Careview Communications, Inc. 8-K [crvw-8k_101315.htm]

Exhibit 10.01

FIRST AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of October 7,
2015, is entered into by and among CAREVIEW COMMUNICATIONS, INC., a Nevada
corporation (“Holdings”), CAREVIEW COMMUNICATIONS, INC., a Texas corporation and
a wholly-owned subsidiary of Holdings (the “Borrower”), and PDL BIOPHARMA, INC.,
a Delaware corporation, in its capacity as lender (in such capacity, the
“Lender”) and in its capacity as agent (in such capacity, the “Agent”).

W I T N E S S E T H

WHEREAS the Borrower, the Lender and the Agent have entered into that certain
Credit Agreement dated as of June 26, 2015 (the “Credit Agreement”);

WHEREAS the Borrower has requested that the Lender agree to amend the conditions
precedent required to be satisfied prior to the borrowing by the Borrower of the
Tranche One Loan, as set forth herein;

WHEREAS the Lender is willing to make such amendments to the Credit Agreement
upon the terms and conditions set forth herein;

WHEREAS pursuant to Section 10.1 of the Credit Agreement, PDL, as the Lender and
the Agent, is willing to agree to make such amendments to the Credit Agreement
subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

Article I.
DEFINITIONS

1.1              Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment, including its preamble and
recitals, have the meanings provided in the Credit Agreement.

Article II.
AMENDMENTS

2.1              Amendments. Upon satisfaction of the conditions set forth in
Article III hereof, the Credit Agreement is hereby amended as follows:

(a)                Section 1.1 (Definitions) of the Credit Agreement is hereby
amended by adding, or amending and restating in their entirety, as applicable,
the following definitions in alphabetical order:

 

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“Bed Equivalent Units” means, as of any date of determination, an aggregate
number of units equal to (i) 1 unit for each room control platform; (ii) 2 units
for each nurse station monitor; (iii) 14 units for each Headend; and (iv)
fractional units for mobile assets computed by taking the gross revenue for all
mobile assets for the last full calendar month ending immediately prior to the
date of determination divided by 60, in the case of each such unit in clauses
(i) through (iv) for which each of the following clauses (a) to (c) is true: (a)
such unit is mounted (where applicable) and operational, (b) required personnel
have been trained in the use of such unit (where applicable) and (c) the
Borrower is receiving revenue as of such date in respect of such unit.

“Headend” means an individual head-end server operating as the communications
center for the CareView Systems that allows such CareView Systems to communicate
over a coaxial cable television infrastructure, in each case (i) that consists
of at least two servers, a switch and a router and (ii) for which the Borrower
is charging a monthly service fee.

“Tranche One Funding Date” means the date on which the conditions set forth in
Section 4.2 have been satisfied or waived by the Agent in its sole discretion
and the Tranche One Loan is funded.

(b)               Each of the following definitions is hereby deleted from
Section 1.1 (Definitions) of the Credit Agreement in its entirety: “Billable
CareView System Unit”, “Tranche One Loan Request Date”, “Tranche One Milestone”,
and “Tranche One Milestone Notice”.

(c)                Section 2.1.1(a) (Loans) of the Credit Agreement is hereby
amended and restated in its entirety as follows:

“(a) on the Tranche One Funding Date, the entire amount of its Tranche One
Commitment, after which the Tranche One Commitment shall terminate in full.”

(d)               Section 4.2 (Tranche One Loan) of the Credit Agreement is
hereby amended and restated in its entirety as follows:

4.2 Tranche One Loan. The obligation of the Lender to make the Tranche One Loan
is subject to the following conditions precedent, each of which shall be
satisfactory in all respects to the Agent and the Lender:

4.2.1 Delivery of Borrowing Request. The Borrower shall have delivered to Agent
a Borrowing Request requesting that the entire amount of the Tranche One
Commitment be funded on a date that is no less than one Business Day after the
date of such Borrowing Request.

