Exhibit 10.66
AGREEMENT
REGARDING GROSS INCOME INTERESTS
between
CAREVIEW COMMUNICATIONS, INC.
and
GERALD L. MURPHY,
dated
AUGUST 20, 2010
TABLE OF CONTENTS
SECTION | PAGE | |||
1. | Definitions and Titles | 1 | ||
2. | Gross Income Interests | 2 | ||
3. | Put/Call Rights | 2 | ||
4. | Information | 2 | ||
5. | Dispute Resolution | 2 | ||
6. | Governing Law | 3 | ||
7. | Notices | 3 | ||
8. | Further Assurances | 4 | ||
9. | Severability | 4 | ||
10. | Specific Performance | 4 | ||
11. | Amendments | 4 | ||
12. | Counterparts | 5 | ||
13 | Noncircumvention | 5 | ||
14. | Waiver | 5 | ||
15. | Relates Back | 5 | ||
16. | Authority | 5 | ||
17. | Merger | 5 |
EXHIBITS
Exhibit 1 | August 2010 CareView/T2 Agreement | |
Exhibit 4 | Information Rights | |
Exhibit 5 | Arbitration | |
Exhibit 16 | CareView’s Secretary’s Certificate |
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AGREEMENT REGARDING
GROSS INCOME INTERESTS
This Agreement Regarding Gross Income Interests (hereinAgreement) is between CareView Communications, Inc. (hereinCareView orCompany) and Gerald L. Murphy (hereinMurphy), and is dated the 20th day of August, 2010, but relates back to February 28, 2005.
WHEREAS,CareView,T2,Langley,Thompson andMurphy have entered into the terms of theAugust 2010 CareView/T2 Agreement (Exhibit 1 hereto) which requires thatCareView andMurphyenter into the terms hereof; and
WHEREAS,T2 is dissolving and distributing its assets in kind to itsMembers and this assignment of theGross Income Interestsis a part ofMurphy’sin kind distribution ofT2 assets as more particularly set forth in theAugust 2010 CareView/T2 Agreement; and
WHEREAS, theGross Income Interests are being substituted in part for theAdjusted Gross Income Interests by mutual agreement of all the parties to theAugust 2010 CareView/T2 Agreement and theParties hereto;
NOW THEREFORE, for good and valuable consideration which theParties hereto acknowledge, stipulate and agree has been received and/or is set forth herein, thePartiesagree as follows, to-wit:
1.Definitions and Titles. The titles and subtitles of the sections and subsections of thisAgreement are for convenience only, are not part of the terms of thisAgreement, are without legal or contractual significance, and as such shall not govern the terms of thisAgreement or in any way influence the interpretation of thisAgreement. The terms used herein shall be ascribed the definitions given thereto in theAugust 2010 CareView/T2 Agreement (Exhibit 1 hereto), unless otherwise noted and defined to the contrary herein.CareView may also be referred to herein as theCompany.
Affiliated Entity orAffiliate shall be deemed affiliated as to each other to the extent: (a) one of theEntities directly or indirectly controls, or is controlled by, the operations of the other, or the direct or indirect control of one of theEntities is exercised by the officers, directors, stockholders, or partners of the otherEntity (whether or not such persons exercise such control in their capacities as officers, directors, stockholders, or partners); or (b) one of theEntities directly or indirectly owns, and/or its officers, directors, stockholders or partners (limited or general) directly or indirectly own, a ten percent (10%) or greater interest in the capital and/or profits of the otherEntity.
Fair Market Value means a price per share that is determined by calculating the average of the closing bid price ofCareView’s Common Stock over the thirty (30) day period immediately prior to the payment of the Purchase Price.
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Gross Income Interest means an income interest inCareViewreflecting rights to receive a one-third portion of one and one-half percent (1 1/2%) of all revenue of any type or nature, and from whatever source received byCareViewand its subsidiaries, without any deductions for expenses, costs or any other purpose.
Interest means twelve percent (12%) per annum compounded monthly from the date due unless the context indicates otherwise.
Party(s)/Parties in the singular shall meanMurphy orCareView, and in the plural shall meanMurphy andCareView.
