Document:

snwv_ex102

 

 

  Exhibit
10.2

   

 

 

LICENSE AND MARKETING AGREEMENT BY AND BETWEEN

 

CELULARITY INC.

 

AND

 

SANUWAVE HEALTH, INC.

 

AUGUST 6, 2020

 

 

 

 

1

 

 

TABLE OF CONTENTS

 

	

ARTICLE
1 DEFINITIONS

	

3

	

ARTICLE
2 LICENSES

	

8

	

ARTICLE
3 GOVERNANCE

	

9

	

ARTICLE
4 REGULATORY MATTERS

	

11

	

ARTICLE
5 COMMERCIALIZATION

	

12

	

ARTICLE
6 COMPENSATION

	

12

	

ARTICLE
7 INTELLECTUAL PROPERTY MATTERS

	

13

	

ARTICLE
8 REPRESENTATIONS AND WARRANTIES; COVENANTS

	

15

	

ARTICLE
9 INDEMNIFICATION

	

17

	

ARTICLE
10 CONFIDENTIALITY

	

17

	

ARTICLE
11TERM AND TERMINATION

	

19

	

ARTICLE
12 DISPUTE RESOLUTION

	

21

	

ARTICLE
13 MISCELLANEOUS

	

21

 

 

 

 

 

2

 

 

LICENSE AND MARKETING AGREEMENT

 

This LICENSE AND MARKETING AGREEMENT
(“Agreement”)
dated August 6, 2020 is entered by and between Celularity Inc., a Delaware corporation
having a principal place of business at 33 Technology Drive,
Warren, NJ 07059 (“Celularity”), and Sanuwave Health, Inc., a Nevada
corporation having a principal place of business at 3360 Martin
Farm Road, Suite 100, Suwanee, GA 30024 (“Sanuwave”). Sanuwave and
Celularity may each be referred to as a “Party” or collectively be referred
to as the “Parties.”

 

RECITALS

 

WHEREAS, Celularity owns or has rights
to placental based products, including intellectual property
relating thereto, and is willing to license such intellectual
property to Sanuwave, and Sanuwave desires to accept such
license;

 

WHEREAS, Celularity and Sanuwave desire
to establish a collaboration for the commercialization of Licensed
Products in the Field in the Territory (each, as defined below), in
accordance with the terms and conditions set forth
herein;

 

WHEREAS, as a condition for the closing
of a certain Asset Purchase Agreement (defined below) to be signed
between the Parties, Celularity and Sanuwave must enter into the
Agreement with the terms and conditions set forth herein;
and

 

NOW, THEREFORE, in consideration of the
foregoing premises and the mutual promises, covenants and
conditions contained in this Agreement, the Parties agree as
follows:

 

ARTICLE 1

DEFINITIONS

 

The
terms in this Agreement with initial letters capitalized, whether
used in the singular or the plural, shall have the meaning set
forth below or, if not listed below, the meaning designated
elsewhere in this Agreement (and derivative forms of them shall be
interpreted accordingly). The terms “include,”
“includes,” “including” and derivative
forms of them shall be deemed followed by the phrase “without
limitation” regardless of whether such phrase appears there
(and with no implication being drawn from its inconsistent
inclusion or non-inclusion).

 

“Acquired
Entity” has the meaning set forth in Section
2.2(e).

 

“Acquiring
Entity” has the meaning set forth in Section
2.2(d).

 

“Act”
means the Federal Food, Drug, and Cosmetic Act, as amended, and the
rules, regulations, guidelines and requirements of the FDA as may
be in effect from time to time.

 

“Affiliate”
means, with respect to a Person, any Person that controls, is
controlled by or is under common control with such first Person.
For purposes of this definition only, “control” means (a) to possess,
directly or indirectly, the power to direct the management or
policies of a Person, whether through ownership of voting
securities, by contract relating to voting rights or corporate
governance or otherwise, or (b) to own, directly or indirectly,
more than fifty percent (50%) of the outstanding securities or
other ownership interest of such Person. For the purposes of this
Agreement, neither Party shall be considered an Affiliate of the
other, and the Affiliates of each Party shall not be considered
Affiliates of the other Party or of any of such other Party’s
Affiliates.

 

“Agreement”
has the meaning set forth in the Preamble.

 

“Alliance
Manager” has the meaning set forth in Section
3.2.

 

“Asset
Purchase Agreement” means that certain Asset Purchase
Agreement entered into between the Parties, effective as of August
6, 2020 in connection with Sanuwave’s acquisition of
Celularity’s UltraMIST therapy business.

 

“Audited
Party” has the meaning set forth in Section
6.6.

 

“Auditing
Party” has the meaning set forth in Section
6.6.

 

“Bankrupt
Party” has the meaning set forth in Section
11.4.

 

“Bankruptcy
Code” has the meaning set forth in Section
11.4.

 

“Biovance”
means decellularized, dehydrated human amniotic membrane, as
produced according to the Celularity Technology as of the Effective
Date or thereafter, which are marketed under the Biovance
name.

 

3

 

 

“Business
Day” means any day (other than a Saturday, Sunday or a
legal holiday) on which banks are open for general business in New
York, NY.

 

“Celularity”
has the meaning set forth in the Preamble.

 

“Celularity
Indemnitees” has the meaning set forth in Section
9.2.

 

“Celularity
Know-How” means all Know-How Controlled by Celularity
as of the Effective Date or during the Term that is necessary or
useful for the Commercialization of the Licensed
Products.

 

“Celularity
Mark(s)” has the meaning set forth in Section
7.6(b).

 

“Celularity
Patents” means (i) the Patents listed in Exhibit A and (ii) any other
Patents in the Territory that issue from, or that claim the
priority of, any of the Patents listed in Exhibit A in the Field in the
Territory.

 

“Celularity
Technology” means the Celularity Know-How and the
Celularity Patents. For clarity, Celularity Technology shall not
include any intellectual property rights which are included in the
Acquired Assets as defined in the Asset Purchase
Agreement.

 

“Claims”
has the meaning set forth in Section 9.1.

 

“Commercialization
Plan” has the meaning set forth in Section
5.2.

 

“Commercialize”
or “Commercialization” means
activities, whether conducted by a Party by itself, through a
Sublicensee, an Affiliate or a Third Party acting on such
Party’s behalf, performed to package (from bulk to finished
form), label, advertise, market, promote, sell, offer for sale,
distribute, import or export Licensed Products.

 

“Commercially
Reasonable Efforts” means, with respect to either
Party’s obligations under this Agreement, the carrying out of
such activities with a level of effort and resources consistent
with the commercially reasonable practices of a similarly situated
company that would be applied to the packaging, labeling or
commercialization of a pharmaceutical product comparable to the
Licensed Product at a similar stage of commercialization, taking
into account, among such other things, product safety and efficacy,
product profile, the competitiveness of alternative products,
regulatory concerns, potential market and market size, proprietary
position and potential profitability.

 

“Competing
Product of Biovance” means any advanced biologic wound
care biological skin substitute product derived from the placenta
in the Field that is substantially similar to Biovance in
composition other than a Licensed Product.

 

“Competing
Product of Interfyl” means any advanced biologic wound
care biological integumental tissue replacement or supplementation
product derived from the chronic plate of the human placenta in the
Field that is substantially similar to Interfyl in composition
other than a Licensed Product.”

 

“Confidential
Information” of a Party means any and all information
of a confidential or proprietary nature disclosed by such Party to
the other Party under this Agreement or under the Prior CDA,
whether in oral, written, graphic or electronic form.

 

“Control”
means, with respect to any particular Know-How or Patent, that a
Party (a) owns or (b) has a license (other than a license granted
to such Party under this Agreement) to such Know-How or Patent and,
in each case, has the ability to grant to the other Party access, a
license, or a sublicense (as applicable) to such Know-How or Patent
on the terms and conditions set forth in this Agreement without
violating the terms of any then-existing agreement or other
arrangement with any Third Party.

 

“Cover”
means, with respect to a particular item and a particular Patent,
that such Patent claims or covers, in any of the countries of
manufacture, use, and/or sale, (a) the composition of such item,
any of its ingredients or formulations or any product containing or
that is made using such item (by virtue of such product containing
or being made using such item); (b) a method of making or using any
of the foregoing things referred to in (a); (c) an item used or
present in the manufacture of any of the foregoing things referred
to in (a); and/or (d) the method by which such item was discovered
or identified, or another item present during or used in such
method.

 

“Covered
Opportunity” has the meaning set forth in Section
2.6.

 

“COVID-19
Period” means the period from the Effective Date until
the earlier of (a) December 31, 2021 or (b) the date The Centers
for Disease Control and Prevention under the U.S. Department of
Health and Human Services has declared that the outbreak of the novel coronavirus known
as SARS-CoV-2 (“COVID-19”) has been contained in the United States
and is no longer a pandemic and there is no likelihood of a
resurgence of COVID-19 at a pandemic or epidemic
level.

 

“Dollar”
or “$” means a
USA dollar.

 

 

4

 

 

“Effective
Date” means the Closing Date of the Asset Purchase
Agreement as defined therein.

 

“Event
of Bankruptcy” has the meaning set forth in Section
11.4.

 

“Executive
Officer” means, with respect to Celularity, its Chief
Executive Officer or such Chief Executive Officer’s designee,
or such other person holding a similar position designated by
Celularity from time to time, and with respect to Sanuwave, its
Chief Executive Officer or such Chief Executive Officer’s
designee, or such other person holding a similar position
designated by Sanuwave from time to time.

 

“FD&C
Act” means the USA Federal Food, Drug and Cosmetic
Act, as amended.

 

“FDA”
means the USA Food and Drug Administration or any successor
entity.

 

“Field”
means the care and treatment of acute and/or chronic wounds,
limited to partial and full thickness burns, pressure ulcers,
venous ulcers, diabetic ulcers, chronic vascular ulcers,
tunnel/undermined wounds, surgical wounds (donor sites/grafts,
dehiscence), trauma wounds (abrasions, lacerations, second degree
burns, and skin tears), radiation induced wounds and burns,
post-operative wounds, and draining wounds. The Field is limited to
any wound care procedure performed in an operating room setting
related to debridement and/or wound cleansing with the application
of a biologic and procedures that are performed in the following
settings: Veteran Affairs (VA) medical facilities, wound care
clinics or chains, outpatient independent wound care centers,
outpatient hospital owned wound care centers, outpatient physician
offices, inpatient rehabilitation long term care facilities and
nursing homes.

 

“Governmental
Authority” means any multi-national, federal, state,
local, municipal, provincial or other governmental authority of any
nature (including any governmental division, prefecture,
subdivision, department, agency, bureau, branch, office,
commission, council, court or other tribunal).

 

“Government
Price Reporting” has the meaning set forth in Section
4.6.

 

“Improvements”
means an invention, idea, concept, formula, design, technique or
improvement (whether or not patentable or subject to any other form
of intellectual property right registration) to a Licensed Product
developed, conceived or reduced to practice subsequent to the date
hereof in the Field.

 

“Indemnified
Party” has the meaning set forth in Section
9.3.

 

“Indemnifying
Party” has the meaning set forth in Section
9.3.

 

“Infringement”
has the meaning set forth in Section 7.3(a).

 

“Infringement
Dispute” has the meaning set forth in Section
7.4(b).

 

“Initial
Term” has the meaning set forth in Section
11.1.

 

“Interfyl”
means human connective tissue matrix derived from the human
placenta, as produced according to the Celularity Technology as of
the Effective Date or thereafter, which may be (but is not
necessarily) formulated into particulates or a flowable
matrix.

 

“Joint
Steering Committee” or “JSC” means the committee formed by
the Parties as described in Section 3.1.

 

“JSC
Dispute” has the meaning set forth in Section
3.1(c)(i).

 

“Know-How”
means all technical information, data and know-how, including
inventions, discoveries, trade secrets, specifications,
instructions, processes, formulae, expertise, materials, methods,
protocols and other technology applicable to formulations,
compositions or products or to their manufacture, development,
registration, use or marketing or processes for their manufacture,
formulations containing them or compositions incorporating or
comprising them, and including all biological, chemical,
pharmacological, biochemical, toxicological, pharmaceutical,
physical and analytical, safety, quality control, manufacturing,
preclinical and clinical data, instructions, processes, formula,
and expertise.

 

“Knowledge”
means with respect to a Party, the actual knowledge of the
directors, officers or employees of such Party but without any duty
to conduct any investigation with respect to such facts or
information.

 

“Launch
Year” means, for each of the Licensed Products, (i)
with respect to the first Launch Year, the 12-month period
beginning on the first day of the calendar month immediately
preceding Sanuwave’s payment to Celularity of the first
Quarterly License Fee and (ii) with respect to any subsequent
Launch Year, the 12-month period beginning on the first day of the
relevant anniversary of the first Launch Year. Solely by way of
example, if the date of payment of the First Quarterly License Fee
occurs on August 15, 2020, the first Launch Year shall commence on
August 1, 2020 and each subsequent Launch Year shall commence on
August 1st of each subsequent year.

 

 

5

 

 

“Launch
Year Quarter” means the first three (3) calendar month
period, second three (3) calendar month period, third three (3)
calendar month period and fourth three (3) calendar month period,
in each case, commencing with the first day of each Launch Year.
Solely by way of example, if the Launch Year commences on August 1,
2020, the first Launch Year Quarter shall mean the period
commencing on August 1, 2020 and ending on October 31, 2020, the
second Launch Year Quarter shall mean the period commencing on
November 1, 2020 and ending on January 31, 2021, the third Launch
Year Quarter shall mean the period commencing on February 1, 2021
and ending on April 30, 2021 and the fourth Launch Year Quarter
shall mean the period commencing May 1, 2021 and ending on July 31,
2021.

 

“Laws”
means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of any federal, national,
multinational, state, provincial, county, city or other political
subdivision, domestic or foreign.

 

“Liabilities”
has the meaning set forth in Section 9.1.

 

“Licensed
Product” means each of Biovance and Interfyl and any
and all Improvements of each of them.

 

“Licensed
Products” shall mean Biovance and Interfyl,
collectively.

 

“Management
Change Transaction” has the meaning set forth in
Section 2.2(d).

 

“Market
Condition Change” means, for Biovance, at any time
during the first two (2) years of this Agreement, factors outside
the reasonable control of Sanuwave, including supply shortages or
outages, changes in any Governmental Authority or Regulatory
Authority regulation or reimbursement rate, and/or any Regulatory
Authority action which would adversely affect the Commercialization
of such Licensed Product in any material respect.

 

“Market
Condition Financial Terms” has the meaning set forth
in Section 6.3.

 

“Minimum
Sales Threshold” has the meaning set forth in Section
11.2(b)(i).

 

“Negotiation
Period” has the meaning set forth in Section
2.6.

 

“Non-Bankrupt
Party” has the meaning set forth in Section
11.4.

 

“Notice
of Interest” has the meaning set forth in Section
2.6.

 

“Party”
or “Parties” has
the meaning set forth in the Preamble.

 

“Patents”
means, collectively, (a) pending patent applications (and patents
issuing therefrom), issued patents, regional patents, utility
models and designs; and (b) reissues, divisions, substitutions,
confirmations, renewals, extensions, provisionals, registrations,
validations, re-examinations, additions, continuations, continued
prosecution applications, continuations-in-part, divisionals, or
any Supplementary Protection Certificates or restoration of patent
terms of or to any patents, patent applications, utility models or
designs, in each case being enforceable within the applicable
territory.

 

“Person”
means an individual, sole proprietorship, partnership, limited
partnership, limited liability partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or other similar entity
or organization, including a government or political subdivision,
department or agency of a government.

 

“Prior
CDA” means that certain Mutual Confidentiality
Agreement between the Parties dated October 17, 2019, as amended on
March 5, 2020.

 

“Product
Marks” has the meaning set forth in Section
7.6(a).

 

“Promotional
Materials” has the meaning set forth in Section
3.4.

 

 

6

 

 

“Quarterly
License Fee(s)” has the meaning set forth in Section
6.1.

 

“Regulatory
Clearances and/or Approvals” means all approvals
necessary for the commercial sale of a Licensed Product for any
indication in a given country or regulatory jurisdiction in the
Territory, which shall include satisfaction of all applicable
regulatory and notification requirements, and shall be deemed to
include any stockpiling by any Governmental Authority for civilian
or military use, but which shall exclude any pricing and
reimbursement approvals.