4.2.2 Payment of Closing Fee and Fees and Expenses. The Borrower shall have
paid, on or prior to the Tranche One Funding Date, (i) the Closing Fee, (ii) all
fees and expenses owing and payable to the Agent and the Lender as of such date
and (iii) subject to Section 10.3, without duplication, all costs and expenses
incurred by the Agent and the Lender in connection with the funding of

 

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the Tranche One Loan which are required to be paid by the Borrower, and shall
provide evidence acceptable to the Agent of the foregoing.

4.2.3 Notes. A Note in respect of the Tranche One Loan.

4.2.4 Officer’s Certificate. A certificate, dated the Tranche One Funding Date
and signed by the chief executive officer or the chief financial officer of each
of Holdings and the Borrower, confirming compliance with the conditions set
forth in Section 4.2.5, 4.2.6, and 4.2.7.

4.2.5 Representations and Warranties. Each representation and warranty by each
Loan Party contained herein or in any other Loan Document to which such Loan
Party is a party, shall be true and correct in all material respects (without
duplication of any materiality qualifier contained therein) as of the Tranche
One Funding Date (or as of a specific earlier date if such representation or
warranty expressly relates to an earlier date).

4.2.6 No Default. No Default or Event of Default shall have occurred and be
continuing.

4.2.7 No Material Adverse Change. Since December 31, 2014, no event or
occurrence shall have occurred that has resulted or could reasonably be expected
to result in a Material Adverse Effect.

(e)                Section 4.3.2 (Tranche Two Milestone) of the Credit Agreement
is hereby amended and restated in its entirety as follows:

4.3.2 Tranche Two Milestone. On or prior to June 30, 2017, (a) the Borrower
shall have placed in service a minimum of 31,500 Bed Equivalent Units and (b)
the Consolidated EBITDA of Holdings, computed on an annualized basis for the
three-calendar month period immediately preceding the Tranche Two Funding Date,
shall not be less than $7,000,000 (the foregoing conditions, collectively, the
“Tranche Two Milestone”). For the avoidance of doubt, if the Tranche Two
Milestone shall have not occurred on or prior to June 30, 2017, the condition
set forth in this Section 4.3.2 shall not be satisfied.

(f)                Section 6.9 (Tranche One Milestone Notice) of the Credit
Agreement is hereby deleted in its entirety and replaced with “[RESERVED]”.

Article III.
CONDITIONS TO EFFECTIVENESS

This Amendment shall be and become effective (the “Closing”) on the date (the
“First Amendment Effective Date”) all of the conditions set forth in this
Article III shall have been satisfied (or waived by the Agent and the Lender in
its sole discretion in accordance with Section 10.1 of the Credit Agreement):

 

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3.1              Counterparts. The Agent shall have received counterparts to
this Amendment duly executed by each of Holdings, the Borrower, the Lender and
the Agent.

3.2              Fees and Expenses. The Agent shall have received, by wire
transfer of immediately available funds to an account of the Agent designated in
writing, reimbursement from the Borrower of all costs and expenses incurred by
the Agent and the Lender in connection with this Amendment and the transactions
contemplated hereby, including any and all fees payable or owed to Gibson, Dunn
& Crutcher LLP in connection with the drafting, negotiation, and execution of
this Amendment.

3.3              Amendment and Restatement of Warrants. The Agent shall have
received counterparts duly executed by Holdings of amended and restated Warrants
(the “Amended and Restated Warrants”), which Amended and Restated Warrants shall
provide for an exercise price of $0.40 per share and be in a form reasonably
acceptable to the Agent.

3.4              Representations and Warranties. Both prior to and after giving
effect to this Amendment, each representation and warranty by each Loan Party
that is a party hereto contained herein or in any other Loan Document to which
such Loan Party is a party, shall be true and correct in all material respects
(without duplication of any materiality qualifier contained therein) on and as
of the First Amendment Effective Date (or as of a specific earlier date if such
representation or warranty expressly relates to an earlier date).

