snwv_ex106





 







Exhibit 10.6


 


August
6, 2020


 


Russell
Newman


President
and CEO


HealthTronics,
Inc.


9825
Spectrum Drive, Bldg 3


Austin,
TX 78717


 


 


Dear
Mr. Newman:


 



Reference is made to those two certain promissory notes issued by
SANUWAVE, Inc. (“Borrower”) to HealthTronics, Inc.
(“HealthTronics”) in August 2005 each in the original
principal amount of $2,000,000 (as amended from time to time, the
“Notes”). Capitalized terms used herein but not defined
herein shall have the meanings ascribed to them in the
Notes.


 



Through the date hereof, the aggregate outstanding principal amount
of the Notes is $5,372,743 (the “Outstanding
Principal”) and the accrued interest under the Notes is
$2,291,047 (plus a per diem amount of $2,100 for each day after the
date hereof but prior to the Repayment Date (as defined below), the
“Accrued Interest”).


 


Borrower’s
parent, SANUWAVE Health, Inc. (“SANUWAVE”), is
contemplating a private offering of its common stock and warrants
to purchase common stock to take place on or about the date of this
letter agreement (the “Offering”). In order to
facilitate the Offering and for other good and valuable
consideration, SANUWAVE, Borrower and HealthTronics hereby agree
that if the Offering is consummated that:


 




1.

At the closing of
the Offering, SANUWAVE shall pay to HealthTronics an amount in cash
equal to $4,000,000 as a payment on the Outstanding
Principal.






 




2.

At the closing of
the Offering, HealthTronics shall, automatically and without the
need to take any other action, be deemed to exercise all
outstanding Class K Warrants in SANUWAVE held by HealthTronics (the
“Class K Warrants”) and the exercise price of such
Class K Warrants shall be deemed paid by HealthTronics by
forgiveness of a portion of the Accrued Interest in an amount equal
to $636,000 which is equal to the aggregate exercise price for all
such Class K Warrants.






 



 

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3.

At the closing of
the Offering, HealthTronics shall purchase a number of shares of
SANUWAVE common stock and warrants to purchase common stock
(“New
Warrants”) in the Offering (in the same ratio of
common stock relative to warrants as such securities are being
purchased by all of the other purchasers in the Offering) at the
purchase price per unit thereof in the Offering (which shall be the
same purchase price per unit for all purchasers participating in
the Offering), which purchase price shall be deemed paid by
HealthTronics by forgiveness of the remaining Accrued Interest
after deducting the aggregate exercise price of the Class K
Warrants pursuant to paragraph 2 above. HealthTronics shall sign a
securities purchase agreement in the same form as the other
investors in the Offering (other than with respect to the
satisfaction of the purchase price, as described in this paragraph
3) and attached hereto as Exhibit A.






 




4.

At the closing of
the Offering, HealthTronics shall be issued a convertible
promissory note in the form attached hereto as Exhibit B in the
principal amount equal to $1,372,743 (the “HealthTronics
Note”), which purchase price shall be deemed paid by
HealthTronics by forgiveness of the remaining Outstanding Principal
after deducting the cash payment made pursuant to paragraph 1
above.






 




5.

Upon receipt of the
cash payment in accordance with paragraph 1 above, the exercise of
the Class K Warrants in accordance with paragraph 2 above, the
purchase of the SANUWAVE common stock and warrants to purchase
common stock in accordance with paragraph 3 above, and the purchase
of the HealthTronics Note in accordance with paragraph 4 above, all
outstanding principal and accrued interest on the Notes shall be
deemed repaid and the Notes shall be terminated and of no further
force or effect (such date, the “Repayment
Date”).






 




6.

