Document:

ex10-1.htm

Exhibit 10.1

 

 

AMENDMENT TO PROMISSORY NOTES

 

This AMENDMENT TO PROMISSORY NOTES (the “Amendment”) is entered into as of June 15, 2015 by and between SANUWAVE, INC., a Delaware corporation (the “Borrower”), SANUWAVE HEALTH, INC., a Nevada corporation (the “Parent”), and HEALTHTRONICS, INC., a Georgia corporation (“Healthtronics”). 

 

W I T N E S S E T H:

 

WHEREAS, the Borrower and Healthtronics entered into that certain Promissory Note due August 1, 2015 dated August 1, 2005 in the original principal amount of $2,000,000 and that certain Promissory Note due August 1, 2015 dated August 1, 2005 in the original principal amount of $2,000,000 (as may have been amended from time to time, collectively, the “Promissory Notes”), pursuant to which Healthtronics extended loans to the Borrower, and the Borrower and Healthtronics desire to amend the Promissory Notes (capitalized terms, as used herein, shall have the meaning set forth in the Promissory Notes, unless the context otherwise requires); 

 

WHEREAS, the aggregate outstanding principal amount under the Promissory Notes as of the date hereof is $5,372,743; and 

 

WHEREAS, the Borrower has requested that Healthtronics amend certain provisions of the Promissory Notes and Healthtronics has agreed to the amendments set forth in this Amendment, all on the terms and subject to the conditions set forth herein.

 

For the purpose of conforming the same to the intention of the parties and for other value received, it is hereby agreed that each of the Promissory Notes shall be amended and modified in the following particulars:

 

Section 1. Amendments to the Promissory Notes. Effective upon satisfaction of the conditions set forth in Section 3 hereof, each Promissory Note is hereby amended as follows:

 

A.     The definition of Stated Maturity Date of “August 1, 2015” in the first paragraph of the Promissory Notes shall be deleted and replaced with “January 31, 2017.” 

 

B.     Section 2.1 shall be deleted in its entirety and the following substituted in lieu thereof:

 

2.1      Interest. This Note shall accrue daily interest from the date hereof on the outstanding Principal Amount of this Note at six percent (6%) per annum (the “Interest Rate”), provided, for the period commencing August 1, 2015 through the date this Note is paid in full, the Interest Rate shall be eight percent (8%) per annum, provided, further that, during any period when an Event of Default shall be in existence, the then applicable Interest Rate shall increase by two percent (2%) per annum. Such interest shall be paid to Healthtronics quarterly in arrears on each March 31, June 30, September 30 and December 31 of each calendar year and on the Stated Maturity Date and any other date upon which any Principal Amount hereunder is paid, or if any such day is not a business day, on the next succeeding business day (each an “Interest Payment Date”).

 

 

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C.     Section 2.2 shall be deleted in its entirety and the following substituted in lieu thereof:

 

2.2     [Intentionally Omitted]. 

 

D.     Section 3.1 shall be deleted in its entirety and the following substituted in lieu thereof:

 

3.1     Payments. 

 

(a)     Mandatory Payment on the Stated Maturity Date. The outstanding Principal Amount of this Note together with all accrued and unpaid interest thereon and all other amounts due to Healthtronics under this Note will be payable on the Stated Maturity Date in cash. 

 

(b)     Mandatory Prepayments. The Borrower shall make a mandatory prepayment of the Principal Amount of this Note in (i) an amount equal to twenty percent (20%) of the proceeds received by the Borrower, the Borrower’s parent company, SANUWAVE Health, Inc., a Nevada corporation (the “Parent”), or any subsidiary of the Borrower or the Parent pursuant to (a) the issuance or sale by the Borrower, the Parent or any of their subsidiaries of any equity securities or any securities exercisable for or convertible into or exchangeable for any equity securities, or receipt by the Borrower, the Parent or any of their subsidiaries of capital contributions in cash or (b) the licensing by Borrower of any of Borrower’s products or patents or other intellectual property rights, and (ii) without limiting the restrictions contained in Section 7.12, an amount equal to one hundred percent (100%) of the proceeds received by the Parent, the Borrower or any subsidiary of the Parent or the Borrower from (a) borrowings through secured or unsecured debt (other than debt expressly permitted by Section 7.12(iii)), (b) a sale of all or a material portion of the assets of the Parent, the Borrower or any of their respective subsidiaries and (c) any sale of assets (including any patents or other intellectual property rights) of the Parent, the Borrower or any of their respective subsidiaries (other than sales of inventory in the ordinary course of business) for which the proceeds from such sales exceed $20,000 individually or $50,000 in the aggregate. Such mandatory prepayments shall be made within one (1) business day after the receipt of such proceeds. 

 

E.     Section 4.1 shall be deleted in its entirety and the following substituted in lieu thereof:

 

4.1     Change of Control of the Borrower. If a Change of Control shall occur, the Borrower shall pay the entire outstanding Principal Amount together with all accrued and unpaid interest thereon and all other amounts due to Healthtronics under this Note on the date of such Change of Control.

 

F.     Section 4.2 shall be deleted in its entirety and the following substituted in lieu thereof:

 

 

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4.2     [Intentionally Omitted]. 

 

G.     Section 4.3 shall be deleted in its entirety and the following substituted in lieu thereof:

 

4.3     Definitions.

 

“Change of Control” means (i) the merger, consolidation or other combination of the Parent with any person in which the stockholders of the Parent immediately prior to such transaction in the aggregate cease to own and control more than 50% of the voting securities of the person surviving or resulting from such transaction (or the ultimate parent thereof), (ii) if any person (as such term is used in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on June 15, 2015) or related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act) become the “beneficial owners” (as such term is used in Rule 13d-3 under the Exchange Act as in effect on June 15, 2015), directly or indirectly, of more than 50% of the total voting power of all classes then outstanding of the Parent’s voting stock, (iii) the Parent ceases to directly own and control 100% of the issued and outstanding equity interests of the Borrower, (iv) the sale, conveyance or other transfer of all or substantially all of the assets of the Borrower or the Parent or (v) the Borrower fails to own and control 100% of the issued and outstanding equity interests in each of its subsidiaries. 

 

H.     Article V shall be deleted in its entirety and the following substituted in lieu thereof:

 

ARTICLE V

[INTENTIONALLY OMITTED]

 

I.     Article VI shall be deleted in its entirety and the following substituted in lieu thereof:

 

ARTCLE VI

EVENTS OF DEFAULT

 

6.1     Events of Default; Remedies. If any of the following events shall occur and be continuing for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be effected by operation of law or otherwise) (each such event herein termed an “Event of Default”):

 

6.1.1     the Borrower shall fail to make any payment of (i) Principal Amount of this Note when due, whether at maturity by acceleration or otherwise or (ii) any interest on this Note or other amount payable by the Borrower under this Note;

 

6.1.2     (i) the Borrower defaults in the performance of or compliance with any term contained in Sections 7.11, 7.12 or 7.15 or in the Security Agreement or (ii) the Parent defaults in the performance of or compliance with any term contained in Sections 7.11 or 7.12; 

 

 

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6.1.3     the Parent, the Borrower or any subsidiary defaults in the performance of or compliance with any term contained in this Note or any other agreement, document or instrument executed and delivered pursuant hereto and such default continues for 15 days after the earlier of (i) the Parent, the Borrower or a subsidiary becoming aware of such default or (ii) receipt by the Parent, the Borrower or any subsidiary of notice of such default from Healthtronics;

 

6.1.4     there occurs an Event of Default (under and as defined in any other evidence of indebtedness of the Parent, the Borrower or any subsidiary owing to Healthtronics);

 

6.1.5     the Parent, the Borrower or any subsidiary shall:

 

(a)     commence a voluntary case under Title 11 of the United States Code as from time to time in effect, or authorize, by appropriate proceedings of its board of managers or other governing body, the commencement of such a voluntary case; 

 

(b)     have filed against it a petition under said Title 11 which shall not have been dismissed within 30 days after the date on which said petition is filed, or file an answer or other pleading within said 30-day period admitting or failing to deny the material allegations of such a petition, or seeking, consenting to or acquiescing in the relief therein provided, or fail to controvert timely the material allegations of any such petition;

 

