Careview Communications, Inc. 8-K


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:


4.2Tranche
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:


4.2.1Delivery
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.


4.2.2Payment
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.


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


4.2.4Officer’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.


4.2.5Representations
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).


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


4.2.7No
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:


4.3.2Tranche
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]