CAREVIEW COMMUNICATIONS, INC. 8-K


EXHIBIT 10.05


 





AMENDMENT TO MODIFICATION AGREEMENT


This AMENDMENT TO
MODIFICATION AGREEMENT (this “Amendment”) is made and entered into as of May 31, 2018 (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”), and that certain Second Amendment to Credit Agreement
dated as of February 23, 2018 (the “Second 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 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).


C.       The
Lender, the Agent, Holdings, the Borrower and the Subsidiary Guarantor wish to enter into this Amendment to (1) revise the dates
on which the Lender may, in its sole discretion, terminate the Modification Period, and (2) provide that the Borrower shall
satisfy its obligation to obtain financing referenced in B. above (as modified below by Article I) 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 June 15, 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 August 31, 2018 (resulting in aggregate
net cash proceeds of $3,550,000).


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.

AMENDMENT TO MODIFICATION AGREEMENT


Upon the Amendment
Effective Date:


1.1       Modification
Period. Section 2 of the Modification Agreement is amended and restated in its entirety as follows:


 “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) December 31, 2018, subject to the Lender’s right, in its sole discretion, to terminate the Modification
Period on July 31, 2018 and September 30, 2018 (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.”


1.2.       Covenants.
The first sentence of Section 5(a) of the Modification Agreement, as previously amended by the Second 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 June 15, 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 August 31,
2018 (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:


 






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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).


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.






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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.


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.


 






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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.


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]


 






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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 COMMUNICATIONS, INC.,
	 	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
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/ Chris Stone
	 	 	 Name: Chris Stone
Title: CEO



 

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




 


 


[Signature Page to
Amendment to Modification Agreement]