Purchase Price shall mean, absent an agreement betweenMurphy and theCompany to the contrary, atCareView’s election, either: i) a monetary amount equal to the aggregatedGross Income Interestreceived in the twelve (12) month period immediately prior to the sale, transfer or exchange, or ii) the payment of the monetary amount as determined in i) above in shares ofCareView’sCommon Stock at Fair Market Value.
2.Gross Income Interests.Murphyshall release his respective interest in and claims to theAdjusted Gross Income Interests arising from theFebruary 2005 CareView-TX/T2 Agreement, andMurphy is hereby assigned aGross Income Interest byCareView. TheGross Income Interest shall be paid and accounted for monthly no later than the 15th day of each calendar month. Notwithstanding the prior sentence,Murphy and theCompany have agreed to delay the initial payment until the earlier of: i) August 15, 2011, or ii) thirty (30) days after theCompany is producing a profit by GAAP standards (the earliest of i) or ii) being referred to herein as the “First Payment Date”). Because theGross Income Interestgiven toMurphyis a substitute in part for theAdjusted Gross Income Interests of CareView-TXowned byT2 pursuant to theAugust 2010 CareView/T2 Agreement, the rights ofMurphy to receive theGross Income Interestrelates back to February 28, 2005, but the percentage shall be reduced from an aggregate of five percent (5%) Adjusted Gross Income Interests of CareView-TX to an aggregate of one and one-half percent (1 1/2%)Gross Income Interestsof the Company with all amounts due from February 28, 2005 through the quarter ended prior to theFirst Payment Datebeing accrued and payable on theFirst Payment Date. Payments will be accompanied by a report reasonably acceptable toMurphy.
3.Put/Call Rights. TheCompany has the right to acquire theGross Income Interest ofMurphy from September 1, 2013 until December 31, 2015, for thePurchase Price.Murphy has the right to require that hisGross Income Interest be purchased by theCompany any time from September 1, 2011 until December 31, 2015, for thePurchase Price.
4.Information.CareView shall provideMurphy with the data and information rights set forth in Exhibit 4 hereto “Information Rights”, the terms of which are incorporated herein.
5.Dispute Resolution. Any and allDisputes between theParties shall be resolved by thePartiespursuant to this Section 5, “Dispute Resolution”, and Exhibit 5, “Arbitration”, the terms of which are incorporated herein. In the event aParty believes
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the otherPartyis in breach of the terms hereof for any reason(s), it shall provide written notice of such purported breach(es) describing such breach(es) with particularity (in fact and in legal impact) and the purported breachingParty shall be granted thirty (30) days from its actual receipt of such notice to cure said breach(es) if it concurs that the complaint(s) constitutes a breach(s) hereof, and if so cured by the purported breachingParty, the breach(es) shall be deemed to have never occurred. In the event theParties cannot agree as to whether the complaint(s) constitutes a breach(es) of the terms hereof, or the purported breachingParty does not elect to undertake the expense of resolving the complaint(s), then theParties agree to submit the facts to an appropriate court pursuant to this section, “Dispute Resolution”, and Exhibit 5, “Arbitration”. If the court determines any action or inaction of the purported breachingPartyin fact constitutes a breach(es) of the terms hereof, then the breachingPartyshall have thirty (30) days from the date the court’s decision becomes final to cure said breach(es), and if so cured by the breachingParty, shall be deemed to have never occurred. Unless expressly specified otherwise herein to the contrary, a breachingParty shall only be obligated to the non-breachingParty for said non-breachingParty(s) actual damages (plusInterestthereon from the date of the occurrence or loss) proximately caused by the breach of theAgreement. In no event shall the remedy of termination or cancellation of theAgreementbe employed, permitted or decreed; and, unless specified otherwise herein to the contrary, aParty shall not be responsible for punitive or consequential damages for a breach of theAgreement. Specific performance and other equitable remedies, unless otherwise barred herein are expressly stipulated by thePartiesto be with the discretion, authority and purview of the court. The cure of any monetary payment breach shall require the breachingParty to pay the full amount due, plusInterest thereon during the period that the amount due remains unpaid. In the alternative, theParty alleged to be in default may place the disputed amount in an interest-bearing,Third Party escrow account, and the Party(s) ultimately determined to be entitled to such amount shall receive theInterest accrued thereon in such escrow account.
