Document:

CareView Communications, Inc. 8-K

 

Exhibit 10.02

 

SENIOR SECURED CONVERTIBLE
NOTE

 

NEITHER THE ISSUANCE AND SALE OF
THIS NOTE NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS NOTE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THIS NOTE OR THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE UNDER THE SECURITIES ACT, AS APPLICABLE, OR
(B) AN OPINION OF COUNSEL (SELECTED BY THE HOLDER AND REASONABLY ACCEPTABLE TO THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY BE OFFERED FOR SALE, SOLD, ASSIGNED OR TRANSFERRED
PURSUANT TO AN EXEMPTION FROM REGISTRATION; PROVIDED THAT SUCH OPINION OF COUNSEL SHALL NOT BE REQUIRED IN CONNECTION WITH ANY SUCH SALE,
ASSIGNMENT OR TRANSFER TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT IS, PRIOR TO SUCH SALE, ASSIGNMENT OR TRANSFER, AN AFFILIATE OF THE
HOLDER OF THIS NOTE, OR (II) UNLESS THE HOLDER PROVIDES THE COMPANY WITH ASSURANCE (REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH
NOTE OR THE SHARES OF COMMON STOCK ISSUABLE UPON THE CONVERSION OF THE NOTE CAN BE SOLD, ASSIGNED OR TRANSFERRED PURSUANT TO RULE 144.

 

ANY TRANSFEREE OF THIS NOTE SHOULD
CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING, WITHOUT LIMITATION, SECTIONS 3(c)(iii) AND 12(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED
BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.

 

NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, THE RIGHTS AND REMEDIES GRANTED TO THE HOLDER PURSUANT TO THIS NOTE, THE LIEN AND SECURITY INTEREST GRANTED TO THE AGENT
SECURING THIS NOTE AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE HOLDER OR AGENT RELATING TO THIS NOTE ARE SUBJECT TO THE PROVISIONS
OF THE SUBORDINATION AND INTERCREDITOR AGREEMENT DATED AS OF JUNE 26, 2015 (AS AMENDED, AMENDED AND RESTATED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, THE “INTERCREDITOR AGREEMENT”), AMONG PDL INVESTMENT HOLDINGS,
LLC (AS ASSIGNEE OF PDL BIOPHARMA, INC.) AND EACH OF THE NOTE INVESTORS PARTY TO THAT CERTAIN NOTE AND WARRANT PURCHASE AGREEMENT DATED
AS OF APRIL 21, 2011, AS SUBSEQUENTLY AMENDED, AND CERTAIN OTHER PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME. IN
THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS NOTE, THE PURCHASE AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS (AS DEFINED IN THE PURCHASE AGREEMENT), THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.

 

 

 

    	 

     

    

CAREVIEW COMMUNICATIONS, INC. 

SENIOR SECURED CONVERTIBLE NOTE

 

Issuance Date: December
30, 2022Principal Amount: U.S. $[_______]

(subject to Section 3(c)(iii)
hereof)

 

FOR VALUE RECEIVED,
CareView Communications, Inc., a Nevada corporation (the “Company”), hereby promises to pay to [______] or the
registered assign(s) thereof (“Holder”) the principal amount set forth above (as adjusted pursuant to the terms hereof
by reason of partial conversion or otherwise, the “Principal”) when due, whether upon the Maturity Date, acceleration
or otherwise (in each case in accordance with the terms hereof). This Senior Secured Convertible Note (this “Note”)
is being issued pursuant to that certain Consent and Agreement to Cancel and Exchange Existing Notes and Issue Replacement Notes and Cancel
Warrants (the “Agreement”), and is entitled to the benefits of, and evidences obligations incurred under, the Agreement
and the Purchase Agreement, to which reference is made for a description of the security for this Note and for a statement of the terms
and conditions on which the Company is permitted and required to make prepayments and repayments of principal of the obligations evidenced
hereby and on which such obligations may be declared to be immediately due and payable. This Note represents a full recourse obligation
of the Company, and replaces in their entirety the debt instruments listed on Exhibit II attached hereto.

 

Certain capitalized terms used herein are defined in Section 22.

