Document:

ex10-1.htm

Exhibit 10.1

 

 

 

 

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

 

This Settlement Agreement and Mutual Release (this “Settlement Agreement”) is made and entered into as of the 24th day of June, 2015, by and among Victory Energy Corporation, a Nevada corporation (the “Victory”) and Lucas Energy, Inc., a Nevada corporation (“Lucas”). Each of Victory and Lucas is referred to herein as a “Party” and, collectively, as the “Parties.”

BACKGROUND

On February 2, 2015, Victory and Lucas entered into a Letter of Intent for Business Combination (the “Letter of Intent”) relating to a proposed business combination (the “Merger”) between the two parties.  Thereafter, on February 26, 2015, Victory and Lucas entered into a Pre-Merger Loan and Funding Agreement (the “Loan Agreement”) pursuant to which Victory agreed to loan Lucas up to Two Million Dollars ($2,000,000) as evidenced by a Delayed Draw Term Note that was issued by Lucas to Victory on the same day (the “Lucas Note”). A total of $600,000 in principal amount (the “Principal Amount”) has been advanced by Victory to Lucas under the Loan Agreement.  The Principal Amount and accrued interest thereon is secured by a pledge of Lucas Common Stock (the “Pledged Securities”) pursuant to a Pledge Agreement entered into on the same date (the “Pledge Agreement”) between the Parties.  The Parties and certain other affiliates of Victory also entered into the Pre-Merger Collaboration Agreement on February 26, 2015, as amended by Amendment No. 1 thereto, dated March 3, 2015 (the “Collaboration Agreement”).  Pursuant to the Collaboration Agreement, Lucas’ assigned to Victory certain rights (the “Well Rights”) in five (5) Penn Virginia well-bores (the “Penn Virginia Well-Bores”) and two (2) Earthstone Energy/Oak Valley Resources Boggs Unit No. 1H and Boggs Unit No. 2H well-bores (the “Oak Valley Wells”).  In connection with the assignment of the Well Rights, Lucas obtained a partial release from Louise H. Rogers, Lucas’ secured lender (the “Senior Lender”), and Sharon E. Conway, as Trustee, under that certain Mortgage, Deed of Trust, Assignment, Security Agreement, Financing Statement and Fixture Filing, dated August 13, 2013, that permitted Lucas to transfer the Well Rights to Victory. The Collaboration Agreement provides that Victory retains the Well Rights whether or not the Merger is consummated. The Collaboration Agreement also required Victory to issue a contingent promissory note in the principal amount of $250,000 to the Senior Lender (the “Rogers Note”).  In accordance with its terms, the Rogers Note becomes due and payable, among other times, within ninety (90) days following the termination of the Letter of Intent.

The Parties now desire to resolve their respective claims under the Letter of Intent, Loan Agreement, Collaboration Agreement, Pledge Agreement, Lucas Note and Rogers Note and otherwise without admitting liability therefor, and in order to avoid the uncertainty, expense and burden of litigation.

 

  

  

  

AGREEMENT

 

 

NOW, THEREFORE, in consideration of the promises, representations, warranties and covenants contained herein, and intending to be legally bound hereby, the Parties agree as follows:

 

1.           Termination of Terminated Agreements; Further Assurances.

 

(a)            Subject to the terms and conditions of this Settlement Agreement and except as expressly provided otherwise below, all rights, duties, liabilities and obligations of each of the Parties under the Letter of Intent and the Collaboration Agreement (such agreements being referred to herein as the “Terminated Agreements”) are hereby terminated and cancelled as of the date hereof, and neither of the Parties nor any of their affiliates (including, without limitation, Aurora Energy Partners, Navitus Energy Group, and AEP Assets, LLC), shall have any further rights, duties, liabilities or obligations to the other Party under any of the Terminated Agreements.

 

(b)           Each of the Parties hereto agrees to execute and deliver all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Settlement Agreement.

 

2.           Obligations and Understandings of the Parties.  In consideration for the mutual releases contained in this Settlement Agreement, the Parties hereto agree as follows:

 

(a)           Victory shall retain ownership and control over the Penn Virginia Well-Bores and all unpaid joint interest billings relating to the Penn Virginia Well-Bores for operations on or after August 1, 2014 shall be payable by Victory and all division orders with respect to the Penn Virginia Well-Bores shall reflect Victory as a successor in interest to Lucas. In addition to the originally assigned Penn Virginia Well-Bores, on the date hereof, Lucas shall assign to Victory (to be held in escrow by Attorney Sharon E. Conway, as agent for the Senior Lender in accordance with the Rogers Release) all related acreage, reserves and proven undeveloped drilling locations remaining at Platypus and Dingo and the proven developed Platypus Hunter 1H (the “Additional Penn Virginia Property”) pursuant to an assignment in substantially the form of Exhibit A to this Agreement.   The Additional Penn Virginia Property is more specifically described as follows and on Exhibit A to this Agreement, which includes a full property description of the Additional Penn Virginia Property:

 

Penn Virginia Well-Bores

-      Platypus Hunter 2H

-      Platypus Hunter 3H

	
  

	
-

	
Dingo Unit 1H – 1-H

	
  

	
-

	
Dingo Unit 2H – 2H

	
  

	
-

	
Dingo Unit 3H - 3H

Additional Penn Virginia Property

One 116.11 acre Tract #4 (lessor Jackie Robertson, et al) in the 531.67 acre Dingo Unit, giving rise to a 3.27581% working interest and Two Tracts #8 & #9 totaling 75.0 acre (lessor Jackie Robertson, et al) in the 649.322 ac Platypus Unit, giving rise to a 1.481330% working interest.

(b)           Neither Lucas nor its affiliates shall in anyway interfere with Victory’s ownership and control of the Penn Virginia Well-Bores or the Additional Penn Virginia Property and Lucas on behalf of itself and its affiliates hereby waives any right to contest Victory’s ownership of the Penn Virginia Well-Bores and the Additional Penn Virginia Property.  Lucas shall notify the operator in writing that all future communications and divisions orders are to be sent directly to Victory (c/o Aurora Energy Partners).  Lucas shall execute and deliver all such other and additional instruments and documents and do all such other acts and things as may be necessary to ensure that Victory retains ownership and control over the Penn Virginia Wells-Bores and the Additional Penn Virginia Property.

 

  

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(c)           Victory shall execute and deliver the mutual release with the Senior Lender in the form of Exhibit B to this Agreement (the “Rogers Release”) against execution and delivery by the Senior Lender of the same.  Lucas shall procure the Senior Lender’s agreement to the Rogers Release and execution of the same as required by this Agreement as soon as practicable and in any event within two (2) business days of the date hereof. The Rogers Release shall include a release in favor of Victory and its affiliates from the Senior Lender from all obligations under the Rogers Note, including, without limitation, interest, fees and penalties and from any and all claims that the Senior Lender may have against Victory and its affiliates arising out of, or in connection with, the Rogers Note or any of the Terminated Agreements, and the only remaining obligations of Victory to Rogers are those set forth in the Rogers Release. The release contained herein in favor of Lucas shall not become effective unless and until the Senior Lender delivers to Victory and its affiliates the Rogers Release.

 

(d)           Lucas acknowledges that Victory has paid $195,928.33 toward AFEs with respect to the Oak Valley Wells (the “Oak Valley AFE Payment”).  As part of this Agreement, Victory is relinquishing its rights to receive the return of the Oak Valley AFE Payment.  Victory shall execute and deliver the mutual release with Oak Valley in the form of Exhibit C to this Agreement (the “Oak Valley Release”) against execution and delivery by Oak Valley of the same. Lucas shall procure Oak Valley’s agreement to the Oak Valley Release and execution of the same as required by this Agreement as soon as practicable and in any event within two (2) business days of the date hereof.  The Oak Valley Release shall include a release in favor of Victory and its affiliates from Oak Valley and its affiliates that releases Victory and its affiliates from all obligations that Victory and its affiliates may have relating to the Oak Valley Wells and from any claims that Oak Valley and its affiliates may have against Victory and its affiliates.  The release contained herein in favor of Lucas shall not become effective unless and until Oak Valley and its affiliates deliver to Victory and its affiliates the Oak Valley Release.

 

(e)           Without making any representation to Lucas with respect to Victory’s title to the Oak Valley Wells, in accordance with the Oak Valley Release, Victory shall quitclaim to Sabine River Energy, LLC any and all right, title and interest that Victory may have to the Oak Valley Wells.  Victory agrees to execute and deliver all such other and additional instruments and documents and do all such other acts and things as may be necessary to effectuate such assignment.

 

  

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(f)           Lucas acknowledges and agrees that the Principal Amount is $600,000, that Victory has already advanced the Principal Amount to Lucas in full, and that all obligations under the Loan Agreement and the Lucas Note are secured by the Pledged Securities under the Pledge Agreement.  Lucas further acknowledges that Victory has no further obligation to advance any funds to Lucas under the Loan Agreement, the Lucas Note or otherwise.  Lucas shall promptly (and in any event within 14 days) issue 1,101,729 shares of Lucas Common Stock registered in the name of Victory (the “Settlement Shares”) subject to equitable adjustment if there is a stock split, stock combination, stock dividend, recapitalization or similar event relating to Lucas common stock prior to the issuance of such Settlement Shares.  Lucas shall cause the Settlement Shares to be delivered to Attorney Sharon E. Conway, as agent for the Senior Lender, who shall hold the Settlement Shares in accordance with the Rogers Release.  Victory shall accept the Settlement Shares in full satisfaction of Lucas’ Obligations under the Loan Agreement and the Lucas Note. The Settlement Shares shall upon issuance be duly issued, fully paid and non assessable.  Lucas hereby grants to Victory piggyback registration rights on the terms described below and upon Victory’s request shall enter into a customary agreement relating to these rights, which will include, among other things, customary indemnification provisions.  If at any time there is not an effective registration statement covering the Settlement Shares and any other shares of Lucas Common Stock held by Victory (the “Registrable Securities”) and Lucas shall determine to prepare and file with the Securities and Exchange Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of 1933, as amended (the “Securities Act”) of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then Lucas shall send to Victory written notice of such determination and if, within fifteen days after receipt of such notice, Victory shall so request in writing, Lucas shall include in such registration statement all or any part of such Registrable Securities Victory requests to be registered; provided, however, that Lucas shall not be required to register any Registrable Securities pursuant to this Section 2(e) that are eligible for sale pursuant to Rule 144 of the Securities Act without any restriction as to volume of sales (without reference to any contractual volume limitations applicable to Victory).

 

(g)           So long as Victory owns any Settlement Shares it shall comply with the following limitations on the number of Settlement Shares that it may sell in the market through a broker (not including private sales to unaffiliated third parties):

 

(i)           Victory shall not sell more than Twenty Five Thousand (25,000) Settlement Shares per trading day;

 

(ii)           Victory shall not sell more than One Hundred Twenty Five Thousand (125,000) Settlement Shares per week; and

 

(iii)           Victory shall not sell more than Five Hundred Thousand (500,000) Settlement Shares per month.

 

(iv)           If Lucas effects a stock split, stock combination, stock dividend recapitalization or similar event affecting the number of shares of Lucas common stock outstanding, then the aforementioned limitations on the number of Settlement Shares that Victory may sell will be equitably adjusted such that Victory shall be permitted to sell the same overall percentage of Settlement Shares per period.

 

  

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(v)           Upon the written request from Lucas, Victory shall promptly provide to Lucas brokerage statements confirming the number of Settlement Shares that Victory has sold in any applicable period.  On the date hereof, Victory is executing and delivering to Lucas a proxy in the form of Exhibit D.  This proxy provides that for a period of twenty four (24) months following the date of this Agreement, Lucas’ board of directors or its designee may vote the Settlement Shares (including through the execution of a written consent) that Victory continues to hold on any matter coming before the stockholders of Lucas for a vote.  Victory shall not request and Lucas shall not provide to Victory any material non-public information relating to Lucas or its affiliates.  So long as Victory owns any Settlement Shares, it shall not directly or indirectly, nor shall it cause any person acting on its behalf or pursuant to any understanding with it to, execute any short sales (as such term is defined in rule 200 of Regulation SHO under the Securities Exchange Act of 1934, as amended), in the securities of Lucas.

 

(h)           Victory acknowledges and agrees that so long as the Settlement Shares are in certificate form they shall bear any legend required by the Securities Act of 1933, as amended and they shall bear the following legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A PROXY IN FAVOR OF THE BOARD OF DIRECTORS OF THE ISSUER AND TO CERTAIN LIMITATIONS ON THE NUMBER OF SECURITIES THAT MAY BE SOLD AS SPECIFIED IN THAT CERTAIN SETTLEMENT AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THIS CERTIFICATE.  A COPY OF THE SETTLEMENT AGREEMENT MAY BE OBTAINED BY REQUESTING THE SAME FROM THE SECRETARY OF THE ISSUER AT THE ISSUER’S EXECUTIVE OFFICES.

Victory acknowledges and agrees that if and to the extent that Victory transfers the Settlement Shares to any third party in a transaction other than a market transaction through a broker, it shall, as a condition to such transfer, cause such third party to be bound by the sale restrictions and voting rights provisions of this Settlement Agreement.  For the avoidance of doubt, if Victory transfers the Settlement Shares in the market through a brokerage transaction to a third party, the purchaser of such unrestricted Settlement Shares shall acquire the same without any restriction or limitation imposed under this Settlement Agreement.

Lucas agrees that it shall take any and all reasonable action to facilitate the deposit of the Settlement Shares into Victory’s brokerage account if such Settlement Shares are registered or may be sold in accordance with Rule 144 of the Securities Act.  Such action shall include, but not be limited to, the provision to Lucas’ transfer agent of an instruction letter in form satisfactory to such transfer agent, the removal of the aforementioned legend (in which case, the covenants in this Settlement Agreement relating to restrictions on sale of the Settlement Shares and the proxy for the Settlement Shares would remain in effect in accordance with their terms notwithstanding the removal of the legend), the delivery to Lucas’ transfer agent of an opinion (or the acceptance of an opinion from Victory’s counsel), and such other similar actions as may be necessary to facilitate the deposit of the Settlement Shares into a brokerage account.

  

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3.           Mutual Releases.

 

(a)           Subject to the terms and conditions of this Agreement, from and after the date hereof, each of the Parties on behalf of itself and all of its affiliates and assigns hereby fully, finally, voluntarily and irrevocably releases and discharges the other Party and such other Party’s affiliates and its and their officers, directors, shareholders, members, partners, employees, legal counsel, accountants, auditors, advisors and agents  (the “Released Parties”) to the fullest extent permitted under applicable law from any and all claims, counterclaims, demands, causes of action, contract obligations, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, obligations, guarantees, endorsements, liens, security interests, agreements, promises, variances, trespasses, judgments, extents, executions, damages, attorneys’ fees or costs whatsoever, at law or in equity or otherwise, whether direct or indirect, known or unknown (any of the foregoing, a “Claim” and, collectively, the “Claims”), which such Party now owns or holds, or has at any time heretofore owned or held, or may in the future own or hold, against the Released Parties, or any of them, in any capacity, including as an officer, director or stockholder of the other Party, which are or may be based upon any facts, acts, omissions, representations, contracts, agreements, including the Terminated Agreements, events or matters of any kind occurring or existing at any time on or before the date of this Settlement Agreement, in each case, solely to the extent such Claims arise from or are in any way related to Terminated Agreements or any act or event taken by or on behalf of the other Party in furtherance of the Terminated Agreements.

 

(b)           Waiver of Unknown Claims. In addition to each Party’s release of Claims provided for in Section 3(a), each Party hereby expressly waives any protection under applicable state law for releases of unknown claims. Each Party understands the significance of his or its release of unknown claims and the waiver of any applicable statutory protection against a release of unknown claims.  EACH PARTY EXPRESSLY ASSUMES THE RISK OF SUCH UNKNOWN AND UNANTICIPATED CLAIMS AND AGREES THAT THIS SETTLEMENT AGREEMENT APPLIES TO ALL CLAIMS, AS DEFINED UNDER SECTION 3(a), WHETHER KNOWN, UNKNOWN, OR UNANTICIPATED.

 

4.           Waiver of Suit.  For the consideration and mutual promises specified herein and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, each Party agrees to waive, release, promise and agrees not to bring or pursue any judicial, quasi-judicial or administrative action against the other Party for any reason whatsoever arising out of the Claims released herein up to and including the date of this Settlement Agreement.  Each party further acknowledges and agrees that it has not already filed or otherwise commenced any such action.  For the avoidance of doubt, any action for enforcement of this Settlement Agreement is expressly excluded from this waiver provision.

 

  

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5.           Representations and Warranties.

 

(a)           Each Party represents and warrants to the other Party that it has the requisite power to enter into this Settlement Agreement and to carry out its obligations hereunder and that the terms of this Settlement Agreement have been fully disclosed to the Board of Directors of such Party and that the requisite approvals have been obtained, prior to its execution and that this Settlement Agreement does not conflict with, or result in a breach of, any other agreement to which such Party is a party.

 

(b)           Each Party represents and warrants to the other Party that this Settlement Agreement has been duly executed and delivered and constitutes a valid and binding obligation enforceable in accordance with its terms.

 

6.           Entire Agreement.  This Settlement Agreement constitutes the entire, exclusive and final agreement among the parties and supersedes any and all prior agreements, discussions, representations and warranties among the parties with respect to the matters set forth herein.  The parties have not relied upon any statements or representations made by any party outside the contents of this Settlement Agreement.

 

7.           Choice of Law.  This Settlement Agreement shall be enforced, governed by and construed in accordance with the laws of the State of Texas without regard to principles of conflict of laws.

 

8.           Counterparts.  This Settlement Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original but all of which together shall constitute but one agreement.

 

9.           Severability.  If any provision of this Settlement Agreement is determined to be unlawful or otherwise unenforceable, the remaining provisions of this Settlement Agreement shall nevertheless continue in full force and effect.

 

10.           Parties in Interest; Assignment; Third Party Beneficiaries.  This Settlement Agreement is binding upon the parties and their respective successors, heirs, legal representatives and permitted assigns.  Aurora Energy Partners, Navitus Energy Group and AEP Assets, LLC and each of their respective officers, directors, managers and owners are each intended third party beneficiaries of this Settlement Agreement and may enforce their rights under this Settlement Agreement.

 

11.           No Admission of Liability or Wrongdoing.  This Settlement Agreement and the negotiations and discussions leading up to this Settlement Agreement effect the settlement of claims which are denied and contested, and do not constitute, nor shall they be construed as, an admission of liability by the parties.  This Settlement Agreement is made solely for the purpose of avoiding the burden and expense of litigation, which would be imposed on the parties if the disputes between them remained unsettled.  This Settlement Agreement does not constitute an admission by any of the parties hereto that they have engaged in any unlawful act.  Each of the parties hereto expressly deny that they have engaged in any unlawful act and deny liability for all claims any other party had, has, or may have against them.

 

  

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12.           Indemnification and Contribution.  Each Party (an “Indemnitor”) agrees to indemnify the other Party and its affiliates and its and their officers, directors, employees, agents, shareholders, members and/or partners (collectively referred to as the “Indemnitees”) against, and hold them harmless of and from, any and all loss, liability, cost, damage and expense, including without limitation, reasonable counsel fees, which the Indemnitees may suffer or incur by reason of any action, claim or proceeding brought against the Indemnitees arising out of or relating in any way to a breach by the Indemnitor of any representation, warranty or covenant contained in this Settlement Agreement. If the indemnification provided for in Section 12 is applicable, but for any reason is held to be unavailable, the Indemnitor shall contribute such amounts as are just and equitable to pay, or to reimburse the Indemnitees for, the aggregate of any and all losses, liabilities, costs, damages and expenses, including counsel fees, actually incurred by the Indemnitees as a result of or in connection with, and any amount paid in settlement of, any action, claim or proceeding arising out of or relating in any way to any actions or omissions of the Indemnitor.  The provisions of this Section 12 shall survive any termination of this Agreement.

 

13.           Construction.  This Settlement Agreement shall not be construed against the party preparing it, but shall be construed as if the parties collectively prepared it and any uncertainty or ambiguity shall not be interpreted against any party.

 

14.           Modifications; Waiver.  This Settlement Agreement may not be modified orally.  No breach of any provision hereof may be waived unless in writing.  Waiver of any breach shall not be deemed to be a waiver of any other breach of the same or of any other provision hereof.  All modifications to this Settlement Agreement must be in writing and signed by the Party to be charged.

 

15.           No Assignments. Each of the Parties hereby represents and warrants to the other Party that there has been no assignment or transfer whatsoever of any of the Claims released herein.  Each Party agrees to defend and indemnify the other Party and the other persons and entities released herein against any Claim based upon, arising out of or in connection with any such assignment or transfer.

 

16.           Attorneys' Fees.  If any action is brought for the enforcement of this Settlement Agreement or in connection with any dispute arising out of it or the claims which are the subject of this Settlement Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and any other costs incurred in such litigation in addition to any other relief to which the prevailing party may be entitled.

 

17.           Advice of Counsel.  Each party to this Settlement Agreement has had the opportunity to discuss the matter with legal counsel, and enters into this Settlement Agreement only after such consultation.

 

18.           Waiver Of Jury Trial.  EACH PARTY EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS SETTLEMENT AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

  

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19.           Notices.  All notices and other communications hereunder shall be in writing to the parties at the addresses specified on the signature pages hereto.

 

 

[Signature page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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IN WITNESS WHEREOF, the parties have executed this Settlement Agreement as of the date first above written.

 

 

	 	 	
Victory Energy Corporation

By: /s/ Kenny Hill                                           

Name: Kenny Hill

Title: Chief Executive Officer

3355 Bee Caves Road, Suite 608

Austin, TX  78746

Lucas Energy, Inc.

By:/s/ Anthony Schnur                                       

Name: Anthony Schnur

Title: Chief Executive Officer

3555 Timmons Lane, Suite 1550

Houston, TX 77027

	 	 	 	 
	 	 	 	 

 

Acknowledgement of Counsel:

 

Each of the undersigned legal counsel to Victory and to Lucas by signing this Settlement Agreement below acknowledge that they approve the Settlement Agreement as to form:

 

 

 

 

	/s/ David M. Loev                                     	/s/ David McCall                                        
	David Loev of The Loev Law Firm, PC,	David McCall
	Counsel to Lucas	Counsel to Victory
	Approving as to form only	Approving as to form only

 

             

  

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EXHIBIT A

Assignment of Additional Penn Virginia Property

 

PARTIAL ASSIGNMENT AND BILL OF SALE

 

	
STATE OF TEXAS

	
§

	  
	  	  	
KNOW ALL MEN BY THESE PRESENTS:

	
COUNTY OF KARNES

	
§

	  

THAT, LUCAS ENERGY, INC., a Nevada corporation, whose mailing address is 3555 Timmons Lane, Suite 1550, Houston, Texas 77027 (hereinafter referred to as “Assignor”) for sufficient consideration received from SABINE RIVER ENERGY, LLC, a Texas limited liability company, whose mailing address is 1400 Woodloch Forest Drive, Suite 300, The Woodlands, Texas 77380-1197 (hereinafter referred to as “Assignee”), does hereby transfer, assign, sell, bargain and convey unto Assignee, subject as herein provided, all of Assignor’s right, title and interest in the oil and/or gas leases listed in Exhibit “A” attached hereto and made a part hereto (said leases being hereinafter referred to as “Leases”), insofar and only insofar as the leases cover the rights below the Austin Chalk formation.  The Austin Chalk formation shall mean the correlative interval from 9,982 feet to 10,294 feet as shown on the Baker-Hughes High Definition Induction Log dated February 4, 2009 of the EOG Resources, Inc. Milton Unit Well No. 1, API No. 4225531608, Eagleville (Eagle Ford) Field, Abstraction 247, Karnes County, Texas.

To have and to hold the Leases and interest forever, subject to the following:

1.  This Partial Assignment and Bill of Sale is subject to the terms and provisions of the Leases and Assignee hereby assumes all express and implied covenants thereunder.

2.  This Partial Assignment and Bill of Sale shall be binding upon and inure to the benefit of Assignee and Assignor and their respective successors, heirs and assigns.

3.  This Partial Assignment and Bill of Sale may be executed in any number of counterparts, and each counterpart may be recorded separately or may be combined to form one (1) instrument for recording purposes.

Executed by Assignor and Assignees on the dates reflected in their respective acknowledgments, but effective as of June 1, 2015.

ASSIGNOR

LUCAS ENERGY, INC.

By: _________________________________

Anthony Schnur

Chief Executive Officer

  

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ASSIGNEE

SABINE RIVER ENERGY, LLC

By: _________________________________

Christopher E. Cottrell

Executive Vice President Land & Marketing

 

ACKNOWLEDGMENTS

 

STATE OF TEXAS

COUNTY OF MONTOGMERY

This instrument was acknowledged before me on this _____ day of _______________, 2015 by Christopher E. Cottrell, who is Executive Vice President Land & Marketing of SABINE RIVER ENERGY, LLC, a Texas limited liability company, on behalf of said limited liability company.

My Commission Expires: ___________                     ____________________________________

Notary Public for the State of Texas

County of Montgomery

Printed Name: ________________________

STATE OF TEXAS

COUNTY OF HARRIS

This instrument was acknowledged before me on this _____ day of _________________, 2015 by Anthony Schnur, who is the Chief Executive Officer of LUCAS ENERGY, INC., a Nevada corporation, on behalf of said corporation.

My Commission Expires: _____________                ____________________________________

Notary Public for the State of Texas

County of Harris

Printed Name: ________________________

 

 

  

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EXHIBIT A

	
OIL AND GAS LEASES:

	  
	  	  
	
Lessor:

	
Leland Copeland

	
Lessee:

	
Lucas Energy, Inc.

	
Effective Date:

	
July 16, 2013

	
Memorandum Recorded:

	
Volume 1134, Page 651

	
Description:

	
143.00 acres more or less, out of the Thomas P. Crosby Survey,

	  	
Abstract 66, Karnes County, Texas

	  	  
	
Lessor:

	
Glenn D. Boggs, Jr. and Wife, Betty J. Boggs

	
Lessee:

	
Lucas Energy, Inc.

	
Effective Date:

	
July 16, 2013

	
Memorandum Recorded:

	
Volume 1134, Page 653

	
Description:

	
143.00 acres more or less, out of the Thomas P. Crosby Survey,

	  	
Abstract 66, Karnes County, Texas

	  	  
	
Lessor:

	
Red Crest Trust, JPMorgan Chase Bank, N. A. as Trustee

	
Lessee:

	
Billy R. Wilson

	
Effective Date:

	
March 25, 2008

	
Recorded:

	
Volume 873, Page 394

	
Description:

	
250.00 acres more or less, out of the Thomas P. Crosby Survey,

	  	
Abstract 66, Karnes County, Texas

	  	  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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EXHIBIT B

Form of Rogers Release

For Purposes of Settlement Discussions;

Subject to Texas Rule of Evidence 408 and

Federal Rule of Evidence 408

 

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

 

This Settlement Agreement and Mutual Release (this “Settlement Agreement”) is made and entered into as of the __ day of June, 2015, by and among Victory Energy Corporation, a Nevada corporation (the “Victory”) and Louise H. Rogers, an individual (“Rogers”). Each of Victory and Rogers is referred to herein as a “Party” and, collectively, as the “Parties.”

BACKGROUND

On February 2, 2015, Victory and Lucas Energy, Inc. (“Lucas”) entered into a Letter of Intent for Business Combination (the “Letter of Intent”) relating to a proposed business combination (the “Merger”) between the two parties.  Thereafter, Lucas, Victory and certain other affiliates of Victory entered into the Pre-Merger Collaboration Agreement on February 26, 2015, as amended by Amendment No. 1 thereto, dated March 3, 2015 (the “Collaboration Agreement”).  Pursuant to the Collaboration Agreement, Lucas assigned to Victory certain rights (the “Well Rights”) in five (5) Penn Virginia well-bores and two (2) Earthstone Energy/Oak Valley Resources Boggs Unit No. 1H and Boggs Unit No. 2H well-bores.  In connection with the assignment of the Well Rights, Lucas obtained a partial release from Rogers, Lucas’ secured lender, and Sharon E. Conway, as Trustee, under that certain Mortgage, Deed of Trust, Assignment, Security Agreement, Financing Statement and Fixture Filing, dated August 13, 2013, that permitted Lucas to transfer the Well Rights to Victory. Among other things, the Collaboration Agreement required Victory to issue a contingent promissory note in the principal amount of $250,000 to Rogers (the “Rogers Note”).  In accordance with its terms, the Rogers Note becomes due and payable, among other times, within ninety (90) days following the termination of the Letter of Intent.

On May 11, 2015, Victory notified Lucas that Victory does not intend to proceed with the Merger and thereby terminated the Letter of Intent.

The Parties now desire to resolve their respective claims under the Collaboration Agreement and the Rogers Note and otherwise without admitting liability therefor, and in order to avoid the uncertainty, expense and burden of litigation.

 

AGREEMENT

 

 

NOW, THEREFORE, in consideration of the promises, representations, warranties and covenants contained herein, and intending to be legally bound hereby, the Parties agree as follows:

 

1.           Termination of Rogers Note; Further Assurances.

 

(a)            Subject to the terms and conditions of this Settlement Agreement and except as expressly provided otherwise below, all rights, duties, liabilities and obligations of each of the Parties under the Rogers Note is hereby terminated and cancelled as of the date hereof, and neither of the Parties nor any of their affiliates, shall have any further rights, duties, liabilities or obligations to the other Party under the Rogers Note.

 

 

  

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For Purposes of Settlement Discussions;

Subject to Texas Rule of Evidence 408 and

Federal Rule of Evidence 408

 

(b)           Each of the Parties hereto agree to execute and deliver all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Settlement Agreement.

 

2.           Victory Payment Obligation. On or before July 15, 2015, Victory shall pay to Rogers Two Hundred and Fifty Three Thousand Seven Hundred Fifty Dollars ($253,750) in immediately available funds to an account specified by Rogers to Victory in writing; provided, however, that if Victory fails to make such payment on or before July 15, 2015 it shall be in breach of this Settlement Agreement and default interest on such amount shall accrue at a per diem rate of $126.88 (i.e., 18% per annum).  Victory agrees that Roger’s counsel, Attorney Sharon E. Conway, may hold in escrow (i) the assignment of the additional Penn Virginia properties contemplated by Section 2(a) of the VL Settlement Agreement (as defined below), and (ii) the Settlement Shares (as defined in the VL Settlement Agreement), until such time as Victory pays to Rogers the amounts due and payable to Rogers pursuant to this Section 2 and Rogers shall immediately release such assignment once such payment has been made in full.

 

3.           Concurrent Settlement Agreements. This Settlement Agreement has been negotiated concurrently with (a) that certain settlement agreement being entered into on or about the date hereof between Victory and Lucas (the “VL Settlement Agreement”), and (b) that certain settlement agreement being entered into on or about the date hereof among Oak Valley Operating LLC and its affiliates, Lucas and its affiliates and Victory and its affiliates (the “Oak Valley Settlement Agreement”).  Notwithstanding any provision herein contained to the contrary, this Settlement Agreement shall automatically terminate and be of no force or effect if each of the VL Settlement Agreement and the Oak Valley Settlement Agreement is not executed by all of the parties thereto on or before the expiration of two (2) business days after the date hereof.