(c)     have entered against it an order for relief in any involuntary case commenced under said Title 11; 

 

(d)     seek relief as a debtor under any applicable law, other than said Title 11, of any jurisdiction relating to the liquidation or reorganization of debtors or to the modification or alteration of the rights of creditors, or consent to or acquiesce in such relief;

 

(e)     have entered against it any order by a court of competent jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering or approving its liquidation, reorganization or any modification or alteration of the rights of its creditors or (iii) assuming custody of, or appointing a receiver or other custodian for, all or a substantial part of its property; or

 

(f)     make an assignment for the benefit of, or enter into a composition with, its creditors or appoint or consent to the appointment of a receiver or other custodian for all or a substantial part of its property; 

 

6.1.6     any representation or warranty made in writing by or on behalf of the Parent, the Borrower or any subsidiary or any officer of the Parent, the Borrower or any subsidiary in this Note, the Security Agreement or any other document or writing furnished in connection with the transactions contemplated hereby or thereby proves to have been false or incorrect in any material respect on the date as of which made; 

 

 

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6.17     the Security Agreement shall cease to be in full force and effect or the Borrower shall contest or deny the validity or enforceability of, or deny that it has any liability or obligations under, the Security Agreement, or Healthtronics does not have or ceases to have a valid first priority perfected security interest in all of the collateral referred to in the Security Agreement; or

 

6.1.8     the Parent shall have any direct subsidiary (other than Borrower), own or acquire any assets (other than the equity interests of the Borrower) or engage in any operations or business (other than activities incidental to being a holding company).

 

6.2     Remedies on Default.

 

6.2.1     Acceleration. 

 

(a)     If an Event of Default with respect to the Borrower described in Section 6.1.5 has occurred this Note shall automatically become immediately due and payable.

 

(b)     If any other Event of Default has occurred and is continuing, Healthtronics may, at any time at its option, by notice to the Borrower, declare this Note to be immediately due and payable.

 

Upon this Note becoming due and payable under this Section 6.2.1, whether automatically or by declaration, this Note will forthwith mature and the entire unpaid Principal Amount of this Note, plus all accrued and unpaid interest and all other amounts due and payable by the Borrower hereunder, shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived and Healthtronics, may proceed to enforce payment of such amount or part thereof in such manner as it may elect and Healthtronics may proceed to protect and enforce its rights by suit in equity, action at law and/or other appropriate proceeding either for specific performance of any covenant, provision or condition contained in this Note or the Security Agreement, or in aid of the exercise of any power granted in this Note or the Security Agreement

 

6.3     Annulment of Defaults. An Event of Default shall not be deemed to be in existence for any purpose of this Note if Healthtronics shall have waived such event in writing or stated in writing that the same has been cured to its reasonable satisfaction. No waiver or statement of satisfactory cure pursuant to this Section 6.3 shall extend to or affect any subsequent or other Event of Default not specifically identified in such waiver or statement of satisfactory cure or impair any of the rights of Healthtronics upon the occurrence thereof.

 

 

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6.4     Waivers. The Parent and the Borrower each hereby waives to the extent not prohibited by provisions of applicable law which cannot be waived (a) all presentments, demands for performance and notices of nonperformance (except to the extent specifically required by the provisions hereof), (b) any requirement of diligence or promptness on the part of Healthtronics in the enforcement of its rights under the provisions of this Note or the Security Agreement, (c) any and all notices of every kind and description which may be required to be given by any legal requirement, and (d) any defense of any kind (other than payment) which it may now or hereafter have with respect to its obligations and liability under this Note and the Security Agreement

 

6.5     Course of Dealing. No course of dealing between the Parent, the Borrower or any subsidiary on the one hand, and Healthtronics on the other hand, shall operate as a waiver of the parties’ rights under this Note. No delay or omission in exercising any right under this Note shall operate as a waiver of such right or any other right. A waiver on any one occasion shall not be construed as a waiver of or bar to any right or remedy on any other occasion. No waiver or statement of satisfactory cure or consent shall be binding upon Healthtronics unless it is in writing and signed by Healthtronics as may be required by the provisions of this Note. 

 

J.     Section 7.2 shall be amended by deleting the reference to “telecopied” contained therein and inserting “facsimile” in lieu thereof.

 

K.     Section 7.2.1 and 7.2.2 shall be deleted in their entirety and the following substituted in lieu thereof:

 

7.2.1     If to Healthtronics, to:

 

HealthTronics, Inc.

9825 Spectrum Drive, Bldg 3

Austin, TX 78717

Attention: President and General Counsel

Facsimile: 

 

with a copy (which shall not constitute notice) to:

 

Schiff Hardin LLP

233 South Wacker Drive, Suite 6600

Chicago, Illinois 60606

Attention:

 

Phone: 

Facsimile: 

 

 

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7.2.2     If to the Borrower, to:

 

SANUWAVE, Inc.

11475 Great Oaks Way, Suite 150

Alpharetta, GA 30022

Attention: Chief Financial Officer

Facsimile: 

 

with a copy (which shall not constitute notice) to:

 

Smith, Gambrell & Russell, LLP

Promenade, Suite 310

Atlanta, GA 30309

Attention:

Phone:      

Facsimile:      

Email:       

 

 

L.     Section 7.3 shall be deleted in its entirety and the following substituted in lieu thereof:

 

7.3     Expenses. The Borrower agrees to pay or reimburse Healthtronics on demand for and save Healthtronics harmless against any and all losses, liabilities, costs and expenses, including attorneys’ fees and expenses, incurred by Healthtronics in connection with this Note and the Security Agreement and the enforcement or preservation of any of the rights and remedies of Healthtronics under this Note and the Security Agreement including, without limitation, the costs of collection of this Note.

 

M.     Section 7.9 shall be deleted in its entirety and the following substituted in lieu thereof:

 

7.9      Assignment. The Borrower may not assign its rights or obligations under this Note. The Holder may not assign all or any of its rights or obligations under this Note without the prior written consent of the Borrower; provided, however, that no such consent of the Borrower shall be required with respect to any such assignment by the Holder (a) to any affiliate of the Holder, or to a purchaser of all or substantially all of the assets of the Holder or its subsidiaries, or (b) if any Event of Default has occurred that has not been cured by the Borrower or waived by the Holder.

 

N.     Section 7.10 shall be deleted in its entirety and the following substituted in lieu thereof:

 

7.10      Further Assurances. Each of the Parent and the Borrower agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to implement the transactions contemplated by this Note as requested by Healthtronics. 

 

 

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O.
	
The following provision is included as Section 7.11:

 

7.11      Board Observation Rights. 

 

	 	
7.11.1
	
For so long as any amounts remain outstanding hereunder, Healthtronics shall have the right to appoint one representative to exercise the rights as conferred pursuant to this Section 7.11 (such representative being referred to as the “Observation Party”) and shall notify the Borrower of the identity of such person.

 

	 	
7.11.2
	
The Borrower shall notify the Observation Party of the date and time for each general or special meeting of the board of directors, board of managers or similar governing body (or any committee thereof) of the Borrower and of the Parent or of the adoption of any resolutions by any such body or committee by written consent (describing in reasonable detail the nature and substance of such action) at the time notice is provided to the directors or managers of the Borrower or the Parent, as applicable, and concurrently deliver to the Observation Party any materials delivered to directors or managers of the Borrower or the Parent, as applicable, including a draft of any resolutions proposed to be adopted by written consent. 

 

	 	
7.11.3
	
The Observation Party shall be entitled to, or to select one representative to, attend and participate (but not vote) in all meetings of the board of directors, board of managers or other governing body (including any committee thereof) of the Borrower and of the Parent, including telephonic meetings. The Observation Party (or its representative) shall be entitled to receive all written materials and other information at the same time and in the same manner as given to the participants in such meetings. The Borrower or the Parent shall reimburse Healthtronics for all reasonable and documented out-of-pocket costs and expenses incurred by the Observation Party in connection with traveling to and from and attending such meetings. 

 

	 	
P.
	