6.Governing Law. ThisAgreement shall be governed by and construed and interpreted in accordance with the laws of the State of Texas applicable to agreements made and to be performed entirely within such state, including all matters of enforcement, validity and performance.
7.Notices. AnyNotice required or permitted to be given hereunder (herein “Notice”) shall be in writing shall be: (i) personally delivered; and/or (ii) transmitted by postage pre-paid first class certified United States mail return receipt requested; and/or (iii) transmitted by pre-paid, overnight courier (e.g. FedEx, UPS, etc.). DuplicativeNotices may be given in writing by: United States mail (not certified and no return receipt), facsimile (fax) and/or e-mail. AllNotices and other communications shall be deemed to have been duly given, received and effective on the earlier of: (i) the date of receipt if delivered personally; (ii) the second business day after the date of transmission if by overnight courier; (iii) the date the return receipt is signed by the receivingParty in the case of pre-paid postage; or (iv) the date of actual receipt if the same can be demonstrated by other evidence (including parole evidence). AnyParty may unilaterally change its address for purposes hereof byNoticegiven to the otherParty.Notices hereunder shall be directed to the following agents of theParties at the following addresses:
Company: | CareView Communications, Inc. | |
Attn: Steven G. Johnson, President | ||
405 State Highway 121, Suite B-240 | ||
Lewisville, TX 75067 | ||
Telephone: 972-943-6050 | ||
Fax: 972-403-7659 | ||
E-mail:sjohnson@care-view.com |
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Murphy: | Gerald L. Murphy | |
2701 W. Concord | ||
Broken Arrow, OK 74012 | ||
Telephone: (918) 712-0011 | ||
Fax: | ||
E-mail: mei@oklahoma.net |
8.Further Assurances. TheParties hereby agree to execute, acknowledge and deliver to each other any further writings, documents, liens, security instruments, deeds of trust, mortgages, transfers, acknowledgements, instruments, powers of attorney, authorizations, filings, applications, reports, etc. that may be reasonably required to give full force and effect to the provisions of thisAgreement, and to take such further actions reasonably required in fulfillment of obligations set forth herein or in furtherance of the intent hereof. The Gross Income Interest ofMurphymay be filed of record as a security interest, mortgage or an appropriate lien in the jurisdiction in which theCompany has real or personal property, and theCompany shall acknowledge or execute and file the appropriate security documents and instruments on the request ofMurphy.
9.Severability. The provisions of thisAgreement are severable, so that the invalidity or unenforceability of any provision of thisAgreement shall not affect the validity or enforceability of any other term or provision of thisAgreement, which shall remain in full force and effect.
10.Specific Performance. In addition to any and all other remedies that may be available at law in the event of any breach of thisAgreement, eachPartyshall be entitled to specific performance of the agreements and obligations of the otherParty hereunder and to such other injunctive or other equitable relief as may be granted by the Arbitrator.
11.Amendments. ThisAgreement constitutes the full and complete agreement of theParties hereto with respect to the subject matter hereof. ThisAgreement may be amended, modified, terminated or waived (in any one instance or generally and whether retroactively or prospectively) by a writing signed by theCompany andMurphy.
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12.Counterparts. ThisAgreement may be executed in any number of counterparts, each of which shall constitute oneAgreement binding on theParties hereto and may be executed by facsimile.
13.Noncircumvention. NeitherParty nor any of theirAffiliated Entities shall directly or indirectly circumvent, avoid, bypass, or in any way obviate the otherParty’s rights under thisAgreement. The terms of thisAgreement are binding uponAffiliated Entities of the eachPartyto the extent anyAffiliated Entity(s) violate(s) or proximately causes a violation of any of the terms of thisAgreement. In the event of a violation proximately caused by anAffiliated Entity(s) of eitherParty,theParty which is affiliated therewith agrees to be pecuniarily liable to the otherParty(s) as if they had directly violated the terms hereof. In the event anAffiliated Entity(s) violates or proximately causes a violation of the terms hereof, the Party which is affiliated with suchEntity shall indemnify and keep the otherParty(s) whole as if it/he had directly violated the terms hereof, and the aggrievedParty(s) shall be entitled to attach and/or to offset the share of any proceeds of the otherParty under thisAgreement. Notwithstanding the above, theAffiliated Entity(s) of eitherParty shall NOT be liable to otherParty for violations of thisAgreement, proximately caused by aParty hereto without the willful, material, in such violation by theAffiliated Entity(s).