 

 

 

 

 

 

 

 

 

 

 

  

B-2

  

For Purposes of Settlement Discussions;

Subject to Texas Rule of Evidence 408 and

Federal Rule of Evidence 408

 

4.           Mutual Releases.

 

(a)           Subject to the terms and conditions of this Agreement, from and after the date hereof, each of the Parties on behalf of itself and all of its affiliates and assigns hereby fully, finally, voluntarily and irrevocably releases and discharges the other Party and such other Party’s affiliates (including, specifically and without limitation, in the case of Victory, Aurora Energy Partners, Navitus Energy Group and AEP Assets, LLC) and its and their officers, directors, shareholders, members, partners, employees, legal counsel, accountants, auditors, advisors and agents  (the “Released Parties”) to the fullest extent permitted under applicable law from any and all claims, counterclaims, demands, causes of action, contract obligations, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, obligations, guarantees, endorsements, liens, security interests, agreements, promises, variances, trespasses, judgments, extents, executions, damages, attorneys’ fees or costs whatsoever, at law or in equity or otherwise, whether direct or indirect, known or unknown (any of the foregoing, a “Claim” and, collectively, the “Claims”), which such Party now owns or holds, or has at any time heretofore owned or held, or may in the future own or hold, against the Released Parties, or any of them, in any capacity, including as an officer, director or stockholder of the other Party, which are or may be based upon any facts, acts, omissions, representations, contracts, agreements, including the Rogers Note and the Collaboration Agreement, events or matters of any kind occurring or existing at any time on or before the date of this Settlement Agreement.

 

(b)           Waiver of Unknown Claims. In addition to each Party’s release of Claims provided for in Section 4(a), each Party hereby expressly waives any protection under applicable state law for releases of unknown claims. Each Party understands the significance of his or its release of unknown claims and the waiver of any applicable statutory protection against a release of unknown claims.  EACH PARTY EXPRESSLY ASSUMES THE RISK OF SUCH UNKNOWN AND UNANTICIPATED CLAIMS AND AGREES THAT THIS SETTLEMENT AGREEMENT APPLIES TO ALL CLAIMS, AS DEFINED UNDER SECTION 4(a), WHETHER KNOWN, UNKNOWN, OR UNANTICIPATED.

 

5.           Waiver of Suit.  For the consideration and mutual promises specified herein and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, each Party agrees to waive, release, promise and agrees not to bring or pursue any judicial, quasi-judicial or administrative action against the other Party for any reason whatsoever arising out of the Claims released herein up to and including the date of this Settlement Agreement.  Each party further acknowledges and agrees that it has not already filed or otherwise commenced any such action.  For the avoidance of doubt, any action for enforcement of this Settlement Agreement is expressly excluded from this waiver provision.

 

6.           Representations and Warranties.

 

(a)           Each Party represents and warrants to the other Party that it has the requisite power to enter into this Settlement Agreement and to carry out its obligations hereunder and that the terms of this Settlement Agreement have been fully disclosed to the Board of Directors, if applicable, of such Party and that the requisite approvals have been obtained, prior to its execution and that this Settlement Agreement does not conflict with, or result in a breach of, any other agreement to which such Party is a party.

 

 

 

 

  

B-3

  

For Purposes of Settlement Discussions;

Subject to Texas Rule of Evidence 408 and

Federal Rule of Evidence 408

 

(b)           Each represents and warrants to the other Party that this Settlement Agreement has been duly executed and delivered and constitutes a valid and binding obligation enforceable in accordance with its terms.

 

7.           Entire Agreement.  This Settlement Agreement constitutes the entire, exclusive and final agreement among the parties and supersedes any and all prior agreements, discussions, representations and warranties among the parties with respect to the matters set forth herein.  The parties have not relied upon any statements or representations made by any party outside the content of this Settlement Agreement.

 

8.           Choice of Law.  This Settlement Agreement shall be enforced, governed by and construed in accordance with the laws of the State of Texas without regard to principles of conflict of laws.

 

9.           Counterparts.  This Settlement Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original but all of which together shall constitute but one agreement.

 

10.           Severability.  If any provision of this Settlement Agreement is determined to be unlawful or otherwise unenforceable, the remaining provisions of this Settlement Agreement shall nevertheless continue in full force and effect.

 

11.           Parties in Interest; Assignment; Third Party Beneficiaries.  This Settlement Agreement is binding upon the parties and their respective successors, heirs, legal representatives and permitted assigns.  Aurora Energy Partners, Navitus Energy Group and AEP Assets, LLC and each of their respective officers, directors, managers and owners are each intended third party beneficiaries of this Settlement Agreement and may enforce their rights under this Settlement Agreement.

 

12.           No Admission of Liability or Wrongdoing.  This Settlement Agreement and the negotiations and discussions leading up to this Settlement Agreement effect the settlement of claims which are denied and contested, and do not constitute, nor shall they be construed as, an admission of liability by the parties.  This Settlement Agreement is made solely for the purpose of avoiding the burden and expense of litigation, which would be imposed on the parties if the disputes between them remained unsettled.  This Settlement Agreement does not constitute an admission by any of the parties hereto that they have engaged in any unlawful act.  Each of the parties hereto expressly deny that hey have engaged in any unlawful act and deny liability for all claims any other party had, has, or may have against them.

 

13.           Indemnification and Contribution.  Each Party (an “Indemnitor”) agrees to indemnify the other Party and its affiliates and its and their officers, directors, employees, agents, shareholders, members and/or partners (collectively referred to as the “Indemnitees”) against, and hold them harmless of and from, any and all loss, liability, cost, damage and expense, including without limitation, reasonable counsel fees, which the Indemnitees may suffer or incur by reason of any action, claim or proceeding brought against the Indemnitees arising out of or relating in any way to a breach by the Indemnitor of any representation, warranty or covenant contained in this Settlement Agreement. If the indemnification provided for in Section 13 is applicable, but for any reason is held to be unavailable, the Indemnitor shall contribute such amounts as are just and equitable to pay, or to reimburse the Indemnitees for, the aggregate of any and all losses, liabilities, costs, damages and expenses, including counsel fees, actually incurred by the Indemnitees as a result of or in connection with, and any amount paid in settlement of, any action, claim or proceeding arising out of or relating in any way to any actions or omissions of the Indemnitor.  The provisions of this Section 13 shall survive any termination of this Agreement.

 

 

 

  

B-4

  

For Purposes of Settlement Discussions;

Subject to Texas Rule of Evidence 408 and

Federal Rule of Evidence 408

 

14.           Construction.  This Settlement Agreement shall not be construed against the party preparing it, but shall be construed as if the parties collectively prepared it and any uncertainty or ambiguity shall not be interpreted against any party.

 

15.           Modifications; Waiver.  This Settlement Agreement may not be modified orally.  No breach of any provision hereof may be waived unless in writing.  Waiver of any breach shall not be deemed to be a waiver of any other breach of the same or of any other provision hereof.  All modifications to this Settlement Agreement must be in writing and signed by all of the Parties hereto.

 

16.           No Assignments. Each of the Parties hereby represents and warrants to the other Party that there has been no assignment or transfer whatsoever of any of the Claims released herein.  Each Party agrees to defend and indemnify the other Party and the other persons and entities released herein against any Claim based upon, arising out of or in connection with any such assignment or transfer.

 

17.           Attorneys' Fees.  If any action is brought for the enforcement of this Settlement Agreement or in connection with any dispute arising out of it or the claims which are the subject of this Settlement Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and any other costs incurred in such litigation in addition to any other relief to which the prevailing party may be entitled.

 

18.           Advice of Counsel.  Each party to this Settlement Agreement has had the opportunity to discuss the matter with legal counsel, and enters into this Settlement Agreement only after such consultation.

 

19.           Waiver Of Jury Trial.  EACH PARTY EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS SETTLEMENT AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

20.           Notices.  All notices and other communications hereunder shall be in writing to the parties at the addresses specified on the signature pages hereto.

 

 

[Signature page follows]

 

 

 

 

 

 

  

B-5

  

For Purposes of Settlement Discussions;

Subject to Texas Rule of Evidence 408 and

Federal Rule of Evidence 408

 

IN WITNESS WHEREOF, the parties have executed this Settlement Agreement as of the date first above written.

 

 

	 	 	

Victory Energy Corporation

By:                                           

Name: Kenneth Hill

Title: Chief Executive Officer

3355 Bee Caves Road, Suite 608

Austin, TX  78746

Louise H. Rogers

  

c/o Sharon E. Conway

Attorney at Law

2441 High Timbers, Suite 410

The Woodlands, Texas  77380-1052

	 	 	 	 
	 	 	 	 

 

Acknowledgement of Counsel:

 

Each of the undersigned legal counsel to Victory and to Rogers by signing this Settlement Agreement below acknowledge that they approve the Settlement Agreement as to form:

 

 

 

 

	______________________________	______________________________
	Sharon E. Conway	David McCall
	Counsel to Rogers	Counsel to Victory
	Approving as to form only	Approving as to form only

 

 

                                                                                                                                                                                                                                                               

 

 

 

 

 

 

 

 

 

  

B-6

  

EXHIBIT C

Form of Oak Valley Release

COMPROMISE SETTLEMENT AGREEMENT AND

 

MUTUAL GENERAL RELEASE

 

 

I.

PARTIES

 

The parties to this Compromise Settlement Agreement and Mutual General Release are:

1.01           Earthstone Operating, LLC; Earthstone Energy, Inc.; Oak Valley Resources, LLC; Oak Valley Operating, LLC; and Sabine River Energy, LLC (collectively, “Earthstone”).

 

1.02           Lucas Energy, Inc. (“LEI”).

 

1.03           Victory Energy Corporation; AEP Assets LLC, and Aurora Energy Partners (together, “Victory”).

 

II.

DEFINITIONS

 

2.01           “JOA” means that certain Joint Operating Agreement which appears as Exhibit “C” to the Participation Agreement, as defined below.

 

2.02           “Earthstone Parties” means Earthstone and its past and present principals, officers, directors, shareholders, employees, agents, representatives, members, parents, subsidiaries, affiliates, assigns, predecessors and successors.

 

2.03           “LEI Parties” means LEI and its past and present principals, officers, directors, shareholders, employees, agents, representatives, members, parents, subsidiaries, affiliates, assigns, and successors.

 

2.04           “Participation Agreement” means that certain Participation Agreement, dated August 1, 2014, between Earthstone and LEI.

 

2.05           “Victory Assignment” means the assignment to Victory of the Subject Interests, as defined below, pursuant to that certain Partial Assignment and Bill of Sale of Wellbore Rights dated effective as of February 27, 2015 and recorded in Volume 1223, Page 133 in the Official Records of Karnes County, Texas.

 

2.06           “Victory Parties” means Victory and its past and present principals, officers, directors, shareholders, employees, agents, representatives, members, parents, subsidiaries, affiliates, assigns, and successors.

 

2.07             “Settlement Agreement” means this Compromise Settlement Agreement and Mutual General Release.

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

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2.08           “Subject Interests” means a purported fifty percent (50%) Working/Leasehold Interest in and to the Boggs #1H and #2H wellbore rights, along with one hundred feet (100’) laterally perpendicular to said wellbores that were assigned by Lucas to Victory pursuant to the Victory Assignment.

 

2.09           “Parties” means Earthstone, LEI, and Victory, each of whom shall be individually referred to as a “Party.”

 

2.10           The “Dispute” means all claims and causes of action of any kind whatsoever which the Parties have or may have in the future against each other, based on any acts or events that have occurred on or before the Effective Date, as defined below, related to or arising out of those facts set forth in Section III below, except as otherwise provided in this Settlement Agreement.

 

2.11           “Effective Date” means the date on which this Settlement Agreement is executed by LEI, Earthstone and Victory.  If executed on different dates, the Effective Date shall be the date that this Agreement is executed by the last party to any such agreement to execute.

 

2.12           “VL Settlement Agreement”  means that certain Settlement Agreement and Mutual Release between Victory and Lucas, including all exhibits thereto.

 

2.13           “Rogers Release” means the full mutual release, including a release in favor of Victory and its affiliates from Louis H. Rogers, Lucas’ senior  secured lender that is contemplated by the VL Settlement Agreement.

 

III.

Background

 

3.01           Each of the Parties has informed the other Parties that it intends to assert claims against the other Parties for various reasons, including, without limitation, claims arising out of the following agreements, conveyances or interests:

 

	
  

	
(a)

	
the Participation Agreement;

 

	
  

	
(b)

	
the JOA;

 

	
  

	
(c)

	
the letter of intent dated August 4, 2014 between LEI and the Earthstone Parties;

 

	
  

	
(d)

	
the Partial Assignment dated effective August 1, 2014, and recorded in Volume 1196, Page 702 of the Official Records of Karnes County;

 

	
  

	
(e)

	
the Victory Assignment;

 

	
  

	
(f)

	
the letter agreement dated February 9, 2015, between LEI and the Earthstone Parties;

 

	
  

	
(g)

	
a letter dated May 1, 2015, from the Earthstone Parties to LEI; and

 

	
  

	
(h)

	
an oil and gas lease, the memorandum of which is recorded as Instrument No. 201500142279 of the Official Records of Karnes County (the “Boggs Lease”).

 

 

All of the Parties dispute the claims that each other Party has made against it.  The parties wish to resolve the respective claims by entering into this Agreement without admitting liability therefor, and in order to avoid the uncertainty, expense and burden of litigation.  Concurrently, one or more of the Parties is entering into the Lucas Settlement, the VL Settlement Agreement and the Rogers Release.

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

PAGE 2

  

Scope of Settlement

 

3.02           Bona fide disputes and controversies may exist between the Parties, both as to the fact and extent of liability, if any, and as to the fact and extent of damages, if any, and by reason of such disputes and controversies, the Parties to this Settlement Agreement desire to settle all claims and causes of action of any kind whatsoever which the Parties have or may have in the future against each other, based on any acts or events that have occurred on or before the Effective Date, except as otherwise provided in this Settlement Agreement.

 

3.03           The Parties intend that the full terms and conditions of the compromise and settlement be set forth in this Settlement Agreement.

 

In consideration of the agreements contained in this Settlement Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

IV.

REPRESENTATIONS AND WARRANTIES

 

The following representations and warranties shall survive the execution of this Settlement Agreement and the completion of the settlement provided below.

 

Authority/Capacity

 

4.01           Each Party to this Settlement Agreement warrants and represents that it has the power and authority to enter into this Settlement Agreement and that this Settlement Agreement and all documents delivered pursuant to this Settlement Agreement are valid, binding, and enforceable upon him or it.

 

4.02           Each Party to this Settlement Agreement warrants and represents that no consent, approval, authorization or order of, and no notice to, or filing with any court, governmental authority, person or entity is required for the execution, delivery, and performance of this Settlement Agreement.

 

4.03           Earthstone warrants and represents that it is not the fiduciary of LEI or Victory; no fiduciary relationship exists between Earthstone and LEI or between Earthstone and Victory; and this is an arm’s length transaction.  LEI warrants and represents that it is not the fiduciary of Earthstone or Victory; no fiduciary relationship exists between LEI and Earthstone or between LEI and Victory; and this is an arm’s length transaction.  Victory warrants and represents that it is not the fiduciary of LEI or Earthstone; no fiduciary relationship exists between Victory and LEI or between Victory and Earthstone; and this is an arm’s length transaction.

 

4.04           Earthstone warrants and represents that it is duly formed under the laws of the state of its organization and is duly organized and validly existing in good standing under such laws.  Earthstone warrants and represents that it has the power and authority to execute and deliver this Settlement Agreement and all other agreements and instruments to be executed by it as contemplated by this Settlement Agreement and to carry out the transactions and perform its obligations provided for in this Settlement Agreement and in those other agreements and instruments.  The execution and delivery of this Settlement Agreement and such other agreements and instruments and the consummation of the transactions contemplated by this Settlement Agreement and such other agreements and instruments have been duly and validly authorized by all necessary action on the part of Earthstone.

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

PAGE 3

  

4.05           LEI warrants and represents that it is duly formed under the laws of the state of its organization and is duly organized and validly existing in good standing under such laws.  LEI warrants and represents that it has the power and authority to execute and deliver this Settlement Agreement and all other agreements and instruments to be executed by it as contemplated by this Settlement Agreement and to carry out the transactions and perform its obligations provided for in this Settlement Agreement and in those other agreements and instruments.  The execution and delivery of this Settlement Agreement and such other agreements and instruments and the consummation of the transactions contemplated by this Settlement Agreement and such other agreements and instruments have been duly and validly authorized by all necessary action on the part of LEI.

 

4.06           Victory warrants and represents that it is duly formed under the laws of the state of its organization and is duly organized and validly existing in good standing under such laws.  Victory warrants and represents that it has the power and authority to execute and deliver this Settlement Agreement and all other agreements and instruments to be executed by it as contemplated by this Settlement Agreement and to carry out the transactions and perform its obligations provided for in this Settlement Agreement and in those other agreements and instruments.  The execution and delivery of this Settlement Agreement and such other agreements and instruments and the consummation of the transactions contemplated by this Settlement Agreement and such other agreements and instruments have been duly and validly authorized by all necessary action on the part of Victory.

 

V.

SETTLEMENT TERMS

 

This Settlement Agreement has been negotiated concurrently with (a) the VL Settlement Agreement, (b) the Rogers Release and (c) that certain Compromise Settlement Agreement and General Release by and between Earthstone and LEI of even date herewith (the “Lucas Settlement”).  Notwithstanding any provision herein contained to the contrary, this Settlement Agreement shall automatically terminate and be of no force or effect if (a) the VL Settlement Agreement, (b) the Rogers Release or (c) the Lucas Settlement is not executed by all of the parties thereto on or before the expiration of two (2) business days after the Effective Date.

 

In reliance upon the representations, warranties, and covenants in this Settlement Agreement, and concurrently with the execution and delivery of this Settlement Agreement, the Parties have settled and compromised their claims and causes of action against each other as follows:

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

PAGE 4

  

Payment, Reassignment & Non-Consent

 

5.01           LEI shall be entitled to receive from Earthstone $195,928.33, being the sum previously advanced to Earthstone on behalf of LEI (the “JIB Return”); and Earthstone shall be entitled to receive from LEI $141,907.50 (the “Title Failure Return”).

 

THEREFORE, Earthstone shall pay to LEI the difference between the JIB Return and the Title Failure Return, being FIFTY-FOUR THOUSAND TWENTY AND 83/100 DOLLARS ($54,020.83) (the “Payment”).

 

5.02           Earthstone shall deliver the Payment by wire transfer of immediately available funds in U.S. dollars to the account of LEI to the bank or account specified as follows:

 

_________________

_________________

_________________

_________________

5.03           The parties hereby agree that, notwithstanding the election period set forth in the Letter dated May 1, 2015 (described in Section 3.01(g) above), LEI is hereby deemed a Non-Consenting Party as defined under the terms of the JOA, for all purposes.

 

5.04           LEI shall execute and deliver an irrevocable election not to participate in the Boggs #1H and #2H Wells (or any AFEs related thereto) as proposed under the above described May 1, 2015 Letter.  LEI will further acknowledge in such election that it and its interests in the Boggs #1H and #2H wells are subject to the non-consent penalties set forth in the JOA for failure to participate in such wells.

 

5.05           Victory shall execute and record a “quit claim” assignment of leasehold working interest in favor of Sabine River Energy, LLC, effective as of February 27, 2015, substantially in the form attached hereto as Exhibit A (the “Reassignment”), of all of the right, title and interest conveyed pursuant to the Victory Assignment.  LEI shall warrant title to the Subject Interests unto Sabine River Energy, LLC, against all persons claiming by, through and under LEI and/or Victory, but not otherwise.

 

5.06           As described in Section 5.02 above, the Payment shall be transmitted to the account specified by LEI within two (2) business days after receipt by Earthstone’s counsel, Thompson & Knight, LLP (“T&K”) of the fully executed signature pages of this Settlement Agreement, the Lucas Settlement, the VL Settlement Agreement, and the Rogers Release for all respective parties thereto; the Reassignment; and any other documentation required to be exchanged under this Settlement Agreement.  This Settlement Agreement shall automatically terminate and be null and void, and of no further force or effect, if the Payment is not timely transmitted in accordance with this Settlement Agreement.

 

5.07           LEI acknowledges that Earthstone has in good faith commenced operations, and Earthstone shall take commercially reasonable steps to continue such operations on or before August 31, 2015, for the drilling of either the Boggs #1H well or the Boggs #2H well.  LEI’s sole and exclusive remedy for any failure of Earthstone to take such further steps shall be Earthstone’s waiver of the non-consent penalty as to the AFEs included in the May 1, 2015 letter to the extent such waiver is required under the JOA, and LEI shall waive all other rights and remedies for the same (including, without limitation, LEI shall not sue Earthstone for money damages or injunctive relief for failure to continue its operations for such wells).

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

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5.08           In the event that “Recoupment”, as defined under Article VI(d) of the JOA, occurs as to either the Boggs #1H well or the Boggs #2H well, respectively, then within thirty (30) days thereafter Earthstone shall assign to LEI its proportionate share of the applicable wellbore, and the Subject Interests to the extent located within one hundred feet (100’) laterally perpendicular to such wellbore with special warranty of title by, through and under Earthstone, but not otherwise, effective as of the first day of the month following the month in which such Recoupment occurs. For purposes of this section, LEI’s “proportionate share” means an undivided 34.3971%, provided that if as of the Effective Date Earthstone, Victory and LEI, collectively, own less than one hundred percent (100%) of the wells, leases, and other oil and gas properties lying within the “Contract Area” of the JOA (as defined therein), as reflected in the real property records of Karnes County, Texas, then such percentage shall be proportionately reduced.

 

Non-Disparagement

 

5.09           From and after the Effective Date, LEI agrees not to discuss or comment upon, or publish any information concerning, any Earthstone Parties or Victory Parties, their business affairs, or their management in a negative or disparaging manner.  From and after the Effective Date, Victory agrees not to discuss or comment upon, or publish any information concerning, any Earthstone Parties or LEI Parties, their business affairs, or their management in a negative or disparaging manner. From and after the Effective Date, Earthstone agrees not to discuss or comment upon, or publish any information concerning, any Victory Parties or LEI Parties, their business affairs, or their management in a negative or disparaging manner.  LEI, Victory, and Earthstone each agree not to act to disrupt, derogate, or detrimentally affect, directly or indirectly, the business or any business relationship, services, operations, reputation, officers, employees, financial status, or liabilities of any other Party.

 

Release by LEI of the Earthstone Parties

 

5.10           Except as otherwise expressly set forth in the Lucas Settlement, as of the Effective Date, LEI generally releases and forever discharges the Earthstone Parties from any and all claims, demands, and causes of action of whatever kind or character which LEI or any other LEI Parties have, or may have in the future, based on any acts or omissions that have occurred on or before the Effective Date, whether known or unknown, including claims for fraud, fraudulent inducement, and breach of fiduciary duty (collectively, the “LEI Claims”), save and except solely those claims, demands, and causes of action arising out of or relating to the breach, enforcement, or interpretation of this Settlement Agreement.

 

5.11           This release is to be construed as the broadest type of general release and includes, but is not limited to: (a) any claim growing out of, or connected in any way with, the Dispute; (b) any claims growing out of, or connected in any way with, LEI’s business dealings with the Earthstone Parties; (c) any claim based in whole or in part on the activities of the Earthstone Parties that may have been alleged to violate any laws or administrative rules of the United States, or any state or subdivision of the United States, or any foreign country or subdivision of any foreign country, pertaining to inter alia, breach of contract, fraud, negligent misrepresentation, tortious interference of prospective contractual relations, intentional interference with an existing contract, attorneys’ fees, breach of fiduciary duty, or punitive damages; (d) any claim based in whole or in part on the activities of the Earthstone Parties that may have been alleged to create any right or action for recovery for damages or injunction, under any federal or state statutes or administrative rule or other judicial decisions or the common law of the United States, or any state or subdivision of the United States, or any foreign country or subdivision of any foreign country; (e) any claim based in whole or in part on the activities of the Earthstone Parties that may have been alleged to create or contribute to any other right, claim or cause of action of LEI against the Earthstone Parties; and (f) claims for punitive or exemplary damages, attorneys’ fees, or penalties.

 

5.12           This release is intended to constitute a general release by LEI of the Earthstone Parties of the LEI Claims, whether known or unknown.  To the extent any of the LEI Claims have not been released by this Settlement Agreement, LEI hereby assigns those claims to Earthstone.

 

 

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Release by Victory of the Earthstone Parties

 

5.13           As of the Effective Date, Victory generally releases and forever discharges the Earthstone Parties from any and all claims, demands, and causes of action of whatever kind or character which Victory or any other Victory Parties have, or may have in the future, based on any acts or omissions that have occurred on or before the Effective Date, whether known or unknown, including claims for fraud, fraudulent inducement, and breach of fiduciary duty (collectively, the “Victory Claims”), save and except solely those claims, demands, and causes of action arising out of or relating to the breach, enforcement, or interpretation of this Settlement Agreement.

 

5.14           This release is to be construed as the broadest type of general release and includes, but is not limited to: (a) any claim growing out of, or connected in any way with, the Dispute; (b) any claims growing out of, or connected in any way with, Victory’s business dealings with the Earthstone Parties; (c) any claim based in whole or in part on the activities of the Earthstone Parties that may have been alleged to violate any laws or administrative rules of the United States, or any state or subdivision of the United States, or any foreign country or subdivision of any foreign country, pertaining to inter alia, breach of contract, fraud, negligent misrepresentation, tortious interference of prospective contractual relations, intentional interference with an existing contract, attorneys’ fees, breach of fiduciary duty, or punitive damages; (d) any claim based in whole or in part on the activities of the Earthstone Parties that may have been alleged to create any right or action for recovery for damages or injunction, under any federal or state statutes or administrative rule or other judicial decisions or the common law of the United States, or any state or subdivision of the United States, or any foreign country or subdivision of any foreign country; (e) any claim based in whole or in part on the activities of the Earthstone Parties that may have been alleged to create or contribute to any other right, claim or cause of action of Victory against the Earthstone Parties; and (f) claims for punitive or exemplary damages, attorneys’ fees, or penalties.

 

5.15           This release is intended to constitute a general release by Victory of the Earthstone Parties of the Victory Claims, whether known or unknown.  To the extent any of the Victory Claims have not been released by this Settlement Agreement, Victory hereby assigns those claims to Earthstone.

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

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Release of the Earthstone Claims

 

5.16           Except as otherwise expressly set forth in the Lucas Settlement as to Earthstone Claims against LEI, as of the Effective Date, Earthstone generally releases and forever discharges the LEI Parties and the Victory Parties from any and all claims, demands, and causes of action of whatever kind or character which Earthstone or any other Earthstone Parties have, or may have in the future, based on any acts or omissions that have occurred on or before the Effective Date, whether known or unknown, including claims for fraud, fraudulent inducement, and breach of fiduciary duty (collectively, the “Earthstone Claims”), save and except solely those claims, demands, and causes of action arising out of or relating to the breach, enforcement, or interpretation of this Settlement Agreement.

 

5.17           This release is to be construed as the broadest type of general release and includes, but is not limited to: (a) any claim growing out of, or connected in any way with, the Dispute; (b) any claims growing out of, or connected in any way with, Earthstone’s business dealings with the LEI Parties and/or the Victory Parties; (c) any claim based in whole or in part on the activities of the LEI Parties and/or the Victory Parties that may have been alleged to violate any laws or administrative rules of the United States, or any state or subdivision of the United States, or any foreign country or subdivision of any foreign country, pertaining to inter alia, breach of contract, fraud, negligent misrepresentation, tortious interference of prospective contractual relations, intentional interference with an existing contract, attorneys’ fees, breach of fiduciary duty, or punitive damages; (d) any claim based in whole or in part on the activities of the LEI Parties and/or the Victory Parties that may have been alleged to create any right or action for recovery for damages or injunction, under any federal or state statutes or administrative rule or other judicial decisions or the common law of the United States, or any state or subdivision of the United States, or any foreign country or subdivision of any foreign country; (e) any claim based in whole or in part on the activities of the LEI Parties and/or the Victory Parties that may have been alleged to create or contribute to any other right, claim or cause of action of Earthstone against the LEI Parties and/or the Victory Parties; and (f) claims for punitive or exemplary damages, attorneys’ fees, or penalties.

 

5.18           This release is intended to constitute a general release by Earthstone of the LEI Parties and/or the Victory Parties of the Earthstone Claims, whether known or unknown.  To the extent any of the Earthstone Claims have not been released by this Settlement Agreement, Earthstone hereby assigns those claims to LEI and/or Victory, as may be applicable.

 

5.19           Notwithstanding anything in this Settlement Agreement to the contrary, the Earthstone Claims do not include, and Earthstone hereby reserves and does not release or waive, and does not assign to LEI and/or Victory, any claims, demands, and/or causes of action of whatever kind or character which Earthstone or any other Earthstone Parties have against LEI arising from or relating to the Lucas Settlement or the performance or enforcement thereof.

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

PAGE 8

  

Indemnification

 

5.20           LEI warrants and represents that it owns the LEI Claims and that no part of the LEI Claims has been assigned or transferred to any other person or entity.  LEI AGREES TO FULLY INDEMNIFY AND HOLD HARMLESS EARTHSTONE FROM ANY AND ALL CLAIMS ARISING OUT OF, OR DERIVATIVE OF, THE CLAIMS RELEASED BY LEI IN THIS SETTLEMENT AGREEMENT, INCLUDING ALL CLAIMS FOR CONTRIBUTION AND INDEMNITY, AND EXPRESSLY INCLUDING ANY CLAIMS ARISING OUT OF LEI’S OWN NEGLIGENCE OR FAULT.  LEI AGREES THAT THE INDEMNIFICATION AND HOLD HARMLESS INCLUDES THE AMOUNTS OF THE CLAIMS, THE EXPENSES OF DEFENDING AGAINST THE CLAIMS, COURT COSTS, AND ATTORNEYS’ FEES.

 

5.21           Victory warrants and represents that it owns the Victory Claims and that no part of the Victory Claims has been assigned or transferred to any other person or entity.  Victory AGREES TO FULLY INDEMNIFY AND HOLD HARMLESS EARTHSTONE FROM ANY AND ALL CLAIMS ARISING OUT OF, OR DERIVATIVE OF, THE CLAIMS RELEASED BY VICTORY IN THIS SETTLEMENT AGREEMENT, INCLUDING ALL CLAIMS FOR CONTRIBUTION AND INDEMNITY, AND EXPRESSLY INCLUDING ANY CLAIMS ARISING OUT OF VICTORY’S OWN NEGLIGENCE OR FAULT.  VICTORY AGREES THAT THE INDEMNIFICATION AND HOLD HARMLESS INCLUDES THE AMOUNTS OF THE CLAIMS, THE EXPENSES OF DEFENDING AGAINST THE CLAIMS, COURT COSTS, AND ATTORNEYS’ FEES.

 

5.22           Earthstone warrants and represents that it owns the Earthstone Claims and that no part of the Earthstone Claims has been assigned or transferred to any other person or entity.  EARTHSTONE AGREES TO FULLY INDEMNIFY AND HOLD HARMLESS LEI AND/OR VICTORY FROM ANY AND ALL CLAIMS ARISING OUT OF, OR DERIVATIVE OF, THE CLAIMS RELEASED BY EARTHSTONE IN THIS SETTLEMENT AGREEMENT, INCLUDING ALL CLAIMS FOR CONTRIBUTION AND INDEMNITY, AND EXPRESSLY INCLUDING ANY CLAIMS ARISING OUT OF EARTHSTONE’S OWN NEGLIGENCE OR FAULT.  EARTHSTONE AGREES THAT THE INDEMNIFICATION AND HOLD HARMLESS INCLUDES THE AMOUNTS OF THE CLAIMS, THE EXPENSES OF DEFENDING AGAINST THE CLAIMS, COURT COSTS, AND ATTORNEYS’ FEES.

 

Covenant Not to Sue

 

5.23           LEI covenants and agrees not to sue Earthstone for any matters released in Sections 5.10 and 5.11 above.

 

5.24           Victory covenants and agrees not to sue Earthstone for any matters released in Sections 5.13 and 5.14 above.

