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CareView Communications, Inc. 8-K [crvw-8k_082013.htm]
 
Exhibit 10.116
 
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
 
This Third Amendment to Loan and Security Agreement (this “Amendment”) is
entered into as of August 20, 2013, by and between COMERICA BANK (“Comerica”
and, solely in its capacity as collateral agent for the Lenders (as defined
below), “Collateral Agent”), BRIDGE BANK, NATIONAL ASSOCIATION (“Bridge” and,
collectively, with Comerica, the “Lenders” and each, individually, a “Lender”)
and CAREVIEW COMMUNICATIONS, INC., a Nevada corporation (“Parent”), CAREVIEW
COMMUNICATIONS, INC., a Texas corporation (“CareView Texas”) and CAREVIEW
OPERATIONS, L.L.C., a Texas limited liability company (“CV Operations” and,
collectively with CareView Texas and Parent, “Borrowers” and each, individually,
a “Borrower”).
 
RECITALS
 
Collateral Agent, Lenders and Borrowers are parties to that certain Loan and
Security Agreement dated as of August 31, 2011 (as amended from time to time,
including by that certain First Amendment to Loan and Security Agreement dated
as of January 31, 2012 and that certain Second Amendment to Loan and Security
Agreement dated as of January 15, 2013, collectively, the “Agreement”).  The
parties desire to amend the Agreement in accordance with the terms of this
Amendment.
 
NOW, THEREFORE, the parties agree as follows:
 
1.   The following term and its definition hereby is added to Section 1.1 of the
Agreement:
 
“Reduced Minimum Cash Period” means the period from the date that Borrower’s
Cash with Comerica and Bridge Bank, collectively, is less than Five Million
Dollars ($5,000,000) in the aggregate (the “Reduced Minimum Cash Period Start
Date”) through the earlier of (a) the date one hundred twenty (120) days after
the Reduced Minimum Cash Period Start Date or (b) the date (i) Borrower’s Cash
with Comerica and Bridge Bank, collectively, is equal to or greater than Five
Million Dollars ($5,000,000) in the aggregate and (ii) Lenders receive notice
from Borrower of Borrower’s termination of such Reduced Minimum Cash Period;
provided, however, such Reduced Minimum Cash Period shall not apply more than
once during the term of this Agreement.
 
2.   The following sentence hereby is added immediately after the first sentence
of Section 2.1(a)(i) as follows:
 
“Notwithstanding the foregoing, the aggregate amount of outstanding Advances
shall not exceed  Three Million Dollars ($3,000,000) at any time during the
Reduced Minimum Cash Period.”
 
3.   Section 2.2 of the Agreement hereby is amended and restated in its entirety
to read as follows:
 
“2.2           Overadvances.  If the aggregate amount of the outstanding
Advances exceeds, (x) at any time other than during the Reduced Minimum Cash
Period, the lesser of the Revolving Line or the Borrowing Base and (y) at any
time during the Reduced Minimum Cash Period, the lesser of the Borrowing Base or
Three Million Dollars ($3,000,000), Borrowers shall immediately pay to Lenders,
in cash, each Lender’s Pro Rata Share of the amount of such excess, for
application against the outstanding Advances.”
 
4.   Section 6.7(a) of the Agreement hereby is amended and restated in its
entirety to read as follows:
 
“(a)           Minimum Cash.  At least, (x) (i) at all times other than during
the Reduced Minimum Cash Period, Two Million Five Hundred Thousand Dollars
($2,500,000) Cash with each of Comerica and Bridge Bank and (ii) during the
Reduced Minimum Cash Period, Two Million Dollars ($2,000,000) Cash with each of
Comerica and Bridge Bank; and (y) approximately fifty percent (50%) of its Cash
with each of Comerica and Bridge Bank; provided that Borrower shall have five
(5) days from notice or knowledge thereof to “rebalance” the accounts with
Comerica and Bridge Bank to ensure compliance with this clause (y); and”
 
 
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5.   Exhibit E to the Agreement is replaced with Exhibit E attached hereto.
 
