CareView Communications, Inc. 8-K


 


Exhibit 10.01


 


CONSENT
AND AGREEMENT TO CANCEL AND EXCHANGE Existing Notes AND ISSUE Replacement Notes AND CANCEL Warrants






 


This CONSENT
AND AGREEMENT, dated as of December 30, 2022 (this “Consent Agreement”), is made by and among CAREVIEW
COMMUNICATIONS, INC., a Nevada corporation (the “Company”), the HealthCor Parties (as defined below), and such
additional Existing Investors (as defined below) as, together with the HealthCor Parties (collectively, the “Majority Investors”),
are holders of at least a majority of the shares of Common Stock issued or issuable (on an as converted basis) upon conversion of the
Existing Notes and Warrants.


 


RECITALS:


 


WHEREAS, the Company is insolvent, having a
negative net worth of $117 million and substantial debt, both long and short term as of September 30, 2022; and


 


WHEREAS, because the Company files reports with
the SEC, its financial statements are publicly available, including to its existing and prospective customers; and


 


WHEREAS, the Company believes that it is losing
sales of its products/services to its existing and prospective customers due to its negative net worth and perception that it will be
unable to continue operations with the consequential loss of all or substantially all of the Existing Indebtedness (as defined below);
and


 


WHEREAS, the Existing Investors have agreed
to enter into this Consent Agreement to reduce the aggregate principal amount of the Existing Indebtedness in order to contribute to the
Company’s ability to continue as a “going concern” and thereby hopefully salvaging the repayment of at least a portion
of the Existing Indebtedness; and


 


WHEREAS, the Company, HealthCor
Partners Fund, L.P. (“HealthCor Partners”), HealthCor Hybrid Offshore Master Fund, L.P. (“HealthCor Hybrid”
and, together with HealthCor Partners, the “HealthCor Parties”) and certain additional investors that purchased additional
Notes and additional Warrants on February 17, 2015 (the “2015 Investors”), additional Notes and additional Warrants
on February 23, 2018 (the “February 2018 Investors”), additional Notes on July 13, 2018 (the “July 2018 Investors”),
additional Notes on May 15, 2019 (the “2019 Investor”) and additional Notes on February 6, 2020 (the “2020
Investor” and, together with the 2015 Investors, the February 2018 Investors, the July 2018 Investors, the 2019 Investor and
the HealthCor Parties, the “Existing Investors”) are parties to that certain Note and Warrant Purchase Agreement, dated
as of April 21, 2011 (as amended from time to time, including without limitation pursuant to that certain Note and Warrant Amendment Agreement
dated December 30, 2011, that certain Second Amendment to Note and Warrant Purchase Agreement dated January 31, 2012, that certain Third
Amendment to Note and Warrant Purchase Agreement dated August 20, 2013, that certain Fourth Amendment to Note and Warrant Purchase Agreement
dated January 16, 2014, that certain Fifth Amendment to Note and Warrant Purchase Agreement dated December 15, 2014, that certain Sixth
Amendment to Note and Warrant Purchase Agreement dated March 31, 2015, that certain Seventh Amendment to Note and Warrant Purchase Agreement
dated June 26, 2015, that certain Eighth Amendment to Note and Warrant Purchase Agreement dated February 23, 2018, that certain Ninth
Amendment to Note and Warrant Purchase Agreement dated July 10, 2018, that certain Tenth Amendment to Note and Warrant Purchase Agreement
dated July 13, 2018, that certain Eleventh Amendment to Note and Warrant Purchase Agreement dated March 27, 2019, that certain Twelfth
Amendment to Note and Warrant Purchase Agreement dated May 15, 2019 and that certain Thirteenth Amendment to Note and Warrant Purchase
Agreement dated February 6, 2020, the “Purchase Agreement”); and


 







    	 	1	 



     


    




 