 

(1)        MATURITY. On the Maturity Date, the Holder shall surrender this Note to the Company and the
Company shall pay to the Holder an amount in cash representing all outstanding Principal and accrued and unpaid Late Charges (as defined
in Section 18(b)), if any. The “Maturity Date” shall be December 31, 2023.

 

		(2)	NO INTEREST.

 

(a)     No interest shall accrue on this Note.

(b)     This Note is one of a series of notes issued by the Company pursuant to the Agreement. Such Notes
are referred to herein as the “Notes,” and the holders thereof (including the Holder) are referred to herein as the
“Investors.” The right of an Investor to receive payments of Principal under this Note shall be pari passu with
the rights of the other Investors to receive payments of Principal under their respective Notes, and the Company covenants that any payments
made by it with respect to the Notes shall be made pro rata among the Investors determined based on the ratio of the outstanding
balance of Principal under each Note divided by the aggregate outstanding balance of Principal under all Notes. By the Holder’s
acceptance of this Note, the Holder agrees to the foregoing sentence.

 

(3)        CONVERSION OF NOTE. This Note shall be convertible into shares of Common Stock, on the terms
and conditions set forth in this Section 3.

 

    	 	2	 

     

    

 

 

(a)     Conversion Right. At any time or times on or after the Issuance Date, the Holder shall be
entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into fully paid and nonassessable shares
of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The Company shall not issue any fraction of
a share of Common Stock upon any conversion. If any conversion would result in the issuance of a fraction of a share of Common Stock,
the Company shall round such fraction of a share of Common Stock to the nearest whole share but shall have no obligation to pay the Holder
for any fraction of a share of Common Stock forfeited as a result of such rounding. The Company shall pay any and all stock transfer,
stamp, documentary and similar taxes (excluding any taxes on the income or gain of the Holder) that may be payable with respect to the
issuance and delivery of shares of Common Stock to the Holder upon conversion of any Conversion Amount. To the extent permitted by law,
the Company and the Holder acknowledge and agree that any conversion of all or any portion of the Conversion Amount into shares of Common
Stock pursuant to the terms of this Section 3(a) will not be treated as a taxable transaction and the Company and the Holder agree to
report any such conversion in a manner consistent with the foregoing treatment.

 

(b)     Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Conversion
Amount pursuant to Section 3(a) (the “Conversion Rate”) shall be determined by dividing (x) such Conversion Amount
by (y) the Conversion Price.

 

(i)     “Conversion Amount” means the sum of (A) the portion of the Principal to be converted
with respect to which this determination is being made, and (B) accrued and unpaid Late Charges, if any, with respect to such Principal.

 

(ii)     “Conversion Price” means $0.10, subject to adjustment as provided herein (including,
without limitation, adjustment pursuant to Section 6).

 

(c)   Mechanics
of Conversion.

 

(i)     Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date
(a “Conversion Date”), the Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior to
4:00 p.m., Dallas, TX time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion
Notice”) to the Company and (B) if required by Section 3(c)(iii), cause this Note to be delivered to the Company as soon as
practicable on or following such date. On or before 4:00 p.m., Dallas, TX time, on the first (1st) Business Day following the
date of receipt of a Conversion Notice, the Company shall transmit by facsimile a confirmation of receipt of such Conversion Notice to
the Holder (at the facsimile number provided in the Conversion Notice) and the Company’s transfer agent, if any (the “Transfer
Agent”). On or before 4:00 p.m., Dallas, TX time, on the third (3rd) Business Day following the date of receipt of
a Conversion Notice (the “Share Delivery Date”), the Company shall (X) provided
the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, cause the Transfer Agent to credit such aggregate
number of shares of Common Stock to which the Holder shall be entitled to the Holder's or its designee's balance account with DTC through
its Deposit/Withdrawal At Custodian (“DWAC”) system, or (Y) if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, or if the Holder otherwise requests, issue and deliver to the address as specified in the Conversion
Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder
shall be entitled. If this Note is physically surrendered for conversion as required by Section 3(c)(iii) and the outstanding Principal
of this Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable
and in no event later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the Holder
a new Note (in accordance with Section 12(d)), representing the outstanding Principal not converted. The Person or Persons entitled to
receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on the Conversion Date.

