8-K

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): December 8, 2006

CAREGUIDE, INC.
(Exact name of the Registrant as specified in its charter)
Delaware	0-22319	16-1476509
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
12301 N.W. 39th Street Coral Springs, Florida 33065
(Address of principal executive offices and Zip Code)
the Registrant’s telephone number, including area code: (954) 796-3714
Not applicable
(Former name or former address, if changed since last report.)

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))

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Item 2.01. Completion of Acquisition or Disposition of Assets.

Acquisition of Haelan Corporation

On December 8, 2006, pursuant to the Agreement and Plan of Merger, dated as of November 3, 2006, by and among CareGuide, Inc., a Delaware corporation (the “Registrant”), Haelan Acquisition Corporation, an Indiana corporation and a wholly-owned subsidiary of the Registrant (“Merger Sub”), Haelan Corporation, an Indiana corporation (“Haelan”) and Richard L. Westheimer, as securityholders’ representative (the “Merger Agreement”), Merger Sub merged with and into Haelan (the “Merger”), and as a result Haelan became a wholly-owned subsidiary of the Registrant. The Merger Agreement and the Merger were approved by the shareholders of Haelan at a meeting held on November 20, 2006. In the Merger, the Registrant paid $1.5 million in cash to Haelan to satisfy certain liabilities of Haelan existing at the closing and specified in the Merger Agreement, and all outstanding securities of Haelan were exchanged for convertible promissory notes of the Registrant (the “Convertible Notes”) in the aggregate principal amount of $6.5 million. The Convertible Notes are subordinated to the rights of the Registrant’s senior lender.

The Convertible Notes carry an interest rate of 5% per year, compounding annually, mature on December 8, 2009 and are convertible at maturity into shares of the Registrant’s common stock, par value $0.01 per share, valued based upon the average closing price of the common stock on the OTC Bulletin Board, or any exchange on which the Registrant’s common stock is then traded, for the 20 consecutive trading days ending on the date prior to conversion. The maturity date of the notes may be accelerated in the event of a sale transaction, as defined in the Convertible Notes, involving the Registrant.

In the event that the average closing price of the Registrant’s common stock for the 20 consecutive trading days ending on the date prior to conversion is equal to or greater than $1.50 per share, the outstanding principal and accrued interest under the Convertible Notes will convert into shares of common stock at $1.50 per share. In the event that such average closing price at the time of conversion is less than $1.50 per share, the outstanding principal and accrued interest under the Convertible Notes will convert into shares of common stock at such average closing price, but not less than $1.00 per share, and in such case each holder of a Convertible Note may elect to receive all or a portion of the amounts due under the note in cash in lieu of shares of common stock of the Registrant. After December 8, 2007, or upon a sale transaction, the Registrant may elect to prepay the amounts then outstanding under the Convertible Notes in cash, subject to the prior approval of the Registrant’s senior lender under its credit facility, but upon any such election by the Registrant, if the average closing price of the Registrant’s common stock for the 20 consecutive trading days ending on the date prior to conversion is at least $1.00 per share, each holder of a Convertible Note may elect to receive all or any portion of the amounts due under the Convertible Note in the form of shares of common stock.

The Merger Agreement also contains an “earn-out” provision under which the Registrant is required to pay additional amounts to the former Haelan securityholders in the event that Haelan’s revenues during the year ending December 31, 2007 exceed $4,380,000. For each $1.00 of revenue above this target, the Registrant will pay $1.875, up to a maximum of $3,000,000 in the event that Haelan’s revenues for 2007 equal or exceed $5,980,000. The maximum amount will also be payable by the Registrant in the event of a sale transaction involving the Registrant that is consummated on or before December 31, 2007. The “earn-out” consideration is payable by the Registrant in cash, although the Registrant may elect to pay up to two-thirds of any amounts due under this provision by the issuance of shares of common stock, with such shares being valued by reference to the average closing price of the Registrant’s common stock for the 20 consecutive trading days ending on the last trading day before December 31, 2007. In the event that the Registrant issues shares of its common stock in satisfaction of any “earn-out” obligations, the Registrant has agreed to file with the Securities and Exchange Commission, and thereafter use its commercially reasonable efforts to have declared effective as soon as practicable, a “shelf” registration statement under the Securities Act covering the resale of such shares.

