CAREVIEW COMMUNICATIONS, INC. 8-K 


 


Exhibit
10.16


 


Execution
Version


 


ELEVENTH
AMENDMENT TO MODIFICATION AGREEMENT


 


This
ELEVENTH AMENDMENT TO MODIFICATION AGREEMENT (this “Amendment”) is made and entered into as of February
28, 2019 (the “Amendment Effective Date”), 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”), CAREVIEW OPERATIONS, L.L.C., a Texas limited liability company (the “Subsidiary
Guarantor”), and PDL INVESTMENT HOLDINGS, LLC (as assignee of PDL BioPharma, Inc.), a Delaware limited liability
company (both in its capacity as the lender (“Lender”) and in its capacity as Agent (solely in such
capacity as Agent, the “Agent”)) under the Credit Agreement (as defined below).


 


RECITALS


 


A.       Reference
is made to that certain Credit Agreement dated as of June 26, 2015, among Holdings, the Borrower, the Lender and the Agent (as
amended, supplemented or modified as of the date hereof (the “Credit Agreement”), including pursuant
to that certain First Amendment to Credit Agreement dated as of October 7, 2015, that certain Modification Agreement dated as
of February 2, 2018 (the “Modification Agreement”), that certain Second Amendment to Credit Agreement
dated as of February 23, 2018 (the “Second Amendment”), that certain Amendment to Modification Agreement
dated as of May 31, 2018 (the “First Modification Amendment”), that certain Second Amendment to Modification
Agreement dated as of June 14, 2018 (the “Second Modification Amendment”), that certain Third Amendment
to Modification Agreement dated as of June 28, 2018 (the “Third Modification Amendment”), that certain
Third Amendment to Credit Agreement dated as of July 13, 2018, that certain Fourth Amendment to Modification Agreement dated as
of August 31, 2018 (the “Fourth Modification Amendment”), that certain Fifth Amendment to Modification
Agreement dated as of September 28, 2018 (the “Fifth Modification Amendment”), that certain Sixth
Amendment to Modification Agreement dated as of November 12, 2018 (the “Sixth Modification Amendment”),
that certain Seventh Amendment to Modification Agreement dated as of November 19, 2018 (the “Seventh Modification
Amendment”), that certain Eighth Amendment to Modification Agreement dated as of December 3, 2018 (the “Eighth
Modification Amendment”), that certain Ninth Amendment to Modification Agreement dated as of December 17,
2018 (the “Ninth Modification Amendment”) and that certain Tenth Amendment to Modification Agreement
dated as of January 31, 2019 (the “Tenth Modification Amendment”); capitalized terms used and not defined
in this Amendment shall have the meaning set forth in the Credit Agreement.


 


B.       Pursuant
to the Modification Agreement, as amended by the First Modification Amendment, the Fifth Modification Amendment, the Sixth Modification
Amendment, the Seventh Modification Amendment, the Eighth Modification Amendment, the Ninth Modification Amendment and the Tenth
Modification Amendment, the parties agreed that the term, “Modification Termination Event” would mean the earliest
to occur of: (a) the occurrence of any Event of Default under any Loan Documents that does not constitute a Covered Event; (b)
the occurrence of any Agreement Event of Default; (c) the Lender’s delivery to Holdings and the Borrower of a Lender Termination
Notice; and (d) February 28, 2019, subject to the Lender’s right, in its sole discretion, to terminate the Modification
Period on July 31, 2018 and February 28, 2019 (with each such date permitted to be extended by the Lender in its sole discretion).


 






     


     


    

 


C.       The
parties wish to enter into this Amendment to extend the first date referred to in Recital B.(d) above from “February 28,
2019” until “March 31, 2019”.


 


D.       Pursuant
to the Modification Agreement, as amended by the Second Amendment, the parties agreed that the Borrower shall obtain (i) at least
$2,050,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Stock) or Debt on or prior to February
23, 2018 (which obligation Borrower satisfied by Holdings’ issuance of Debt pursuant to that certain Eighth Amendment to
Note and Warrant Purchase Agreement dated as of February 23, 2018) and (ii) an additional $3,000,000 in net cash proceeds from
the issuance of Capital Stock (other than Disqualified Stock) or Debt on or prior to May 31, 2018 (resulting in aggregate net
cash proceeds of at least $5,050,000).