 

    	 	3	 

     

    

 

(ii)     Company’s Failure to Timely Convert. If, at any time, the Company shall fail to credit
the Holder’s balance account with DTC or issue a certificate to the Holder, as the case may be, upon conversion of any Conversion
Amount on or prior to the date which is seven (7) Business Days after the Conversion Date (a “Conversion Failure”),
then (A) the Company shall pay damages to the Holder for each day of such Conversion Failure in an amount equal to 1.5% of the product
of (I) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery Date and to which the
Holder is entitled, and (II) the Closing Sale Price of the Common Stock on the Share Delivery Date and (B) the Holder, upon written notice
to the Company, may void its Conversion Notice with respect to, and retain or have returned, as the case may be, any portion of this Note
that has not been converted pursuant to such Conversion Notice; provided that the voiding of a Conversion Notice shall not affect
the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii)
or otherwise.

 

(iii)     Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of
any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the
Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the Holder has provided the Company with
prior written notice (which notice may be included in a Conversion Notice) requesting physical surrender and reissue of this Note. The
Holder and the Company shall maintain records showing the Principal and Late Charges converted and the dates of such conversions or shall
use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon
conversion.

 

(iv)     Disputes. In the event of a dispute between the Company and the Holder of this Note as to
the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Company shall issue to the
Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 17.

 

		(4)	RIGHTS UPON EVENT OF DEFAULT.

 

		(a)	Event of Default. Each of the following events shall constitute an “Event of Default”:

 

(i)     the Company’s failure to pay to the Investors any amount of Principal when and as due under the Notes (including, without limitation,
upon a redemption request pursuant to Section 2(d));

 

    	 	4	 

     

    

 

(ii)      the Company’s failure to pay to the Investors any amount of Late Charges or other amounts (other
than the amounts specified in clause (i)) when and as due under the Notes if such failure continues for a period of at least three (3)
Business Days;

 

(iii)     any acceleration prior to maturity of any Indebtedness referred to in clause (a) or (b) of the definition
thereof of the Company or any of its Subsidiaries consisting of principal individually or in the aggregate equal to or greater than $250,000;

 

(iv)     the Company or any of its Subsidiaries, pursuant to or within the meaning of Title 11, U.S. Code,
or any similar Federal, foreign or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences
a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment
of a receiver, trustee, assignee, liquidator or similar official (a “Custodian”), (D) makes a general assignment for
the benefit of its creditors or (E) admits in writing that it is generally unable to pay its debts as they become due;

 

(v)      a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that is not
vacated, set aside or reversed within sixty (60) days that

(A) is for relief against the Company
or any of its Subsidiaries in an involuntary case, (B) appoints a Custodian of the Company or any of its Subsidiaries or (C) orders the
liquidation of the Company or any of its Subsidiaries;

 

(vi)     a final judgment or judgments for the payment of money aggregating in excess of $2,000,000 are rendered
against the Company or any of its Subsidiaries and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged
or stayed pending appeal, or are not discharged within sixty (60) days after the expiration of such stay; provided, however, that any
judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $2,000,000
amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written
statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and
the Company will receive the proceeds of such insurance or indemnity within sixty (60) days of the issuance of such judgment;

 

(vii)     the Company or any Subsidiary breaches any negative covenant in any Transaction Document;

 

(viii)    the Company breaches any affirmative covenant or agreement or materially breaches any representation
or warranty in any Transaction Document, and such breach continues for a period of at least thirty (30) days;

 

(ix)      if at any time while any portion of the Notes remain outstanding (x) the Board of Directors fails
to include one (1) Director designated by the Holder(s) of at least a majority of the Principal amount of the Notes outstanding, voting
as a separate class (the “Noteholder Director”), provided that the Company shall have thirty (30) Business Days following
the resignation, removal or death or disability of the Noteholder Director to appoint a successor Noteholder Director designated by the
Holder(s) of at least a majority of the Principal amount of the Notes outstanding, voting as a separate class, unless such failure is
the result of the failure by such Holders to notify the Company of the name of the replacement Noteholder Director, in which event the
thirty (30) Business Day period shall be extended until a date which is ten (10) Business Days after notice of the name and background
of the replacement Noteholder Director is given to the Company, or (y) without the consent of the Noteholder Director (or, in the absence
of a Noteholder Director, the Holder(s) of at least a majority of the Principal amount of the Notes outstanding), the Board of Directors
exceeds seven (7) directors, or the Compensation Committee or Nominating Committee (or other committees serving similar functions) of
the Board of Directors exceeds three (3) members, or (z) the Noteholder Director is not afforded the right to serve as a member of each
of the Compensation Committee and Nominating Committee (or committees serving similar functions);