The following provision is included as Section 7.12:

 

	 	
7.12
	
Restrictions on Material Transactions. Without the prior written consent of Healthtronics, neither the Parent, the Borrower nor any of their subsidiaries shall (i) merge into or consolidate with any other entity; make any substantial change in the nature of their business as conducted as of June 15, 2015; (ii) acquire all or substantially all of the assets of any other entity; sell, lease, transfer or otherwise dispose of all or a substantial or material portion of such person’s assets except in the ordinary course of its business (other than the licensing of Borrower’s products or patents or other intellectual property rights); (iii) create, incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, loans or advances, whether secured or unsecured, matured or unmatured, liquidated or unliquidated, joint or several other than unsecured indebtedness or liabilities of the Borrower resulting from borrowings in an aggregate outstanding amount not to exceed $200,000; or (iv) (a) make any dividend or distribution to any holders of its equity securities, or any securities exercisable for or convertible into or exchangeable for any equity security (other than dividends from subsidiaries of the Borrower to the Borrower), (b) purchase or redeem any of its equity securities, (c) pay any management fees or similar fees to any of its equity holders or any affiliate thereof, or (d) set aside funds for any of the foregoing. 

 

 

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Q.
	
The following provision is included as Section 7.13:

 

	 	
7.13
	
Security Agreement. The indebtedness evidenced by this Note and the obligations created hereby are secured by, among other things, the grant of a security interest in favor of Healthtronics in, or the conveyance to Healthtronics of title to, all assets of the Borrower and each of its domestic subsidiaries now owned or hereafter acquired, as further described in that certain Security Agreement executed and delivered by the Borrower and each of its domestic subsidiaries to Healthtronics on June 15 2015 (the “Security Agreement”). 

 

	 	
R.
	
The following provision is included as Section 7.14:

 

	 	
7.14
	
Confession of Judgment. The Borrower hereby authorizes and empowers any attorney of any court of record to appear for the Borrower and to confess judgment as often as necessary against the Borrower in favor of Healthtronics, as of any term or time, for the above sums plus interest due, together with costs and other expenses of legal proceedings and reasonable attorneys’ fees, with release of all errors and waive all rights of appeal If a copy of this Note verified by an affidavit shall have been filed in the proceeding, it will not be necessary to file the original as a warrant of attorney. The Borrower waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect. No single exercise of the foregoing warrant in power to confess judgment will be deemed to exhaust the power, whether or not any such exercise shall be held by any court to be invalid, voidable or void; but the power will continue undiminished and may be exercised from time to time as Healthtronics may elect until the Principal Amount and all other amounts payable under this Note are paid in full. The Borrower hereby waives and releases any and all claims or causes of action, which the Borrower might have against any attorney acting under the terms of authority which the Borrower has granted herein arising out of or connected with the confession of judgment hereunder.

 

	 	
S.
	
The following provision is included as Section 7.15:

 

	 	
7.15
	
Notices of Event of Default. Immediately, and in any event within one (1) business day, after obtaining knowledge of the occurrence of any Event of Default or event which, with notice or passage of time or both, would constitute an Event of Default, the Borrower shall give written notice thereof to Healthtronics and specify the nature and period of existence thereof and what action the Borrower proposes to take with respect thereto. 

 

 

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T.
	
The following provision is included as Section 7.16:

 

	 	
7.16
	
Replacement of Note. On the date hereof, Borrower will execute and deliver a replacement Note evidencing the terms of this Note (as amended by that certain Amendment To Promissory Notes dated as of June 15, 2015 between the Borrower and Healthtronics); and upon any future request of Healthtronics, the Borrower agrees to execute and deliver a replacement Note evidencing the terms of this Note (as amended by that certain Amendment To Promissory Notes dated as of June 15, 2015 between the Borrower and Healthtronics) upon delivery of the original Note (or, to the extent the original Note has been lost or mutilated, a lost note affidavit from Healthtronics). 

 

Section 2.     Representations and Warranties. Each of the Parent and the Borrower, jointly and severally, represents and warrants to Healthtronics that (a) the execution and delivery of this Amendment has been duly authorized by all requisite corporate action on behalf of the Parent and the Borrower, this Amendment has been duly executed and delivered by an authorized officer of the Parent and the Borrower, and each of the Parent and the Borrower has obtained all authorizations, consents, and approvals necessary for the execution, delivery and performance of this Amendment and such authorizations, consents and approvals are in full force and effect, (b) this Amendment and each Promissory Note (as amended by this Amendment) constitutes the legal, valid and binding obligation of each of the Parent and the Borrower enforceable against the Parent and the Borrower in accordance with its terms, (c) neither the execution nor delivery of this Amendment or the Security Agreement nor fulfillment of nor compliance with the terms and provisions of the Promissory Notes, this Amendment or the Security Agreement will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in any violation of, or result in the creation of any lien (other than liens created pursuant to the Security Agreement) upon any of the properties or assets of the Parent, the Borrower or any of its subsidiaries pursuant to, the charter, limited liability company operating agreement, partnership agreement, by-laws, limited liability company operating agreement or partnership agreement of the Parent, the Borrower or any of its subsidiaries, any award of any arbitrator or any agreement (including any agreement with stockholders, members or partners), instrument, order, judgment, decree, statute, law, rule or regulation to which the parent, the Borrower or any of its subsidiaries is subject, (d) before and after giving effect to this Amendment, no Event of Default has occurred and is continuing under either Promissory Note, (e) Healthtronics has a valid, perfected, first-priority lien upon and security interest in all assets of the Borrower and each of its domestic subsidiaries whether now owned or hereafter acquired, and (f) immediately before and after giving effect to this Amendment, (i) the sum of the debts and liabilities of the Borrower (including, without limitation, contingent liabilities of the Borrower) is not greater than all of the assets of the Borrower at a fair valuation, (ii) the present fair salable value of the assets of the Borrower is not less than the amount that will be required to pay the probable liability of the Borrower on its debts as they become absolute and matured, and (iii) the Borrower is not otherwise insolvent as defined in, or otherwise in a condition which could in any circumstances then or subsequently render any transfer, conveyance, obligation or act then made, incurred or performed by it avoidable or fraudulent pursuant to, any law, rule or regulation that may be applicable to the Borrower pertaining to bankruptcy, insolvency or creditors’ rights, fraudulent conveyance or fraudulent transfers or preferences.

 

 

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Section 3.     Conditions to Effectiveness. The amendments to the Promissory Notes set forth in Section 1 hereof shall become effective as of the date (the “Effective Date”) when each of the following conditions has been satisfied:

 

(a)          The representations and warranties of the Parent, the Borrower and each of its subsidiaries set forth in the Promissory Notes, this Amendment, the Security Agreement and in all agreements, documents and instruments executed and delivered pursuant to the Promissory Notes or this Amendment shall be true and correct in all material respects when made and as of the date of this Amendment. 

 

(b)           After giving effect to the terms of this Amendment, there shall be no Event of Default or event which, with notice or passage of time or both, would constitute an Event of Default under the Promissory Notes.

 

(c)          On or before the date hereof, the Borrower and each of its domestic subsidiaries shall execute and deliver the Security Agreement which shall be in form and substance satisfactory to Healthtronics and Healthtronics shall have a valid, perfected, first-priority lien upon and security interest in all assets of the Borrower and each of its domestic subsidiaries.

 

(d)          On or before the date hereof, the Borrower and each of its domestic subsidiaries shall execute and deliver deposit account control agreements in form and substance satisfactory to Healthtronics and each executed by the applicable depository bank.

 

(e)          On or before the date hereof, the Borrower and each of its domestic subsidiaries shall execute and deliver intellectual property security agreements in form and substance satisfactory to Healthtronics.

 

(f)          On or before the date hereof, the Parent shall execute and deliver the Class K Warrant Agreement to Healthtronics evidencing fully vested warrants for the purchase of the number of shares of common stock of the Parent as more fully set forth in such Class K Warrant Agreement.

 

(g)          The Borrower shall have paid the fees and expenses of Schiff Hardin LLP, special counsel to Healthtronics, in connection with this Amendment, the Security Agreement, the Class K Warrant Agreement and the Promissory Notes which shall not exceed $15,000.

 

Section 4.     Reference to and Effect on Promissory Notes. 

 

A.     From and after the date hereof, the Promissory Notes shall be deemed to mean the Promissory Notes, as amended hereby.