14.Waiver. EachParty reserves the right to waive, in whole or in part, any provision hereof which is for the benefit of thatParty, and such waiver shall not be construed as creating a course of conduct which prevents it from refusing to waive other provisions and/or the same provisions thereafter. EachParty’sfailure or delay in protesting, or contending breach pursuant to Section 5, “Dispute Resolution” and Exhibit 5, “Arbitration”, or taking legal action or demanding arbitration upon the otherParty’sbreach is no waiver of that course of action, unless thatParty’sdelay to take action exceeds a reasonable time under the circumstances and exceeds the statute of limitations. EitherParty’sfailure or delay in protesting or contending breach pursuant to Section 5, “Dispute Resolution” and Exhibit 5, “Arbitration”, upon the otherParty’sbreach is not to be considered as being a waiver of thatParty’scause of action for any subsequent breach of the same or of a different nature.
15.Relates Back. TheParties hereby stipulate and agree that the provisions of thisAgreement relate back to February 28, 2005, the date of theFebruary 2005 CareView-TX/T2 Agreement. For purposes of clarity, theGross Income Interests commenced as of February 28, 2005, shall continue in perpetuity, unless purchased by theCompany as provided for in Section 2.
16.Authority. TheParties represent and warrant to one another that eachParty has the authority, and the signing representative of theParty is authorized to enter into thisAgreement, and the attached Secretary’s Certificate certifies to a resolution ofCareView’s Board of Directors (Exhibit 16) that so authorizesCareView to enter into the terms hereof.
17.Merger. In the event of a merger, theGross Income Interests shall become applicable to the merged or consolidated entity.
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IN WITNESS WHEREOF, thisAgreement has been executed by theParties hereto as of the day and year first above written or consented to and ratified as if executed on such date.
COMPANY: | ||
CAREVIEW COMMUNICATIONS, INC. | ||
By: | /s/ Steven G. Johnson | |
Steven G. Johnson, President |
Attested by: | /s/ John R. Bailey | |
John R. Bailey, Secretary |
MURPHY: |
/s/ Gerald L. Murphy |
Gerald L. Murphy |
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EXHIBIT 1
AUGUST 2010 CAREVIEW/T2 AGREEMENT
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EXHIBIT 4
INFORMATION RIGHTS
The Company intends to file a Registration Statement on Form 10 (“Form 10”) with the Securities and Exchange Commission (the “Commission”), after which it will be subject to the requirements of Regulation 13A under the Exchange Act which will require it to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and it will be required to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act.
TheCompany will deliver toMurphy:
A. Annual Reports on Form 10-K upon filing same with the Commission within the time constraints permitted and pursuant to the rules promulgated by the Commission.
B. Quarterly Reports on Form 10-Q upon filing same with the Commission within the time constraints permitted and pursuant to the rules promulgated by the Commission.
Murphyshall have the right upon reasonable notice to inspect and audit any books and records of theCompanyand any subsidiaries. The inspection and audit will be at the cost ofMurphy.However, if any payment ofGross Income Interest is more than 3% less than it should have been, then theCompany will pay the additional amount owed, interest at thePrime Rate plus 6 percentage points, and reimburseMurphy for the fees and expenses of the audit or inspection. TheCompany andMurphyagree, for the benefit ofMurphy, to account for and stipulate to the amount of theGross Income Interest past due within ninety (90) days of the execution of thisAgreement, and to that end theCompany will provideMurphy with any and all data or information necessary or desirable to fulfill such accounting and stipulation.