The foregoing description of the Merger and the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as an exhibit to a Current Report on Form 8-K filed by the Registrant on November 6, 2006 and is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

Issuance of Convertible Notes

The Registrant’s Convertible Notes described in Item 2.01 of this Form 8-K were issued without registration under the Securities Act of 1933, as amended, in reliance upon Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

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Appointment of Julie A. Meek as Executive Officer

In connection with the completion of the Merger, the Registrant entered into an employment agreement with Julie A. Meek pursuant to which Dr. Meek has been appointed as the Chief Science Officer of the Registrant. Her employment agreement has an initial one-year term, which automatically renews for additional one-year periods unless earlier terminated by the Registrant or Dr. Meek. Dr. Meek’s base salary under the employment agreement is initially $185,000 per year, increasing to $200,000 per year as of January 1, 2007, and Dr. Meek is eligible for a discretionary calendar year bonus in an amount up to 20% of her base salary, subject to her achievement of mutually agreed upon performance goals to be established within the first 60 days of each calendar year. In addition, Dr. Meek is eligible for any other bonus payments as may be awarded by the Registrant’s board of directors. Dr. Meek is also eligible to receive options to purchase shares of the Registrant’s common stock under the Registrant’s stock option plans on the same basis as similarly situated employees. The decision to grant any such options and the terms of such options will be within the discretion of the Registrant’s board of directors.

In the event that Dr. Meek’s employment is terminated by the Registrant “without cause” or by Ms. Meek for “good reason” (each as defined in her employment agreement), subject to Dr. Meek’s entering into and not revoking a separation agreement and release in a form acceptable to the Registrant, Dr. Meek will be entitled to receive: (i) severance payments equal to her then applicable base salary for a period of six months; (ii) a pro rated portion of any annual bonus that she would have received had she remained employed through the calendar year for which the bonus is calculated; and (iii) if she timely elects and remains eligible for continued coverage under COBRA, that portion of the COBRA premiums that the Registrant was paying prior to the date of termination for as long as she is receiving severance payments under the employment agreement (or until she is eligible for health care coverage under another employer’s plan, whichever period is shorter).

The foregoing description of Dr. Meek’s employment agreement is not complete and is qualified in its entirety by reference to the employment agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

Additional information about Dr. Meek is set forth below:

Julie A. Meek, D.N.S. Dr. Meek, age 53, is Chief Science Officer of the Registrant. From May 1995 to December 2006, she was founder, president and chief executive officer of Haelan Corporation, a privately-held health improvement solutions company based in Indianapolis, Indiana, and a member of its board of directors. For more than two decades, Dr. Meek has been working with companies to enhance the workplace culture, improve employee health and productivity, and establish effective population health management strategies for decreased healthcare costs. Her long-term research and development efforts have focused on predictive modeling, health coaching and the perceived health model. Dr. Meek serves on the Disease Management Association of America’s Employer Council, Quality & Research Committee and the Predictive Modeling Subcommittee. Dr. Meek completed her doctoral work, with highest distinction, in the areas of behavioral science and health management at Indiana University, where she was awarded a three-year Research Fellow position while attending Indiana University. She is a prominent speaker at national conferences and also is published in the areas of predictive modeling, behavior change, behavioral coaching, disease management, benefit strategies and outcomes evaluation.

Appointment of Michael J. Barber as New Director

In connection with the completion of the Merger, Michael J. Barber was appointed to the Registrant’s Board of Directors, which appointment became effective upon the closing of the Merger. Information about Dr. Barber is set forth below:

Michael Barber, M.D. Mr. Barber, age 58, joined the Registrant’s board of directors in December 2006. In July 2006, Dr. Barber founded and since July 2006 has been serving as the chief executive officer of The Advanced Practice Institute, a health care consulting company specializing in the implementation of technology and advanced practice techniques into medical practice, hospital/physician business development and collaboration strategies and organizational development. From February 2003 to May 2006, Dr. Barber served as the chief executive officer and chief operating officer of Group Health Associates, where he was responsible for reorganizing the leadership team and moving the group from a pre-paid medical group model to a fee-for-service business model. From November 2001 to February 2003, he was a healthcare consultant for The Scheller Bradford Group. From November 1999 to November 2001, Dr. Barber served in executive roles with Haelan Corporation, a health improvement solutions company based in Indianapolis, Indiana, and served on Haelan’s board of directors from November 1999 to December 2006. He was chief executive officer of Momentum Health Solutions, a new venture associated with a long-term care managed care company, from January 1998 to November 1999. From 1991 to 1997, Dr. Barber was with ChoiceCare, where he served in a series of executive roles, including vice president of clinical services, senior medical director, executive vice president and chief medical officer. From 1976 to 1990, Dr. Barber was a staff physician and the president of The Fairfield Group, a family medical practice, and was associate clinical