WHEREAS, as contemplated
by the Purchase Agreement, the Company issued and sold (a) $20,000,000 initial principal amount of Notes (the “2011 Notes”)
and Warrants to purchase 11,782,859 shares of Common Stock to the HealthCor Parties on April 21, 2011, (the “2011 Warrants”)
(b) $5,000,000 initial principal amount of additional Notes (the “2012 Notes”) to the HealthCor Parties on January
31, 2012, (c) $5,000,000 initial principal amount of additional Notes (the “2014 Supplemental Closing Notes”) and Warrants
to purchase 4,000,000 shares of Common Stock (the “2014 Supplemental Warrants”) to the HealthCor Parties on January
16, 2014, (d) $6,000,000 initial principal amount of additional Notes (the “Fifth Amendment Supplemental Closing Notes”)
and Warrants to purchase 3,692,308 shares of Common Stock (the “Fifth Amendment Supplemental Warrants”) to HealthCor
Partners and the 2015 Investors on February 17, 2015, (e) Warrants to purchase 1,000,000 shares of Common Stock on March 31, 2015 (the
“Sixth Amendment Supplemental Warrants”), (f) $2,050,000 initial principal amount of additional Notes (the “Eighth
Amendment Supplemental Notes”) and Warrants to purchase 512,500 shares of Common Stock (the “Eighth Amendment Supplemental
Warrants”) to the February 2018 Investors on February 23, 2018, (f) $1,000,000 initial principal amount of additional Notes
(the “Tenth Amendment Supplemental Notes”) to the July 2018 Investors on July 13, 2018, (g) $50,000 initial principal
amount of additional Notes (the “Twelfth Amendment Supplemental Notes”) to the 2019 Investor on May 15, 2019, (h) $100,000
initial principal amount of additional Notes (the “Thirteenth Amendment Supplemental Notes”) to the 2020 Investor on
February 6, 2020, (i) Warrants to purchase 2,000,000 shares of Common Stock on April 20, 2021 (the “2021 Warrants”),
and (j) Warrants to purchase 3,000,000 shares of Common Stock on March 8, 2022 (the “2022 Warrants”); and 


 


WHEREAS,
the undersigned Existing Investors in and holders of the 2011 Notes, 2012 Notes, 2014 Supplemental Closing
Notes, Fifth Amendment Supplemental Closing Notes, Eighth Amendment Supplemental Notes, Tenth Amendment Supplemental
Notes, Twelfth Amendment Supplemental Notes, Thirteenth Amendment Supplemental Notes (collectively the “Existing Notes”
and the indebtedness represented by such Existing Notes, the “Existing Indebtedness”), desire to cancel and exchange
their respective Existing Notes for replacement notes in the amounts and in consideration of earlier maturity
dates as set forth on Schedule 1 attached hereto and incorporated herein and in the form as attached hereto as Exhibit A (collectively
the “Replacement Notes”); and


 


WHEREAS, the
Existing Investors agree to the cancellation by the Company and the forfeiting of their respective rights in and to the 2011 Warrants,
2014 Supplemental Warrants, Fifth Amendment Supplemental Warrants, Sixth Amendment Supplemental Warrants, Eighth Amendment Supplemental
Warrants, 2021 Warrants and 2022 Warrants (collectively, the “Warrants”); and


 







    	 	2	 



     


    




 


WHEREAS, the Existing Investors
have agreed to waive any and all interest that has accrued, but remains unpaid on the Existing Notes held
by the Existing Investors;


 


WHEREAS, in exchange for
releasing its second senior secured position they hold in connection with the 2011 Notes and 2012 Notes, the HealthCor Parties will receive
an additional $5,000,000 in value in the Replacement Notes as reflected on Exhibit A; and


 


WHEREAS, the Company agrees
to use its best efforts to facilitate the best taxable treatment/event/outcome to the Existing Investors resulting from their agreement
to enter into this Consent Agreement.


 


NOW, THEREFORE, in consideration
of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto agree as follows:


 


1.       Definitions.
Capitalized terms used in this Consent Agreement but not defined in this Consent Agreement shall have the meanings ascribed to them in
the Purchase Agreement.


