Entityβ of a Person means an entity that, directly or
indirectly, controls the applicable Person, including such entity whose common capital stock or equivalent equity security is quoted or listed on a Trading Market (or, if so elected by the Holder, any other market, exchange or quotation system),
or, if there is more than one such Person or such entity, the Person or entity designated by the Holder or in the absence of such designation, such Person or such entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.
(u) βPermitted Indebtednessβ means (i) Indebtedness evidenced by this Note;
(ii) debt incurred to make acquisitions; (iii) trade payables incurred in the ordinary course of business consistent with past practice,Β (iv) unsecured indebtedness not in
excess of $100,000 in the aggregate, (v) the Indebtedness set forth on Schedule 27(v) hereto; (vi) Indebtedness secured by Permitted Liens; (vii) Indebtedness with respect to surety bonds
and similar obligations not to exceed $100,000, in each case incurred in the ordinary course of business; (viii) Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business; (ix) Indebtedness
evidenced by the North Haven Note Purchase Agreement and the Notes (as defined therein) issued in connection therewith; (x) Indebtedness evidenced by the Permitted Notes, (xi) indebtedness incurred as a result of a loan made by any current officer,
director, or employee of the Company, and (xii) indebtedness relating to a credit facility, revolving credit facility, asset backed loan, factoring arrangement or similar financing; provided that such facility, loan or financing is made on
commercially reasonable terms and in any case does not involve the payment by the Company of interest at a rate in excess of twenty percent (20%) per year on amounts advanced to the Company thereunder
(v) βPermitted Liensβ means (i) any Lien for taxes not yet due or delinquent
or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business by operation of law with respect to a
liability that is not yet due or delinquent, (iii) any Lien created by operation of law, such as materialmen's liens, mechanicsβ liens and other similar liens, arising in the ordinary course of business with respect to a liability that is not yet
due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or
Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and
improvements thereon, and the proceeds of such equipment, (v) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clause (iv) above, provided that any extension,
renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) leases or subleases and licenses and sublicenses
granted to others in the ordinary course of the Companyβs business, not interfering in any material respect with the business of the Company and its Subsidiaries taken as a whole, (vii) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payments of custom duties in connection with the importation of goods, (viii) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 5(a)(vi), (ix) Liens
listed on Schedule 27(v) hereto and (x) Liens to secure repayment of the North Haven Note Purchase Agreement and the Notes (as defined therein).
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(w) βPermittedΒ Notesβ means (a) that certain Convertible Promissory Note, dated as of August 6, 2020, by and between the Company and Celularity Inc., a Delaware corporation, in the original principal amount of $4,000,000, (b) that certain
Convertible Promissory Note, dated as of August 6, 2020, by and between the Company and HealthTronics, Inc., a Georgia corporation, in the original principal amount of $1,72,743, and (c) that certain Convertible Promissory Note, dated as of August
6, 2020, by and between the Company and A. Xxxxxxx Xxxxxxxxx, in the original principal amount of $223,511.26.
(x) βPrincipal Marketβ means the OTCQB tier of the OTC Markets or any
successor principal Trading Market for the Common Stock.
(y) βRedemption Datesβ means, collectively, the Event of Default Redemption
Dates, and the Optional Redemption Dates, each of the foregoing, individually, a Redemption Date.
(z) βRedemption Noticesβ means, collectively, the Event of Default
Redemption Notices, and the Optional Redemption Notices, each of the foregoing, individually, a Redemption Notice.
(aa) βRelated Fundβ means, with respect to any Person, a fund or account
managed by such Person or an Affiliate of such Person.
(bb) βRule 144β shall have the meaning ascribed to such term in the Purchase
Agreement.
(cc) βSECβ means the United States Securities and Exchange Commission.
(dd) βSubject Entityβ means any Person, Persons or Group or any Affiliate or
associate of any such Person, Persons or Group.