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professor of family practice at the University of Cincinnati from 1981 to 1990. Dr. Barber received his B.A. degree from Indiana University, where he was elected to Phi Beta Kappa. He received his M.D. from the Indiana University School of Medicine. He is a licensed physician, is certified by the American Board of Medical Management and is a member of the American College of Physician Executives and the American Academy of Family Practice. He also serves on the boards of directors of Beech Acres Parenting Center and Episcopal Retirement Homes of Ohio.

Item 8.01 Other Events.

A copy of the press release dated December 11, 2006 announcing the completion of the Merger is attached as Exhibit 99.1 hereto and incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(a)Financial Statements of Businesses Acquired

The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment on or before February 23, 2007.

(b)Pro Forma Financial Information

The pro forma financial statements required by Item 9.01(b) of Form 8-K will be filed by amendment on or before February 23, 2007.

(d)Exhibits

	Exhibit
	Number	ExhibitDescription
2.1 (1)		Agreement and Plan of Merger, dated November 3, 2006, by and among CareGuide, Inc., Haelan Acquisition Corporation, Haelan Corporation and Richard L. Westheimer as securityholders’ representative
10.1		Employment Agreement, effective as of December 8, 2006, by and between CareGuide, Inc. and Julie A. Meek
99.1		Press Release dated December 11, 2006

(1) Previously filed as Exhibit 2.1 to the Registrant’s Report on Form 8-K filed with the Commission on November 6, 2006, and incorporated by reference herein.

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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: December 12, 2006 PATIENT INFOSYSTEMS, INC. By:         /s/ Chris E. Paterson             Chris E. Paterson President and Chief Executive Officer

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EXHIBIT INDEX

	Exhibit
	Number	ExhibitDescription
2.1 (1)		Agreement and Plan of Merger, dated November 3, 2006, by and among CareGuide, Inc., Haelan Acquisition Corporation, Haelan Corporation and Richard L. Westheimer as securityholders’ representative
10.1		Employment Agreement, effective as of December 8, 2006, by and between CareGuide, Inc. and Julie A. Meek
99.1		Press Release dated December 11, 2006

(1) Previously filed as Exhibit 2.1 to the Registrant’s Report on Form 8-K filed with the Commission on November 6, 2006, and incorporated by reference herein.

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EX-99

Exhibit 99.1

Contact:	Chris Paterson
	Chief Executive Officer
	(954) 796-3651
	cpaterson@careguide.com

CAREGUIDE ANNOUNCES COMPLETION OF ACQUISITION

OF HAELAN CORPORATION

Doctors Meek and Barber Join CareGuide Leadership Team

Coral Springs, Florida (December 11, 2006) – CareGuide, Inc. (OTCBB:CGDE), a national disease and healthcare management company, today announced that it has completed its previously announced acquisition of Haelan Corporation, a privately held health improvement solutions company based in Indianapolis, Indiana, for $1.5 million in cash and the issuance of three-year convertible promissory notes to Haelan securityholders in the aggregate principal amount of up to $6.5 million. In addition, CareGuide will pay to Haelan’s securityholders up to an additional $3.0 million, a portion of which may be paid by CareGuide in shares of its common stock, in the event that certain revenue targets are achieved in connection with Haelan’s business in calendar year 2007. Pursuant to the closing of the transaction, Haelan Corporation became a wholly owned subsidiary of CareGuide, Dr. Julie Meek, founder and chief executive officer of Haelan Corporation, joined CareGuide as chief science officer, and Dr. Michael Barber, former Haelan board member, was elected as CareGuide’s seventh board member.

Haelan brings to CareGuide a unique patent-pending predictive modeling approach, One Care Street^TM, that identifies at-risk members for high near-term healthcare utilization. One Care Street employs a proprietary survey to identify at-risk individuals before they begin requiring high levels of medical resources, and does so with significantly greater sensitivity and specificity than traditional claims-based approaches. Once identified, members at risk have the opportunity to work with a One Care Street “Health Coach” to establish and accomplish their healthcare goals. In an August 2006 case study of 10 Haelan customers, nine reported no meaningful increase and, in numerous cases, a year-over-year reduction in the cost of healthcare services provided for their employees following the introduction of One Care Street as part of the employer’s benefits package.