Upon the occurrence
of the Repayment Date, without further action on the part of the
parties hereto: (i) all indebtedness owing from Borrower to
HealthTronics under the Notes shall be deemed to have been paid and
discharged in full; (ii) all unfunded commitments to make credit
advances to Borrower or any other person under the Notes shall be
terminated; (iii) all liens, pledges, security interests, financing
statements, encumbrances, mortgages, and other liens of every type
at any time prior to the Repayment Date granted to or held by
HealthTronics as security for the Notes (the
“Encumbrances”) shall be terminated and released; and
(iv) all other obligations of Borrower under the Notes or under the
Security Agreement, dated as of June 15, 2015, between
HealthTronics and Borrower and its Subsidiaries (as amended) (the
Notes and such Security Agreement, each, a “Note
Document”) shall be deemed terminated; provided, however, those obligations that
are expressly specified in any Note Document as surviving such Note
Document’s termination shall survive in accordance with their
terms; and provided, further, that to the extent
that any payments or proceeds (or any portion thereof) received by
HealthTronics shall be subsequently invalidated, declared to be
fraudulent or a fraudulent conveyance or preferential, set aside or
required to be repaid to a trustee, receiver, debtor-in-possession
or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent that the payment
or proceeds is rescinded or must otherwise be restored by
HealthTronics, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, the obligations or part thereof
which were intended to be satisfied shall be revived and continue
to be in full force and effect, as if the payment or proceeds had
never been received by HealthTronics, and this letter agreement
shall in no way impair the claims of HealthTronics with respect to
the revived obligations.






 



 

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7.

From and after the
Repayment Date, HealthTronics: (i) authorizes Borrower, or
Borrower's designee, at Borrower's sole cost and expense to file
any UCC3 termination statements necessary or desirable to terminate
all UCC financing statements and other Encumbrances of record filed
in HealthTronics' favor in respect of the Notes with respect to
Borrower and its subsidiaries, and any other termination or release
documents as may be necessary or desirable to effect the release
contemplated hereby with respect to the Notes, including, without
limitation, intellectual property security interest releases and
(ii) shall execute and deliver to Borrower or its designee any
other documents reasonably requested by Borrower to release or
terminate any other Encumbrances in respect of the Notes with
respect to the assets of SANUWAVE, Borrower or its subsidiaries.
All such agreements, documents, and instruments which are requested
by Borrower to be delivered by HealthTronics on or after the
Repayment Date shall be prepared at Borrower's expense and any
costs or expenses incurred by HealthTronics with respect to such
items (including all reasonable and documented attorneys' fees)
shall be reimbursed promptly by Borrower on demand. Borrower hereby
waives any and all claims and releases HealthTronics and its
parents, subsidiaries, affiliates, and each of the
foregoing’s officers, directors, managers, employees,
attorneys, and representatives and agents from all claims,
liabilities, damages, fees, costs and expenses associated with,
caused by, or arising from HealthTronics’ preparation of any
the aforementioned documents.








8.

From and after the
Offering, so long as HealthTronics holds (i) any shares of
SANUWAVE’s common stock acquired by HealthTronics pursuant to
(A) the exercise of the Class K Warrants pursuant to paragraph 2
above, (B) the exercise of New Warrants, (C) the acquisition of
shares of such common stock pursuant to paragraph 3 above, or (D)
the conversion of the HealthTronics Note, (ii) any New Warrants, or
(iii) the HealthTronics Note (any shares of SANUWAVE’s common
stock held by HealthTronics as described in the foregoing clause
(i)(A) and (i)(C), and any shares of SANUWAVE’s common stock
that are issued or issuable to HealthTronics upon the exercise of
any of the warrants described in the foregoing clause (ii) or the
conversion of the HealthTronics Note described in the foregoing
clause (iii), are collectively referred to herein as the
“Subject
Shares”), each time that SANUWAVE proposes to register
for sale or re-sale (whether by SANUWAVE or any other person or
entity) any of SANUWAVE’s common stock under the Securities
Act of 1933 (each, a “Piggyback Registration”),
SANUWAVE shall give prompt (and in any event at least fifteen (15)
days prior to the Piggyback Registration) written notice to
HealthTronics of its intention to effect such a registration and
shall include in each such registration all Subject Shares that
HealthTronics elects to include in such registration, and SANUWAVE
shall be responsible for all fees and expenses (other than any
underwriter discounts, if applicable) of each such registration and
the applicable offering effected thereby.