 


2.       Consent
to Cancellation of the Existing Notes and Issuance of Replacement Notes. The Existing Investors each hereby consent to the cancellation
of his/hers/its respective Existing Note(s) and the issue to him/her/it of a Replacement Note(s) in the amount and on the terms set forth
on Schedule 1 hereto and form of Replacement Note set forth on Exhibit A hereto. Each Existing Investor hereby represents
and warrants to the Company that the Existing Note(s) held by such Existing Investor, as set forth on Schedule 1, represents all
of the promissory notes, convertible promissory notes and any other debt security issued by the Company and held by such Existing Investor
as of the date hereof.


 


3.       Cancellation
of Warrants. Subject to compliance with the terms and conditions of this Consent Agreement, the Existing Investors agree to the cancellation
by the Company and the forfeiting of their respective rights in and to the Warrants.


 


	 	4.	Miscellaneous.


 


(a)     Ratification
and Confirmation. The Company acknowledges, agrees and confirms that the Purchase Agreement and each of the other Transaction Documents,
except as expressly set forth in this Consent Agreement, are and shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed. Without limiting the effect of the foregoing, the Company and the other parties hereto agree and confirm that
the Replacement Notes shall be considered “Notes” and “Closing Securities” under the Purchase Agreement, any shares
of Common Stock issuable upon conversion of the Replacement Notes shall be considered “Note Shares” under the Purchase Agreement
and “Registrable Securities” under the Registration Rights Agreement, and the obligations of the Company under the Replacement
Notes shall be “Obligations” within the meaning of the Security Agreement.


 







    	 	3	 



     


    

  


(b)     Expenses.
The Company will pay and bear full responsibility for the reasonable legal fees and other out-of-pocket costs and expenses of the Existing
Investors attributable to the negotiation and consummation of the transactions contemplated hereby.


 


(c)     Governing
Law. All questions concerning the construction, interpretation and validity of this Consent Agreement shall be governed by and construed
and enforced in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision
or rule (whether in the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware will control the interpretation
and construction of this Consent Agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive
law of some other jurisdiction would ordinarily or necessarily apply.


 


(d)     Construction.
The Company and the Existing Investors acknowledge that the Company and its independent counsel and the Existing Investors and their independent
counsel have jointly reviewed and drafted this document, and agree that any rule of construction and interpretation to the effect that
drafting ambiguities are to be resolved against the drafting party shall not be employed.


 


(e)     Counterparts;
Facsimile and Electronic Signatures. This Consent Agreement may be executed in any number of counterparts, and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Counterpart
signatures to this Consent Agreement delivered by facsimile or other electronic transmission shall be acceptable and binding.


 


(f)     Headings.
The section and paragraph headings contained in this Consent Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Consent Agreement.


 


(g)     Recitals.
The above Recitals are contractual and form an integral / substantive part of this Consent Agreement.


 







    	 	4	 



     


    

 


(h)     Release
of Claims. Effective upon the date hereof, each Existing Investor, and each of his, her or its equityholders, subsidiaries, affiliates,
employees, agents, advisors, heirs, executors, administrators, legal and personal representatives, successors and assigns, as applicable
(collectively, the “Releasors”), hereby unconditionally and irrevocably waives, releases and forever discharges the
Company and its affiliates and its past, present and future directors, officers, employees, advisors, agents, predecessors, successors,
assigns, equityholders, partners, insurers and affiliates (the “Released Parties”) from any and all liabilities, actions,
causes of action, suits, guarantees, proceedings, grievances, executions, judgments and claims for injuries, losses, interest, costs,
expenses, indemnity, fines, penalties, legal and professional fees and assessments or other amounts of any kind or nature whatsoever,
in law or in equity, whether express or implied, in each case whether absolute or contingent, liquidated or unliquidated, known or unknown,
matured or unmatured, from the inception of time through the date hereof, that any Releasor ever had, may have or now has against the
Released Parties in its capacity as a holder of an Existing Note or Warrant, or in connection with the Purchase Agreement (collectively,
the “Claims”); provided, that, except as set forth in the last sentence of this paragraph, the foregoing shall not
(i) release any rights of the Existing Investor arising under (a) any indemnification obligations under the DGCL or (b) the Replacement
Notes, or the transactions contemplated by this Consent Agreement; or (ii) release any Claims that cannot be released as a matter of law
(the “Non-Released Matters”). Each Existing Investor understands that this is a full and final release of all actions
and Claims of any nature whatsoever, whether or not known, suspected or claimed, that could have been asserted in any legal or equitable
proceeding against the Released Parties as of the date hereof, except as expressly set forth in this Section 4(h). Existing Investor acknowledges
that it, he or she may hereafter discover facts in addition to or different from those that Existing Investor now knows or believes to
be true with respect to the subject matter of this release, but it is Existing Investor’s intention, except for the Non-Released
Matters, to fully and finally and forever settle and release any and all claims that do now exist, may exist or heretofore have existed
with respect to the subject matter of this release. In furtherance of this intention, the releases contained herein will be and remain
in effect as full and complete general releases notwithstanding the discovery or existence of any such additional or different facts.


