CareView Communications, Inc. 8-K [crvw-8k_071018.htm]

 

Exhibit 10.52

 

SECOND AMENDMENT TO
SUBORDINATION AND INTERCREDITOR AGREEMENT

SECOND AMENDMENT TO SUBORDINATION AND INTERCREDITOR AGREEMENT (this
“Amendment”), dated as of July 10, 2018, among CAREVIEW COMMUNICATIONS, INC., a
Nevada corporation (“Holdings”), CAREVIEW COMMUNICATIONS, INC., a Texas
corporation and a wholly-owned subsidiary of Holdings (the “Borrower”), PDL
INVESTMENT HOLDINGS, LLC, a Delaware limited liability company (as assignee of
PDL BioPharma, Inc.), in its capacity as lender under the Credit Agreement
defined below (in such capacity, the “Lender”) and in its capacity as agent (in
such capacity, the “Agent”) under the Credit Agreement defined below, and the
Required Second Lien Claimholders (as defined in the Intercreditor Agreement
defined below).

W I T N E S S E T H

WHEREAS Holdings, the Borrower, the Lender and the Agent have entered into that
certain Credit Agreement dated as of June 26, 2015 (as amended, the “Credit
Agreement”) pursuant to which the Lender made a term loan to the Borrower in the
original aggregate principal amount of $20,000,000;

WHEREAS Holdings and the Note Investors (as defined in the Intercreditor
Agreement defined below) have entered into that certain Note and Warrant
Purchase Agreement dated as of April 21, 2011 (as amended, the “NWPA”) pursuant
to which Holdings issued to the Note Investors senior secured convertible notes
(the “NWPA Notes”) and warrants to purchase Holdings’ common stock (the “NWPA
Warrants”);

WHEREAS the Agent and the Note Investors have entered into that certain
Subordination and Intercreditor Agreement dated as of June 26, 2015 (as amended
by that certain Consent and Amendment to Note and Warrant Purchase Agreement and
Subordination and Intercreditor Agreement dated as of February 2, 2018, among
Holdings, Borrower, the Lender, the Agent and the Note Investors, the
“Intercreditor Agreement”) pursuant to which the Note Investors agreed to the
payment and lien subordination of obligations owed to the Note Investors under
the NWPA to obligations owed to the Lender and the Agent under the Credit
Agreement;

WHEREAS, the Borrower has requested, and the Agent and Required Second Lien
Claimholders have agreed, to amend the Intercreditor Agreement as 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 Intercreditor Agreement.

 

  

 

 

Article II.
AMENDMENT TO INTERCREDITOR AGREEMENT

2.1   

Amendment to Section 5.1(b). Subject to Section 4.1 of this Amendment, Section
5.1(b) of the Intercreditor Agreement is hereby amended and restated in its
entirety as follows:

“(b) 

If in connection with any sale, lease, exchange, transfer or other disposition
of any Collateral (collectively, a “Disposition”) permitted under the terms of
both the First Lien Loan Documents and the Second Lien Loan Documents (other
than in connection with the exercise of PDL’s remedies in respect of the
Collateral provided for by the First Lien Loan Documents), PDL releases for
itself or on behalf of any of the First Lien Claimholders any of its Liens on
any part of the Collateral or releases any Grantor from its guaranty of the
First Lien Obligations in connection with the sale of the stock, or
substantially all the assets, of the Borrower or the applicable Grantor other
than (A) in connection with the Discharge of First Lien Obligations and (B)
after the occurrence and during the continuance of any Event of Default under
the Note Purchase Agreement, then the Liens, if any, of the Second Lien
Claimholders on such Collateral and the obligations of such Grantor under its
guaranty of the Second Lien Obligations shall be automatically, unconditionally
and simultaneously released; provided that the net proceeds from any Disposition
are applied to repay Obligations under the Credit Agreement to the extent
required thereby. The foregoing notwithstanding, in the event that PDL consents
to any Disposition of all or any portion of the hospital assets of any Grantor
that is Collateral (including a sale of any Grantor all or substantially all of
the assets of which are hospital assets) (but other than in connection with the
exercise of PDL’s remedies in respect of the Collateral provided for by the
First Lien Loan Documents) (a “Hospital Disposition”), and PDL releases for
itself or on behalf of any of the First Lien Claimholders any of its Liens on
any part of such hospital assets that are Collateral or releases any Grantor
from its guaranty of the First Lien Obligations in connection with a Hospital
Disposition, then the Liens, if any, of the Second Lien Claimholders on such
hospital assets and the obligations of any such Grantor under its guaranty of
the Second Lien Obligations shall be automatically, unconditionally and
simultaneously released; provided that the net proceeds from any Hospital
Disposition are applied first, to repay Obligations under the Credit Agreement
until paid in full, second, up to the next $5,000,000 of such net proceeds may
be retained by the Borrower for working capital purposes, and third, all
remaining net proceeds shall be applied to repay the Second Lien Obligations in
accordance with the priorities set forth in the NWPA and NWPA Notes. The Second
Lien Claimholders shall promptly execute and deliver to PDL, the Borrower or the
applicable Grantor such termination statements, releases and other documents as
PDL, the Borrower or the applicable Grantor may reasonably request to
effectively confirm any such release contemplated herein.”

Article III.
MISCELLANEOUS

3.1   

Reaffirmation of Intercreditor Agreement. Each of Agent and the Note Investors
party hereto hereby acknowledges and reaffirms its respective obligations,
duties and covenants under the Intercreditor Agreement, as modified hereby.

3.2       

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.

3.3       

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. This Amendment shall, unless otherwise
expressly indicated herein, be construed, administered and applied in accordance
with the terms and provisions of the Intercreditor Agreement.

