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Careview Communicaions, Inc. 8-K [careview-8k_08312011.htm]
 
Exhibit 10.86
 
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS, AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 4 BELOW,
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR
PURSUANT TO RULE 144 OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
WARRANT TO PURCHASE STOCK
 

 
Corporation:
CAREVIEW COMMUNICATIONS, INC., a Nevada corporation
 
Number of Shares:
714,286
 
Class of Stock:
Common Stock, $0.001 par value per Share
 
Warrant Price:
$1.40 per share
 
Issue Date:
August 31, 2011
 
Expiration Date:
August 31, 2018 (Subject to Section 4.1)

 
THIS WARRANT TO PURCHASE STOCK (THIS “WARRANT”) CERTIFIES THAT, for good and
valuable consideration, the receipt of which is hereby acknowledged, BRIDGE
BANK, NATIONAL ASSOCIATION, or its assignee (“Holder”), is entitled to purchase
the number of fully paid and nonassessable shares of the Class of Stock (the
“Shares”) of CAREVIEW COMMUNICATIONS, INC. (the “Company”) at the Warrant Price,
all as set forth above and as adjusted pursuant to the terms of this Warrant,
subject to the provisions and upon the terms and conditions set forth in this
Warrant.  This warrant is one of a series of warrants (the “Loan
Warrants”)  issued by the Company on the Issue Date pursuant to a Loan and
Security Agreement with Comerica Bank and Bridge Bank, National Association
dated August 31, 2011.
 
ARTICLE 1
EXERCISE
 
1.1           Method of Exercise.  Holder may exercise this Warrant by a duly
executed Notice of Exercise in substantially the form attached as Appendix I to
the principal office of the Company (or such other appropriate location as
Holder is so instructed by the Company). Holder shall also deliver to the
Company a check, wire transfer (to an account designated by the Company) or
other form of payment acceptable to the Company for the aggregate Warrant Price
for the Shares being purchased.
 
1.2           Conversion Right.  In lieu of exercising this Warrant as specified
in Section 1.1, Holder may from time to time convert this Warrant, in whole or
in part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares issuable upon exercise of this Warrant that are being
exercised minus the aggregate Exercise Price of such Shares being exercised by
(b) the fair market value of one Share.  The fair market value of Shares shall
be equal to the average of the closing prices reported for the ten trading days
immediately preceding the day on which the Holder converts this Warrant as
provided herein.  If fair market value cannot be calculated on the foregoing
basis, the fair market value shall be as determined by the Board of Directors of
the Company in the exercise of its good faith judgment.
 
1.3           Delivery of Certificate and New Warrant.  Within 30 days after
Holder exercises this Warrant and the Company receives payment of the aggregate
Warrant Price, the Company shall deliver to Holder certificates for the Shares
acquired and, if this Warrant has not been fully exercised and has not expired,
a new warrant representing the Shares not so acquired.
 
1.4           Replacement of Warrants.  In the case of loss, theft or
destruction of this Warrant, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of mutilation,
upon surrender and cancellation of this Warrant, the Company at its expense
shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.
 
1.5           Acquisition of the Company.
 
 
 

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1.5.1           “Acquisition.”  For the purpose of this Warrant, “Acquisition”
means (a) any sale, license, or other disposition of all or substantially all of
the assets (including intellectual property) of the Company, or (b) any
reorganization, consolidation, merger of the Company with another entity in
which the Company is not the survivor.
 
1.5.2           Treatment of Warrant in the Event of an Acquisition.  The
Company shall give Holder written notice at least 20 days prior to the closing
of any proposed Acquisition (the “Acquisition Notice”).  The Company will use
commercially reasonable efforts to cause (i) the acquirer of the Company, (ii)
successor or surviving entity or (iii) parent entity in an Acquisition (the
“Acquirer”) to assume this Warrant as a part of the Acquisition.
 
   (a)           If the Acquirer assumes this Warrant, then this Warrant shall
be exercisable for the same securities, cash, and property as would be payable
for the Shares issuable upon exercise of the  unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing.  The Warrant Price shall be adjusted
accordingly, and the Warrant Price and number and class of Shares shall continue
to be subject to adjustment from time to time in accordance with the provisions
hereof.
 
   (b)           If the Acquirer refuses to assume this Warrant in connection
with the Acquisition, the Company shall give Holder an additional written notice
at least ten (10) days prior to the closing of the Acquisition of such fact
(unless such fact is disclosed in the Acquisition Notice).  In such event,
notwithstanding any other provision of this Warrant to the contrary, Holder may
immediately exercise this Warrant in the manner specified in this Warrant with
such exercise effective immediately prior to closing of the Acquisition.  If
Holder elects not to exercise this Warrant, then this Warrant will terminate
immediately prior to the closing of the Acquisition.
 