 

    	 	5	 

     

    

 

 

(x)       the failure of the Company for a period of ninety (90) days following the resignation and/or departure
of Steven Johnson to engage a replacement therefor that is reasonably acceptable to the Investors holding a majority in principal amount
of the Notes issued and outstanding as of such date (the “Majority Investors”);

 

(xi)     the Company or any Subsidiary shall fail to make any payment in respect of any Indebtedness in excess
of $500,000 (“Material Indebtedness”), when and as the same shall become due and payable, after giving effect to any
grace period with respect thereto;

 

(xii)     any event or condition occurs that results in any Material Indebtedness becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity;

 

(xiii)    there
shall occur any material loss theft, damage or destruction of any Collateral (as defined in the Security Agreement) not fully covered
(subject to such reasonable deductibles as the Majority Investors shall have approved) by insurance; or

 

(xiv)    either
(a) the Company's Board of Directors, a committee of the Board of Directors or the officer or officers of the Company authorized to take
such action if board action is not required, concludes that any previously issued financial statements, including interim periods, should
no longer be relied upon because of an error in such financial statements as addressed in FASB Accounting Standards Codification Topic
250, as may be modified, supplemented or succeeded, or (b) the Company is advised by, or receives notice from, its independent accountant
that disclosure should be made or action should be taken to prevent future reliance on a previously issued audit report or completed
interim review related to previously issued financial statements, and in either case the amended financial statements required in order
to permit reliance on such financial statements for the affected periods have not been filed with the SEC within ninety (90) days of
the earliest such event; provided, however that if the facts and/or circumstances underlying the Event of Default described
in this Section 4(a)(xiv) would also create or constitute a separate Event of Default under this Note, the cure period set forth in this
Section 4(a)(xiv) shall not supersede or prevent the application of any shorter cure period associated with such other applicable Event
of Default, which may be enforced separately and independently.

 

    	 	6	 

     

    

 

 

(b)     Rights Upon Event of Default. Promptly after the occurrence of an Event of Default, the Company
shall deliver written notice thereof (an “Event of Default Notice”) to the Holder, and the Majority Investors may,
at their option, by notice to the Company (an “Event of Default Acceleration Notice”), declare the Default Amount to
be due and payable upon demand (an “Acceleration”), provided that upon the occurrence of an Event of Default
described in Sections 4(a)(iv) and 4(a)(v) above, such Acceleration shall occur automatically without requiring the delivery of an Event
of Default Acceleration Notice, such that the Default Amount shall automatically become immediately due and payable without any further
notice, demand or other action. For purposes hereof, the “Default Amount” shall equal the entire unpaid Principal balance
under this Note, plus all previously accrued and unpaid Late Charges, in each case without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company. Following an Acceleration (other than an Acceleration based on an Event of
Default described in Sections 4(a)(iv) and 4(a)(v) above), the Holder shall have the right, but not the obligation, to demand payment
in full of the Default Amount at any time prior to the original Maturity Date of this Note upon written notice to the Company (a “Demand
Notice”). The Company shall deliver the applicable Default Amount to the Holder (x) in the case of an Event of Default under
Section 4(a)(iv) or 4(a)(v), immediately, and (y) in the case of any other Event of Default, within five (5) Business Days after the Company’s
receipt of the Demand Notice. In the event the Company fails to deliver the Default Amount as described above, the Holder shall be permitted
to exercise such rights as a secured party or otherwise hereunder or under the other Transaction Documents to the extent permitted by
applicable law.

 

		(5)	RIGHTS UPON A CHANGE OF CONTROL.