 

“Regulatory
Authority” means the FDA or any corollary agency or
Governmental Authority involved in granting Regulatory Clearances
and/or Approvals in any other country or jurisdiction in the
Territory.

 

“Regulatory
Materials” means regulatory applications, submissions,
notifications, communications, correspondence, registrations,
Regulatory Clearances and/or Approvals and/or other filings made
to, received from or otherwise conducted with a Regulatory
Authority in order to Develop, manufacture, market, sell or
otherwise Commercialize a Licensed Product in a particular country
or jurisdiction.

 

“Remedial
Action” has the meaning set forth in Section
4.5.

 

“Renewal
Term” has the meaning set forth in Section
11.1.

 

“Revenue”
has the meaning set forth in Section 7.3(e).

 

“Royalty
Credit” has the meaning set forth in Section
6.2(c).

 

“Royalty
Term” has the meaning set forth in Section
6.2(b).

 

“Safety
Data and Exchange Agreement” has the meaning set forth
in Section 4.5.

 

“Sales
Threshold Default” has the meaning set forth in
Section 11.2(b)(i).

 

“Sales
Threshold Default Notice” has the meaning set forth in
Section 11.2(b)(i).

 

“Sanuwave”
has the meaning set forth in the Preamble.

 

“Sanuwave
Indemnitees” has the meaning set forth in Section
9.1.

 

“Sanuwave
Note” means that certain Promissory Note, in the
original amount of $4,000,000, to be executed by Sanuwave in favor
of Celularity, as the same may be amended from time to time, in
connection with Asset Purchase Agreement.

 

“Sanuwave
Sublicense Agreement” has the meaning set forth in
Section 2.3(a).

 

“Secretary
Designee” has the meaning set forth in Section
3.1(d).

 

“Sell-Off
Period” has the meaning set forth in Section
11.7(c).

 

“Supply
Agreement” means any agreement entered into between
the Parties for the supply by Celularity of a Licensed Product to
Sanuwave.

 

“Term”
has the meaning set forth in Section 11.1.

 

 

7

 

 

“Territory”
means worldwide, excluding the People’s Republic of China
(including Taiwan, Hong Kong and Macau), Japan, the Republic of
South Korea, India, Sri Lanka, Thailand, Myanmar, Malaysia,
Vietnam, Cambodia, Laos, Philippines, Indonesia and
Singapore.

 

“Third
Party” means any Person not including the Parties or
the Parties’ respective Affiliates.

 

“Unit”
or “Units” means
any Licensed Product sold, provided or disposed by Sanuwave, its
Affiliates or its Sublicensees to Third Parties anywhere within the
Territory, including sales, provisions and dispositions to
wholesale distributors, regardless of whether such Licensed Product
is sold, provided or otherwise disposed of for consideration other
than cash or in a transaction that is not at arm’s length
between the buyer and the seller and further regardless of whether
such Licensed Product is subsequently returned other than a
material defect to such Licensed Product which is directly
attributable to Celularity. For clarity, the term
“Unit” includes Licensed Products provided to Third
Parties without charge, in connection with research and
development, clinical trials, compassionate use, humanitarian and
charitable donations, or indigent programs or for uses as samples
or for promotional purposes.

 

“USA”
or “United
States” means the United States of America, including
all possessions and territories thereof.

 

ARTICLE 2

LICENSES

 

2.1.

Licenses
to Sanuwave.

 

(a) Subject
to the terms and conditions of this Agreement, Celularity hereby
grants to Sanuwave during the Term an exclusive, royalty-bearing
license, with the right to sublicense solely as provided in Section
2.3, under the Celularity Technology, to Commercialize, including
to use, offer for sale, sell, package, label, distribute, import
and export Biovance in the Field in the Territory.

 

(b) Subject
to the terms and conditions of this Agreement, Celularity hereby
grants to Sanuwave during the Term a non-exclusive, royalty-bearing
license, with the right to sublicense solely as provided in Section
2.3, under the Celularity Technology, to Commercialize, including
to use, offer for sale and sell, package, label, distribute, import
and export Interfyl in the Field in the Territory.

 

(c) Sanuwave
shall not, and shall not permit any of its Affiliates to, use or
practice any Celularity Technology outside the scope of the license
granted to it under Section 2.1(a) and Section 2.1(b). Celularity
hereby expressly retains for itself and others exclusive rights
under the Celularity Technology to manufacture Licensed Products
for Sanuwave pursuant to a Supply Agreement to be entered between
the Parties as of the Effective Date to address the supply of
Licensed Products.

 

(d) Sanuwave
may not enhance, decompile, disassemble, improve, modify, change,
reverse assemble or reverse engineer Licensed Products or any part
thereof, except as set forth in the Supply Agreement.

 

2.2.

Exclusivity.

 

(a) As
partial consideration for the grant of rights set forth in Section
2.1(a) and 2.2(b), Sanuwave agrees that during the Term of this
Agreement, it and its Affiliates shall not, directly or indirectly,
Develop or Commercialize any Competing Product of Biovance or any
Competing Product of Interfyl in the Field in the
Territory.

 

(b) Subject
to Section 2.2(d), 2.2(e) and 2.2(f), as partial consideration for
the services to be performed by Sanuwave hereunder, Celularity
agrees that during the Term of this Agreement, it shall not
Commercialize any Competing Product of Biovance in the Field in the
Territory.

 

(c) This
Section 2.2 shall not limit the right of Celularity, or any Third
Party, to directly or indirectly Commercialize
Interfyl.

 

(d) Nothing
in this Section 2.2 shall prohibit any Acquiring Entity of
Celularity or any of its respective Affiliates or sublicensees from
continuing, furthering or performing (i) any activities in which it
was engaged prior to the effective date of a Management Change
Transaction or (ii) any activities relating to products developed
by an Acquiring Entity or Celularity without accessing or
practicing technology or information made available to Sanuwave
under this Agreement; provided,
however, the continuation, furtherance or performance of any
of such activities will not in any way breach Celularity’s
obligations under this Agreement or violate Sanuwave’s rights
and licenses granted under this Agreement. For purposes of this
Section 2.2(d), (x) “Management Change Transaction”
shall mean a transfer to a Third Party of all or substantially all
of Celularity’s assets to which this Agreement relates, or
the merger or consolidation with, or acquisition of Celularity by a
Third Party and (y) “Acquiring Entity” shall mean such
Third Party described in clause (x).

 

(e) Nothing
in this Section 2.2 shall prohibit Celularity, Sanuwave or any of
their respective Acquired Entities from continuing, furthering or
performing (i) any activities in which an Acquired Entity was
engaged prior to the effective date of a Subject Transaction or
(ii) any activities relating to products developed by an Acquired
Entity, Celularity or Sanuwave without accessing or practicing
technology or information made available to Sanuwave under this
Agreement; provided,
however, the continuation, furtherance or performance of any
of such activities will not in any way breach the obligations of
Celularity or Sanuwave, as the case may be, under this Agreement or
violate either party’s respective rights granted under this
Agreement. For purposes of this Section 2.2(e), (x)
“Subject
Transaction” shall mean a transfer to Celularity or
Sanuwave, as the case may be, by a Third Party of all or
substantially all of such Third Party’s assets, or the merger
or consolidation with, or acquisition of, a Third Party by
Celularity or Sanuwave, as the case may be, and (y)
“Acquired
Entity” shall mean such Third Party described in
clause (x).

 

 

8

 

 

(f) The
exclusivity rights provided to Sanuwave under Section 2.2(b) shall
not commence until Sanuwave has fully settled its obligations owed to Celularity as set
forth in the Sanuwave Note and thereafter shall be expressly
contingent on Sanuwave’s timely payment of the License Fees pursuant to
Section 6.1. In addition to all other remedies available to
Celularity, Sanuwave’s exclusivity rights shall be
irrevocably terminated for failure to timely pay the undisputed
License Fees pursuant to Section 6.1 and such breach has not been
cured within forty-five (45) days of the date for which such
payment was due to Celularity

 

2.3.

Sanuwave
Sublicense Rights.

 

(a) Sanuwave shall have the right to
grant sublicenses of the licenses granted in Section 2.1(a) and
Section 2.1(b) to (i) its Affiliates without the consent of
Celularity and (ii) any Third Party for the sole purpose of
providing services directly to Sanuwave, so that Sanuwave may
perform its rights and/or obligations of Sanuwave hereunder (but
which, for the avoidance of doubt, shall not include a wholesale
sublicense of the licenses granted in Section 2.1(a) for purposes
of transferring Sanuwave’s rights and obligations hereunder
in their entirety), upon the prior written consent by Celularity,
which shall not be unreasonably withheld or delayed (each such
sublicense, a “Sanuwave
Sublicense Agreement”); provided, however, if
Celularity fails to respond to Sanuwave within ten (10) days from
the date of Sanuwave’s notice to Celularity of a potential
Third Party sublicensee, such consent requirement shall be deemed
waived and Sanuwave may grant a sublicense to such sublicensee
Sanuwave shall remain primarily responsible for all of its
Affiliates’ and sublicensees’ activities and any and
all failures by its Affiliates and/or sublicensees to comply with
the applicable terms of this Agreement.

 

(b) Sanuwave
shall, within thirty (30) days after granting any Sanuwave
Sublicense Agreement, notify Celularity of the grant of such
sublicense and provide Celularity with a true and complete copy of
the Sanuwave Sublicense Agreement. Each Sanuwave Sublicense
Agreement shall be consistent with the terms and conditions of this
Agreement and the Affiliate shall be bound by and subject to all
applicable terms and conditions of this Agreement in the same
manner and to the same extent as Sanuwave is bound
thereby.

 

2.4.

Third
Party Licenses.

 

(a) For
the avoidance of doubt, Celularity shall be responsible for payment
obligations to Third Parties for Patents and Know-How within the
Celularity Technology that are licensed to Celularity by a Third
Party prior to the Effective Date, if any. Sanuwave hereby
acknowledges and agrees that its sublicense under such in-licensed
Celularity Technology (if any) is subject to the terms and
conditions of the applicable license agreement governing
Celularity’s license of such in-licensed Celularity
Technology.

 

(b) The
responsibility, necessity and handling of any Third Party license
required as a result of Improvements to a Licensed Product after
the Effective Date shall be agreed upon by the JSC, provided that
Sanuwave shall have the right to negotiate any third party license
agreement that is required as a result of any Improvement to the
Celularity Technology, subject to (i) information sharing with
Celularity, including apprising Celularity of any offers made by
Third Parties, the substance of such offer, the status of any
negotiations with Third Parties and any other information regarding
such Third Party license as reasonably requested by Celularity and
(ii) Celularity’s prior written consent of such Third Party
license agreement, which shall not be unreasonably withheld or
delayed. The costs associated with any Third Party license
agreement shall be allocated as follows: (x) if such Third Party
license is required in order to Commercialize the Licensed Products
developed based upon the Celularity Technology existing on the
Effective Date, the costs of such Third Party license shall be
divided equally between the Parties, and (y) if such Third Party
license is required in order to Commercialize Licensed Products
developed based upon the Celularity Technology made on or after the
Effective Date, the costs of such Third Party license shall be the
sole responsibility of Sanuwave. Sanuwave may deduct up to fifty
percent (50%) of the amount of royalties paid by Sanuwave to a
Third Party for such license against amounts payable to Celularity
hereunder, but in no event shall Sanuwave deduct an amount greater
than fifty percent (50%) of any payment of the royalties due and
payable to Celularity for the Licensed Products in accordance with
Article 6 below. For the avoidance of doubt, any portion of
Sanuwave’s royalties paid to Third Parties under for such
license with respect to such Licensed Product would, but for the
foregoing limitation on royalty reductions, be entitled to deduct
under this Section 2.4(b) shall be carried over and applied against
royalties payable to Celularity in respect of such Licensed Product
in subsequent years until the full deduction is taken.

 

2.5. Celularity
Retained Rights. The licenses granted by Celularity under
this Agreement are limited to those grants specifically set forth
in Section 2.1(a), Section 2.1(b) and Section 7.6(b). Nothing in
this Agreement will be construed to grant any rights or licenses to
any other intellectual property rights of Celularity. All rights,
licenses, benefits and privileges not expressly granted to Sanuwave
hereunder are reserved by Celularity. For the avoidance of doubt,
Celularity shall retain all rights in all Celularity intellectual
property (including the Celularity Technology) (i) outside the
Field in the Territory and (ii) in any field (including the Field)
outside the Territory.

 

2.6. Right
of First Offer/Option to Enter into an Exclusive License and
Marketing Agreement. As of the Effective Date of this
Agreement, Celularity grants to Sanuwave a right of first offer (on
the terms and conditions set forth in this Section 2.6) with
respect to the Commercialization of any Competing Product of
Biovance or Competing Product of Interfyl Developed by Celularity
and any other wound care biologic products in the Field in the
Territory Developed by Celularity during the Term (each, a
“Covered
Opportunity”). Celularity will promptly notify
Sanuwave in writing of each Covered Opportunity. If, within thirty
(30) Business Days of receiving such notice from Celularity,
Celularity receives a notice in writing from Sanuwave that Sanuwave
wishes to enter into negotiations of an exclusive license and
marketing agreement (the “Exclusive License”) for the
Commercialization of the Covered Opportunity (the
“Notice of
Interest”), then Celularity shall negotiate
exclusively with Sanuwave in good faith for a period of ninety (90)
days from the date of Celularity’s notice to Sanuwave of the
Covered Opportunity (or such longer period of time as may be agreed
to by the Parties in writing) (the “Negotiation Period”) with respect
to the Exclusive License. If (a) Sanuwave indicates in writing that
it does not wish to enter into negotiations regarding such Covered
Opportunity, (b) Celularity fails to receive a Notice of Interest
within the thirty (30) Business Day period described above, or (c)
the Parties have not entered into such an Exclusive License by the
end of the Negotiation Period, then (i) Celularity shall be free to
Commercialize the Covered Opportunity itself and/or enter into one
or more agreements regarding the Covered Opportunity with any Third
Party and (ii) the restrictions set forth in Section 2.2(b) shall
automatically terminate solely with respect to Celularity’s
Commercialization of such Covered Opportunity.

 

ARTICLE 3

GOVERNANCE

 

3.1.

Joint Steering Committee.

 

(a) Within
30 days after the Effective Date, the Parties shall establish a
joint steering committee (the “Joint Steering Committee” or
“JSC”). The JSC
shall oversee the performance of the Parties’ activities
under this Agreement and provide a forum for sharing advice,
progress, and results relating to such activities and shall attempt
to facilitate the resolution of any disputes between the
Parties.

 

 

9

 

 

(b) Membership;
Meetings. The JSC shall be composed of three (3) members
from each of Celularity and Sanuwave or such equal number of
members as the Parties may agree, and shall meet, in person, by
teleconference, or by video-teleconference, at least one (1) time
per calendar quarter, or more or less often as unanimously agreed
by both Parties’ JSC members (provided that in any event, the
Parties meet at least one (1) time per year in person). Either
Party may reasonably call a meeting upon no less than fifteen (15)
Business Days’ notice. In-person meetings shall alternate
between Celularity and Sanuwave locations, or as mutually agreed
upon by the Parties. Each Party shall be responsible for all of its
own personnel and travel costs and expenses relating to
participation in JSC meetings. The first such meeting shall be
within sixty (60) days after the Effective Date. Any member of the
JSC may designate a substitute to attend with prior written notice
to the other Party. Ad hoc guests who are subject to written
confidentiality obligations commensurate in scope to the provisions
in Article 10 may be invited, upon prior joint consent of Sanuwave
and Celularity, to the JSC meetings. Each Party may replace its JSC
members with other of its employees, at any time, upon written
notice to the other Party.

 

(c) Decision-Making;
Limitations on JSC; JSC Disputes. Decisions of the JSC shall
be made by unanimous vote or written consent, with each Party
having collectively one vote in all decisions. The presence of at
least one (1) JSC member representing each Party shall constitute a
quorum in order for decisions to be made. The JSC shall have only
such powers as are specifically delegated to it in this Agreement,
and such powers shall be subject to the terms and conditions set
forth herein. Amendments or changes to this Agreement shall be
valid and binding only upon mutual written agreement of the Parties
in accordance with Section 13.1 and the JSC shall have no authority
to amend, change or modify the terms and conditions of this
Agreement. The JSC shall use reasonable best efforts to resolve the
matters within its roles and functions or otherwise referred to
it.