Commenting on the transaction, Chris E. Paterson, Ph.D., president and chief executive officer of CareGuide, said, “We are very excited about the addition of Haelan Corporation. We believe that this acquisition, together with the acquisition of Patient Infosystems earlier this year, transitions us into a next generation disease and care management company. We now have a model supported by information technology that we expect will thrust us into a leadership position among disease and care management companies.”

Dr. Paterson further commented, “We expect rapid integration of Haelan and CareGuide, and One Care Street will be offered immediately by CareGuide as a breakthrough predictive modeling and behavioral coaching product. Additionally, we are delighted about having Doctors Meek and

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CGDE Completes Acquisition of Haelan Corporation

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December 11, 2006

Barber in senior and pivotal roles in our company, and we look forward to their continuing leadership role in the healthcare management field as part of CareGuide.”

Dr. Meek added, “We believe that Haelan and CareGuide will be a powerful combination. One Care Street is a comprehensive intervention that will result in a higher return on investment for our customers than traditional disease management approaches. Through the combination of these two companies and the offering of all the products on an integrated basis, both CareGuide and Haelan customers will give their health plan members access to products that can help them live healthier, more productive lives.”

About CareGuide

Headquartered in Coral Springs, Florida, CareGuide is a national disease and care management company serving the health and benefit plans of managed care organizations, employers, unions, third party administrators and government customers. Understanding that health status is dynamic and encompasses physical, mental and social qualities, CareGuide focuses on total population health management. The Company employs a unique approach to identify members of its clients’ populations who are at risk for medical destabilization, loss of productivity and high claims expense. Through flexible, evidence-based and member-centric interventions that are matched to the individual’s holistic health needs, hospital admissions are prevented and quality of life is enhanced. CareGuide distinguishes itself by combining high human touch with technology to assist chronically ill members in self-managing their health. Visit www.careguide.com for more information.

About Haelan

Headquartered in Indianapolis, Indiana, Haelan Corporation, d/b/a The Haelan Group, is a nationally recognized total population health management company serving government and employer markets. Haelan’s vision to produce best-in-class health and financial outcomes for its clients led to 11 years of research on its predictive modeling and coaching solutions, culminating in the One Care Street^TM product suite. Haelan’s clients enjoy unprecedented health claims impact with low or negative year-over-year healthcare cost trends thanks to Haelan’s rigorous research and controlled trials in developing and validating the program. Visit www.haelan.com for more information.

This release contains information about management’s view of the Company’s future expectations, financial results, plans and prospects, including prospects for success of the combination of the two companies and their products, that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with the Company’s financial condition, its ability to integrate Haelan into its operations and sell the combined company’s products, its ability to compete with competitors and its ability to increase its business and revenue base, difficulties encountered in integrating the business of Haelan, difficulties in achieving profitability from the Haelan business, the competitive environment in the healthcare industry and competitive responses to the merger, and the growth of the healthcare market, as well as other factors that are discussed in the Company’s filed Annual Report on Form 10-KSB for the fiscal year ended March 31, 2006, filed with the SEC on June 29, 2006, and the Company’s Quarterly Reports on Form-10-QSB for the quarter ended

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CGDE Completes Acquisition of Haelan Corporation

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December 11, 2006

June 30, 2006, filed with the SEC on August 14, 2006, and for the quarter ended September 30, 2006, filed with the SEC on November 14, 2006, and for the quarter ended September 30, 2006, filed with the SEC on November 14, 2006, as well as other documents the Company files with the SEC.

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EX-10

Exhibit 10.1

CAREGUIDE, INC.

MEEK EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into and is effective as of the "Effective Time" as defined in that certain Agreement and Plan of Merger by and among CareGuide, Inc. Haelan Acquisition Corporation and the Haelan Corporation (the "Merger Agreement"), by and between CareGuide, Inc., a Delaware corporation (the "Company"), and Julie Meek, D.N.S. ("Employee").

