Document:

ex10-1.htm

    
    
         

    

    
        CareView Communications, Inc. 8-K 
    

    
         
    

    
        Exhibit 10.1
    

     

    MODIFICATION AGREEMENT

      

    THIS MODIFICATION AGREEMENT (this “
        Agreement”) is made and entered into as of February 2, 2018, to effectuate the modification pursuant to the Binding Forbearance Term Sheet (the “Binding Term Sheet
            ”) entered into as of December 28, 2017 (the “Effective Date
            ”), by and among CAREVIEW COMMUNICATIONS, INC., a Nevada corporation (“Holdings
            ”), CAREVIEW COMMUNICATIONS, INC., a Texas corporation and a wholly-owned subsidiary of Holdings (the “Borrower
            ”), CAREVIEW OPERATIONS, L.L.C., a Texas limited liability company (the “Subsidiary Guarantor
            ”), and PDL INVESTMENT HOLDINGS, LLC (as assignee of PDL BioPharma, Inc.), a Delaware limited liability company (both in its capacity as the lender (“Lender
            ”) and in its capacity as Agent (solely in such capacity as Agent, the “Agent
            ”)) under the Credit Agreement (as defined below).
        
    

    RECITALS

    A.       

    
        Reference is made to: (i) that certain Credit Agreement dated as of June 26, 2015 (as amended, supplemented or modified as of the date hereof, including pursuant to that certain First Amendment to Credit Agreement dated as of October 7, 2015, the “Credit Agreement”; capitalized terms used and not defined herein shall have the meaning set forth in the Credit Agreement), among Holdings, the Borrower, the Lender and the Agent, pursuant to which Lender agreed to make Loans to Borrower (consisting of the Tranche One Loan and the Tranche Two Loan) upon the occurrence of certain conditions and made the Tranche One Loan (by that certain Tranche One Term Note dated as of October 7, 2015) in the original aggregate principal amount of $20,000,000; and (ii) each of the documents listed on Exhibit A hereto (collectively, with this Agreement, the Credit Agreement, and each other document defined as a “Loan Document” in the Credit Agreement, the “Loan Documents”).

    B.       

    The parties entered into the Binding Term Sheet to modify certain provisions of the Credit Agreement and the other Loan Documents to prevent an Event of Default from occurring.

    C.       

    
        Pursuant to the Binding Term Sheet, the parties agreed that: (i) the Borrower would not make the principal payment due under the Credit Agreement on December 31, 2017 until the end of the Modification Period; (ii) the Borrower would not pay the principal installments due at the end of each calendar quarter during the Modification Period; and (iii) because the Borrower’s Liquidity was anticipated to fall below $3,250,000, the Liquidity required during the Modification Period would be lowered (collectively, the “Covered Events”). The Lender, the Agent, Holdings, the Borrower and the Subsidiary Guarantor wish to enter into this Agreement to set forth the terms and conditions pursuant to which the parties will address the Covered Events.

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

    AGREEMENT

    
        1.       

    
        Reaffirmation of Loan Documents
        . Each of Holdings, the Borrower and the Subsidiary Guarantor hereby acknowledges and reaffirms its respective obligations, duties, covenants and liabilities, including, without limitation, each guaranty, pledge and grant of security interest, under or in connection with the Loan Documents, including, but not limited to, the obligation to pay any and all amounts due thereunder. Each of Holdings and the Borrower hereby represents, warrants and agrees that (a) the current amount due under the Loan Documents as of February 2, 2018 is $20,240,000 and (b) as of the date hereof, there are no claims, demands, offsets or defenses at law or in equity that would defeat or diminish any present and unconditional right of the Agent to collect the indebtedness or other amounts due and owing evidenced by, or arising in connection with, the Loan Documents and to proceed to enforce the rights and remedies available to the Agent pursuant to the Loan Documents or under applicable law. 
    

    
        2.       

    
        Modification Period
        . Subject to the terms and conditions set forth herein, so long as no Modification Termination Event (as defined below) shall have occurred, each of the Agent and the Lender agrees that the occurrence and continuance of any of the Covered Events shall not constitute Events of Default from the Effective Date through the earliest to occur of any Modification Termination Event (the “Modification Period
        ”) and, for the avoidance of doubt, that the Default Rate shall not apply during the Modification Period. As used herein, “Modification Termination Event
        ” shall mean the earliest to occur of: (a) the occurrence of any Event of Default under any Loan Documents that does not constitute a Covered Event; (b) the occurrence of any Agreement Event of Default (as defined below); (c) the Lender’s delivery to Holdings and the Borrower of a Lender Termination Notice (as defined below); and (d) December 31, 2018, subject to the Lender’s right, in its sole discretion, to terminate the Modification Period on May 31, 2018 and September 30, 2018 (with each such date permitted to be extended by the Lender in its sole discretion). Notwithstanding any other provision of this Modification Agreement or any other Loan Document, all principal and interest otherwise due to Lender through the end of the Modification Agreement shall be due and payable at the end of the Modification Period and if not paid in full in Cash at that time shall bear interest at the Default Rate from and after the end of the Modification Period. 

    
    
        	 	
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        3.       
    

    
        Conditions Precedent.

    The Modification Period shall commence retroactively as of the Effective Date but upon the satisfaction of all of the following conditions precedent (the “Conditions”), with any such document listed below being satisfactory in form and substance to the Agent in its sole discretion:

    (a)       

    execution and delivery to Agent, on the date hereof, of a counterpart of this Agreement;

    (b)       

    delivery to the Agent of a certificate of the Secretary of each of Holdings, the Borrower and the Subsidiary Guarantor certifying a copy of the resolutions of Holdings, the Borrower and the Subsidiary Guarantor, respectively, approving the execution and delivery of this Agreement and the performance by Holdings, the Borrower and the Subsidiary Guarantor of their respective obligations hereunder;

    (c)       

    execution and delivery to Agent, on the date hereof of documents that:
        
 (i) amend and restate the Warrants to adjust the Warrant exercise price to the current market value of the common stock of Holdings on terms that are satisfactory to the Lender in its sole discretion as set forth in the Second Amended and Restated Warrant; (ii) to the extent necessary or desirable, amend and restate the Registration Rights Agreement and any other documentation related to the Warrants and the Registration Rights Agreement; and (iii) evidence such amendments and all consents required in connection therewith and with each Modification Document;

    (d)       

    the Borrower has provided a written consent and acknowledgement from each holder of the notes issued pursuant to the HealthCor Debt Documents through an amendment to the Intercreditor Agreement: (i) confirming that any lien of such noteholder would be automatically released in the event of a sale of the Borrower’s hospital assets on terms acceptable to the Agent in its sole discretion; and (ii) reaffirming such noteholder’s obligations under the Intercreditor Agreement; and

    (e)       

    the Borrower has provided a written amendment to the JV Promissory Note pursuant to which JV Seller agrees that no more than 50% of each quarterly principal payment will be made in respect of the JV Promissory Note from January 1, 2018 through the termination of the Modification Period.

    
        4.       
    

