Exhibit 10.1
 
 
SEVERANCE AND ADVISORY AGREEMENT
 
This Severance and Advisory Agreement (this “Severance Agreement”) is made and
entered into by and between Christopher M. Cashman (“Employee”) and SANUWAVE
Health, Inc., a Nevada corporation, and all of its subsidiaries (including
SANUWAVE, Inc.) (collectively, “Employer”), as of this 6th day of November, 2012
(the “Effective Date”).

THE PARTIES acknowledge the following:

WHEREAS, Employee is currently employed by Employer as Employer’s Chief
Executive Officer pursuant to that certain Employment Agreement between Employer
and Employee, dated as of December 19, 2005, as amended by the First, Second,
Third, Fourth and Fifth Amendments to the Employment Agreement (the “Employment
Agreement”); and

WHEREAS, Employer intends that Employee’s employment with Employer will
terminate, effective as of November 7, 2012 (the “Separation Date”);

WHEREAS, subject to the terms of this Severance Agreement, the parties intend
that the Employee will continue to serve Employer as an advisor following the
Separation Date, according to the terms of this Severance Agreement; and

WHEREAS, the parties wish to expressly agree as to the compensation and benefits
that Employee is entitled to receive upon his termination of employment, and the
terms and conditions upon which such compensation and benefits will be provided
by Employer.

NOW, THEREFORE, in consideration of the mutual agreements and promises set forth
within this Severance Agreement, the receipt and sufficiency of which are hereby
acknowledged, Employee and Employer agree as follows:

1.
Separation of Employment.

 
 
a.
Separation of Employment upon Separation Date.  Employee’s employment shall be
terminated effective as of the Separation Date.  After the Separation Date, the
relationship between Employer and Employee is purely contractual and no
employer-employee relationship is intended or inferred from the performance of
the parties’ obligations under this Severance Agreement.  Employee shall resign
from all other positions held with respect to the Employer as of the Separation
Date, including but not limited to Employee’s position as a Director on the
Employer’s Board of Directors and any fiduciary positions held by Employee with
respect to any employee benefit plans of Employer. Employer and Employee agree
that Employee’s separation upon the Separation Date will not be for “Cause” or
for “Good Reason” as such terms are defined in Employee’s Employment Agreement.

 
 
 

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b.
Continued Services as an Advisor.  Subject to Section 1(d) hereof and in
consideration of the benefits provided under Section 2(d) hereof, Employee shall
begin serving Employer as an advisor beginning on the Separation Date and
continuing for a period of twelve (12) months.  Employer and Employee agree that
Employee’s services as an advisor shall not exceed five (5) hours per week for
the first three (3) months of such twelve (12) month period.  For any such
advisory services to be provided by Employee to Employer (i) in excess of five
(5) hours during the initial three (3) month period, or (ii) after the initial
three (3) month period, the parties shall agree upon an appropriate hourly
rate.  Employer agrees and acknowledges that Employee shall be permitted to
provide the advisory services outside of normal business hours if doing
otherwise would interfere with a business opportunity or endeavor of
Employee.  Employee expressly agrees that his advisory duties will include
assisting in the Employer’s continued efforts to obtain Food and Drug
Administration (“FDA”) approval of the dermaPACE device.  Employee shall also
assist in transitioning his duties to the replacement Chief Executive Officer
for Employer.  Employee shall utilize his best efforts to carry out Employee’s
duties in good faith and in an efficient and timely manner and utilize his
personal skills, knowledge, and experience to promote the interest of Employer.

 
 
c.
Employment Agreement Superseded.  Employer and Employee expressly agree that
this Severance Agreement supersedes the Employee’s Employment Agreement and that
Employee shall have no further right to any benefits provided for under the
Employee’s Employment Agreement.  Notwithstanding the foregoing or anything else
stated in this Severance Agreement, in the event that Employer files any claim
for bankruptcy protection within one year from the date of this Severance
Agreement, Employee may elect to rescind this Severance Agreement in its
entirety.  If this Severance Agreement is rescinded by Employee, the Employment
Agreement shall not be superseded, and the parties’ respective rights and
remedies available under the Employment Agreement shall be intact and fully
enforceable by the parties.  Any benefits or payments received by Employee prior
to such rescission, if rescission occurs, shall be credited towards the amounts
owed to Employee under the Employment Agreement, so as to avoid Employee
receiving duplicate compensation under the Employment Agreement and the
rescinded Severance Agreement.

 
 
d.
Termination as an Advisor.  Employer and Employee agree that the Employee’s
services with the Employer as an advisor pursuant to Section 1(b) hereof may be
terminated by either party, for any reason, upon written notice to the other
party; provided, however, that neither party may terminate the advisory services
during the first three (3) months after the date of this Severance
Agreement.  Following the initial three (3) month period, the advisory services
shall continue to be provided on a quarterly (i.e. three (3) month) basis unless
notice of intent to terminate the advisory services is given during the prior
quarter.