 

B.     This Amendment represents a modification only and is not, and should not be construed as, a novation of the Promissory Notes. Nothing contained in this Amendment shall be construed to narrow the scope of the security interest of Healthtronics in any of the Collateral (as defined in the Security Agreement) or the perfection or priority thereof or to impair or otherwise limit any of the rights, powers, privileges or remedies of Healthtronics under the Promissory Notes or the Security Agreement.

 

 

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C.     The Parent and the Borrower each acknowledges and agrees that the agreement of Healthtronics to amend the terms of the Promissory Notes pursuant to and as reflected in this Amendment does not and shall not create (nor shall the Parent or the Borrower rely upon the existence of or claim or assert that there exists) any obligation of Healthtronics to consider or agree to any further amendments and, in the event that Healthtronics subsequently agrees to consider any further amendment, neither the existence of this Amendment, nor any other conduct of Healthtronics, shall be of any force or effect on consideration or decision with respect to any such requested amendment, and Healthtronics shall have no obligation whatsoever to consider or agree to amend the Promissory Notes or forbear or waive any other default or Event of Default. 

 

Section 5.     Release. Each of the Parent and the Borrower, for itself and on behalf of its heirs, legal representatives, affiliates, successors and assigns, hereby: (a) expressly waives, releases and relinquishes any and all defenses, affirmative defenses, setoffs, claims, counterclaims and causes of action of any kind or nature whatsoever which the Borrower has asserted, or might assert, against Healthtronics or any of its affiliates or any shareholders, members, partners, employees, directors, officers, representatives or agents of Healthtronics or any of its affiliates (collectively, the “Released Parties”) with respect to the Promissory Notes or the indebtedness evidenced thereby, or with respect to any other documents or instruments now or heretofore evidencing, securing or in any way relating to the Promissory Notes or the indebtedness evidenced thereby, including without limitation the Purchase Agreement, or with respect to any other matter, cause or thing relating in any way to the Promissory Notes or the Purchase Agreement; (b) expressly remises, releases, acquits, satisfies and forever discharges each Released Party from any and all manner of debts, accountings, bonds, warranties, representatives, covenants, promises, contracts, controversies, agreements, liabilities, obligations, expenses, damages, judgments, executions, actions, claims, demands and causes of action of any nature whatsoever, whether at law or in equity, either now accrued or hereafter maturing, which the Borrower now has or hereafter can, shall or may have by reason of any matter, cause or thing, from the beginning of the world to and including the date hereof relating in any way to the Promissory Notes, including specifically, but without limitation, matters arising out of or relating to: (i) the Promissory Notes or the indebtedness evidenced thereby, including but not limited to, the administration thereof; (ii) the exercise or attempted exercise by any Released Party of any of its rights and remedies against the Borrower or the assets thereof on account of any Event of Default or otherwise; (iii) any other agreement or transaction between the Borrower and any Released Party relating in any way to the Promissory Notes and (iv) any Event of Default; and (c) expressly covenants and agrees never to institute or cause to be instituted or continue prosecution of any suit or other form of action or proceeding of any kind or nature whatsoever against any Released Party by reason of or in connection with any of the foregoing matters, claims or causes of action. 

 

Section 6.     Acknowledgement of Indebtedness. As of June 15, 2015, the Borrower acknowledges and agrees that the Borrower is indebted to Healthtronics under the Promissory Notes in the aggregate principal amount of $5,372,743 plus accrued and unpaid interest since March 31, 2015. The Borrower acknowledges and agrees that it owes the amounts referred to above without defense, right of offset, set off, or counterclaims. 

 

 

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Section 7.     Joinder by the Parent. The Parent hereby joins each Promissory Note and agrees to comply with the provisions thereof as if the Parent were an original signatory thereto. 

 

Section 8.     Miscellaneous. 

 

(a)     This Amendment may be executed in two or more counterparts, each of which, when fully executed, shall be deemed an original; and all of said counterparts taken together shall be deemed to constitute one and the same Amendment. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.

 

(b) THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

 

 

[Signatures on Next Page]

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of June 15, 2015.

 

	
 
	
Borrower:

 

SANUWAVE, INC.

 

By: /s/ Kevin A. Richardson II

Name: Kevin A. Richardson II

Title: Chairman of the board/CEO

 

 

Parent:

 

SANUWAVE HEALTH, INC.

 

By: /s/ Kevin A. Richardson II

Name: Kevin A. Richardson II

Title: Chairman of the board/CEO

 

 

Healthtronics:

 

HEALTHTRONICS, INC.

 

By: /s/ Russell Newman          

Name: Russell Newman

Title: President

 

 

 

14EX-10.22

 Exhibit 10.22 

PAYPAL HOLDINGS, INC. CHANGE IN CONTROL SEVERANCE PLAN 

FOR KEY EMPLOYEES 
 AND

 SUMMARY PLAN DESCRIPTION 
  

	1.	PURPOSE OF THE PLAN 

 The purpose of the PayPal Holdings, Inc. Change in Control Severance Plan (the
“Plan”) is to encourage the full attention and dedication of those officers at and above the level of Vice President, and certain PayPal Holdings, Inc. Fellows as may be selected by the Plan Administrator, in light of the
distractions a potential change in control may cause, and otherwise to provide severance benefits designed to give financial assistance to any Eligible Participants upon their separation from PayPal Holdings, Inc. (“Company”) or any
of its participating subsidiaries or affiliates under the conditions described herein during any Change in Control Period (as such term is defined below). 
  

	2.	DEFINITIONS/GENERAL RULES 

 Definitions 

Accrued Benefits – means prompt payment by the Company to an Eligible Participant of (a) any accrued but unpaid annual
base salary through the last day of employment, (b) any unreimbursed expenses incurred through the last day of employment subject to the Eligible Participant’s prompt delivery to the Company of all required documentation of such expenses
pursuant to applicable employer policies, (c) all other vested payments, benefits or fringe benefits to which the Eligible Participant is entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit
plan or program or grant (excluding any other severance plan, policy or program) of the Company or any of its affiliates in accordance with the terms of such plan, program or grant, including any unpaid annual bonus under the Company Employee
Incentive Plan or applicable successor plan (the “eIP”)) for any prior fiscal year when it otherwise would have been paid (see Section 4, eIP, below). 

Board – means the Board of Directors of the Company. 

Cause – Cause is defined as (a) an Eligible Participant’s failure to attempt in good faith to substantially
perform his or her assigned duties, other than failure resulting from his or her death or incapacity due to physical or mental illness or impairment, which is not remedied within thirty (30) days after receipt of written notice from the Company
specifying such failure; (b) an Eligible Participant’s indictment for, conviction of or plea of nolo contendere to any felony (or any other crime involving fraud, dishonesty or moral turpitude); or (c) an Eligible
Participant’s commission of an act of fraud, 

  
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embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company, except good faith expense account disputes. 

Change in Control – shall have the meaning of such term as specified in that certain Company Inc. Equity Incentive Award
Plan under which the Company is then granting equity awards, as the same shall be in effect from time to time. The Compensation Committee of the Board shall have full and final authority, which shall be exercised in its discretion, to determine
conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto. 

Change in Control Period – means the period that begins ninety (90) days prior to the closing date of, and ends 24
months following, a Change in Control. 
 Company – means Company or any of its participating U.S. subsidiaries, as
applicable, and after a Change in Control, any Successor Entity (as such term is defined in that certain Company Equity Incentive Award Plan, as the same shall be in effect from time to time). 

Company Equity Awards – means incentive awards granted (or deemed granted for accounting purposes) to an Eligible
Participant on shares of common stock of the Company (“Stock”) and, after a Change in Control, any common equity of any Successor Entity, pursuant to the Company Equity Incentive Plan or otherwise, including without limitation any
stock options, performance-based restricted stock units, and restricted stock units. 
 Disability – means
“disability” within the meaning of the long-term disability plan by which the Eligible Participant is covered as of his or her Separation Date. 

Effective Date – this Plan will be effective immediately following the distribution of the Stock by eBay Inc. to the
shareholders of eBay Inc. Except as otherwise provided by the Company, in writing, this Plan replaces all prior plans, programs, and arrangements providing severance type benefits to eligible employees. 

