UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 8-K

 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 
Date of Report (Date of earliest event reported): January 9, 2012


CAREVIEW COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)

 
Nevada
 
000-54090
 
95-4659068
    (State or other jurisdiction of incorporation)
 
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
   405 State Highway 121, Suite B-240, Lewisville, TX  75067
 (Address of principal executive offices and Zip Code)
 
(972) 943-6050
 (Registrant’s telephone number, including area code)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

 
 
 


  TABLE OF CONTENTS

Page
 
SECTION 1 – REGISTRANT'S BUSINESS AND OPERATIONS
 
     
Item 1.01
Entry into a Material Definitive Agreement
3
     
SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
 
     
Item 9.01
(d) Exhibits
           4
 

 
2
 
 
Item 1.01         Entry into a Material Definitive Agreement

On January 9, 2012, the Company entered into a Binding Term Sheet with HealthCor Partners Management, L.P., on behalf of certain affiliated funds (collectively, “HCP”) regarding the issuance by the Company to HCP of a $5,000,000 Senior Convertible Note(s) (the “New Senior Convertible Note(s)”).  The New Senior Convertible Note(s) will have a maturity date ten (10) years from the date of issuance. The New Senior Convertible Note(s) will bear interest accordingly:

(a)  
During years 1-5 (the “First Five Year Note Period”), interest will be payable (on a cumulative basis) by the issuance of additional convertible debt (a “PIK”) with the same terms as the $20 million initial Senior Convertible Notes issued April 21, 2011, as amended December 20, 2011 (the “Initial Investment”), at an interest rate of 12.5%, compounded quarterly.
(b)  
During year 6-10 (the “Second Five Year Note Period,” and together with the First Five Year Note Period, the “Five Year Note Periods”), interest may be paid in cash or as a consideration on the cumulative PIK (at the Company’s option), at an annual interest rate of 10.0%, compounded quarterly.
(c)  
Interest shall be calculated and payable on a quarterly basis in arrears.
(d)  
Notwithstanding the foregoing, during the existence of an event of default, the then applicable interest rate will be increased by 5%.

In addition, the provisions regarding interest acceleration, optional conversion, negative covenants, events of default, preemptive rights and registration rights will be the same as that of the Initial Investment.

Use of proceeds is intended to enable the Company (i) to recruit and employ executives and sales personnel with experience in the healthcare/hospital space to establish contracts and pilot programs with hospitals, (ii) to expand its intellectual property portfolio, and (iii) for general working capital purposes.

The proposed closing date of the transaction is no later than January 31, 2012.

The foregoing description of the Binding Term Sheet is qualified, in entirety, by reference to that agreement, a copy of which is attached as an exhibit to this Current Report on Form 8-K and which is incorporated herein by reference.

The New Senior Convertible Note(s) have not been registered under the Securities Act of 1933, or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) and applicable state securities laws.  Neither this Current Report on Form 8-K nor the press release attached hereto as Exhibit 10.90 are an offer to sell nor a solicitation to buy any New Senior Convertible Note(s). This Current Report on Form 8-K and the press release attached hereto as Exhibit 10.90 are being issued pursuant to and in accordance with Rule 135c under the Securities Act.

 
3
 

Item 9.01           Financial Statements and Exhibits

(d)           Exhibits:

Exh. No.
Date
Document
10.72
April 21, 2011
Note and Warrant Purchase Agreement between the Company and HealthCor Partners Fund, LP and HealthCor Hybrid Offshore Master Fund, LP (1)
10.73
April 21, 2011
Senior Secured Convertible Note of the Company payable to HealthCor Partners Fund, LP (1)
10.74
April 21, 2011
Senior Secured Convertible Note of the Company payable to HealthCor Hybrid Offshore Master Fund, LP (1)
10.75
April 21, 2011
Warrant to Purchase 5,488,456 shares of the Company issued to HealthCor Partners Fund, LP (1)
10.76
April 21, 2011
Warrant to Purchase 6,294,403 shares of the Company issued to HealthCor Hybrid Offshore Master Fund, LP (1)
10.77
April 21, 2011
Registration Rights Agreements between the Company and HealthCor Partners Fund, LP and HealthCor Hybrid Offshore Master Fund, LP (1)
10.78
April 21, 2011
Pledge and Security Agreement between the Company and HealthCor Partners Fund, LP and HealthCor Hybrid Offshore Master Fund, LP (1)
10.79
April 21, 2011
Intellectual Property Security Agreement between the Company and HealthCor Partners Fund, LP and HealthCor Hybrid Offshore Master Fund, LP (1)
10.80
April 25, 2011
Press Release announcing sale of Notes and Warrants (1)
10.88
December 31, 2011
Note and Warrant Amendment Agreement (2)
10.89
January 9, 2012
10.90
January 10, 2012
 
(1)   
Filed with the Current Report on Form 8-K filed with the SEC on April 27, 2011.
(2)   
Filed with the Current Report on Form 8-K filed with the SEC on January 6, 2012.
  * Filed herewith.