    
        Representations and Warranties
        . Each of Holdings, the Borrower and the Subsidiary Guarantor hereby represents and warrants to the Agent that:
    

    (a)       

    this Agreement and the documents and instruments to be entered into in connection therewith, including, without limitation, (i) the Amendment to Intercreditor Agreement (including consents pursuant to Note and Warrant Purchase Agreement), (ii) the Second Amended and Restated Warrant, and (iii) the Amended and Restated Registration Rights Agreement (collectively, the “Modification Documents”) have been duly authorized, executed and delivered by Holdings, the Borrower and the Subsidiary Guarantor, and each Modification Document constitutes an obligation of such party, enforceable against such party in accordance with its terms;

    (b)       

    immediately after giving effect to this Agreement, the representations and warranties of Holdings, the Borrower and the Subsidiary Guarantor set forth in the Loan Documents are true and correct in all material respects on and as of the Effective Date, except to the extent such representations and warranties (i) expressly relate to an earlier date (in which case such representations and warranties were true and correct in all material respects as of such earlier date) or (ii) expressly relate to the existence and continuance of a Covered Event;

    (c)       

    immediately after giving effect to this Agreement, no Default or Event of Default shall have occurred under any of the Loan Documents or the Modification Documents;

    (d)       

    the Collateral for the Loan has not been transferred, pledged or encumbered, directly or indirectly, except as expressly permitted by the Loan Documents or the Modification Documents;

     

    
    
        	 	
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    (e)       

    the Recitals of this Agreement are true and correct in all respects; and

    (f)       

    all of the Loan Documents and the Modification Documents, and any other documents and instruments executed in connection therewith, are in full force and effect, valid, legally binding and enforceable against each of Holdings, the Borrower and the Subsidiary Guarantor.

    
        5.       
    

    
        Covenants
        . Each of Holdings, the Borrower and the Subsidiary Guarantor hereby covenants and agrees as follows:
    

    (a)       

    The Borrower shall obtain: (i) at least $2,250,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to February 23, 2018; and (ii) an additional $3,000,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to May 31, 2018 (resulting in aggregate net cash proceeds of $5,250,000); provided that all such Debt described in clauses (i) and (ii) shall be subordinated to the Loans under the Credit Agreement on terms satisfactory to the Lender in its sole discretion. The Borrower shall provide to the Agent a reasonably detailed summary of the material terms of any such Capital Stock or Debt at least five (5) business days before the documents implementing any such transaction are executed, and copies of all proposed documents for any such Capital Stock or Debt before such documents are executed. The Borrower shall promptly provide to the Agent documentation evidencing the issuance or incurrence of such investments.

    (b)       

    The Borrower shall not suffer or permit Liquidity to be less than $2,500,000 at any time. For the avoidance of doubt, any breach of the Liquidity covenant set forth in Section 7.16 of the Credit Agreement during the Modification Period shall not constitute an Event of Default under the Credit Agreement, Agreement Event of Default or Modification Termination Event so long as the Borrower does not suffer or permit Liquidity to be less than $2,500,000 at any time.

    (c)       

    In the event of any sale or transfer of assets of the Borrower or Holdings (but not including any sale of all or substantially all of the assets of the Borrower and its Subsidiaries subject to Section 5(f) below), all of the proceeds of such sale or transfer (net of reasonable and customary legal and advisor’s fees incurred in connection therewith) shall be first applied to repay all amounts owed under the Loan Documents, including but not limited to any accrued interest and deferred payments of principal, in cash and until all amounts outstanding under the Loan Documents are Paid in Full.

    (d)       

    In the event that the Borrower separates or transfers the senior care business, including but not limited to a sale to, or merger with, a third party of the senior care business or otherwise establishes a senior care business, or in the event that the Borrower disposes of substantially all business divisions other than the senior care business such that the Borrower’s remaining assets consist substantially of the Borrower’s senior care business, the Lender shall be issued 7.5% of the equity in such senior care business (on a fully diluted basis) (the “Equity Grant”), which Equity Grant shall be in addition to any interests represented by the Warrants; provided, however, that in the event of a sale of the senior care business to an unrelated third party, the Lender shall be paid 7.5% of the equity value of such business in Cash or in the same equity securities received by Borrower or its equity holders from the purchaser of the senior care business.

    (e)       

    Notwithstanding any other provision of this Agreement if all amounts owed to the Lender under the Loan Documents have been Paid in Full on or prior to December 31, 2018 (and for the avoidance of doubt, even if the Equity Grant has occurred first), then the Equity Grant (or, as the case may be, a payment in cash or equity received from a purchaser) shall have a value, or shall be equitably adjusted to have a value, that is equal to the lesser of 7.5% of the equity in the senior care business or $5,000,000, which value shall be determined pursuant to: (i) a third-party valuation performed in connection with the first liquidity event or financing event to occur with respect to the senior care business (including the valuation in a transaction with an unrelated third party contemplated in Section 5(d) above); or (ii) in the event that the Lender desires to sell its Equity Grant in a private transaction, a 409A valuation to be performed at the Lender’s sole expense by a third party that is reasonably acceptable to the Borrower and the Lender.

     

    
    
        	 	
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    (f)       

    In the event of any sale of all or substantially all of the assets of the Borrower and its Subsidiaries at a time when amounts under the Loan Documents remain outstanding, then (i) the proceeds of such sale or transfer (net of reasonable and customary legal and advisor’s fees incurred in connection therewith) shall be applied to repay all amounts owed under the Loan Documents until all outstanding amounts are Paid in Full, and (ii) the Lender shall be promptly paid a sum of $5,000,000 in cash from the proceeds of such sale or transfer; provided, however, that no payment shall be made under clause (ii) of this Section 5(f) if the Lender has previously received a cash payment or equity from a purchaser in respect of the Equity Grant; and, provided, further, that the Equity Grant shall be automatically terminated and deemed cancelled upon the delivery to the Lender of a payment contemplated by clause (ii) of this Section 5(f), with no further action or consent required on the part of the Lender.

    (g)       

    The Borrower shall achieve a reduction in operating expenses, compared to the operating expenses of the Borrower incurred in October 2017, of at least: (i) $113,000 for the month of January 2018; (ii) $148,000 for the month of February 2018; and (iii) $167,000 for each other month for the duration of the Modification Period.

    (h)       

    As of the Effective Date, the Lender shall be granted observation rights with respect to meetings (including telephonic meetings) of the boards of directors of the Borrower or Holdings (the “Board of Directors”), including any executive sessions, committee meetings or similar events (and be provided (i) reasonable prior written notice of any such meeting and (ii) copies of board and committee materials to be distributed at such meeting at least three (3) calendar days prior to any such meeting) and excluding solely such meeting or portions thereof as may be necessary or reasonably advisable to protect any privileged information or matter, based on the advice of counsel, which advice may be written or oral, it being understood and agreed that any such exclusion shall be limited to the extent possible and solely in accordance with such advice.

    (i)       

    The Chief Executive Officer of the Borrower and Jeffrey Lightcap, in his role as a member of the Board of Directors, shall participate in monthly calls with the Lender to discuss updates with respect to the Borrower’s business.

    
        6.       
    

    
        Release of Claims
        . In consideration of the Lender’s and Agent’s agreements contained in this Agreement, each of Holdings, the Borrower and the Subsidiary Guarantor hereby releases and discharges the Lender and the Agent and their affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants and attorneys (each, a “Released Person
        ”) of and from any and all other claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which Holdings, the Borrower or the Subsidiary Guarantor ever had or now has against the Agent, the Lender or any other Released Person which relates, directly or indirectly, to any acts or omissions of the Agent, the Lender or any other Released Person relating to the Credit Agreement or any other Loan Document on or prior to the date hereof.
    