 

5.25           Earthstone covenants and agrees not to sue LEI and/or Victory for any matters released in Sections 5.16 and 5.17 above.

 

5.26           The parties agree that for any breach of a covenant not to sue the breaching party shall be liable for the non-breaching party’s attorneys’ fees and costs as actual damages in a breach of contract action.

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

PAGE 9

  

Cooperation and Additional Actions

 

5.27           The Parties agree to cooperate fully in executing any and all supplementary documents, and to take all additional actions that may be necessary or appropriate to give full force and effect to the basic terms and intent of this Settlement Agreement.

 

Costs and Fees

 

5.28           The Parties agree that each Party shall bear its or his own costs and attorneys’ fees incurred in connection with the Dispute and the negotiation, drafting, and execution of this Settlement Agreement.

 

Choice of Law

 

5.29           This Settlement Agreement shall be governed by, construed, interpreted, and enforced in accordance with the laws of the State of Texas, except that any conflict of law rule of that jurisdiction that may require reference to the laws of some other jurisdiction shall be disregarded.

 

Confidentiality

 

5.30           From the Effective Date forward, the Parties agree not to reveal the terms of this Settlement Agreement to anyone who is not a Party to this Settlement Agreement.  However, the Parties agree that this section shall not prevent any Party from revealing or discussing the terms of this Settlement Agreement (a) with its or his legal advisors, accountants, tax advisors, or financial advisors; (b) in any action regarding the breach, enforcement, or interpretation of this Settlement Agreement; and (c) as required by law (including, where applicable, the Securities and Exchange Commission filing obligations of the Parties), contract, governmental agency, or any court of competent jurisdiction.

 

Miscellaneous

 

5.31           The Parties agree that this Settlement Agreement is entered into for settlement purposes only in order to avoid further trouble, litigation, and expense, and it is further agreed that no Party admits any liability or damages as a result of the acts and omissions that form the basis of the Dispute.

 

5.32           This Settlement Agreement has been prepared by the joint efforts of the respective attorneys for each of the Parties.

 

5.33           Section numbers and section titles have been set forth herein for convenience only; they shall not be construed to limit or extend the meaning or interpretation of any part of this Settlement Agreement.

 

5.34           With the exception of Sections 5.10, 5.13 and 5.16, if any provision of this Settlement Agreement is or may be held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless survive and continue in full force and effect without being impaired or invalidated in any way.

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

PAGE 10

  

5.35           None of the Parties to this Settlement Agreement has expressed any facts, representations, or express or implied warranties to the other Party, except as expressly contained in this Settlement Agreement.

 

5.36           This Settlement Agreement shall continue perpetually and shall be binding upon the Parties and their heirs, successors, and assigns and shall inure to the benefit of the Parties and their heirs, successors, and assigns.

 

5.37           Except, as between Earthstone and LEI, as expressly set forth in the Lucas Settlement, and as between Victory and LEI as expressly set forth in the VL Settlement Agreement or the Rogers Release, this Settlement Agreement represents the entire agreement of the Parties and supersedes all prior written or oral agreements, and the terms are contractual and not mere recitals.

 

5.38           This Settlement agreement may not be amended, altered, modified or changed in any way except in writing signed by all the Parties to this Settlement Agreement.

 

5.39           EACH PARTY WARRANTS THAT IT HAS CAREFULLY READ THIS AGREEMENT (INCLUDING THIS DISCLAIMER OF RELIANCE SET FORTH HEREIN IN WHAT EACH PARTY AGREES TO BE APPROPRIATELY CONSPICUOUS LANGUAGE) AND ANY EXHIBITS ATTACHED TO THIS AGREEMENT, EACH PARTY REPRESENTS AND WARRANTS THAT IT UNDERSTANDS THIS AGREEMENT AND DISCLAIMER’S CONTENTS, AND SIGNS THIS AGREEMENT AS ITS OR HIS OWN FREE ACT.  EACH PARTY  EXPRESSLY WARRANTS THAT NO PROMISE OR AGREEMENT WHICH IS NOT HEREIN EXPRESSED HAS BEEN MADE TO IT OR HIM IN EXECUTING THIS AGREEMENT, AND THAT EACH PARTY IS NOT RELYING UPON (INDEED, EXPRESSLY DISCLAIMS RELIANCE UPON) ANY STATEMENT OR REPRESENTATION OF ANY PARTY OR ANY AGENT OF ANY OF THE PARTIES HERETO.  EACH PARTY AGREES THIS IS AN ARM’S-LENGTH TRANSACTION (NO FIDUCIARY RELATIONSHIP EXISTS) AND EACH PARTY REPRESENTS, WARRANTS, AND PROMISES THAT IT OR HE IS RELYING SOLELY ON ITS OR HIS OWN JUDGMENT AND DUE DILIGENCE, WHICH IT OR HE HEREBY CONTRACTUALLY AGREES TO UNDERTAKE.  EACH PARTY WARRANTS IT OR HE HAS BEEN REPRESENTED BY LEGAL COUNSEL IN THIS MATTER.  EACH PARTY REPRESENTS THAT ITS OR HIS LEGAL COUNSEL HAS READ AND EXPLAINED TO THAT PARTY THE ENTIRE CONTENTS OF THIS AGREEMENT IN FULL, AS WELL AS THE LEGAL CONSEQUENCES OF THIS AGREEMENT AND DISCLAIMER.  EACH PARTY AGREES AND WARRANTS THAT IT OR HE HAS READ THE ENTIRE CONTENTS OF THIS AGREEMENT IN FULL, IS SOPHISTICATED AND KNOWLEDGEABLE ABOUT BUSINESS, AND FULLY UNDERSTANDS THE LEGAL CONSEQUENCES OF THIS AGREEMENT AND DISCLAIMER.  EACH PARTY REPRESENTS, WARRANTS, AND PROMISES THAT THIS SECTION IS A CLEAR, UNEQUIVOCAL, AND EFFECTIVE DISCLAIMER OF RELIANCE UNDER TEXAS LAW AND THAT THIS AGREEMENT AND DISCLAIMER IS INTENDED TO AND DOES NEGATE ANY CLAIM FOR FRAUD OR FRAUDULENT INDUCEMENT INTO THIS AGREEMENT.

 

[The remainder of this page has been intentionally left blank]

 

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

PAGE 11

  

5.40            This Settlement Agreement may be executed in multiple counterparts or copies and/or on separated signature pages and/or by e-mail transmission, any or all of which when taken together shall be deemed an original for all purposes.

 

 

EARTHSTONE OPERATING, LLC (formerly Oak Valley Operating, LLC)

By:   ___________________________________

Name, Title: ________________________, ________

Date: ________________

EARTHSTONE ENERGY, INC.

By:   ___________________________________

Name, Title: ________________________, ________

Date: ________________

OAK VALLEY RESOURCES, LLC

By:   ___________________________________

Name, Title: ________________________, ________

Date: ________________

SABINE RIVER ENERGY, LLC

By:   ___________________________________

Name, Title: ________________________, ________

Date: ________________

 

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

PAGE 12

  

LUCAS ENERGY INC.

By:   ___________________________________

Name, Title: ________________________, ________

Date: ________________

VICTORY ENERGY CORPORATION

By:   ___________________________________

Name, Title: ________________________, ________

Date: ________________

AEP ASSETS, LLC 

By:   ___________________________________

Name, Title: ________________________, ________

Date: ________________

AURORA ENERGY PARTNERS 

 

 

By ______________________________

Its General Partner

By:   ___________________________________

Name, Title: ________________________, ________

Date: ________________

 

 

COMPROMISE SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

  

PAGE 13

  

EXHIBIT A

Form of Reassignment

[ attached ]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

EXHIBIT A - PAGE 1

  

NOTICE OF CONFIDENTIALITY RIGHTS:  IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:  YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

 

ASSIGNMENT AND BILL OF SALE

 

 

STATE OF TEXAS   

                                                                                                                                                                               KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF KARNES

THAT, VICTORY ENERGY CORPORATION, a Texas corporation, whose mailing address is 3355 Bee Caves Road, Suite 608, Austin, Texas 78746 (hereinafter referred to as “Assignor”), for sufficient consideration received from SABINE RIVER ENERGY, LLC, a Texas limited liability company, whose mailing address is 1400 Woodloch Forest Drive, Suite 300, The Woodlands, Texas 77380-1197 (hereinafter referred to as “Assignee”), does hereby transfer, assign, sell, bargain and convey unto Assignee, subject as herein provided, all of Assignor’s right, title and interest in and to the Oil and Gas Leases described on Exhibit “A” attached hereto and made a part hereof (said leases being hereinafter referred to as “Leases”).

It is the intent of this Assignment and Bill of Sale that Assignor shall retain no interest of any kind or character in the Leases described on Exhibit “A” attached hereto and made a part hereof.

To have and to hold the Leases and interest forever, subject to the following:

1.  This Assignment and Bill of Sale is subject to the terms and provisions of the Leases and Assignee hereby assumes its proportionate share of all express and implied covenants thereunder.

 

2.  This Assignment and Bill of Sale shall be binding upon and inure to the benefit of Assignee and Assignor and their respective successors, heirs and assigns.

 

3.      This Assignment and Bill of Sale is subject to all of the terms and provisions contained in the unrecorded Participation Agreement dated effective August 1, 2014.  It is agreed between the Parties that should there arise any conflict between the terms of this Assignment and Bill of Sale and said Participation Agreement, the terms and provisions of the Participation Agreement shall control.

4.      This Assignment and Bill of Sale is further made subject to all of the terms and provisions contained in that certain unrecorded Compromise Settlement Agreement and General Release executed by and among the Assignor, the Assignee, Lucas Energy, Inc., and certain affiliated parties, dated June ___ , 2015 (the “Settlement Agreement”).  Notwithstanding anything contained herein to the contrary, in the event of conflict between the terms of this Assignment and Bill of Sale, the Participation Agreement referenced in Section 3 above, and the Settlement Agreement, the terms of the Settlement Agreement shall control.

  

EXHIBIT A - PAGE 2

  

5.      This Assignment and Bill of Sale may be executed in any number of counterparts, and each counterpart may be recorded separately or may be combined to form one (1) instrument for recording purposes.

[Signature Page to Follow]

  

EXHIBIT A - PAGE 3

  

Executed by Assignor and Assignee on the dates reflected in their respective acknowledgments, but effective as of February 27, 2015.

 

	 	 	
ASSIGNOR

VICTORY ENERGY CORPORATION

By:________________________________

Printed Name:_______________________

Title:______________________________

 

 

 

ASSIGNEE

SABINE RIVER ENERGY, LLC

By:_________________________________

Christopher E. Cottrell

Executive Vice President Land & Marketing

	 	 	 	 
	 	 	 	 

 

  

EXHIBIT A - PAGE 4

  

ACKNOWLEDGMENTS

 

STATE OF TEXAS

COUNTY OF TRAVIS

This instrument was acknowledged before me on this _____ day of _________________, 2015 by ___________________________, who is _____________ of VICTORY ENERGY CORPORATION, a Texas corporation, on behalf of said corporation.

My Commission Expires:_____________                 ____________________________________

Notary Public for the State of Texas

County of Travis

Printed Name:________________________

STATE OF TEXAS

COUNTY OF MONTGOMERY

This instrument was acknowledged before me on this _____ day of _______________, 2015 by Christopher E. Cottrell, who is Executive Vice President Land & Marketing of SABINE RIVER ENERGY, LLC, a Texas limited liability company, on behalf of said limited liability company.

My Commission Expires:___________                      ____________________________________

Notary Public for the State of Texas

County of Montgomery

Printed Name:________________________

EXHIBIT “A”

  

EXHIBIT A - PAGE 5

  

Attached hereto and made to that certain Assignment and Bill of Sale dated effective February 27, 2015 by and between Victory Energy Corporation, as Assignor, and Sabine River Energy, LLC, as Assignee.

OIL AND GAS LEASES:

	
Lessor:

	
Leland Copeland

	
Lessee:

	
Lucas Energy, Inc.

	
Effective Date:

	
July 16, 2013

	
Memorandum Recorded:

	
Volume 1134, Page 651

	
Description:

	
143.00 acres more or less, out of the Thomas P. Crosby Survey,

	  	
Abstract 66, Karnes County, Texas

	  	  
	
Lessor:

	
Glenn D. Boggs, Jr. and Wife, Betty J. Boggs

	
Lessee:

	
Lucas Energy, Inc.

	
Effective Date:

	
July 16, 2013

	
Memorandum Recorded:

	
Volume 1134, Page 653

	
Description:

	
143.00 acres more or less, out of the Thomas P. Crosby Survey,

	  	
Abstract 66, Karnes County, Texas

	  	  
	
Lessor:

	
Red Crest Trust, JPMorgan Chase Bank, N. A. as Trustee

	
Lessee:

	
Billy R. Wilson

	
Effective Date:

	
March 25, 2008

	
Recorded:

	
Volume 873, Page 394

	
Description:

	
250.00 acres more or less, out of the Thomas P. Crosby Survey,

	  	
Abstract 66, Karnes County, Texas

IN ADDITION TO ANY AND ALL INTEREST ASSIGNOR HAS IN THE ABOVE DESCRIBED LEASES, ASSIGNOR IS CONVEYING TO ASSIGNEE ALL OF ITS RIGHT, TITLE AND INTEREST THAT ASSIGNOR WAS ASSIGNED IN THAT CERTAIN PARTIAL ASSIGNMENT AND BILL OF SALE OF WELLBORE RIGHTS BY AND BETWEEN LUCAS ENERGY, INC., AS ASSIGNOR, AND VICTORY ENERGY CORPORATION, AS ASSIGNEE, DATED EFFECTIVE FEBRUARY 27, 2015, RECORDED IN VOLUME 1223, PAGE 133, DOCUMENT NO. 00141110 IN THE OFFICIAL RECORDS OF KARNES COUNTY, TEXAS.

All recording references are as to Karnes County, Texas.

END OF EXHIBIT “A”

 

 

 

  

EXHIBIT A - PAGE 6

  

 

 

 

 

 

 

 

 

 

 

 

  

 

  

EXHIBIT D

Form of Proxy

PROXY

The undersigned, Victory Energy Corporation, having an address at 3355 Bee Caves Road, Suite 608, Austin, Texas 78746, being the holder of 1,517,241 shares of Lucas Energy, Inc. (or such lesser number of shares of Lucas Energy, Inc. that Victory continues to hold after the date hereof), does hereby constitute and appoint the Board of Directors of Lucas Energy, Inc. acting through its authorized officer, including its Chief Executive Officer, as the undersigned’s proxy to act by written consent of the stockholders of Lucas Energy, Inc. during the period from the date hereof through the second anniversary of the date hereof and to attend all the meetings of the stockholders of said corporation to be held between the date hereof and the second anniversary of the date hereof or any continuation or adjournment thereof, with full power to vote and act for undersigned and in the undersigned’s name, place and stead, in the same manner, to the same extent and with the same effect that the undersigned might were the undersigned personally present thereat, giving to said Board of Directors of Lucas Energy, Inc. full power of substitution and revocation, and the undersigned hereby revokes any other proxy heretofore given by the undersigned.  This proxy is coupled with an interest and is irrevocable during the period from the date hereof through the second anniversary of the date hereof.

Dated _____, 2015.

 

	 	 	
Victory Energy Corporation

By:                                                                           

Kenneth Hill, Chief Executive OfficerCareview Communications, Inc. 8-K 

 

Exhibit 10.01 

 

EXECUTION
VERSION

	 

 

CREDIT
AGREEMENT

 

dated
as of June 26, 2015

 

among

 

CAREVIEW
COMMUNICATIONS, INC.,

a
Nevada corporation,

 

as
Holdings,

 

CAREVIEW
COMMUNICATIONS, INC.,

a
Texas corporation,

 

as
the Borrower,

 

PDL
BIOPHARMA, INC.,

 

as
the Lender,

 

and

 

PDL
BIOPHARMA, INC.,

 

as
the Agent

	 

 

    	 

    	 

    

 

TABLE OF CONTENTS 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page
	 	 	 	 	 	 	 
	Section 1.	 	Definitions; Interpretation	 	1
	 	 	1.1	Definitions	 	1
	 	 	1.2	Interpretation	 	15
	 	 	 	 	 
	Section 2.	 	Credit Facilities	 	16
	 	 	2.1	Loans	 	16
	 	 	 	2.1.1	Loans	 	16
	 	 	 	2.1.2	General	 	17
	 	 	2.2	Loan Accounting	 	17
	 	 	 	2.2.1	Recordkeeping	 	17
	 	 	 	2.2.2	Notes	 	17
	 	 	2.3	Interest	 	17
	 	 	 	2.3.1	Interest Rate	 	17
	 	 	 	2.3.2	Interest Payments	 	19
	 	 	 	2.3.3	Computation of Interest	 	19
	 	 	2.4	Amortization; Prepayment	 	19
	 	 	 	2.4.1	Amortization	 	19
	 	 	 	2.4.2	Voluntary Prepayment; Termination	 	20
	 	 	2.5	Payment Upon Maturity	 	20
	 	 	2.6	Making of Payments	 	20
	 	 	2.7	Application of Payments and Proceeds	 	21
	 	 	2.8	Payment Dates	 	21
	 	 	2.9	Set-off	 	21
	 	 	2.10	Currency Matters	 	21
	 	 	2.11	Protective Advances	 	21
	 	 	2.12	Fees; Equity Issuance	 	22
	 	 	 	2.12.1	Closing Fee	 	22
	 	 	 	2.12.2	Equity Issuance	 	22
	 	 	 	 	 
	Section 3.	 	Yield Protection	 	22
	 	 	3.1	Taxes	 	22
	 	 	3.2	Increased Cost	 	24
	 	 	3.3	Mitigation of Circumstances	 	25
	 	 	3.4	Conclusiveness of Statements; Survival	 	25
	 	 	 	 	 
	Section 4.	 	Conditions Precedent	 	26
	 	 	4.1	Closing Date	 	26
	 	 	 	4.1.1	Delivery of Loan Documents	 	26
	 	 	 	4.1.2	Representations and Warranties	 	28
	 	 	 	4.1.3	No Default	 	28
	 	 	 	4.1.4	No Material Adverse Change	 	28
	 	 	4.2	Tranche One Loan	 	28
	 	 	 	4.2.1	Delivery of Borrowing Request	 	28
	 	 	 	4.2.2	Tranche One Milestone	 	28
	 	 	 	4.2.3	Delivery of Tranche One Milestone Notice	 	28
	 	 	 	4.2.4	Payment of Closing Fee and Fees and Expenses	 	28
	 	 	 	4.2.5	Notes	 	28

 

    	ii

    	 

    

 

TABLE
OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page
	 	 	 	 	 	 	 
	 	 	 	4.2.6	Officer’s Certificate	 	29
	 	 	 	4.2.7	Representations and Warranties	 	29
	 	 	 	4.2.8	No Default	 	29
	 	 	 	4.2.9	No Material Adverse Change	 	29
	 	 	4.3	Tranche Two Loan	 	29
	 	 	 	4.3.1	Delivery of Borrowing Request	 	29
	 	 	 	4.3.2	Tranche Two Milestone	 	29
	 	 	 	4.3.3	Delivery of Tranche Two Milestone Notice	 	29
	 	 	 	4.3.4	Payment of Fees and Expenses	 	29
	 	 	 	4.3.5	Officer’s Certificate	 	30
	 	 	 	4.3.6	Representations and Warranties	 	30
	 	 	 	4.3.7	No Default	 	30
	 	 	 	4.3.8	No Material Adverse Change	 	30
	 	 	 	4.3.9	Note	 	30
	 	 	 	 	 
	Section 5.	 	Representations and Warranties	 	30
	 	 	5.1	Organization	 	30
	 	 	5.2	Authorization; No Conflict	 	31
	 	 	5.3	Validity; Binding Nature	 	31
	 	 	5.4	Financial Condition	 	31
	 	 	5.5	No Material Adverse Change	 	31
	 	 	5.6	Litigation	 	32
	 	 	5.7	Ownership of Properties; Liens; Real Property	 	32
	 	 	5.8	Capitalization; Subsidiaries	 	32
	 	 	5.9	Pension Plans	 	33
	 	 	5.10	Compliance with Law; Investment Company Act; Other
    Regulated Entities	 	33
	 	 	5.11	Margin Stock	 	34
	 	 	5.12	Taxes	 	34
	 	 	5.13	Solvency	 	34
	 	 	5.14	Environmental Matters	 	35
	 	 	5.15	Insurance	 	35
	 	 	5.16	Information	 	35
	 	 	5.17	Intellectual Property	 	36
	 	 	5.18	Labor Matters	 	39
	 	 	5.19	No Default	 	39
	 	 	5.20	Foreign Assets Control Regulations and Anti-Money
    Laundering	 	40
	 	 	 	5.20.1	OFAC	 	40
	 	 	 	5.20.2	PATRIOT Act	 	40
	 	 	5.21	Non-Competes	 	40
	 	 	 	 	 
	Section 6.	 	Affirmative Covenants	 	40
	 	 	6.1	Information	 	40
	 	 	 	6.1.1	Annual Report	 	40
	 	 	 	6.1.2	Quarterly Reports	 	41
	 	 	 	6.1.3	Monthly Reports	 	41
	 	 	 	6.1.4	Compliance Certificate	 	41

 

    	iii

    	 

    

 

TABLE
OF CONTENTS 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	Page
	 	 	 	 	 	 	 
	 	 	 	6.1.5	Notice of Default; Litigation; ERISA Matters	 	42
	 	 	 	6.1.6	Budgets	 	42
	 	 	 	6.1.7	Other Information	 	42
	 	 	6.2	Books; Records; Inspections	 	43
	 	 	6.3	Maintenance of Property; Insurance	 	43
	 	 	6.4	Compliance with Laws and Contractual Obligations;
    Payment of Taxes and Liabilities	 	44
	 	 	6.5	Maintenance of Existence	 	45
	 	 	6.6	Environmental Matters	 	45
	 	 	6.7	Further Assurances	 	45
	 	 	6.8	Conference Calls	 	47
	 	 	6.9	Tranche One Milestone Notice	 	47
	 	 	6.10	Tranche Two Milestone Notice	 	47
	 	 	6.11	Post-Closing Obligations	 	47
	 	 	 	 	 
	Section 7.	 	Negative Covenants	 	48
	 	 	7.1	Debt	 	48
	 	 	7.2	Liens	 	49
	 	 	7.3	Restricted Payments	 	50
	 	 	7.4	Mergers; Consolidations; Asset Sales	 	52
	 	 	7.5	Modification of Organizational Documents; HealthCor
    Debt Documents	 	53
	 	 	7.6	Use of Proceeds	 	53
	 	 	7.7	Transactions with Affiliates	 	53
	 	 	7.8	Inconsistent Agreements	 	54
	 	 	7.9	Business Activities	 	54
	 	 	7.10	Investments	 	54
	 	 	7.11	Fiscal Year	 	55
	 	 	7.12	Deposit Accounts and Securities Accounts	 	55
	 	 	7.13	Sale-Leasebacks	 	56
	 	 	7.14	Hazardous Substances	 	56
	 	 	7.15	ERISA Liability	 	56
	 	 	7.16	Liquidity	 	56
	 	 	7.17	Permitted Activities of Holdings	 	56
	 	 	 	 	 
	Section 8.	 	Events of Default; Remedies	 	57
	 	 	8.1	Events of Default	 	57
	 	 	 	8.1.1	Non-Payment of Credit Agreement	 	57
	 	 	 	8.1.2	No Default Under Other Debt; Material Contracts	 	57
	 	 	 	8.1.3	Bankruptcy; Insolvency	 	57
	 	 	 	8.1.4	Non-Compliance with Loan Documents	 	58
	 	 	 	8.1.5	Representations; Warranties	 	58
	 	 	 	8.1.6	Judgments	 	58
	 	 	 	8.1.7	Invalidity of Collateral Documents	 	59
	 	 	 	8.1.8	Invalidity of Subordination Provisions	 	59
	 	 	 	8.1.9	Change of Control	 	59
	 	 	8.2	Remedies	 	59

 

    	iv

    	 

    

 

TABLE
OF CONTENTS 

	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	Section 9.	 	The Agent	 	60
	 	 	9.1	Appointment; Authorization	 	60
	 	 	9.2	Delegation of Duties	 	60
	 	 	9.3	Limited Liability	 	60
	 	 	9.4	Successor Agent	 	60
	 	 	9.5	Collateral Matters	 	61
	 	 	9.6	Collateral Agent	 	61
	 	 	 	 	 
	Section 10.	 	Miscellaneous	 	61
	 	 	10.1	Waiver; Amendments	 	61
	 	 	10.2	Notices	 	62
	 	 	10.3	Costs; Expenses	 	62
	 	 	10.4	Indemnification by the Borrower	 	62
	 	 	10.5	Marshaling; Payments Set Aside	 	63
	 	 	10.6	Nonliability of the Lender	 	63
	 	 	10.7	Confidentiality	 	64
	 	 	10.8	Captions	 	64
	 	 	10.9	Nature of Remedies	 	64
	 	 	10.10	Counterparts	 	64
	 	 	10.11	Severability	 	64
	 	 	10.12	Entire Agreement	 	65
	 	 	10.13	Successors; Assigns	 	65
	 	 	10.14	Governing Law	 	65
	 	 	10.15	Forum Selection; Consent to Jurisdiction; Service of Process	 	66
	 	 	10.16	Waiver of Jury Trial	 	66

	 	 	 	 	 	 	 
	 	 	SCHEDULES	 	 
	 	 	 	 	 	 
	 	 	Schedule 1.1(a)	Subsidiary Guarantors	 	 
	 	 	Schedule 10.2	Addresses for Notices	 	 
	 	 	 	 	 	 
	 	 	EXHIBITS	 	 
	 	 	 	 	 	 
	 	 	Exhibit A	Form of Note	 	 
	 	 	Exhibit B	Form of Compliance Certificate	 	 

 

    	v

    	 

    

 

CREDIT
AGREEMENT

 

This
Credit Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”),
is made among CareView Communications, Inc., a Nevada corporation (“Holdings”), CareView Communications, Inc.,
a Texas corporation and a wholly-owned subsidiary of Holdings (the “Borrower”), PDL BioPharma, Inc., a Delaware
corporation, as the lender (the “Lender”), and PDL BioPharma, Inc., a Delaware corporation, not individually,
but as the Agent (as defined below).

 

The
Borrower has agreed to enter into this Agreement with the Lender and the Agent evidencing its agreement to incur the Loans, and
in connection therewith, to make the representations and warranties, covenants and undertakings as hereinafter set forth.

 

	Section 1.	Definitions;
    Interpretation.

 

1.1           Definitions.
When used herein the following terms shall have the following meanings:

 

“Accounts”
means “accounts” as defined in the UCC, and also means a right to payment of a monetary obligation, whether or not
earned by performance, (a) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, or
(b) for services rendered or to be rendered.

 

“Acquisition”
means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of all or substantially all of any business or division of a Person,
(b) the acquisition of in excess of 50% of the Capital Stock of any Person, or otherwise causing any Person to become a Subsidiary,
(c) a merger, consolidation, amalgamation or any other combination with another Person (other than a combination between two Persons
that prior to the merger, consolidation, amalgamation or combination were already Loan Parties) and (d) the acquisition from any
Person of a brand, line of business, division, branch or product line, or of marketing rights, patent rights or other Intellectual
Property rights with respect to a product line, operating division, product or potential product or other unit of operation.

 

“Affiliate”
of any Person means (a) any other Person which, directly or indirectly, controls or is controlled by or is under common control
with such Person and (b) any officer or director of such Person. A Person shall be deemed to be “controlled by” any
other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise. Unless expressly stated otherwise herein, neither the
Agent nor the Lender shall be deemed an Affiliate of any Loan Party.

 

“Agent”
means PDL BioPharma, Inc. in its capacity as administrative agent for the Lender hereunder and any successor thereto in such capacity.

 

    	1

    	 

    

 

“Agreement”
has the meaning set forth in the Preamble.

 

“Applicable
Law” means all applicable provisions of all (i) constitutions, treaties, statutes, laws, rules, regulations and ordinances
of any Governmental Authority, (ii) authorizations, consents, approvals, permits or licenses issued by, or a registration or filing
with, any Governmental Authority and (iii) orders, decisions, judgments, awards and decrees of any Governmental Authority (including
common law and principles of public policy).

 

“Billable
CareView System Unit” means, as of any date of determination, each room control platform or nurse station monitor (each,
a “Unit”) for which each of the following clauses (i) to (iii) is true: (i) such Unit is
mounted (where applicable) and operational, (ii) required personnel have been trained in the use of such Unit and (iii) the Borrower
is receiving revenue as of such date in respect of such Unit.

 

“Borrower”
has the meaning set forth in the Preamble.

 

“Borrowing
Request” means an irrevocable written notice of borrowing delivered by the Borrower to the Agent and appropriately specifying
(a) the aggregate principal amount of the Loans to be incurred, (b) the date of such borrowing (which shall be a Business Day),
(c) the account details and wiring instructions for the Borrower and (d) that the applicable conditions set forth in Section
4 of this Agreement have been satisfied.

 

“Business
Day” means any day on which commercial banks are open for commercial banking business in New York, New York.

 

“Capital
Lease” means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal
property by such Person that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person.

 

“Capital
Stock” means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests,
beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests
in, or Stock Equivalents (regardless of how designated) of, a Person (other than an individual), whether voting or non-voting.

 

“CareView
Hillcrest JV” means CareView-Hillcrest, LLC, a Wisconsin limited liability company and a variable interest entity in
which Holdings owns 50% of the Capital Stock.

 

“CareView
System” means the suite of video monitoring guest services and related applications of Holdings and its Subsidiaries
provided and installed in healthcare facilities and designed to enhance patient care and safety.

 

“CareView
Saline JV” means CareView-Saline, LLC, a Wisconsin limited liability company and a variable interest entity in which
Holdings owns 50% of the Capital Stock.

 

    	2

    	 

    

 

“Cash
Equivalent Investment” means, at any time, (a) any evidence of Debt, maturing not more than one year after such time,
issued or guaranteed by the United States government or any agency thereof, (b) commercial paper, or corporate demand notes, in
each case rated at least A-l by Standard & Poor’s Ratings Group or P-l by Moody’s Investors Service, Inc., (c)
any certificate of deposit (or time deposit represented by a certificate of deposit) or banker’s acceptance maturing not
more than one year after such time, or any overnight Federal Funds transaction that is issued or sold by a commercial banking
institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not
less than $500,000,000, (d) any repurchase agreement entered into with any commercial banking institution of the nature referred
to in clause (c) above which (i) is secured by a fully perfected security interest in any obligation of the type described
in any of clauses (a) through (c) above and (ii) has a market value at the time such repurchase agreement is entered
into of not less than 100% of the repurchase obligation of such commercial banking institution thereunder, (e) money market accounts
or mutual funds which invest predominantly in assets satisfying the foregoing requirements and (f) other short term liquid investments
approved in writing by the Agent.

 

“CFC”
means a Person that is a “controlled foreign corporation” as defined in Section 957 of the IRC.

 

“Change
of Control” means an event or series of events by which:

 

(a)           any
“person” or “group” (within the meaning of the Exchange Act and the rules of the SEC thereunder) (other
than the Permitted Holders), shall own, directly or indirectly, beneficially or of record, shares representing more than 35% of
the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of Holdings;

 

(b)           the
Permitted Holders shall own, directly or indirectly, beneficially or of record, shares representing more than 50% of the aggregate
ordinary voting power represented by the issued and outstanding Capital Stock of Holdings;

 

(c)           Holdings
shall cease to directly own, beneficially and of record, 100% of the issued and outstanding Capital Stock of the Borrower; or

 

(d)           all
or substantially all of the assets of Holdings or the Borrower are disposed of in any one or more related transactions.