 
 
e.
Press Release. The parties agree that the termination of the Employee’s
employment with Employer under Section 1(a) hereof shall be announced by a press
release issued by Employer, the language of which shall be mutually agreed upon
by the parties prior to the execution of this Severance Agreement.  Employee
agrees that Employee’s consent regarding the language contained in the press
release issued pursuant to this Section 1(e) shall not be unreasonably withheld.

 
 
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f.
Nondisparagement by Employer.  Employer agrees that, following the Separation
Date, Employer (including Employer’s officers, employees, agents, subsidiaries,
joint venture partners, shareholders and directors) shall not disparage, impugn
or attack the Employee or his reputation or character, or take any action that
would interfere with, or attempt to interfere with, any business relationships
of the Employee.

 
2.
Severance Benefits.

 
a.
Continued Salary and Bonus.  Contingent upon the Employee’s compliance with the
requirements of Section 2(f) hereof (including the execution of a release of
claims in favor of Employer in accordance with Section 2(f) hereof), Employer
shall continue to pay Employee annual compensation of $405,000 (less standard
statutory deductions for federal and state taxes and withholdings) for a period
of six (6) months following the Separation Date.  Payments shall be made on the
15th and 30th dates of each month in accordance with Employer’s regular payroll
schedule applicable to senior executives of Employer. The first installment of
continued salary will be a lump sum payment covering the period from the
Effective Date through the first installment date.  The first installment date
of continued salary will be December 15, 2012.  However, if the Release is
signed and the seven day rescission period lapses prior to November 27, 2012,
then the first installment of the continued salary will start on November 30,
2012. In addition, the Employer shall pay to Employee a separate and independent
cash bonus of $100,000 (less standard statutory deductions for federal and state
taxes and withholdings) upon each of the following four bonus payment events
(“Bonus Payment Events”): (i) the first (1st) enrollee in the Employer’s
clinical trial plan, (ii) the twentieth (20th) enrollee in the Employer’s
clinical trial plan, (iii) the fiftieth (50th) enrollee in the Employer’s
clinical trial plan, and (iv) receipt of an FDA approval letter of the dermaPACE
device allowance for commercial use; provided, that if the FDA approval letter
at subpart (iv) is received prior to the achievement of the enrollment
thresholds at subparts (i), (ii), and/or (iii), the bonuses for achievement of
subparts (i), (ii), and/or (iii) will be accelerated and become due and payable
immediately with the bonus for subpart (iv).  Any of the Bonus Payment Events
which have not occurred as of December 31, 2016 shall be considered to have
occurred as of December 31, 2016, and the remaining previously unpaid bonus
payments of $100,000 per Bonus Payment Event shall be due and payable
immediately.  Enrollment for purposes of this Severance Agreement shall mean a
patient’s first dermaPACE or sham treatment.  If payment of any salary
continuation or cash bonus amount under this Section 2(a) is not made timely,
interest shall accrue upon and be payable by Employer with respect to such
amount at a rate of eighteen percent (18%) per annum until full payment of such
salary or cash bonus amount is made, with interest.  A bonus payment under this
subsection 2(a) shall be considered timely for purposes of this Section 2(a) if
it is made within thirty (30) days of the  date the Employer has knowledge of
the occurrence of the event giving rise to the payment.  Employer shall be
obligated to inform Employee of the occurrence of any of the events giving rise
to payment obligations under this Severance Agreement; such notice shall be
given as soon as practicable, but in no event later than twenty (20) days after
the Employer has knowledge of the occurrence of the event giving rise to the
payment obligation.

 
 
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b.
Continued Health Benefits.  Provided Employee elects continuation coverage in
accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) under the Employer’s group health plan, Employer shall make payment
for such health insurance for family coverage directly to the insurer as if
Employee were still an employee until the earlier of (i) twelve (12) calendar
months after the Separation Date, or (ii) the date that Employee becomes covered
under another insurer’s group health plan.  The coverage provided to Employee
and his family shall be the same as provided to other employees of Employer
under the Employer’s group health insurance policy.  If for any reason Employer
fails to make full and timely payment for the coverage described herein directly
to the insurance carrier and Employee makes payment on his own behalf to protect
and preserve his coverage, Employer shall owe and make reimbursement payment to
Employee for any and all the premium amounts so paid by Employee, and each
reimbursement payment shall be grossed-up to account for taxes likely to be owed
by Employee, assuming a tax rate of 40%.  Reimbursement by Employer in such
instance shall be made within twenty (20) days of the date on which Employee
provides written notice (e-mail notice shall be sufficient) to Employer that
Employee has made such payment for coverage.

 
c.
Currently Outstanding Stock Options.  All stock options held by the Employee as
of the Effective Date (specifically excluding the options granted pursuant to
Section 2(d) hereof) not previously vested shall become fully vested and
exercisable as of the Separation Date.  Said options shall remain exercisable
throughout the term of the option.  Notwithstanding any contrary provision(s)
contained in the underlying stock option agreement(s) or plan(s) pursuant to
which such options were issued, the Employee’s termination under Section 1(a)
hereof shall not cause any stock options held by the Employee as of the
Separation Date to expire prior to the end of the term of such options.