 

(i) If,
with respect to a matter that is subject to the JSC’s
decision-making authority: (i) the JSC cannot reach consensus
within five (5) Business Days after it has met and attempted to
reach such consensus or (ii) the Parties cannot reach consensus on
whether the JSC has decision-making authority regarding a matter
within three (3) Business Days after such matter was first raised
by either Party (each of the foregoing cases, a “JSC Dispute”); then in each such
instance, the JSC Dispute in question shall be referred to the
Executive Officer, or designee, of Celularity and the Executive
Officer, or designee, of Sanuwave for resolution. The Executive
Officers, or designees, shall use reasonable efforts to resolve the
JSC Dispute referred to them.

 

(ii) If
the Executive Officers, or designees, are unable to resolve the JSC
Dispute within five (5) Business Days, the provisions of this
Section 3.1(c)(ii) shall control:

 

(1) if
the JSC Dispute solely relates to the Commercialization, packaging,
marketing, promotion, distribution, sales channels, commercial
launch or sale of Licensed Products, any Promotional Materials used
in connection with any Licensed Product, Commercialization Plan (as
defined in Section 5.2) or any use or purported use of the
Celularity Marks, and the Executive Officers cannot resolve the
matter within five (5) Business Days, then the matter shall be
decided by the Executive Officer, or designee, of Sanuwave in good
faith, giving appropriate consideration to the reasonable business,
regulatory and scientific concerns of Celularity; and

 

(2) if
the JSC Dispute solely relates to an intellectual property,
manufacturing and/or regulatory matter (in each case excluding any
dispute to the extent relating to any matters which are the subject
of Section 7.4) and the Executive Officers cannot resolve the
matters within five (5) Business Days, then the matter shall be
decided by the Executive Officer, or designee, of Celularity in
good faith, giving appropriate consideration to the reasonable
business concerns of Sanuwave and without limiting Sanuwave’s
rights and licenses under this Agreement.

 

(3) Notwithstanding
Sections 3.1(c)(ii)(1) and 3.1(c)(ii)(2) above, any dispute
relating to Article 6 or any financial term of this Agreement,
shall be excluded from the provisions of this Section 3.1(c)(ii)
and shall be conclusively settled in accordance with Article 12
below.

 

(iii) Any
JSC Dispute that is not covered by 3.1(c)(ii) or resolved pursuant
to Section 3.1(c)(i) or Section 3.1(c)(ii) shall be conclusively
settled in accordance with Article 12 below. For all purposes under
this Agreement, any decision made pursuant to this Section 3.1(c)
shall be deemed to be the decision of the JSC.

 

(d) Secretary;
Agenda; Minutes. The Chairperson of the JSC shall be
designated by Celularity. Sanuwave shall designate a secretary of
the JSC (the “Secretary
Designee”) who will be responsible for calling
meetings and preparing and circulating an agenda in advance of each
meeting. The Secretary Designee shall solicit agenda items from JSC
members and provide an agenda along with appropriate information
for such agenda reasonably in advance of any meeting. It is
understood that such agenda will include all items reasonably
requested by any JSC member for inclusion therein. Additionally,
the Secretary Designee shall be responsible for preparing and
circulating minutes within 15 days after each meeting of the JSC
setting forth, among other things, a description, in reasonable
detail, of the discussions at the meeting and a list of any
actions, decisions, or determinations approved by the JSC. Such
minutes shall be effective only after being approved by both
Parties. Definitive minutes of all JSC meetings shall be finalized
no later than 30 days after the meeting to which the minutes
pertain.

 

3.2. Alliance
Managers. Promptly after the Effective Date, each Party
shall appoint an individual to act as the alliance manager for such
Party (each, an “Alliance
Manager”) (who may be a member of the JSC). Each
Alliance Manager shall thereafter be permitted to attend meetings
of the JSC as a nonvoting observer (if not a member), subject to
the confidentiality provisions of Article 10. The Alliance Managers
shall be the primary point of contact for the Parties regarding the
activities contemplated by this Agreement and shall facilitate
communication regarding all activities hereunder. The Alliance
Managers shall lead the communications between the Parties and
shall be responsible for following-up on decisions made by the JSC.
The name and contact information for such Alliance Manager, as well
as any replacement(s) chosen by Celularity or Sanuwave, in their
sole discretion, from time to time, shall be promptly provided to
the other Party in accordance with Section 13.3.

 

3.3. Commercial
Launch Team. Within thirty (30) days of the Effective Date,
Sanuwave shall establish a commercial launch team with respect to
the Commercialization of Licensed Products, and shall invite at
least two (2) employees of Celularity, or such number as the
Parties may agree, to participate in such commercial launch team
and Sanuwave shall consider in good faith, any advice, comments or
recommendations given by the Celularity participants. The
commercial launch team shall, among other things, provide the
Parties with technical and other related support with respect to
Commercialization, as well as recommendations in connection
therewith.

 

 

10

 

 

3.4. Promotional
Materials. Sanuwave will not use any Promotional Materials
in connection with the marketing, sale or distribution of the
Licensed Products until after such Promotional Materials have been
reviewed by the JSC and by Celularity, as needed, and Sanuwave has
considered in good faith any comments of the JSC and Celularity,
except that Sanuwave may use, without such review, in its
introduction announcements to the trade, bill sheets and product
catalog Promotional Materials that incorporate only the Licensed
Product’s name, launch date, available packaging
configurations, and the pricing and delivery terms and the Training
Materials (as defined below), which will be provided by Celularity
to Sanuwave upon Sanuwave’s reasonable request without
excessive and undue burden on Celularity. For purposes of clarity,
Celularity shall have final discretion to approve the content of
all Promotional Materials in accordance with Section 3.1(c)(ii)(1)
above. For purposes of this Agreement, “Promotional Materials” means all
labeling and advertising materials as defined in the Act and the
regulations of the FDA thereunder and all training materials
relating to the marketing, sale or distribution of the Licensed
Products (“Training
Materials”). For the purposes of clarity, as
applicable, Sanuwave will be responsible for the filing of
Promotional Materials with the FDA as directed by Celularity or as
otherwise required by applicable Law.

 

ARTICLE 4

REGULATORY MATTERS

 

4.1. Regulatory
Activities. Celularity shall file and own all right, title
and interest in all Regulatory Materials designed to obtain or
support such Regulatory Clearances and/or Approvals. Upon
Celularity’s reasonable request and expense, Sanuwave shall
cooperate fully with, and provide assistance to, Celularity in
connection with the activities set forth in this Article
4.

 

4.2. Regulatory
Reports; Meetings with Regulatory Authorities. Each Party
shall keep the other Party informed of material regulatory
developments relating to Licensed Products in the Territory through
regular reports at the JSC meetings. Each Party shall provide to
the other Party, for review and comment, draft material regulatory
filings solely relating to the Licensed Products at least twenty
(20) Business Days in advance of their intended date of submission
to the extent possible and on a rolling basis as needed to any
Regulatory Authority in any country or jurisdiction and shall
consider any comments provided by such other party. Each Party
shall notify the other Party as soon as practical of any Regulatory
Materials (other than routine correspondence) submitted to or
received from any Regulatory Authority in any jurisdiction relating
directly or indirectly to the Licensed Products and shall provide
the other Party with copies thereof within twenty (20) Business
Days after submission or receipt. Each Party shall provide the
other Party with reasonable advance notice of all meetings,
conferences and discussions scheduled with any Regulatory Authority
in any country or jurisdiction concerning a Licensed Product to the
extent such meeting, conferences and discussions affects this
Agreement and/or such other Party’s obligations hereunder,
and shall consider any input from the other Party in preparing for
such meetings, and if permitted by the relevant Regulatory
Authority, appropriate personnel from such other Party may have the
right to attend such meetings, conferences or discussions at each
Party’s own expense.

 

4.3. Notification
of Threatened Action. Each Party shall immediately notify
the other Party of any information it receives regarding any
threatened or pending action, inspection or communication by or
from any Third Party, including a Regulatory Authority, which may
materially affect the Commercialization or regulatory status of a
Licensed Product. Upon receipt of such information, the Parties
shall consult with each other in an effort to arrive at a mutually
acceptable procedure for taking appropriate action.

 

4.4. Adverse
Event Reporting and Safety Data Exchange. As soon as
practical, the Parties shall enter into a commercially reasonable
pharmacovigilance agreement (the “Safety Data and Exchange
Agreement”). The Safety Data and Exchange Agreement
shall include customary guidelines and procedures for the receipt,
investigation, recordation, communication, and exchange (as between
the Parties) of adverse event reports, pregnancy reports, and any
other information concerning the safety of any Licensed Product.
Such guidelines and procedures shall be in accordance with, and
enable the Parties to fulfill, local and national regulatory
reporting activities under applicable Laws. Furthermore, such
agreed procedure shall be consistent with relevant guidelines of
the International Conference on Harmonisation, except where such
guidelines may conflict with existing local regulatory reporting or
safety reporting requirements, in which case the local reporting
requirements shall prevail. The Safety Data and Exchange Agreement
shall provide for an adverse event database for Licensed Products
in the Territory to be maintained by Celularity. Celularity shall
be responsible for reporting quality complaints, adverse events and
safety data related to Licensed Products to applicable Regulatory
Authorities in the Territory, as well as responding to safety
issues and to all requests of Regulatory Authorities relating to
Licensed Products in the Territory. Each Party hereby agrees to
comply with its respective activities under such Safety Data and
Exchange Agreement and to cause its Affiliates which perform such
Party’s obligations under this Agreement to comply with such
activities.

 

4.5. Remedial
Actions. Each Party shall notify the other Party
immediately, and promptly confirm such notice in writing, if it
obtains information indicating that any Licensed Product may be
subject to any recall, corrective action or other regulatory action
with respect to a Licensed Product taken by virtue of applicable
Laws (a “Remedial
Action”). The Parties shall assist each other in
gathering and evaluating such information as is necessary to
determine the necessity of conducting a Remedial Action, provided
that before taking action, Celularity shall consult with Sanuwave
as to the course of the Remedial Action to be taken. If Sanuwave
disagrees with Celularity as to whether Remedial Action should be
taken or what Remedial Action is appropriate, then the Executive
Officers of both parties shall convene within twenty-four (24)
hours in an attempt to resolve the disagreement. If the
disagreement cannot be resolve by them, then then the matter shall
be decided by the Executive Officer, or his or her designee, of
Celularity in good faith, giving appropriate consideration to the
reasonable business concerns of Sanuwave and without limiting
Sanuwave’s rights and licenses under this Agreement.
Notwithstanding the above, the Parties shall comply with all orders
of the FDA or any other applicable authority on a timely basis. The
cost of any Remedial Action shall be borne by Celularity.
Celularity shall, and shall ensure that its Affiliates will,
maintain adequate records to permit the Parties to trace the
distribution and use of the Licensed Products. Celularity shall
have the right to decide whether any Remedial Action with respect
to any Licensed Product should be commenced and Celularity shall,
at its expense, control and coordinate all efforts necessary to
conduct such Remedial Action. Upon Celularity’s reasonable
request, Sanuwave shall reasonably cooperate with, and provide
reasonable assistance to, Celularity in connection with any
activities undertaken by Celularity pursuant to the immediately
preceding sentence, at Celularity’s sole cost and
expense.

 

4.6. Rebate
Processing and Government Price Reporting. Sanuwave will be
solely responsible for all federal, state and local government and
private purchasing, pricing or reimbursement programs with respect
to the Licensed Products, including taking all necessary and proper
steps to execute agreements and file other appropriate reports and
other documents with Governmental Authorities and private Persons
and Celularity shall provide reasonable assistance to Sanuwave to
effectuate the same. Sanuwave shall be solely responsible for
payment and processing of all discounts, rebates, and fees, whether
required by contract or Laws, for the Licensed Products. For the
avoidance of doubt, with respect to Licensed Products, Sanuwave
shall report all applicable data, including price, rebate and
discount data to the Centers for Medicare and Medicaid Services,
data to the Department of Veterans Affairs and any other pricing or
reimbursement related data required by Governmental Authorities
under applicable Laws (“Government Price Reporting”).
Sanuwave’s Government Price Reporting shall comply with all
applicable Laws and contracts. Sanuwave shall pay the rebates,
chargebacks, discounts, and fees for the Licensed Products as
required by applicable Laws and contracts. If Celularity notifies
Sanuwave that it is required to refer to Licensed Products sales
made by Sanuwave, or other reimbursement or
Commercialization-related data maintained by Sanuwave under this
Agreement, in Celularity’s reports to Governmental
Authorities, Sanuwave shall provide Celularity with required sales
figures or other data for Licensed Products sales made by Sanuwave,
and Celularity shall be entitled to use such data or information
that Sanuwave provides under this Section 4.6 or otherwise for
complying with Celularity’s required reports to Governmental
Authorities.

 

 

11

 

 

ARTICLE 5

COMMERCIALIZATION

 

5.1. Commercialization
Responsibilities. During the Term, Sanuwave shall use
Commercially Reasonable Efforts to, and shall be responsible for,
all aspects of, the Commercialization of Licensed Products for all
indications in the Field throughout the Territory. Such
Commercialization responsibilities for each Licensed Product shall
include: (a) developing and executing a Commercialization Plan for
each Licensed Product; (b) negotiating with applicable Governmental
Authorities and private Third Party payers regarding the price and
reimbursement status of each Licensed Product; (c) marketing and
promotion; (d) booking sales and distribution and performance of
related services; (e) handling all aspects of order processing,
invoicing and collection, inventory and receivables; (f) providing
customer support, including handling medical queries, and
performing other related functions; and (g) conforming its
practices and procedures to applicable Laws relating to the
marketing, detailing and promotion of each Licensed Product in the
Territory, in each case, unless otherwise expressly provided in
this Agreement, as determined by Sanuwave in its sole discretion;
provided, however, that Sanuwave shall promptly inform and provide
Celularity with any material developments, updates and
documentation related to Sanuwave’s obligations set forth in
this Section 5.1(a)-(g). Sanuwave shall bear all of the costs and
expenses incurred in connection with such Commercialization
activities.

 

5.2. Commercialization
Plan. The strategy for the Commercialization of each
Licensed Product shall be described in a comprehensive plan that
describes the pre-launch, launch and subsequent Commercialization
activities for such Licensed Product in the Territory, which shall
include, without limitation, (i) the annual anticipated number of
details to be conducted in each country within the Territory, (ii)
the annual anticipated marketing expenses to be incurred in each of
the countries within the Territory, (iii) the annual anticipated
number of FTEs to be assigned to Commercialize in each of the
countries within the Territory, and (iv) a report on pricing,
advertising, education, planning, marketing, and sales force
training (the “Commercialization Plan”). An
initial Commercialization Plan for Biovance shall be prepared by
Sanuwave and presented to the JSC as soon as practicable, but in
any event, within ninety (90 days) of the Effective Date or such
other time agreed to by the JSC. The Parties shall, and shall cause
their respective members of the JSC to, cooperate with each other
in good faith to promptly finalize a mutually acceptable
Commercialization Plan for each Licensed Product. Sanuwave shall
deliver an updated Commercialization Plan for each Licensed
Product, as applicable, at each meeting of the JSC or at such times
as agreed to by the JSC.

 

5.3. Commercial
Diligence. During the Term, Sanuwave shall use Commercially
Reasonable Efforts to Commercialize each Licensed Product in the
Field throughout the Territory, in each case as contemplated by the
applicable Commercialization Plan or as otherwise mutually agreed
upon by the Parties in writing.

 

5.4. Records
and Reports. Sanuwave shall maintain complete, current and
accurate records of all work conducted by it or its Affiliates
under each Commercialization Plan. At each quarterly JSC meeting,
Sanuwave shall provide all written updates that Sanuwave has
provided to its management team during the previous calendar
quarter with respect to the Commercialization of the Licensed
Products and all other information reasonably requested by
Celularity, including but not limited to, an update of all work
conducted by it or its Affiliates under each Commercialization Plan
during the previous calendar quarter.