3.5              Event of Default. Both prior to and giving effect to this
Amendment, no Default or Event of Default shall have occurred and be continuing,
and no Default or Event of Default shall result from the execution and delivery
of this Amendment and the consummation of the transactions contemplated herein.

3.6              No Material Adverse Effect. Since December 31, 2014, no event
or occurrence shall have occurred that has resulted or could reasonably be
expected to result in a Material Adverse Effect.

Article IV.
REPRESENTATIONS AND WARRANTIES

4.1              Representations and Warranties of Loan Parties. In order to
induce the Agent and the Lender to enter into this Amendment, each of Holdings
and the Borrower hereby represents and warrants to the Agent and the Lender that
as of the date hereof, both prior to and after giving effect to this Amendment:

(a)                Organization. Holdings is a corporation validly existing and
in good standing under the laws of the State of Nevada; the Borrower is a
corporation validly existing and in good standing under the laws of the State of
Texas; and each other Loan Party and each of its Subsidiaries is duly organized,
validly existing and in good standing (as applicable) under the laws of the
jurisdiction of its incorporation or organization. Each Loan Party has all power
and authority and all material governmental approvals required for the ownership
and operation of its properties and the conduct of its business as now conducted
and as proposed to be conducted and is qualified to do business, and is in good
standing (as applicable), in every jurisdiction where, because of the nature of
its activities or properties, such qualification is required, except for such

 

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jurisdictions where the failure to so qualify could not reasonably be expected
to have a Material Adverse Effect.

(b)               Due Authorization. The execution, delivery and performance of
this Amendment, and the performance of its obligations under the Credit
Agreement as amended hereby, have been duly authorized by all necessary action
on the part of each Loan Party that is a party hereto.

(c)                No Conflict. The execution, delivery and performance of this
Amendment by each Loan Party that is a party hereto and the consummation of the
transactions contemplated hereby do not and will not (a) require any consent or
approval of, or registration or filing with or any other action by, any
Governmental Authority (other than any consent or approval which has been
obtained and is in full force and effect), (b) conflict with (i) any provision
of material Applicable Law, (ii) the charter, by-laws, limited liability company
agreement, partnership agreement or other organizational documents of any Loan
Party or (iii) any material agreement, indenture, instrument or other document,
or any judgment, order or decree, which is binding upon any Loan Party or any of
their respective properties or (c) require, or result in, the creation or
imposition of any Lien on any asset of Holdings, the Borrower or any other Loan
Party (other than Liens in favor of the Agent created pursuant to the Collateral
Documents).

(d)               Incorporation of Representations and Warranties from Loan
Documents. Each representation and warranty by each Loan Party that is a party
hereto contained in the Credit Agreement or in any other Loan Document to which
such Loan Party is a party is true and correct in all material respects (without
duplication of any materiality qualifier contained therein) as of the date
hereof (or as of a specific earlier date if such representation or warranty
expressly relates to an earlier date).

(e)                No Default. Both prior to and after giving effect to this
Amendment, no Default or Event of Default has occurred and is continuing, and no
Default or Event of Default will result from the execution and delivery of this
Amendment and the consummation of the transactions contemplated herein.

(f)                No Material Adverse Effect. Since December 31, 2014, no event
or occurrence has occurred that has resulted or could reasonably be expected to
result in a Material Adverse Effect.

(g)               Validity; Binding Nature. This Amendment has been duly
executed by each Loan Party that is a party hereto, and each of (i) this
Amendment and (ii) the Credit Agreement as amended hereby is the legal, valid
and binding obligation of each Loan Party that is a party hereto, enforceable
against such Person in accordance with its terms, subject to bankruptcy,
insolvency and similar laws affecting the enforceability of creditors’ rights
generally and to general principles of equity.