    
        7.       
    

    
        Lender Termination Notice
        . Lender may, in its sole discretion and for no reason given, terminate the Modification Period on May 31, 2018 and September 30, 2018 (with each such date permitted to be extended by the Lender in its sole discretion) by delivering a written notice to the Borrower on or prior to the date of such termination, stating the Lender’s election to terminate the Modification Period as of such date (a “Lender Termination Notice
        ”). The delivery of a Lender Termination Notice shall give rise to the remedies set forth in Section 9 below.
    

     

    
    
        	 	
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        8.       
    

    
        Events of Default
        . Each of the following events shall be an event of default hereunder (each an “Agreement Event of Default
        ”) and shall give rise to the remedies set forth in Section 9 below. Each Agreement Event of Default shall also constitute an Event of Default under the Credit Agreement and other Loan Documents and shall give rise to the rights and remedies thereunder.
    

    (a)       

    
        Performance of Modification Agreement. Holdings, the Borrower or the Subsidiary Guarantor shall fail to timely perform or observe any obligation or any of the terms, provisions, covenants, conditions, and/or agreements contained in this Agreement or the Exhibits to this Agreement.

    (b)       

    
        Accuracy of Representations. Any representation or warranty made in writing by or on behalf of Holdings, the Borrower or the Subsidiary Guarantor pursuant to this Agreement or any other Modification Document, or the information (other than any projections or other forward-looking statements), taken as a whole, in any written report, certificate, financial statement or other written document furnished in connection with this Agreement or any other Modification Document, or otherwise in connection with the transactions contemplated hereby, shall be inaccurate or incomplete in any material respect.

    (c)       

    
        Breach of Any Covenant or Failure to Amend JV Promissory Note. Any breach by the Borrower of any of the covenants set forth in this Agreement or failure to deliver to the Agent and the Lender an amendment to the JV Promissory Note pursuant to which JV Seller agrees that no more than 50% of each quarterly principal payment will be made in respect of the JV Promissory Note from January 1, 2018 through the termination of the Modification Period.

    (d)       

    
        Adverse Action. Holdings, the Borrower or the Subsidiary Guarantor shall (i) initiate or assert any action, cause of action, claim, demand, damages or liability of whatever kind or nature, in law or in equity, against the Agent or the Lender, or (ii) object to or dispute any claim or lien of the Agent or the Lender.

    
        9.       
    

    
        Remedies
        . Upon the delivery of a Lender Termination Notice or the occurrence of an Agreement Event of Default or Modification Termination Event: (a) the Modification Period and the modification hereunder shall terminate automatically; (b) all obligations of the Agent hereunder shall terminate automatically; (c) all obligations owed to the Agent, including, without limitation, all amounts outstanding under the Loan Documents shall, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable; (d) the Agent may immediately, and without expiration of any period of grace or any further period of reinstatement or redemption, enforce payment of all obligations owed to the Agent hereunder and under the Loan Documents, and may exercise any and all other rights, powers and remedies granted to it under the Loan Documents, at law, in equity, or otherwise; and (e) all obligations of Holdings, the Borrower and the Subsidiary Guarantor hereunder, including, without limitation, all covenants under Article 5 hereof, shall continue in full force and effect until all amounts outstanding under the Loan Documents are Paid in Full.
    

    
        10.       
    

    
        Transaction Costs
        . In consideration of the Agent’s willingness to enter into this Agreement, the Borrower shall pay all documented out-of-pocket costs and expenses of the Agent, including, without limitation, (a) legal fees, title searches, recording fees, and all other fees and expenses incurred in connection with this Agreement, and (b) all costs and expenses 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. 
    

    
        11.       
    

    
        [Reserved]
    

    
        12.       
    

    
        Advice of Counsel
        . Each of Holdings, the Borrower and the Subsidiary Guarantor acknowledges that it has sought the advice of, and has been advised by, legal counsel of its choice, in connection with the negotiation of this Agreement, and that it has willingly entered into this Agreement with full understanding of the legal and financial consequences of this Agreement.
    

     

    
    
        	 	
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        13.       
    

    
        Non-Impairment
        . Except as expressly provided herein, nothing in this Agreement shall alter or affect any provision, condition or covenant contained in the Loan Documents, or affect or impair any rights, powers, or remedies hereunder or thereunder, it being the intent of the parties hereto that the provisions of the Loan Documents shall continue in full force and effect except as expressly modified hereby.
    

    
        14.       
    

    
        No Waiver
        . No failure to exercise, and no delay in exercising any right, power or remedy hereunder or under any Loan Document or any Modification Document shall impair any right, power or remedy which the Agent may have, nor shall any such delay be construed to be a waiver of any of such rights, powers, or remedies, or an acquiescence in any breach or default under any Loan Document or any Modification Document, nor shall any waiver of any breach or default of the Borrower hereunder be deemed a waiver of any breach or default subsequently occurring. The rights and remedies herein specified are cumulative and not exclusive of any rights or remedies which the Agent would otherwise have.
    

    
        15.       
    

    
        Integration; Interpretation
        . The Loan Documents and the Modification Documents contain or expressly incorporate by reference the entire agreement of the parties with respect to the matters contemplated therein, and supersede all prior negotiations and documents, including, without limitation, any term sheet, but the Loan Documents are not being superseded by the Modification Documents, except to the limited extent that the Modification Documents expressly provide. The Loan Documents and Modification Documents shall not be modified except by written instrument executed by all parties. Any reference to the Loan Documents in any of the Loan Documents includes any amendments, renewals or extensions approved by the Agent and all of the Modification Documents.
    

    
        16.       
    

    
        No Further Commitment
        . Without limiting the foregoing, each of Holdings, the Borrower and the Subsidiary Guarantor expressly acknowledges that, except as specifically set forth in this Agreement, neither Lender nor the Agent: (a) has made or is making any commitment for, and there is no understanding, explicit or implicit, relating to, or affecting, any modification or forgiveness of future or past interest (whether at the Default Rate or otherwise) and/or principal, or any other matter; (b) has made any commitment with respect to, and there is no understanding, explicit or implicit, relating to or affecting the terms of any further modification or restructure or workout which may be entered into with respect to the Loans; and (c) has made or is making any commitment for, and there is no understanding, explicit or implicit, relating to or affecting any amendment or waiver of any of Lender’s or Agent’s rights under the Loan Documents, all of which are expressly preserved.
    

    
        17.       
    

    
        Miscellaneous
        . This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, without regard to conflicts of law principles. In the event any provision of this Agreement is deemed to conflict with the Credit Agreement or any other Loan Document, the provisions of this Agreement shall control. 
    

    
        18.       
    

    
        Headings; Severability
        . The headings used in this Agreement are for convenience only and shall be disregarded in interpreting the substantive provisions of this Agreement. Time is of the essence of each term of the Loan Documents and the Modification Documents, including this Agreement. If any provision of any Loan Document or Modification Document shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that portion shall be deemed severed therefrom, and the remaining parts shall remain in full force as though the invalid, illegal or unenforceable portion had never been a part thereof.
    