ARTICLE 2
ADJUSTMENTS TO THE SHARES
 
2.1           Stock Dividends, Splits, Etc.  If the Company declares or pays a
dividend on its common stock payable in common stock, or other securities, or
subdivides the outstanding common stock into a greater amount of common stock,
then upon exercise of this Warrant, for each Share acquired, Holder shall
receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as
of the date the dividend or subdivision occurred.
 
2.2           Reclassification, Exchange or Substitution.  Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event.  The Company or its successor shall promptly issue to Holder a new
warrant for such new securities or other property.  The new warrant shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 2 including, without
limitation, adjustments to the Warrant Price, the number of securities or
property issuable upon exercise of the new warrant and expiration date.  The
provisions of this Section 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.
 
2.3           Adjustments for Combinations, Etc.  If the outstanding Shares are
combined or consolidated, by reclassification, reverse split or otherwise, into
a lesser Number of Shares, the Warrant Price shall be proportionately
increased.  If the outstanding Shares are split or multiplied, by
reclassification or otherwise, into a greater Number of Shares, the Warrant
Price shall be proportionately decreased.
 
2.4           Intentionally Omitted.
 
2.5           No Impairment.  The Company shall not, by amendment of its
Articles or Certificate of Incorporation or through a reorganization, transfer
of assets, consolidation, merger, dissolution, issue, or sale of
 
 
 

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securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed under this
Warrant by the Company, but shall at all times in good faith assist in carrying
out all the provisions of this Article 2 and in taking all such action as may be
necessary or appropriate to protect Holder’s rights under this Article 2 against
impairment.
 
2.6           Certificate as to Adjustments.  Upon each adjustment of the
Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish Holder with a certificate signed by its Chief Financial
Officer setting forth such adjustment and the facts upon which such adjustment
is based.  The Company shall, upon written request, furnish Holder a certificate
setting forth the Warrant Price in effect upon the date thereof and the series
of adjustments leading to such Warrant Price.
 
2.7           Fractional Shares.  No fractional Shares shall be issuable upon
exercise of this Warrant and the Number of Shares to be issued shall be rounded
down to the nearest whole Share.  If a fractional share interest arises upon any
exercise of this Warrant, the Company shall eliminate such fractional share
interest by paying Holder an amount computed by multiplying the fractional
interest by the fair market value, as determined by the Company’s Board of
Directors, of a full Share.
 
ARTICLE 3
REPRESENTATIONS AND COVENANTS OF THE COMPANY
 
3.1           Representations and Warranties.  The Company hereby represents and
warrants to, and agrees with, the Holder as follows:
 
3.1.1         The initial Warrant Price referenced on the first page of this
Warrant is not greater than the fair market value of the Shares as of the date
of this Warrant.
 
3.1.2         All Shares which may be issued upon the exercise of the purchase
right represented by this Warrant, and all securities, if any, issuable upon
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
 
3.1.3         The Company’s capitalization table delivered to Holder as of the
Issue Date is true and complete as of the Issue Date.
 
3.2           Notice of Certain Events.  If the Company proposes at any time (a)
to declare any dividend or distribution upon its stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of stock; or (d) to merge
or consolidate with or into any other corporation, or sell, lease, license, or
convey all or substantially all of its assets, or to liquidate, dissolve or wind
up, then, in connection with each such event, the Company shall give Holder (1)
at least 20 days prior written notice of the date on which a record will be
taken for such dividend, distribution, or subscription rights (and specifying
the date on which the holders of stock will be entitled thereto) or for
determining rights to vote, if any, in respect of the matters referred to in (a)
and (b) above; and (2) in the case of the matters referred to in (c) and (d)
above at least 20 days prior written notice of the date when the same will take
place (and specifying the date on which the holders of stock will be entitled to
exchange their stock for securities or other property deliverable upon the
occurrence of such event).  Upon request, the Company shall provide Holder with
such information reasonably necessary for Holder to evaluate its rights as a
holder of this Warrant or Warrant Shares in the case of matters referred to (a),
(b), (c) and (d) herein above.
 
ARTICLE 4
MISCELLANEOUS
 
4.1           Term; Exercise Upon Expiration.  This Warrant is exercisable in
whole or in part, at any time and from time to time on or before the Expiration
Date set forth above.  The Company shall give Holder written notice of Holder’s
right to exercise this Warrant, in the form attached hereto as Appendix II, not
less than 90 days before
 
 
 

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the Expiration Date.  If the notice is not so given, the Expiration Date shall
automatically be extended until 90 days after the date the Company delivers such
notice to Holder.  The Company agrees that Holder may terminate this Warrant,
upon notice to the Company, at any time in its sole discretion.
 
4.2           Legends.  This Warrant and the Shares (and the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) shall
be imprinted with a legend in substantially the following form:
 
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS, AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 4 BELOW,
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR
PURSUANT TO RULE 144 OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
4.3           Compliance with Securities Laws on Transfer.  This Warrant and the
Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee.  The
Company shall not require Bridge Bank (“Bank”) to provide an opinion of counsel
if the transfer is to Bank’s parent company, Bridge Capital Holdings, or any
other affiliate of Bank.
 