 

“Closing
Date” means the date on which the conditions set forth in Section 4.1 have been satisfied or waived by the Agent
in its sole discretion.

 

“Closing
Fee” means the closing fee due from the Borrower to the Lender in an aggregate amount equal to 1.0% of the aggregate
principal amount of the Commitments, which closing fee is fully earned as of the Closing Date and shall be due and payable on
or before the earliest of (i) the Tranche One Funding Date, (ii) December 31, 2015, irrespective of whether the Tranche One Funding
Date has occurred as of such date, and (iii) the termination of this Credit Agreement by the Borrower and the payment of all outstanding
Obligations hereunder pursuant to Section 2.4.2.

 

“Collateral”
has the meaning set forth in the Guarantee and Collateral Agreement.

 

“Collateral
Access Agreement” means an agreement in form and substance satisfactory to the Agent in its reasonable discretion pursuant
to which a mortgagee or lessor of real property on which Collateral is stored or otherwise located, or a warehouseman, processor
or other bailee of inventory or other property owned by any Loan Party, acknowledges the Liens of the Agent and waives (or, if
approved by the Agent, subordinates) any Liens held by such Person on such property, and, in the case of any such agreement with
a mortgagee or lessor, permits the Agent reasonable access to and use of such real property during the continuance of an Event
of Default to assemble, complete and sell any Collateral stored or otherwise located thereon.

 

    	3

    	 

    

 

“Collateral
Documents” means, collectively, the Guarantee and Collateral Agreement (including as may be supplemented by the joinder
of any Subsidiary or any other Person who intends to guarantee the Obligations) and each other agreement or instrument pursuant
to or in connection with which any Loan Party grants a security interest in any Collateral to the Agent for the benefit of the
Lender or pursuant to which any such security interest in Collateral is perfected, each as amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and thereof.

 

“Commitments”
means the Tranche One Commitment and the Tranche Two Commitment.

 

“Compliance
Certificate” means a certificate substantially in the form of Exhibit B and otherwise satisfactory to the Agent
in all respects.

 

“Connection
Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that
are franchise Taxes or branch profits Taxes.

 

“Consolidated
EBITDA” means, for any period, Consolidated Net Income for such period plus (a) without duplication and to the
extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense paid or accrued for
such period, (ii) consolidated income tax expense for such period, (iii) all amounts attributable to depreciation and amortization
for such period and (iv) non-cash expense associated with granting stock options, warrants or other similar securities, and minus
(b) without duplication to the extent included in determining such Consolidated Net Income, any extraordinary, unusual or
non-recurring gains and all non-cash items of income for such period, all determined on a consolidated basis in accordance with
GAAP.

 

“Consolidated
Net Income” means, for any period, the net income or loss of Holdings and its consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded the income of
any Person that is not a Loan Party except to the extent of the amount of cash dividends or similar cash distributions actually
paid by such Person to a Loan Party.

 

“Contingent
Obligation” means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes
or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply
funds to or otherwise to invest in a debtor, to provide security for the obligations of a debtor or otherwise to assure a creditor
against loss) any indebtedness, obligation or other liability of any other Person (other than by endorsements of instruments in
the course of collection), or guarantees the payment of dividends or other distributions upon the Capital Stock of any other Person.
The amount of any Person’s obligation in respect of any Contingent Obligation shall (subject to any limitation set forth
therein) be deemed to be the principal amount of the indebtedness, obligation or other liability supported thereby or the amount
of the dividends or distributions guaranteed, as applicable.

 

    	4

    	 

    

 

“Control
Agreement” means a tri-party deposit account, securities account or commodities account Control Agreement by and among
the applicable Loan Party, the Agent and the depository, securities intermediary or commodities intermediary, each in form and
substance reasonably satisfactory to the Agent and in any event providing to the Agent “control” of such deposit account,
securities or commodities account within the meaning of Articles 8 and 9 of the UCC.

 

“Controlled
Investment Affiliate” means, as to any Person, any other Person that (a) is an Affiliate of such Person and (b) is organized
by such Person (or any Person controlling such Person) primarily for the purposes of making equity investments in Holdings or
other portfolio companies.

 

“Copyrights”
means all rights, title and interests (and all related IP Ancillary Rights) arising under any Applicable Law in copyrights and
all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof
and all applications in connection therewith.

 

“Debt”
of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all indebtedness of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person as lessee under Capital
Leases which have been or should be recorded as liabilities on a balance sheet of such Person in accordance with GAAP, (d) all
obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable in the
ordinary course of business), (e) all indebtedness secured by a Lien on the property of such Person, whether or not such indebtedness
shall have been assumed by such Person (with the amount thereof being measured as the fair market value of such property), (f)
all obligations, contingent or otherwise, with respect to letters of credit (whether or not drawn), banker’s acceptances
and surety bonds issued for the account of such Person, (g) all Hedging Obligations of such Person, (h) all Contingent Obligations
of such Person for obligations of any other Person constituting Debt (under another clause of this definition) of such Person,
(i) earn-out, purchase price adjustment and similar obligations, (j) all obligations of such Person in respect of Disqualified
Capital Stock issued by such Person, (k) all obligations of such Person under any synthetic lease transaction, where such obligations
are considered borrowed money indebtedness for tax purposes but the transaction is classified as an operating lease in accordance
with GAAP and (l) all indebtedness of the types listed in clauses (a) through (k) of any partnership of which such
Person is a general partner.

 

“Default”
means any event that, if it continues uncured, will, with the lapse of time or the giving of notice or both, constitute an Event
of Default.

 

“Default
Rate” has the meaning set forth in Section 2.3.1(c).

 

“Disclosure
Letter” means the letter dated as of the date of this Agreement delivered by the Loan Parties to the Agent and the Lender
in connection with the execution and delivery of this Agreement; provided that the Disclosure Letter may be updated or
supplemented a reasonable time prior to the Tranche Two Funding Date in a manner reasonably acceptable to the Agent and the Lender.

 

    	5

    	 

    

 

“Disposition”
has the meaning set forth in Section 7.4(b).

 

“Disqualified
Capital Stock” means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an
optional redemption by the issuer thereof) or is mandatorily redeemable or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the date ninety-one (91) days after the latest Maturity Date then in effect, (b) is convertible
into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Capital Stock referred
to in clause (a) above, in each case at any time on or prior to the date ninety-one (91) days after the latest Maturity
Date then in effect, or (c) contains any repurchase obligation which may come into effect prior to the date ninety-one (91) days
after the latest Maturity Date then in effect; provided that any Capital Stock that would not constitute Disqualified Capital
Stock but for provisions thereof giving holders thereof (or the holders of any security into or for which such Capital Stock is
convertible, exchangeable or exercisable) the right to require the issuer thereof to redeem or repurchase such Capital Stock upon
the occurrence of a change in control occurring prior to the date ninety-one (91) days after the latest Maturity Date then in
effect, shall not constitute Disqualified Capital Stock if such Capital Stock provides that the issuer thereof will not redeem
or repurchase any such Capital Stock pursuant to such provisions prior to the repayment in full of the Obligations.

 

“Dollar”
and “$” mean lawful currency of the United States of America.

 

“Environmental
Claims” means all claims, however asserted, by any governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility under or for violation of any Environmental Law, or for release or injury to the environment
or any Person or property or natural resources.

 

“Environmental
Laws” means all present or future federal, state, provincial or local laws, statutes, common law duties, rules, regulations,
ordinances and codes, including all amendments, together with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority, in each case relating to any matter arising out
of or relating to health and safety, or pollution or protection of the environment, natural resources or the workplace, including
any of the foregoing relating to the presence, use, production, recycling, reclamation, generation, handling, transport, treatment,
storage, disposal, distribution, discharge, release, emission, control, cleanup or investigation or management of any Hazardous
Substance.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

“Event
of Default” means any of the events described in Section 8.1.

 

“Exchange
Act” means the United States Securities Exchange Act of 1934, as amended.

 

    	6

    	 

    

 

“Excluded
Taxes” means any of the following Taxes required to be withheld or deducted from a payment to the Lender: (a) Taxes
imposed on or measured by the Lender’s net income, franchise Taxes in lieu of Taxes on net income, and branch profits Taxes,
in each case (i) imposed by the jurisdiction under which the Lender is organized or has its principal office or (ii) that are
Other Connection Taxes, (b) U. S. federal withholding taxes pursuant to a law in effect at the time such Lender first becomes
a party to this Agreement, except to the extent that, pursuant to Section 3.1(a), amounts with respect to such Taxes were
payable to such Lender’s assignor immediately before such Lender became a party hereto, and (c) any U. S. federal withholding
taxes imposed pursuant to FATCA.

 

“FATCA”
means Sections 1471 through 1474 of the IRC, as of the date of this Agreement (or any amended or successor provision that is substantively
comparable and not materially more burdensome to comply with), and any current or future regulations issued thereunder or official
interpretations thereof.

 

“Fiscal
Quarter” means a fiscal quarter of a Fiscal Year.

 

“Fiscal
Year” means the fiscal year of Holdings and the consolidated Subsidiaries, which period shall be the 12-month period
ending on December 31 of each year.

 

“FRB”
means the Board of Governors of the Federal Reserve System or any successor thereto.

 

“GAAP”
means generally accepted accounting principles as in effect in the United States of America.

 

“Governmental
Authority” means any nation or government, any state, province, municipality or other political subdivision thereof,
any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government (including any supra-national bodies such as the European
Union or the European Central Bank), and any corporation or other entity owned or controlled, through stock or capital ownership
or otherwise, by any of the foregoing.

 

“Guarantee
and Collateral Agreement” means the Guarantee and Collateral Agreement dated as of the Closing Date, executed by Holdings,
the Borrower, the Subsidiary Guarantors and each other person that becomes party to such Guarantee and Collateral Agreement in
favor of the Agent, and governed by the laws of the State of New York, as amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms hereof and thereof.

 

“Hazardous
Substances” means any waste, chemical, substance, or material listed, defined, classified, or regulated as a hazardous
waste, hazardous substance, pollutant, contaminant, toxic substance, or hazardous, dangerous or radioactive material, chemical
or waste or any waste, chemical, substance or material otherwise regulated by any Environmental Law, including, without limitation,
any petroleum or any derivative, waste, or byproduct thereof, radon, asbestos, and polychlorinated biphenyls, and any other substance,
the storage, manufacture, disposal, treatment, generation, use, transportation, remediation, release into or concentration in
the environment of which is prohibited, controlled, regulated or licensed by any governmental authority under any Environmental
Law.

 

    	7

    	 

    

 

“Healthcare
Laws” means all federal and state laws applicable to the business of the Borrower or any other Loan Party, regulating
the manufacturing, labeling, promotion and provision of and payment for healthcare products and services, including HIPAA, Section
1128B(b) of the Social Security Act, as amended, 42 U.S.C. Section 1320a-7b (Criminal Penalties Involving Medicare or State Health
Care Programs), commonly referred to as the “Federal Anti-Kickback Statute,” Section 1877 of the Social Security
Act, as amended, 42 U.S.C. Section 1395nn (Limitation on Certain Physician Referrals), commonly referred to as “Stark
Statute,” U.S. Federal Food, Drug, and Cosmetic Act, as amended from time to time (21 U.S.C. Section 301 et seq.), all
applicable Good Manufacturing Practice requirements addressed in the FDA’s Quality System Regulation (21 C.F.R. Part 820),
the Medical Devices Regulations, 21 C.F.R. Part 812, and Parts 50, 54, and 56, all applicable labeling requirements address in
FDA’s Device Labeling Regulation (21 C.F.R. Part 801), and all rules, regulations and guidance promulgated thereunder, including
the Medicare Regulations and the Medicaid Regulations.

 

“HealthCor
Debt Documents” means (i) the HealthCor Note and Warrant Purchase Agreement, (ii) all notes evidencing the Debt of Holdings
issued thereunder, and (iii) all other documents and instruments executed and delivered in connection with the Debt of Holdings
issued thereunder, in each case in effect as of the Closing Date or as amended, restated, supplemented or otherwise modified in
accordance with the terms of the Intercreditor Agreement and the terms hereof.

 

“HealthCor
Debt Documents Amendments” means (i) the Seventh Amendment dated as of June 26, 2015 to the HealthCor Note and Warrant
Purchase Agreement, by and among Holdings, HealthCor Partners Fund, L.P.  and HealthCor Hybrid Offshore
Master Fund, L.P., (ii) the Amendment dated as of June 26, 2015 to the Registration Rights Agreement relating to the HealthCor
Note and Warrant Purchase Agreement, (iii) Allonge No. 1 to the Senior Secured Convertible Notes (issued February 17, 2015) payable
to each of the investors named therein, (iv) Allonge No. 1 to the Senior Secured Convertible Note (issued January 16, 2014) payable
to the order of HealthCor Hybrid Offshore Master Fund, L.P., (v) Allonge No. 1 to the Senior Secured Convertible Note (issued
January 16, 2014) payable to the order of HealthCor Partners Fund, L.P., (vi) Allonge No. 1 to the Senior Secured Convertible
Note (issued January 31, 2012) payable to the order of HealthCor Hybrid Offshore Master Fund, L.P., (vii) Allonge No. 1 to the
Senior Secured Convertible Note (issued January 31, 2012) payable to the order of HealthCor Partners Fund, L.P., (viii) Allonge
No. 1 to the Senior Secured Convertible Note (issued April 21, 2011) payable to the order of HealthCor Hybrid Offshore Master
Fund, L.P. and (ix) Allonge No. 1 to Senior Secured Convertible Note (issued April 21, 2011) payable to the order of HealthCor
Partners Fund, L.P.

 

“HealthCor
Note and Warrant Purchase Agreement” means the Note and Warrant Purchase Agreement dated as of April 21, 2011, among
Holdings, HealthCor Partners Fund, L.P., HealthCor Hybrid Offshore Master Fund, L.P., and the other investors party thereto, as
amended pursuant to the First Amendment dated December 30, 2011, the Second Amendment dated January 31, 2012, the Third Amendment
dated August 20, 2013, the Fourth Amendment dated January 16, 2014, the Fifth Amendment dated December 15, 2014, and the Sixth
Amendment dated March 31, 2015, and as further amended, restated, supplemented or otherwise modified pursuant to (i) the Seventh
Amendment dated as of June 26, 2015 by and among Holdings, HealthCor Partners Fund, L.P. and HealthCor Hybrid Offshore Master
Fund, L.P. and (ii) the terms of the Intercreditor Agreement.

 

    	8

    	 

    

 

“HealthCor
Obligations” means all obligations of the Loan Parties, including accrued interest, outstanding pursuant to the HealthCor
Debt Documents.

 

“Hedging
Obligation” means, with respect to any Person, any liability of such Person under any interest rate, currency or commodity
swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to protect a Person against
fluctuations in interest rates, currency exchange rates or commodity prices. The amount of any Person’s obligation in respect
of any Hedging Obligation shall be deemed to be the incremental obligation that would be reflected in the financial statements
of such Person in accordance with GAAP.

 

“Indemnified
Liabilities” has the meaning set forth in Section 10.4.

 

“Indemnified
Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of
any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other
Taxes.

 

“Intellectual
Property” means all rights, title and interests in intellectual property arising under any Applicable Law and all IP
Ancillary Rights relating thereto, including all Copyrights, Patents, Trademarks, Internet Domain Names, Trade Secrets, industrial
designs, integrated circuit topographies, and rights under IP Licenses.

 

“Intelliview
License Agreement” has the meaning set forth in Section 5.17(f).

 

“Intelliview
License Assignment” has the meaning set forth in Section 5.17(f).

 

“Intercreditor
Agreement” means the subordination and intercreditor agreement dated as of the Closing Date among Holdings, the Borrower,
the Subsidiary Guarantors, the Lender, the Agent and the secured parties party to the HealthCor Debt Documents, in form and substance
satisfactory to the Agent.

 

“Interest
Payment Date” means the last Business Day of each March, June, September and December.

 

“Internet
Domain Name” means all right, title and interest (and all related IP Ancillary Rights) arising under any Applicable
Law in Internet domain names.

 

“Investment”
means, with respect to any Person, (a) the purchase or other acquisition of any debt or equity security of any other Person, (b)
the making of any loan, advance or capital contribution to any other Person, (c) becoming obligated with respect to a Contingent
Obligation in respect of obligations of any other Person or (d) the making of an Acquisition.

 

    	9

    	 

    

 

“IP
Ancillary Rights” means, with respect to an item of Intellectual Property all foreign counterparts to, and all divisionals,
reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property
and all income, royalties, proceeds and liabilities at any time due or payable or asserted under or with respect to any of the
foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity
for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each
case, all rights to obtain any other IP Ancillary Right.

 

“IP
License” means all contractual obligations (and all related IP Ancillary Rights), whether written or oral, granting
any right, title and interest in any Intellectual Property.

 

“IRC”
means the Internal Revenue Code of 1986, as amended.

 

“IRS”
has the meaning set forth in Section 3.1(d).

 

“Legal
Costs” means, with respect to any Person, (a) all fees and charges of any counsel, accountants, auditors, appraisers,
consultants and other professionals to such Person and (b) all court costs and similar legal expenses.

 

“Lender”
has the meaning set forth in the Preamble.

 

“Lender
Party” has the meaning set forth in Section 10.4.

 

“Lien”
means, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right
owned or being purchased or acquired by such Person which secures payment or performance of any obligation and shall include any
mortgage, lien, encumbrance, charge or other security interest of any kind, whether arising by contract, as a matter of law, by
judicial process or otherwise.

 

“Liquidity”
means, at any time, the aggregate amount of cash held by the Loan Parties at such time (in deposit accounts located in the United
States that are subject to Control Agreements in form and substance reasonably satisfactory to the Agent) that are not (A) subject
to any Liens (other than Liens under the Collateral Documents and the HealthCor Debt Documents and customary setoff rights with
respect to deposit accounts or other funds maintained with depository institutions that are created by law or by applicable account
agreements in favor of such depositary institutions or securities intermediaries), (B) required to be maintained or kept segregated
from the general assets of Holdings, the Borrower or any other Subsidiary for the purpose of securing or providing a source of
payment for Debt or other obligations that are or from time to time may be owed to one or more creditors of Holdings, the Borrower
or any other Subsidiary (other than to secure the Obligations or the HealthCor Obligations) or (C) held by any Subsidiary that
is subject to restrictions on its ability to pay dividends or distributions.

 

“Loan
Documents” means this Agreement, the Notes, the Collateral Documents, the Perfection Certificate delivered by the Loan
Parties on or prior to the Closing Date (as supplemented pursuant to the terms of the Guarantee and Collateral Agreement), the
Disclosure Letter, the Intercreditor Agreement and all other documents, certificates, instruments and agreements delivered in
connection with the foregoing, all as amended, restated, supplemented or otherwise modified from time to time in accordance with
the terms hereof and thereof.

 

    	10

    	 

    

 

“Loan
Party” means Holdings, the Borrower, each Subsidiary Guarantor and each other person that guarantees the Obligations
pursuant to the Guarantee and Collateral Agreement.

 

“Loans”
means the Tranche One Loan and the Tranche Two Loan.

 

“Margin
Stock” means any “margin stock” as defined in Regulation T, U or X of the FRB.

 

“Material
Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, assets, business,
properties or condition (financial or otherwise) of the Loan Parties and their Subsidiaries taken as a whole, (b) a material impairment
of the ability of any Loan Party to perform in any material respect any of its Obligations under any Loan Document to which it
is a party or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party
of any Loan Document to which it is a party. For the avoidance of doubt, a decrease (or volatile fluctuations) in the share price
of the Capital Stock of Holdings shall not be deemed, in and of itself, a Material Adverse Effect (it being understood that the
underlying facts or circumstances giving rise or contributing to such decrease or volatile fluctuations may be taken into account
in determining whether there has been, or could reasonably be expected to have or result in, a Material Adverse Effect).

 

“Maturity
Date” means (i) with respect to the Tranche One Loan, the Tranche One Maturity Date, and (ii) with respect to the Tranche
Two Loan, the Tranche Two Maturity Date.

 

“Note”
means a promissory note in substantially the form of Exhibit A or otherwise in form and substance acceptable to the Lender
and the Agent, as the same may be replaced, substituted, amended, restated or otherwise modified from time to time.

 

“Obligations”
means all liabilities, indebtedness and obligations (including interest accrued at the rate provided in the applicable Loan Document
after the commencement of a bankruptcy proceeding whether or not a claim for such interest is allowed) of any Loan Party under
this Agreement or otherwise with respect to any Loan or Protective Advance, or any Loan Party under any other Loan Document or
any Collateral Document, including the Closing Fee, in each case howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become due. The parties agree that the Closing Fee is
fully earned as of the Closing Date and shall be due and payable in accordance with Section 2.12.1 or otherwise upon any
acceleration of the Obligations in accordance with the Agreement.

 

“OFAC”
has the meaning set forth in Section 5.20.1.

 

“Other
Connection Taxes” means, with respect to the Lender, Taxes imposed as a result of a present or former connection between
the Lender and the jurisdiction imposing such Tax (other than any such connection arising from the Lender having executed, delivered,
become a party to, performed its obligations under, received payments under, received or perfected a security interest under,
engaged in any other transaction with respect to, or enforced or sold or assigned an interest in, any Loan or Loan Document).

 

“Other
Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that
arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt
or perfection of a security interest under, or otherwise with respect to, any Loan Document.

 

    	11

    	 

    

 

“Paid
in Full” or “Payment in Full” means, with respect to any Obligations, the payment in full in cash
and performance of all such Obligations, other than contingent indemnification obligations as to which no unsatisfied claim has
been asserted.

 

“Patents”
means all (i) all patents and certificates of invention, or similar property rights, and applications for any of the foregoing,
of the United States, any other country or any political subdivision thereof, (ii) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals, and reexaminations thereof, (iii) all rights corresponding thereto throughout the world, (iv) all inventions
and improvements described therein, (v) all rights to sue for past, present and future infringements thereof, (vi) all licenses,
claims, damages, and proceeds of suit arising therefrom, (vii) all proceeds of the foregoing, including, without limitation, licenses,
royalties, and income, and (viii) without duplication, all IP Ancillary Rights in respect of the foregoing.

 

“Perfection
Certificate” means the Perfection Certificate dated as of the date hereof delivered by the Loan Parties to the Agent
and the Lender in connection with the execution and delivery of this Agreement, as amended, supplemented or otherwise modified
from time to time.

 

“Permitted
Holders” means HealthCor Management, LP; HealthCor Associates, LLC; HealthCor Hybrid Offshore Master Fund, LP; HealthCor
Hybrid Offshore GP, LLC; HealthCor Group, LLC; HealthCor Partners Management, L.P.; HealthCor Partners Management GP, LLC; HealthCor
Partners Fund, LP; HealthCor Partners, LP; HealthCor Partners GP, LLC and their respective Controlled Investment Affiliates.

 

“Permitted
Lien” means any Lien expressly permitted by Section 7.2.

 

“Permitted
Refinancing” means any replacement, renewal, refinancing or extension of any existing Debt (the “Original Debt”),
in any such case, permitted by this Agreement (a) that does not exceed the aggregate principal amount (plus accrued interest and
any applicable premium and associated fees and expenses) of the Original Debt, (b) that does not have a weighted average life
to maturity at the time of such replacement, renewal, refinancing or extension that is less than the weighted average life to
maturity of the Original Debt, (c) that does not rank at the time of such replacement, renewal, refinancing or extension senior
to the Original Debt, (d) that is not secured by any Lien on any asset other than the assets that secured the Original Debt (or
would have been required to secure the Original Debt pursuant to the terms thereof); (e) with respect to which the primary obligor
in respect of, and the Persons (if any) that guarantee, such Debt (resulting from such replacement, renewal, refinancing or extension)
are the primary obligor in respect of, and the Persons (if any) that guaranteed, respectively, the Original Debt, and (f) that
does not contain terms (including, without limitation, terms relating to security, amortization, interest rate, premiums, fees,
covenants, subordination, event of default and remedies) that are materially less favorable to any Loan Party (as determined by
such Loan Party in the exercise of its reasonable business judgment), or otherwise adverse to the interests of the Agent and the
Lender, than those applicable to the Original Debt.

 

“Person”
means any natural person, corporation, partnership, trust, limited liability company, association, Governmental Authority or unit,
or any other entity, whether acting in an individual, fiduciary or other capacity.

 

    	12

    	 

    

 

“PIK
Interest” has the meaning set forth in Section 2.3.1(a).

 

“Product”
means and includes the CareView System and all component products and services therein, any and all future iterations of any of
the foregoing and any other products developed by any Loan Party.

 

“Protective
Advance” has the meaning set forth in Section 2.11.

 

“Registered
Intellectual Property” has the meaning set forth in Section 5.17(a).

 

“Registration
Rights Agreement” means the Registration Rights Agreement dated as of June 26, 2015 by and between Holdings and the
Lender.

 

“Restricted
Payment” has the meaning set forth in Section 7.3.

 

“SEC”
means the United States Securities and Exchange Commission.

 

“Stock
Equivalents” means all securities convertible into or exchangeable for Capital Stock or any other Stock Equivalent,
and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any Capital Stock or any other Stock
Equivalent, whether or not presently convertible, exchangeable or exercisable. For the avoidance of doubt, “Stock Equivalent”
shall not include debt instruments that are convertible into Capital Stock or Stock Equivalents.

 

“Subsidiary”
means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person
owns, directly or indirectly, such number of outstanding shares of voting Capital Stock as to have more than 50% of the ordinary
voting power for the election of directors or other managers of such corporation, partnership, limited liability company or other
entity. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of Holdings.
For the avoidance of doubt, neither the CareView Hillcrest JV or the CareView Saline JV shall be deemed “Subsidiaries”
for purposes of this Agreement and the other Loan Documents unless and until it is a Wholly-Owned Subsidiary.

 

“Subsidiary
Guarantor” means each Subsidiary listed on Schedule 1.1(a) as a guarantor and each other Subsidiary that is or
becomes a party to the Guarantee and Collateral Agreement in accordance with the terms thereof.

 

“Tax
Returns” has the meaning set forth in Section 5.12.

 

“Taxes”
has the meaning set forth in Section 3.1(a).

 

“Trade
Secrets” means all right, title and interest (and all related IP Ancillary Rights) arising under any Applicable Law
in or relating to trade secrets.

 

“Trademark”
means all rights, title and interests (and all related IP Ancillary Rights) arising under any Applicable Law in trademarks, trade
names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof
and all applications in connection therewith.

 

    	13

    	 

    

 

“Tranche
One Commitment” means, as to the Lender, the Lender’s commitment to provide the Tranche One Loan in the aggregate
principal amount of $20,000,000 pursuant to Section 2.1.1(a).

 

“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, which date shall occur no later than November 25, 2015.

 

“Tranche
One Interest-Only Period” means the period beginning on the Tranche One Funding Date and continuing through and including
the eighth (8th) Interest Payment Date after the Tranche One Funding Date.

 

“Tranche
One Loan” means the term loan from the Lender pursuant to Section 2.1.1(a), together with any PIK Interest accrued
thereon and added to the aggregate principal balance thereof in accordance with Section 2.3.1(a).

 

“Tranche
One Loan Request Date” has the meaning set forth in Section 2.1.1(a).

 

“Tranche
One Maturity Date” means the date that is the fifth (5th) anniversary of the Tranche One Funding Date.

 

“Tranche
One Milestone” has the meaning set forth in Section 4.2.2.

 

“Tranche
One Milestone Notice” means written notice from the Borrower to the Agent that the Tranche One Milestone has occurred,
accompanied by a certificate of Holdings signed by the chief financial officer and/or chief accounting officer of Holdings certifying
as to the occurrence of the Tranche One Milestone.

 

“Tranche
Two Commitment” means, as to the Lender, the Lender’s commitment to provide the Tranche Two Loan in the aggregate
principal amount of $20,000,000 pursuant to Section 2.1.1(b).

 

“Tranche
Two Funding Date” means the date on which the conditions set forth in Section 4.3 have been satisfied or waived
by the Agent in its sole discretion and the Tranche Two Loan is funded, which date shall occur no later than July 26, 2017.

 

“Tranche
Two Interest-Only Period” means the period beginning on the Tranche Two Funding Date and continuing through and including
the eighth (8th) Interest Payment Date after the Tranche Two Funding Date.

 

“Tranche
Two Loan” means the term loan from the Lender pursuant to Section 2.1.1(b), together with any PIK Interest accrued
thereon and added to the aggregate principal balance thereof in accordance with Section 2.3.1(b).

 

“Tranche
Two Loan Request Date” has the meaning set forth in Section 2.1.1(b).

 

    	14

    	 

    

 

“Tranche
Two Maturity Date” means the date that is the fifth (5th) anniversary of the Tranche Two Funding Date.

 

“Tranche
Two Milestone” has the meaning set forth in Section 4.3.2.

 

“Tranche
Two Milestone Notice” means written notice from the Borrower to the Agent that the Tranche Two Milestone has occurred,
accompanied by a certificate of Holdings signed by the chief financial officer and/or chief accounting officer of Holdings certifying
as to the occurrence of the Tranche Two Milestone.

 

“UCC”
means the Uniform Commercial Code as in effect in from time to time in the State of New York.

 

“Warrants”
means a number of common stock purchase warrants sufficient to entitle the holder thereof to purchase 4,444,445 shares of common
stock of Holdings.

 

“Wholly-Owned
Subsidiary” means, as to any Subsidiary, all of the Capital Stock of which (except directors’ qualifying shares)
are at the time directly or indirectly owned by Holdings and/or another Wholly-Owned Subsidiary of Holdings.

 

1.2           Interpretation.
In the case of this Agreement and each other Loan Document, (a) the meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms; (b) Annex, Exhibit, Schedule and Section references in each Loan Document are to the particular
Annex, Exhibit, Schedule and Section of such Loan Document unless otherwise specified; (c) the term “including” is
not limiting and means “including but not limited to”; (d) in the computation of periods of time from a specified
date to a later specified date, the word “from” means “from and including”; the words “to”
and “until” each mean “to but excluding”, and the word “through” means “to and including”;
(e) unless otherwise expressly provided in such Loan Document, (i) references to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and
other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation shall
be construed as including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute
or regulation; (f) this Agreement and the other Loan Documents may use several different limitations, tests or measurements to
regulate the same or similar matters, all of which are cumulative and each of which shall be performed in accordance with its
terms; and (g) this Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel
to Holdings, the Borrower, the Lender, the Agent, and the other parties hereto and thereto and are the products of all parties;
accordingly, this Agreement and the other Loan Documents, in each case, shall not be construed against the Agent or the Lender
merely because of the Agent’s or the Lender’s involvement in their preparation. Any reference in any Loan Document
to a Permitted Lien is not intended to subordinate or postpone, and shall not be interpreted as subordinating or postponing, or
as any agreement to subordinate or postpone, any Lien created by any of the Loan Documents to any Permitted Lien. If at any time
any change in GAAP (including the adoption of IFRS) would affect the computation of any financial measure, covenant or requirement
set forth in any Loan Document, and either the Borrower or the Lender shall so request, the Agent, the Lender and the Borrower
shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change
in GAAP; provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with
GAAP as in effect prior to such change therein and (ii) the Borrower shall provide to the Agent and the Lender financial statements
and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between
the calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the
foregoing, leases shall continue to be classified and accounted for on a basis consistent with that reflected in the current financial
statements of Holdings for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties
hereto enter into a mutually acceptable amendment addressing such changes, as provided for above.