 
 
d.
Grant of Options.  Employer shall grant Employee, effective as of the date of
this Severance Agreement, an additional one million (1,000,000) options to
acquire shares of Employer stock under the Amended and Restated 2006 Stock
Incentive Plan of SANUWAVE Health, Inc. (the “Stock Option Plan”).  The exercise
price for such options shall be equal to the closing price of Employer stock on
the Effective Date.  The term of such options shall be ten (10) years.  The
first 600,000 options shall vest and become exercisable immediately upon the
execution of this Severance Agreement.  The remaining 400,000 options shall vest
and become exercisable in increments of 100,000 upon each of the Bonus Payment
Events at subparts (i)-(iv) of Section 2(a); provided, that if the FDA approval
letter at subpart (iv) is received prior to the achievement of the enrollment
thresholds at subparts (i), (ii), and/or (iii), all options granted under this
Section 2(d) but not previously vested shall become vested and immediately
exercisable upon receipt of such letter.  Any of the Bonus Payment Events which
have not occurred as of December 31, 2016 shall be considered to have occurred
as of December 31, 2016, and all options granted under this Section 2(d) but not
previously vested shall become vested and immediately exercisable on such
date.  Only such options that have vested shall be exercisable by Employee.

 
 
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e.
Special Grant of Advisory Options. Employer shall grant Employee, effective as
of the date of this Severance Agreement, an additional 50,000 options to acquire
shares of Employer stock under the Stock Option Plan as consideration for the
provision of advisory services hereunder.  The exercise price for such options
shall be equal to the closing price of Employer stock on the Effective
Date.  The term of such options shall be ten (10) years.  The options granted
pursuant to this Section 2(e) shall vest and be exercisable based on the
following schedule: (i) 25% of the options shall vest immediately upon the
execution of this Severance Agreement, but shall be forfeited if Employee fails
to provide advisory services as called for in Section 1(b) above; and (ii)
unless the advisory services have been terminated in accordance with Section
1(d), an additional 25% of the options shall vest on each date three (3), six
(6), and nine (9) months after the execution date of this Severance
Agreement.  Vested options shall be exercisable throughout the term of the
options.  Only such options that have vested shall be exercisable by Employee.

 
 
f.
Release and Continued Compliance.  Employer’s obligation to pay the continued
salary benefits provided for under Section 2(a) hereof is expressly contingent
upon Employee’s (i) execution of a release of claims in favor of Employer, in
the form attached hereto as Exhibit A, (ii) not revoking the release for a
period of seven (7) days after execution and delivery to Employer, and (iii)
continued compliance with the provisions of Sections 3 and 4 hereof.  Employer’s
obligation to pay the continued salary payments under Section 2(a) hereof shall
terminate upon the Employee’s failure to satisfy any of the requirements of this
Section 2(f).

 
 
g.
Expenses.  Employer shall reimburse Employee for any and all reasonable business
expenses incurred by Employee through the Separation Date, provided that such
expenses are submitted by Employee for reimbursement within thirty (30) days of
the Separation Date. Additionally, Employer shall, within thirty (30) days of
the Separation Date, reimburse Employee in the amount of four thousand, eight
hundred and twenty five dollars ($4,825) for attorney fees incurred by Employee
in connection with the preparation and review of this Severance Agreement and
related documents.

 
 
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h.
Default by Employer.  If Employer fails to make timely payment or other grant to
Employee for any of the Severance Benefits outlined in this Section 2, Employee
shall provide written notice to Employer of such failure.  A bonus payment or
other grant to Employee shall be timely if it is made within thirty (30) days of
the event that causes the payment to be due (or, with respect to cash bonuses
payable based upon enrollment of patients in Employer’s clinical trial plan
under Section 2(a) hereof, within thirty (30) days of Employer’s knowledge of
such event).  A salary continuation payment shall be timely if it is made on or
before the due date in accordance with Employer’s standard payroll schedule; and
shall be untimely if made otherwise.  Upon notice, Employer shall have fifteen
(15) days to cure the failure, and if it does not cure the failure within that
time period Employer shall be in Default.  If Employer goes into Default,
Employer shall be entitled to pursue damages and other remedies as allowed by
contract or law with respect to the breach by Employer.  If Employer goes into
Default with respect to any of the salary continuation payment obligations under
Section 2(a), the remaining salary continuation payments provided for in Section
2(a) shall be accelerated and shall be due and paid by Employer within thirty
(30) days of the date of Default.  In the event Employer is in Default as
provided hereunder, Employer shall be responsible for paying the reasonable
attorney fees and expenses incurred by Employee if Employee uses legal action to
enforce his rights under this Agreement.