 

ARTICLE 6

COMPENSATION

 

6.1. License
Fee. As partial
consideration for the rights granted to Sanuwave pursuant to
Section 2.1(a), Sanuwave shall pay to Celularity the license fees
set forth on Schedule
6.1(a) hereto following the Effective Date (each, a
“Quarterly License
Fee,” and, collectively, the “Quarterly License Fees”), provided
that if a Market Condition Change occurs in a Launch Year that a
Quarterly License Fee is due and payable, the Parties shall
negotiate and mutually agree upon an alternative Quarterly License
Fee in accordance with Section 6.3 below. Other than the first
Quarterly License Fee, which shall be due within fifteen (15) days
from the Effective Date, Sanuwave shall pay to Celularity each
Quarterly License Fee for each Launch Year Quarter due and payable
ten (10) days prior to the first day of each Launch Year
Quarter.

 

6.2. Royalties.

 

(a) Royalty Rates. Sanuwave shall pay to
Celularity royalties for each Unit, on a Product-by-Product basis,
as set forth on Schedule
6.2; provided that if a Market Condition Change occurs in a
Launch Year Quarter that royalties are due and payable, the Parties
shall negotiate and mutually agree upon an alternative royalty rate
in accordance with Section 6.3 below.

 

(b) Royalty Term. Royalties shall be due
under this Section 6.3 during the period of time beginning from the
Effective Date until the termination or expiration of this
Agreement in accordance with Article 11, below, including through
any Sell-Off Period (if applicable) in accordance with Section
11.7(c) (the “Royalty
Term”).

 

(c) Biovance Royalty Credit. Sanuwave shall
be provided a credit equal to the total License Fee for each Launch
Year Quarter equal to the Quarterly License Fee actually paid by
Sanuwave to Celularity pursuant to Section 6.1 (each, a
“Royalty
Credit”). Each Royalty Credit shall be deducted from
the total royalty payment owed to Celularity by Sanuwave for each
Biovance Unit pursuant to Section 6.2(d). For the avoidance of
doubt, the Royalty Credit shall not be deduced from the royalty
payments owed for Interfyl (as described in Schedule 6.2) sold by
Sanuwave.

 

(d) Reports and Royalty Payments. Within
thirty (30) days following the end of each Launch Year Quarter,
Sanuwave shall provide Celularity with a report containing the
following information for the applicable Launch Year Quarter on a
Licensed Product-by-Licensed Product basis: (i) the number of sales
of such Licensed Product by Sanuwave and its Affiliates in the
Territory for each Unit, and (ii) a calculation of the royalty
payment due on such sales. Contemporaneously with the delivery of
the applicable quarterly report, Sanuwave shall pay in Dollars all
amounts due to Celularity pursuant to Section 6.3(a) for such
Launch Year Quarter, less the Royalty Credit pursuant to Section
6.2(c).

 

6.3. Market
Condition Change. In the event of a Market Condition Change,
the Parties shall negotiate in good faith and mutually agree upon
an alternative (i) Quarterly License Fee for a Launch Year and (ii)
Minimum Sales Threshold (as defined below) to account for such
Market Condition Change (the “Market Condition Financial
Terms”), provided that unless otherwise agreed by the
Parties, such Market Condition Financial Terms shall not be reduced
by more than fifty percent (50%) of the then-current financial
terms set forth in this Article 6 and provided further that, once
such Market Condition Change is cured, the Market Condition
Financial Terms shall automatically expire as of the end of the
calendar year in which the Market Condition Change occurred, and
the terms and conditions set forth in this Article 6 shall control.
Notwithstanding the above, during the COVID-19 Period, the Parties
shall meet (whether physically or virtually) and confer to
re-evaluate in good faith the Minimum Sales Thresholds (as defined
in Section 11.2(b)), the Quarterly License Fees, the Royalties,
forecasts and other payments due hereunder once every six months
and appropriately adjust such payments and forecasts to reflect the
impact of COVID-19 outbreak on Sanuwave’s actual and
potential sales of the Licensed Products.

 

 

12

 

 

6.4 Payment
Method; Late Payments. All payments due hereunder shall be
made in Dollars by wire transfer of immediately available funds
into an account in the USA designated by the payee Party. If a
Party does not receive payment of any undisputed sum due to it on
or before the due date, simple interest shall thereafter accrue on
the sum due until the date of payment at the per annum rate of one
and one-half percent (1.5%) over the then-current prime rate
reported in The Wall Street
Journal or the maximum rate allowable by applicable Laws,
whichever is lower. For clarity, in addition to all other remedies
available to Celularity, Sanuwave’s exclusivity rights
provided in Section 2.2(b) shall be suspended for failure to timely
pay the undisputed License Fees pursuant to Section 6.1 and such
breach has not been cured within ninety (90) days of the date for
which such payment was due to Celularity and shall only be resumed
upon Sanuwave’s full payment of such undisputed License
Fees.

 

6.5 Records.
Sanuwave and its Affiliates shall maintain complete and accurate
records in reasonably sufficient detail to permit Celularity to
confirm the accuracy of the calculation of royalty payments.
Celularity shall have the right to audit such records in accordance
with Section 6.6.

 

6.6 Audits.
For a period of two (2) years from the end of the Launch Year in
which a payment was due hereunder, upon thirty (30) days’
prior notice, Sanuwave (the “Audited Party”) shall (and shall
require that its Affiliates) make such records relating to such
payment available, during regular business hours and not more often
than once each Launch Year, for examination by an independent
certified public accountant selected by Celularity (the
“Auditing
Party”), for the purposes of verifying compliance with
this Agreement and the accuracy of the financial reports and/or
invoices furnished pursuant to this Agreement. The results of any
such audit shall be shared by the auditor with both Parties and
shall be considered Confidential Information of both Parties. Any
amounts shown to be owed to the other shall be paid within thirty
(30) days from the auditor’s report, plus interest (as set
forth in Section 6.4) from the original due date. The Auditing
Party shall bear the full cost of such audit unless such audit
discloses a deficiency in the Audited Party’s payments of
greater than five percent (5.0%) (i.e., an under-payment by
Sanuwave pursuant to Section 6.2), in which case the Audited Party
shall bear the full cost of such audit.

 

6.7 Taxes.

 

(a) Taxes
on Income. Each Party shall be solely responsible for the
payment of all taxes imposed on its share of income arising
directly or indirectly from the efforts of the Parties under this
Agreement.

 

(b) Tax
Cooperation. The Parties agree to cooperate with one another
and use reasonable efforts to reduce or eliminate tax withholding
or similar obligations in respect of License Fees, royalties, and
other payments made by Sanuwave to Celularity under this Agreement.
To the extent Sanuwave is required to deduct and withhold taxes on
any payment to Celularity, Sanuwave shall pay the amounts of such
taxes to the proper Governmental Authority in a timely manner and
promptly transmit to Celularity an official tax certificate or
other evidence of such withholding sufficient to enable Celularity
to claim such payment of taxes. Celularity shall provide Sanuwave
any tax forms that may be reasonably necessary in order for
Sanuwave not to withhold tax or to withhold tax at a reduced rate
under an applicable bilateral income tax treaty. Each Party shall
provide the other with reasonable assistance to enable the
recovery, as permitted by applicable Laws, of withholding taxes,
value added taxes, or similar obligations resulting from payments
made under this Agreement, such recovery to be for the benefit of
the Party bearing such withholding tax or value added tax. Sanuwave
shall require its Affiliates in the Territory to cooperate with
Celularity in a manner consistent with this Section
6.7(b).

 

6.8 Annual
Fee on Medical Device Manufacturers and Importers. The
Parties acknowledge that the “Annual Fee on Medical Device
Manufacturers and Importers” was signed into United States
law with the Patient Protection and Affordable Care Act (PPACA) in
2010. For the avoidance of doubt, in the event the Annual Fee on
Medical Device Manufacturers and Importers or any similar fee for a
drug or biological product is applied to the sale of any Licensed
Product by Sanuwave, the Parties hereby acknowledge and agree that
(a) Sanuwave shall be solely responsible for full payment of such
fee; and (b) Sanuwave shall supply Celularity with reasonable
documentation supporting the imposition of such fee, including, but
not limited to, as applicable, the annual invoice for such fee
received from the United States Internal Revenue
Service.

 

ARTICLE 7

INTELLECTUAL PROPERTY MATTERS

 

7.1. Prosecution of
Patents.

 

(a)

Celularity Prosecuted
Patents.

 

(i) Subject
to Section 7.1(a)(ii) below, as between the Parties, Celularity
shall have the first right to (and shall use Commercially
Reasonable Efforts to) prepare, file, prosecute and maintain the
Celularity Patents in the Territory and internationally. The costs
of preparation, filing, prosecution and maintenance of Celularity
Patents shall be borne by Celularity.

 

 

13

 

 

(ii) If
Celularity decides to cease the prosecution or maintenance of any
Celularity Patent after the Effective Date, it shall notify
Sanuwave in writing sufficiently in advance (but in no event less
than twenty (20) Business Days prior to the date on which the
Celularity Patent would become abandoned) so that Sanuwave may, at
its discretion, assume the responsibility for the prosecution or
maintenance of such Patent, at Sanuwave’s cost and expense.
If Sanuwave assumes the prosecution and maintenance of any
Celularity Patent, Celularity will assign to Sanuwave, without
further consideration, Celularity’s rights in and to that
Celularity Patent for Commercialization whether in or outside the
Field or in or outside the Territory.

 

(b) Cooperation.
Each Party shall provide the other Party all reasonable assistance
and cooperation, at the other Party’s request and expense, in
the patent prosecution efforts provided above in this Section 7.1,
including providing any necessary powers of attorney and executing
any other required documents or instruments for such
prosecution.

 

7.2. Inventions
Generally. Inventions conceived or reduced to practice in
the course of activities performed under this Agreement which
relate to a Licensed Product, or relate to or derive from
Celularity Know-How, Celularity Patents, Celularity’s
Confidential Information or otherwise to Celularity’s
biomaterials-related intellectual property (including those which
are Improvements to Celularity Know-How, Celularity Patents or
otherwise to Celularity’s biomaterials-related intellectual
property), by Celularity shall be owned by Celularity
(“Celularity
Inventions”). The inventions solely developed by
Sanuwave that are not Celularity Inventions shall be owned by
Sanuwave. New inventions jointly invented by (i) one or more
employees or agents of Celularity of its Affiliates or other
persons acting under the authority on the other hand and (ii) one
or more employees or agents of Sanuwave or its Affiliates or other
persons acting under its authority on the other hand, shall be
jointly owned by both Parties (“Joint IP”). Inventorship shall be
determined by applying the patent laws of the United States,
including, in the case of New Inventions jointly invented outside
the United States, as if such new inventions were invented in the
United States. The Parties shall discuss in good faith the filing,
prosecution, maintenance, enforcement, defense of and patent
applications relating to such Joint IP, as well as each
Party’s right to use, any such Joint IP. In the absence of an
agreement of the Parties, each Party shall have the right to
practice, use, grant licenses to practice and use, any Joint IP
without the other Party’s consent and has no duty to account
to the other Party for such practice, use and license; provided,
however, that Sanuwave shall not have any rights to Celularity
Know-How, Celularity Technology, Celularity Marks, Celularity
Patents and/or Celularity’s Confidential Information unless
otherwise permitted under this Agreement. Sanuwave hereby makes all
assignments to Celularity in order to effect Celularity’s
ownership in and to Celularity Inventions, and agrees, at
Celularity’s cost and expense, to take all further actions
requested by Celularity in order to perfect the foregoing
assignment. All rights assigned to Celularity by Sanuwave shall be
deemed to be Celularity Know-How or Celularity Patents, as
applicable.

 

7.3. Enforcement
of Celularity Patents.

 

(a) Notification. If either Party becomes
aware of any existing or threatened infringement of the Celularity
Patents (an “Infringement”), which infringing
activity involves the using, making, importing, offering for sale
or selling of any Licensed Product or a competitive product or
otherwise adversely affects or is reasonably expected to adversely
affect the Commercialization of any Licensed Product, it shall
promptly notify the other Party in writing to that effect and the
Parties shall consult with each other regarding any actions to be
taken with respect to such Infringement.

 

(b) Actions
Controlled by Celularity; Sanuwave’s Back-Up Enforcement
Right. Celularity shall have the first right to bring an
appropriate suit or take other action against any Third Party
engaged in any Infringement, at Celularity’s cost and
expense. If, after its receipt or delivery of notice thereof under
Section 7.3(a), Celularity (i) notifies Sanuwave that it will not
bring any claim, suit or action to prevent or abate such
Infringement or (ii) fails to commence a suit to prevent or abate
such Infringement within one hundred and eighty (180) days,
Sanuwave shall have the right, but not the obligation, to commence
a suit or take action to prevent or abate such Infringement under
the Celularity Patents at its own cost and expense. Expenses of,
and recoveries on, suits under this Section 7.3(b) shall be handled
as provided in Section 7.3(e).

 

(c) Collaboration.
Each Party shall provide to the enforcing Party reasonable
assistance in such enforcement, at such enforcing Party’s
request and expense, including joining such action as a party
plaintiff if required by applicable Laws to pursue such action. The
enforcing Party shall keep the other Party regularly informed of
the status and progress of such enforcement efforts and shall
reasonably consider the other Party’s comments on any such
efforts. The enforcing Party shall consult with the other Party as
to any important aspects of such enforcement, including
determination of litigation strategy and filing of material papers
to the competent court. The non-enforcing Party shall be entitled
to separate representation in such matter by counsel of its own
choice and at its own expense, but such Party shall at all times
cooperate fully with the enforcing Party.

 

(d) Settlement.
Neither Party shall settle any claim, suit or action that it brings
under Section 7.3(b) in a manner that would negatively impact the
applicable Celularity Patents (e.g., shorten the life of such
Patents or narrow their scope) without the prior written consent of
the other Party, which consent shall not be unreasonably withheld,
conditioned, or delayed.

 

(e) Expenses
and Recoveries. The term “Revenue” includes all fees,
minimum royalties, payments, compensation, or consideration of any
kind (including without limitation in-kind payments, forbearance in
connection with settlement, equity amounts taken in lieu of cash,
or discounts below fair market value of equity) received by either
Party or its Affiliates, without regard to which entity pays,
transfers or otherwise provides the Revenue, or how the Revenue is
structured, denominated, or paid transferred or provided. The
enforcing Party bringing a claim, suit or action under Section
7.3(b) shall be solely responsible for any expenses incurred by
such Party as a result of such claim, suit or action. If such Party
receives Revenue in such claim, suit or action, such Revenue shall
be allocated first to the reimbursement of any expenses incurred by
the Parties in such litigation (including, for this purpose, a
reasonable allocation of expenses of internal counsel), and any
remaining amounts shall be allocated as follows: (i) if Celularity
is the Party bringing the suit, then the rest of the remaining
recovery shall be allocated to Celularity; and (ii) if instead
Sanuwave exercised its back-up right to enforce, then the rest of
the remaining recovery shall be allocated to
Celularity.

 

7.4. Infringement
of Third-Party Rights in the Territory.

 

(a) If
any Licensed Product Commercialized by or on behalf of Sanuwave
becomes the subject of a Third Party claim or assertion of
infringement of such Third Party’s intellectual property,
including any Patent, issued in the Territory, Sanuwave shall
promptly notify Celularity and the Parties shall negotiate in good
faith and agree on and enter into a “common interest
agreement” wherein the Parties agree to their shared, mutual
interest in the outcome of such potential dispute, and thereafter,
the Parties shall promptly meet to consider the claim or assertion
and the appropriate course of action. Subject to Sections 2.4 and
12.5, Celularity shall have the right, but not the obligation, to
defend any such infringement claim, provided that all costs and
expenses relating to, and arising from, the defense of any such
infringement claim shall be divided equally between the Parties.
Sanuwave shall provide all reasonable assistance to Celularity and
reasonably cooperate in the defense of any such action. At each
quarterly JSC meeting, Celularity shall provide to Sanuwave an
update on the status and defense of such infringement claim during
the previous calendar quarter and any other information with
respect thereto as reasonably requested by Sanuwave.