 

    	15

    	 

    

 

	Section 2.	Credit
    Facilities.

 

2.1          Loans.

 

2.1.1        Loans.
Subject to the terms and conditions set forth in this Agreement, the Lender agrees to lend to the Borrower funds in an aggregate
principal amount not to exceed the aggregate Commitments as follows:

 

  (a)           on
the Tranche One Funding Date, subject to satisfaction of the Tranche One Milestone, the entire amount of its Tranche One Commitment,
after which the Tranche One Commitment shall terminate in full; provided that the Tranche One Funding Date shall occur
no later than November 25, 2015; provided, further, that if (i) the Tranche One Milestone has occurred and
(ii) the Borrower has failed to deliver the Borrowing Request for the Tranche One Loan in accordance with Section 4.2.1
no later than five Business Days after the date that the Tranche One Milestone Notice was or should have been delivered pursuant
to Section 6.9 (such fifth Business Day, the “Tranche One Loan Request Date”), then the Borrower
shall automatically be deemed to have requested a borrowing of the entire amount of the Tranche One Commitment on the tenth Business
Day after the Tranche One Loan Request Date and, subject to the satisfaction of the conditions set forth in Section 4.2,
such loan will be funded.

 

  (b)           on
the Tranche Two Funding Date, subject to satisfaction of the Tranche Two Milestone, the entire amount of its Tranche Two Commitment,
after which the Tranche Two Commitment shall terminate in full; provided that the Tranche Two Funding Date shall occur
no later than July 26, 2017; provided, further, that if (i) the Tranche Two Milestone has occurred and (ii) the
Borrower has failed to deliver the Borrowing Request for the Tranche Two Loan in accordance with Section 4.3.1 no later
than five Business Days after the date that the Tranche Two Milestone Notice was or should have been delivered pursuant to Section 6.10
(such fifth Business Day, the “Tranche Two Loan Request Date”), then the Borrower shall automatically be
deemed to have requested a borrowing of the entire amount of the Tranche Two Commitment on the tenth Business Day after the Tranche
Two Loan Request Date and, subject to the satisfaction of the conditions set forth in Section 4.3, such loan will be funded.

 

    	16

    	 

    

 

2.1.2        General.
No portion of the Loans may be re-borrowed once repaid. $15,000,000 of the proceeds of each of the Tranche One Loan and (if funded)
the Tranche Two Loan shall be used to pay for capital expenditures in connection with the manufacture and placement of CareView
Systems, and the remaining proceeds of each of the Tranche One Loan and the Tranche Two Loan may be used for general corporate
purposes, in each case, in compliance with the Loan Documents and Applicable Law.

 

2.2          Loan
Accounting.

 

2.2.1        Recordkeeping.
The Agent, on behalf of the Lender, shall record in its records the date and amount of the Loans made by the Lender, accrued interest
and each repayment of principal or interest thereon. The aggregate unpaid principal amount so recorded shall, absent manifest
error, be presumptive evidence of the principal amount of the Loans owing and unpaid. The failure to so record any such amount
or any error in so recording any such amount shall not, however, limit or otherwise affect the Obligations of the Borrower hereunder
or under any Note to repay the principal amount of the Loans hereunder, together with all interest accruing thereon.

 

2.2.2        Notes.
At the request of the Lender, the Loans shall be evidenced by one or more Notes, with appropriate insertions, payable to the order
of the Lender in a face principal amount equal to the Loans and payable in such amounts and on such dates as are set forth herein.

 

2.3          Interest.

 

2.3.1        Interest
Rate.

 

  (a)           The
Borrower promises to pay interest on the unpaid principal amount of the Tranche One Loan for the period commencing on the Tranche
One Funding Date until such Tranche One Loan is Paid in Full, at a rate payable in cash per annum equal to 13.5%. During the Tranche
One Interest-Only Period, the Borrower may elect to pay up to 1.0% per annum of interest on the Tranche One Loan, for each Interest
Payment Date occurring during the Tranche One Interest-Only Period, as interest paid-in-kind (“PIK Interest”)
and such PIK Interest shall be added to the aggregate principal balance of the Tranche One Loan in arrears on such Interest Payment
Date. The Borrower shall deliver to the Agent, at least three (3) Business Days prior to the applicable Interest Payment Date,
a written notice setting forth (i) its election to pay an amount of interest in the form of PIK Interest, (ii) whether interest
on the Tranche One Loan shall take the form of PIK Interest and (iii) the amount of interest that shall constitute PIK Interest
on the applicable Interest Payment Date. Any such election shall be deemed to remain in effect until superseded by a subsequent
notice delivered as set forth in the preceding sentence or until the Tranche One Interest-Only Period has expired.

 

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(b)           The
Borrower promises to pay interest on the unpaid principal amount of the Tranche Two Loan for the period commencing on the Tranche
Two Funding Date, until such Tranche Two Loan is Paid in Full, at a rate payable in cash per annum equal to 13.0%. During the
Tranche Two Interest-Only Period, the Borrower may elect to pay up to 1.0% per annum of interest on the Tranche Two Loan, for
each Interest Payment Date occurring during the Tranche Two Interest-Only Period, as PIK Interest and such PIK Interest shall
be added to the aggregate principal balance of the Tranche Two Loan in arrears on such Interest Payment Date. The Borrower shall
deliver to the Agent, at least three (3) Business Days prior to the applicable Interest Payment Date, a written notice setting
forth (i) its election to pay an amount of interest in the form of PIK Interest, (ii) whether interest on the Tranche Two Loan
shall take the form of PIK Interest and (iii) the amount of interest that shall constitute PIK Interest on the applicable Interest
Payment Date. Any such election shall be deemed to remain in effect until superseded by a subsequent notice delivered as set forth
in the preceding sentence or until the Tranche Two Interest-Only Period has expired. Any such written notice of any election or
modification of an election to pay PIK Interest in respect of the Tranche Two Loan may be combined with any written notice of
any election or modification of an election to pay PIK Interest in respect of the Tranche One Loan described in Section 2.3.1(a)
above.

 

(c)           The
foregoing notwithstanding, (i) at any time an Event of Default has occurred and is continuing, the interest rate then applicable
to the Loans shall automatically be increased, without demand or notice of any kind from the Lender (including declaration or
notice of an Event of Default), by five percent (5.00%) per annum (any such increased rate, the “Default Rate”)
and (ii) any such increase may thereafter be waived or rescinded by the Lender in its sole discretion by written notice to the
Borrower. In the event that the Obligations in respect of the Tranche One Loan are not Paid in Full as of the Tranche One Maturity
Date or any existing Obligations are not Paid in Full as of the Tranche Two Maturity Date, or in the event that the Obligations
shall be declared or shall become due and payable pursuant to Section 8.2, the Obligations shall bear interest subsequent
thereto at the Default Rate and such interest shall be payable in cash on demand. In no event shall interest or other amounts
payable by the Borrower to the Lender hereunder exceed the maximum rate permitted under Applicable Law, and if any such provision
of this Agreement is in contravention of any such law, (x) any amounts paid hereunder shall be deemed to be and shall be applied
against the principal amount of the Obligations to the extent necessary such that the amounts paid hereunder do not exceed the
maximum rate under Applicable Law and (y) such provision shall otherwise be deemed modified as necessary to limit such amounts
paid to the maximum rate permitted under Applicable Law.

 

    	18

    	 

    

 

2.3.2         Interest
Payments.

 

  (a)           Interest
accrued on the Tranche One Loan during the period from the Tranche One Funding Date until the Tranche One Maturity Date shall
accrue and be payable in cash (subject to Section 2.3.1(a)) quarterly on each Interest Payment Date, in arrears (provided,
however, that PIK Interest, if any, shall accrue and be added to the aggregate principal balance of the Tranche One Loan
in arrears on such Interest Payment Date), and, to the extent not paid in advance, upon a prepayment of the Tranche One Loan in
accordance with Section 2.4 and on the Tranche One Maturity Date, in each such case, in cash. After the Tranche One Maturity
Date and at any time an Event of Default exists, all accrued interest on the Tranche One Loan shall be payable in cash on demand
at the rates specified in Section 2.3.1.

 

  (b)           Interest
accrued on the Tranche Two Loan during the period from the Tranche Two Funding Date until the Tranche Two Maturity Date shall
accrue and be payable in cash (subject to Section 2.3.1(b)) quarterly on each Interest Payment Date, in arrears (provided,
however, that PIK Interest, if any, shall accrue and be added to the aggregate principal balance of the Tranche Two Loan
in arrears on such Interest Payment Date), and, to the extent not paid in advance, upon a prepayment of the Tranche Two Loan in
accordance with Section 2.4 and on the Tranche Two Maturity Date, in each such case, in cash. After the Tranche Two Maturity
Date and at any time an Event of Default exists, all accrued interest on the Tranche Two Loan shall be payable in cash on demand
at the rates specified in Section 2.3.1.

 

2.3.3         Computation
of Interest. Interest on the Loans shall be computed on the basis of a 360-day year comprised of twelve 30-day months. For
partial months, interest shall be calculated on the number of days actually elapsed in a 30-day month.

 

2.4         Amortization;
Prepayment.

 

2.4.1         Amortization.

 

  (a)           Commencing
on the first Interest Payment Date following the Tranche One Interest-Only Period, the Borrower shall repay the Tranche One Loan
to the Agent, for the account of the Lender, on each Interest Payment Date following the Tranche One Interest-Only Period, an
amortization payment in aggregate principal amount equal to the quotient of (i) the aggregate principal amount of the Tranche
One Loan outstanding on the first Interest Payment Date following the Tranche One Interest-Only Period, divided by (ii)
the number of Interest Payment Dates remaining from and including such first Interest Payment Date following the Tranche One Interest-Only
Period through and including the Tranche One Maturity Date (which amortization payment shall be reduced as a result of the application
of prepayments in accordance with Section 2.7), provided that solely for purposes of calculating the number of Interest
Payment Dates for this clause (a)(ii), Interest Payment Dates shall be deemed to include the Tranche One Maturity Date.

 

    	19

    	 

    

 

  (b)           Commencing
on the first Interest Payment Date following the Tranche Two Interest-Only Period, the Borrower shall repay the Tranche Two Loan
to the Agent, for the account of the Lender, on each Interest Payment Date following the Tranche Two Interest-Only Period, an
amortization payment in aggregate principal amount equal to the quotient of (i) the aggregate principal amount of the Tranche
Two Loan outstanding on the first Interest Payment Date following the Tranche Two Interest-Only Period, divided by (ii)
the number of Interest Payment Dates remaining from and including such first Interest Payment Date following the Tranche Two Interest-Only
Period through and including the Tranche Two Maturity Date (which amortization payments shall be reduced as a result of the application
of prepayments in accordance with Section 2.7), provided that for purposes of calculating the number of Interest
Payment Dates for this clause (b)(ii), Interest Payment Dates shall be deemed to include the Tranche Two Maturity Date.

 

  (c)           The
amount of each amortization payment specified in Section 2.4.1(a) and (b) as determined by the Agent shall be binding
on the Borrower absent manifest error.

 

2.4.2        Voluntary
Prepayment; Termination. The Borrower may, on at least three (3) Business Days’ written notice to the Agent, not
later than 12:00 p.m. New York City time on such day, prepay any of the Tranche One Loan or the Tranche Two Loan in whole or in
part without premium or penalty (together with accrued and unpaid interest to the date of prepayment on such prepaid amount);
provided, however, that each partial prepayment that is not of the entire outstanding amount of any Loan shall be
in an aggregate amount that is an integral multiple of $1,000,000. The Borrower may also, on at least three (3) Business Days’
written notice to the Agent, not later than 12:00 p.m. New York City time on such day, terminate this Agreement and Borrower’s
liabilities hereunder without premium or penalty by paying to the Lender the full amount of all outstanding Obligations (other
than inchoate indemnification obligations).

 

2.5          Payment
Upon Maturity. The Tranche One Loan, any accrued but unpaid interest thereon and, if the Tranche Two Loan has not been funded
hereunder, any other Obligations then outstanding, shall be Paid in Full on the Tranche One Maturity Date. The Tranche Two Loan,
and any other Obligations then outstanding, shall be Paid in Full on the Tranche Two Maturity Date.

 

2.6          Making
of Payments. All payments on the Loans in accordance with this Agreement, including all payments of fees and expenses, shall
be made by the Borrower to the Agent without setoff, recoupment or counterclaim and in immediately available funds, in United
States Dollars, by wire transfer to the account of the Agent specified by the Agent, in any case, not later than 1:00 p.m. New
York City time on the date due, and funds received after that hour shall be deemed to have been received by the Agent on the following
Business Day. The Agent shall promptly remit to the Lender all payments received in collected funds by the Agent for the account
of such Lender.

 

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2.7           Application
of Payments and Proceeds. Each voluntary prepayment of the outstanding Tranche One Loan or the Tranche Two Loan pursuant to
Section 2.4.2 shall be applied to reduce the subsequent scheduled amortization payments of such Loan to be made pursuant
to Section 2.4.1 as the Borrower may elect in its sole discretion.

 

2.8           Payment
Dates. If any payment of principal of or interest on a Loan, or of any fees, falls due on a day which is not a Business Day,
then such due date shall be extended to the immediately following Business Day and, in the case of principal, additional interest
shall accrue and be payable for the period of any such extension.

 

2.9           Set-off.
The Borrower agrees that the Agent, the Lender and their respective Affiliates have all rights of set-off, counterclaim and bankers’
lien provided by Applicable Law, and in addition thereto, the Borrower agrees that at any time an Event of Default has occurred
and is continuing, the Agent and the Lender may apply to the payment of any Obligations of the Borrower hereunder, whether or
not then due, any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with the
Agent or such Lender.

 

2.10         Currency
Matters. All amounts payable under this Agreement and the other Loan Documents to the Agent and/or the Lender shall be payable
in Dollars.

 

2.11         Protective
Advances. Whether or not an Event of Default or a Default shall have occurred and be continuing, the Agent is authorized by
the Borrower and the Lender, from time to time in the Agent’s sole discretion (but the Agent shall have absolutely no obligation
to), to make disbursements or advances to the Borrower or any other Loan Party in amounts which the Agent, in its sole discretion,
deems necessary or desirable (i) to preserve or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood
of, or maximize the amount of, repayment of the Loans and other Obligations, or (iii) to pay any other amount chargeable to or
required to be paid by the Borrower or any other Loan Party pursuant to the terms of this Agreement and the other Loan Documents,
including, without limitation, payments of principal, interest, fees and reimbursable expenses (any of such disbursements or advances
are in this Section 2.12 referred to as “Protective Advances”). Unless otherwise agreed by the Lender
in its sole discretion, Protective Advances shall bear interest at a rate payable in cash per annum equal to 13.5% plus the Default
Rate. Each Protective Advance shall be secured by the Liens in favor of the Agent in and to the Collateral and shall constitute
Obligations hereunder. The Protective Advances shall constitute Obligations hereunder which are subject to the rights of the Agent,
the Lender and their respective Affiliates in accordance with Section 2.9. The Borrower shall pay the unpaid principal
amount and all unpaid and accrued interest of each Protective Advance on the earliest of (i) the Tranche One Maturity Date, (ii)
the Tranche Two Maturity Date and (iii) the date on which demand for payment is made by the Agent. The Agent shall promptly notify
the Lender and the Borrower in writing of each such Protective Advance, which notice shall include a description of the amount
and the purpose of such Protective Advance. Any other terms with respect to the extension of any Protective Advance may be set
forth in a separate agreement satisfactory to each of the Agent and the Lender in its sole discretion.

 

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2.12        Fees;
Equity Issuance.

 

2.12.1      Closing
Fee. As consideration for the agreements of the Lender hereunder, the Borrower agrees to pay to the Lender, for its own account,
the Closing Fee on or prior to the earliest of (i) the Tranche One Funding Date, (ii) December 31, 2015, irrespective of whether
the Tranche One Funding Date has occurred as of such date, and (iii) the termination of this Credit Agreement by the Borrower
and the payment of all outstanding Obligations hereunder pursuant to Section 2.4.2.

 

2.12.2      Equity
Issuance  As consideration for the agreements of the Lender hereunder, the Borrower agrees to issue and deliver
to the Lender, for its own account, on or prior or the Closing Date, the Warrants and the Registration Rights Agreement. The Lender
and the Borrower agree that the aggregate fair market value (as of the date hereof) of the Warrants is equal to $1,257,778.

 

	Section 3.	Yield Protection.

 

3.1          Taxes.

 

  (a)           All
payments of principal and interest on the Loans and all other amounts payable under any Loan Document shall be made free and clear
of and without deduction or withholding for any present or future income, excise, stamp, documentary, property or franchise taxes
or other taxes, fees, imposts, duties, levies, deductions, withholdings (including backup withholding) or other charges of any
nature whatsoever imposed by any taxing authority, including any interest, additions to tax or penalties applicable thereto (“Taxes”),
except as required by Applicable Law. If any withholding or deduction from any payment to be made by the Borrower hereunder is
required in respect of any Taxes pursuant to any Applicable Law (as determined in the good faith reasonable discretion of the
Borrower or the Agent), then the Borrower shall: (i) timely pay directly to the relevant taxing authority the full amount required
to be so withheld or deducted; (ii) within thirty (30) days after the date of any such payment of Taxes, forward to the Agent
an official receipt or other documentation satisfactory to the Agent evidencing such payment to such relevant taxing authority;
and (iii) in the case of Indemnified Taxes, pay to the Agent for the account of the Lender such additional amount or amounts as
is necessary to ensure that the net amount actually received by the Lender will equal the full amount the Lender would have received
had no such withholding or deduction (including withholdings and deductions applicable to any additional sums payable under this
Section 3.1) been required.

 

  (b)           The
Borrower shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Agent
timely reimburse it for the payment of, any Other Taxes.

 

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(c)           The
Loan Parties shall jointly and severally reimburse and indemnify, within 30 days after receipt of demand therefor (with copy to
the Agent), the Agent and the Lender for all Indemnified Taxes and Other Taxes (including any Indemnified Taxes and Other Taxes
imposed by any jurisdiction on amounts payable under this Section 3.1) paid by the Agent or the Lender, or required to
be withheld or deducted from a payment to the Agent or the Lender, and any liabilities arising therefrom or with respect thereto
(including any penalty, interest or expense), whether or not such Taxes were correctly or legally asserted. A certificate of the
Agent or the Lender (or of the Agent on behalf of the Lender) claiming any compensation under this clause (c), setting
forth the amounts to be paid thereunder and delivered to the Borrower with a copy to the Agent, shall be conclusive, binding and
final for all purposes, absent manifest error.

 

(d)           On
or prior to the date it becomes a party to this Agreement, and from time to time thereafter as required by law or reasonably requested
in writing by the Borrower, the Lender (including for this purpose any assignee of the Lender that becomes a party to this Agreement)
shall (but only so long as the Lender remains lawfully able to do so) provide the Borrower with such documents and forms as prescribed
by the Internal Revenue Service (“IRS”) in order to certify that payments to the Lender are exempt from or
entitled to a reduced rate of U.S. federal withholding tax on payments pursuant to this Agreement or any other Loan Document.
Without limiting the generality of the foregoing, any Lender that is the beneficial owner of payments made under this Agreement
will (but only so long as the Lender remains lawfully able to do so) provide: (i) in the case of a beneficial owner that is U.S. person
within the meaning of Section 7701 of the IRC, IRS Form W-9 certifying that such beneficial owner is exempt from U.S. Federal
backup withholding tax, (ii) in the case of a beneficial owner claiming the benefits of the exemption for portfolio interest under
Section 881(c) of the IRC, both (A) IRS Form W-8BEN and (B) a certificate to the effect that such beneficial
owner is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the IRC, (2) a “10 percent
shareholder” of Holdings within the meaning of Section 881(c)(3)(B) of the IRC, or (3) a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the IRC, (iii) in the case of a beneficial owner that is not a U.S.
person within the meaning of Section 7701 of the IRC claiming the benefits of an income tax treaty to which the United States
is a party, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to
the “interest,” “business profits” or “other income” article of such tax treaty; and (iv)
in the case of a beneficial owner for whom payments under this Agreement constitute income that is effectively connected with
such beneficial owner’s conduct of a trade or business in the United States, IRS Form W-8ECI. Any Lender that
is not the beneficial owner of payments made under this Agreement, such as an entity treated as a partnership for U.S. federal
income tax purposes, will (but only so long as the Lender remains lawfully able to do so) provide (x) an IRS Form W-8IMY
on behalf of itself and (y) on behalf of each such beneficial owner, the forms set forth in clauses (i) through
(iv) of the preceding sentence that would be required of such beneficial owner if such beneficial owner were a Lender.
If a payment made to the Lender under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA if the
Lender were to fail to comply with the applicable reporting requirements of FATCA, the Lender shall (but only so long as the Lender
remains lawfully able to do so) deliver to the Borrower, at the time or times prescribed by law or reasonably requested in writing
by the Borrower, such documentation prescribed by applicable law or reasonably requested in writing by the Borrower as may be
necessary for the Borrower to comply with its obligations under FATCA, to determine that the Lender has complied with its obligations
under FATCA, or to determine the amount to deduct and withhold from such payment. Solely for purposes of the preceding sentence,
FATCA shall include any amendments made to FATCA after the date of this Agreement.

 

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(e)           If
the Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes
or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, the Lender shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes giving rise to such refund),
net of all out-of-pocket expenses (including Taxes) incurred by the Lender, and without interest (other than any interest paid
by the relevant taxing authority with respect to such refund), provided that the Borrower, upon the request of the Lender,
agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant taxing
authority) to the Lender in the event the Lender is required to repay such refund to such taxing authority. Notwithstanding anything
to the contrary in this clause (e), in no event will the Lender be required to pay any amount to the Borrower pursuant
to this clause (e) the payment of which would place the Lender in a less favorable net after-Tax position than the Lender
would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise
imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This clause (e)
shall not be construed to require the Lender to make available its tax returns (or any other information relating to its taxes
that it deems confidential) to the Borrower or any other Person.

 

(f)           The
provisions of this Section 3.1 shall survive the termination of this Agreement and repayment of all Obligations.

 

3.2           Increased
Cost.

 

(a)           If,
after the Closing Date, the adoption or taking effect of, or any change in, any Applicable Law, rule, regulation or treaty, or
any change in the interpretation or administration of any Applicable Law, rule, regulation or treaty by any Governmental Authority,
central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Lender with
any request, rule, guideline or directive (whether or not having the force of law) of any such authority, central bank or comparable
agency: (i) shall impose, modify or deem applicable any reserve (including any reserve imposed by the FRB), special deposit or
similar requirement against assets of, deposits with or for the account of, or credit extended by the Lender; (ii) shall subject
the Lender or the Agent to any Taxes (other than Taxes described in clauses (b) and (c) of the definition of Excluded
Taxes, Taxes indemnified pursuant to Section 3.1 and Connection Income Taxes); or (iii) shall impose on the Lender any
other condition affecting its Loan, its Note or its obligation to make the Loan; and the result of anything described in clauses
(i) through (iii) above is to increase the cost to (or to impose a cost on) such Lender of making or maintaining its
Loan, or to reduce the amount of any sum received or receivable by such Lender under this Agreement or under its Note with respect
thereto, then, upon demand by such Lender (which demand shall be accompanied by a statement setting forth the basis for such demand
and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to the Agent), the Borrower shall
pay directly to the Lender such additional amount as will compensate the Lender for such increased cost or such reduction.

 

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(b)           If
the Lender shall reasonably determine that any change in, or the adoption or phase-in of, any Applicable Law, rule or regulation
regarding capital adequacy, or any change in the interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration thereof, or the compliance by the Lender or any Person
controlling the Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the Lender’s
or such controlling Person’s capital as a consequence of such Lender’s Commitments hereunder to a level below that
which the Lender or such controlling Person could have achieved but for such change, adoption, phase-in or compliance (taking
into consideration the Lender’s or such controlling Person’s policies with respect to capital adequacy) by an amount
deemed by the Lender or such controlling Person to be material, then from time to time, upon demand by the Lender (which demand
shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable
detail, a copy of which shall be furnished to the Agent), the Borrower shall pay to the Lender such additional amount as will
compensate the Lender or such controlling Person for such reduction.

 

(c)           Notwithstanding
anything herein to the contrary, (i) all requests, rules, guidelines, requirements and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or by United States
or foreign regulatory authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or
in implementation thereof, shall in each case be deemed to be a change in Applicable Law, regardless of the date enacted, adopted,
issued or implemented. Notwithstanding anything to the contrary in this Section 3.2, the Borrower shall not be required
to compensate the Lender for any amounts in this Section 3.2 (excluding Taxes described in Section 3.2(a)(ii)) incurred
more than 180 days prior to the date that the Lender delivers the statement making the demand for such payment.

 

3.3           Mitigation
of Circumstances. The Lender will use commercially reasonable efforts available to it (and not, in such Lender’s sole
judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, any obligation by the Borrower to pay any amount pursuant
to Section 3.1 or 3.2; provided, that this Section 3.3 shall not apply to, or operate to prevent,
any assignment of the Loan and the rights and obligations of the Lender pursuant to Section 10.13. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by the Lender in connection with this Section 3.3.

 

3.4           Conclusiveness
of Statements; Survival. Determinations and statements of the Lender pursuant to Sections 3.1 or 3.2 shall be
conclusive absent demonstrable error provided that the Lender or the Agent provides the Borrower with written notification
of such determinations and statements. The Lender may use reasonable averaging and attribution methods in determining compensation
under Sections 3.1 or 3.2 and the provisions of such Sections shall survive repayment of the Loan, cancellation
of the Notes and termination of this Agreement.

 

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	Section 4.	Conditions
    Precedent.

 

4.1          Closing
Date. The occurrence of the Closing Date and the effectiveness of this Agreement is subject to the following conditions precedent,
each of which shall be satisfactory in all respects to the Agent and the Lender:

 

4.1.1        Delivery
of Loan Documents. The Borrower shall have delivered the following documents in form and substance satisfactory to the Agent
(and, as applicable, duly executed by all Persons named as parties thereto and dated the Closing Date or an earlier date satisfactory
to the Agent):

 

  (a)           Agreement.
This Agreement.

 

  (b)           Collateral
Documents. The Guarantee and Collateral Agreement and all other Collateral Documents, and all instruments, documents, certificates
and agreements executed or delivered pursuant thereto (including Intellectual Property assignments and pledged equity and limited
liability company interests in the Subsidiaries, if any, with undated irrevocable transfer powers executed in blank), in each
case, executed and delivered by each Loan Party and each other Person named as a party thereto.

 

  (c)           Intercreditor
Agreement. The Intercreditor Agreement.

 

  (d)           HealthCor
Debt Documents Amendments. Each of the HealthCor Debt Documents Amendments.

 

  (e)           Financing
Statements. Properly completed Uniform Commercial Code financing statements and other filings and documents required by law
or the Loan Documents to provide the Agent with perfected first priority Liens (subject only to Permitted Liens) in the Collateral.

 

  (f)           Warrants.
The Warrants and the Registration Rights Agreement.

 

  (g)           Lien
Searches. Copies of Uniform Commercial Code search reports listing all effective financing statements or equivalent filings
filed against any Loan Party, with copies of such financing statements and filings; and copies of Patent, Trademark, Copyright
and Internet Domain Name search reports conducted by the Borrower listing all effective collateral assignments in respect of such
Intellectual Property filed with respect to any Loan Party, with copies of such collateral assignment documentation.

 

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(h)           Authorization
Documents. For each Loan Party, such Person’s (i) charter (or similar formation document), certified as of a recent
date by the appropriate Governmental Authority (as applicable) in its jurisdiction of incorporation (or formation), (ii) limited
liability company agreement, partnership agreement and bylaws (and similar governing document) (as applicable), (iii) resolutions
of its board of directors (or similar governing body) approving and authorizing such Person’s execution, delivery and performance
of the Loan Documents to which it is party and the transactions contemplated thereby, (vi) signature and incumbency certificates
of its officers authorized to execute the Loan Documents, in each case with respect to clauses (i) through (iv),
all certified by its secretary or an assistant secretary (or similar officer) as being in full force and effect without modification
and (v) good standing certificates in its jurisdiction of incorporation (or formation) and in each other jurisdiction requested
by the Agent or the Lender, in each case, dated as of a recent date.

 

(i)           Opinions
of Counsel. Opinions, addressed to the Agent and the Lender and dated as of the Closing Date, from each of (i) Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., counsel to Holdings and the Borrower, and (ii) local counsel to the Loan Parties in each
jurisdiction in which any Loan Party is organized and the laws of which are not covered by the opinion letter referred to in clause
(i) above, in each case in form and substance satisfactory to the Agent.

 

(j)           Insurance.  Certificates
or other evidence of insurance in effect as required by Section 6.3(b).

 

(k)           Control
Agreements. A Control Agreement for each deposit account and securities account maintained by any Loan Party (other than zero
balance, payroll and similar accounts) in form and substance reasonably satisfactory to the Agent.

 

(l)           Payment
of Fees and Expenses. The Borrower shall have paid, on or prior to the Closing Date, subject to Section 10.3,
without duplication, all costs and expenses (including, to the extent invoiced, payment or reimbursement of all Legal Costs) incurred
by the Agent and the Lender in connection with the preparation, execution and delivery of this Agreement, the other Loan Documents
and the transactions contemplated hereby and thereby which are required to be paid by the Borrower, provided that such
costs and expenses incurred by the Agent and the Lender and reimbursable by the Borrower pursuant to this paragraph (l)
shall not exceed $150,000.

 

(m)          Officer’s
Certificate. A certificate, dated the Closing 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 4.1.2, 4.1.3,
and 4.1.4.

 

(n)           Other
Documents. Such other certificates, documents and agreements that may be listed on the closing checklist provided by the Agent
to the Borrower or as the Agent or the Lender may request.

 

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4.1.2         Representations
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 Closing Date (or as of a specific earlier date if such representation or warranty expressly relates
to an earlier date).

 

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

 

4.1.4         No
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.

 

4.2         Tranche
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:

 

4.2.1         Delivery
of Borrowing Request. On or prior to the Tranche One Loan Request Date, 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 five Business
Days and no more than ten Business Days from the date of such Borrowing Request (or shall be deemed to have delivered such a Borrowing
Request pursuant to Section 2.1.1(a)).

 

4.2.2         Tranche
One Milestone. On or prior to October 31, 2015, the Borrower shall have placed in service a minimum of 9,000 Billable
CareView System Units (the “Tranche One Milestone”). For the avoidance of doubt, if the Tranche One Milestone
shall not have occurred on or prior to October 31, 2015, the condition set forth in this Section 4.2.2 shall not
be satisfied.

 

4.2.3         Delivery
of Tranche One Milestone Notice. The Borrower shall have delivered to Agent the Tranche One Milestone Notice in accordance
with Section 6.9.

 

4.2.4         Payment
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 the Tranche One Loan which are required to be paid by the Borrower, and shall provide evidence acceptable to the Agent
of the foregoing.

 

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

 

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4.2.6         Officer’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 4.2.7, 4.2.8,
and 4.2.9.

 

4.2.7         Representations
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).

 

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

 

4.2.9         No
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.

 

4.3           Tranche
Two Loan. The obligation of the Lender to make the Tranche Two Loan is subject to the following conditions precedent, each
of which shall be satisfactory in all respects to the Agent and the Lender:

 

4.3.1         Delivery
of Borrowing Request. On or prior to the Tranche Two Loan Request Date, the Borrower shall have delivered to Agent a Borrowing
Request requesting that the entire amount of the Tranche Two Commitment be funded on a date that is no less than five Business
Days and no more than ten Business Days from the date of such Borrowing Request (or shall be deemed to have delivered such a Borrowing
Request pursuant to Section 2.1.1(b)).