 
 
i.
Change in Control Acceleration.  To the extent not previously paid, in the event
of a Change in Control of the Employer (as defined herein), all salary
continuation payments and all cash bonus amounts payable based upon enrollment
of patients in Employer’s clinical trial plan under Section 2(a) hereof shall be
accelerated and payable by Employer in a lump-sum cash payment within thirty
(30) days of such Change in Control event.  Upon payment under this Section
2(i), Employee shall have no future rights with respect to such salary
continuation or bonus amounts.  Further, upon a Change in Control event, all
stock options granted to Employee but not vested shall vest and become
exercisable upon the Change in Control.  For purposes of this Section 2(i), a
“Change in Control” shall mean the first of the following events to occur:

 
 
(1)
The acquisition by any Person (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended from time to time, and used in
Sections 13(d) and 14(d) thereof) or group of Persons acting as a group
immediately after which such Person or group of Persons possess more than 75% of
the total fair market value or voting power of the stock of Employer, excluding
any acquisition where such Person or Persons are considered to already own more
than 75% of such stock prior to such acquisition;

 
 
(2)
The acquisition during any 12-month period of stock possessing 75% or more of
the total voting power of stock of Employer by any Person or group of Persons
acting as a group, excluding any acquisition where such Person or Persons are
considered to already own 75% or more of such stock prior to such acquisition;

 
 
(3)
The acquisition by any Person or Persons acting as a group in any 12-month
period of more than 75% of the total gross fair market value of the assets of
Employer, excluding transfers to related entities (within the meaning of
Treasury Regulation 1.409A-3(i)(5)(vii)(B)).

 
 
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Notwithstanding the foregoing, a Change in Control shall not be considered to
occur unless such event constitutes change in the ownership or effective control
of Employer or in the ownership of a substantial portion of the assets of
Employer, as such terms are defined under Treasury Regulation 1.409A-3(i)(5).

3.
Non-Competition.

 
a.
Employee acknowledges and recognizes the highly competitive nature of the
businesses of the Employer and its affiliates and accordingly agrees as follows:

 
(1)
For a period of two years following the Separation Date (the “Restricted
Period”), Employee will not, whether on Employee’s own behalf or on behalf of or
in conjunction with any person, firm, partnership, joint venture, association,
corporation or other business organization, entity or enterprise whatsoever
(“Person”), directly or indirectly solicit or assist in soliciting in
competition with the Employer the business of any client or prospective client
for the purpose of selling or providing a Competitive Product or Service.

 
 
(2)
During the Restricted Period, Employee will not directly or indirectly:

 
(i)
engage in any business that competes with the business of the Employer or its
affiliates in selling or providing a Competitive Product or Service (including,
without limitation, businesses which the Employer or its affiliates have
specific plans to conduct in the future and as to which Employee is aware of
such planning) in any geographical area that is within 100 miles of any
geographical area where the Employer or its affiliates manufactures, produces,
sells, leases, rents, licenses or otherwise provides its Competitive Products or
Services (a “Competitive Business”);

 
(ii)
enter the employ of, or render any services to, any Person who or which (or any
division or controlled or controlling affiliate of such Person) engages in a
Competitive Business; provided, however, that Employee shall be permitted to
become an employee of, or render services to, a Person that engages in a
Competitive Business (or that is a controlled or controlling affiliate of any
Person that engages in a Competitive Business) if Employee’s employment or
provision of services is limited to a line of business of such Person that does
not constitute a Competitive Business, Employee does not sell or provide a
Competitive Product or Service, and Employee does not otherwise indirectly
violate the restrictive covenants set forth herein;

 
 
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(iii)
acquire a financial interest in, or otherwise become actively involved with, any
Competitive Business, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or consultant; or

 
(iv)
disparage, impugn or attack the Employer or its reputation or character, or that
of any of its customers, suppliers, officers, employees, agents, subsidiaries,
joint venture partners, shareholders or directors, or damage the goodwill
thereof, or take any action that would interfere with, or attempt to interfere
with, business relationships (whether formed before, on or after the date of
this Severance Agreement) between the Employer or any of its affiliates and
customers, clients, suppliers, partners, members or investors of the Employer or
its affiliates with respect to a Competitive Product or Service.

 
b.
Notwithstanding anything to the contrary in this Severance Agreement, Employee
may, directly or indirectly own, solely as an investment, securities of any
Person engaged in the business of the Employer or its affiliates which are
publicly traded on a national or regional stock exchange or on the
over-the-counter market if Employee (i) is not a controlling person of, or a
member of a group which controls, such person and (ii) does not, directly or
indirectly, own 5% or more of any class of securities of such Person.

 
c.
During the Restricted Period, Employee will not, whether on Employee’s own
behalf or on behalf of or in conjunction with any Person, directly or
indirectly:

 
(1)
solicit or encourage any employee of the Employer or its affiliates to leave the
employment of the Employer or its affiliates; or

 
(2)
hire any such employee who is at the time employed by the Employer or its
affiliates; provided, however, that nothing herein shall prevent Employee,
whether on Employee’s own behalf or on behalf of or in conjunction with any
Person, from hiring any such employee if such employee initially contacted
Employee and initially solicited an offer of employment from Employee.

 
d.
During the Restricted Period, Employee will not, directly or indirectly, solicit
or encourage to cease to work with the Employer or its affiliates any consultant
then under contract with the Employer or its affiliates.

 
e.
For purposes of this Severance Agreement, the term “Competitive Product or
Service” means the products that use or incorporate Extracorporeal Shock Wave
Technology for orthopedic, urology, wound care, or cardiac procedures, and any
services related to such products.  Notwithstanding anything to the contrary in
this Section 3, Employee may request in writing a waiver of the restrictions
contained in Section 3(a)(2)(i)-(iii), and such request shall not be
unreasonably denied by Employer.

 
 
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f.
It is expressly understood and agreed that although Employee and the Employer
consider the restrictions contained in this Section 3 to be reasonable, if a
final judicial determination is made by a court of competent jurisdiction that
the time or territory or any other restriction contained in this Severance
Agreement is an unenforceable restriction against Employee, the provisions of
this Severance Agreement shall not be rendered void but shall be deemed amended
to apply as to such maximum time and territory and to such maximum extent as
such court may judicially determine or indicate to be enforceable Alternatively,
if any court of competent jurisdiction finds that any restriction contained in
this Severance Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.

4.           Confidentiality; Intellectual Property.

 
a.
Confidentiality.

 
(1)
Employee will not at any time (whether during Employee’s performance of services
as an advisor pursuant to Section 1(b) hereof or after) (x) retain or use for
the benefit, purposes or account of Employee or any other Person; or (y)
disclose, divulge, reveal, communicate, share, transfer or provide access to any
Person outside the Employer (other than its professional advisers who are bound
by confidentiality obligations), any non-public, proprietary or confidential
information -- including without limitation trade secrets, know-how, research
and development, software, databases, inventions, processes, formulae,
technology, designs and other intellectual property, information concerning
finances, investments, profits, pricing, costs, products, services, vendors,
customers, clients, partners, investors, personnel, compensation, recruiting,
training, advertising, sales, marketing, promotions, government and regulatory
activities and approvals -- concerning the past, current or future business,
activities and operations of the Employer, its subsidiaries or affiliates and/or
any third party that has disclosed or provided any of same to the Employer on a
confidential basis (“Confidential Information”) without the prior written
authorization of the Board.

 
(2)
“Confidential Information” shall not include any information that is (a)
generally known to the industry or the public other than as a result of
Employee’s breach of this covenant; (b) made legitimately available to Employee
by a third party without breach of any confidentiality obligation; or (c)
required by law to be disclosed; provided that Employee shall give prompt
written notice to the Employer of such requirement, disclose no more information
than is so required, and cooperate with any attempts by the Employer to obtain a
protective order or similar treatment.

 
 
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(3)
Except as required by law, Employee will not disclose to anyone, other than
Employee’s immediate family and legal or financial advisors, the contents of
this Severance Agreement; provided that Employee may disclose to any prospective
future employer the provisions of Sections 3 and 4 of this Severance Agreement
provided they agree to maintain the confidentiality of such terms.  If the terms
of this Severance Agreement enter the public domain by the act of Employer,
Employee shall not be bound further by confidentiality obligations with respect
to the terms hereof.

 
(4)
Upon the Separation Date, except to the extent reasonably necessary for the
performance of services by Employee as an advisor under Section 1(b) hereof,
Employee shall (x) cease and not thereafter commence use of any Confidential
Information or intellectual property (including without limitation, any patent,
invention, copyright, trade secret, trademark, trade name, logo, domain name or
other source indicator) owned or used by the Employer, its subsidiaries or
affiliates; (y) immediately destroy, delete, or return to the Employer, at the
Employer’s option, all originals and copies in any form or medium (including
memoranda, books, papers, plans, computer files, letters and other data) in
Employee’s possession or control (including any of the foregoing stored or
located in Employee’s office, home, laptop or other computer, whether or not
Employer property) that contain Confidential Information or otherwise relate to
the business of the Employer, its affiliates and subsidiaries, except that
Employee may retain only those portions of any personal notes, notebooks and
diaries that do not contain any Confidential Information and copies of any
agreements to which Employee is a party; and (z) notify and fully cooperate with
the Employer regarding the delivery or destruction of any other Confidential
Information of which Employee is or becomes aware.

 
b.
Intellectual Property.