Conditioned on the successful consummation of the Plan of Merger pursuant to the Merger Agreement and in consideration of the mutual covenants and conditions set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1.            Employment. The Company hereby employs Employee in the capacity of Chief Science Officer or similar title acceptable to both the Company and the Employee, reporting to the Company’s Chief Executive Officer and/or Chief Operating Officer. Employee accepts such employment and agrees to diligently, conscientiously and exclusively perform such services as are customary to such office and as shall from time to time be assigned to her by the Chief Executive Officer, Chief Operating Officer, or the Company’s Board of Directors (the "Board"). Employee’s employment will be on a full-time business basis requiring the devotion of substantially all of her productive business time for the efficient and successful operation of the business of the Company.

2.            Conditional Agreement; Term. The employment hereunder shall be for a one year period commencing as of the date hereof, unless earlier terminated as provided in Section 4 (the "Initial Term"). This Agreement shall be automatically renewed for successive one-year periods upon the expiration of the Initial Term (and each successive one year period) unless earlier terminated as provided in Section 4. The parties expressly agree that designation of a term and renewal provisions in this Agreement does not in any way limit the right of the parties to terminate this Agreement at any time as hereinafter provided. Reference herein to the term of this Agreement shall refer both to the Initial Term and any successive term as the context requires.

3. Compensation and Benefits

3.1        Salary. For the performance of Employee’s duties hereunder, the Company shall pay Employee a salary at the annualized rate of $185,000 through December 31, 2006 and at an annualized rate of $200,000 effective January 1, 2007 (the "Base Compensation").

3.2 Bonuses.

(a) The Employee shall be eligible to receive a discretionary calendar year annual bonus in an amount of up to twenty percent (20%) of Base Compensation. The award of the bonus shall be subject to the satisfaction of mutually agreed upon performance goals. These performance goals will be established within the first sixty (60) days of each calendar year. If the Company and the Employee are unable to agree on mutually acceptable performance goals,

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Exhibit 10.1

then the Company shall not be responsible for the payment of any bonus for such calendar year. The CEO, in consultation with the Board, in his/her sole reasonable, good faith discretion, shall determine the extent to which the performance goals upon which the annual bonus is based have been achieved. Employee must remain an active employee through the end of the applicable bonus year and will not earn any bonus if employment terminates for any reason before the end of the bonus year. No prorated bonus can be earned except during 2006, during which time Employee will have only been employed for part of the year. The bonus, if any, shall be paid within thirty (30) days after the end of the calendar year.

(b) The Employee will be eligible during the term of this Agreement for such other bonus payments as may be awarded to the Employee by the Company.

3.3        Payment and Withholding. All payments required to be made by the Company to the Employee shall be made in accordance with the Company’s normal payroll practices and shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine should be withheld pursuant to any applicable law or regulation.

3.4        Personnel Policies and Benefits. Unless otherwise specified herein, the Employee’s employment is subject to the Company’s personnel policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole reasonable discretion. The Employee will be eligible to participate on the same basis as similarly situated employees in the Company’s benefit plans in effect from time to time during her employment. For this purpose, Employee will be considered "similarly situated" to the executive level officers of the Company. All matters of eligibility for coverage or benefits under any benefit plan shall be determined in accordance with the provisions of the applicable plan. The Company reserves the right to change, alter, or terminate any benefit plan in its sole discretion. While this Agreement is in effect the Company agrees to maintain at its expense a group life insurance program in which the Employee is eligible to apply for coverage and name the beneficiary or beneficiaries and a group long term disability insurance program in which the Employee is eligible to apply for coverage.

3.5          Stock Options. Prior to December 31, 2006, the Company shall grant Employee options under a Company Option Plan in a number commensurate with Employee’s position in the Company, and from time to time thereafter the Company may grant to Employee additional options under the Company’s then current Stock Option Plan to purchase shares of the Company’s common stock at a stated exercise price per share. Any options granted will vest and be exercisable in accordance with a Stock Option Agreement to be executed pursuant to the Company’s Stock Option Plan. Employee will participate in any stock grant program established by the Company on the same basis as similarly situated employees.

3.6        Reimbursement of Expenses. Employee shall be eligible to be reimbursed for all reasonable business expenses, including but not limited to expenses for cellular telephone, Blackberry (or comparable email), travel, meals, and entertainment incurred by Employee in connection with and reasonably related to the furtherance of the Company’s business in accordance with the Company’s policy. Employee shall submit expense reports and receipts documenting the expenses incurred in accordance with Company policy.