    
        19.       
    

    
        Counterparts
        . This Agreement may be executed by facsimile or other electronic means, and in any number of counterparts, each of which when executed and delivered to the Agent will be deemed to be an original and all of which, taken together, will be deemed to be one and the same instrument.
    

    [SIGNATURES FOLLOW ON NEXT PAGE]

     

     

    
    
        	 	
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    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.

     

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

     

     

     

    [Signature Page to Modification Agreement]

     

    
    
        	 

    

    
        	 

    

    
     

    	 	
                PDL INVESTMENT HOLDINGS, LLC,
            
	 	
                a Delaware limited liability company,
            
	 	
                as Agent
            
	 	 
	 	
                By:
            	
                /s/ Steffen Pietzke
            
	 	
                Name:  Steffen Pietzke
            
	 	
                Title:  CEO
            
	 	 
	 	 
	 	
                PDL INVESTMENT HOLDINGS, LLC,
            
	 	
                a Delaware limited liability company,
            
	 	
                as Lender
            
	 	 
	 	
                By:
            	
                /s/ Steffen Pietzke
            
	 	
                Name:  Steffen Pietzke
            
	 	
                Title:  CEO
            

     

     

     

    [Signature Page to Modification Agreement]

     

     

    
    
        	 

    

    
        	 

    

    
    EXHIBIT A

     

     

    	 	
                Document
            
	
                1
            	
                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
            
	
                2
            	
                Guarantee and Collateral Agreement
                , dated as of June 26, 2015 by CAREVIEW COMMUNICATIONS, INC., a Nevada corporation, CareView communications, Inc., A Texas corporation, The Subsidiary Guarantors Party Hereto, as Grantors in Favor of PDL BIOPHARMA, INC., as Collateral Agent
            
	
                3
            	
                Subordination and Intercreditor Agreement 
                dated as of June 26, 2015 between PDL BIOPHARMA, INC., as agent for the First Lien Claimholders and EACH OF THE NOTE INVESTORS SIGNATORY TO THAT CERTAIN NOTE AND WARRANT PURCHASE AGREEMENT DEFINED HEREIN, as the initial Second Lien Claimholders, and each other Second Lien Claimholder who becomes a party hereto pursuant to the terms hereof
            
	
                4
            	
                Patent Security Agreement 
                between CAREVIEW COMMUNICATIONS, INC., a Texas corporation, as Grantor, and PDL BIOPHARMA, INC., a Delaware corporation, as the agent for itself and the Lender party to the Credit Agreement, the Secured Creditors
            
	
                5
            	
                Trademark Security Agreement
                between CAREVIEW COMMUNICATIONS, INC., a Texas corporation, as Grantor, and PDL BIOPHARMA, INC., a Delaware corporation, as the Agent for itself and the Lender party to the Credit Agreement, the Secured Creditors
            
	
                6
            	
                Warrant to Purchase Common Stock of CareView Communications, Inc.
                , date of issuance June 26, 2015, CAREVIEW COMMUNICATIONS, INC., a Nevada corporation, the Registered Holder
            
	
                7
            	
                Registration Rights Agreement
                , dated as of June 26, 2015, by and between CAREVIEW COMMUNICATIONS, INC., a Nevada corporation and PDL BIOPHARMA, INC., a Delaware corporation, the Original Holder
            
	
                8
            	
                Deposit Account Control Agreement
                , dated as of June 26, 2015, by and among CAREVIEW COMMUNICATIONS, INC., a Nevada corporation, and CAREVIEW COMMUNICATIONS, INC., a Texas corporation, PDL BIOPHARMA, INC., a Delaware corporation, the Administrative Agent,  and BOKF, NA, the Bank
            
	
                9
            	
                Borrower’s Disclosure Letter,
                dated as of June 26, 2015, by and among CAREVIEW COMMUNICATIONS, INC., a Nevada corporation, CAREVIEW COMMUNICATIONS, INC., a Texas corporation and a wholly-owned subsidiary of Holdings, PDL BIOPHARMA, INC., a Delaware corporation, as the lender, and PDL BIOPHARMA, INC., a Delaware corporation, as the Agent
            
	
                10
            	
                Side Letter re Assignment, 
                dated June 26, 2015, by and among CAREVIEW COMMUNICATIONS, a Nevada corporation (Holdings), CAREVIEW COMMUNICATIONS, INC., a Texas corporation, as Borrower, PDL BIOPHARMA, INC., as the Lender and PDL BIOPHARMA, INC., as Agent
            
	
                11
            	
                First Amendment to Credit Agreement, 
                dated as of October 7, 2015, entered into by and among CAREVIEW COMMUNICATIONS, INC., a Nevada corporation (Holdings); CAREVIEW COMMUNICATIONS, INC., a Texas corporation and a wholly-owned subsidiary of Holdings, the Borrower, and PDL BIOPHARMA, INC., a Delaware corporation, in its capacity as Lender and as Agent
            

     

    
    
        	 	
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                12
            	
                Amended and Restated Warrant to Purchase Common Stock of CareView Communications, Inc., 
                date of issuance October 7, 2015
            
	
                13
            	
                Tranche One Term Note, 
                dated October 7, 2015, CAREVIEW COMMUNICATIONS, INC., a Texas corporation, the Borrower; PDL BIOPHARMA, INC., a Delaware corporation, the Lender
            
	
                14
            	
                Tranche One Borrowing Request, 
                dated October 6, 2015, by and among CAREVIEW COMMUNICATIONS, INC., a Nevada corporation (Holdings), CAREVIEW COMMUNICATIONS, INC., the Borrower, PDL BIOPHARMA, INC., as Lender and as Agent
            
	
                15
            	
                CareView Communications, Inc. Officer’s Certificate, 
                dated October 7, 2015, by and among CAREVIEW COMMUNICATIONS, INC., a Nevada corporation, (Holdings), CAREVIEW COMMUNICATIONS, INC., a Texas corporation, the Borrower, PDL BIOPHARMA, INC., as Lender and as Agent
            
	
                16
            	
                Lost Stock Certificate Affidavit and Indemnity, 
                dated June 11, 2015
            
	
                17
            	
                Lost Unit Certificate Affidavit and Indemnity, 
                dated June 10, 2015
            
	
                18
            	
                UCC-1 Financing Statement =- CareView Communications, Inc. (Nevada), 
                filing date June 29, 2015
            
	
                19
            	
                UCC-1 Financing Statement =- CareView Communications, Inc. (Texas), 
                filing date June 29, 2015
            
	
                20
            	
                UCC-1 Financing Statement =- CareView Operations, L.L.C. (Texas), 
                filing date June 29, 2015
            
	
                21
            	
                U.S. Patent & Trademark Office – Notice of Recordation of Patents
                , recordation date July 2, 2015
            
	
                22
            	
                U.S. Patent & Trademark Office – Notice of Recordation of Trademarks
                , recordation date July 2, 2015
            
	
                23
            	
                Stock Certificates and Stock Powers
                

                 1. Stock Certificate No. 2 of CareView Communications, Inc. (Texas) and related Stock Power, dated June 11, 2015
                

                 2. Unit Certificate No. 2 of CareView Operations, L.L.C. (Texas) and related Unit Power, dated June 20, 2015
            
	
                24
            	
                Receipt for Delivery of Warrant and Stock Certificates to PDL 
                dated July 2, 2015
            
	
                25
            	
                Receipt for Delivery of Tranche One Note and Amended & Restated Warrant to PDL 
                dated October 7, 2015
            

     

     

    
    
        	 	
                    2ex10-2.htm

    
    
         

    

    CareView Communications, Inc. 8-K 

    Exhibit 10.2

     

    THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, DISTRIBUTED, TRANSFERRED OR OTHERWISE DISPOSED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.