 
(1)
If Employee created, invented, designed, developed, contributed to or improved
any works of authorship, inventions, intellectual property, materials, documents
or other work product (including without limitation, research, reports,
software, databases, systems, applications, presentations, textual works,
content, or audiovisual materials) (“Works”), either alone or with third
parties, prior to Employee’s employment by the Employer, that are relevant to or
implicated by such employment (“Prior Works”), Employee hereby grants the
Employer a perpetual, non-exclusive, royalty-free, worldwide, assignable, sub
licensable license under all rights and intellectual property rights (including
rights under patent, industrial property, copyright, trademark, trade secret,
unfair competition and related laws) therein for all purposes in connection with
the Employer’s current and future business. A list of all such material Works,
if any, as of the date hereof is attached hereto as [Exhibit B].

 
 
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(2)
If Employee (i) has created, invented, designed, developed, contributed to or
improved any Works, either alone or with third parties, at any time during
Employee’s employment by the Employer and within the scope of such employment
and/or with the use of any the Employer resources, or (ii) Employee creates,
invents, designs, develops, contributes to or improves any Works, either alone
or with third parties, at any time during Employees services as an advisor
pursuant to Section 1(b) hereof and within the scope of the performance of such
services and/or with the use of any the Employer resources (collectively,
“Employer Works”), Employee shall promptly and fully disclose same to the
Employer and hereby irrevocably assigns, transfers and conveys, to the maximum
extent permitted by applicable law, all rights and intellectual property rights
therein (including rights under patent, industrial property, copyright,
trademark, trade secret, unfair competition and related laws) to the Employer to
the extent ownership of any such rights does not vest originally in the
Employer.

 
(3)
Employee agrees to keep and maintain adequate and current written records (in
the form of notes, sketches, drawings, and any other form or media requested by
the Employer) of all Employer Works. The records will be available to and remain
the sole property and intellectual property of the Employer at all times.

 
(4)
Employee shall take all requested actions and execute all requested documents
(including any licenses or assignments required by a government contract) at the
Employer’s expense (but without further remuneration) to assist the Employer in
validating, maintaining, protecting, enforcing, perfecting, recording, patenting
or registering any of the Employer’s rights in the Prior Works and Employer
Works. If the Employer is unable for any other reason to secure Employee’s
signature on any document for this purpose, then Employee hereby irrevocably
designates and appoints the Employer and its duly authorized officers and agents
as Employee’s agent and attorney in fact, to act for and in Employee’s behalf
and stead to execute any documents and to do all other lawfully permitted acts
in connection with the foregoing.

 
(5)
Employee shall not improperly use for the benefit of, bring to any premises of
divulge, disclose, communicate, reveal, transfer or provide access to, or share
with the Employer any confidential, proprietary or non-public information or
intellectual property relating to a former employer or other third party without
the prior written permission of such third party. Employee hereby indemnifies,
holds harmless and agrees to defend the Employer and its officers, directors,
partners, employees, agents and representatives from any breach of the foregoing
covenant. Employee shall comply with all relevant policies and guidelines of the
Employer, including regarding the protection of confidential information and
intellectual property and potential conflicts of interest. Employee acknowledges
that the Employer may amend any such policies and guidelines from time to time,
and that Employee remains at all times bound by their most current version.

 
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5. 
Specific Performance.

Employee acknowledges and agrees that the Employer’s remedies at law for a
breach or threatened breach of any of the provisions of Section 3 or Section 4
would be inadequate and the Employer would suffer irreparable damages as a
result of such breach or threatened breach.  In recognition of this fact,
Employee agrees that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Employer, without posting any bond, shall
be entitled to cease making any payments or providing any benefit otherwise
required by this Severance Agreement and obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
 
6. 
Property.

 
Upon the termination of Employee’s services with Employer as an advisor pursuant
to Section 1(d) hereof, Employee shall return all property of Employer which is
in his possession on such date.  This includes, but is not limited to, the
laptop provided for Employee’s use by Employer, and all data, documents,
records, correspondence, reports, memoranda, or other property and shall include
all copies thereof, including electronically stored information. Employee shall
retain the use of his company-issued laptop computer throughout the duration of
the time in which he is providing advisory services under this Severance
Agreement.  Employee shall retain the use of his Blackberry mobile device
following the Separation Date.  However, effective as of the Separation Date,
(i) Employee shall allow the device to be wiped of all confidential and
proprietary information, as determined by Employer, and (ii) Employee shall be
responsible for all service, data, and other charges related to his phone
service following the Separation Date.
 
7.
Governing Law and Jurisdiction.

This Severance Agreement shall be construed under, governed by and enforced in
accordance with the laws of the State of Georgia, excepting its laws and
principles related to conflicts of laws.

8.
No Waiver by Employer.

The waiver by the Employer or the Employee of a breach of any provision of this
Severance Agreement by the other shall not operate or be construed as a waiver
of any subsequent breach. No waiver shall be valid unless in writing and signed
by an authorized officer of Employer, or in the case of Employee, signed by the
Employee himself.