 

(a)     Assumption. The Company shall not enter into or be party to a transaction resulting in a Change
of Control unless the Successor Entity assumes in writing all of the obligations of the Company under this Note and the other Transaction
Documents in accordance with the provisions of this Section 5(a) pursuant to written agreements on or prior to the consummation of such
Change of Control, including the agreement to deliver to the Holder of this Note in exchange for this Note a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Note, including, without limitation, having
a principal amount equal to the principal amount of this Note (the “Successor Note”). Upon the occurrence of any Change
of Control, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Change of Control,
the provisions of this Note referring to the “Company” shall refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the Company under this Note with the same effect as if such
Successor Entity had been named as the Company herein, until such time as the Successor Note is delivered. Upon consummation of a Reclassification
or Change of Control as a result of which holders of Common Stock shall be entitled to receive stock, securities, cash, assets or any
other property with respect to or in exchange for such Common Stock, the Company or Successor Entity, as the case may be, shall deliver
to the Holder confirmation that there shall be issued upon conversion of this Note at any time after the consummation of such Reclassification
or Change of Control, in lieu of the shares of Common Stock (or other securities, cash, assets or other property) issuable upon the conversion
of this Note prior to such Reclassification or Change of Control, such shares of stock, securities, cash, assets or any other property
whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the
happening of such Reclassification or Change of Control had this Note been converted immediately prior to such Reclassification or Change
of Control, as adjusted in accordance with the provisions of this Note. The provisions of this Section 5(a) shall apply similarly and
equally to successive Change of Control transactions and shall be applied without regard to any limitations on the conversion of this
Note.

 

    	 	7	 

     

    

 

 

		(6)	RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

 

(a)    Record Date. If the Company takes a record of the holders of Common Stock for the purpose
of entitling them to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities, then such
record date will be deemed to be the date of the issue or sale of the Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution, as the case may be.

 

(b)     Adjustment of Conversion Rate upon Subdivision or Combination of Common Stock; Stock Dividends.
If the Company at any time, or from time to time, subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or
more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior
to such subdivision will be proportionately reduced. If the Company at any time, or from time to time, combines (by combination, reverse
stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion
Price in effect immediately prior to such combination will be proportionately increased. Any adjustment under this Section 6(b) shall
become effective at the close of business on the date the subdivision or combination becomes effective or, in the case of a stock dividend,
the date of such event.

 

(c)     (i) Adjustment of Conversion Rate upon Cash Dividends and Distributions. If the Company at
any time, or from time to time, pays a dividend or makes a distribution in cash to the record holders of any class of Common Stock, then
immediately after the close of business on the day that the Common Stock trades ex-distribution, the Conversion Price then in effect shall
be reduced to an amount equal to the product of (i) the Conversion Price in effect immediately prior to such dividend or distribution
and (ii) the quotient determined by dividing (A) the Closing Sale Price of the Common Stock on the day that the Common Stock trades ex-distribution
by (B) the sum of (1) the Closing Sale Price of the Common Stock on the day that the Common Stock trades ex-distribution plus (2) the
amount per share of such dividend or distribution. The Company shall not be required to give effect to any adjustment in the Conversion
Price pursuant to this Section 6(c) unless and until the net effect of one or more adjustments (each of which shall be carried forward
until counted toward an adjustment), determined in accordance with this Section 6(c), shall have resulted in a change of the Conversion
Price by at least 1%, and when the cumulative net effect of more than one adjustment so determined shall be to change the Conversion Price
by at least 1%, such change in the Conversion Price shall then be given effect.

 

(ii)     Adjustment of Conversion Rate upon Distributions of Capital Stock, Indebtedness or Other Non-Cash
Assets. If the Company at any time, or from time to time, distributes any shares of capital stock of the Company (other than Common
Stock), evidences of indebtedness or other non-cash assets (including securities of any person other than the Company but excluding (1)
dividends or distributions paid exclusively in cash or (2) dividends or distributions referred to in Section 6(b)) to the record holders
of any class of Common Stock, then the Conversion Price then in effect shall be reduced to an amount equal to the product of (A) the Conversion
Price then in effect and (B) a fraction of which the numerator shall be the Closing Sale Price per share of the Common Stock on the record
date fixed for determination of stockholders entitled to receive such distribution less the fair market value on such record date (as
determined by the Board of Directors) of the portion of the capital stock, evidences of indebtedness or other non-cash assets so distributed
applicable to one share of Common Stock (determined on the basis of the number of shares of Common Stock outstanding on the record date)
and of which the denominator shall be the Closing Sale Price per share of the Common Stock on such record date.