 

(b) Celularity
shall not settle or consent to judgment of any infringement claim
without the prior written consent of Sanuwave, such consent not to
be unreasonably delayed, conditioned, or withheld; provided,
however, that if such settlement or consent to judgment does not
impose any liability on, or materially affect the rights or
obligations of, Sanuwave, Celularity shall have the right to settle
such claim or consent to judgment (e.g., a monetary liability that
is fully satisfied by Celularity on behalf of Sanuwave). In the
event the Parties cannot reach consensus within five (5) Business
Days after they have met and attempted to reach consensus regarding
settlement of any such infringement claim (an “Infringement Dispute”), the
settlement of such Infringement Dispute shall be referred to the
JSC for resolution; provided, however, that the provisions of
Section 3.1(c)(ii) shall not apply with respect to that particular
matter and the Parties’ resolution thereof.

 

 

14

 

 

7.5. Patent
Marking. Sanuwave and its Affiliates shall mark each
Licensed Product marketed and sold by Sanuwave or its Affiliates
hereunder with appropriate patent numbers or indicia.

 

7.6. Trademarks.

 

(a) Product Marks. Sanuwave shall have the
right to brand the Licensed Products and create all Licensed
Product labels using Sanuwave-related trademarks and any other
trademarks and trade names it determines appropriate (including the
Celularity Marks as set forth in Section 7.6(b) below) for the
Licensed Products, which may vary by country or within a country
(collectively, the “Product
Marks”). The Parties acknowledge and agree that the
Licensed Products shall be co-branded as mutually agreed upon in
writing by the Parties and that Sanuwave shall give the proper
attribution on each Licensed Product to Celularity as provider of
the Celularity Technology or as otherwise mutually agreed upon by
the Parties. The Parties shall mutually agree upon the form and
substance of such attribution rights. In the event that Sanuwave
desires to brand a Licensed Product using an alternative name,
Sanuwave shall first propose such alternative name to Celularity
and Celularity may provide comments on the alternative name, which
shall be considered in good faith by Sanuwave. For clarity, Sanuwave has the
right to brand Biovance and Interfyl using alternative names and
Sanuwave’s Product Marks (excluding the Celularity Marks)
provided that Sanuwave shall pay for the costs associated with such
branding, including design, labor and material costs and
expenses.

 

(b) Celularity
Marks. Subject to the terms and conditions of this
Agreement, Celularity hereby grants to Sanuwave an exclusive
license to use and display (with the right to grant sublicenses to
any (i) sublicensees permitted under Section 2.3 and (ii)
distributors and other Third Parties who perform activities
directly on behalf of Sanuwave, provided that such sublicense is
incidental to the activities performed by such Third Party), during
the Term and in the Field in the Territory, to the Biovance and/or
Interfyl trademark, as applicable, as set forth in Exhibit B, to identify the
Licensed Products (each, a “Celularity Mark” and collectively,
the “Celularity
Marks”), (i) on the Licensed Product itself, (ii) as
part of the Product Marks and (iii) on any other labels,
Promotional Materials or Regulatory Materials used in connection
with any Licensed Product, provided that if Sanuwave, upon the
consent of Celularity, brings an enforcement action with respect to
any Celularity Mark, Sanuwave shall reimburse Celularity for the
expenses Celularity reasonably incurs in connection therewith
(including, without limitation, costs associated with hiring
consultants, attorneys’ fees and preparation and filing of
any applications, renewals or other documentation with the United
States Patent and Trademark Office, foreign counterparts, or other
relevant agency). Sanuwave shall give reasonable prior advance
notice to Celularity regarding any use or display of the Celularity
Marks and shall provide Celularity with a sample embodying such use
or display, for Celularity’s prior review and approval to
ensure such use or display complies with Celularity’s
reasonable trademark guidelines, such approval not to be
unreasonably withheld, conditioned or delayed. Sanuwave shall use
its Commercially Reasonable Efforts to follow Celularity’s
reasonable trademark guidelines at all times as to the use of the
Celularity Marks. If Celularity changes such trademark guidelines:
(x) Celularity shall, if practical, provide Sanuwave with at least
thirty (30) days prior written notice of such changes, (y) such
changes shall not apply to any materials that are in inventory or
on order as of the effective date of such notice and (z) Sanuwave
shall be solely responsible for any expense of implementing such
changes, including on packaging, promotional materials and other
items if such changes are required by Law, and if such changes are
not required by Law, each Party shall bear equal responsibility for
any expense of implementing such changes. Other than as expressly
set forth herein, use of the Celularity Marks shall not confer on
Sanuwave any right to or interest in such trademark, and Sanuwave
acknowledges and agrees that all use of the Celularity Marks and
the goodwill generated thereby shall inure solely to the benefit of
Celularity. Sanuwave shall not use, adopt, file, register, seek to
register or take any other action to use or establish rights in any
mark anywhere in the world which is comprised of, derivative of, a
combination with, or otherwise confusingly similar to, any
Celularity Mark or file any application to register any trademark
or trade name that is confusingly similar to the Celularity
Marks.

 

(c) Ownership;
No Challenge. Subject to Section 7.6(b), above, Sanuwave
shall own all right, title and interest in and to the Product Marks
(excluding the Celularity Marks). All use of the Product Marks
(excluding the Celularity Marks) and the goodwill generated thereby
shall inure solely to the benefit of Sanuwave. Other than in
connection with the Celularity Marks, Celularity shall not use,
adopt, file, register, seek to register, or take any other action
to use or establish rights in any mark anywhere in the world which
is comprised of, derivative of, a combination with, or otherwise
confusingly similar to, any Product Mark. For the avoidance of
doubt, subject to Section 7.6(b) above, this Section 7.6(c) does
not grant Sanuwave any right to or interest in the Celularity
Marks, and Sanuwave acknowledges and agrees that all use of the
Celularity Marks and the goodwill generated thereby shall inure
solely to the benefit of Celularity.

 

 

ARTICLE
8

REPRESENTATIONS AND WARRANTIES; COVENANTS

 

8.1. Mutual
Representations and Warranties. Each Party hereby represents
and warrants to the other Party as follows:

 

(a) Organization.
As of the Effective Date, such Party is an entity duly organized,
validly existing and in good standing under the laws of the state
of its incorporation or organization, with the requisite legal
authority to own and use its properties and assets and to carry on
its business as currently conducted. Such Party not in violation of
any of the provisions of its respective certificate or articles of
incorporation, formation, bylaws or other organizational or charter
documents.

 

(b) Authorization;
Enforcement. Such Party has the requisite corporate
authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its
obligations hereunder. The execution and delivery by it of this
Agreement and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action and no further consent or action is required by
it, its Board of Directors or its stockholders. This Agreement has
been duly executed by such Party and is the valid and binding
obligation of such Party enforceable against such Party in
accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, and
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable
remedies.

 

(c) No
Conflicts. The execution, delivery and performance by such
Party of this Agreement and the consummation by such Party of the
transactions contemplated hereby does not, and will not, (i)
conflict with or violate any provision of such Party’s
certificate or articles of incorporation, bylaws or other
organizational or charter documents, (ii) in any material respect,
conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument or other
understanding to which such Party is a party or by which any
property or asset of such Party is bound, or affected, or (iii) in
any material respect, result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which such
Party is subject, or by which any property or asset of such Party
is bound or affected.

 

 

15

 

 

8.2. Additional
Representations and Warranties of Celularity. Celularity
represents and warrants to Sanuwave as follows, as of the Effective
Date:

 

(a) It
has sufficient legal and/or beneficial title, ownership or license
to the Celularity Technology to grant the licenses to Sanuwave as
purported to be granted pursuant to this Agreement;

 

(b) Celularity
has not licensed from any Third Party any intellectual property
rights included in the Celularity Technology, and, to
Celularity’s Knowledge, no such license is
required;

 

(c) Celularity
has not received any written claim or notice from any Third Party
asserting or alleging that the Celularity Technology infringes any
intellectual property rights of such Third Party, and, to
Celularity’s Knowledge, the Celularity Technology does not
infringe any intellectual property rights of any Third
Party;

 

(d) It
has not received any written notice from any Third Party asserting
or alleging that any research or development of any Licensed
Product by Celularity as of the Effective Date infringed or
misappropriated the intellectual property rights of such Third
Party;

 

(e) There
are no pending, and to Celularity’s Knowledge, no threatened,
adverse actions, suits or proceedings against Celularity involving
Celularity Technology, or any Licensed Product;

 

(f) The
Celularity Patents include all Patents that Cover the Licensed
Products which are Controlled by Celularity and/or its Affiliates
on the Effective Date;

 

(g) To
Celularity’s Knowledge (i) the Celularity Marks have been
properly filed and registered with the U.S. Patent and Trademark
Office and is valid and in full force and effect, and (ii)
Celularity has the right to use and license the Celularity Marks,
free and clear of any liens or encumbrances;

 

(h) To
Celularity’s Knowledge, there are no pending legal suits or
proceedings involving the Celularity Technology or any Licensed
Product; and to there are no threatened legal suits or proceedings
in the Territory involving the Celularity Technology or any
Licensed Product; and

 

(i) There
are no current pending, or to Celularity’s Knowledge,
threatened in writing, product liability, warranty or other similar
claims by any Third Party (whether based in contract or tort and
whether relating to personal injury, including death, property
damage or economic loss) arising from the marketing or sale of any
Licensed Product.

 

8.3. Mutual
Covenants.

 

(a) No
Debarment. In the course of, and with respect, the
Commercialization of the Licensed Products, each Party shall not
use any employee or consultant who has been debarred , excluded or
disqualified under applicable Law by any Governmental Authority,
or, to such Party’s Knowledge, is the subject of debarment,
exclusion or disqualification proceedings by any Governmental
Authority. Each Party shall notify the other Party promptly upon
becoming aware that any of its employees or consultants has been
debarred, excluded or disqualified under applicable Law, or is the
subject of debarment, exclusion or disqualification proceedings by
any Governmental Authority.

 

(b) Compliance.
Each Party and its Affiliates shall comply in all material respects
with all applicable Laws in the Commercialization of Licensed
Products and performance of its obligations under this Agreement,
including the statutes, regulations and written directives of the
FDA and any Regulatory Authority having jurisdiction in the
Territory, the FD&C Act, the Prescription Drug Marketing Act,
the federal Anti-Kickback Law (42 U.S.C. 1320a-7b(b)), the
statutes, regulations and written directives of Medicare, Medicaid
and all other federal health care programs (as defined in 42 U.S.C.
§ 1320a-7b(f)), the civil False Claims Act (31 U.S.C. 3729 et.
seq.), the administrative False Claims Act (42 U.S.C. 1320a-7b(a)),
the United States Public Health Service Act, the Physician Payment
Sunshine Act (42 U.S.C. 1320a-7h), the United States Health
Insurance Portability and Accountability Act of 1996 and the
Foreign Corrupt Practices Act of 1977, and all regulations
promulgated thereunder, each as may be amended from time to
time.

 

(c) Disclaimer.
Sanuwave understands that the Licensed Products are the subject of
ongoing clinical research and development and that Celularity
cannot assure the safety or efficacy of any Licensed Product. In
addition, Celularity makes no warranties except as set forth in
this Article 8 concerning the Celularity Technology. EXCEPT AS
EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR
WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY
INTELLECTUAL PROPERTY RIGHTS ARE MADE OR GIVEN BY OR ON BEHALF OF A
PARTY, AND ALL IMPLIED REPRESENTATIONS AND WARRANTIES, WHETHER
ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY
DISCLAIMED.

 

 

16

 

 

ARTICLE
9

INDEMNIFICATION

 

9.1. Indemnification by Celularity.
Celularity shall indemnify and hold harmless Sanuwave, and its
directors, officers, employees, agents, Affiliates and contractors
(collectively, the “Sanuwave
Indemnitees”), from and against all losses,
liabilities, damages and expenses, including reasonable
attorneys’ fees and costs (collectively, “Liabilities”), resulting from any
claims, demands, actions or other proceedings by any Third Party
(including Claims based upon products liability)
(“Claims”) to
the extent resulting from or relating to (a) the breach or
inaccuracy of any representation or warranty made by Celularity in
this Agreement; (b) the breach by Celularity of any covenant or any
of its obligations under this Agreement; (c) Celularity’s
failure to comply with any applicable federal, state or local Laws
in connection with the performance of its obligations hereunder;
(d) any design (latent, patent or inherent) defect of the Licensed
Products, provided that the Licensed Products are Commercialized in
accordance with this Agreement and are used in the Field in the
Territory; or (e) any gross negligence or willful misconduct of
Celularity or any of its Affiliates. The foregoing indemnity
obligation shall not apply to the extent that (i) the Sanuwave
Indemnitees fail to comply with the indemnification procedures set
forth in Section 9.3 and Celularity’s defense of the relevant
Claims is prejudiced by such failure, or (ii) any Claim arises
from, is based on, or results from any activity set forth in
Sections 9.2(a), 9.2(b), 9.2(c), 9.2(d), 9.2(e) or 9.2(f) for which
Sanuwave is obligated to indemnify the Celularity Indemnitees under
Section 9.2.

 

9.2. Indemnification
by Sanuwave. Sanuwave shall indemnify and hold harmless
Celularity, and its directors, officers, employees, agents,
Affiliates and contractors (collectively, the “Celularity Indemnitees”), from and
against all Liabilities resulting from any Claims by any Third
Party to the extent resulting from or relating to (a) the breach or
inaccuracy of any representation or warranty made by Sanuwave in
this Agreement; (b) the breach by Sanuwave of any covenant or any
of its obligations under this Agreement; (c) Sanuwave’s
failure to comply with any applicable federal, state or local Laws
in connection with the performance of its obligations hereunder;
(d) improper Commercialization of the Licensed Products by or on
behalf of Sanuwave or any representations regarding the Licensed
Products made by Sanuwave in breach of this Agreement; (e) any
gross negligence or willful misconduct of Sanuwave or any of its
Affiliates; or (f) any manufacturing defects of the Licensed
Products manufactured by Sanuwave or by a Third Party on behalf of
Sanuwave. The foregoing indemnity obligation shall not apply to the
extent that (i) the Celularity Indemnitees fail to comply with the
indemnification procedures set forth in Section 9.3 and
Sanuwave’s defense of the relevant Claims is prejudiced by
such failure, or (ii) any Claim arises from, is based on, or
results from any activity set forth in Sections 9.1(a), 9.1(b),
9.1(c), 9.1(d), or 9.1(e) for which Celularity is obligated to
indemnify the Sanuwave Indemnitees under Section 9.1.

 

9.3. Indemnification
Procedures. The Party claiming indemnity under this Article
9 (the “Indemnified
Party”) shall give written notice to the Party from
whom indemnity is being sought (the “Indemnifying Party”) promptly
after learning of such Claim. The Indemnifying Party shall have the
right to assume and conduct the defense of the Claim with counsel
of its choice, and the Indemnified Party may participate in and
monitor such defense with counsel of its own choosing at its sole
expense. The Indemnified Party shall provide the Indemnifying Party
with reasonable assistance, at the Indemnifying Party’s
expense, in connection with the defense of the Claim for which
indemnity is being sought. Each Party shall not settle or
compromise any Claim without the prior written consent of the other
Party, which consent shall not be unreasonably withheld, delayed or
conditioned. If the Parties cannot agree as to the application of
the foregoing Sections 9.1 and 9.2, each may conduct separate
defenses of the Claim, and each Party reserves the right to claim
indemnity from the other in accordance with this Article 9 upon the
resolution of the underlying Claim.

 

9.4. Limitation
of Liability. NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES, INCLUDING
LOST PROFITS, ARISING FROM OR RELATING TO ANY BREACH OF THIS
AGREEMENT EXCEPT FOR FRAUD OR WILLFUL MISCONDUCT, BREACH OF EITHER
PARTY’S CONFIDENTIALITY OBLIGATIONS, A PARTY’S
INDEMNIFICATION OBLIGATIONS, REGARDLESS OF ANY NOTICE OF THE
POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT ANY DAMAGES
PAID TO A THIRD PARTY IN A THIRD PARTY ACTION SHALL NOT BE
CONSIDERED SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR
INDIRECT DAMAGES FOR PURPOSES OF THIS AGREEMENT.