     

    	Date of Issuance: February 2, 2018	
                Number of Shares: 4,444,445
                    
 (subject to adjustment)

            

     

    SECOND AMENDED AND RESTATED

     

    WARRANT TO PURCHASE COMMON STOCK OF 

     

    CAREVIEW COMMUNICATIONS, INC.

     

    CareView Communications, Inc., a Nevada corporation (the “Company”), for value received, hereby certifies that PDL Investment Holdings, LLC (as assignee of PDL BioPharma, Inc.), a Delaware limited liability company, or its registered assigns (the “Registered Holder”), is entitled, subject to the terms set forth herein, to purchase from the Company, at any time after the date hereof and on or before October 7, 2025 (the “Expiration Date”), up to Four Million Four Hundred and Forty Four Thousand Four Hundred and Forty Five (4,444,445) shares, as adjusted from time to time pursuant to the provisions of this Second Amended and Restated Warrant (this “Warrant”), of common stock of the Company, par value $0.001 (“Common Stock”), at an exercise price equal to $0.0273. The securities issuable upon exercise of this Warrant and the exercise price per share, each as adjusted from time to time pursuant to the provisions of this Warrant, are sometimes hereinafter referred to as the “Warrant Stock” and the “Exercise Price,” respectively.

     

    This Warrant is issued pursuant to that certain Credit Agreement dated as of June 26, 2015, as amended by that certain First Amendment to Credit Agreement, dated as of October 7, 2015 (as amended, the “Credit Agreement”), by and among the Company, CareView Communications, Inc., a Texas corporation and a wholly-owned subsidiary of the Company (“CareView Communications”), and the Registered Holder (as assignee of PDL BioPharma, Inc.), as modified by that certain Modification Agreement dated as of the date hereof by and among the Company, CareView Communications, CareView Operations, L.L.C., a Texas limited liability company, and the Registered Holder.

     

    This Warrant amends and restates in its entirety that certain Warrant to Purchase Common Stock originally issued to PDL BioPharma, Inc. on June 26, 2015, as amended by the Amended and Restated Warrant to Purchase Common Stock dated October 7, 2015, to adjust the initial Exercise Price to $0.0273, subject to adjustment from time to time pursuant to the provisions of this Warrant.

     

    
    
         

    

    
         

    

    
     

    		
                1.
            	EXERCISE OF WARRANT

     

    
        Section 1.1
                      Payment. Subject to compliance with the terms and conditions of this Warrant and applicable securities laws, this Warrant may be exercised by the Registered Holder, in whole or in part, at any time or from time to time, on or before the Expiration Date by (a) surrender of this Warrant at the principal office of the Company, or such other office or agency as the Company may designate, together with the form of Notice of Exercise attached hereto as Exhibit A (the “Notice of Exercise”) duly executed by the Registered Holder or by such Registered Holder’s duly authorized attorney, and (b) payment in full of the aggregate Exercise Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise (the “Purchase Price”), unless the Registered Holder elects a net issue exercise in accordance with Section 1.2. The Purchase Price may be paid by (i) cash, check or wire transfer of immediately available funds to the Company, (ii) cancellation and surrender by the Registered Holder of promissory notes or other instruments representing indebtedness of the Company to the Registered Holder or (iii) a combination of (i) and (ii).

     

    
        Section 1.2
                      
        Net Issue Exercise.

     

    
        (a)
                     
        In lieu of exercising this Warrant in the manner provided in Section 1.1, the Registered Holder may elect to receive shares of Warrant Stock equal to the value of this Warrant (or the portion thereof being exercised and canceled) by surrender of this Warrant at the principal office of the Company, or such other office or agency as the Company may designate, together with the Notice of Exercise duly executed by the Registered Holder or such Registered Holder’s duly authorized attorney, in which event the Company shall issue to the Registered Holder a number of shares of Warrant Stock computed using the following formula:

     

    		
	X =	Y (A - B)
	 	A

     

    	Where	X =	The number of shares of Warrant Stock to be issued to the Registered Holder.

     

    		Y =	The number of shares of Warrant Stock being purchased under this Warrant pursuant to the Notice of Exercise (as adjusted to the date of such calculation).

     

    		A =	The Fair Market Value of one share of Warrant Stock (as adjusted to the date of such calculation).

     

    		B =	The Exercise Price (as adjusted to the date of such calculation).

     

    
    
        
            2
            
             

    

    
         

    

    
     

    All references herein to an “exercise” of the Warrant in this Warrant shall include an exchange pursuant to this Section 1.2.

     

    
        (b)
                      
        For purposes of this Warrant, the term “Fair Market Value” of a share of Warrant Stock as of a particular date shall mean:

     

    
        (i)
                        
        If the Common Stock is traded on a securities exchange or Nasdaq, the Fair Market Value shall be deemed to be the average of the closing prices thereof on such exchange or market over the 30 trading days ending immediately prior to (but not including) the applicable date of valuation;

     

    
        (ii)
                       
        If the Common Stock is actively traded over-the-counter, the Fair Market Value shall be deemed to be the average of the closing bid prices over the 30-day period ending immediately prior to (but not including) the applicable date of valuation;

     

    
        (iii)
                      
        If there is no active public market for the Common Stock but there is an active public market for a class or series of capital stock of the Company into which the Common Stock is convertible, then if such class or series of capital stock is:

     

    
          (A)
                      
        traded on a securities exchange or Nasdaq, the Fair Market Value shall be deemed to be the average of the closing prices of a share of such class or series of capital stock of the Company on such exchange or market over the five trading days ending immediately prior to (but not including) the applicable date of valuation multiplied by the number of shares of such class or series of capital stock into which one share of the Common Stock is convertible, or

     

    
         (B)
                      
        actively traded over-the-counter, the Fair Market Value shall be deemed to be the average of the closing bid prices for a share of such class or series of capital stock of the Company over the 30-day period ending immediately prior to (but not including) the applicable date of valuation multiplied by the number of shares of such class or series of capital stock into which one share of the Common Stock is convertible; or

     

    
        (iv)
                      
        If there is no active public market for the Common Stock or any other class or series of capital stock of the Company into which the Common Stock is convertible, the Fair Market Value shall be the highest price which the Company could obtain on the date of calculation from a willing buyer (not a current employee or director) for shares of Common Stock sold by the Company, from authorized but unissued shares, as reasonably determined in good faith by the Board of Directors.

     

    
        Section 1.3
                       
        Effective Time of Exercise. The exercise of this Warrant in whole or in part shall be deemed to have been effected immediately prior to the close of business on the day on which a Notice of Exercise with respect to this Warrant shall have been surrendered to the Company as provided in Section 1.1 or Section 1.2 above, as applicable. The person entitled to receive shares of Warrant Stock issuable upon exercise of this Warrant in whole or in part shall be treated for all purposes as the holder of record of such shares as of the close of business on the date the Registered Holder is deemed to have exercised this Warrant.