9.
Assignment.

Employee acknowledges that the services to be rendered by Employee are unique
and personal.  Accordingly, Employee may not assign any of Employee’s rights or
delegate any of Employee’s duties or obligations under this Severance
Agreement.  The rights and obligations of the Employer under this Severance
Agreement will inure to the benefit of and shall be binding upon the successors
and assigns of the Employer.
 
 
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10.
Severability.

If any part of this Severance Agreement, for any reason, is declared invalid by
a court of competent jurisdiction, such decision or determination will not
affect the validity of any remaining portion, and such remaining portion will
remain in force and effect as if this Severance Agreement had been executed with
the invalid portion eliminated; but at the same time, the provision declared
invalid will not be invalidated in its entirety, but will be observed and
performed by the parties to the extent such provision is valid and enforceable.

11. 
Headings.

Section and other headings contained in this Severance Agreement are for
reference purposes only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Severance Agreement or any
provision hereof.

12.
Complete Agreement.

This Severance Agreement constitutes the entire agreement between Employer and
Employee and supersedes all previous and contemporaneous written and oral
agreements, and no other representations, statements, inducements, negotiations
or commitments, oral or written, with respect to Employee’s employment that are
not contained in this Severance Agreement will be binding upon the parties.  Any
subsequent alteration or modification to this Severance Agreement must be made
in writing and signed by both parties.

13. 
Counterparts.

This Severance Agreement may be executed in two (2) counterparts, each of which
shall be deemed an original and both of which shall constitute one agreement,
and the signature of either party to a counterpart shall be deemed to be a
signature to, and may be appended to, the other counterpart.

14. 
Section 409A.

 
a.
It is intended that this Severance Agreement will be exempt from or comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (and
any regulations and guidelines issued thereunder) to the extent the Severance
Agreement is subject thereto, and the Severance Agreement shall be interpreted
on a basis consistent with such intent.

 
b.
Any provision that would cause this Severance Agreement to fail to satisfy
Section 409A of the Code (if applicable) or an exemption therefrom shall have no
force or effect until amended to comply with or remain exempt from Section 409A
of the Code, which amendment may be retroactive to the extent permitted by
Section 409A of the Code.  The parties agree to use reasonable efforts to modify
this Severance Agreement to the extent deemed necessary to comply with or remain
exempt from Section 409A of the Code, as determined by the parties in good
faith.

 
 
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c.
For purposes of this Severance Agreement, it is intended that Employee’s
termination of employment pursuant to Section 1(a) hereof shall constitute a
“separation from service” (within the meaning of Treas. Reg. § 1.409A-1(h)).

 
d.
Wherever payments under this Severance Agreement are to be made in installments,
each such installment shall be deemed to be a separate payment for purposes of
Section 409A of the Code. For purposes of this Severance Agreement, each payment
is intended to be excepted from Section 409A of the Code to the maximum extent
provided under Section 409A of the Code.

 
e.
All reimbursements and in kind benefits provided under this Severance Agreement
shall be made or provided in accordance with the requirements of Section 409A of
the Code, including, where applicable, the requirements that (i) any
reimbursement is for expenses incurred during the Employee’s lifetime (or during
a shorter period of time specified in this Severance Agreement); (ii) the amount
of expenses eligible for reimbursement, or in kind benefits provided, during a
calendar year may not affect the expenses eligible for reimbursement, or in kind
benefits to be provided, in any other calendar year; (iii) the reimbursement of
an eligible expense will be made no later than 2 ½ months after the end of the
calendar year in which the expense is incurred; and (iv) the right to
reimbursement or in kind benefits is not subject to liquidation or exchange for
another benefit.

 
IN WITNESS WHEREOF, the undersigned have set their hands and seals, or caused
their duly authorized agent to set their hand and seal, on the day and year
first written above.
 
 
 

  Employee           /s/ CHRISTOPHER M. CASHMAN       Christopher M. Cashman  

 
 

 
Employer
               
SANUWAVE Health, Inc.
               
/s/KEVIN A. RICHARDSON, II
   
Kevin A. Richardson, II
 

 
 
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Exhibit A
RELEASE
                                   , 2012

Christopher M. Cashman
                                              
                                              
 

 
1.
This agreement (“Release Agreement”) is between you, Christopher M. Cashman, for
yourself, your spouse, family, agents and attorneys (jointly, “You”) and
SANUWAVE Health, Inc. ("SANUWAVE"), its parent, subsidiaries, predecessors,
successors, directors, officers, fiduciaries, insurers, employees and agents
(jointly, the “Employer”).