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Exhibit 10.1

4. Termination

4.1        Termination Events. The employment of the Employee and the Term of this Agreement will terminate upon the occurrence of any of the following events (the "Termination Event"):

(a) The Employee’s Death;

(b)         The Employee’s "Disability", defined, subject to applicable state and federal law, as termination by the Company because the Employee is unable to perform the essential functions of Employee’s position (with or without reasonable accommodation as such term is defined in the Americans with Disabilities Act) for six months in the aggregate during any twelve month period. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act and other applicable law.

(c)         Employee is discharged by the Company for "Cause". As used in this Agreement, the term "Cause" shall mean a determination by the Company that:

(i)        Employee has engaged in theft, dishonesty, or falsification of any Company documents or records or been convicted of afelony or a misdemeanor involving dishonesty or moral turpitude; or

(ii)        Employee has failed substantially to perform her duties with the Company (other than any such failure resulting from the Employee’s absence due to approved or legally protected leave) after written demand of no less than ten (10) days for substantial performance is requested by the Company, which demand specifically identifies the manner in which it is claimed Employee has not substantially performed her duties, or

(iii)       Employee is engaged, or has engaged, in conduct which has, or would reasonably be expected to have, a direct and material adverse effect on the Company; or

(iv)   Employee has materially breached this Agreement, any other agreement between the Employee and the Company, or Employee’s duty of loyalty to the Company which breach remains uncured by for a period of thirty (30) days following receipt of written notice thereof to the Employee from the Company.

In the event a failure or breach under (ii) or (iv) above is based on completed actions that cannot be undone, and therefore not, in the opinion of the Company, capable of cure, Employee may be terminated immediately provided it pays the Employee for the cure period. No termination shall be effected for Cause unless Employee has been provided with a written notice that states with reasonable specificity the acts or omissions which form the basis of the Company’s decision.

(d)         Employee is terminated by the Company "without Cause," which the Company may do upon its election, regardless of whether it also has the option to terminate for Cause, upon written notice, which notice shall specify the date of such termination.

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Exhibit 10.1

(e)          Employee terminates her employment due to "Good Reason", which shall mean that any of the following has occurred (i) a material default by the Company in the performance of any of its obligations hereunder or any other agreement between the Employee and the Company, which default remains uncured by the Company for a period of thirty (30) days following receipt of written notice thereof to the Company from Employee; (ii) without the Employee’s consent, a requirement imposed by the Company that the Employee relocate her office to a location more than fifty (50) miles from her current office location; (iii) without the Employee’s consent, a reduction in salary imposed by the Company; or (iv) without the Employee’s consent, a material diminution in the Employee’s title or duties; provided however, that any actions taken by the Company to accommodate a disability of the Employee or pursuant to the Family and Medical Leave Act shall not be a Good Reason for purposes of this Agreement. The Employee may elect to terminate for Good Reason within thirty (30) days of the Employee’s becoming aware of the existence of Good Reason, so long as the Company has not previously notified the Employee of its decision to terminate her employment.

(f)           Employee terminates her employment without Good Reason, which Employee may do at any time with at least thirty (30) days advance notice.

(g)        If at any time during the course of this Agreement the parties by mutual consent decide to terminate this Agreement, they shall do so by separate agreement setting forth the terms and condition of such termination.

4.2 Effects of Termination

(a)         Upon termination of Employee’s employment hereunder for any reason, the Company will pay Employee all amounts owed to Employee through the date of termination. Any amounts earned by Employee as of the date of termination but due to be paid Employee at a future date shall be paid when otherwise due, in accordance with applicable law. Upon termination, the entitlement of the Employee or her estate to benefits, or to continuation or conversion rights, under any Company sponsored benefit plan shall be determined in accordance with applicable law and the provisions of such plan.

(b)        Upon termination of Employee’s employment under Sections 4.1 (d) or (e), if the Employee executes, and does not revoke, a Separation Agreement and Release in a form reasonably acceptable to the Company, the Company shall pay Employee, on the Company’s regular payroll dates, commencing on the first such date that occurs at least eight days following the Employee’s execution of the Separation Agreement and Release, amounts equal to the then applicable Base Compensation, excluding bonus, for a period of six (6) months, pay Employee a portion of any annual bonus she would have earned had she remained employed at the end of such calendar year, prorated based on the number of months she was employed during such calendar year for which the bonus is calculated, and paid on the date it would have been paid had she remained employed, and if the Employee timely elects and remains eligible for continued coverage under COBRA, the Company will pay that portion of the COBRA premiums it was paying prior to the date of termination for the period the Employee is receiving severance under this Agreement or until the Employee is eligible for health care coverage under another employer’s plan, whichever period is shorter.