 

4.3.2         Tranche
Two Milestone. On or prior to June 30, 2017, (a) the Borrower shall have placed in service a minimum of 27,750 Billable CareView
System 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.

 

4.3.3         Delivery
of Tranche Two Milestone Notice. The Borrower shall have delivered to Agent the Tranche Two Milestone Notice in accordance
with Section 6.10.

 

4.3.4         Payment
of Fees and Expenses. The Borrower shall have paid, on or prior to the Tranche Two Funding Date, (i) all fees and expenses
owing and payable to the Agent and the Lender as of such date and (ii) subject to Section 10.3, without duplication, all
costs and expenses incurred by the Agent and the Lender in connection with the funding of the Tranche Two Loan which are required
to be paid by the Borrower, and shall provide evidence acceptable to the Agent of the foregoing.

 

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4.3.5         Officer’s
Certificate. A certificate, dated the Tranche Two 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 4.3.6, 4.3.7,
and 4.3.8.

 

4.3.6         Representations
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 Two Funding Date (or as of a specific earlier date if such representation or warranty expressly
relates to an earlier date).

 

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

 

4.3.8         No
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.

 

4.3.9         Note.
The Borrower shall have delivered a Note in respect of the Tranche Two Loan in form and substance satisfactory to the Agent, duly
executed by the Borrower.

 

Section
5.              Representations and Warranties. To induce the Agent and the
Lender to enter into this Agreement and to induce the Lender to advance the Loans hereunder, each of Holdings and the Borrower
represents and warrants to the Agent and the Lender that each of the following are, and after giving effect to the borrowing of
the Loans, will be, true, correct and complete:

 

5.1           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; 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, 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.

 

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5.2           Authorization;
No Conflict. Each Loan Party is duly authorized to execute and deliver each Loan Document to which it is a party, the Borrower
is duly authorized to borrow monies hereunder, the granting of the security interests pursuant to the Collateral Documents is
within the corporate purposes of the Borrower and each other Loan Party party thereto, and the Borrower and each other Loan Party
is duly authorized to perform its Obligations under each Loan Document to which it is a party. The execution, delivery and performance
by Holdings and the Borrower of this Agreement and by Holdings, the Borrower and each Loan Party of each Loan Document to which
it is a party, and the borrowings by the Borrower hereunder, 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 (i) any consent or approval which has been obtained
and is in full force and effect and (ii) recordings and filings in connection with the Liens granted to the Agent under the Collateral
Documents), (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 the Borrower or any other Loan
Party (other than Liens in favor of the Agent created pursuant to the Collateral Documents).

 

5.3           Validity;
Binding Nature. Each of this Agreement and each other Loan Document to which Holdings, the Borrower or any other Loan Party
is a party is the legal, valid and binding obligation of such Person, 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.

 

5.4           Financial
Condition. The unaudited consolidated financial statements of Holdings and its Subsidiaries (presented on a consolidated basis)
as at March 31, 2015, and the audited consolidated financial statements of Holdings and its Subsidiaries (presented on a consolidated
basis) as at December 31, 2014, have been prepared in accordance with GAAP, subject to, in the case of unaudited financial statements,
the absence of footnotes and year-end adjustments, and present fairly the consolidated financial condition of such Persons as
at such dates and the results of their operations and cash flows for the periods then ended. As of the Closing Date, the Borrower
and its Subsidiaries have no material liabilities other than as set forth on the foregoing financial statements other than trade
payables incurred in the ordinary course of business.

 

5.5           No
Material Adverse Change. Since December 31, 2014, there has been no event or occurrence that has resulted or could reasonably
be expected to result in a Material Adverse Effect.

 

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5.6           Litigation.
No litigation (including derivative actions), arbitration proceeding or governmental investigation or proceeding is pending or,
to any Loan Party’s knowledge, threatened in writing, against any Loan Party or any of its Subsidiaries or any of their
respective properties which (i) purport to affect or pertain to this Agreement, any other Loan Document or any of the transactions
contemplated hereby or (ii) that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse
Effect. No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement, any other Loan Document,
or directing that the transactions provided for herein not be consummated as herein provided. Except as set forth in Section
5.6 of the Disclosure Letter, neither any Loan Party nor any of its Subsidiaries is the subject of an audit or, to the knowledge
of the Loan Parties, any review or investigation by any Governmental Authority (excluding the IRS and other taxing authorities)
concerning the violation or possible violation of any requirement of Applicable Law.

 

5.7           Ownership
of Properties; Liens; Real Property. There are no Liens on the Collateral other than those granted in favor of the Agent to
secure the Obligations and other Permitted Liens. Each Loan Party and each of its Subsidiaries owns good and, in the case of owned
real property, marketable title to all of its properties and assets, real and personal, tangible and intangible, of any nature
whatsoever (including Patents, Trademarks, trade names, service marks and Copyrights), free and clear of all Liens, charges and
claims (including infringement claims with respect to Intellectual Property) other than Permitted Liens. Section 5.7 of
the Disclosure Letter lists all of the real property owned, leased, subleased or otherwise owned or occupied by any Loan Party
as of the Closing Date.

 

5.8           Capitalization;
Subsidiaries.

 

(a)           Equity
Interests. Section 5.8(a) of the Disclosure Letter sets forth, as of the Closing Date, the name and jurisdiction of
incorporation or organization of, and the percentage of each class of Capital Stock owned by Holdings, the Borrower or any other
Subsidiary in, (i) each Subsidiary and (ii) each joint venture in which Holdings, the Borrower or any other Subsidiary owns any
Capital Stock. All Capital Stock in each Subsidiary owned by Holdings, the Borrower or any other Subsidiary are duly and validly
issued and, in the case of each Subsidiary that is a corporation, are fully paid and non-assessable, and are owned by the Borrower,
directly or indirectly through Wholly-Owned Subsidiaries. Each Loan Party is the record and beneficial owner of, and has good
title to, the Capital Stock pledged by it to the Agent under the Collateral Documents, free of any and all Liens, rights or claims
of other Persons, other than Liens created under the Collateral Documents and other Permitted Liens. Each Loan Party is the record
and beneficial owner of, and has good title to, the Capital Stock pledged by it to the Agent under the Collateral Documents, free
of any and all Liens, rights or claims of other persons, except the security interest created by the Collateral Documents, and
there are no outstanding warrants, options or other rights to purchase, or shareholder, voting trust or similar agreements outstanding
with respect to, or property that is convertible into, or that requires the issuance or sale of, any such pledged Capital Stock.

 

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(b)           No
Consent of Third Parties Required. Except as set forth in Section 5.8(b) of the Disclosure Letter, no consent of any
Person, including any other general or limited partner, any other member of a limited liability company, any other shareholder
or any other trust beneficiary, is necessary or reasonably desirable (from the perspective of a secured party) in connection with
the creation, perfection or first priority status of the security interest of the Agent in any Capital Stock pledged to the Agent
for the benefit of the Lender under the Collateral Documents or the exercise by the Agent of the voting or other rights provided
for in the Collateral Documents or the exercise of rights and remedies in respect thereof.

 

5.9           Pension
Plans. No Loan Parties have any liability under ERISA and no Loan Party sponsors any “pension plan” or has any
liability subject to Title IV of ERISA.

 

5.10         Compliance
with Law; Investment Company Act; Other Regulated Entities.

 

(a)           Each
Loan Party and each of its Subsidiaries possesses all, and is not in default under any, necessary authorizations, permits, licenses,
certifications and approvals from all Governmental Authorities in order to conduct their respective businesses as presently conducted,
except where the failure to do so would not reasonably be expected to result in a Material Adverse Effect. All business and operations
of each Loan Party and each of its Subsidiaries complies with all Applicable Law, except where the failure to so comply would
not reasonably be expected to result in a Material Adverse Effect. No Loan Party or any of its Subsidiaries is operating any aspect
of its business under any agreement, settlement, judgment, decree, injunction, order or other arrangement with any Governmental
Authority. None of any Loan Party, any Person controlling any Loan Party, or any Subsidiary of any Loan Party, is subject to regulation
under any Federal or state statute, rule or regulation limiting its ability to incur Debt, pledge its assets or perform its Obligations
under the Loan Documents.

 

(b)           No
Loan Party or any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment
company” or a “subsidiary” of an “investment company”, within the meaning of the Investment Company
Act of 1940.

 

(c)           As
of the Closing Date, no Loan Party is aware of any current or former employee that is a “whistleblower” as defined
in Section 240.21F-2 of the Exchange Act.

 

(d)           Without
limiting the generality of the foregoing, except where noncompliance, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect:

 

 (i)           any
financial relationships of any Loan Party or any Subsidiary with any Person (i) comply with all applicable Healthcare Laws including,
without limitation, the Federal Anti-Kickback Statute, the Stark Statute and applicable state anti-kickback and self-referral
laws; (ii) reflect fair market value, have commercially reasonable terms, and were negotiated at arm’s length; and (iii)
do not obligate such Person to purchase, use, recommend, or arrange for the use of any Products or services of the Borrower, any
Loan Party, or any Subsidiary; and

 

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(ii)           each
Loan Party and each of its Subsidiaries have implemented policies and procedures to monitor, collect, and report, and will report,
any payments or transfers of value to certain healthcare providers and teaching hospitals, in accordance with industry standards
and the Affordable Care Act of 2010 and its implementing regulations and state disclosure and transparency laws.

 

5.11           Margin
Stock. No Loan Party or any of its Subsidiaries is engaged or will engage, principally or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying Margin Stock. No portion of the Obligations is secured
directly or indirectly by Margin Stock.

 

5.12           Taxes.
Each Loan Party and each of its Subsidiaries has filed all federal, state, local and foreign income, sales, goods and services,
harmonized sales and franchise and all other material tax returns, reports and statements (collectively, the “Tax Returns”)
with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are or were required to be filed.
All such Tax Returns are true, correct and complete in all material respects. All Taxes reflected therein and all material Taxes
otherwise due and payable have been paid prior to the date on which any liability may be added thereto for non-payment thereof,
except for those contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained
on the books of the appropriate Loan Party, as applicable. No Tax Return is under audit or examination by any Governmental Authority
and no written notice of such an audit or examination or any written assertion of any claim for Taxes has been given or made by
any Governmental Authority. Proper and accurate amounts have been withheld by each Loan Party and each of its Subsidiaries, as
applicable, from their respective employees for all periods in compliance with the tax, social security and unemployment withholding
provisions of Applicable Law and such withholdings have been timely paid to the respective Governmental Authorities in accordance
with Applicable Law. No Loan Party has been a member of an affiliated, combined or unitary group other than the group of which
a Loan Party is the common parent or has liability for Taxes of any other person by contract, as a successor or transferor or
otherwise by operation of law.

 

5.13           Solvency.
Both immediately before and after giving effect to (a) the Loan or Loans made on or prior to the date this representation and
warranty is made or remade, (b) the disbursement of proceeds of such Loan or Loans, and (c) the payment and accrual of all transaction
costs in connection with the foregoing, with respect to the Loan Parties, on a consolidated basis, (i) the fair value of the assets
of the Loan Parties, on a consolidated basis, is greater than the amount of the liabilities (including disputed, contingent and
unliquidated liabilities) of the Loan Parties, on a consolidated basis, as such value is established and such liabilities evaluated,
(ii) the present fair saleable value of the assets of the Loan Parties, on a consolidated basis, is not less than the amount that
will be required to pay the probable liability on the debts of the Loan Parties, on a consolidated basis, as they become absolute
and matured, (iii) the Loan Parties, on a consolidated basis, are able to realize upon their assets and pay their debts and other
liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (iv)
none of the Loan Parties intends to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as
such debts and liabilities mature, and (v) none of the Loan Parties is engaged in business or a transaction, or is about to engage
in business or a transaction, for which its property would constitute unreasonably small capital.

 

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5.14           Environmental
Matters. The on-going operations of each Loan Party and each of its Subsidiaries comply in all respects with all Environmental
Laws, except such non-compliance which could not (if enforced in accordance with Applicable Law) reasonably be expected to result
in a Material Adverse Effect. Each Loan Party and each of its Subsidiaries have obtained, and maintained in good standing, all
licenses, permits, authorizations and registrations required under any Environmental Law and necessary for their respective ordinary
course operations, and each Loan Party and each of its Subsidiaries are in compliance with all material terms and conditions thereof,
except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. No Loan Party or any
of its Subsidiaries or any of their respective properties or operations is subject to any outstanding written order from or agreement
with any federal, state or local Governmental Authority, nor subject to any judicial or docketed administrative proceeding, nor
subject to any indemnification agreement  respecting any Environmental Law, Environmental Claim or Hazardous Substance,
that would reasonably be expected to have a Material Adverse Effect.

 

5.15           Insurance.
Each Loan Party and its properties are insured with financially sound and reputable insurance companies which are not Affiliates
of Holdings, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where such Loan Party operates. A true and complete listing of
such insurance of the Loan Parties as of the Closing Date, including issuers and coverages, is set forth in Section 5.15 of the
Disclosure Letter.

 

5.16           Information.
All information heretofore or contemporaneously herewith furnished in writing by the Borrower or any other Loan Party to the Agent
or the Lender for purposes of or in connection with this Agreement and the transactions contemplated hereby is, and all written
information hereafter furnished by or on behalf of the Borrower or any Loan Party to the Agent or the Lender pursuant hereto or
in connection herewith will be, taken as a whole, true and accurate in every material respect on the date as of which such information
is dated or certified, and none of such information is or will be incomplete, taken as a whole, by omitting to state any material
fact necessary to make such information not misleading in light of the circumstances under which it was made (it being recognized
by the Agent and the Lender that any projections and forecasts provided by Holdings or the Borrower are based on good faith estimates
and assumptions believed by Holdings or the Borrower to be reasonable as of the date of the applicable projections or assumptions
and that actual results during the period or periods covered by any such projections and forecasts may differ from projected or
forecasted results and such differences may be material).

 

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5.17           Intellectual
Property.

 

(a)           Schedule
5.17(a) of the Disclosure Letter sets forth a true and complete list of all Patents (including patent applications, but excluding
expired patent applications), registered Trademarks, applications for registration of Trademarks, registered Copyrights and applications
for registration of Copyrights owned by or exclusively licensed to any Loan Party or any of its Subsidiaries (collectively, the
“Registered Intellectual Property”). A Loan Party or a Subsidiary thereof exclusively owns, free and clear
of all Liens, all right, title and interest in and to, all Registered Intellectual Property that is indicated on Schedule 5.17(a)
of the Disclosure Letter as owned by such Loan Party or Subsidiary. All of the Registered Intellectual Property is subsisting
and, to Borrower’s knowledge, all of the Registered Intellectual Property (excluding any applications included therein)
is valid and enforceable. To Borrower’s knowledge, there are no facts (including any material prior art not disclosed to
the applicable granting authority in connection with any issued Patents included in the Registered Intellectual Property) that
would invalidate or render unenforceable any issued Patents included in the Registered Intellectual Property. Without limiting
the generality of the foregoing, no prior art exists that would invalidate any of U.S. Patent Nos. 7,612,666, 7,477,285 or 9,041,810.

 

(b)           No
Loan Party or any Subsidiary has received any written notice that the use or exploitation by such any Loan Party or Subsidiary
of any Intellectual Property owned by or licensed to such Loan Party or Subsidiary, or the use, manufacture, sale or distribution
of the Product, infringes or misappropriates the Intellectual Property of any third party and, to Borrower’s knowledge,
there is no reasonable basis for any such claim. To Borrower’s knowledge, there is no reasonable basis for any claim that
the making, having made, use, offer for sale, import or sale of the Product by Borrower or its agents (or use of the Product in
accordance with its intended use) infringes or misappropriates the Intellectual Property of any third party. Except as listed
on Schedule 5.17(b) of the Disclosure Letter, there are no written claims (including interferences, oppositions or cancellation
actions) against any Loan Party or any Subsidiary thereof that are presently pending or, to the knowledge of Borrower, threatened,
contesting the validity, ownership or enforceability of any of the Registered Intellectual Property and, to the knowledge of Borrower,
no third party is infringing or misappropriating any of the Registered Intellectual Property (excluding patent applications).
The Registered Intellectual Property is not subject to any outstanding order, injunction, judgment, decree or arbitration award
restricting the use thereof. In the last twelve (12) months, no Loan Party or any Subsidiary thereof has taken any action (or
failed to take any action) that has resulted in the loss, lapse, abandonment, invalidity or unenforceability of any of the Registered
Intellectual Property or any other Intellectual Property owned by any Loan Party or Subsidiary thereof.

 

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(c)           Except
as set forth on Schedule 5.17(c) of the Disclosure Letter, (i) no Loan Party or any Subsidiary has granted any licenses
under Registered Intellectual Property or any other material Intellectual Property owned by any Loan Party or any Subsidiary thereof
to third parties; and (ii) no Loan Party or any Subsidiary thereof is party to any contract with any Person that limits or restricts
the use of the Registered Intellectual Property or any other material Intellectual Property owned by any Loan Party or any Subsidiary
thereof that requires any payments for such use.

 

(d)           No
Loan Party or any of its Subsidiaries has filed any disclaimer or made or permitted any other voluntary reduction in the scope
of any Patent included in the Registered Intellectual Property. None of the Patents included in Registered Intellectual Property
has been or is currently involved in any interference, re-examination, opposition, derivation or other post-grant proceedings
and no such proceedings are, to the knowledge of Borrower, threatened.

 

(e)           At
least one valid and enforceable claim of an issued and subsisting patent included in the Registered Intellectual Property covers
the Product, including any anticipated Product. Without limiting the generality of the foregoing, at least one valid and enforceable
claim of each of U.S. Patent No. 7,612,666, U.S. Patent No. 7,477,285 and U.S. Patent No. 9,041,810 covers the Product as sold
commercially as of the Closing Date.

 

(f)           Borrower
has provided to Lender true, correct and complete copies of the Intelliview License Agreement and the Intelliview License Assignment.
Borrower has a valid and enforceable exclusive license under the “Licensor IP” (as defined in the Intelliview License
Agreement) in accordance with the terms of the Intelliview License Agreement. The Intelliview License Agreement is in full force
and effect and is the legal, valid and binding obligation of Intelliview Technologies, Inc., enforceable against Intelliview Technologies,
Inc. in accordance with its terms, subject, as to the enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium
or similar Applicable Law affecting creditors’ rights generally and general equitable principles. The execution and delivery
of, and performance of obligations under, the Intelliview License Agreement were and are within the powers of Intelliview Technologies,
Inc. The Intelliview License Agreement was duly authorized by all necessary action on the part of, and validly executed and delivered
by, Intelliview Technologies, Inc. The Intelliview License Assignment was duly authorized by all necessary action on the part
of, and validly executed and delivered by, Mann Equity, LLC. Borrower is not in breach or violation of or in default under the
Intelliview License Agreement. Borrower has received no written notice from Intelliview Technologies, Inc. or any other Person
to the effect that the Intelliview License Agreement is not an enforceable obligation of Intelliview Technologies, Inc. Borrower
will be able to secure the full cooperation and assistance of and from Intelliview Technologies, Inc. and Wael Badawy as may be
necessary for Borrower to effectively enforce U.S. Patent No. 7,612,666 against infringers within the medical field and to effectively
defend challenges to the validity and enforceability of U.S. Patent No. 7,612,666. For the purposes hereof, (i) the term “Intelliview
License Agreement” means the License Agreement effective as of September 1, 2011 between Intelliview Technologies, Inc.,
and Borrower (as assignee of Mann Equity, LLC) and (ii) the term “Intelliview License Assignment” means the
Instrument of Assignment and Assumption made as of September 1, 2011 between Mann Equity, LLC and Borrower.

 

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(g)           To
Borrower’s knowledge, each Loan Party and each of its Subsidiaries owns, or is licensed or otherwise has the right to use,
all Intellectual Property necessary to conduct its business as currently conducted. The conduct and operations of the businesses
of each Loan Party and each of its Subsidiaries do not and, to Borrower’s knowledge, the anticipated Products of the Loan
Parties and its Subsidiaries, upon their commercial release, will not, infringe upon, misappropriate, dilute or violate any Intellectual
Property owned by any other Person. No Loan Party or any of its Subsidiaries has received any written notice or claim that (i)
asserts any right, title or interest with respect to, or (ii) contests any right, title or interest of any Loan Party or any of
its Subsidiaries in, any Intellectual Property, any anticipated Products and applications derived or expected to be derived therefrom,
or the development and commercialization of any Products derived or expected to be derived therefrom. To Borrower’s knowledge,
the Intellectual Property owned by the Loan Parties and their Subsidiaries is sufficient, and conveys adequate rights, title and
interests, for the Borrower, the other Loan Parties and their Subsidiaries to develop and commercialize their anticipated Products
and Intellectual Property applications.

 

(h)           Each
Loan Party and each of its Subsidiaries (either itself or through licensees) has (i) used each Trademark owned by it on each and
every trademark class of goods in the ordinary course of business in order to maintain such Trademark in full force free from
any claim of abandonment for non-use in any class of goods for which registration was obtained, (ii) maintained in the ordinary
course of business the quality of products and services offered under such Trademark and taken all necessary steps to ensure that
all licensed users of such Trademark maintain as in the past such quality, (iii) used such Trademark with the appropriate notice
of registration and all other notices and legends required by Applicable Law, (iv) not adopted or used any mark which is confusingly
similar to or a colorable imitation of such Trademark that the Agent, for the benefit of the Lender, has not obtained a perfected
security interest in and (v) not (and has not permitted any licensee or sublicensee thereof to have) done any act or knowingly
omitted to do any act whereby such Trademark may become invalidated or impaired in any way.

 

(i)            Each
Loan Party and each of its Subsidiaries (either itself or through licensees) has not done any act, or omitted to do any act, whereby
any of its Patents may become forfeited, abandoned or dedicated to the public.

 

(j)            Each
Loan Party and each of its Subsidiaries (either itself or through licensees) has not acted or omitted to act whereby any portion
of its Copyrights may become invalidated or otherwise impaired. Such Loan Party or such Subsidiary has not (either itself or through
licensees) done any act whereby any portion of its Copyrights may fall into the public domain as a result of any such act.

 

(k)           Each
Loan Party (either itself or through licensees) has used proper statutory notice in connection with the use of each of its Patents,
Trademarks and Copyrights included in the Intellectual Property of such Loan Party.

 

(l)            Each
Loan Party and each of its Subsidiaries has taken all reasonable and necessary steps, including, without limitation, in any proceeding
before the Patent and Trademark Office, the Copyright Office or any similar office or agency in any other country or any political
subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration
of its Intellectual Property, including, without limitation, the payment of required fees and taxes, the filing of responses to
office actions issued by the Patent and Trademark Office and the Copyright Office, the filing of applications for renewal or extension,
the filing of affidavits of use and affidavits of incontestability, the filing of divisional, continuation, continuation-in-part,
reissue, and renewal applications or extensions, the payment of maintenance fees, and the participation in interference, reexamination,
opposition, cancellation, infringement and misappropriation proceedings.

 

    	38

    	 

    

 

(m)          No
Loan Party or any of its Subsidiaries (either itself or through licensees) (i) has abandoned any of its Intellectual Property
or (ii) has abandoned any right to file an application for letters patent, trademark, or copyright, in each case except where
such abandonment could not reasonably be expected to have a Material Adverse Effect.

 

(n)           Each
Loan Party and each of its Subsidiaries has done all things that are necessary and proper within such Loan Party’s or such
Subsidiary’s power and control to keep each license of Intellectual Property held by such Loan Party or such Subsidiary
as licensee or licensor in full force and effect.

 

(o)           Each
Loan Party and each of its Subsidiaries has maintained all of its rights to its Internet Domain Names in full force and effect,
except that each Loan Party and each of its Subsidiaries may elect not to renew any Internet Domain Name the failure of which
could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

5.18           Labor
Matters. No Loan Party or any of its Subsidiaries is subject to any labor or collective bargaining agreement. There are no existing
or threatened strikes, lockouts or other labor disputes involving any Loan Party or any of its Subsidiaries that individually
or in the aggregate could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees
of the Borrower, the other Loan Parties and any Subsidiary are not in violation of the Fair Labor Standards Act or any other Applicable
Law, rule or regulation dealing with such matters, except for any such violations which would not reasonably be expected to have
a Material Adverse Effect.

 

5.19           No
Default. No Loan Party or any of its Subsidiaries is in default under or with respect to any contractual obligation which, individually
or together with all such defaults, could reasonably be expected to have a Material Adverse Effect.

 

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5.20          Foreign
Assets Control Regulations and Anti-Money Laundering.

 

  5.20.1           OFAC.
Each Loan Party and each of its Subsidiaries is and will remain in compliance in all material respects with all U.S. economic
sanctions laws, executive orders and implementing regulations as promulgated by the U.S. Treasury Department’s Office of
Foreign Assets Control (“OFAC”) and all applicable anti-money laundering and counter-terrorism financing provisions
of the Bank Secrecy Act of 1970 and all regulations issued pursuant to any of the foregoing. No Loan Party and no Subsidiary (i)
is a Person designated by the U.S. government on the list of the Specially Designated Nationals and Blocked Persons (the “SDN
List”) with which a U.S. Person cannot deal with or otherwise engage in business transactions, (ii) is a Person who
is otherwise the target of U.S. economic sanctions laws such that a U.S. Person cannot deal or otherwise engage in business transactions
with such Person or (iii) is controlled by (including without limitation by virtue of such person being a director or owning voting
shares or interests), or acts, directly or indirectly, for or on behalf of, any person or entity on the SDN List, a terrorist
list maintained by a U.S. Government Authority or a foreign government that is the target of U.S. economic sanctions prohibitions
such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited under U.S. law.

 

  5.20.2           PATRIOT
Act. The Loan Parties and each of their Affiliates are in compliance in all material respects with (a) the Trading with the Enemy
Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B Chapter
V, as amended) and any other enabling legislation or executive order relating thereto and (b) the PATRIOT Act. No part of the
proceeds of any Loan will be used directly or indirectly for any payments to any government official or employee, political party,
official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain,
retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of
1977.

 

5.21         Non-Competes.
None of the Loan Parties nor any of their executive officers is subject to a non-compete agreement that prohibits or would materially
interfere with the development, commercialization or marketing of any Product.

 

Section
6.              Affirmative
Covenants. Until all Obligations (other than contingent indemnification obligations to the extent no claim giving rise thereto
has been asserted) are Paid in Full, each of Holdings and the Borrower agrees that, unless at any time the Lender shall otherwise
expressly consent in writing, it will:

 

6.1          Information.
Furnish to the Agent and the Lender:

 

6.1.1           Annual
Report. As soon as available and in any event within 90 days (or such earlier date on which Borrower is required to file a
Form 10-K under the Exchange Act) after the end of each Fiscal Year, beginning with the Fiscal Year ending December 31, 2015,
(i) the consolidated balance sheet of Holdings as of the end of such Fiscal Year and related consolidated statements of income,
cash flows and stockholders’ equity for such Fiscal Year, in comparative form with such financial statements as of the end
of, and for, the preceding Fiscal Year, and notes thereto, all prepared in accordance with GAAP and accompanied by an opinion
of BDO USA, LLP or other independent public accountants of recognized national standing (which opinion shall not be qualified
as to scope or contain any explanatory paragraph expressing substantial doubt about the ability of Holdings to continue as a going
concern), stating that such financial statements fairly present, in all material respects, the consolidated financial condition,
results of operations and cash flows of Holdings as of the dates and for the periods specified in accordance with GAAP, and (ii)
a narrative report and management’s discussion and analysis of the financial condition and results of operations of Holdings
for such Fiscal Year, as compared to amounts for the previous Fiscal Year (it being understood that the information required by
clauses (i) and (ii) may be furnished in the form of a Form 10-K filed with the SEC via the EDGAR System).

 

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6.1.2           Quarterly
Reports. As soon as available and in any event within 45 days (or such earlier date on which Holdings is required to file
a Form 10-Q under the Exchange Act) after the end of each of the first three Fiscal Quarters of each Fiscal Year, beginning with
the Fiscal Quarter ending June 30, 2015, (i) the consolidated balance sheet of Holdings as of the end of such Fiscal Quarter and
related consolidated statements of income and cash flows for such Fiscal Quarter and for the then elapsed portion of the Fiscal
Year, in comparative form with the consolidated statements of income and cash flows for the comparable periods in the previous
Fiscal Year, and notes thereto, all prepared in accordance with GAAP and accompanied by a certificate of the chief financial officer
of Holdings stating that such financial statements fairly present, in all material respects, the consolidated financial condition,
results of operations and cash flows of Holdings as of the date and for the periods specified in accordance with GAAP consistently
applied, and on a basis consistent with audited financial statements referred to in Section 6.1.1, subject to normal year-end
audit adjustments, and (ii) a narrative report and management’s discussion and analysis, of the financial condition and
results of operations for such Fiscal Quarter and the then elapsed portion of the Fiscal Year, as compared to the comparable periods
in the previous Fiscal Year (it being understood that the information required by this Section 6.1.2 may be furnished in
the form of a Form 10-Q filed with the SEC via the EDGAR System).

 

6.1.3           Monthly
Reports. Commencing with respect to the first calendar month after the Closing Date, promptly when available and in any event
within 30 days of the end of such calendar month and each subsequent calendar month (including any calendar month ending December
31), a consolidated balance sheet of Holdings and its Subsidiaries as of the end of such calendar month, together with consolidated
statements of income and cash flows for such period prepared on a basis consistent with GAAP, together with a comparison with
the budget for such period of the current Fiscal Year, all certified by the chief financial officer of Holdings.

 

6.1.4           Compliance
Certificate. Contemporaneously with the furnishing of the financial statements required pursuant to Sections 6.1.1
and 6.1.2, a duly completed Compliance Certificate signed by the chief financial officer of Holdings to the effect that
such officer has not become aware of any Event of Default or Default that has occurred and is continuing or, if there is any such
Event of Default or Default, describing it and the steps, if any, being taken to cure it, and providing such other information
as required thereby.

 

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6.1.5        Notice
of Default; Litigation; ERISA Matters. Promptly upon becoming aware of any of the following, written notice describing the same
and the steps being taken by the Borrower or the applicable Loan Party affected thereby with respect thereto:

 

 (a)           the
occurrence of an Event of Default or a Default;

 

 (b)           any
litigation, arbitration or governmental investigation or proceeding not previously disclosed by Holdings or the Borrower to the
Lender which has been instituted or, to the knowledge of Holdings or the Borrower, is threatened in writing against any Loan Party
or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect;

 

 (c)           any
cancellation or material change in coverage in any insurance maintained by Holdings, the Borrower or any other Loan Party; or

 

 (d)           any
other event (including (i) any violation of any Environmental Law or the assertion of any Environmental Claim, (ii) any violation
or noncompliance with any Applicable Law or (iii) any breach or non-performance of, or any default under, any contractual obligation
of any Loan Party or any of its Subsidiaries), in all cases which could reasonably be expected to have a Material Adverse Effect.

 

6.1.6        Budgets.
As soon as practicable, and in any event not later than 90 days after the commencement of each Fiscal Year, a budget of Holdings
and its Subsidiaries for such Fiscal Year (including quarterly operating and cash flow budgets) prepared in a manner satisfactory
to the Agent, accompanied by a certificate of the chief financial officer of Holdings to the effect that (a) such budget was prepared
by Holdings in good faith, (b) Holdings has a reasonable basis for the assumptions contained in such budget and (c) such budget
has been prepared in accordance with such assumptions.

 

6.1.7        Other
Information. Promptly from time to time, such other information concerning Holdings and any of its Subsidiaries as the
Lender or the Agent may reasonably request.