 
2.
You understand that SANUWAVE is terminating your employment with SANUWAVE
effective as of November 7, 2012 pursuant to that certain Severance and Advisory
Agreement entered into between You and SANUWAVE on November 6, 2012.  In
consideration of the promises contained in this Release Agreement, Employer has
agreed to provide You with certain severance benefits under the terms of that
Severance and Advisory Agreement.  You understand that SANUWAVE has no legal
obligation to provide You with the payments under such Severance and Advisory
Agreement.

 
3.
In this Release Agreement, in exchange for the payments and benefits described
in Section 2, You are agreeing not to sue the Employer and waiving and releasing
any and all claims, demands, lawsuits, obligations, promises, administrative
actions and causes of actions, both known or unknown, contingent or absolute,
both in law or in equity, which You ever had, now have, or may have against the
Employer, for, upon or by reason of any matter, cause or thing whatsoever, that
occurred up to and including the date of this Release Agreement.

 
4.
The claims and causes of action You are releasing and waiving include, but are
not limited to, any and all claims and causes of action that your Employer:

 
§
violated its personnel policies, handbooks or any covenant of good faith and
fair dealing or any contract of employment between You and it; or

 
§
violated the Fair Labor Standards Act, as amended, 29 U.S.C. § 203, et seq., the
Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq., or the
Georgia Minimum Wage Law §34-4-1, et. seq.; or

 
§
discriminated against You in violation of the Americans with Disabilities Act,
as amended, 42 U.S.C. § 12101, et seq., the Family and Medical Leave Act, as
amended, 29 U.S.C. § 2601, et seq., Title VII of the Civil Rights Act of 1964,
as amended, 42 U.S.C. § 2000(e), et seq., the Age Discrimination in Employment
Act of 1967, as amended, 29 U.S.C. § 621, et seq., the Lilly Ledbetter Fair Pay
Act of 2009, 29 U.S.C. §626(d)(1)-(3), the Equal Pay Act of 1963, 29 U.S.C.
§ 206(d), the Georgia Age Discrimination in Employment Act, O.C.G.A. § 34-1-2,
the Georgia Equal Employment for Persons With Disabilities Code, O.C.G.A. §
34-6A-1, et. seq.; or

 
 
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§
discriminated against You based on race, color, sex (including sexual
harassment), national origin, ancestry, religion, sexual orientation, marital
status, parental status, veteran status, source of income, entitlement to
benefits or any union activities in violation of local, state or federal laws,
constitutions, regulations, ordinances or executive orders; or

 
§
violated public policy or common law (including claims for: personal injury;
invasion of privacy;  retaliatory discharge; negligent hiring, retention or
supervision; defamation; intentional or negligent infliction of emotional
distress and/or mental anguish; intentional interference with contract;
negligence;  detrimental reliance; loss of consortium to You or any member of
your family and/or promissory estoppel).

 
5.
Excluded from this Release Agreement are any claims which cannot be waived by
law, including but not limited to the right to file a charge with or participate
in an investigation conducted by the Equal Employment Opportunity Commission
(“EEOC”) or relevant state agency.  You are waiving, however, your right to any
monetary recovery should the EEOC or any other agency pursue any claims on your
behalf.

 
6.
You also agree that You have been paid for all hours worked, including overtime,
not suffered any on-the-job injury for which You have not already filed a claim
and have received all the vacation pay You were owed.  Notwithstanding anything
to the contrary in this Release Agreement, Your waiver and release of claims and
rights under the Employment Agreement, as amended, is conditioned on SANUWAVE
not filingany claim for bankruptcy protection within one year from the date of
this Release Agreement.  In the event that SANUWAVE files such a claim within
one year from the date of this Release Agreement, the parties’ respective rights
and remedies available under the Employment Agreement shall be intact and fully
enforceable by the parties.

 
7.
You also agree that:

 
§
You are entering into this Release Agreement knowingly and voluntarily;

 
 
§
You have been advised by the Employer to consult an attorney;

 
§
You have had twenty-one (21) days to consider this Release Agreement;

 
§
You are not otherwise entitled to the payments or benefits described in
Paragraph 2;

 
§
if any part of this Release Agreement is found to be illegal or invalid, the
rest of the Release Agreement will be enforceable.

 
8.
This Release Agreement is made and entered into in the State of Georgia, and
shall in all respects be interpreted, enforced, and governed by and under the
laws of the State of Georgia, excepting its laws and principles related to
conflicts of laws.

 
 
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9.
You have been provided until November 28, 2012 to consider this Release
Agreement and waive and release all claims and rights, including but not limited
to those arising under the Age Discrimination in Employment Act.  After You sign
this Release Agreement, you may forward the signed document to Kevin
Richardson.  Upon execution of this Release Agreement, You shall have seven (7)
days to revoke it by delivering a written revocation to Kevin Richardson.  If
you do not revoke this Release Agreement, you will start receiving the payments
and benefits described in Paragraph 2.

 
 

     / /     Signature of Employee   Date  

 
    
 

     / /    
Signature of SANUWAVE Representative
  Date  

 
 
 
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