 
4
 

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Date:   January 11, 2012    
CAREVIEW COMMUNICATIONS, INC.
     
   
By:
/s/Samuel A. Greco
   
Name:
Samuel A. Greco
   
Title:
Chief Executive Officer
 
 
 5
CareView Communications, Inc. 8-K
 
Exhibit 10.89
BINDING TERM SHEET
FOR THE HEALTHCOR PARTNERS
SENIOR CONVERTIBLE NOTE INVESTMENT IN
CAREVIEW COMMUNICATIONS, INC.

JANUARY 9, 2011

This Binding Term Sheet summarizes the principal terms of the HCP Senior Convertible Note investment in CareView Communications, Inc., a Nevada corporation (the “ Company ”). This Binding Term Sheet is subject to certain customary closing conditions defined below.  This Term Sheet shall be governed in all respects by the laws of the State of Delaware.

OFFERING TERMS
Proposed Closing Date:
No later than January 31, 2012 (the “ Closing ”).
   
Investors:
HealthCor Partners Management, L.P., on behalf of certain affiliated funds   (collectively, “ HCP ”).
   
Type and Amount of Investment:
$5,000,000 of a Senior Convertible Note (the “New Senior Convertible Note” ).
   
Maturity:
10 years following the issuance of the New Senior Convertible Note.
   
Interest:
The New Senior Convertible Note shall bear interest accordingly:
 
During years 1-5 (the “ First Five Year Note Period ”), interest will be payable (on a cumulative basis) by the issuance of additional convertible debt (a “ PIK ”) with the same terms as the $20 million initial Senior Convertible Notes issued April 21, 2011, as amended December 20, 2011, at an interest rate of 12.5%, compounded quarterly.
 
During years 6-10 (the “ Second Five Year Note Period ,” and together with the First Five Year Note Period, the “ Five Year Note Periods ”), interest may be paid in cash or as a continuation of the cumulative PIK (at the Company’s option), at an annual interest rate of 10.0%, compounded quarterly.
 
Interest shall be calculated and payable on a quarterly basis in arrears.
 
Notwithstanding the foregoing, during the existence of an event of default, the then applicable interest rate will be increased by 5%.
   
Interest Acceleration:
Same as initial $20 million investment, as amended (i.e., two ‘five-year’ periods).
   
Optional Conversion:
Same as initial $20 million investment, as amended.
 
 
 
 
 
Call Provision:
None
   
Put Provision:
None
   
Forced Conversion Provision:
None
   
Covenants:
Same as initial $20 million security, as amended.
   
Events of Default
Same as initial $20 million security, as amended.
   
Security:
This $5 million security will be pari passu with HCP’s existing $20 million security and have the same security rights.
   
Warrants:
None.
   
Preemptive Rights :
Same as initial $20 million investment, as amended.
   
Representations and Warranties:
Standard representations and warranties by the Company.
   
Registration Rights:
Same as initial $20 million investment, as amended.
   
Conditions to Close:
Conditions to Closing shall be mutually satisfactory final documentation and the lack of: (i) a Company material adverse change (“MAC”), (ii) new information that is deemed highly unfavorable to the Company or (iii) a Market MAC.  HCP shall use good faith in determining what events or information would be considered to fall under any of the conditions outlined in the previous sentence.
   
Use of Proceeds:
Use of proceeds is intended to enable the Company to (i) recruit and employ executives and sales personnel with experience in the healthcare/hospital space to establish contracts and pilot programs with hospitals, (ii) expand its intellectual property portfolio, and (iii) for general working capital purposes.
   
No-Shop / Confidentiality:
This term sheet is binding on the part of the Company and HCP .  The Company agrees that it will not, from the date these terms are accepted until February 29, 2012, take any action to solicit, initiate, encourage or assist the submission of, or engage or enter into any negotiations, discussions or agreements with respect to, any proposal, negotiation or offer from any person or entity other than HCP relating to the sale or issuance of any of any security of the Company and shall notify HCP promptly of any inquiries by any third parties in regards to the foregoing.  The Company will not disclose the terms of this Term Sheet to any person other than officers, members of the Board of Directors, and the Company’s accountants and attorneys and other potential investors acceptable to HCP, without the written consent of HCP or except as required by law.
   