4.4           Transfer Procedure.  After receipt by Holder of the executed
Warrant, Bank will transfer all of this Warrant to Bank’s parent company, Bridge
Capital Holdings, by execution of an Assignment substantially in the form of
Appendix III.  Subject to the provisions of Article 4.3 and upon providing the
Company with written notice, Bridge Capital Holdings and any subsequent Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant (or the Shares issuable directly or indirectly, upon conversion of
the Shares, if any) to any transferee, provided, however, in connection with any
such transfer, Bridge Capital Holdings or any subsequent Holder will give the
Company notice of the portion of the Warrant being transferred with the name,
address and taxpayer identification number of the transferee and Holder will
surrender this Warrant to the Company for reissuance to the transferee(s) (and
Holder if applicable).  Unless the Company is filing financial information with
the SEC pursuant to the Securities Exchange Act of 1934, the Company shall have
the right to refuse to transfer any portion of this Warrant to any person who
directly competes with the Company.
 
4.5           Notices.  All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, or sent via a nationally recognized overnight courier service, fee
prepaid, or on the first business day after transmission by facsimile, at such
address or facsimile number as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such Holder from time
to time.  Effective upon the receipt of executed Warrant and initial transfer
described in Article 4.4 above, all notices to the Holder shall be addressed as
follows until the Company receives notice of a change of address in connection
with a transfer or otherwise:

     
Bridge Bank, National Association
55 Almaden Boulevard
San Jose, California  95113
Attn:  Mike Field, Executive Vice President
Facsimile No:  (408) 282-1681

 
All notices to the Company shall be addressed as follows:

     
CAREVIEW COMMUNICATIONS, INC.
405 State Highway 121 Bypass, Suite B240
Lewisville, Texas 75067
Attn:  Chief Financial Officer
FAX:  (___)

 
 
 

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4.6           Amendments; Waiver.  This Warrant and any term hereof may be
amended, changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of such amendment, change,
waiver, discharge or termination is sought.
 
4.7           Attorneys’ Fees.  In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys’ fees.
 
[Balance of Page Intentionally Left Blank]
 
 
 

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4.8           Governing Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.

     
CAREVIEW COMMUNICATIONS, INC.
      By:   /s/ Steven Johnson 

 

  Name:  Steven Johnson            

 

  Title:  President/COO  

 

  By:    

 

  Name:   

 

  Title:   

                                         
[Signature Page to Warrant to Purchase Stock]
 
 
Bridge Bank, National Association

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APPENDIX I
 
NOTICE OF EXERCISE
 
[Strike paragraph that does not apply.]
 
1.           The undersigned hereby elects to purchase               shares of
the Common Stock of CAREVIEW COMMUNICATIONS, INC.  pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
 
1.   The undersigned hereby elects to convert the attached Warrant into Shares
in the manner specified in the Warrant.  This conversion is exercised with
respect to _____________________ of the Shares covered by the Warrant.
 
2.           Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:
 
 

Name:    

Address:           

 
3.           The undersigned represents it is acquiring the shares solely for
its own account and not as a nominee for any other party and not with a view
toward the resale or distribution thereof except in compliance with applicable
securities laws.
 

   
(Signature)
              (Date)  

 
 
Appendix I
Page 1

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APPENDIX II
 
Notice that Warrant Is About to Expire
 
[Insert Date of Notice]
 
To:
Bridge Bank, National Association

 
Attn: ___________________

 
55 Almaden Boulevard

 
San Jose, California  95113

 
The Warrant issued to you described below will expire on  ______________, ____.

        Issuer:          Issue Date:  August 31, 2011     Class of Security
Issuable: Common     Exercise Price per Share:  $________     Number of Shares
Issuable:        
Procedure for Exercise:
 

 
Please contact __________ at (___) ___-____ with any questions you may have
concerning exercise of the Warrant. This is your only notice of pending
expiration.
 
 

 
(Name of Issuer)
    By       Its:    

 
 
Appendix II
Page 1

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APPENDIX III
 
Assignment
 
For value received, Bridge Bank, N.A. hereby sells, assigns and transfers unto:
 

  Name: Bridge Capital Holdings   Address: 55 Almaden Boulevard     San Jose,
California  95113   Tax ID:      

 
that certain Warrant to Purchase Stock issued by CAREVIEW COMMUNICATIONS, INC.
(the “Company”), on August 31, 2011 (the “Warrant”) together with all rights,
title and interest therein.
 

  BRIDGE BANK, N.A.           By:       Name:       Title:      

 

Date:    

 
By its execution below, and for the benefit of the Company, Bridge Capital
Holdings agrees to all other provisions of the Warrant as of the date hereof.
 

  BRIDGE CAPITAL HOLDINGS         By:      

  Name:     

  Title:     

 
 
Appendix III
Page 1

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