Eligible Employee – is an individual who meets all of the eligibility requirements set forth in Section 3
(Eligibility), and is not otherwise excluded from such eligibility requirements. 
 Eligible Participant – means
any Eligible Employee holding a position that is at or above the level of Vice President, and certain Company Fellows, in each case as may be selected by the Plan Administrator in its sole discretion to participate in this Plan at any one of the
levels specified in the CIC Severance Pay Guidelines attached to this Plan as the Plan Administrator shall, in its sole discretion, designate. 

Employer – means the Company and any U.S. subsidiary or U.S. affiliate of the Company whose voting equity is, directly or
indirectly, at least 50.1% owned by the Company. 

  
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 Good Reason – means: 

(A) for any Eligible Participant who is designated by the Plan Administrator as a Direct Report or an SVP/Certain VP (as identified on the CIC
Severance Pay Guidelines): (i) a material reduction in the Eligible Participant’s annual total target cash compensation (which is comprised of his or her annual base salary rate and annual target bonus opportunity under the eIP;
(ii) a material reduction in the Eligible Participant’s reporting relationship and/or diminution in his or her scope of responsibilities; or (iii) a relocation of the Eligible Participant’s principal workplace location by more
than thirty-five (35) miles, in any case of the foregoing without such Eligible Participant’s written consent. 
 (B) for any
Eligible Participant who is designated by the Plan Administrator as a VP/Fellow (as identified on the CIC Severance Pay Guidelines): (i) a material reduction in the Eligible Participant’s annual total target cash compensation (which is
comprised of his or her annual base salary rate and annual target bonus opportunity under the eIP; or (ii) a relocation of the Eligible Participant’s principal workplace location by more than thirty-five (35) miles, in any case of the
foregoing without such Eligible Participant’s written consent. 
 In addition, in any case of an occurrence described in clause
(A) or clause (B) of this definition with respect to a given Eligible Participant, the Eligible Participant will be deemed to have given such consent to any of the condition(s) described in any of the applicable clauses of this definition
if the Eligible Participant does not provide written notice to the Company of such Good Reason event(s) within 60 days from the first occurrence of such Good Reason event(s), following which the Company shall have 30 days to cure such event, and to
the extent the Company has not cured such Good Reason event(s) during the 30-day cure period, the Eligible Participant must terminate his/her employment for Good Reason no later than 60 days following the occurrence of such Good Reason event(s) by
providing the Company 30 days’ prior written notice of termination, which may run concurrently with the Company’s cure period. 

Make-Good Payment – Make-Good Payment is the sum total of an Eligible Participant’s unpaid cash “make-good”
awards, if any, that the Eligible Participant has received in connection with his or her employment with the Company. 
 Plan
Administrator – is the Compensation Committee of the Board or such other person or committee appointed from time to time by the Compensation Committee of the Board to administer the Plan. 

Premium Payment – Premium Payment is the sum total of an Eligible Participant’s monthly premium payments for health
insurance continuation coverage under COBRA, or similar payments for employees outside the U.S., if applicable. The Company shall withhold such amounts from payments under this Plan as it determines necessary to

  
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fulfill any applicable federal, state, or local wage or compensation withholding requirements. A more detailed description of the Premium Payment follows in Section 4 (Severance
Benefits). 
 Salary Amount – Salary Amount is an Eligible Participant’s base salary rate in effect upon the
occurrence of the Employee’s severance event (expressed in weekly, semi-monthly, monthly, or annual terms, as applicable) without considering bonuses, back-pay or other awards, or Company contributions to any employee plans. 

Separation from Service – means, except as provided in subsections (a) and (b) below, an employee’s
termination from employment (whether by retirement or resignation from or discharge by the Company). 
 (a) A Separation from
Service shall be deemed to have occurred if an employee and the Company reasonably anticipate, based on the facts and circumstances, that the employee will not provide any additional services for an Employer after a certain date; provided, however,
that if any payments or benefits that may be provided under this Plan constitute deferred compensation within the meaning of Section 409A of the Code, a Separation from Service also shall be deemed to have occurred in the event that the level
of bona fide services performed by the employee after a certain date will permanently decrease to no more than 20% of the average level of bona fide services performed by the employee over the immediate preceding 36-month period. 

(b) Notwithstanding the foregoing, for purposes of this Plan, an employee’s employment relationship is treated as
continuing intact while the employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment with an
Employer under an applicable statute or by contract. For purposes of this Plan, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the employee will return to perform services for an
Employer. If the period of leave exceeds six months and the employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such
six-month period due to such employee’s Disability, in which case such employee shall not be an Eligible Participant except as otherwise provided in Section 3 of this Plan. 

The definition of “Separation from Service” shall at all times be interpreted in accordance with the terms of Treasury Regulations
Section 1.409A-1(h) and any guidance issued thereunder, and the term “Separation Date” shall mean the effective date of the Eligible Participant’s Separation from Service. 

Severability – the provisions of the Plan are severable. If any provision of the Plan is deemed legally or factually invalid
or unenforceable to any extent or in any application, 

  
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then the remainder of the provisions of the Plan, except to such extent or in such application, shall not be affected, and each and every provision of the Plan shall be valid and enforceable to
the fullest extent and in the broadest application permitted by law. 
 Severance Bonus Amount – Severance Bonus Amount is
an Eligible Participant’s target annual bonus opportunity as provided under the eIP for the bonus year in which the Separation Date occurs. 

Severance Pay – Severance Pay is the sum total of an Eligible Participant’s Salary Amount and Severance Bonus Amount.
The Company shall withhold such amounts from payments under this Plan as it determines necessary to fulfill any federal, state, or local wage or compensation withholding requirements. A more detailed description of Severance Pay follows in
Section 4 (Severance Benefits). 
 General Rules 

Amendment and Termination – The Company (as defined below) shall be under no obligation to continue this Plan for any period
of time. The Plan Administrator, in its sole discretion, reserves the right to modify, amend, or terminate this Plan (including any of the CIC Severance Pay Guidelines, form of Separation Agreement and/or Schedule 1 of Designated Participants
attached to this Plan), in whole or in part, at any time and for any or no reason with respect to any employee or all employees at any time prior to his, her or their receipt of any Severance Benefits under Section 4 of this Plan; provided,
however, that in no event shall this Plan be terminated, or modified or amended in any manner that is adverse to any Eligible Participants at any time during the Change in Control Period nor to any Eligible Participant who is receiving payments or
benefits under this Plan as a result of a Qualifying Termination occurring during a Change in Control Period. Such foregoing prohibition shall not require that all Eligible Participants receive the same Severance Pay, Premium Payment, treatment of
Company Equity Awards or other additional payments and benefits that the Plan Administrator may in its sole discretion choose to provide to any given Eligible Employee. 

Benefits Non-Assignable – Benefits under the Plan may not be anticipated, assigned or alienated. The exception being if an
employee becomes eligible and dies before payment is made, the heirs will be entitled to the payment. 
 Governing Laws –
The provision of the Plan shall be construed, administered and enforced according to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and, to the extent applicable, according to applicable Federal law or the
laws of the State of California. 
 No Right to Continued Employment – Neither the Plan nor any action taken with respect
to it shall confer upon any person the right to continue in the employ of the Company or any of its subsidiaries or affiliates. Company employees shall continue to be employed “at-will,” as defined under applicable law. 

  
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 Funding – The Company will make all payments under the Plan, and pay all
expenses of the Plan, from its general assets. Nothing contained in this Plan shall give any eligible employee any right, title, or interest in any property of the Company or any of its affiliates. 

 

	3.	ELIGIBILITY 

 General Eligibility 

The benefits under this Plan are limited to employees of the Employer who satisfy each of the following conditions, as determined by the Plan Administrator in
its sole discretion: 
  

	 	•	 	Are classified as Eligible Participants, whether or not based in the United States of America (“USA”) and paid through the payroll system based in the USA, such that data is received and processed in
the USA. 

  

	 	•	 	Are being terminated involuntarily without Cause by Employer; or are terminating voluntarily for Good Reason (either such event, a “Qualifying Termination”), in either such case occurring during a
Change in Control Period. 

  

	 	•	 	Are actively at work through the last day of work designated by Employer, unless the employee is absent due to an approved absence from work (including leave under the Family and Medical Leave Act) or unless otherwise
designated by his or her agreement with the Employer. 