6.   No course of dealing on the part of Collateral Agent, any Lender or their
officers, nor any failure or delay in the exercise of any right by Collateral
Agent or any Lender, shall operate as a waiver thereof, and any single or
partial exercise of any such right shall not preclude any later exercise of any
such right.  Collateral Agent’s or any Lender’s failure at any time to require
strict performance by a Borrower of any provision shall not affect any right of
Collateral Agent or any Lender thereafter to demand strict compliance and
performance.  Any suspension or waiver of a right must be in writing signed by
an officer of Collateral Agent and each Lender or as otherwise provided for in
the Agreement.
 
7.   Unless otherwise defined, all initially capitalized terms in this Amendment
shall be as defined in the Agreement.  The Agreement, as amended hereby, shall
be and remain in full force and effect in accordance with its respective terms
and hereby is ratified and confirmed in all respects.  Except as expressly set
forth herein, the execution, delivery, and performance of this Amendment shall
not operate as a waiver of, or as an amendment of, any right, power, or remedy
of Collateral Agent or any Lender under the Agreement, as in effect prior to the
date hereof.
 
8.   Each Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct in all material
respects as of the date of this Amendment (provided, however, that those
representations and warranties expressly referring to another date shall be
true, correct and complete in all material respects as of such date), and that
no Event of Default has occurred and is continuing.
 
9.   As a condition to the effectiveness of this Amendment, Collateral Agent
shall have received, in form and substance satisfactory to Collateral Agent, the
following:
 
(a)   this Amendment, duly executed by each Borrower;
 
(b)   that certain Affirmation of Subordination Agreement dated as of even date
herewith, duly executed by each party thereto;
 
(c)   an officer’s certificate of each Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this Amendment;
 
(d)   an amendment fee equal to Fifteen Thousand Dollars ($15,000), to be shared
between the Lenders pursuant to their respective Commitment Percentages;
 
(e)   all reasonable Lender Expenses incurred through the date of this
Amendment, which may be debited from any of Borrowers’ accounts; and
 
(f)   such other documents, and completion of such other matters, as Collateral
Agent may reasonably deem necessary or appropriate.
 
10.   This Amendment may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instrument.

 
[Balance of Page Intentionally Left Blank]
 

 
 
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.
 

  CAREVIEW COMMUNICATIONS, INC., a Nevada Corporation      
By:
/s/ Samuel A. Greco
       
Title:
CEO
              CAREVIEW COMMUNICATIONS, INC. a Texas Corporation        
By:
/s/ Samuel A. Greco
       
Title:
CEO
              CAREVIEW OPERATIONS, L.L.C. a Texas Limited Liability Company    
 
By:
    /s/ Samuel A. Greco
       
Title:
CEO
              COLLATERAL AGENT AND LENDER: COMERICA BANK      
By:
    /s/ [Unintelligible]
       
Title:
Senior Vice President
             
LENDER:
 
BRIDGE BANK, NATIONAL ASSOCIATION
 
 
By:
    /s/ [Unintelligible]
       
Title:
Vice President

 
[Signature Page to Third Amendment to Loan & Security Agreement]
 

 
 

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EXHIBIT E

COMPLIANCE CERTIFICATE
 
Please send all Required Reporting to:
Comerica Bank
 
Technology & Life Sciences Division
 
Loan Analysis Department
 
Five Palo Alto Square, Suite 800
 
3000 El Camino Real
 
Palo Alto, CA 94306
 
Phone: (650) 846-6820
 
Fax: (650) 462-6061

 
FROM:
CAREVIEW COMMUNICATIONS, INC., a Nevada corporation, for itself and on behalf of
its Subsidiaries (collectively, “Borrowers”)

 
The undersigned authorized Officer of CAREVIEW COMMUNICATIONS, INC., a Nevada
corporation, hereby certifies that in accordance with the terms and conditions
of the Loan and Security Agreement among Borrowers, Bridge Bank, N.A. and Bank
(the "Agreement"), (i)Borrowers are in complete compliance for the period
ending_________________________ with all required covenants, including without
limitation the ongoing registration of intellectual property rights in
accordance with Section 6.8, except as noted below and (ii) all representations
and warranties of Borrowers stated in the Agreement are true and correct in all
material respects as of the date hereof.  Attached herewith are the required
documents supporting the above certification.  The Officer further certifies
that these are prepared in accordance with Generally Accepted Accounting
Principles (GAAP) and are consistently applied from one period to the next
except as explained in an accompanying letter or footnotes.
 