 


E.       Pursuant
to the First Modification Amendment, as amended by the Second Modification Amendment, the Third Modification Amendment, the Fourth
Modification Amendment, the Fifth Modification Amendment, the Sixth Modification Amendment, the Seventh Modification Amendment,
the Eighth Modification Amendment, the Ninth Modification Amendment and the Tenth Modification Amendment, the parties agreed,
among other things, to provide that the Borrower shall satisfy its obligation to obtain financing referenced in B. above by obtaining:
(i) at least $2,050,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt
on or prior to February 23, 2018; and (ii) an additional (A) $750,000 in net cash proceeds from the issuance of Capital Stock
(other than Disqualified Capital Stock) or Debt on or prior to July 13, 2018 and (B) $750,000 in net cash proceeds from the issuance
of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to February 28, 2019 (resulting in aggregate net
cash proceeds of $3,550,000).


 


F.       The
parties also wish to enter into this Amendment to extend the date referred to in Recital E.(ii)(B) above from “February
28, 2019” until “March 31, 2019”.


 


G.       Pursuant
to the Modification Agreement, as amended, the parties agreed that subject to the terms and conditions set forth therein, so long
as no Modification Termination Event shall have occurred, the occurrence and continuance of any of the Covered Events shall not
constitute Events of Default from the Effective Date through the end of the Modification Period and, for the avoidance of doubt,
that the Default Rate shall not apply during the Modification Period.


 


H.       Pursuant
to the Modification Agreement, as amended by the Ninth Modification Amendment and the Tenth Modification Amendment, the parties
agreed to defer the Borrower’s interest payment that would otherwise be due to Lender on December 31, 2018 until February
28, 2019 (the end of the extended Modification Period as referenced in Recital C above), and to treat the deferral of the interest
payment as a “Covered Event”.


 


I.       The
parties acknowledge that this Amendment will extend the date of the end of the extended Modification Period referred to in Recital
H. above (and the date of the Borrower’s interest payment that would have otherwise been due to Lender on December 31, 2018)
from February 28, 2019 until March 31, 2019.


 






    2 


     


    

 


J.       Pursuant
to the Modification Agreement, as amended by the First Modification Amendment, the Fifth Modification Amendment, the Sixth Modification
Amendment, the Seventh Modification Amendment, the Eighth Modification Amendment, the Ninth Modification Amendment and the Tenth
Modification Amendment, the parties also agreed that (i) the Lender shall have a right to terminate the Modification Period (as
defined in the Modification Agreement) on July 31, 2018 and February 28, 2019 (with each such date permitted to be extended by
the Lender in its sole discretion).


 


K.       The
parties also wish to enter into this Amendment to extend the date for Lender to terminate the Modification Period from February
28, 2019 until March 31, 2019.


 


NOW,
THEREFORE, in consideration of the above premises, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:


 


Article
I.

AMENDMENTs TO MODIFICATION AGREEMENT


 


Upon
the Amendment Effective Date:


 


1.1          Modification
Period. Section 2 of the Modification Agreement, as amended by the First Modification Amendment, the Fifth Modification Amendment,
the Sixth Modification Amendment, the Seventh Modification Amendment, the Eighth Modification Amendment, the Ninth Modification
Amendment and the Tenth Modification Amendment, is amended and restated in its entirety as follows:


 


“2.          Modification
Period. Subject to the terms and conditions set forth herein, so long as no Modification Termination Event (as defined below)
shall have occurred, each of the Agent and the Lender agrees that the occurrence and continuance of any of the Covered Events
shall not constitute Events of Default from the Effective Date through the earliest to occur of any Modification Termination Event
(the “Modification Period”) and, for the avoidance of doubt, that the Default Rate shall not apply during the Modification
Period. As used herein, “Modification Termination Event” shall mean the earliest to occur of: (a) the occurrence of
any Event of Default under any Loan Documents that does not constitute a Covered Event; (b) the occurrence of any Agreement Event
of Default (as defined below); (c) the Lender’s delivery to Holdings and the Borrower of a Lender Termination Notice (as
defined below); and (d) March 31, 2019, subject to the Lender’s right, in its sole discretion, to terminate the Modification
Period on July 31, 2018 and March 31, 2019 (with each such date permitted to be extended by the Lender in its sole discretion).
Notwithstanding any other provision of this Modification Agreement or any other Loan Document, all principal and interest otherwise
due to Lender through the end of the Modification Agreement shall be due and payable at the end of the Modification Period and
if not paid in full in Cash at that time shall bear interest at the Default Rate from and after the end of the Modification Period.”