Expenses:
The Company will bear the reasonable legal fees and other out-of-pocket expenses of HCP with respect to the transaction.
 

 
2
 
 
EXECUTED this 9 th   day of January 2012.
 
 
   
HealthCor Partners Management, L.P.
     
    By: HealthCor Partners Management GP, LLC, its general partner
     
       
    By: /s/ Jeffrey C. Lightcap
    Name: Jeffrey C. Lightcap
    Title: Senior Managing Director
    Date: January 9, 2012
 
   
CareView Communications, Inc.
     
    By: /s/ Steve Johnson
    Name: Steven Johnson
    Title: President & COO
    Date: January 9, 2012

 3
                   
 
CareView Communications, Inc. 8-K
 
Exhibit 10.90
 
(CAREVIEW LOGO)
 
 Press Release
January 11, 2012
   
FOR IMMEDIATE RELEASE   SYMBOL:   CRVW
January 11, 2012  TRADED:   OTC  QB
 
CAREVIEW COMMUNICATIONS, INC. ANNOUNCES
INTENTION TO ISSUE AN ADDITIONAL $5 MILLION OF
SENIOR SECURED CONVERTIBLE NOTES TO HEALTHCOR

FOR IMMEDIATE RELEASE – January 11, 2012 – Lewisville, TX – CareView Communications, Inc. ("CareView" or the "Company") (OTC QB: CRVW), an information technology provider to the healthcare industry, announced today that it entered into an agreement to issue an additional $5 million of Senior Secured Convertible Notes (the “Notes”) to funds managed by HealthCor Partners Management, L.P. and HealthCor Management, L.P. (together, “HealthCor”).  HealthCor is a leading investment manager in the healthcare and life sciences sectors.

The terms of the Notes will be substantially the same as those contained in the $20 million of Senior Secured Convertible Notes issued to HealthCor in April 2011, as amended in December 2011, with the exception that no additional warrants shall be granted.  The closing of the financing is expected to occur in approximately three to four weeks.

CareView's President, Steven G. Johnson, stated, “We have benefitted significantly from having HealthCor as an investor and designated board member and believe that this $5 million investment will provide the Company with additional financial flexibility. HealthCor's extensive knowledge of the healthcare industry and its service providers should enable CareView to achieve its goals of becoming an industry leader in the application of healthcare technology to patient monitoring and safety.  Additionally, we would like to thank HealthCor for agreeing to waive the non-dilutive feature of the original notes.”

HealthCor's Senior Managing Director, Jeffrey C. Lightcap, stated, “We have been very pleased with the progress that CareView has made over the course of the last nine months and are looking forward to continuing to work with the Company to revolutionize the way that most hospitals provide patient care.”

About CareView Communications, Inc.
CareView has created a proprietary high-speed data network system that can be deployed throughout a healthcare facility using the existing cable television infrastructure. This network supports CareView’s Room Control Platform and complementary suite of software applications designed to streamline workflow and improve value-added services offered to customers. Real-time bedside monitoring and point-of-care video monitoring and recording improve efficiency while limiting liability, and entertainment packages and education enhance quality of stay. CareView’s Virtual Bed Rail application has helped hospitals dramatically reduce falls.  This technology may also act as an interface gateway for other software systems and medical devices moving forward. CareView is dedicated to working with all types of hospitals, nursing homes, adult living centers and selected outpatient care facilities domestically and internationally. Corporate offices are located at 405 State Highway 121 Bypass, Suite B-240, Lewisville, TX 75067. Questions may be directed to Steven Johnson, President and Chief Operating Officer at (972) 943-6050. More information about the Company is available on the Company’s website at www.care-view.com .

About HealthCor
HealthCor’s private equity funds, with approximately $300 million of assets dedicated to private equity, invest primarily in later-stage development and growing mid-sized companies across all sectors of the healthcare and life sciences industry.

 
This press release shall not constitute an offer to sell or a solicitation of an offer to buy securities of CareView Communications, Inc. Any securities that are ultimately sold in the offering described in this press release will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of that Act. Certain statements in this release and other written or oral statements made by or on behalf of the Company are “forward looking statements” within the meaning of the federal securities laws.  Statements regarding future events and developments and our future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws.  The forward-looking statements are subject to a number of risks and uncertainties including market acceptance of the Company’s services and projects and the Company’s continued access to capital and other risks and uncertainties. The actual results the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties.  These statements are based on our current expectations and speak only as of the date of such statements.  The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.  
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