  

	 	•	 	Execute and do not revoke a Separation Agreement and Release in a form attached to this Plan as Exhibit I (with only those changes as may be required to maintain such a form to be compliant with applicable law) within
the period specified by Plan Administrator or its delegates (the “Separation Agreement”); and, 

  

	 	•	 	Return all property of any Employer and settle satisfactorily all expenses owed to Employer and any of its subsidiaries or affiliates. 

Exclusions from Eligibility 
 Unless the Plan
Administrator provides otherwise in writing, the following employees are NOT eligible to participate in this Plan: 
  

	 	•	 	 Any Eligible Participant who is eligible to receive severance payments and/or benefits under an individual employment letter agreement or other
agreement between such employee and the Company under circumstances that would otherwise give rise to a right to receive payments and benefits under this Plan (any such agreement, an “Individual Agreement”); except, if the total
present value, as of the Separation Date, of the aggregate amount of all payments and benefits payable under any Individual Agreement that covers an Eligible Participant who is not subject to income taxation in

  
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the USA is less than the total present value of the aggregate amount of all payments and benefits that would be payable to him or her under Section 4 of this Plan, then the Eligible
Participant shall not be excluded from eligibility to participate in this Plan; 

  

	 	•	 	Any Eligible Participant who terminates employment prior to the stated Separation Date as set forth in their Separation Agreement; 

  

	 	•	 	Any Eligible Participant whose employment is terminated for any of the following reasons: 

  

	 	•	 	Resignation or other voluntary termination of employment, other than for Good Reason as provided in this Plan; 

  

	 	•	 	Death or Disability; except as expressly otherwise provided in Section 4 of this Plan; or 

  

	 	•	 	Termination for Cause. 

  

	4.	SEVERANCE BENEFITS 

 Severance Pay 

 

	 	•	 	Amount of Severance Pay 

 The amount of Severance Pay payable to an Eligible Participant will be
determined in accordance with the CIC Severance Pay Guidelines attached to this Plan subject to the reductions set forth below; provided, however, that the Plan Administrator, in its sole discretion, and on a case-by-case basis, may increase (but
not decrease, except as provided below) the amount of Severance Pay payable to an Eligible Participant. 
  

	 	•	 	Reduction of Severance Pay Benefits 

 Unless Employer, in its sole discretion, provides
otherwise in writing, the amount of Severance Pay payable to an Eligible Participant shall be reduced as follows: 
 In the event that an
Employer triggers Worker Adjustment and Retraining Notification Act (“WARN”) (or other similar federal or state statute), the WARN period will run concurrently with the Severance Pay under this Plan and any lump sum Severance Pay
remaining will be paid out following the Separation Date as set forth in the Separation Agreement. If the Employer provides pay-in-lieu-of-notice to the Eligible Participant instead of advance notice of his or her termination of employment in
accordance with the requirements of WARN then the amount of such Eligible Participant’s Severance Pay will be reduced (but not below zero) any amount required to be paid or otherwise owing to the employee under WARN. 

  
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 Severance Pay will be reduced by any outstanding debt owed by the employee to Employer or any of
its affiliates, where permitted by law, including but not limited to loans granted by Employer, advanced commissions, bonuses, vacation pay, salary and/or expenses. 

In addition, Severance Pay will be inclusive of, and not be in addition to, any severance or termination payments that may be required to be
paid by statute or other governmental mandate of the laws of a country outside of the USA. 
 In the event of a Change in Control, where an
accounting firm designated by the Company determines that (x) the aggregate amount of the payments and benefits that (but for the application of this paragraph) would be payable to an Eligible Participant under this Plan and/or any other plan,
policy or arrangement of the Company or of its affiliates, exceeds (y) the greatest amount of payments and benefits that could be paid or provided to the Eligible Participant without giving rise to any liability for any excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then the Eligible Participant shall either (1) pay the Excise Tax and receive all such payments and benefits as may be payable to him or her, or (2) only receive the
aggregate amount of such payments and benefits payable or to be provided to the Eligible Participant that would not exceed the greatest amount of payments and benefits that could be paid or provided to the Eligible Participant without giving rise to
any liability for any Excise Tax (such reduced amount of payments and benefits, the “Reduced Benefit Amount”), whichever of the two courses of action in clause (1) or clause (2) hereof produces the greatest after-tax
benefit to the Eligible Participant. In the event the Reduced Benefit Amount is paid, the reduction in such payments or benefits pursuant to the immediately preceding sentence shall be made in the following order: (1) by reducing the Salary
portion of the Severance Pay, and then the Severance Bonus Amount, and then (2) by reducing amounts in respect of any then outstanding Company Equity Awards, first in the form of cash payments, if any are due under this Plan or any other
arrangement (e.g., in connection with the Change in Control), and then in respect of any vesting of any such awards under this Plan, and only thereafter in respect of any vesting of any such awards under any other plan or arrangement. 

 

	 	•	 	Payment of Severance Pay 

 The Company will pay the Severance Pay in a lump sum. Payment will be
made as soon as practicable after the later of the Eligible Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but not later than ninety
(90) days following the Eligible Participant’s Separation Date. 
 Other Severance Benefits 

 

	 	•	 	Medical/Dental Benefits 

  
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 Eligible Participants employed by the Company in the USA (and their eligible dependents) who
participate in a Company health insurance plan and who are eligible to continue to participate in such plan under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”), will receive a lump sum cash payment
that is equal to the product of (x) the monthly premium payable by the Eligible Participant for himself or herself (and his or her eligible dependents) under the Company’s health insurance plan in which he or she participates immediately
prior to the Separation Date; (y) the Multiple of Premium Payment (as set forth in the CIC Severance Pay Guidelines attached hereto) applicable to such Eligible Participant (such resulting product, the “Premium Payment”) and
(z) two (2). 
 Eligible Participants employed by the Company outside of the USA (and their eligible dependents) shall be eligible for
medical and dental insurance coverage that is comparable to such coverage provided to such individuals immediately prior to the Separation Date, with such coverage to be provided for the period beginning with the Separation Date and running through
a number of full calendar months equal to the Multiple of Premium Payment (as set forth in the CIC Severance Pay Guidelines attached hereto) applicable to such Eligible Participant, to the extent permissible under applicable local law. If, and to
the extent, the Eligible Participant is obligated to pay all or a portion of the premiums for such continuation coverage, the Eligible Employee will receive a Premium Payment calculated in the manner described above. 

The Company will pay the Premium Payment in a lump sum. Payment will be made as soon as practicable after the later of the Eligible
Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but not later than ninety (90) days following the Eligible Participant’s
Separation Date. 
  

	 	•	 	eIP 

 (The Eligible Participant will be eligible to receive the amount of the eIP bonus
that he or she otherwise would have earned and been paid in respect of the fiscal year of the Company in which his or her Separation Date occurs, assuming target company performance had been achieved in such year; except, if the Eligible
Participant’s eIP bonus is intended to constitute performance-based compensation within the meaning of Section 162(m) of the Code, then the Eligible Participant will only be eligible to receive the amount of such eIP bonus, if any, that he
or she otherwise would have earned and been paid in respect of the fiscal year of the Company in which his or her Separation Date occurs, based solely on the actual performance of the Company through the date immediately prior to the Eligible
Participant’s Separation Date. In all cases, Eligible Participants who are eligible to receive payments of his or her eIP bonus will be paid based on target individual performance, to the extent applicable. 

  
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 The Company will pay the eIP bonus amount determined above in a lump sum. Payment will be made as
soon as practicable after the later of the Eligible Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but not later than ninety
(90) days following the Eligible Participant’s Separation Date. 
  

	 	•	 	Company Equity Awards. 