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EXHIBIT 5
ARBITRATION
This Exhibit is to that particularAgreementbetweenCareView andMurphy.The terms of this Exhibit and theAgreementare hereby incorporated into one another. It is the expressed intent of theParties that any and allDisputesbetween theParties and theirAffiliated Entities, regardless of the nature thereof, which have not been resolved or cured by theParties as described in Section 5, “Dispute Resolution,” of theAgreement, shall be submitted toArbitration (pursuant to the terms of theAgreement and this Exhibit thereto) under the applicable Rules and Procedures ofArbitration of the American Arbitration Association (AAA). TheParties further stipulate that the decision or award rendered from saidArbitration will be enforceable under the Federal Arbitration Act of the United States and/or comparable arbitration enforcement laws in theUSA.
1.Arbitration Notice. Notice of the demand forArbitration shall be filed in writing with the otherPartyto theAgreement as provided for in Section 5, “Dispute Resolution” and with theAAA. The demand forArbitration shall be made within a reasonable time (not less than ten (10) days and not more than sixty (60) days) after the notice is received. In no event shall notice be given after the date when the institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations or statute of repose. Notice to the otherParty shall be given as provided in Section 7, “Notices”, of theAgreement.
2.Choosing an Arbitrator. TheParties agree to have one (1) disinterested and independentArbitratorappointed by the U.S. District Court, Northern District of Texas in Dallas, Texas to sit during theArbitration proceedings and render an award thereon. The court appointedArbitrator shall be an attorney or judge with a background in corporate law and business transactions.
3.Location of Hearing; Language. ActualArbitrationhearings shall take place in the Dallas Metropolitan Area unless otherwise mutually agreed to, in writing.
4.Discovery. Unless otherwise agreed by theParties, theParties will be entitled to conduct complete discovery as awarded by Federal practices and procedures for a civil case prior to the hearing, on a schedule to be agreed to by theParties or established by theArbitrator,consisting of production of documents relevant to theDispute, depositions of witnesses having knowledge relevant to theDispute,and depositions (and production of reports if prepared) of any expert witness any otherParty intends to call at theArbitration hearing.
5.Presentation of Arguments. Absent the mutual agreement of theParties to the contrary, all arguments must be presented in no more than thirty (30) days after the start of theArbitrationhearings. Failure to present arguments within the time allotted shall be considered a default only in respect to the matter presented forArbitration.If anyPartyso defaults, it hereby agrees to forfeit all other remedies available to it inLaw, equity or otherwise for the matter being arbitrated only.
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6.Rendering of Award. After each side rests in theArbitrationhearing, the award of theArbitratormust be rendered in writing within ten (10) days; however, an award rendered extrinsic of such time frame shall be valid and binding on theParties. If either Party believes the award to be ambiguous or unclear in any manner, it shall submit its questions in writing to theArbitratorand to the otherParty which may elect to submit comments on the questions in writing to theArbitratorand to the questioningParty within ten (10) days, and theArbitratorshall respond thereto in writing within ten (10) days of their receipt of the later of the questions or the comments on the questions.
7.Remedies and Rules of Construction. In theArbitrationof anyDisputebetween theParties hereto theArbitratorand/or reviewing courts are expressly restricted as follows by the contractual agreement of theParties:
A. Absent an expressed written statement(s) in theAgreement, the terms of theAgreementmay not be revised, rewritten or modified by theArbitratoror reviewing court (such terms can only be interpreted in accordance with the guidelines and directives herein and therein contained).
B. The common law principle of legal construction that the document is to be strictly construed against the draftingParty is expressly waived by theParties hereto and theArbitratoris expressly instructed not to apply such principle in his/her deliberations.
C. TheArbitratormust resolve the conflict; i.e., theArbitrator may not allow the conflict to remain unresolved.
D. TheArbitratormay not deliver an award which is arbitrary, capricious, or which is not supported by substantial evidence, or which revises, rewrites or ignores the terms of thisAgreement,and if he/she does so, the award may be submitted for review to a court of proper jurisdiction and venue, which is hereby requested to vacate, overturn, reverse and/or remand the same.