 






    3 


     


    

 


1.2       Deadline
for Raising Monies. The first sentence of Section 5(a) of the Modification Agreement, as previously amended by the Second
Amendment, the First Modification Amendment, the Second Modification Amendment, the Third Modification Amendment, the Fourth Modification
Amendment, the Fifth Modification Amendment, the Sixth Modification Amendment, the Seventh Modification Amendment, the Eighth
Modification Amendment, the Ninth Modification Amendment and the Tenth Modification Amendment, is amended and restated in its
entirety as follows:


 


“(a)          The Borrower shall obtain: (i) at least $2,050,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified
Capital Stock) or Debt on or prior to February 23, 2018; and (ii) an additional (A) $750,000 in net cash proceeds from the issuance
of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to July 13, 2018 and (B) $750,000 in net cash proceeds
from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to March 31, 2019 (resulting in
aggregate net cash proceeds of $3,550,000); provided that all such Debt described in clauses (i) and (ii) shall be subordinated
to the Loans under the Credit Agreement on terms satisfactory to the Lender in its sole discretion.”


 


Article
II.

REPRESENTATIONS AND WARRANTIES


 


In
order to induce the Agent and the Lender to enter into this Amendment, each of Holdings, the Borrower and the Subsidiary Guarantor
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:


 


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


 


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


 


2.3       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 Permitted Liens and Liens in favor of the Agent created pursuant to the Collateral Documents).


 






    4 


     


    

 


2.4       Incorporation
of Representations and Warranties from Loan Documents. Each representation and warranty by each Loan Party that is a party
hereto contained in the Modification Agreement, the Credit Agreement or in any other Modification Document or 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).


 


2.5       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.


 


2.6       Validity;
Binding Nature. This Amendment has been duly executed by each Loan Party that is a party hereto, and each of (i) this Amendment,
(ii) the Modification Agreement as amended hereby and (iii) 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
III.

MISCELLANEOUS


 


3.1       Modification
and Loan Document. This Amendment is a Modification Document and 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.


 


3.2       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 


     


    

 


3.3       Reaffirmation.
Each of Holdings, the Borrower and the Subsidiary Guarantor hereby reaffirms its obligations under each Modification Document
and Loan Document to which it is a party. Each of Holdings, the Borrower and the Subsidiary Guarantor 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.


 


3.4       Fees
and Expenses. The Borrower agrees to pay within five Business Days of the Amendment Effective Date, 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, including any and all fees payable or owed to Gibson, Dunn &
Crutcher LLP in connection with the drafting, negotiation, and execution of this Amendment.


 


3.5       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.


 


3.6       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.


 


3.7       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).


 


3.8       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).


 


3.9       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.


 






    6 


     


    

 

3.10       Release
of Claims. In consideration of the Lender’s and Agent’s agreements contained in this Amendment, each of Holdings,
the Borrower and the Subsidiary Guarantor 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, the Borrower or the Subsidiary Guarantor 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 Modification Agreement or Credit Agreement or any other Modification Document or Loan Document on or prior to the date
hereof.

 


[Signature
page follows]


 




    7 


     


    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written.





	 	 	 	 
	 	CAREVIEW
    COMMUNICATIONS, INC.,
	 	a
    Nevada corporation,
	 	as
    Holdings
	 	 	 	 
	 	By:	/s/
    Steven G. Johnson
	 	 	Name:	Steven
    G. Johnson
	 	 	Title:
    	President
    and Chief Executive Officer
	 	 	 	 
	 	CAREVIEW
    COMMUNICATIONS, INC.,
	 	a
    Texas corporation,
	 	as
    Borrower
	 	 	 	 
	 	By:	/s/
    Steven G. Johnson
	 	 	Name:
    	Steven
    G. Johnson
	 	 	Title:
    	President
    and Chief Executive Officer
	 	 	 	 
	 	CAREVIEW
    OPERATIONS, L.L.C.,
	 	a
    Texas limited liability company,
	 	as
    Subsidiary Guarantor
	 	 	 	 
	 	By:	/s/
    Steven G. Johnson
	 	 	Name:
    	Steven
    G. Johnson
	 	 	Title:
    	President
    and Chief Executive Officer


 


[Signature
Page to Eleventh Amendment to Modification Agreement]


 






     


     


    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above written.





	 	 	 	 
	 	PDL INVESTMENT HOLDINGS, LLC,
	 	a Delaware limited liability company,
	 	as Agent
	 	 
	 	By:	/s/ Christopher Stone
	 	 	Name: 	Christopher Stone
	 	 	Title: 	CEO and Treasurer
	 	 	 	 
	 	PDL INVESTMENT HOLDINGS, LLC,
	 	a Delaware limited liability company,
	 	as Lender
	 	 	 	 
	 	By:	/s/ Christopher Stone
	 	 	Name: 	Christopher Stone
	 	 	Title: 	CEO and Treasurer


 


[Signature
Page to Eleventh Amendment to Modification Agreement]