 Effective immediately prior to the Separation Date, the
following provisions shall apply to the Eligible Participant’s Company Equity Awards that are unvested as of the date prior to the Eligible Participant’s Separation Date: 

(1) All unvested Company Equity Awards that vest solely based on the continued service of the Eligible Participant (including any restricted
stock units that have been granted in respect of any performance-based restricted stock units whose target value has been established prior to such Separation Date), will be treated as though immediately vested on the Eligible Participant’s
Separation Date; and 
 (2) Effective immediately prior to the Separation Date, all unvested Company Equity Awards that are unvested as of
the date prior to the Eligible Participant’s Separation Date shall be treated as though immediately vested on the Separation Date; and, for purposes of the foregoing, if the Eligible Participant’s Separation Date occurs during the
performance period with respect to a given award of performance-based restricted stock units whose target value has been established prior to such Separation Date, but whose number of shares of applicable employer stock that would be subject to such
award based on achievement of applicable performance targets has not yet been granted, then any such award shall be deemed to have been earned and granted assuming achievement of target performance in respect of the applicable performance period in
effect immediately prior to such Separation Date for purposes of determining the number of such awards that shall be treated as though vested hereunder; provided, further, however, that 

(3) if the Eligible Participant’s unvested Company Equity Awards are intended to constitute performance-based compensation within the
meaning of Section 162(m) of the Code (a “Section 162(m) Award”), then, any such Company Equity Awards shall remain outstanding and eligible to vest, based solely on the achievement of the applicable Company performance targets
upon which the awards are subject to vesting for the relevant performance period; and to the extent such performance targets are determined (in a manner compliant with the requirements of Section 162(m) of the Code) to have been achieved
following the completion of such performance period, the Eligible Participant shall, upon the date of such determination (the “PBRSU Vesting Determination Date”), be treated as though fully vested in the resulting amount of such
Company Equity Awards that would have become vested pursuant to the service-vesting schedule that would have applied to such Company Equity Awards on and after the PBRSU Vesting Determination Date. 

  
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 All such Company Equity Awards shall be settled in a lump sum, through the vesting of shares of
Stock, through the payment of cash in lieu of vesting shares of Stock, or a combination thereof as determined in the discretion of the Plan Administrator, as soon as practicable after (x) for any Company Equity Awards that are treated as though
vested pursuant to clause (1) or clause (2) above, the later of the Eligible Participant’s Separation Date or the date on which such employee’s Separation Agreement becomes effective (i.e., cannot be revoked by the employee), but
not later than ninety (90) days following the Eligible Participant’s Separation Date; and (y) for any Company Equity Awards that are treated as though vested pursuant to clause (3) above, promptly following the date the
determination regarding the amount of such Company Equity Awards will be treated as though vested (but in no event later than the last day of the calendar year in which the PBRSU Vesting Determination Date occurs). In the event the Company elects to
settle any such awards through the payment of cash in lieu of vesting shares of Stock, the Company will pay the Eligible Participant a lump sum cash amount equal to the value of all of the Company Equity Awards that are treated as though vested in
accordance with the foregoing clauses (with such value calculated based on the Valuation Assumptions). 
 For purposes of the foregoing, the
term “Valuation Assumptions” means, collectively, the following assumptions: (x) each share of common equity underlying an award has a value equal to the average of the closing prices of Company (or, after the Change in
Control, the applicable Successor Entity) common stock as reported on the NASDAQ Global Select Market for the period of 10 consecutive trading days ending on (and including) the last trading day prior to I) for any Company Equity Awards that are
treated as though vested pursuant to clause (1) or clause (2) above, or pursuant to the provisions under “Death and Disability”, below, the Separation Date, and (II) for any Company Equity Awards that are treated as though
vested pursuant to clause (3) above, the PBRSU Vesting Determination Date, and (y) any Company stock options that the Eligible Participant holds that are outstanding immediately prior to the Separation Date will be valued based on their
spread (i.e., the positive difference, if any, of the value of each share of Company (or, after the Change in Control, the applicable Successor Entity) common equity underlying the stock option, as determined pursuant to clause (x) above), less
the per share exercise price of such stock option). 
  

	 	•	 	Make-Good Payment 

 The Make-Good Payment shall be paid in a lump sum and subject to the
same terms as Severance Pay, as set forth above. 
  

	 	•	 	Death and Disability 

 Notwithstanding anything else in this Plan or Company Equity Award
agreement to the contrary, upon the occurrence of an Eligible Participant’s death or Disability, all unvested Company Equity Awards that are unvested as of the date prior to the Eligible Participant’s death or Disability shall be treated
in the same manner as if the Eligible 

  
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Participant had experienced a Qualifying Termination pursuant to clauses (1) and (2) under “Company Equity Awards”, above, except all references to the term
“Separation Date” shall refer to the date of the Eligible Participant’s death or Disability, and no Separation Agreement shall be required to be executed, such that all such awards shall be settled in a lump sum, through the vesting
of shares of Stock, through the payment of cash in lieu of vesting shares of Stock, or a combination thereof as determined in the discretion of the Plan Administrator, as soon as practicable after the date of the Eligible Participant’s death or
Disability, but not later than ninety (90) days following such date. In the event the Company elects to settle any such awards through the payment of cash in lieu of vesting shares of Stock, the Company will pay the Eligible Participant a lump
sum cash amount equal to the value of all of the Company Equity Awards that are treated as though vested in accordance with the foregoing clauses (with such value calculated based on the Valuation Assumptions). 

 

	 	•	 	Accrued Benefits 

 The Company shall make payment or otherwise provide all Accrued
Benefits when due. Such obligation shall not be subject to the Eligible Participant’s execution of a Separation Agreement. 
  

	5.	RIGHT TO TERMINATE BENEFITS 

 Notwithstanding anything in this Plan to the contrary, in the event that:

  

	 	•	 	Employer determines that an Eligible Participant or Eligible Employee has breached any of the terms and conditions set forth in any agreement executed by the employee as a condition to receiving benefits under this Plan
(i.e., the Separation Agreement), THEN 

  

	 	•	 	Employer shall have the right to terminate the benefits payable under this Plan at any time. Further, the Eligible Participant shall be obligated to return to the Employer any benefits paid to such employee:
(i) due to the employee’s breach of the terms and conditions set forth in any agreement executed by such employee or (ii) due to any overpayments of benefits paid under this Plan to such employee. 

 

	6.	ADMINISTRATION OF THE PLAN 

 The Plan Administrator shall have sole authority and discretion to
administer and construe the terms of this Plan. Without limiting the generality of the foregoing, the Plan Administrator shall have the following powers and duties: 
  

	 	•	 	To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan; 

  

	 	•	 	To Amend and Terminate the Plan as defined in, and in accordance with, Section 2; 

  
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	 	•	 	To interpret the Plan, its interpretation thereof to be final and conclusive on all persons claiming benefits under the Plan; 

  

	 	•	 	To decide all questions concerning the Plan, including the eligibility of any person to participate in, and receive benefits under, the Plan; and 

 

	 	•	 	To appoint and/or retain such employees, agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan. 

 

	7.	CLAIMS PROCEDURE 

 The Plan Administrator reviews and authorizes payment of severance benefits for those
employees who qualify under the provisions of the Plan. No claim forms need be submitted. Questions regarding payment of severance benefits under the Plan should be directed to the Plan Administrator. 

If an employee believes he or she is not receiving severance payments and benefits hereunder which are due, the employee should file a written claim for the
benefits with the Plan Administrator. A decision on whether to grant or deny the claim will be made within 90 days following receipt of the claim. If more than 90 days is required to render a decision, the employee will be notified in writing of the
reasons for delay. In any event, however, a decision to grant or deny a claim will be made by not later than 180 days following the initial receipt of the claim. 

If the claim is denied, in whole or in part, the employee will receive a written explanation containing the following information: 

 

	 	•	 	The specific reason(s) for the denial, including a reference to the Plan provisions on which the denial is based; 

  

	 	•	 	A description of any additional material or information necessary for the employee to perfect the claim and an explanation of why such material or information is necessary; and 

 

	 	•	 	A description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the employee’s right to bring a civil action under Section 502(a) of ERISA
following an adverse determination on review. 

 If the employee wishes to appeal this denial, the employee may write within 60 days after
receipt of the notification of denial. The claim will then be reviewed by the Plan Administrator, and the employee will receive written notice of the final decision within 60 days after the request for review. If more than 60 days are required to
render a decision, the employee will be notified in writing of the reasons for delay. In any event, however, the employee will receive a written notice of the final decision within 120 days after the request for review. 

  
 -13- 

 As part of the Plan’s appeal process, the employee shall be afforded: 

 

	 	•	 	The opportunity to submit written comments, documents, records, and other information relating to the claim for benefits; 

  

	 	•	 	Upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the employee’s claim for benefits; and 

 

	 	•	 	A review that takes into account all comments, documents, records and other information submitted by the employee relating to the claim, without regard to whether such information was submitted or considered in the
initial benefit determination. 