E. The award/decision rendered by theArbitratorshall be final and conclusive, and theParties stipulate that legal and/or equitable judgment may be entered upon it in the court having jurisdiction. It is also stipulated and agreed and the specific intent of theParties hereto that termination of theAgreementshall not be remedy ordered and/or awarded by theArbitrator,or the court.
F. It is stipulated that this agreement to arbitrate shall be enforceable via specific performance and/or injunctive relief. It is also stipulated and agreed that theArbitrator in rendering his/her award/decision shall be authorized to order both specific performance, and in the same decision award aParty monetary damages as to the failure of the otherParty to perform its previous obligations to the otherParty.
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G. EitherParty shall be entitled to the pre and post judgment remedy of attaching or offsetting income or monies in order to pay any amount due or owing to it by the otherParty pursuant to theAgreement.If the pre and/or post judgment, self-help remedy of attaching or offsetting income is disputed it shall be decided as otherDisputesbetween theParties, with no penalty(s) being awarded for the use of pre and/or post judgment, self-help remedies, even if the use thereof is held to have been in error.
8.Costs of Arbitration. All costs of arbitration shall be borne by the losingParty. The losingParty shall be theParty designated as such by theArbitrator. In the event aParty prevails on certain issues and loses on others, the cost ofArbitrationshall be apportioned between theParties in any manner theArbitrator orders. Costs ofArbitrationinclude, but are not limited to the following withInterest thereon from the date such expenses are accrued, to wit: i) expenses and fees of theArbitrator;ii) legal expenses of theParties during the course of and in preparation forArbitrationandDispute Resolutionand/or involving or enforcing the processArbitrationandDispute Resolutionand/or involving or enforcing the processArbitrationandDispute Resolutionand/or enforcing the decision or judgment of theArbitrator via legal proceedings; iii) travel and out-of-pocket expenditures of eitherParty in relation toArbitrationandDispute Resolution.In the event there is any dispute regarding what constitutes anArbitrationexpense or the reasonableness of a particular item of expense submitted, theArbitratorshall resolve the same.
9.Application of AAA and Federal Arbitration Act. Except as herein provided, the provisions of theAAA and the Federal Arbitration Act shall apply; and wherever and whenever there is a conflict between the provisions of theAAA and the Federal Arbitration Act and theAgreement, the provisions of the relevantAgreement shall prevail.
10.Enforceable at Law and In Equity. It is stipulated that theParties’ agreement to arbitrate shall be enforceable via specific performance and/or injunctive relief via any proper court with jurisdiction. The award and judgment rendered by theArbitrator shall be final and conclusive, and theParties stipulate that legal and/or equitable judgment may be entered upon jurisdiction in accordance with the Federal Arbitration Act in the Federal Courts for the Northern District of Texas in Dallas, Texas.
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EXHIBIT 16
CAREVIEW’S SECRETARY’S CERTIFICATE
CAREVIEW COMMUNICATIONS, INC.
CERTIFICATE OF SECRETARY
Pursuant to provisions of the Agreement Regarding Gross Income Interests dated August 20, 2010, by and between CareView Communications, Inc., a Nevada corporation (the “Company”) and Gerald L. Murphy, the undersigned, as Secretary of the Company, hereby certifies the following as of the Closing Date:
(i) Each representation and warranty contained in the Agreement Regarding Gross Income Interests is true and correct with the same effect as though such representation and warranty had been made on and as of the date of this Secretary’s Certificate.
(ii) The Company has performed and complied with all covenants, agreements, obligations, and conditions contained in the Agreement Regarding Gross Income Interests required to be performed or complied with by the Company prior to or at the date of this Secretary’s Certificate.
(iii) The Company’s Board of Directors held a meeting on August 19, 2010, at which a quorum was present, and adopted a resolution to approve the Company’s entry into the Agreement Regarding Gross Income Interests and to authorize its President, Steven G. Johnson, to execute same in the name of and on behalf of the Company.
All capitalized terms used herein but not otherwise defined shall have the meaning ascribed to them in the Agreement Regarding Gross Income Interests.
IN WITNESS WHEREOF, the undersigned has executed and delivered this certificate this 20th day of August, 2010.
/s/ John R. Bailey |
John R. Bailey |
Secretary |
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