 

9.5. Insurance.
Each Party shall, at all times during the Term of this Agreement
and for five (5) years thereafter, obtain and maintain at its own
expense the following types of insurance, with limits of liability
not less than those specified below:

 

(a) Commercial
general liability insurance against claims for bodily injury and
property damage which shall include contractual coverage and
product liability coverage, with limits of not less than $2,000,000
per occurrence and not less than $5,000,000 in the aggregate (which
may be met by a combination of primary, excess and umbrella
coverage).

 

(b) Workers
compensation and employers’ liability with limits to comply
with the statutory requirements of the state(s) in which the
Agreement is to be performed. The policy shall include
employers’ liability for not less than $1,000,000 per
accident.

 

(c) All
policies shall be issued by insurance companies with an A.M.
Best’s rating of Class A-, V (or its equivalent) or higher
status. Each Party shall deliver certificates of insurance
evidencing coverage to the other Party promptly after the execution
of this Agreement and annually thereafter. All policies provided
for herein shall expressly provide that such policies shall not be
cancelled, terminated or altered without at least thirty (30) days
prior written notice to the insured Party, and each insuring Party
shall immediately notify the insured Party in the event that a
policy provided for herein is cancelled, terminated or
altered.

 

ARTICLE
10

CONFIDENTIALITY

 

10.1. Confidentiality. During the Term and for
a period of five (5) years thereafter, each Party shall maintain
all Confidential Information of the other Party in trust and
confidence and shall not, without the written consent of the other
Party, disclose any Confidential Information of the other Party to
any Third Party or use any Confidential Information of the other
Party for any purpose other than as necessary in connection with
the exercise of rights or discharge of obligations under this
Agreement. The confidentiality obligations of this Section 10.1
shall not apply to Confidential Information to the extent that the
receiving Party can establish by competent evidence that such
Confidential Information: (a) is publicly known prior or subsequent
to disclosure without breach of confidentiality obligations by such
Party or its employees, consultants or agents; (b) was in such
Party’s possession at the time of disclosure without any
restrictions on further disclosure; (c) is received by such
receiving Party, without any restrictions on further disclosure,
from a Third Party who has the lawful right to disclose it and
without restriction on disclosure; or (d) is independently
developed by employees or agents of the receiving Party who had no
access to the disclosing Party’s Confidential
Information.

 

 

17

 

 

10.2. Authorized
Disclosure. Nothing herein shall preclude a Party from
disclosing the Confidential Information of the other Party to the
extent:

 

(a) such disclosure is reasonably
necessary (i) for the filing or prosecuting of Patents as
contemplated by this Agreement; (ii) to comply with the requirement
of Regulatory Authorities with respect to obtaining and maintaining
Regulatory Clearance and/or Approval (or any pricing and
reimbursement approvals) of any Licensed Product; or (iii) for
prosecuting or defending litigations as contemplated by this
Agreement;

 

(b) such
disclosure is reasonably necessary to its employees, agents,
consultants or contractors on a need-to-know basis for the sole
purpose of performing its obligations or exercising its rights
under this Agreement; provided that in each case, the disclosees
are bound by written obligations of confidentiality and non-use
consistent with those contained in this Agreement;

 

(c) such
disclosure is reasonably necessary to any bona fide potential or
actual investor, acquiror, merger partner, or other financial or
commercial partner for the sole purpose of evaluating an actual or
potential investment, acquisition or other business relationship;
provided that in each case, the disclosees are bound by written
obligations of confidentiality and non-use consistent with those
contained in this Agreement;

 

(d) such
disclosure is reasonably necessary to comply with applicable Laws,
including regulations promulgated by applicable security exchanges,
a valid order of a court of competent jurisdiction, administrative
subpoena or order.

 

Notwithstanding the
foregoing, in the event a Party is required to make a disclosure of
the other Party’s Confidential Information pursuant to any of
Sections 10.2(a) through 10.2(d), such Party shall promptly notify
the other Party of such required disclosure and to the extent
commercially reasonable, shall use reasonable efforts to obtain, or
to assist the other Party in obtaining, a protective order
preventing or limiting the required disclosure.

 

10.3. Return
of Confidential Information. Promptly after the termination
or expiration of this Agreement for any reason, each Party shall
return to the other Party all tangible manifestations of such other
Party’s Confidential Information at that time in the
possession of the receiving Party.

 

10.4. Publicity;
Terms of the Agreement; Confidential Treatment.

 

(a) The
Parties agree that the terms of this Agreement (including without
limitation any exhibits and schedules hereto) shall be considered
Confidential Information of each Party, subject to the special
authorized disclosure provisions set forth in Section 10.2 and this
Section 10.4.

 

(b) If
either Party desires to make a public announcement concerning the
material terms of this Agreement, such Party shall give reasonable
prior advance notice of the proposed text of such announcement to
the other Party for its prior review and approval (except as
otherwise provided herein), such approval not to be unreasonably
withheld, conditioned or delayed. A Party commenting on such a
proposed press release shall provide its comments, if any, within
three (3) Business Days after receiving the press release for
review. In addition, to the extent required by applicable Laws,
including regulations promulgated by applicable security exchanges,
each Party shall have the right to make a press release announcing
the achievement of each milestone under this Agreement as it is
achieved, and the achievements of Regulatory Clearances and/or
Approvals in the Territory as they occur, subject to the other
Party’s consent as to form and substance of such
announcement, which shall not be unreasonably withheld, conditioned
or delayed. In relation to the other Party’s review and
approval of such an announcement, such other Party may make
specific, reasonable comments on such proposed press release within
the prescribed time for commentary, but shall not withhold its
consent to disclosure of the information that the relevant
milestone has been achieved and triggered a payment hereunder.
Neither Party shall be required to seek the permission of the other
Party to repeat any information regarding the terms of this
Agreement that has already been publicly disclosed by such Party,
or by the other Party, in accordance with this Section 10.4,
provided such information remains accurate as of such
time.

 

(c) In
addition, the Parties acknowledge that either or both Parties may
be obligated to file under applicable law and regulation a copy of
this Agreement with the USA Securities and Exchange Commission or
similar stock exchange authorities or other governmental
authorities. Each Party shall be entitled to make such a required
filing; provided,
however, that it requests
confidential treatment of the commercial terms and sensitive
technical terms hereof and thereof to the extent such confidential
treatment is reasonably available to such Party. In the event of
any such filing, each Party shall provide the other Party with a
copy of this Agreement marked to show provisions for which such
Party intends to seek confidential treatment and shall reasonably
consider and incorporate the other Party’s comments thereon
to the extent consistent with the legal requirements, with respect
to the filing Party, governing disclosure of material agreements
and material information that must be publicly filed.

 

10.5. Technical
Publication. Neither Party may publish peer reviewed
manuscripts or give other forms of public disclosure such as
abstracts and media presentations (such disclosure collectively,
for purposes of this Section 10.5, “publication”), of results of
studies carried out under this Agreement, without the opportunity
for prior review by the other Party, except to the extent required
by applicable Laws. A Party seeking publication shall provide the
other Party the opportunity to review and comment on any proposed
publication that relates to the Licensed Product at least thirty
(30) days (or at least ten (10) days in the case of abstracts and
media presentations) prior to its intended submission for
publication. The other Party shall provide the Party seeking
publication with its comments in writing, if any, within twenty
(20) days (or within five (5) days in the case of abstracts and
media presentations) after receipt of such proposed publication.
The Party seeking publication shall consider in good faith any
comments thereto provided by the other Party and shall comply with
the other Party’s reasonable request to remove any and all of
such other Party’s Confidential Information from the proposed
publication. In addition, the Party seeking publication shall delay
the submission for a period up to sixty (60) days in the event that
the other Party can demonstrate reasonable need for such delay in
order to accommodate the preparation and filing of a patent
application. If the other Party fails to provide its comments to
the Party seeking publication within such twenty (20) day period
(or five (5) day period, as the case may be), such other Party
shall be deemed not to have any comments, and the Party seeking
publication shall be free to publish in accordance with this
Section 10.5 after the thirty (30) day period (or ten (10) day
period, as the case may be) has elapsed. The Party seeking
publication shall provide the other Party a copy of the publication
at the time of the submission. Each Party agrees to acknowledge the
contributions of the other Party and its employees in all
publications as scientifically appropriate.

 

 

18

 

 

ARTICLE 11

TERM AND TERMINATION

 

11.1. Term. This Agreement shall commence on
the Effective Date and, unless earlier terminated in accordance
with the terms of this Article 11, shall continue for a period of
five (5) years (the “Initial
Term”). Upon expiration of the Initial Term, this
Agreement will automatically renew for additional one (1) year
periods (each period, a “Renewal Term” and together with
the Initial Term, the “Term”) unless either Party gives
written notice of termination at least one hundred and eighty (180)
days prior to the expiration of the then-current term, which shall
cause this Agreement to terminate at the end of the then-current
term.

 

11.2. Termination
by Celularity.

 

(a) For
Patent Challenge. Celularity may terminate this Agreement in
its entirety immediately upon written notice to Sanuwave if
Sanuwave or its Affiliates, directly or through the assistance of a
Third Party, challenges the validity, enforceability or scope of
any Celularity Patent anywhere in the world.

 

(b) For Failure to Meet
Thresholds.

 

(i) In the event that
gross sales of all Licensed Products during the second Launch Year
are less than (x) Three Million Dollars ($3,000,000) or
alternatively, (y) the new gross sales volume agreed to by the
Parties for the Licensed Products pursuant to Section 6.3, as the
case may be (the “Minimum
Sales Threshold”), Celularity shall have the right to
terminate the Agreement in its entirety, on ninety (90) days’
written notice to Sanuwave (a “Sales Threshold Default”), which
notice of such Sales Threshold Default must be delivered to
Sanuwave within thirty (30) calendar days following the delivery of
the royalty report for the fourth Launch Year Quarter of the second
Launch Year (a “Sales
Threshold Default Notice”). Upon receipt of a Sales
Threshold Default Notice, Sanuwave may cure the Sales Threshold
Default solely for the second Launch Year by (i) paying to
Celularity an amount equal to the difference between the Quarterly
License Fees for the four Launch Year Quarters of the second Launch
Year and the aggregate royalties which would be due to Celularity
if gross annual sales of all the Licensed Products for the second
Launch Year were Three Million Dollars ($3,000,000) (or the
alternative Minimum Sales Threshold, as the case may be) or (ii) by
demonstrating with reasonable documentation that the gross annual
sales of all Licensed Products will reach an annualized run rate of
Three Million Dollars ($3,000,000) (or the alternative Minimum
Sales Threshold for all Licensed Products) as of the second Launch
Year Quarter of the third Launch Year.

 

(ii) In
the event gross annual sales of all Licensed Products for the third
Launch Year or any subsequent Launch Year thereafter are less than
Five Million Dollars ($5,000,000) (or the alternative Minimum Sales
Threshold for all Licensed Products, as the case may be) each of
Celularity and Sanuwave shall have the right to terminate this
Agreement in its entirety upon six months’ prior written
notice to the other Party, which notice of such termination must be
delivered to the other Party within ninety (90) calendar days
following the delivery of the royalty report for the fourth Launch
Year Quarter of the applicable Launch Year. Notwithstanding the
foregoing, in the event that in the third Launch Year the gross
annual sales of all the Licensed Products are less than Five
Million Dollars ($5,000,000) (or the alternative Minimum Sales
Threshold for all the Licensed Products, as the case may be), the
Parties may discuss alternative options to the termination of this
Agreement with respect to the Licensed Products, including, without
limitation, the sale of all rights in and to the Licensed Products
to Sanuwave.

 

11.3. Termination
for Breach.

 

(a) Subject
to Section 11.3(b), each Party shall have the right to terminate
this Agreement in its entirety upon written notice to the other
Party if the other Party materially breaches its obligations under
this Agreement (including, but not limited to, failure of a Party
to exert Commercially Reasonable Efforts in accordance with the
terms set forth in this Agreement) and, after receiving written
notice identifying such material breach in reasonable detail, fails
to cure such material breach within sixty (60) days from the date
of such notice.

 

(b) If
the alleged breaching Party disputes in good faith the existence or
materiality of a breach specified in a notice provided by the other
Party in accordance with Section 11.3(a), and such alleged
breaching Party provides the other Party notice of such dispute
within the applicable cure period, then the non-breaching Party
shall not have the right to terminate this Agreement under Section
11.3(a) unless and until an arbitrator, in accordance with Article
12, has determined that the alleged breaching Party has materially
breached the Agreement and such breaching Party fails to cure such
breach within the applicable cure period (measured as commencing
after the arbitrator’s decision). It is understood and agreed
that during the pendency of such dispute, all of the terms and
conditions of this Agreement shall remain in effect and the Parties
shall continue to perform all of their respective obligations
hereunder.

 

11.4. Termination
for Bankruptcy. To the extent permitted under applicable
Laws, if at any time during the Term of this Agreement, an Event of
Bankruptcy (as defined below) relating to either Party (the
“Bankrupt
Party”) occurs, the other Party (the
“Non-Bankrupt
Party”) shall have, in addition to all other legal and
equitable rights and remedies available hereunder, the option to
terminate this Agreement upon sixty (60) days written notice to the
Bankrupt Party. It is agreed and understood that if the
Non-Bankrupt Party does not elect to terminate this Agreement upon
the occurrence of an Event of Bankruptcy, except as may otherwise
be agreed with the trustee or receiver appointed to manage the
affairs of the Bankrupt Party, the Non-Bankrupt Party shall
continue to make all payments required of it under this Agreement
as if the Event of Bankruptcy had not occurred, and the Bankrupt
Party shall not have the right to terminate any license granted
herein. The term “Event of
Bankruptcy” means: (a) filing, in any court or agency
pursuant to any statute or regulation of any state or country, (i)
a petition in bankruptcy or insolvency, (ii) for reorganization or
(iii) for the appointment of (or for an arrangement for the
appointment of) a receiver or trustee of the Bankrupt Party or of
its assets; (b) with respect to the Bankrupt Party, being served
with an involuntary petition filed in any insolvency proceeding,
which such petition is not dismissed within sixty (60) days after
the filing thereof; (c) proposing or being a party to any
dissolution or liquidation when insolvent; or (d) making an
assignment for the benefit of creditors. Without limitation, the
Bankrupt Party’s rights under this Agreement shall include
those rights afforded by 11 USAC. § 365(n) of the United
States Bankruptcy Code (the “Bankruptcy Code”) and any
successor thereto. If the bankruptcy trustee of a Bankrupt Party as
a debtor or debtor-in-possession rejects this Agreement under 11
USAC. § 365(o) of the Bankruptcy Code, the Non-Bankrupt Party
may elect to retain its rights licensed from the Bankrupt Party
hereunder (and any other supplementary agreements hereto) for the
duration of this Agreement and avail itself of all rights and
remedies to the full extent contemplated by this Agreement and 11
USAC. § 365(n) of the Bankruptcy Code, and any other relevant
Laws.

 

11.5. Termination
for Safety, Legal or Economic Risks. Either Party may
terminate this Agreement on a Licensed Product-by-Licensed Product
basis, or in the entirety, immediately upon thirty (30) days prior
written notice to the other Party if a Party is advised in writing
by its outside legal counsel that it is not advisable for such
Party to continue the Commercialization of such Licensed Product in
the Territory to the extent permitted by this Agreement as a result
of an actual, threatened or perceived significant safety, legal or
economic risk regarding such Licensed Product as the result of any
Law, decree, resolution, Liabilities resulting from any Claim, or
any decision of a Governmental Authority or Regulatory Authority or
change in the interpretation of any current Law, decree, resolution
or decision by a Governmental Authority or Regulatory Authority,
provided that a Party may only terminate this Agreement in the
entirety if the actual, threatened or perceived significant safety,
legal or economic risk relates to the Licensed Products as a
whole.

 

 

19

 

 

11.6. Termination
for Infringement. This Agreement may be terminated by a
non-defaulting Party solely with respect to a Licensed Product upon
the issuance of a final order or decree issued in a bona fide
proceeding by or before a competent judicial authority that such a
Licensed Product infringed the intellectual property rights of a
Third Party, if, after receiving such issuance of a final order or
decree of infringement, the other Party who is obligated under the
applicable laws or this Agreement to cure the infringement, as
applicable, fails to or is unable to cure such infringement within
sixty (60) days from the date of issuance.