     

    
    
        
            3
            
             

    

    
         

    

    
     

    
        Section 1.4
                      
        Stock Certificates; Fractional Shares; Partial Exercise.

     

    
        (a)
                     
        As soon as practicable on or after the date of exercise determined in accordance with Section 1.3, the Company shall issue the number of shares of Warrant Stock to which the Registered Holder is entitled upon the exercise. On or before the first business day following the date of any exercise of this Warrant, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Notice of Exercise to the Registered Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the third business day following the date of any exercise of this Warrant, the Company shall (A) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Registered Holder, credit the aggregate number of Warrant Stock to which the Registered Holder is entitled pursuant to such exercise to the Registered Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal At Custodian system, or (B) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver by overnight courier to the address as specified in the Notice of Exercise, a certificate, registered in the Company’s share register in the name of the Registered Holder or its designee, for the number of shares of Warrant Stock to which the Registered Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Stock via DTC, if any. Any certificates so delivered shall be in such denominations as may be requested by the Registered Holder and shall be registered in the name of the Registered Holder or such other name as shall be designated by the Registered Holder, as specified in the Notice of Exercise.

     

    
        (b)
                     
        No fractional shares or scrip representing fractional shares shall be issued upon an exercise of this Warrant. In lieu of any fraction shares which would otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the Fair Market Value of one share of Warrant Stock on the date of exercise determined in accordance with Section 1.3.

     

    
        (c)
                     
        In case of any partial exercise of this Warrant, the Company shall cancel this Warrant and shall execute and deliver a new warrant or warrants (dated the date hereof) of like terms and with the same date, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (without giving effect to any adjustment thereof) to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the Registered Holder upon such exercise as provided in this Section 1 (without giving effect to any adjustment thereof).

     

    
    
        
            4
            
             

    

    
         

    

    
     

    		
                2.
            	ADJUSTMENT OF NUMBER OF SHARES AND EXERCISE PRICE

     

    The number of shares of Warrant Stock issuable upon exercise of this Warrant and the Exercise Price are subject to adjustment as follows:

     

    
        Section 2.1
                      
        Adjustment for Stock Splits, Stock Subdivisions or Combinations of Shares. If all or any portion of the outstanding shares of the Common Stock shall be subdivided into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall, simultaneously with the effectiveness of such subdivision, be proportionately reduced. If all or any portion of the outstanding shares of the Common Stock shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased. When any adjustment is required to be made in the Exercise Price, the number of shares of Warrant Stock purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (a) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect immediately prior to such adjustment, by (b) the Exercise Price in effect immediately after such adjustment.

     

    
        Section 2.2
                      
        Adjustment for Dividends or Distributions of Stock or Other Securities or Property. In case the Company shall make or issue, or shall fix a record date for the determination of eligible holders entitled to receive, a dividend or other distribution with respect to all or any portion of the outstanding shares of the Common Stock payable in (a) securities of the Company or (b) assets (excluding cash dividends paid or payable solely out of retained earnings), then, in each such case, the Registered Holder on exercise hereof at any time after the consummation, effective date or record date of such dividend or other distribution, shall receive, in addition to the shares of Warrant Stock issuable on such exercise prior to such date, and without the payment of additional consideration therefor, the securities or such other assets of the Company to which the Registered Holder would have been entitled upon such date if the Registered Holder had exercised this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period giving effect to all adjustments called for by this Section 2.

     

    
        Section 2.3
                      
        Reclassification. If the Company, by reclassification of securities or otherwise, shall change the Common Stock into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change and the Exercise Price therefore shall be appropriately adjusted, all subject to further adjustment as provided in this Section 2. No adjustment shall be made pursuant to this Section 2.3 upon any conversion or redemption of Common Stock which is the subject of Section 2.5.

     

    
    
        
            5
            
             

    

    
         

    

    
     

    
        Section 2.4
                      
        Adjustment for Capital Reorganization, Merger or Consolidation. In case of any capital reorganization of the capital stock of the Company (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), any Acquisition or any other merger or consolidation of the Company with or into another organization, or the sale of all or substantially all the assets of the Company then, and in each such case, as a part of such transaction, lawful provision shall be made so that the Registered Holder shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the applicable Purchase Price, the number of shares of stock or other securities or property of the successor organization resulting from such transaction that a holder of the securities deliverable upon exercise of this Warrant would have been entitled to receive in such transaction if this Warrant had been exercised immediately before such transaction, all subject to further adjustment as provided in this Section 2. The foregoing provisions of this Section 2.4 shall similarly apply to successive acquisitions, reorganizations, consolidations, mergers, sales, transfers and similar transactions and to the stock or securities of any other organizations that are at the time receivable upon the exercise of this Warrant. If the per-share consideration payable to the Registered Holder for shares in connection with any such transaction is in a form other than cash, then the provisions of Section 1.2(b) shall be applied except that each reference to Warrant Stock shall be replaced by the consideration payable in connection with such transaction. If the provisions of Section 1.2(b) cannot be applied to value such consideration, then the value of such consideration shall be determined in good faith by the Company’s Board of Directors. In all events, appropriate adjustment, as determined in good faith by the Company’s Board of Directors, shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Registered Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant.

     

    
        Section 2.5
                      
        Conversion of Warrant Stock. In case all or any portion of the outstanding shares of the Common Stock are redeemed or converted into other securities or property pursuant to the Company’s Articles of Incorporation or otherwise, or the Common Stock otherwise ceases to exist, then, in such case, the Registered Holder of this Warrant, upon exercise hereof at any time after the date on which the Common Stock is so redeemed or converted, or ceases to exist (the “Termination Date”), shall receive, in lieu of the number of shares of Warrant Stock that would have been issuable upon such exercise immediately prior to the Termination Date, the securities or property that would have been received if this Warrant had been exercised in full and the Warrant Stock received thereupon had been simultaneously converted immediately prior to the Termination Date, all subject to further adjustment as provided in this Warrant. Additionally, the Exercise Price shall be immediately adjusted to equal the quotient obtained by dividing (a) the aggregate Purchase Price of the maximum number of shares of Warrant Stock for which this Warrant was exercisable immediately prior to the Termination Date by (b) the number of shares of Warrant Stock for which this Warrant is exercisable immediately after the Termination Date, all subject to further adjustment as provided herein.

     

    
    
        
            6
            
             

    

    
         

    

    
     

    
        Section 2.6
                      
        Certificate as to Adjustments. When any adjustment in the Exercise Price or the number or type of shares issuable upon exercise of this Warrant is required to be made pursuant to this Section 2, the Chief Financial Officer or Controller of the Company shall compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth (a) a brief statement of the facts upon which such adjustment is based, (b) the Exercise Price after such adjustment and (c) the kind and amount of stock into which this Warrant shall be exercisable after such adjustment. The Company shall promptly send (by electronic transmission and/or facsimile and by either first class mail, postage prepaid or overnight delivery) a copy of each such certificate to the Registered Holder.