 

 2 

 

 

3.4       

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

3.5       

Governing Law. This Amendment, the rights and obligations of the NOTE INVESTORS
AND THE OTHER 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).

3.6       

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

[Signature page follows]

 

 3 

 

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 G. Johnson   Name: Steven G. Johnson   Title: President and
Chief Executive Officer           BORROWER:       CAREVIEW COMMUNICATIONS, INC.,
  a Texas corporation           By: /s/ Steven G. Johnson   Name: Steven G.
Johnson   Title: President and Chief Executive Officer           LENDER:      
PDL INVESTMENT HOLDINGS, LLC           By: /s/ Christopher Stone   Name:  
Christopher Stone   Title:   CEO           AGENT:       PDL INVESTMENT HOLDINGS,
LLC           By: /s/ Christopher Stone   Name:   Christopher Stone   Title:  
CEO

 

 

 

[Signature Page to Second Amendment to Subordination and Intercreditor
Agreement]

 

 

 

  NOTE INVESTORS:         HealthCor Partners Fund, L.P.   By:   HealthCor
Partners Management L.P., as Manager   By:   HealthCor Partners Management,
G.P., LLC, as General Partner         By: /s/ Jeffrey C. Lightcap   Name:
Jeffrey C. Lightcap   Title: Senior Managing Director

 

  Address: HealthCor Partners     1325 Avenue of Americas, 27th Floor     New
York, NY 10019      

 

  HealthCor Hybrid Offshore Master Fund, L.P.   By:   HealthCor Hybrid Offshore
G.P., LLC, as General Partner         By:  /s/ Joseph P. Healey   Name: Joseph
P. Healey   Title: Trustee

 

  Address: HealthCor Partners     1325 Avenue of Americas, 27th Floor     New
York, NY 10019      

 

 

 

[Signature Page to Second Amendment to Subordination and Intercreditor
Agreement]

 

 

 

 

  NOTE INVESTORS:       /s/ Allen Wheeler   Allen Wheeler           /s/ Steven
Johnson   Steven Johnson           /s/ Dr. James R. Higgins   Dr. James R.
Higgins

  

 

 

[Signature Page to Second Amendment to Subordination and Intercreditor
Agreement]

 

 

 

  NOTE INVESTORS:       Raymond James & Assoc. Inc., not in its corporate
capacity but solely as Custodian of the Individual Retirement Account of Sandra
K. McRee.  Further, all representations, warranties and covenants (including
indemnities) set forth herein are being made by Sandra K. McRee, not Raymond
James & Assoc. Inc.           By: /s/ Marguerite Shoro   Name:   Marguerite
Shoro   Title:   Authorized Signer/Custodian               /s/ Sandra K. McRee  
Sandra K. McRee

 

 

 

[Signature Page to Second Amendment to Subordination and Intercreditor
Agreement]

 

 

 

  NOTE INVESTORS:       /s/ Stephen Berkley   Stephen Berkley           /s/
Alexandra Berkley   Alexandra Berkley           /s/ Steven B. Epstein   Steven
B. Epstein           /s/ Deborah L. Epstein   Deborah L. Epstein           /s/
Jason Peter Epstein   Jason Peter Epstein           /s/ Gregory Harris Epstein  
Gregory Harris Epstein           /s/ David Epstein   David Epstein

 

 

 

[Signature Page to Second Amendment to Subordination and Intercreditor
Agreement]

 

 

 

  NOTE INVESTORS:       /s/ Juliann Martin   Juliann Martin           /s/ Jason
Thompson   Jason Thompson

 

 

  Thompson Family Investments, LLC           By: /s/ Jason Thompson   Name:
Jason Thompson   Title: Manager

 

 

  Rockwell Holdings I, LLC           By: /s/ Matthew Bluhm   Name: Matthew Bluhm
  Title: Managing Member

 

 

 

[Signature Page to Second Amendment to Subordination and Intercreditor
Agreement]

 

 

 

 

  NOTE INVESTORS:       /s/ Irwin Leiber   Irwin Leiber           /s/ Joseph P.
Healey   Joseph P. Healey           /s/ Arthur B. Cohen   Arthur B. Cohen

 

 

  SJ2, LLC           By: /s/ Michael Mashaal   Name:   Michael Mashaal  
Title:   Manager           The Joseph P. Healey 2011 Family Trust           By:
/s/ Joseph L. Dowling   Name: Joseph L. Dowling   Title: Trustee

 

 

 

[Signature Page to Second Amendment to Subordination and Intercreditor
Agreement]

 

 

 

  NOTE INVESTORS:       PENSCO TRUST COMPANY LLC, not in its corporate capacity
but solely as Custodian of the Individual Retirement Account of Jeffrey C.
Lightcap           By: /s/ Cody Alford   Name: Cody Alford   Title: Authorized
Signor

 

 

  /s/ Jeffrey C. Lightcap   Jeffrey C. Lightcap

 

 

  Jeffrey C. Lightcap & Jane Lightcap Minor’s Present Interest Trust dated March
20th, 1997 F/B/O Bradford C. Lightcap           By: /s/ Ira Schwartz   Name: Ira
Schwartz   Title: Trustee           Jeffrey C. Lightcap & Jane Lightcap Minor’s
Present Interest Trust dated March 20th, 1997 F/B/O Brian R. Lightcap          
By: /s/ Ira Schwartz   Name: Ira Schwartz   Title: Trustee           Jeffrey C.
Lightcap & Jane Lightcap Minor’s Present Interest Trust dated March 20th, 1997
F/B/O Megan M. Lightcap           By: /s/ Ira Schwartz   Name: Ira Schwartz  
Title: Trustee

 

 

 

[Signature Page to Second Amendment to Subordination and Intercreditor
Agreement]