Please indicate compliance status by circling Yes/No under "Complies" or
"Applicable" column.
 
REPORTING COVENANTS
 
REQUIRED
COMPLIES
Company Prepared Monthly F/S
Monthly, within 30 days
YES
NO
Compliance Certificate
Monthly, within 30 days
YES
NO
CPA Audited, Unqualified F/S
Annually, within 120 days of FYE
YES
NO
Borrowing Base Cert., A/R & A/P Agings; future, rolling twelve (12) month
billings report
Monthly, within 30 days
YES
NO
Annual Business Plan (incl. operating budget)
By 2/15
YES
NO
Intellectual Property Report
Quarterly within 30 days
YES
NO
Audit
Semi-annual
YES
NO
       
10-Q
Quarterly, within 5 days of SEC filing (50 days)
YES
NO
10-K
Annually, within 5 days of SEC filing (95 days)
YES
NO
Total amount of Borrower's cash and
     
investments
     
Total amount of Borrower's cash and
Amount: $______________________
YES
NO
investments maintained with Comerica Bank
     
Total amount of Borrower's cash and
     
investments maintained with Bridge Bank, N.A.
Amount: $______________________
YES
NO

REPORTING COVENANTS
 
DESCRIPTION
APPLICABLE
Legal Action > $100,000 (Sect. 6.2(iv))
Notify promptly upon notice _________________ 
YES
NO
Inventory Disputes > $100,000 (Sect. 6.3)
Notify promptly upon notice _________________
YES
NO
Mergers & Acquisitions > $250,000 (Sect. 7.3)
Notify promptly upon notice _________________
YES
NO
Cross default with other agreements
Notify promptly upon notice _________________
YES
NO
> $100,000 (Sect. 8.7)
 
YES
NO
Judgment > $100,000 (Sect. 8.9)
Notify promptly upon notice _________________
YES
NO
       

 
 

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FINANCIAL COVENANTS
 
REQUIRED
ACTUAL
COMPLIES
TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED:
             
Minimum Cash at Comerica Bank (at all times)
$2,500,000*
$________________________________________
YES
NO
Minimum Cash at Bridge Bank (at all times)
$2,500,000*
$________________________________________
YES
NO
Minimum Fixed Charge Coverage Ratio (quarterly)
5.01:1:00
_______________________:1.00
YES
NO
         
OTHER COVENANTS
REQUIRED
ACTUAL
COMPLIES
Permitted Indebtedness for equipment leases
<$250,000
  _______________________________
YES
NO
Permitted Investments for stock repurchase
<$250,000
  _______________________________
YES
NO
Permitted Investments for subsidiaries
<$100,000
  _______________________________
YES
NO
Permitted Investments for employee loans
<$100,000
  _______________________________
YES
NO
Permitted Investments for joint ventures
<$250,000
  _______________________________
YES
NO
Permitted Liens for equipment leases
<$250,000
  _______________________________
YES
NO
Permitted Transfers
<$250,000
  _______________________________
YES
NO

*$2,000,000 during the Reduced Minimum Cash Period
 
Please Enter Below Comments Regarding Violations:
 
The Officer further acknowledges that at any time Borrowers are not in
compliance with all the terms set forth in the Agreement, including, without
limitation, the financial covenants, no credit extensions will be made.
 
Very truly yours,
     
Authorized Signer
 
 
Name:                                                                
     
Title:                                                      
             

 

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