 If the decision on appeal is upheld, in whole or in part, the employee will receive a written explanation
containing the following information: 
  

	 	•	 	The specific reason(s) for the decision, including a reference to the Plan provisions on which the decision is based; 

  

	 	•	 	A statement that the employee is entitled to receive, upon request and free of charge, reasonable access to, and copies of all documents, records and other information relevant to the employee’s claim for benefits;
and 

  

	 	•	 	A statement of the employee’s right to bring an action under Section 502(a) of ERISA. 

 No legal
action for benefits under this Plan may be brought unless the action is commenced within one (1) year from the date of the final decision on appeal has been made. No person may bring an action for any alleged wrongful denial of Plan benefits in
a court of law unless the claims procedures set forth above are exhausted and a final determination is made. If the employee or other interested person challenges a decision, a review by the court of law will be limited to the facts, evidence and
issues presented during the claims procedure set forth above. Facts and evidence that become known to the employee or other interested person after having exhausted the claims procedure must be brought to the attention of the Plan Administrator for
reconsideration of the claims determination. Issues not raised with the Plan Administrator will be deemed waived. 
  

	8.	SECTION 409A 

 Notwithstanding anything contained in this Plan to the contrary, to the maximum extent
permitted by applicable law, no employee shall have a legally binding right to payments under this Plan unless and until amounts are actually paid to them. To the extent that an employee is deemed to have a legally binding right to a payment under
this Plan, then amounts payable under this Plan shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9) (Separation Pay Plans) or Treasury Regulation Section 1.409A-1(b)(4) (Short-Term Deferrals) and exempt from
Section 409A of the Code as a result of such reliance. To the extent that the Plan Administrator determines that the Company will pay severance benefits in a form other 

  
 -14- 

 
than a lump sum, any installment or monthly payment to which an employee is entitled under this Plan shall be considered a separate and distinct payment. In addition, (i) no amount payable
hereunder shall be payable unless the employee’s termination of employment constitutes a Separation from Service and (ii) if the employee is deemed at the time of his or her separation from service to be a “specified employee”
for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the termination benefits to which Eligible Participant is entitled under this Plan is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the employee’s termination benefits shall not be provided to the employee prior to the earlier of (A) the expiration of the six-month period measured from the
Eligible Participant’s Separation Date or (B) the date of the employee’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section 8 shall be paid in a lump sum to the employee without interest, and
any remaining payments due under this Plan shall be paid as otherwise provided herein. The determination of whether the employee is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his or
her Separation from Service shall be made by the Company in accordance with the terms of Section 409A of the Code (including without limitation Treas. Reg. Section 1.409A-1(i) and any successor provision thereto). To the extent applicable,
if payment of an amount under the Plan could be paid in one of two calendar years subject to the delivery of the Separation Agreement and it is determined that payment of such amount in the earlier of such two years could constitute noncompliance
with Section 409A of the Code, then such amount shall be paid in the later of such two years. 
  

	9.	STATEMENT OF ERISA RIGHTS 

 Eligible Participants in this Plan are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). ERISA provides that all plan Eligible Participants shall be entitled to: 

 

	 	•	 	Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the plan and a copy of the latest annual report (Form 5500 Series) filed by
the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. 

  

	 	•	 	Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the plan and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The
administrator may make a reasonable charge for the copies. 

  

	 	•	 	Obtain a complete list of the Employers sponsoring the Plan upon written request to the Plan Administrator. 

  
 -15- 

	 	•	 	Receive a summary of the Plan’s annual financial report, if any. The Plan Administrator is required by law to furnish each Eligible Participant with a copy of this summary annual report. 

Prudent Actions by Plan Fiduciaries 
 In addition to
creating rights for plan Eligible Participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do
so prudently and in the interest of all Plan Eligible Participants and beneficiaries. No one, including any Employer, any union, or any other person, may fire an employee or otherwise discriminate against him or her in any way to prevent them from
obtaining a benefit under this Plan or exercising their rights under ERISA. 
 Enforce Your Rights 

If an employee’s claim for a severance benefit is denied or ignored, in whole or in part, he or she has a right to know why this was done, to obtain
copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. 
 Under ERISA, there are steps an
employee can take to enforce the above rights. For instance, if he or she requests a copy of plan documents or the latest annual report from the plan and does not receive them within 30 days, he or she may file suit in a Federal court. In such a
case, the court may require the Plan Administrator to provide the materials and pay him or her up to $110 a day until he or she receives the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If
an employee has a claim for benefits which is denied or ignored, in whole or in part, he or she may file suit in a state or Federal court. In addition, if he or she disagrees with the Plan’s decision or lack thereof concerning the qualified
status of a domestic relations order or a medical child support order, he or she may file suit in Federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if an employee is discriminated against for asserting his or
her rights, he or she may seek assistance from the U.S. Department of Labor, or may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If an employee is successful the court may order the person he or she
has sued to pay these costs and fees. If the employee loses, the court may order him or her to pay these costs and fees, for example, if it finds the claim is frivolous. 
  

	10.	ASSISTANCE WITH QUESTIONS 

 If an employee has any questions about the Plan, he or she should contact the
Plan Administrator. If he or she has any questions about this statement or about his or her rights under ERISA, or if he or she needs assistance in obtaining documents from the Plan Administrator, he or she should contact the nearest office of the
Employee Benefits Security Administration, U.S. Department of Labor, listed in the telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution
Avenue N.W., Washington, D.C. 20210. An employee may also 

  
 -16- 

 
obtain certain publications about his or her rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration. 

  
 -17- 

 ADMINISTRATIVE INFORMATION 

REQUIRED BY ERISA 
  

			
	Plan Sponsor and Plan Administrator, including address and telephone:		 PayPal Holdings, Inc.
 Compensation Committee of
the
 PayPal Holdings, Inc. Board of Directors
 2211 North First
Street
 San Jose, CA 95131
 (408) 967-7400

		
	Name and address of person designated as agent for service of process:		 A. Louise Pentland
 Senior Vice President,
General Counsel and Secretary
 PayPal Holdings, Inc.
 2211
North First Street
 San Jose, CA 95131
 (408)
967-7400

		
	Basis on which Plan records are kept:		Calendar year - January 1 to December 31
		
	Type of Plan:		Unfunded welfare benefit severance plan
		
	Plan Number:		
		
	EIN:		[INSERT]

  
 -18- 

 Appendix A 

CIC Severance Pay Guidelines 
 Under the
Plan, Eligible Participants are entitled to: (i) the Severance Pay and (ii) the Premium Payment, to be calculated based on the Multiples identified below as applying to the Tier for which the Eligible Participant has been selected. 

 

													
	 Severance Pay and Premium Payment Calculations
	  	SVPs Direct
Reports	 	  	SVPs/
Certain VPs	 	  	VPS/
Fellows	 
	 Multiple of Salary
	  	 	2.0x	  	  	 	1.0x	  	  	 	0.5x	  
	 Multiple of Severance Bonus Amount
	  	 	2.0x	  	  	 	1.0x	  	  	 	0.5x	  
	 Multiple of Premium Payment
	  	 	24	  	  	 	12	  	  	 	6	  

 The Company will pay the Severance Pay and the Premium Payment in accordance with the terms of the Plan to which this
Appendix A is attached. 

  
 -19- 

 Appendix B 

Form of Separation Agreement 

[On file with the Company] 

  
 -20- 

 Schedule I1 

Designation of Eligible Participants, as of the Effective Date 

Direct Reports:2 

Chief Executive Officer 
 Senior Vice Presidents who are direct
reports to the Chief Executive Officer 
 SVPs/Certain VPs: 

Senior Vice Presidents not designated as Tier I Employees 
 Vice
Presidents who are specifically selected by the Compensation Committee to participate in this Plan as Tier II Employees 
 VPs/Fellows: 

All Vice Presidents not designated as Tier II Employees 
 Fellows

  

	1 	This Schedule is subject to change, from time to time, in the discretion of the Plan Administrator. 

	2 	Note: As of the Effective Date, all Senior Vice Presidents who are CEO Direct Reports are excluded from the Plan due to their holding Individual Agreements. 

  
 -21-

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