Article V.
MISCELLANEOUS

5.1              Loan Document. This Amendment is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
therein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.

 

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5.2              Effect of Amendment. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect, the rights and remedies of the parties to the
Credit Agreement and shall not alter, modify, amend or in any way affect any of
the terms or conditions contained therein, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. Nothing
herein shall be deemed to entitle any Loan Party to any future consent with
respect to, or waiver, amendment, modification or other change of, any of the
terms or conditions contained in the Credit Agreement in similar or different
circumstances. Except as expressly stated herein, the Agent and the Lender
reserve all rights, privileges and remedies under the Loan Documents. All
references in the Credit Agreement and the other Loan Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement as modified
hereby.

5.3              Reaffirmation. Each of Holdings and the Borrower hereby
reaffirms its obligations under each Loan Document to which it is a party. Each
of Holdings and the Borrower hereby further ratifies and reaffirms the validity
and enforceability of all of the liens and security interests heretofore
granted, pursuant to and in connection with the Guarantee and Collateral
Agreement or any other Loan Document, to the Agent, as collateral security for
the obligations under the Loan Documents in accordance with their respective
terms, and acknowledges that all of such liens and security interests, and all
Collateral heretofore pledged as security for such obligations, continue to be
and remain collateral for such obligations from and after the date hereof.

5.4              Counterparts. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of an executed signature page of this Amendment by facsimile
transmission or electronic transmission shall be as effective as delivery of a
manually executed counterpart hereof.

5.5              Construction; Captions. Each party hereto hereby acknowledges
that all parties hereto participated equally in the negotiation and drafting of
this Amendment and that, accordingly, no court construing this Amendment shall
construe it more stringently against one party than against the other. The
captions and headings of this Amendment are for convenience of reference only
and shall not affect the interpretation of this Amendment.

5.6              Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns (as permitted under the Credit Agreement).

5.7              Governing Law. This Amendment, the rights and obligations of
the parties hereto, and any claims or disputes relating thereto shall be
governed by and construed in accordance with THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

5.8              Severability. The illegality or unenforceability of any
provision of this Amendment or any instrument or agreement required hereunder
shall not in any way affect or

 

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impair the legality or enforceability of the remaining provisions of this
Amendment or any instrument or agreement required hereunder.

5.9              Release of Claims. In consideration of the Lender’s and Agent’s
agreements contained in this Amendment, each of Holdings and Borrower hereby
releases and discharges the Lender and the Agent and their affiliates,
subsidiaries, successors, assigns, directors, officers, employees, agents,
consultants and attorneys (each, a “Released Person”) of and from any and all
other claims, suits, actions, investigations, proceedings or demands, whether
based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute or common law of any kind or character, known or unknown, which
Holdings or Borrower ever had or now has against the Agent, any Lender or any
other Released Person which relates, directly or indirectly, to any acts or
omissions of the Agent, any Lender or any other Released Person relating to the
Credit Agreement or any other Loan Document on or prior to the date hereof.

[Signature page follows]

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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered as of the date first above written.

 

HOLDINGS:

 

CAREVIEW COMMUNICATIONS, INC.,

a Nevada corporation

 

 

By:/s/ Steven Johnson

Name: Steven Johnson

Title: President and CEO

 

BORROWER:

 

CAREVIEW COMMUNICATIONS, INC.,

a Texas corporation

 

 

By: /s/ Steven Johnson

Name: Steven Johnson

Title: President and CEO

 

LENDER:

 

PDL BIOPHARMA, INC.

 

 

By:/s/ John P. McLaughlin

Name: John P. McLaughlin

Title: President and Chief Executive Officer

 

AGENT:

 

PDL BIOPHARMA, INC.

 

 

 

By: /s/ John P. McLaughlin

Name: John P. McLaughlin

Title: President and Chief Executive Office

 

 

[Signature Page to First Amendment to Credit Agreement]

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