 

11.7. Effects
of Expiration or Early Termination.

 

(a) General. Upon the expiration or
termination of this Agreement (i) all licenses and rights granted
to Sanuwave under Section 2.1 of this Agreement or with respect to
each Licensed Product, as applicable, shall terminate, (ii)
Sanuwave shall immediately transfer and assign to Celularity or its
designee all materials, Know-How, Regulatory Materials, licenses,
Third Party agreements and other items as are reasonably necessary
for Celularity to continue the Commercialization of the Licensed
Product(s) and (iii) Sanuwave shall immediately cease all sales,
marketing and distribution of the Licensed Product(s), subject to
Section 11.7(c), below.

 

(b) Additional Effects of Termination.
Without limiting the generality of Section 11.7(a), the following
rights and consequences shall apply upon termination:

 

(i) Regulatory Materials; Data. To the
extent permitted by applicable Laws, Sanuwave shall transfer and
assign to Celularity all Regulatory Materials to extent such
Regulatory Materials are not owned by Celularity, and related data
and Know-How relating to the Licensed Product(s) and shall treat
the foregoing as Confidential Information of Celularity (and not of
Sanuwave) under Article 10; provided that Sanuwave shall be allowed
to retain any such materials that a Regulatory Authority requires
Sanuwave to retain under applicable Laws.

 

(ii)           Sanuwave
Assignment. Sanuwave hereby irrevocably assigns to
Celularity, effective upon such Termination by Celularity for
Cause, a non-exclusive, fully paid, worldwide, fully transferrable,
irrevocable license (with the right to grant sublicenses through
multiple tiers) to all intellectual property, including all Patents
and Know-How (i) Controlled by Sanuwave (or its Affiliates) as of
the effective date of such termination and (ii) reasonably
necessary or useful for the Commercialization of the Licensed
Product(s) in the Field.

 

(iii)           Trademarks.
Sanuwave shall assign to Celularity all right, title and interest
in and to the Product Marks (excluding any such marks that include,
in whole or part, any corporate name or logo of Sanuwave)
throughout the Territory.

 

(iv)           Transition
Assistance. In the event this Agreement terminates other
than for Celularity’s breach for the Agreement in accordance
with Section 11.3(a), Sanuwave shall provide such assistance, at no
cost to Celularity, for a period of ninety (90) days as may be
reasonably necessary or useful for Celularity to continue
Commercializing the Licensed Product(s) throughout the Territory,
including assigning or amending as appropriate, upon request of
Celularity, any agreements or arrangements with Third Party vendors
to Commercialize the Licensed Product(s). To the extent that any
such contract between Sanuwave and a Third Party is not assignable
to Celularity, Sanuwave shall reasonably cooperate with Celularity
to arrange to continue to provide such services for a reasonable
time after termination. Sanuwave shall not, during such applicable
notice period, take any action that could reasonably be expected to
have a material adverse impact on the further Commercialization of
any Licensed Product.

 

(v)           Inventories.
Subject to Section 11.7(c) below, in the event this Agreement
terminates other than for Celularity’s breach for the
Agreement in accordance with Section 11.3(a), then Celularity shall
have the right to purchase from Sanuwave any and all of the
inventory of the Licensed Product(s) held by Sanuwave as of the
effective date of termination at a price equal to Sanuwave’s
actual cost to acquire of such inventory from Celularity.
Celularity shall notify Sanuwave within thirty (30) days after the
effective date of termination whether Celularity elects to exercise
such right.

 

(vi)           Termination
for Celularity Breach

 

a.
During the Initial Term, upon termination of this Agreement in its
entirety by Sanuwave pursuant to Section 11.3 due to
Celularity’s breach of this Agreement which is not caused by
Celularity’s fraud or criminal misconduct, as
Sanuwave’s sole and exclusive remedy (in addition to such
termination), Celularity shall pay to Sanuwave, as liquidated
damages, one of the following amounts depending upon the effective
date of such termination: (1) $9,000,000 if this Agreement
terminates before the first anniversary of the Effective Date; (B)
$7,000,000 if this Agreement terminates on or after the first
anniversary of the Effective Date and before the second anniversary
of the Effective Date; (3) $5,000,000 if this Agreement terminates
on or after the second anniversary of the Effective Date and before
the third anniversary of the Effective Date; (4) $3,000,000 if this
Agreement terminates on or after the third anniversary of the
Effective Date and before the fourth anniversary of the Effective
Date; or (5) $2,000,000 if this Agreement terminates on or after
the fourth anniversary of the Effective Date and before the fifth
anniversary of the Effective Date. The foregoing shall not apply to
any termination of this Agreement for Celularity’s breach
pursuant to Section 11.3 during a Renewal Term; provided, however, nothing in this
Agreement shall affect Sanuwave’s right to enforce any
remedies available to it at law, in equity, by statute, or by
contract with respect to such breach of Celularity during such
Renewal Term.

 

b.
Notwithstanding the first sentence of Section 11.7(b)(vi)(a), if
this Agreement terminates during the Initial Term while Sanuwave
otherwise is meeting its financial commitments to Celularity,
because Celularity grants an exclusive license under Celularity
Technology to any Third Party to market and commercialize any
Licensed Product or because Celularity is marketing and
commercializing any Licensed Product internally in the Territory,
then Sanuwave’s liquidated damages remedy shall be as
follows: Sanuwave’s revenues under this Agreement for the
twelve (12) month period ending on the last day of the month prior
to termination multiplied by its Market Revenue Multiple.
“Market Revenue Multiple” shall mean the market
capitalization for Sanuwave, based on the last trading day for its
common stock on the date prior to the termination date, divided by
all of its revenue as most recently reported publicly by Sanuwave;
provided, however, that if Sanuwave is no longer trading as a
public company, the Market Revenue Multiple shall be the price paid
by the acquirer of Sanuwave in such a transaction.

 

(c)           Sanuwave’s
Right to Sell Off. In the event this Agreement terminates
other than for Sanuwave’s breach of the Agreement in
accordance with Section 11.3(a), then Celularity, at its option,
shall (i) have the right to purchase from Sanuwave any and all of
the inventory of Licensed Products held by Sanuwave as of the
effective date of termination in accordance with the terms of
Section 11.7(b), above, or (ii) permit Sanuwave, for a period of
ninety days (90) from the effective date of termination, to market,
distribute, offer to sell and sell off then-existing inventory of
Licensed Products then on hand (the period referred to in this
Section 11.7(c)(ii), the “Sell-Off Period”). If Celularity
elects to allow Sanuwave to sell off its then-existing inventory of
Licensed Products in accordance with Section 11.7(c)(ii), following
the expiration of the Sell Off Period, Sanuwave shall immediately
cease all sales, marketing and distribution of the then-existing
inventory Licensed Products on hand as of the end of such Sell-Off
Period, and Celularity, at its option, shall (x) have the right to
purchase from Sanuwave any and all of the inventory of Licensed
Products held by Sanuwave as of the last date of the Sell-Off
Period at a price equal to Sanuwave’s actual cost to acquire
or manufacture such inventory, or (y) instruct Sanuwave to destroy
or donate (to a recognized not-for-profit charitable organization,
provided however, that such inventory is not further re-sold or
distributed for profit) such remaining inventory.

 

For
clarity, Sanuwave shall continue to perform all of its obligations
under this Agreement with respect to the Commercialization of
Licensed Products until the effective date of termination and shall
not modify in any material respects such activities from past
practices during such period.

 

 

20

 

 

11.8. Survival.
Termination or expiration of this Agreement shall not affect any
rights or obligations of the Parties under this Agreement that have
accrued prior to the date of termination or expiration.
Notwithstanding anything to the contrary, the following provisions
shall survive any expiration or termination of this Agreement: 1,
6.2, 7, 8, 9, 10, 11, 12, 13 and this Section 11.8.

 

ARTICLE
12

DISPUTE RESOLUTION

 

12.1. Disputes.
The Parties recognize that disputes as to certain matters may from
time to time arise that relate to either Party’s rights
and/or obligations hereunder. It is the objective of the Parties to
establish procedures to facilitate the resolution of disputes
arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. To accomplish this
objective, the Parties agree to follow the procedures set forth in
this Article 12 to resolve any controversy or claim arising out of,
relating to or in connection with any provision of this Agreement,
if and when a dispute arises under this Agreement.

 

12.2. Internal
Resolution. With respect to all disputes arising between the
Parties under this Agreement, including any alleged breach under
this Agreement or any issue relating to the interpretation or
application of this Agreement, if the Parties are unable to resolve
such dispute within thirty (30) days after such dispute is first
identified by either Party in writing to the other, the Parties
shall refer such dispute to the Executive Officers of the Parties
for attempted resolution by good faith negotiations within thirty
(30) days after such notice is received, including at least one (1)
in-person meeting of the Executive Officers within twenty (20) days
after such notice is received. If the Executive Officers are not
able to resolve such dispute referred to them within such thirty
(30) day period, then Section 13.11 shall control.

 

12.3. Patent
and Trademark Disputes. Any dispute, controversy or claim
relating to the scope, validity, enforceability or infringement of
any Patent Covering the manufacture, use, importation, offer for
sale or sale of any Licensed Product or of any trademark rights
relating to any Licensed Product shall be submitted to a court of
competent jurisdiction in the country in which such Patent or
trademark rights were granted or arose.

 

12.4. Equitable
Relief. Each Party shall be entitled to seek injunctive and
other appropriate equitable relief from a court of competent
jurisdiction in the context of a bona fide emergency or prospective
irreparable harm to prevent or curtail any actual or threatened
breach of either Party’s rights or obligations under this
Agreement without the necessity of posting a bond. The rights and
remedies provided to each Party in this Section 12.4 are cumulative
and in addition to any other rights and remedies available to such
Party at law or in equity.

 

ARTICLE 13

MISCELLANEOUS

 

13.1. Entire
Agreement; Amendment. This Agreement, together with the
exhibits and schedules attached hereto, which are hereby
incorporated herein, represents the entire agreement and
understanding between the Parties with respect to its subject
matter and supersedes and terminates any prior and/or
contemporaneous discussions, representations or agreements, whether
written or oral, of the Parties regarding the subject matter
hereto, and supersedes, as of the Effective Date, all prior and
contemporaneous agreements and understandings between the Parties
with respect to the subject matter hereof (including for the Prior
CDA, provided that non-public and proprietary information disclosed
by either Party under the Prior CDA shall be deemed to be
Confidential Information disclosed pursuant to this Agreement).
There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or
written, between the Parties other than as are set forth in this
Agreement. Amendments or changes to this Agreement shall be valid
and binding only if in writing and signed by duly authorized
representatives of the Parties.

 

13.2. Force
Majeure. Both Parties shall be excused from the performance
of their obligations under this Agreement to the extent that such
performance is prevented by force majeure and the nonperforming
Party promptly provides notice of the prevention to the other
Party. Such excuse shall be continued so long as the condition
constituting force majeure continues and the nonperforming Party
takes reasonable efforts to remove the condition. For purposes of
this Agreement, force majeure shall mean conditions beyond the
control of the Parties, including an act of God, war, civil
commotion, terrorist act, labor strike or lock-out, epidemic,
pandemic, outbreak of an infectious disease, failure or default of
public utilities or common carriers, destruction of production
facilities or materials by fire, earthquake, storm or like
catastrophe, and failure of plant or machinery (provided that such
failure could not have been prevented by the exercise of skill,
diligence, and prudence that would be reasonably and ordinarily
expected from a skilled and experienced person engaged in the same
type of undertaking under the same or similar circumstances). If a
force majeure persists for more than ninety (90) days, then the
Parties shall discuss in good faith the modification of the
Parties’ obligations under this Agreement in order to
mitigate the delays caused by such force majeure.

 

13.3. Notices.
Any notice required or permitted to be given under this Agreement
shall be in writing, shall specifically refer to this Agreement,
and shall be addressed to the appropriate Party at the address
specified below or such other address as may be specified by such
Party in writing in accordance with this Section 13.3, and shall be
deemed to have been given for all purposes (a) when received, if
hand-delivered or sent by confirmed facsimile or a reputable
courier service, or (b) three (3) Business Days after mailing, if
mailed by first class certified or registered airmail, postage
prepaid, return receipt requested.

 

If to
Celularity:

Celularity
Inc.

Attn.:
General Counsel

33
Technology Drive

Warren,
NJ 07059-5148

 

If to
Sanuwave:

Sanuwave Health,
Inc.

Attn.:
General Counsel

3360
Martin Farm Rd Ste 100

Suwanee,
GA 30024

 

 

21

 

 

13.4. No
Strict Construction; Headings. This Agreement has been
prepared jointly by the Parties and shall not be strictly construed
against either Party. Ambiguities, if any, in this Agreement shall
not be construed against any Party, irrespective of which Party may
be deemed to have authored the ambiguous provision. The headings of
each Article and Section in this Agreement have been inserted for
convenience of reference only and are not intended to limit or
expand on the meaning of the language contained in the particular
Article or Section. Except where the context otherwise requires,
the use of any gender shall be applicable to all genders, and the
word “or” is used in the inclusive sense (and/or). The
term “including” as used herein means including,
without limiting the generality of any description preceding such
term.

 

13.5. Assignment.
Neither Party may assign this Agreement without the prior written
consent of the other Party, such consent not to be unreasonably
withheld, conditioned or delayed; provided, however, that either
Party may assign this Agreement without the consent of the other
Party, effective upon written notice to the other Party thereof, to
(i) an Affiliate of such Party, provided that the Party hereunder
who assigns this Agreement agrees in writing to continue to be
bound by and subject to the terms and conditions of this Agreement
and (ii) any Person who acquires all or substantially all of such
Party’s assets or that is the surviving entity in a merger,
recapitalization, combination or other similar transaction with
such assigning Party and who agrees in writing to be bound by and
subject to the terms and conditions of this Agreement. Further,
Celularity may assign without Sanuwave’s consent its rights
to payments received under this Agreement. Any permitted assignment
shall be binding on the successors of the assigning Party. Any
attempted or purported assignment in violation of this Section 13.5
shall be null and void.

 

13.6. Performance
by Affiliates. Each Party may discharge any obligations and
exercise any right hereunder through any of its Affiliates. Each
Party hereby guarantees the performance by its Affiliates of such
Party’s obligations under this Agreement and shall cause its
Affiliates to comply with the provisions of this Agreement in
connection with such performance. Any breach by a Party’s
Affiliate of any of such Party’s obligations under this
Agreement shall be deemed a breach by such Party, and the other
Party may proceed directly against such Party without any
obligation to first proceed against such Party’s
Affiliate.

 

13.7. Further
Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as
may be necessary or appropriate in order to carry out the purposes
and intent of this Agreement.

 

13.8. Severability.
If any provision of this Agreement is found by a court of competent
jurisdiction to be unenforceable, then such provision shall be
construed, to the extent feasible, so as to render the provision
enforceable, and if no feasible interpretation would save such
provision, it shall be severed from the remainder of this
Agreement. The remainder of this Agreement shall remain in full
force and effect, unless the severed provision is essential and
material to the rights or benefits received by either Party. In
such event, the Parties shall negotiate, in good faith, and
substitute a valid and enforceable provision or agreement that most
nearly implements the Parties’ intent in entering into this
Agreement.

 

13.9. No
Waiver. No provision of this Agreement can be waived except
by the express written consent of the Party waiving compliance.
Except as specifically provided for herein, the waiver from time to
time by either Party of any of its rights or its failure to
exercise any remedy shall not operate or be construed as a
continuing waiver of same or of any other of such Party’s
rights or remedies provided in this Agreement.

 

13.10. Independent
Contractors. For all purposes under this Agreement, Sanuwave
and Celularity and their respective Affiliates are independent
contractors with respect to each other, and shall not be deemed to
be an employee, agent, partner or legal representative of the other
Party. This Agreement does not grant any Party or its employees,
consultants or agents any authority (express or implied) to do any
of the following without the prior express written consent of the
other Party: create or assume any obligation; enter into any
agreement; make any representation or warranty; serve or accept
legal process on behalf of the other Party; settle any claim by or
against the other Party; or bind or otherwise render the other
liable in any way.