 




9.

SANUWAVE represents
and warrants to HealthTronics that SANUWAVE is not subject to any
obligations that would be in conflict with the terms of this letter
agreement. SANUWAVE covenants and agrees that it shall not take any
actions that would cause the foregoing representations and
warranties to not be true and correct in any respect, either prior
to the Offering or while HealthTronics holds any Subject
Shares.






 




10.

SANUWAVE shall give
prompt written notice to HealthTronics in the event that SANUWAVE
reasonably believes that the Offering or any transactions
contemplated to be taken in connection therewith and herewith would
result in the Subject Shares representing five percent (5%) or more
of the issued and outstanding shares of common stock of
SANUWAVE.






 




11.

If the Repayment
Date has not occurred by September 1, 2020, HealthTronics may at
any time thereafter terminate this letter agreement by written
notice to SANUWAVE, upon which this letter agreement shall be of no
further force or effect.






 



 

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12.

SANUWAVE and
Borrower acknowledge and agree that HealthTronics has not waived,
and, unless and until the Repayment Date occurs, is not by this
letter agreement waiving, any Events of Default under the Notes
which may be continuing on the date hereof or any Events of Default
which may occur after the date hereof, and unless and until the
Repayment Date occurs, nothing contained herein shall be deemed or
constitute any such waiver. HealthTronics reserves the right, in
its sole discretion, to exercise any or all rights or remedies
under the Notes and any agreements or documents related thereto,
applicable law and otherwise as a result of any Events of Default,
and HealthTronics has not waived any such rights or remedies, and,
unless and until the Repayment Date occurs, nothing in this letter
agreement, and no delay on HealthTronics’ part in exercising
such rights or remedies, should be construed as a waiver of any
such rights or remedies.






 




13.

Except as
specifically set forth herein, all provisions of the Notes, the
Security Agreement and the Class K Warrants remain unchanged and in
full force and effect, including, without limitation, with respect
to the accrual of interest on the Notes, which shall continue in
accordance with their terms.






 




14.

SANUWAVE shall
promptly (and in any event within 30 days after submission of an
invoice by HealthTronics) reimburse HealthTronics for its
reasonable attorneys’ fees incurred in connection with the
negotiation of, and exercise and enforcement of rights under, this
letter agreement, and in connection with the transactions
contemplated hereby, including the Offering and any subsequent
offering in which any Subject Shares are sold, provided that the
aggregate amount of such attorneys’ fees to be so reimbursed
shall not exceed $30,000.






 




15.

Except to the
extent expressly inconsistent with the other terms of this letter
agreement, Article VII of the Notes is hereby incorporated by
reference herein, mutatis
mutandis.





 


 



[signature page follows]


 


 




 

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If you are amenable to these terms, kindly acknowledge your
acceptance by signing below and returning a copy to me via email
at kevin.richardson@sanuwave.com.


 


Please do not
hesitate to contact me to discuss this matter
further.


 


Very
truly yours,


 


 


/s/
Kevin A. Richardson, II


Kevin
A. Richardson, II


Chairman
and CEO


SANUWAVE
Health, Inc. and SANUWAVE, Inc.


 

 


 

 


AGREED
TO AND ACCEPTED:

 


 


HealthTronics,
Inc.

 


 


 


 


 


By:
/s/ Russell
Newman________________


Russell
Newman


President and
CEO


 




 

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EXHIBIT
A


 


SECURITIES
PURCHASE AGREEMENT


 


 


 


 




 

6








 






 


 


EXHIBIT
B


 


HEALTHTRONICS
NOTE


 

 


 

 


 

 


 

 


 

 


 

 


 

 


 

 




 

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