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Exhibit 10.1

(c)         Following a Termination Event, both the Employee and the Company agree not to make to any person, including but not limited to customers of the Company, any statement that disparages the other or which reflects negatively upon the other in any manner likely to be harmful to them or their business, business reputation or personal reputation (with respect to the Employee), including but not limited to statements regarding the Company’s financial condition, its officers, and directors; provided that both the Employee and the Company may respond accurately and fully to any question, inquiry or request for information when required by legal process. The Company’s obligations under this section are limited to the Company’s officers and directors and Company representatives with knowledge of this provision.

(d)         Following a Termination Event and until Employee's last day of employment with the Company, Employee shall fully cooperate with the Company in all matters relating to the winding up of Employee’s pending work including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to such other Employees as may be designated by the Company. Cooperation on litigation and other Company matters about which Employee has special knowledge shall be extended to the Company on an indefinite basis, assuming that such consultation is reasonable in volume and that Employee is paid a reasonable fee for time spent consulting with Company.

5. General Provisions

5.1        Assignment. Neither party may assign or delegate any of her or its rights or obligations under this Agreement without the prior written consent of the other party. Provided however, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and permitted assigns and Employee and Employee’s legal representatives, heirs, legatees, distributees, assigns and transferees by operation of law, whether or not any such person shall have become a party to this Agreement and have agreed in writing to join and be bound by the terms and conditions hereof.

5.2        Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all prior agreements between the parties. The parties hereto have entered into: a Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement which may be amended by the parties from time to time without regard to this Agreement. The Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement contains provisions that are intended by the parties to survive and do survive termination or expiration of this Agreement.

5.3        Modifications. This Agreement may be changed or modified only by an agreement in writing signed by both parties hereto.

5.4        Prior Agreements. This Agreement supersedes all prior written and verbal agreements with the Company and/or its Board of Directors and shall govern all future employment obligations.

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

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Exhibit 10.1

5.6        Governing Law. This Agreement shall be governed by, construed and enforced in accordance with, the laws of the State of Indiana, and venue and jurisdiction for any disputes hereunder shall be heard in any court of competent jurisdiction in Indiana for all purposes.

5.7        Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force and effect.

5.8        Further Assurances. The parties will execute such further instruments and take such further actions as may be reasonably necessary to carry out the intent of this Agreement.

5.9        Notices. Any notice expressly provided for under this Agreement shall be in writing, shall be given either by hand delivery, by courier, or by mail and shall be deemed sufficiently given when actually received by the party to be notified, or, if delivered by courier, when delivered to the party’s address as set forth below, or when mailed, if mailed by certified or registered mail, postage prepaid, addressed to the party’s address as set forth below. Either party may, by notice to the other party, given in the manner provided for herein, change their address for receiving such notices.

• If to the Company, to the Chief Executive Officer in person or to its corporate headquarters at the time notice is given, "Attention: Chief Executive Officer."

• If to the Employee, to her in person or to her home address as listed in Company records at the time notice is given.

5.10      No Waiver. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver of that provision, nor prevent that party thereafter from enforcing that provision of any other provision of this Agreement.

5.11      Legal Fees and Expenses. In the event of any disputes under this Agreement, the prevailing party shall be entitled to recover from the other party its reasonable attorneys' fees, costs, and disbursements (in addition to any other relief to which the prevailing party may be entitled). In addition, Employee shall be entitled to be reimbursed by the Company for fifty percent of in legal fees and expenses incurred prior to 11-20-06 and 100% after 11-27-06 in connection with the negotiation and execution of this Agreement.

5.12      Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

* * * * *

(Signature Page Follows)

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Exhibit 10.1

IN WITNESS WHEREOF, the Company and Employee have executed this Agreement, effective as of the day and year first above written.

CareGuide, Inc. EMPLOYEE:

By: __/s/ Chris E. Paterson______________					_/s/ Julie A. Meek __________________
		Name:		Chris E. Paterson		Julie Meek, D.N.S.
	Title:		CEO

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