 


[Signature Pages Follow]


 







    	 	5	 



     


    

 


 


IN WITNESS WHEREOF, each
of the undersigned has duly executed this Consent Agreement as of the date first written above.


 


	 	COMPANY:
	 	 	 
	 	CareView Communications, Inc., a Nevada corporation
	 	 	 
	 	By:	 /s/ Steven G. Johnson
	 	 	Name: Steven G. Johnson
	 	 	Title: President


 


 




    	 	[Signature Page to Consent Agreement]	 



     


    




 


 


	 	MAJORITY INVESTORS:
	 	 	 
	 	HealthCor Partners Fund, L.P.
	 	By: HealthCor Partners Management L.P., as Manager
	 	By: HealthCor Partners Management, G.P., LLC, as General Partner
	 	 	 
	 	By:	 /s/ Jeffrey C. Lightcap
	 	Name: Jeffrey C. Lightcap
	 	Title: Senior Managing Director
	 	Address:	HealthCor Partners
	 	 	1325 Avenue of Americas, 27th Floor
	 	 	New York, NY 10019
	 	 	 
	 	HealthCor Hybrid Offshore Master Fund, L.P.
	 	By: HealthCor Hybrid Offshore G.P., LLC, as General Partner
	 	 	 
	 	By:	 /s/ Laurie Hadick
	 	Name: Laurie Hadick
	 	Title: CCO
	 	Address:	HealthCor Partners
	 	 	1325 Avenue of Americas, 27th Floor
	 	 	New York, NY 10019
	 	 	 	 


 


 




    	 	[Signature Page to Consent Agreement]	 



     


    




 


	 	MAJORITY INVESTORS:
	 	 
	 	
     

    /s/ Steven B. Epstein

	 	Steven B. Epstein
	 	 
	 	
     

    /s/ James R. Higgins

	 	Dr. James R. Higgins
	 	 
	 	
     

    /s/ Steven G. Johnson

	 	Steven G. Johnson
	 	 
	 	
     

    /s/ Jeffrey C. Lightcap

	 	
    Jeffrey C. Lightcap

     



 







    	 	[Signature Page to Consent Agreement]	 



     


    

 


 


ACKNOWLEDGED AND AGREED:


 


	CareView Communications, Inc., a Texas corporation	 
	 	 	 
	By:	 /s/ Steven G. Johnson	 
	Name:	 Steven G. Johnson	 
	Title:	President	 
	 	 	 
	CareView Operations, LLC, a Texas limited liability company	 
	 	 	 
	By:	 /s/ Steven G. Johnson	 
	Name:	 Steven G. Johnson	 
	Title:	President	 


 


 







    	 	[Signature Page to Consent Agreement]	 



     


    

 


 


SCHEDULE 1


 


EXISTING INVESTORS REPLACEMENT NOTES AMOUNTS AND
MATURITY DATES


 


[***]


 


[Omitted pursuant to Instruction 4 to Item 1.01 of
Form 8-K]


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




    	 



     


    




  


 


EXHIBIT A


 


FORM OF REPLACEMENT NOTE


 


[See attached]