 

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6.2           Books;
Records; Inspections.

 

(a)           Keep,
and cause each Loan Party and each of its Subsidiaries to keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with GAAP.

 

(b)           Permit,
and cause each other Loan Party to permit, at reasonable times during business hours and with reasonable prior notice, the Agent,
the Lender, or any representative of the foregoing to: (i) inspect (at the sole expense of the Borrower) the properties and operations
of Holdings, the Borrower or any such Loan Party; (ii) visit any or all of its offices, to discuss its financial matters with
its directors or officers and its independent auditors, if any (and Holdings and the Borrower hereby authorize such independent
auditors, if any, to discuss such financial matters with the Lender or the Agent or any representative thereof), (iii) examine
(and, at the expense of the Borrower, photocopy extracts from) any of its books or other records; and (iv)(A) inspect (at the
sole expense of the Borrower) the Collateral and other tangible assets of Holdings, the Borrower or any such Loan Party, (B) perform
appraisals of the equipment of Holdings, the Borrower or any such Loan Party, and (C) inspect, audit, check and make copies of
and extracts from the books, records, computer data, computer programs, journals, orders, receipts, correspondence and other data
relating to any Collateral, for purposes of or otherwise in connection with conducting a review, audit or appraisal of such books
and records. If an Event of Default has occurred and is continuing, the Agent, the Lender, or any representative of the foregoing
may take any of the actions specified in clauses (i) through (iv) of this Section 6.2(b) without notice to
the Borrower. Notwithstanding the foregoing, except during the continuance of an Event of Default, all visits and inspections
by the Agent, the Lender, or any representative thereof pursuant to this Section 6.2(b) in excess of one time during a
calendar year shall not be at the Loan Parties’ expense, but shall be at the sole expense of the Agent or Lender.

 

6.3           Maintenance
of Property; Insurance.

 

(a)           Keep,
and cause each other Loan Party and each of its Subsidiaries to keep, all property useful and necessary in the business of Holdings,
the Borrower, such other Loan Party or such Subsidiary in good working order and condition, ordinary wear and tear excepted, and
maintain, and cause each other Loan Party to maintain, its Intellectual Property in accordance with the provisions of the Collateral
Documents.

 

(b)           Maintain,
and cause each other Loan Party and each of its Subsidiaries to maintain, with responsible insurance companies, such insurance
coverage as shall be required by Applicable Laws, and such other insurance, to such extent and against such hazards and liabilities,
as is customarily maintained by companies similarly situated; provided that in any event, such insurance shall insure against
all risks and liabilities of the type insured against as of the Closing Date and shall have insured amounts no less than, and
deductibles no higher than, those amounts provided for as of the Closing Date. Upon request of the Agent or the Lender and to
the extent not previously delivered to the Agent or Lender, the Borrower shall furnish to the Agent or such Lender a certificate
setting forth in reasonable detail the nature and extent of all insurance maintained by the Borrower and each other Loan Party;
provided, however, that except during the continuance of an Event of Default, such certificate shall not be requested
more than once during a calendar year. Holdings and the Borrower shall cause each issuer of an insurance policy to provide the
Agent with an endorsement (i) showing the Agent as a lenders’ loss payee with respect to each policy of property or casualty
insurance and naming the Agent as an additional insured with respect to each policy of liability insurance, (ii) providing that
30 days’ notice will be given to the Agent prior to any cancellation of such policy and (iii) reasonably acceptable in all
other respects to the Agent.

 

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(c)           Unless
the Borrower provides the Agent with evidence of the continuing insurance coverage required by this Agreement, the Agent may purchase
insurance (to the extent of such insurance coverage as shall be required by clause (b) above) at the Borrower’s expense
to protect the Agent’s and the Lender’s interests in the Collateral. This insurance may, but need not, protect the
Borrower’s and each other Loan Party’s interests. The coverage that the Agent purchases may, but need not, pay any
claim that is made against the Borrower or any other Loan Party in connection with the Collateral. The Borrower may later cancel
any insurance purchased by the Agent, but only after providing the Agent with evidence that the Borrower has obtained the insurance
coverage required by this Agreement. If the Agent purchases insurance for the Collateral, as set forth above, the Borrower will
be responsible for the costs of that insurance, including interest and any other charges that may be imposed with the placement
of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of such insurance may
be added to the principal amount of either Loan owing hereunder as determined by the Agent in its sole discretion.

 

(d)           To,
and to cause each Loan Party and each of its Subsidiaries to: (i) use commercially reasonable efforts to protect, defend and maintain
the validity and enforceability of its Intellectual Property that is material to its business; (ii) promptly advise the Agent
in writing of material infringement of which it is aware by a third party of its Intellectual Property; and (iii) not allow any
Intellectual Property material to its business to be abandoned, forfeited or dedicated to the public without the Agent’s
prior written consent.

 

6.4           Compliance
with Laws and Contractual Obligations; Payment of Taxes and Liabilities. (a) Comply, and cause each other Loan Party and each
of its Subsidiaries to comply, with all Applicable Laws   and all indentures, agreements and other instruments
binding upon it or its property, except where failure to comply could not reasonably be expected to have a Material Adverse Effect;
(b) without limiting clause (a) above, ensure, and cause each other Loan Party and each of its Subsidiaries to ensure,
that no Person who owns a controlling interest in or otherwise controls a Loan Party or one of its Subsidiaries is or shall be
(i) listed on the Specially Designated Nationals and Blocked Person List maintained by OFAC, the United States Department of the
Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, executive order or regulation
or (ii) a Person designated under Section 1(b), (c) or (d) of Executive Order 13224, any related enabling legislation or any other
similar executive orders; (c) without limiting clause (a) above, comply and cause each other Loan Party and each of its
Subsidiaries to comply, with all applicable Bank Secrecy Act and anti-money laundering laws and regulations; and (d) timely prepare
and file all Tax Returns required to be filed by Applicable Law and pay, and cause each other Loan Party and each of its Subsidiaries
to pay, prior to delinquency, all Taxes against it or any of its property, as well as claims of any kind which, if unpaid, could
become a Lien on any of its property; provided that the foregoing shall not require the Borrower, any other Loan Party or any
of their Subsidiaries to pay any such Tax or charge so long as it shall promptly contest the validity thereof in good faith by
appropriate proceedings and shall set aside on its books adequate reserves with respect thereto in accordance with GAAP.

 

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6.5           Maintenance
of Existence. Maintain and preserve, and (subject to Section 7.4) cause each other Loan Party and each of its Subsidiaries
to maintain and preserve, (a) its existence and good standing (as applicable) in the jurisdiction of its organization and (b)
its qualification to do business and good standing (as applicable) in each jurisdiction where the nature of its business makes
such qualification necessary, except, in each case, as not prohibited hereunder and as would not reasonably be expected to have
Material Adverse Effect.

 

6.6           Environmental
Matters. If any release or disposal of Hazardous Substances shall occur or shall have occurred on or from any real property
of any Loan Party or any of its Subsidiaries, cause, or direct the applicable Loan Party or Subsidiary to cause, the prompt containment
and removal of such Hazardous Substances and the remediation of such real property as is necessary to comply with all Environmental
Laws except as would not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing,
Holdings and the Borrower shall, and shall cause each other Loan Party and Subsidiary to, comply with each Applicable Law and
judicial or administrative order requiring the performance at any real property by any Loan Party or any of its Subsidiaries of
activities in response to the release or threatened release of a Hazardous Substance. If any violation of any Environmental Law
shall occur or shall have occurred at any real property or any other assets of any Loan Party or any of its Subsidiaries or otherwise
in connection with their operations, cause, or direct the applicable Loan Party or Subsidiary to cause, the prompt correction
of such violation.

 

6.7           Further
Assurances.

 

(a)           Further
Assurances. Promptly upon request by the Agent, take, and cause each other Loan Party and each of its Subsidiaries to take,
such additional actions as the Agent may reasonably require from time to time in order (i) to subject to the Liens created by
any of the Collateral Documents any of the properties, rights or interests, whether now owned or hereafter acquired, covered or
intended to be covered by any of the Collateral Documents, (ii) to perfect and maintain the validity, effectiveness and priority
of any of the Collateral Documents and the Liens intended to be created thereby, and (iii) to assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Agent and the Lender the rights granted or now or hereafter intended to be granted to the
Agent and the Lender under any Loan Document.

 

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(b)           Additional
Subsidiaries. Without limiting the generality of the foregoing and except as otherwise approved in writing by the Lender,
cause, and cause each of the Loan Parties to cause, each of their Subsidiaries (including any such Subsidiary formed or acquired
after the Closing Date) other than CFCs to the extent a guaranty of the Obligation by such CFCs could reasonably be expected to
result in a material adverse tax consequence for Holdings or the Borrower under Section 956 of the IRC, to guaranty the Obligations
and cause each such Subsidiary to grant to the Agent, for the benefit of the Agent and the Lender, a security interest in, subject
to the limitations set forth herein or set forth in the Guarantee and Collateral Agreement, all of such Subsidiary’s property
to secure such guaranty, in each case pursuant to the execution and delivery of a joinder to the Guarantee and Collateral Agreement
and such other documents as may be reasonably requested, each in form and substance reasonably satisfactory to the Agent. Furthermore
and except as otherwise approved in writing by the Lender, Holdings and the Borrower shall, and shall cause each of its Subsidiaries
(including, any such Subsidiary formed or acquired after the Closing Date) to, pledge (i) all of the Capital Stock of each of
its Subsidiaries that are not CFCs and (ii)(A) all of the nonvoting Capital Stock of each of its Subsidiaries that are CFCs, and
(B) 65% of the voting Capital Stock of each of its Subsidiaries that are CFCs if the pledge of a greater percentage of such voting
Capital Stock could reasonably be expected to result in a material adverse tax consequence for Holdings or the Borrower under
Section 956 of the IRC (and 100% of such voting Capital Stock if no such material adverse tax consequence could reasonably be
expected), to the Agent, for the benefit of the Lender, to secure the Obligations, in each case pursuant to documents in form
and substance reasonably satisfactory to the Agent. In connection with each pledge of Capital Stock that is certificated, as promptly
as practicable, Holdings, the Borrower and each other Loan Party shall deliver, or cause to be delivered, to the Agent, irrevocable
proxies and stock powers and/or assignments, as applicable, duly executed in blank, in each case pursuant to documents in form
and substance satisfactory to the Agent.

 

(c)           Collateral
Access Agreements. The Borrower and each other Loan Party shall be under an ongoing obligation to obtain a Collateral Access
Agreement from the lessor of each leased property and bailee in possession of any Collateral with a book value in excess of $100,000
with respect to each location in the United States where any Collateral is stored or located (other than hospital or acute care
sites on which CareView Systems are installed), which Collateral Access Agreement shall be in form and substance reasonably satisfactory
to the Agent.

 

(d)           Intellectual
Property. Without limiting the requirements of the Collateral Documents, in the event that any Loan Party shall acquire, develop,
or otherwise obtain, register or seek to register any Patent, Copyright, Trademark, or other Intellectual Property with any United
States Governmental Authority, or obtain, register or seek to register any application for, or license in respect of, any of the
foregoing, Holdings and the Borrower shall notify the Agent, in the case of an application to register a Copyright, within five
(5) Business Days thereof, and in the case of any other application seeking to register or apply for Intellectual Property, on
a quarterly basis concurrently with the delivery of the reports required under Section 6.1.2, and shall promptly thereafter
execute and deliver to the Agent, for the benefit of the Lender, such Intellectual Property security agreements, other Collateral
Documents or other documents as the Agent may request in order to secure and perfect the security interest in respect of such
Intellectual Property (it being understood that this sentence only applies to registered Intellectual Property).

 

    	46

    	 

    

 

(e)           Registered
Intellectual Property. Holdings and Borrower shall (i) take any and all actions, and prepare, execute, deliver and file any
and all agreements, documents and instruments, that are reasonably necessary or desirable to preserve and maintain the Registered
Intellectual Property (including Borrower’s rights as an exclusive licensee under the Intelliview License Agreement), including
payment of applicable maintenance fees or annuities, and (ii) prosecute any corrections, substitutions, reissues, reviews and
reexaminations of Patents included in the Registered Intellectual Property.

 

6.8           Conference
Calls. After delivery of the financial statements pursuant to Sections 6.1.1 and 6.1.2, at the request of the
Agent, cause the chief financial officer of Holdings to participate in conference calls with the Agent and the Lender to discuss,
among other things, the financial condition of the Loan Parties and any financial or earnings reports.

 

6.9           Tranche
One Milestone Notice. As promptly as practicable and in any event within three (3) Business Days after the satisfaction of
the Tranche One Milestone, Holdings and the Borrower shall deliver to Agent the Tranche One Milestone Notice.

 

6.10         Tranche
Two Milestone Notice. As promptly as practicable and in any event within three (3) Business Days after the satisfaction of
the Tranche Two Milestone, Holdings and the Borrower shall deliver to Agent the Tranche Two Milestone Notice.

 

6.11         Post-Closing
Obligations.

 

(a)           Insurance.
Within 15 days after the Closing Date, Holdings shall deliver endorsements naming the Agent as lenders’ loss payee and/or
additional insured, as applicable, in form and substance reasonably acceptable to the Agent for the insurance policies required
by Section 6.3(b).

 

(b)           Collateral
Access Agreement. Holdings shall use commercially reasonable efforts to deliver within 30 days of the request by the Agent
therefor a Collateral Access Agreement from the lessor of each leased property and bailee in possession of any Collateral with
a book value in excess of $100,000 with respect to each location in the United States where any Collateral is stored or located
(other than hospital or acute care sites on which CareView Systems are installed), which Collateral Access Agreement shall be
in form and substance reasonably satisfactory to the Agent as required by Section 6.7(c). The Agent hereby requests the
delivery of a Collateral Access Agreement for the premises leased by the Borrower and located at 405 State Highway 121, Suite
B-240, Lewisville, TX 75067.

 

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Section 7.              Negative
    Covenants. Until
the Obligations are Paid in Full, each of Holdings and the Borrower agrees that, unless at any time the Agent, on behalf of the
Lender, shall otherwise expressly consent in writing (such consent to be withheld in the Lender’s sole discretion), it will:

 

7.1           Debt.
Not, and not suffer or permit any Loan Party or any other Subsidiary, to, create, incur, assume or suffer to exist any Debt, except:

 

(a)           Obligations
under this Agreement and the other Loan Documents;

 

(b)           Debt
in respect of Capital Leases and purchase money Debt, in each case incurred in the ordinary course of business for the purpose
of financing all or any part of the cost of acquiring, repair, construction or improvement of fixed or capital assets; provided
that the aggregate principal amount of all such Debt at any time outstanding shall not exceed $1,000,000;

 

(c)           (i)
Debt of the Borrower to any Loan Party that is a Wholly-Owned Subsidiary or Debt of any Loan Party that is a Wholly-Owned Subsidiary
to the Borrower or another Loan Party that is a Wholly-Owned Subsidiary; provided that all such Debt in this clause
(i) shall be evidenced by a global intercompany demand note in form and substance satisfactory to the Agent and pledged and
delivered to the Agent pursuant to the applicable Collateral Document as additional collateral security for the Obligations, and
the obligations under such demand note shall be subordinated to the Obligations hereunder in a manner satisfactory to the Agent;
(ii) Debt of a Loan Party to a non-Loan Party permitted by Section 7.10(a)(ii); and (iii) Debt of any Wholly-Owned Subsidiary
that is not a Loan Party to another Wholly-Owned Subsidiary that is not a Loan Party;

 

(d)           Debt
existing as of the Closing Date and described in Section 7.1 of the Disclosure Letter (other than the HealthCor Obligations),
and any Permitted Refinancing thereof;

 

(e)           Contingent
Obligations arising with respect to customary indemnification obligations in favor of purchasers in connection with dispositions
permitted under Section 7.4;

 

(f)           HealthCor
Obligations in an aggregate principal amount not to exceed the aggregate principal amount of the HealthCor Notes outstanding as
of the Closing Date, plus accrued interest thereon that is paid-in-kind and added to the principal balance thereof in accordance
with the terms of the HealthCor Debt Documents, and any Permitted Refinancing thereof so long as concurrently with the closing
of any such Permitted Refinancing the lenders or investors (or any agent with the power to enter into a binding obligation on
behalf of such lenders or investors) in respect of such Permitted Refinancing enter into an intercreditor agreement satisfactory
in form and substance to the Agent;

 

(g)           Debt
incurred in connection with the financing of insurance premiums in the ordinary course of business;

 

(h)           Debt
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business, provided that such Debt is extinguished within two (2) Business Days of notice to Holdings,
the Borrower or the relevant Subsidiary of its incurrence;

 

    	48

    	 

    

 

(i)           guaranties
by the Borrower of the Debt of any Loan Party that is a Wholly-Owned Subsidiary or guaranties by any Subsidiary of the Debt of
the Borrower in each case so long as such Debt is otherwise permitted under Section 7.1(a) or (b);

 

(j)           reimbursement
obligations under corporate credit cards not to exceed $750,000 in the aggregate at any time; and

 

(k)           other
unsecured Debt in an amount not to exceed $250,000 in the aggregate at any time outstanding.

 

7.2           Liens.
Not, and not suffer or permit any Loan Party or any other Subsidiary to, create or permit to exist any Lien on any of its real
or personal properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired), except:

 

(a)           Liens
arising under the Loan Documents;

 

(b)           Liens
for Taxes or other governmental charges not at the time delinquent or thereafter payable without penalty, or being diligently
contested in good faith by appropriate proceedings and for which it maintains adequate reserves in accordance with GAAP and the
execution or other enforcement of which is effectively stayed;

 

(c)           (i)
Liens of carriers, warehousemen, mechanics, customs brokers, landlords and materialmen and other similar Liens imposed by law
and (ii) Liens consisting of pledges or deposits incurred in connection with worker’s compensation, unemployment compensation
and other types of social security (excluding Liens arising under ERISA) or in connection with surety bonds, bids, performance
bonds and similar obligations for sums not overdue or being diligently contested in good faith by appropriate proceedings and
not involving any deposits or advances or borrowed money or the deferred purchase price of property or services and, in each case,
for which it maintains adequate reserves in accordance with GAAP;

 

(d)           Liens
existing as of the Closing Date and described in Section 7.2 of the Disclosure Letter (other than Liens securing the HealthCor
Obligations);

 

(e)           Liens
securing Debt permitted by Section 7.1(b); provided, however, that any such Lien (i) attaches only to the property
being leased or financed and any accessions thereto and proceeds thereof and (ii) attaches to such property within 30 days of
the acquisition thereof and attaches solely to the property so acquired and any accessions thereto and proceeds thereof;

 

(f)           Liens
securing the HealthCor Obligations permitted by Section 7.1(f), provided that such Liens are subject to the terms
of the Intercreditor Agreement, and Liens securing any Permitted Refinancing of the HealthCor Obligations so long as such Permitted
Refinancing is incurred in compliance with Section 7.1(f);

 

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(g)           attachments,
appeal bonds, judgments and other similar Liens in connection with judgments the existence of which do not constitute an Event
of Default;

 

(h)           easements,
encroachments, rights of way, leases, subleases, restrictions, minor defects or irregularities in title and other similar Liens
not interfering in any material respect with the ordinary conduct of the business of Holdings, the Borrower or any Subsidiary;

 

(i)           any
interest or title of a lessor or sublessor under any lease (other than a Capital Lease) or of a licensor or sublicensor under
any license, in each case permitted by this Agreement;

 

(j)           leases,
licenses, subleases or sublicenses granted to third parties in the ordinary course of business which do not interfere in any material
respect with, or materially detract from the value of, the business of Holdings and its Subsidiaries, taken as a whole, as determined
by the Borrower in its good faith business judgment;

 

(k)           Liens
arising from precautionary uniform commercial code financing statements filed under any lease (other than a Capital Lease) permitted
by this Agreement;

 

(l)           bankers’
liens, rights of setoff and Liens in favor of financial institutions incurred in the ordinary course of business arising in connection
with deposit accounts or securities accounts held at such institutions solely to secure payment of fees and similar costs and
expenses;

 

(m)           Liens
consisting of pledged cash securing Debt permitted by Section 7.1(j); and

 

(n)           the
replacement, extension or renewal of any Lien permitted by clause (d) above upon or in the same property subject thereto
arising out of the Permitted Refinancing of the Debt secured thereby.

 

7.3           Restricted
Payments. Not, and not suffer or permit any Loan Party or any other Subsidiary to, (i) declare or make any dividend payment
or other distribution of assets, properties, cash, rights, obligations or securities on account of any Capital Stock or Stock
Equivalent, (ii) purchase, redeem or otherwise acquire for value any Capital Stock now or hereafter outstanding (including the
Capital Stock that comprises any Investment in a joint venture in which a Subsidiary is a stockholder or partner) or (iii) make
any payment or prepayment of principal of, premium, if any, interest, fees, redemption, exchange, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, Debt that is subordinated by its terms to the payment of the Obligations (the
items described in clauses (i), (ii) and (iii) above are referred to as “Restricted Payments”),
except:

 

(a)           any
Subsidiary may declare and pay dividends to, repay intercompany debt owed to, and make internal profit-sharing payments to, (i)
the Borrower, (ii) any other Loan Party that is a Wholly-Owned Subsidiary or (iii) so long as such Subsidiary is not a Loan Party,
any other Subsidiary that is not a Loan Party;

 

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(b)           any
Loan Party may purchase, redeem or acquire for value any Capital Stock or Stock Equivalents issued by any Loan Party that is a
Wholly-Owned Subsidiary;

 

(c)           each
Loan Party may declare and make dividend payments or other distributions payable solely in the common stock or other common equity
interests of such Loan Party;

 

(d)           Holdings
may make cash payments in lieu of the issuance of fractional shares upon conversion or in connection with the exercise of warrants
or similar securities;

 

(e)           Holdings
may make repurchases of Capital Stock from any present or former employee, director, officer or consultant (or the assigns, estate,
heirs or current or former spouses thereof) upon the death, disability or termination of employment of such employee, director,
officer or consultant, pursuant to a stock repurchase program approved by the Board of Directors of Holdings, provided
that such repurchases do not exceed $1,000,000 in the aggregate during the term of this Agreement;

 

(f)           the
Borrower may make Restricted Payments to Holdings to the extent necessary to permit Holdings to pay general administrative costs
and expenses (which may include out-of-pocket legal, accounting and filing costs, other reasonable and customary corporate overhead
expenses incurred in the ordinary course of business and customary transaction-based fees and expenses of third-party investment
bankers and advisers for services rendered to Holdings relating to Holdings and its Subsidiaries), so long as Holdings applies
the amount of any such Restricted Payment for such purpose within 90 days of receipt;

 

(g)           the
Borrower may make Restricted Payments to Holdings to the extent necessary to permit Holdings to discharge the consolidated, combined
or similar tax liabilities of Holdings and its Subsidiaries or other fees necessary to maintain the legal existence of Holdings,
in each case so long as Holdings applies the amount of any such Restricted Payment for such purpose;

 

(h)           payments
in respect of the HealthCor Obligations permitted by the terms of the Intercreditor Agreement, and any dividend by the Borrower
to Holdings in order to permit Holdings to make such payments; and

 

(i)            the
conversion of the HealthCor Debt Obligations into, or the exchange of the HealthCor Debt Obligations for, Capital Stock of Holdings
other than Disqualified Capital Stock, together with cash in lieu of fractional shares of such Capital Stock in an amount not
to exceed $50,000.

 

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For
the avoidance of doubt, Investments permitted by Section 7.10 shall not constitute Restricted Payments.

 

7.4           Mergers;
Consolidations; Asset Sales.

 

(a)           Not,
and not suffer or permit any Loan Party or any other Subsidiary to, be a party to any merger, consolidation or amalgamation, except
for any such merger or consolidation (i) of any Subsidiary into (A) the Borrower (so long as the Borrower survives such merger),
(B) any Loan Party that is a Wholly-Owned Subsidiary (so long as such Loan Party that is a Wholly-Owned Subsidiary survives such
merger), or (C) so long as such Subsidiary is not a Loan Party, any Wholly-Owned Subsidiary that is not a Loan Party, or (ii)
in which the Obligations shall be Paid in Full prior to or concurrently with the consummation of such transaction.

 

(b)           Not,
and not suffer or permit any Loan Party or any other Subsidiary to, sell, transfer, dispose of, convey, lease or license any of
its assets (including Intellectual Property) or the Capital Stock of any Loan Party or any other Subsidiary, or sell or assign
with or without recourse any receivables (any such transaction, a “Disposition”), except:

 

(i)           Dispositions
of inventory, worn-out or surplus equipment, all in the ordinary course of business;

 

(ii)          the
abandonment or other Disposition of Intellectual Property that is no longer useful or material to the conduct of the business
of any Loan Party as determined by such Loan Party in its reasonable business judgment;

 

(iii)         Dispositions
of cash and Cash Equivalent Investments;

 

(iv)         non-exclusive
licenses, sublicenses, leases or subleases (including any non-exclusive license or sublicense of Intellectual Property) granted
to third parties in the ordinary course of business not interfering with the business of the Loan Parties in any material respect,
as determined by the Borrower in its reasonable business judgement;

 

(v)          the
granting of Liens permitted under Section 7.2, Restricted Payments permitted by Section 7.3, transactions permitted
by Section 7.4(a) and Investments permitted by Section 7.10;

 

(vi)         Dispositions
as a result of any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of any Loan Party; provided that the proceeds thereof are promptly applied to replace such
assets;

 

(vii)        other
Dispositions not to exceed $100,000 per year;

 

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(viii)       Dispositions
among the Loan Parties; and

 

(ix)          Dispositions
in which the Obligations shall be Paid in Full prior to or concurrently with the consummation of such transaction.

 

7.5           Modification
of Organizational Documents; HealthCor Debt Documents. Not (a) waive, amend or modify, and not suffer or permit any waiver,
amendment or modification of, any term of the charter, limited liability company agreement, partnership agreement, articles of
incorporation, by-laws or other organizational documents of Holdings, the Borrower or any other Loan Party or any Subsidiary,
in each case except for those amendments and modifications that do not materially adversely affect the interests of the Agent
or the Lender under the Loan Documents or in the Collateral (it being understood and agreed that any adverse impact on the effectiveness
or validity of any Collateral Document or the Liens granted to the Agent thereunder shall each be deemed to materially adversely
affect such interests of the Agent and the Lender) or (b) amend, or permit to be amended, the terms of the limited liability company
operating agreement of CareView Operations, L.L.C., a Texas limited liability company and a Wholly-Owned Subsidiary of Borrower,
to provide that the limited liability company interests of such issuer shall be treated as securities governed by Chapter 8 of
the Uniform Commercial Code as in effect from time to time in the State of Texas.

 

Notwithstanding
the foregoing, each Loan Party may change its name, provided that such Loan Party (i) gives at least ten (10) days’
prior written notice to the Agent and (ii) concurrently with the effectiveness of such name change, delivers to the Agent for
filing properly completed Uniform Commercial Code financing statements reflecting the new name and any other filings and documents
required by law or the Loan Documents to provide the Agent with a continuing, perfected first priority Liens (subject only to
Permitted Liens) in the Collateral owned by such Loan Party. Holdings and the Borrower shall not, and shall not permit any Loan
Party or any other Subsidiary to, amend, modify or otherwise change the terms of the HealthCor Debt Documents in a manner prohibited
by the terms of the Intercreditor Agreement.

 

7.6           Use
of Proceeds. Not use the proceeds of the Loan for any purposes other than solely as expressly provided in Section 2.1.2.

 

7.7           Transactions
with Affiliates. Not, and not suffer or permit any Loan Party or any other Subsidiary to, enter into any transaction or arrangement
with any Affiliate of the Borrower, of any such Loan Party or of any such Subsidiary, except:

 

(a)           Restricted
Payments permitted by Section 7.3, intercompany loans among Loan Parties permitted by Section 7.1(c), transactions
permitted by Section 7.4(a) and Investments permitted by Section 7.10(a) and (b);

 

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(b)           transactions
that are consummated on arm’s-length terms, approved by the Board of Directors of Holdings;

 

(c)           payment
of compensation and benefits (including customary indemnities) to officers, directors and employees of the Loan Parties or a Subsidiary
for actual services rendered to the Loan Parties or such Subsidiary in the ordinary course of business; and

 

(d)           Investments
permitted pursuant to Section 7.10(h) and (i).

 

7.8           Inconsistent
Agreements. Not, and not suffer or permit any other Loan Party or any other Subsidiary to, enter into any agreement containing
any provision which would (i) prohibit the Borrower or any other Loan Party from granting to the Agent and the Lender a Lien on
any of its assets that constitute Collateral or prohibit any other Subsidiary from granting to the Agent and the Lender a Lien
on any of its assets or (ii) other than pursuant to the Loan Documents, create or permit to exist or become effective any encumbrance
or restriction on the ability of any other Subsidiary to (x) pay dividends or make other distributions to the Borrower or any
Wholly-Owned Subsidiary, or pay any Debt owed to the Borrower or any Wholly-Owned Subsidiary, (y) make loans or advances to the
Borrower or any Wholly-Owned Subsidiary or (z) transfer any of its assets or properties to the Borrower or any Wholly-Owned Subsidiary,
except, in each case above: (a) negative pledges and restrictions on Liens in favor of any holder of Debt under agreements permitted
under Section 7.1(b), (d), and (j) but solely to the extent any negative pledge or limitation on Liens relates
to the property that is the subject of such Debt or applicable agreement or the cash securing such obligations and the proceeds
and products thereof, (b) customary restrictions on leases, subleases, licenses or asset sale agreements otherwise permitted hereby
so long as such restrictions relate to the assets subject thereto, (c) customary provisions restricting assignment of any agreement
entered into in the ordinary course of business, (d) prohibitions and limitations that exist pursuant to Applicable Law and (e)
the prohibitions and limitations set forth in the HealthCor Debt Documents as in existence on the Closing Date or as may be amended
pursuant to the terms hereof and of the Intercreditor Agreement.

 

7.9           Business
Activities. Not, and not suffer or permit any Loan Party to, engage in any line of business other than the businesses described
in Holdings’ Form 10-K filed with the SEC via the EDGAR System on March 31, 2015 engaged in on the Closing Date and businesses
reasonably related thereto.

 

7.10         Investments.
Not, and not suffer or permit any Loan Party or any other Subsidiary to, make or permit to exist, any Investment in any other
Person, except the following:

 

(a)           Investments
(i) between or among the Borrower and the Loan Parties that are Wholly-Owned Subsidiaries; (ii) by Subsidiaries that are not Loan
Parties in Loan Parties; provided that such Investments permitted by this clause (ii) shall be limited to unsecured
Debt subordinated in right of payment to the payment in full of the Obligations pursuant to the terms of a subordination agreement
acceptable to Agent; (iii) by Subsidiaries that are not Loan Parties in Subsidiaries that are not Loan Parties; and (iv) by Holdings
in the Borrower

 

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(b)           Investments
constituting Debt permitted by Section 7.1(c);

 

(c)           Contingent
Obligations constituting Debt permitted by Section 7.1;

 

(d)           Cash
and Cash Equivalent Investments;

 

(e)           Investments
existing as of the Closing Date and set forth in Section 7.10 of the Disclosure Letter;

 

(f)           extensions
of trade credit in the ordinary course of business;

 

(g)           notes
payable, or stock or other securities issued by an account debtor pursuant to settlement in the ordinary course of business of
such account debtor’s accounts receivable owing to Holdings or its Subsidiaries;

 

(h)           Investments
consisting of non-cash loans to employees, officers, directors or consultants for the purpose of purchasing Capital Stock of Holdings
so long as the proceeds of such loans are used entirely to pay the purchase price of such Capital Stock;

 

(i)            Investments
consisting of loans or advances to employees, officers and directors of a Loan Party for reasonable travel and entertainment expenses
and reasonable relocation costs and expenses and other ordinary business purposes; provided, however, that the aggregate
outstanding principal amount of all loans permitted pursuant to this clause (i) shall not exceed $250,000 at any time;
and

 

(j)            other
Investments in an aggregate amount not to exceed $250,000 at any time outstanding.