 

13.11. Governing
Law. This Agreement shall be governed by the laws of the
State of New York, without regard to its choice of law provisions
that would require the application of the laws of a different
jurisdiction. The Parties hereby irrevocably submit to the
jurisdiction of the state and federal courts sitting in the County
and State of New York for the adjudication of disputes arising out
of or relating to this Agreement.

 

13.12. Counterparts.
This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed an original but all of which together
shall constitute the same legal instrument. Facsimile or PDF
execution and delivery of this Agreement by any Party shall
constitute a legal, valid and binding execution and delivery of
this Agreement by such Party. The Parties to this document agree
that a copy of the original signature (including an electronic
copy) may be used for any and all purposes for which the original
signature may have been used. The Parties agree they will have no
rights to challenge the use or authenticity of this document based
solely on the absence of an original signature.

 

 

[Signature
page follows]

 

 

22

 

 

IN WITNESS WHEREOF, the Parties have
executed this Agreement by their duly authorized officers as of the
Effective Date.

 

	

CELULARITY INC.

	
 

	

SANUWAVE HEALTH, INC.

	
 

	
 

	
 

	

By:
/s/ Robert J. Hariri, MD,
PhD 

Name:
Robert J. Hariri, MD, PhD

Title:
Chairman & CEO

	
 

	

By:
/s/ Kevin A. Richardson,
II 

Name:
Kevin A. Richardson, II

Title:
CEO

 

 

 

 

23snwv_ex103

 

Exhibit 10.3

 

THIS
CONVERTIBLE PROMISSORY NOTE AND THE SECURITIES ISSUABLE UPON THE
CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS
SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

 

CONVERTIBLE
PROMISSORY NOTE

	
 

	
 

	
 

	

$4,000,000

	
 

	

August
6, 2020

 

FOR
VALUE RECEIVED, SANUWAVE Health, Inc., a Nevada corporation (the
“Company”), hereby
promises to pay to the order of Celularity Inc., a Delaware
corporation (the “Seller”), on or before
August 6, 2021 (the “Maturity Date”), in
accordance with the terms of this Convertible Promissory Note (this
“Note”), the principal
amount of $4,000,000 or, if less, the aggregate unpaid principal
amount of the indebtedness evidenced by this Note (the
“Outstanding
Principal Balance”), together with interest on the
Outstanding Principal Balance at the rates and on the dates set
forth in this Note.

 

This
Note is issued in connection with the transactions contemplated by
the Asset Purchase Agreement dated as of the date hereof (as
amended, supplemented or otherwise modified, the
“Purchase
Agreement”), between the Company and the
Seller.

 

This
Note is expressly subordinate to the secured promissory notes
issued pursuant to the Note Purchase Agreement (as defined below)
(as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Senior Debt”), pursuant
to and in accordance with the terms and conditions of that certain
Subordination Agreement dated as of the date hereof, by and between
Agent and the Seller (the “Subordination
Agreement”). The “Note Purchase Agreement”
shall mean and refer to that certain Note and Warrant Purchase and
Security Agreement dated as of August 6, 2020 by and among NH
Expansion Credit Fund Holdings LP (in such capacity,
“Agent”), the Company and the other parties
thereto.

 

1. Payment of Principal. The
Company shall repay the Outstanding Principal Balance in full on
the Maturity Date. The Company may prepay the Outstanding Principal
Balance in full upon two business days advance written notice to
the Seller, without premium or penalty. Notwithstanding the
foregoing, the Company shall not make any payments on the
Outstanding Principal Amount or accrued and unpaid interest to the
extent such payments would violate the Subordination Agreement;
provided, however, that the Company may use the
proceeds from an equity financing consummated after the date hereof
to repay the Outstanding Principal Amount and any accrued and
unpaid interest as long as the Company has not been informed that a
Potential Default or an Event of Default (each as defined in the
Note Purchase Agreement) has occurred and is
continuing.

 

2. The Company shall
pay all accrued and unpaid interest on the Outstanding Principal
Balance with any repayment or prepayments of principal. The Seller
shall record in its records the date and amount of any repayment or
prepayment of principal made pursuant to this Note and the
Outstanding Principal Balance so recorded is rebuttable presumptive
evidence of such principal amount owing and unpaid pursuant to this
Note. The Seller’s failure to so record any such amount or
any error in so recording any such amount does not limit or
otherwise affect the obligations of the Company under this Note to
repay the Outstanding Principal Balance together with all interest
accruing thereon.

 

3. Payment of Interest. The Note
shall accrue interest on the Outstanding Principal Balance at a
rate equal to 12.0% per annum. Accrued and unpaid interest shall be
payable at maturity. Following the occurrence of an Event of
Default (as defined in Section 6), the Note shall
accrue interest on the Outstanding Principal Balance from the date
of such Event of Default until such Event of Default has been
waived in writing at a rate equal to 5.0% per annum in excess of
the interest rate then applicable to the Outstanding Principal
Balance, such interest being payable on demand. All computations of
interest under this Note are made on the actual number of days
elapsed over a year of 360 days.

 

 

1

 

 

4. Payment. The Company shall make
all payments required under this Note in lawful money of the United
States of America at the principal office of the Seller or at such
other place as the Seller may from time to time designate to the
Company.

 

5. Conversion.

 

(A)

At any time on or
after January 1, 2021 (the “Convertibility Date”), at
the election of the Seller at its sole discretion, the Outstanding
Principal Balance, together with any accrued but unpaid interest
thereon, will be convertible into a number of shares of the
Company’s common stock equal to the quotient obtained by
dividing (a) the Outstanding Principal Balance on the date of such
conversion, together with any accrued but unpaid interest thereon,
by (b) $0.10 (as adjusted for any subdivisions, combinations or
reclassifications of the Company’s common stock), and rounded
down to the nearest whole number (the “Conversion Shares”). For
the avoidance of doubt, the Seller may at any time after the
Maturity Date at its sole discretion elect for the Outstanding
Principal Balance, together with any accrued but unpaid interest
thereon, to be paid in full rather than electing a conversion of
the Outstanding Principal Balance pursuant to this Section ‎5.

 

(B)

The Seller may
effect a conversion pursuant to this Section ‎5 by giving the
Company 30 days prior written notice thereof (the
“Conversion
Notice”). The Conversion Notice shall notice shall
notify the Company of Seller’s intention to effectuate a
conversion pursuant to this Section 5 and shall indicate the date
of such conversion, which date shall be not less than 30 days from
the date of such Conversion Notice (the “Conversion Date”). No
original of the Conversion Notice shall be required. The Company
may prepay the Outstanding Principal Balance, together with any
accrued but unpaid interest thereon, prior to the Conversion
Date.

 

(C)

Mechanics of
Conversion

 

(i)

Not later than
three (3) Trading Days (as defined below) after the Conversion Date
(the “Share Delivery
Date”), the Company shall deliver, or cause to be
delivered, to the Seller a certificate representing the Conversion
Shares representing the number of Conversion Shares being acquired
upon conversion of this Note. Upon any conversion under this
Section 4, in lieu
of any fractional shares to which the Seller would otherwise be
entitled, the Company shall pay to the Seller cash equal to such
fraction multiplied by $0.10 (as adjusted for any subdivisions,
combinations or reclassifications of the Company’s common
stock). For purposes hereof, the term “Trading Day”
means a day on which the principal Trading Market (as defined
below) is open for business. The term “Trading Market”
means any of the following markets or exchanges on which the common
stock of the Company is listed or quoted for trading on the date in
question: the NYSE American, the Nasdaq Capital Market, the Nasdaq
Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange or the OTC Bulletin Board (or any successors to any of the
foregoing).

 

(ii)

Obligation Absolute. The
Company’s obligation to issue and deliver the Conversion
Shares upon conversion of this Note in accordance with the terms
hereof is absolute and unconditional, irrespective of any action or
inaction by the Seller to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Seller or any other Person of any
obligation to the Company or any violation or alleged violation of
law by the Seller or any other person, and irrespective of any
other circumstance which might otherwise limit such obligation of
the Company to the Seller in connection with the issuance of such
Conversion Shares; provided,
however, that such delivery shall not operate as a waiver by
the Company of any such action that the Company may have against
the Seller. In the event the Seller shall elect to effect a
conversion pursuant to this Section 5, the Company may not refuse
conversion based on any claim that the Seller or anyone associated
or affiliated with the Seller has been engaged in any violation of
law, agreement or for any other reason and the Company shall issue
the Conversion Shares, upon a properly noticed conversion. Nothing
herein shall limit the Seller’s right to pursue all remedies
available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit the
Seller from seeking to enforce damages pursuant to any other
section hereof or under applicable law.

 

 

2

 

 

(D)

The Company
covenants that it will at all times from and after the
Convertibility Date reserve and keep available out of its
authorized and unissued shares of common stock for the sole purpose
of issuance upon conversion of this Note, free from preemptive
rights or any other actual contingent purchase rights of Persons
other than the Seller, not less than such aggregate number of
shares of the common stock as shall be issuable upon the conversion
of this Note hereunder. The Company covenants that all shares of
Common Stock that shall be so issuable shall, upon issue, be duly
authorized, validly issued, fully paid and
non-assessable.

 

(E)

The issuance of
certificates for shares of the common stock on conversion of this
Note shall be made without charge to the Seller for any documentary
stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificates.

 

(F)

Upon the conversion
of the Note, the Company will use commercially reasonable efforts
to cause the Conversion Shares to
be registered for resale on Form S-3 (or Form S-1 or any
other applicable form, at the sole discretion of the Company, if
Form S-3 is not available to the Company) as soon as practicable
after the Conversion Date, and to cause such registration statement
to remain effective until all of the Conversion Shares are sold or
the holder is entitled to sell all of the unsold Conversion Shares
pursuant to Rule 144 of the Securities Act of 1933, as amended,
without volume limitations.

 

6. Covenants. So long as any of
the Outstanding Principal Balance remains outstanding, the Company
shall not:

 

(A)

incur, create,
assume or become liable in any manner with respect to indebtedness
for borrowed money in excess of $30,000,000 (including indebtedness
hereunder);

 

(B)

directly or
indirectly, (i) make any dividend or distribution on or in respect
of any of its equity interests or (ii) redeem, repurchase or
otherwise retire any of its equity interests; or

 

(C)

be a party to any
merger, consolidation or exchange of stock, or sell or otherwise
transfer all or substantially all of its assets or equity
interests.

 

7. Default; Acceleration. Upon the
occurrence of any one of the following events (each an
“Event of
Default”):

 

(A)

the Company’s
failure to pay any portion of (i) the Outstanding Principal Balance
on the date such obligations are due or are declared due (whether
by scheduled maturity, acceleration, demand or otherwise) or (ii)
interest on the Outstanding Principal Balance within 30 days of the
date when such obligations are due or are declared due (whether by
scheduled maturity, acceleration, demand or
otherwise);

 

(B)

the Company fails
or neglects to perform, keep or observe any of its other covenants,
conditions or agreements contained in this Note and, in the case of
the covenants in Section
6, such failure or neglect continues for a period of 30 days
after the Company becomes aware of such failure or
neglect;

 

(C)

any representation
or warranty made in the Purchase Agreement by the Company proves to
be false or incorrect in any material respect;

 

(D)

the Company
(i) defaults in the payment of any indebtedness for borrowed
money (after expiration of any applicable cure period) or
(ii) defaults in the observance or performance of any
agreement or condition relating to any indebtedness for borrowed
money (after expiration of any applicable cure period), the effect
of which default is to cause, or to permit the holder or holders of
such indebtedness to cause, such indebtedness to become due prior
to its stated maturity;

 

 

3

 

 

(E)

a proceeding under
any bankruptcy, reorganization, arrangement of debt, insolvency,
readjustment of debt or receivership law or statute is filed by or
against the Company; the Company makes an assignment for the
benefit of creditors or takes any action to authorize any of the
foregoing; or, in the case of an involuntary proceeding filed
against the Company, such proceeding is not discharged or dismissed
within 60 days; or

 

(F)

the Company
voluntarily or involuntarily dissolves or the Company is dissolved
or becomes insolvent or fails generally to pay its debts as they
become due;

 

the
Seller may declare the Outstanding Principal Balance, together with
all accrued and unpaid interest thereon, to be, and upon such
declaration all of such principal and interest shall become,
immediately due and payable without presentment, demand, protest or
further notice of any kind; provided that if an Event of
Default described in clause (E) above exists or
occurs, the Outstanding Principal Balance, together with all
accrued and unpaid interest thereon, automatically, without notice
of any kind, becomes immediately due and payable.

 

8. Expenses. The Company shall pay
all reasonable expenses, including reasonable attorneys’ fees
and legal expenses, incurred by the Seller in endeavoring to
collect any amounts payable under this Note which are not paid when
due, whether by declaration or otherwise, without duplication of
any similar amounts for which the Company is liable under the
Purchase Agreement.

 

9. Governing Law. This Note is
governed by, and construed in accordance with, the laws of the
State of New York.

 

10. Jurisdiction. The Company and
the Seller irrevocably submit to the exclusive personal
jurisdiction of the Court of Chancery of the State of Delaware or,
to the extent such court does not have subject matter jurisdiction,
the United States District Court for the District of Delaware (the
“Chosen
Courts”) solely in respect of the interpretation and
enforcement of the provisions of this Note and hereby waive, and
agree not to assert, as a defense in any Action (as defined in the
Purchase Agreement) for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such
Action may not be brought or is not maintainable in the Chosen
Courts or that the Chosen Courts are an inconvenient forum or that
the venue thereof may not be appropriate or that this Note or any
such document may not be enforced in or by the Chosen Courts, and
the Company and the Seller irrevocably agree that all claims
relating to such Action or transactions will be heard and
determined in the Chosen Courts.

 

11. JURY TRIAL. EACH OF
THE COMPANY AND THE SELLER ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY THAT MAY ARISE UNDER THIS NOTE IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS NOTE. EACH OF THE
COMPANY AND THE SELLER CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (B) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION
10.

 

12. Amendments. Neither this Note
nor any provision hereof may be amended, modified or waived except
pursuant to an agreement or agreements in writing entered into by
the Company and the Seller.

 

13. Successors and Assigns. This
Note applies to, inures to the benefit of, and binds the successors
and assigns of the Company and the Seller. The Company may not
assign its obligations under this Note without the written consent
of the Seller.

 

 

4

 

 

14. Notices. All notices and other
communications provided for in this Note must be in writing and
delivered in the manner provided in the Purchase
Agreement.

 

15. Severability. Any provision of
this Note held to be invalid, illegal or unenforceable in any
jurisdiction is, as to such jurisdiction, ineffective to the extent
of such invalidity, illegality or unenforceability without
effecting the validity, legality and enforceability of the
remaining provisions of this Note; and the invalidity of a
particular provision in a particular jurisdiction does not
invalidate such provision in any other jurisdiction.

 

16. No Implied Waivers. No failure
to exercise and no delay in exercising any right or remedy under
this Note operates as a waiver thereof. No single or partial
exercise of any right or remedy under this Note, or any abandonment
or discontinuance thereof, precludes any other or further exercise
thereof or the exercise of any other right or remedy. No waiver or
consent under this Note is applicable to any events, acts or
circumstances except those specifically covered
thereby.

 

17. Integration. This Note and the
Purchase Agreement constitute the entire contract between the
Company and the Seller relating to the subject matter hereof and
supersedes any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof.

 

18. Lost, Stolen, Destroyed or Mutilated
Note. In case this Note shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new Note of like date, tenor
and denomination and deliver the same in exchange and substitution
for and upon surrender and cancellation of any mutilated Note, or
in lieu of any Note lost, stolen or destroyed, upon receipt of
evidence satisfactory to the Company of the loss, theft or
destruction of such Note.

 

[Signature page
follows]

 

 

5

 

Executed and
delivered as of the date first written above.

 

 

 

	
 

	

SANUWAVE
HEALTH, INC.

	
 

	

By:
/s/ Kevin A. Richardson
II

	
 

	

Name:
Kevin A. Richardson II

	
 

	

Title:
CEO

 

 

 

 

 

SIGNATURE
PAGE TOCONVERTIBLE PROMISSORY NOTE

 

6

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