(ee) βSuccessor Entityβ means one or more Person or Persons (or, if so
elected by the Holder, the Company or Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(ff) βTrading Marketβ means any of the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB or OTCQX (or any successors
to any of the foregoing).
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.
Β
| Β | |||
| Β | Β | ||
| Β | By: | Β | Β |
| Β | Name: Xxxxxx X. Xxxxx | ||
| Β | Title: Chief Executive Officer | ||
[Signature Page to Convertible Promissory Note]
EXHIBIT I
Β
CONVERSION NOTICE
Reference is made to the Future Advance Convertible Promissory Note (the βNoteβ) issued to [Β Β Β Β Β
], a [Β Β Β Β Β Β Β Β Β Β ], by SANUWAVE Health, Inc., a corporation organized under the laws of Nevada (the βCompanyβ). In accordance with and pursuant to the Note, the
undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into common stock, par value $0.001 per share (the βCommon Stockβ),
of the Company, as of the date specified below.
| Β |
Date of
Conversion:
|
| Β |
Aggregate Conversion Amount to be
converted:
|
Β |
Please confirm the following information:
|
Conversion Price:
|
Β |
|
Number of shares of Common Stock to be
issued:
|
Please issue the Common Stock into which the Note is being converted in the following name and to the following address:
| Β |
Issue to:
|
Β |
| Β | Β | Β |
| Β | Β | Β |
| Β | Β | Β |
| Β | Β | Β |
| Β |
Electronic Mail:
|
Β |
| Β |
Authorization:
|
Β |
| Β | Β |
By:
|
Β |
| Β | Β |
Title:
|
Β |
|
Dated:
|
Β |
| Β |
Account Number:
|
Β |
| Β |
(if electronic book entry transfer)
|
|
| Β |
Transaction Code Number:
|
Β |
| Β |
(if electronic book entry transfer)
|
|
Β
SCHEDULE 27(V)
PERMITTED INDEBTEDNESS AND LIENS
Permitted Indebtedness
| 1. |
Loan incurred by the Company under 15 U.S.C. 636(a)(36) (as added to the Small Business Act by Section 1102 of the CARES Act) in the original principal amount of Four Hundred Fifty Four Thousand
Three Hundred Thirty Five Dollars ($454,335), as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
|
| 2. |
Indebtedness under that certain Master Equipment Lease, dated as of January 19, 2018 (the βNFS Master Equipment
Leaseβ), by and between NFS Leasing, Inc., a Massachusetts corporation, and the Company, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
|
| 3. |
Indebtedness under that certain Factoring Agreement (the βXxxxxxx Factoring Agreementβ), by and a Xxxxxxx
Capital Finance, a division of Independent Bank, SANUWAVE, Inc., a Delaware corporation, and the Company, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
|
| 4. |
Indebtedness under (a) that certain Future Advance Convertible Promissory Note, dated as of September 3, 2021, by and between the Company and Xxxxx X. Xxxxxxxxx 2003 Revocable Trust, in the
original principal amount of $108,000, (b) that certain Future Advance Convertible Promissory Note, dated as of September 3, 2021, by and between the Company and Xxxxxxx Xxxxxx, in the original principal amount of $54,000, (c) that certain
Future Advance Convertible Promissory Note, dated as of September 3, 2021, by and between the Company and Xxxx X. Xxxxxx, in the original principal amount of $162,000, (d) that certain Future Advance Convertible Promissory Note, dated as of
September 3, 2021, by and between the Company and LGH Investments, LLC, in the original principal amount of $108,000, and (d) that certain Future Advance Convertible Promissory Note, dated as of September 3, 2021, by and between the Company
and Quick Capital, LLC, in the original principal amount of $108,000 (collectively, the β2021 Notesβ).
|
Permitted Liens
| 1. |
Liens securing obligations under the NFS Master Equipment Lease.
|
| 2. |
Liens securing obligations under the Xxxxxxx Factoring Agreement.
|
| 3. |
Liens securing obligations under the 2021 Notes.
|