 

7.11         Fiscal
Year. Not, and not suffer or permit any other Loan Party to, change its Fiscal Year without the prior written consent of the
Agent.

 

7.12         Deposit
Accounts and Securities Accounts. Not, and not suffer or permit any Loan Party to, maintain or establish any deposit account
or securities account other than the deposit accounts and securities accounts set forth in Section 7.12 of the Disclosure
Letter without prior written notice to the Agent and unless the Agent, the Borrower or such other applicable Loan Party and the
bank or securities intermediary at which such deposit account or securities account, as applicable, is to be opened or maintained
enter into a Control Agreement regarding such deposit account or securities account, as applicable, on terms reasonably satisfactory
to the Agent.

 

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7.13           Sale-Leasebacks.
Not, and not suffer or permit any Loan Party or any other Subsidiary to, engage in a sale leaseback, synthetic lease or similar
transaction involving any of its assets.

 

7.14           Hazardous
Substances. Not, and not suffer or permit any other Loan Party or any of its Subsidiaries to, cause or suffer to exist any
release of any Hazardous Substances at, to or from any real property owned, leased, subleased or otherwise operated or occupied
by any Loan Party or any of its Subsidiaries that would violate any Environmental Law, form the basis for any Environmental Claims
or otherwise adversely affect the value or marketability of any real property (whether or not owned by any Loan Party), other
than such violations, Environmental Claims and effects that would not, in the aggregate, be reasonably be expected to have a Material
Adverse Effect. Notwithstanding the foregoing, under no circumstances will any Loan Party cause or suffer to exist any disposal
of any Hazardous Substances at, on, under or in any real property owned, leased, subleased, or otherwise operated or occupied
by any Loan Party.

 

7.15           ERISA
Liability. Not suffer or permit any liability under ERISA and the sponsorship of any “pension plan” or any liability
subject to Title IV of ERISA.

 

7.16           Liquidity.
Not suffer or permit Liquidity to be less than $3,250,000 at any time.

 

7.17           Permitted
Activities of Holdings. Holdings shall not engage in any business, operations or activity, or hold any property, other than
(i) holding Capital Stock of the Borrower, CareView Operations, L.L.C., a Texas limited liability company, CareView Hillcrest
JV, and CareView Saline JV, (ii) issuing, selling and converting its own Capital Stock, (iii) paying taxes (and participating
in tax, accounting and other administrative matters as a member of a consolidated group), (iv) holding directors’ and shareholders’
meetings, preparing corporate and similar records and other activities required to maintain its separate corporate or other legal
structure, (v) preparing reports to, and preparing and making notices to and filings with, the SEC, other Governmental Authorities
and its stockholders, (vi) receiving, and holding proceeds of, Restricted Payments from the Borrower, and making Restricted Payments,
each to the extent permitted by Section 7.3, (vii) the performance of its obligations with respect to the Loan Documents
and the HealthCor Debt Documents, (viii) providing indemnification to its officers and directors, (ix) the making of Investments
in the Borrower, (x) opening deposit accounts and security accounts permitted by Section 7.12; (xi) ownership of Intellectual
Property and (xii) any activities incidental or related to the businesses, operations or activities described in clauses (i)
through (xi); provided, that in no event shall Holdings create or acquire any Subsidiary (other than Borrower)
that is not also a Subsidiary of Borrower.

 

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	Section 8.	Events
    of Default; Remedies.

 

8.1          Events
of Default. Each of the following shall constitute an Event of Default under this Agreement:

 

8.1.1       Non-Payment
of Credit Agreement. (a) Any default in the payment when due of the principal of any Loan, or (b) any default not cured within
three (3) Business Days in the payment when due of any interest, fee, or other amount payable hereunder, including any payment
in respect of any amount due under any other Loan Document, shall occur.

 

8.1.2       No
Default Under Other Debt; Material Contracts.

 

(a)           Any
default shall occur under the terms applicable to any Debt (other than the Obligations and the HealthCor Obligations) of any Loan
Party or any of its Subsidiaries having an aggregate principal amount (for all such Debt so affected and including undrawn committed
or available amounts and amounts owing to all creditors under any combined or syndicated credit arrangement) exceeding $500,000
and such default shall result in the acceleration of the maturity of such Debt or permit the holder or holders thereof, or any
trustee or agent for such holder or holders, to cause such Debt to become due and payable (or require the Borrower, any other
Loan Party or any of their Subsidiaries to purchase or redeem such Debt or post cash collateral in respect thereof) prior to its
scheduled maturity.

 

(b)           Any
“Event of Default” (as defined in any of the HealthCor Debt Documents) by any Loan Party shall occur in respect of
the HealthCor Obligations.

 

(c)           Any
breach or non-performance of, or any default under, any material agreement, indenture, instrument or other document of any Loan
Party or any of its Subsidiaries shall have occurred.

 

8.1.3       Bankruptcy;
Insolvency. (i) Any Loan Party or any of its Subsidiaries becomes insolvent or generally fails to pay, or admits in writing
its inability or refusal to pay, debts as they become due; (ii) any Loan Party or any of its Subsidiaries commences any case,
proceeding or other action (x) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (y) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its assets; or (iii) there shall be commenced against any
Loan Party or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (ii) above
that (x) results in the entry of an order for relief or any such adjudication or appointment or (y) remains undismissed or undischarged
for a period of 60 days; (iv) there shall be commenced against any Loan Party or any of its Subsidiaries any case, proceeding
or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial
part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; (v) any Loan Party shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (ii), (iii)
or (iv) above; or (vi) any Loan Party or any of its Subsidiaries shall make a general assignment for the benefit of its
creditors.

 

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8.1.4       Non-Compliance
with Loan Documents. (a) Failure by Holdings or the Borrower to comply with or to perform any covenant set forth in Sections
6.1, 6.5, 6.8, 6.9, 6.10 and 7; or (b) failure by any Loan Party to comply with or to perform
any other provision of this Agreement or any other Loan Document applicable to it (and not constituting an Event of Default under
any other provision of this Section 8), and continuance of such failure described in this clause (b) for 30 days.

 

8.1.5       Representations;
Warranties. Any representation or warranty made by or in respect of any Loan Party herein or any other Loan Document is breached
or is false or misleading in any material respect (without duplication of any materiality qualifier contained therein), or any
schedule, certificate, financial statement, report, notice or other writing furnished by or on behalf of any Loan Party to the
Agent or the Lender in connection herewith is false or misleading in any material respect on the date as of which the facts therein
set forth are stated or certified.

 

8.1.6       Judgments.

 

(a)           Final
judgment or judgments for the payment of money aggregating in excess of $500,000 shall be rendered against any Loan Party or any
of its Subsidiaries and shall not have been paid, discharged or vacated or had execution thereof stayed pending appeal within
30 days after entry or filing of such judgments, or shall not have been discharged within 30 days after the expiration of such
stay; provided, however, that any judgment which is covered by insurance or an indemnity from a credit-worthy party
shall not be included in calculating the $500,000 amount set forth above so long as Holdings provides the Agent a written statement
from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Agent) to the effect
that such judgment is covered by insurance or an indemnity and that Holdings will receive the proceeds of such insurance or indemnity
within 30 days of the issuance of such judgment; or

 

(b)           One
or more non-monetary judgments, orders or decrees shall be rendered against any one or more of the Loan Parties or any of their
respective Subsidiaries which has had or would reasonably be expected to have, either individually or in the aggregate, a Material
Adverse Effect, and there shall be any period of thirty (30) consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in effect.

 

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8.1.7        Invalidity
of Collateral Documents. Any Collateral Document shall cease to be in full force and effect; or any Loan Party shall contest
in any manner the validity, binding nature or enforceability of any Collateral Document.

 

8.1.8        Invalidity
of Subordination Provisions. Any subordination provision in any document or instrument governing Debt that is intended to
be subordinated to the Obligations or any subordination provision in any subordination agreement that relates to any such Debt,
or any subordination provision in any guaranty by any Loan Party of any such Debt, shall cease to be in full force and effect,
or any Person (including the holder of any applicable Debt) shall contest in any manner the validity, binding nature or enforceability
of any such provision.

 

8.1.9        Change
of Control. (a) A Change of Control shall occur, or (b) a “Change of Control” or other similar event shall occur,
as defined in, or under, any indenture, agreement, instrument or other documentation evidencing or otherwise relating to any Debt
in excess of $500,000.

 

8.2          Remedies.
If any Event of Default described in Section 8.1.3 shall occur, the Loans and all other Obligations shall become immediately
due and payable and all outstanding Commitments shall terminate, all without presentment, demand, protest or notice of any kind;
and, if any other Event of Default shall occur and be continuing, the Agent may, and upon the written request of the Lender shall,
declare all or any part of the Loans and other Obligations to be due and payable and/or all or any part of the Commitments then
outstanding to be terminated, whereupon the Loans and other Obligations shall become immediately due and payable (in whole or
in part, as applicable), and such Commitments shall immediately terminate (in whole or in part, as applicable), all without presentment,
demand, protest or notice of any kind. Any cash collateral delivered hereunder shall be applied by the Agent to any remaining
Obligations and any excess remaining after the Obligations shall have been Paid in Full shall be delivered to the Borrower or
as a court of competent jurisdiction may elect. Upon the declaration of the Obligations to be, or the Obligations becoming, due
and payable pursuant to this Section 8.2 such Obligations shall bear interest at the Default Rate as provided in Section
2.3.1.

 

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	Section 9.	The Agent.

 

9.1           Appointment;
Authorization. Lender hereby irrevocably appoints, designates and authorizes the Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the
Agent shall not have any duty or responsibility except those expressly set forth herein, nor shall the Agent have or be deemed
to have any fiduciary relationship with the Lender, and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Agent.

 

9.2           Delegation
of Duties. The Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees
or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall
not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects with reasonable care.

 

9.3           Limited
Liability. None of the Agent or any of its directors, officers, employees or agents shall (a) be liable for any action taken
or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except to the extent resulting from its own gross negligence or willful misconduct as determined in a final
non-appealable judgment by a court of competent jurisdiction), or (b) be responsible in any manner to the Lender for any recital,
statement, representation or warranty made by any Loan Party or Affiliate of any Loan Party, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan Document (or the creation, perfection or priority
of any Lien or security interest therein), or for any failure of any Loan Party or any other party to any Loan Document to perform
its Obligations hereunder or thereunder. The Agent shall not be under any obligation to the Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party or Affiliate of any Loan Party.

 

9.4           Successor
Agent. The Agent may resign as the Agent at any time upon 10 days’ prior notice to the Lender and the Borrower. If the
Agent resigns under this Agreement, the Lender shall, with (so long as no Event of Default has occurred and is continuing) the
consent of the Borrower (which shall not be unreasonably withheld or delayed), appoint a successor agent for the Lender. If no
successor agent is appointed prior to the effective date of the resignation of the Agent, the Agent may appoint, on behalf of
the Lender after consulting with the Lender and (so long as no Event of Default has occurred and is continuing) the Borrower,
a successor agent. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term “the Agent” shall mean such successor agent,
and the retiring Agent’s appointment, powers and duties as the Agent shall be terminated. After the Agent’s resignation
hereunder as the Agent, the provisions of this Section 9 and Sections 10.4 and 10.5 shall continue to inure
to its benefit as to any actions taken or omitted to be taken by it while it was the Agent under this Agreement. If no successor
agent has accepted appointment as the Agent by the date which is 30 days following a retiring the Agent’s notice of resignation,
the retiring Agent’s resignation shall nevertheless thereupon become effective and the Lender shall perform all of the duties
of the Agent hereunder until such time as the Lender shall appoint a successor agent as provided for above.

 

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9.5           Collateral
Matters. Lender irrevocably authorizes the Agent, at its option and in its discretion, to release any Lien granted to or held
by the Agent under any Collateral Document (i) when all Obligations have been Paid in Full; (ii) constituting property sold or
to be sold or disposed of as part of or in connection with any sale or other disposition permitted hereunder (it being agreed
and understood that the Agent may conclusively rely without further inquiry on a certificate of an officer of Holdings or the
Borrower as to the sale or other disposition of property being made in compliance with this Agreement); or (iii) subject to Section
10.1, if approved, authorized or ratified in writing by the Lender. The Agent shall have the right, in accordance with the
Collateral Documents, to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and the
Agent may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase
price, may credit bid and setoff the amount of such price against the Obligations.

 

9.6           Collateral
Agent. Lender hereby appoints PDL BioPharma, Inc. as its collateral agent under the Guarantee and Collateral Agreement and
agrees that in so acting PDL BioPharma, Inc. will have all the rights, protections, exculpations, indemnities and other benefits
provided to PDL BioPharma, Inc. under Section 9 hereof, and authorizes and directs PDL BioPharma, Inc. to take or refrain
from taking any and all action that it deems necessary or advisable in fulfilling its role as Collateral Agent under the Guarantee
and Collateral Agreement.

 

	Section 10.	Miscellaneous.

 

10.1         Waiver;
Amendments. No delay on the part of the Agent or the Lender in the exercise of any right, power or remedy shall operate as
a waiver thereof, nor shall any single or partial exercise by any of them of any right, power or remedy preclude other or further
exercise thereof, or the exercise of any other right, power or remedy. No amendment, modification or waiver of, or consent with
respect to, any provision of this Agreement, the Notes or any of the other Loan Documents (or any subordination and intercreditor
agreement or other subordination provisions relating to any other Debt) shall in any event be effective unless the same shall
be in writing and approved by the Agent and the Lender, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given. No provision of Section 9 or other
provision of this Agreement affecting the Agent in its capacity as such shall be amended, modified or waived without the consent
of the Agent.

 

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10.2           Notices.
All notices hereunder shall be in writing (including facsimile transmission) and shall be sent to the applicable party at its
address shown on Schedule 10.2 or at such other address as such party may, by written notice received by the other parties,
have designated as its address for such purpose. Notices sent by facsimile or other electronic transmission shall be deemed to
have been given when sent; notices sent to the Loan Parties by mail shall be deemed to have been given three (3) Business Days
after the date when sent by registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight courier
service shall be deemed to have been given when received.

 

10.3           Costs;
Expenses. The Borrower agrees to pay within five (5) Business Days of receipt of a reasonably detailed invoice (a) all reasonable
out-of-pocket and documented costs and expenses of the Agent and the Lender (including Legal Costs) in connection with the administration
(including perfection and protection of Collateral subsequent to the Closing Date) of this Agreement, the other Loan Documents
and all other documents provided for herein or delivered or to be delivered hereunder or in connection herewith (including any
proposed or actual amendment, supplement or waiver to any Loan Document), and (b) all out-of-pocket costs and expenses (including
Legal Costs) incurred by the Agent and the Lender in connection with the collection of the Obligations and enforcement of this
Agreement, the other Loan Documents or any such other documents. All Obligations provided for in this Section 10.3 shall
survive repayment of the Loan, cancellation of the Notes and termination of this Agreement.

 

10.4           Indemnification
by the Borrower. In consideration of the execution and delivery of this Agreement by the Agent and the Lender and the agreement
to extend the Commitments provided hereunder, the Borrower hereby agrees to indemnify, exonerate and hold the Agent, the Lender
and each of the officers, directors, employees, Affiliates, controlling persons, advisors and agents of the Agent and the Lender
(each, a “Lender Party”) free and harmless from and against any and all actions, causes of action, suits, losses,
liabilities (including, without limitation, strict liabilities), obligations, damages, penalties, judgments, fines, disbursements,
expenses and costs, including Legal Costs (collectively, the “Indemnified Liabilities”), incurred by the Lender
Parties or asserted against the Lender Party by any Person (including in connection with any action, suit or proceeding brought
by any Loan Party or any Lender Party) as a result of, or arising out of, or relating to the execution, delivery, performance,
administration or enforcement of this Agreement or any other Loan Document, the use of proceeds of the Loans, or the violation
of, noncompliance with or liability under, any Environmental Law applicable to the operations of any Loan Party, except to the
extent any such Indemnified Liabilities result from the applicable Lender Party’s own gross negligence, willful misconduct
or material breach of any Loan Document, in each case as determined by a court of competent jurisdiction in a final, non-appealable
determination. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees
to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under
Applicable Law. All Obligations provided for in this Section 10.4 shall survive repayment of the Loan, cancellation of
the Notes, any foreclosure under, or any modification, release or discharge of, any or all of the Collateral Documents and termination
of this Agreement.

 

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10.5           Marshaling;
Payments Set Aside. Neither the Agent nor the Lender shall be under any obligation to marshal any assets in favor of any Loan
Party or any other Person or against or in payment of any or all of the Obligations. To the extent that the Borrower or any other
Loan Party makes a payment or payments to the Agent or the Lender, or the Agent or the Lender enforces its Liens or exercises
its rights of set-off, and such payment or payments or the proceeds of such enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into
by the Agent or the Lender in its discretion) to be repaid to a trustee, receiver or any other party in connection with any bankruptcy,
insolvency or similar proceeding, or otherwise, then (a) to the extent of such recovery, the obligation hereunder or part thereof
originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made
or such enforcement or set-off had not occurred and (b) the Lender severally agrees to pay to the Agent upon demand its ratable
share of the total amount so recovered from or repaid by the Agent to the extent paid to such Lender.

 

10.6           Nonliability
of the Lender. The relationship between the Borrower on the one hand and the Lender and the Agent on the other hand shall
be solely that of borrower and lender. Neither the Agent nor the Lender shall have any fiduciary responsibility to the Borrower
or any other Loan Party. Neither the Agent nor the Lender undertakes any responsibility to the Borrower or any other Loan Party
to review or inform (including payment of all outstanding principal) the Borrower or any other Loan Party of any matter in connection
with any phase of the Borrower’s or any other Loan Party’s business or operations. Execution of this Agreement by
Holdings and the Borrower constitutes a full, complete and irrevocable release of any and all claims which Holdings or the Borrower
may have at law or in equity in respect of all prior discussions and understandings, oral or written, relating to the subject
matter of this Agreement and the other Loan Documents. None of Holdings, the Borrower, the Agent or the Lender shall have any
liability with respect to, and Holdings, the Borrower, the Agent and the Lender each hereby waives, releases and agrees not to
sue for, any special, indirect, punitive or consequential damages or liabilities.

 

    	63

    	 

    

 

10.7           Confidentiality.
The Agent and the Lender agree to maintain as confidential all information provided to them and designated as confidential by
any Loan Party, except that the Agent and the Lender may disclose such information (a) to Persons employed or engaged by the Agent
or the Lender or any of their Affiliates (including collateral managers of the Lender) in evaluating, approving, structuring or
administering the Loan and the Commitments; (b) to any assignee or participant or potential assignee or participant that has agreed
to comply with the covenant contained in this Section 10.7 (and any such assignee or participant or potential assignee
or participant may disclose such information to Persons employed or engaged by them as described in clause (a) above);
(c) as required or requested by any federal or state regulatory authority or examiner, or as reasonably believed by the Agent
or the Lender to be compelled by any court decree, subpoena or legal or administrative order or process; (d) as, on the advice
of the Agent’s or the Lender’s counsel, is required by law; (e) in connection with the exercise of any right or remedy
under the Loan Documents or in connection with any litigation to which the Agent or the Lender is a party; (f) to any nationally
recognized rating agency or investor of the Lender that requires access to information about the Lender’s investment portfolio
in connection with ratings issued or investment decisions with respect to the Lender; (g) that ceases to be confidential through
no fault of the Agent or the Lender (or their Affiliates or Persons employed by them); or (h) to a Person that is an investor
or prospective investor in the Agent or any of its Affiliates; provided, that, with respect to clauses (a), (b)
and (h), the Agent or the Lender may disclose such information to the extent that such Person or assignee, as applicable,
agrees to be bound by provisions substantially similar to the provisions of this Section 10.7.

 

10.8           Captions.
Captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

 

10.9           Nature
of Remedies. All Obligations of the Loan Parties and rights of the Agent and the Lender expressed herein or in any other Loan
Document shall be in addition to and not in limitation of those provided by Applicable Law. No failure to exercise and no delay
in exercising, on the part of the Agent or the Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.

 

10.10         Counterparts.
This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same
Agreement. Receipt by facsimile or electronic transmission (including PDF) of any executed signature page to this Agreement or
any other Loan Document shall constitute effective delivery of such signature page.

 

10.11         Severability.
The illegality or unenforceability of any provision of this Agreement 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 Agreement or any instrument
or agreement required hereunder.

 

    	64

    	 

    

 

10.12           Entire
Agreement. This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the
parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating
to the subject matter hereof and thereof and any prior arrangements made with respect to the payment by Holdings or the Borrower
of (or any indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of the
Agent or the Lender

 

10.13           Successors;
Assigns. This Agreement shall be binding upon the Borrower, each other Loan Party party hereto, the Lender and the Agent and
their respective successors and assigns, and shall inure to the benefit of the Borrower, each other Loan Party party hereto, the
Lender and the Agent and the successors and assigns of the Lender and the Agent. No other Person shall be a direct or indirect
legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the
other Loan Documents. The Borrower and each other Loan Party party hereto may not assign or transfer any of its rights or Obligations
under this Agreement without the prior written consent of the Agent and the Lender. The Lender may sell, transfer, or assign any
or all of its rights and obligations hereunder to any Person acceptable to the Lender pursuant to assignment documentation reasonably
acceptable to Lender and such assignee; provided, however, that so long as no Event of Default has occurred and
is continuing, the Lender shall not assign or transfer any of its rights and obligations hereunder to any Person which is a direct
competitor of Holdings or the Borrower (as reasonably determined by Agent) without Holdings’ prior written consent. Such
assignee shall be deemed automatically to have become a party hereto and, to the extent that rights and obligations hereunder
have been assigned to such assignee pursuant to such assignment documentation, shall have the rights and obligations of a Lender
hereunder. The Agent (acting solely for this purpose as the agent of the Borrower) shall maintain a register for the recordation
of the names and addresses of the Lender and its assignees and participants, and the amounts of principal and interest owing to
any of them hereunder from time to time (the “Register”). The entries in the Register shall be conclusive absent
manifest error, and Holdings, the Borrower, the Agent and the Lender and its assignees and participants shall treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement and
all references to the Lender in this Agreement shall include any such assignee of the Lender.

 

10.14           Governing
Law. THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

    	65

    	 

    

 

10.15           Forum
Selection; Consent to Jurisdiction; Service of Process. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE
OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH LOAN PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. Each Loan Party hereby appoints CT Corporation as such Loan Party’s agent where notices and demands to or upon such
Loan Party in respect of this Agreement or any other Loan Document may be served (without prejudice to the right of the Agent
or the Lender to serve process in any other manner permitted by law). If for any reason such process agent is unable to serve
as such, such Loan Party will within 30 days appoint a substitute process agent located in the State of New York and give notice
of such appointment to the Agent.

 

10.16           Waiver
of Jury Trial. EACH LOAN PARTY, THE AGENT AND THE LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING
RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY.

 

[Signature
pages follow]

 

    	66

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers
as of the date first set forth above.

 

	 	CAREVIEW COMMUNICATIONS, INC.,
	 	a
Nevada corporation,
	 	as
Holdings
	 	 
	 	 By:	 /s/ Steven
    Johnson
	 	 	 Name: Steven Johnson
 Title: President

 

	 	CAREVIEW COMMUNICATIONS, INC.,
	 	a
Texas corporation,
	 	as Borrower
	 	 
	 	 By:	 /s/ Steven
    Johnson
	 	 	 Name: Steven Johnson
 Title: President

 

[Signature Page
to CareView Communications, Inc. Credit Agreement] 

    	 

    	 

    

	 	PDL
BIOPHARMA, INC.,
	 	a
Delaware corporation,
	 	as
the Agent and the Lender
	 	 
	 	 By:	/s/
    John P. McLaughlin
	 	 	Name: John P. McLaughlin
Title: President and Chief Executive Officer

[Signature
Page to CareView Communications, Inc. Credit Agreement]

 

    	 

    	 

    

 

SCHEDULE
1.1(a)

 

Subsidiary
Guarantors

 

1.           CareView
Operations, L.L.C., a Texas limited liability company 

 

Schedule 1.1(a)

 

    	 

    	 

    

 

SCHEDULE
10.2

 

Addresses
for Notices

 

LOAN
PARTIES:

 

	  	CareView Communications, Inc., a Nevada
    corporation, as Holdings,

	  	CareView Communications, Inc., a Texas
    corporation, as the Borrower, and

	  	CareView Operations, L.L.C., as a Subsidiary
    Guarantor

 

405
State Highway 121 Bypass 

Suite
B-240 

Lewisville,
Texas 75067 

Attention:
Matthew Jackson, Esq., General Counsel 

Telephone:
(972) 943-6050 

Facsimile:
(972) 403-7659

 

with
a copy (which shall not constitute notice) to:

 

Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. 

One
Financial Center 

Boston,
MA 02111 

Attention:
Meryl Epstein, Esq.

Telephone:
(617) 348-1635 

Facsimile:
(617) 542-2241 

E-mail:
MJEpstein@mintz.com

 

LENDER
AND AGENT:

 

PDL
BioPharma, Inc., as the Lender and the Agent

 

932
Southwood Boulevard 

Incline
Village, NV 89451 

Attention:
General Counsel 

Telephone:
(775) 832-8500 

Facsimile:
(775) 832-8501

 

with
a copy (which shall not constitute notice) to:

 

Andrew
Cheng, Esq. 

Gibson
Dunn & Crutcher LLP 

333
South Grand Avenue, Los Angeles, CA 90071-3197 

Telephone:
(213) 229-7684 

Facsimile:
(213) 229-6684 

Email:
ACheng@gibsondunn.com

 

Schedule 10.2

 

    	 

    	 

    

 

EXHIBIT
B

 

EXHIBIT
A

 

Form
of Note

 

FORM
OF] 

[TRANCHE
ONE][TRANCHE TWO] TERM NOTE

	 	 	 
	$[20,000,000.00] 	 	New York, New York
	[DATE]	 	 

 

FOR
VALUE RECEIVED, the undersigned, CAREVIEW COMMUNICATIONS, INC., a Texas corporation (the “Borrower”), hereby
unconditionally promises to pay to PDL BIOPHARMA, INC., a Delaware corporation (the “Lender”), or its registered
assigns at the address specified in the Credit Agreement (as hereinafter defined; each capitalized term used and not otherwise
defined herein having the meaning assigned to it in the Credit Agreement) in lawful money of the United States and in immediately
available funds, the unpaid amount of the Obligations relating to the [Tranche One Loan][Tranche Two Loan] outstanding
under the Credit Agreement. Amounts evidenced hereby shall be paid in the amounts and on the dates specified in Section 2
of the Credit Agreement. Any principal amount of this Note prepaid or repaid may not be reborrowed. The outstanding principal
balance of this Note together with all accrued and unpaid interest thereon shall be due and payable on the [Tranche One Maturity
Date][Tranche Two Maturity Date].

 

The
holder of this Note is authorized (but not required) to endorse on the schedules annexed hereto and made a part hereof or on a
continuation thereof which shall be attached hereto and made a part hereof the date, the type and amount of the Obligations relating
to the [Tranche One Loan][Tranche Two Loan] and the date, type and amount of each payment or prepayment in respect
thereof. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure
of such holder to make any such endorsement or any error in any such endorsement shall not affect the Obligations.

 

This
Note (a) is one of the Notes referred to in the Credit Agreement dated as of June [•], 2015 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower,
CareView Communications, Inc., a Nevada corporation and the direct parent of the Borrower (“Holdings”),
the Lender, as lender and as agent, and any other entities from time to time party thereto and (b) is subject to the
provisions of the Credit Agreement. This Note is secured and guaranteed as provided in the Loan Documents. Reference is
hereby made to the Loan Documents for a description of the properties and assets in which a security interest has been
granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests
and each guarantee were granted and the rights of the holder of this Note in respect thereof. Borrower acknowledges and
agrees that Lender, as agent, may exercise all rights provided in the Loan Documents with respect to this Note.

 

Schedule 10.2

 

    	 

    	 

    

 

Upon
the occurrence and during the continuance of any one or more of the Events of Default, all Obligations under the Credit Agreement
as evidenced by this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement.

 

All
parties now and hereafter liable with respect to this Note, whether as maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and all other notices of any kind.

 

NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND
IN ACCORDANCE WITH THE CREDIT AGREEMENT.

 

THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE LAWS OF ANY OTHER JURISDICTION THAT MIGHT BE APPLIED BECAUSE OF THE CONFLICTS OF LAWS PRINCIPLES OF THE STATE OF
NEW YORK (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

	 	CAREVIEW COMMUNICATIONS, INC.,
	 	a
Texas corporation
	 	 
	 	 By:	
	 	 	Name: 
Title:

 

    	3

    	 

    

 

 

EXHIBIT
B

 

Form
of Compliance Certificate

 

[FORM
OF] 

COMPLIANCE
CERTIFICATE

 

Date:
__________________, 20_____

 

This
Compliance Certificate (this “Certificate”) is given by CAREVIEW COMMUNICATIONS, INC., a Nevada corporation
(“Holdings”) on behalf of itself and CAREVIEW COMMUNICATIONS, INC., a Texas corporation (“Borrower”),
pursuant to that certain Credit Agreement dated as of June [•], 2015 (as may be amended, restated, supplemented or otherwise
modified as of the date hereof, the “Credit Agreement”; each capitalized term used and not otherwise defined
herein having the meaning assigned to it in the Credit Agreement), by and among Holdings, Borrower and PDL BIOPHARMA, INC., as
lender (“Lender”) and as agent (“Agent”).

 

Pursuant
to Section 6.1.4 of the Credit Agreement, the undersigned hereby certifies that he or she is the duly appointed, qualified,
and acting Chief Financial Officer of Holdings, and in such capacity as an officer and not in an individual capacity, certifies
on behalf of Holdings and the Borrower to the Agent as of the date hereof as follows:

 

1.          The
financial statements delivered contemporaneously with this Certificate fairly present, in all material respects, in accordance
with GAAP consistently applied, the consolidated financial condition, results of operations and cash flows of Holdings and its
Subsidiaries as of the dates and for the periods specified by such financial statements (subject, in the case of interim financial
statements, to normal year-end audit adjustments);

 

2.          The
undersigned officer has reviewed the terms of the Credit Agreement and made, or caused to be made under such officer’s supervision,
a review in reasonable detail of the transactions and condition (financial or otherwise) of Holdings and its Subsidiaries during
the accounting period covered by such financial statements; and

 

3.          Such
review has not disclosed the existence during or at the end of such accounting period, and such officer has no knowledge of the
existence as of the date hereof, of any condition or event that constitutes a Default or an Event of Default[, except as set forth
on Schedule 1 hereto1, which includes a description of the nature and period
of existence of such Default or Event of Default and what action Holdings and the Borrower have taken, are undertaking or propose
to take with respect thereto].

 

[Signature
page follows]

 

 

	  	1	 	[Schedule 1 should be prepared and attached if a Default
    or Event of Default has occurred.]

 

    	4

    	 

    

 

EXHIBIT
B

 

IN
WITNESS WHEREOF, Holdings has caused this Certificate to be executed as of the date first above written.

 

	 	CAREVIEW COMMUNICATIONS, INC.,
	 	a Nevada corporation
	 	 
	 	 By:	
	 	 	Name: 
Title: 

 

Exhibit B

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