     

    		
                3.
            	TRANSFERS

     

    
        Section 3.1
                      
        Unregistered Securities. Each holder of this Warrant acknowledges that this Warrant and the Warrant Stock have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and agrees not to sell, offer for sale, pledge, hypothecate, distribute, transfer or otherwise dispose of this Warrant or any Warrant Stock issued upon its exercise in the absence of (a) an effective registration statement under the Securities Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable state securities law then in effect, (b) an applicable exemption from such registration requirements of the Securities Act and registration or qualification requirements under any applicable state securities law then in effect or (c) the availability of Rule 144 promulgated under the Securities Act for the sale of such securities. Each certificate or other instrument for Warrant Stock issued upon the exercise of this Warrant pursuant to Section 1.4(a) shall bear a legend as follows, unless issued or sold pursuant to an effective registration statement or if, in the reasonable opinion of securities counsel for the Company, such legend is not necessary:

     

    “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, DISTRIBUTED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.”

     

    
        Section 3.2
                      
        Transferability.

     

    
        (a)
                     
        This Warrant and all rights and obligations hereunder may be transferred to any person, in whole or in part, on the books of the Company maintained pursuant to Section 3.3 upon surrender of the Warrant with a properly executed form of Assignment attached hereto as Exhibit B (the “Form of Assignment”) at the principal office of the Company. Upon the proper surrender by the Registered Holder of the Warrant, the Company will issue and deliver to or upon the order of the Registered Holder a new Warrant or Warrants of like tenor as such Registered Holder may direct, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock called for on the face of the Warrant so surrendered.

     

    
    
        
            7
            
             

    

    
         

    

    
     

    
        (b)
                     
        Each holder of this Warrant, by holding the same, consents and agrees that when this Warrant shall have been so endorsed, the person in possession of this Warrant may be treated by the Company, and all other persons dealing with this Warrant, as the absolute owner hereof and as the Registered Holder for any purpose and as the person entitled to exercise the rights represented hereby, any notice to the contrary notwithstanding; provided, however that until a transfer of this Warrant is properly made pursuant to the terms of this Warrant and duly registered on the books of the Company maintained pursuant to Section 3.3, the Company may treat the Registered Holder hereof as the owner for all purposes.

     

    
        Section 3.3
                      
        Warrant Register. The Company or its agent will maintain a register containing the names and addresses of the Registered Holder of this Warrant, and will promptly update such register to reflect any transfers in compliance with the terms hereof. Until any transfer of this Warrant is reflected in the warrant register maintained pursuant to this Section 3.3, the Company may treat the Registered Holder of this Warrant as the absolute owner hereof for all purposes. Any Registered Holder may change such Registered Holder’s address as shown on the warrant register by written notice to the Company requesting such change.

     

    		
                4.
            	REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     

    The Company hereby represents and warrants to the Registered Holder as follows:

     

    
        Section 4.1
                      
        Authorization; Enforceability. The Company has full corporate power and authority to execute and deliver this Warrant, to perform its obligations hereunder and to consummate the transactions contemplated hereby, including the authorization, issuance and delivery of the Warrant Stock. The execution, delivery and performance by the Company of this Warrant and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of the Company. This Warrant has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).

     

    
        Section 4.2
                      
        Valid Issuance of Securities. The Warrant Stock to be issued hereunder, when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Warrant and applicable state and federal securities laws and liens or encumbrances created by or imposed by the Registered Holder.

     

    
    
        
            8
            
             

    

    
         

    

    
     

    
        Section 4.3
                      
        Government Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the issuance of the Warrant or the Warrant Stock by the Company.

     

    
        Section 4.4
                      No Conflict. The execution and delivery of this Warrant and the performance of the Company’s obligations hereunder, including the issuance of the Warrant Stock, (a) will not result in any violation of the Company’s Articles of Incorporation or Bylaws or (b) be in conflict with or constitute, with or without the passage of time or giving of notice, either or both a material violation or default under any material agreement, instrument, judgment, order, writ, decree or contract or an event which results in the creation of any material lien, charge or encumbrance upon any assets of the Company or cause an acceleration of any obligation under any such material agreement, instrument, judgment, order, writ, decree or contract.

     

    		
                5.
            	REPRESENTATIONS AND WARRANTIES OF THE REGISTERED HOLDER

     

    The Registered Holder hereby represents and warrants to the Company as follows:

     

    
        Section 5.1
                      
        Certain Securities Laws Matters. By acceptance of this Warrant, the Registered Holder hereby confirms that this Warrant is acquired for investment only and not with a view to, or for sale in connection with, any distribution; that the Registered Holder has had such opportunity as such Registered Holder has deemed adequate to obtain from representatives of the Company such information as is necessary to permit the Registered Holder to evaluate the merits and risks of its investment in the Company; that the Registered Holder is able to bear the economic risk of holding the Warrant and/or the Warrant Stock (or any shares of stock or other securities at the time issuable upon exercise of the Warrant) for an indefinite period; that the Registered Holder understands that this Warrant and the Warrant Stock (or any shares of stock or other securities at the time issuable upon exercise of the Warrant) are not and will not be registered under the Securities Act except as set forth in in the Amended and Restated Registration Rights Agreement (as defined in Section 6.4 hereof) and will be “restricted securities” within the meaning of Rule 144 under the Securities Act; and that the Registered Holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

     

    		
                6.
            	COVENANTS OF THE COMPANY

     

    
        Section 6.1
                      
        Reservation and Listing of Securities. The Company hereby covenants that (a) at all times there shall be reserved for issuance and delivery upon exercise of this Warrant such number of shares of Common Stock as may be issuable from time to time upon exercise hereof in full and, from time to time, will take all steps necessary to amend its Articles of Incorporation to provide sufficient reserves of shares of Common Stock, and (b) it will cause the Warrant Stock to be authorized to be listed on a securities exchange or Nasdaq if the Common Stock is listed on such exchange or Nasdaq.

     

    
    
        
            9
            
             

    

    
         

    

    
     

    
        Section 6.2
                      
        No Impairment. The Company will not, by amendment of its Articles of Incorporation or Bylaws, or through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Registered Holder against impairment.

     

    
        Section 6.3
                      
        Replacement Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.

     

    
        Section 6.4
                      
        Registration Rights. All shares of Warrant Stock are subject to that certain Amended and Restated Registration Rights Agreement dated as of the date hereof by and between the Company and the Registered Holder (as assignee of PDL BioPharma, Inc.) (the “Amended and Restated Registration Rights Agreement”), and the Registered Holder shall be deemed to be a “Holder” pursuant to the Amended and Restated Registration Rights Agreement and is entitled, subject to the terms and conditions of the Amended and Restated Registration Rights Agreement, to all registration rights granted to Holders thereunder.

     

    		
                7.
            	NOTICES

     

    
        Section 7.1
                      
        Record Dates. In case:

     

    
        (a)
                     
        the Company shall set a record date for the holders of the Common Stock for the purpose of entitling or enabling them to receive any dividend or other distribution (excluding cash dividends paid or payable solely out of retained earnings), or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right;

     

    
        (b)
                     
        of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another organization (other than a consolidation or merger in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company; or

     

    
        (c)
                     
        of the voluntary or involuntary dissolution, liquidation or winding-up of the Company,

     

    then, and in each such case, the Company will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the record date for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place, the time, if any is to be fixed, as of which the holders of record of capital stock of the Company (or such other securities at the time deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up) are to be determined, and the material terms and conditions of the impending transaction. In each such case, the notice shall be provided at least 20 business days prior to the record date or effective date for the event specified in such notice, in each case in accordance with the provisions of Section 7.2.

     

    
    
        
            10
            
             

    

    
         

    

    
     

    
        Section 7.2
                      
        Generally. Unless otherwise provided herein, any notice required or permitted by this Warrant shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or if sent by facsimile, upon written confirmation of receipt of facsimile, or five business days following deposit in the U.S. mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page, or as subsequently modified by written notice.

     

    		
                8.
            	MISCELLANEOUS

     

    
        Section 8.1
                      
        No Rights or Liabilities as a Stockholder. This Warrant shall not entitle the Registered Holder to any voting rights or other rights as a stockholder of the Company. In the absence of affirmative action by the Registered Holder to purchase Warrant Stock by exercise of this Warrant, no provisions of this Warrant, and no enumeration herein of the rights or privileges of the Registered Holder hereof, shall cause the Registered Holder to be or have any rights of a stockholder of the Company for any purpose.

     

    
        Section 8.2
                      
        Survival of Representations and Warranties. Unless otherwise set forth in this Warrant, the warranties, representations and covenants of the Company and the Registered Holder contained in or made pursuant to this Warrant shall survive the execution and delivery of this Warrant.

     

    
        Section 8.3
                      
        Amendment and Modification. This Warrant may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each of the parties in interest at the time of the amendment.

     

    
        Section 8.4
                      
        Waiver. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Any agreement on the part of a party hereto to waive any right or power hereunder shall be valid only if set forth in a written instrument executed and delivered by or on behalf of such party. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder.

     

    
    
        
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        Section 8.5
                      
        Assignment; Successors and Assigns. This Warrant and any of the rights, interests or obligations under this Warrant may be assigned, in whole or in part, by operation of law or otherwise, by the Registered Holder. This Warrant will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

     

    
        Section 8.6
                      
        Interpretation. When a reference is made in this Warrant to a Section or Exhibit such reference shall be to a Section or Exhibit of this Warrant unless otherwise indicated. The headings contained in this Warrant or in any Exhibit are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Warrant. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Exhibit but not otherwise defined therein shall have the meaning as defined in this Warrant. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Warrant as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified.

     

    
        Section 8.7
                      
        Governing Law. This Warrant and all disputes or controversies arising out of or relating to this Warrant or the transactions contemplated hereby shall be governed by, and construed 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.

     

    
        Section 8.8
                      
        Severability. Whenever possible, each provision or portion of any provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Warrant is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Warrant shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

     

    
        Section 8.9
                      
        Counterparts. This Warrant may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

     

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    IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the date of issuance set forth above.

     

    	 	
                CAREVIEW COMMUNICATIONS, INC.
            
	 	 
	 	
                /s/ Steven G. Johnson
            
	 	
                Name: Steven G. Johnson
            
	 	
                Title: President and Chief Executive Officer
            

      

    Signature Page to Second A&R Warrant to Purchase Common Stock of CareView Communications, Inc. 

     

    
    
         

    

    
         

    

    
     

    	 	 	 
	
                Acknowledged and Agreed:
            	 
	 	 
	
                REGISTERED HOLDER:
            	 
	 	 
	
                PDL INVESTMENT HOLDINGS, LLC
            	 
	 	 
	
                By: 
            	
                /s/ Steffen Pietzke
            	 
	Name: Steffen Pietzke	 
	Title: CEO	 

     

    Signature Page to Second A&R Warrant to Purchase Common Stock of CareView Communications, Inc. 

     

    
    
         

    

    
         

    

    
      

    EXHIBIT A

      

    NOTICE OF EXERCISE

     

    SECOND AMENDED AND RESTATED 

    WARRANT TO PURCHASE COMMON STOCK OF CAREVIEW COMMUNICATIONS, INC.

     

    The undersigned hereby irrevocably elects to exercise the right of purchase represented by the Second Amended and Restated Warrant of CareView Communications, Inc. dated February 2, 2018 for, and to purchase thereunder, such number of shares of Warrant Stock (or such other securities or property for which this Warrant may then be exercised) indicated below of CareView Communications, Inc. as provided for therein, and (check the applicable box(es)):

     

    		☐	Tenders herewith payment of the Purchase Price in the form of cash or a certified or official bank check in same-day funds (or has initiated a wire) in the amount of $____________ for _________ shares of Warrant Stock.

     

    		☐	Tenders herewith payment of the Purchase Price in the form of the surrender and cancellation of indebtedness of the Company held by the Registered Holder in the amount of $____________ (the “Indebtedness”) for _________ shares of Warrant Stock. The Indebtedness represents a portion of the indebtedness outstanding under the Credit Agreement (as such term is defined in the Warrant).

     

    		☐	Elects a Net Issue Exercise pursuant to Section 1.2, and accordingly requests delivery of a net of _________ shares of Warrant Stock, calculated as follows:

     

    	
                X = Y (A-B)
            	 	
                (       ) = (       ) [(       ) – (       )]
            
	        A      	 	(       )               

     

    X = the number of shares of Warrant Stock to be issued to the Registered Holder.
        
 Y = the number of shares of Warrant Stock purchasable under the portion of the Warrant being exchanged (as adjusted to the date of such calculation).
        
 A = the Fair Market Value of one share of Warrant Stock
        
 B = Purchase Price (as adjusted to the date of such calculation)

     

    Please issue such shares of Warrant Stock in the name of and pay any cash for any fractional share to (please print name, address and taxpayer i.d. number):

     

    	
                Name:
            	 	 
	 	 	 
	
                Address:
            	 	 
	 	 	 
	
                Tax. I.D.:
            	 	 
	 	 	 
	Signature:	 	 

     

    Notice of Exercise

     

    
    
         

    

    
         

    

    
     

    Note: The above signature must correspond to the name as written upon the face of the Warrant in every particular, without alteration or any change whatsoever. If said number of Warrant Shares shall not be all of the Warrant Shares purchasable under the Warrant, a new Warrant is to be issued in the name of said undersigned for the balance remaining of the Warrant Shares purchasable thereunder.

     

    Notice of Exercise

     

    
    
         

    

    
         

    

    
    EXHIBIT B

      

    ASSIGNMENT

     

    SECOND AMENDED AND RESTATED

    WARRANT TO PURCHASE COMMON STOCK OF CAREVIEW COMMUNICATIONS, INC.

      

    For value received, the undersigned hereby sells, assigns and transfers unto ________________________ the within Warrant, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint _________________________ attorney, to transfer said Warrant on the books of CareView Communications, Inc. with respect to the number of shares of Warrant Stock set forth below, with full power of substitution in the premises:

     

    	Name(s) of Assignee(s)	Address	# of Shares of Warrant Stock
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

     

    And if said number of shares of Warrant Stock shall not be all the number of shares of Warrant Stock represented by the Warrant, a new Warrant is to be issued in the name of said undersigned for the balance remaining of the Warrants registered by said Warrant.

    	 	 	 
	
                Dated:
            	 	 
	 	 	 
	
                Signature:
            	 	 

      

    Note: The signature to the foregoing Assignment must correspond to the name as written upon the face of the Warrant in every particular, without alteration or any change whatsoever.

     

    Form of Assignment

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