 

    	 	8	 

     

    

 

(d)     Other Events; Other Dividends and Distributions. If any event occurs of the type contemplated
by the provisions of this Section 6 but not expressly provided for by such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors shall,
in good faith, make an adjustment in the Conversion Price so as to protect the rights of the Holder under this Note; provided that no
such adjustment will increase the Conversion Price as otherwise determined pursuant to this Section 6.

 

(e)     Notice of Adjustment. Whenever the Conversion Price is adjusted pursuant to this Section 6,
the Company shall promptly mail notice of such adjustment to the Holder, which notice shall set forth the Conversion Price after adjustment,
the date on which such adjustment became effective and a brief statement of the facts resulting in such adjustment.

 

(7)        NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment
of its Certificate of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement,
dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Note, and will at all times in good faith carry out all of the provisions of this Note and take all action as may be
required to protect the rights of the Holder of this Note.

 

		(8)	RESERVATION OF AUTHORIZED SHARES.

 

(a)     Reservation. The Company shall at all times reserve out of its authorized and unissued shares
of Common Stock a number of shares of Common Stock equal to 120% of the Conversion Rate with respect to the full Conversion Amount of
this Note, solely for the purpose of effecting the conversion of this Note (the “Required Reserve Amount”).

 

(b)     Insufficient Authorized Shares. If at any time while this Note remains outstanding the Company
does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve the Required
Reserve Amount (an “Authorized Share Failure”), then the Company shall take all action necessary to increase the Company’s
authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount. Without limiting
the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but
in no event later than seventy-five (75) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting
of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement and shall use its commercially reasonable efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that
they approve such proposal.

 

    	 	9	 

     

    

 

 

(9)        VOTING
RIGHTS. The Holder shall have no voting rights as the Holder of this Note, except as required by law, including, but not limited
to, the General Corporation Law of the State of Nevada, and as expressly provided in this Note, the Company’s Charter or any of
the other Transaction Documents.

 

(10)      VOTE TO ISSUE, OR CHANGE THE TERMS OF, NOTE.Any provision of this Note may be amended,
waived or modified only upon the written consent of both the Company and the Majority Investors; provided, that no amendment or
waiver may (a) extend the Maturity Date of this Note, (b) decrease the Conversion Price or Conversion Rate of this Note, or (c) reduce
the percentage of Notes required for consent to any modifications of the Notes, without the consent of the Holder of this Note.

 

(11)        TRANSFER. This Note and the shares of Common Stock issuable upon conversion of this Note may
not be offered for sale, sold, transferred or assigned (i) in the absence of (a) an effective registration statement for this Note or
the shares of Common Stock issuable upon conversion of this Note, as applicable, or (b) an opinion of counsel (selected by the Holder
and reasonably acceptable to the Company), in a form reasonable acceptable to the Company, that this Note and the shares of Common Stock
issuable upon conversion of this Note may be offered for sale, sold, assigned or transferred pursuant to an exemption from registration;
provided that such opinion of counsel shall not be required in connection with any such sale, assignment or transfer to an institutional
accredited investor that is, prior to such sale, assignment or transfer, an affiliate of the Holder, or (ii) unless the Holder provides
the Company with assurance (reasonably satisfactory to the Company) that such Note or the shares of Common Stock issuable upon the conversion
of this Note can be sold, assigned or transferred pursuant to Rule 144.

 

		(12)	REISSUANCE OF THIS NOTE.

 

(a)     Transfer. This Note is issued in registered form pursuant to Treasury Regulations section
1.871-14(c)(1). The Company (or its agent) will maintain a record of the Holder of this Note, and of Principal hereof, as required by
that regulation. This Note may be transferred or otherwise assigned only by surrender of this Note and issuance of a new Note in accordance
with this Section 12, and neither this Note nor any interest herein may be sold, transferred or assigned to any Person except upon satisfaction
of the conditions specified in this Section 12. If this Note is to be transferred or assigned, the Holder shall surrender this Note to
the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section
12(d)), registered as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than
the entire outstanding Principal is being transferred, a new Note (in accordance with Section 12(d)) to the Holder representing the outstanding
Principal not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the
provisions of Section 3(c)(iii) following conversion of any portion of this Note, the outstanding Principal represented by this Note may
be less than the Principal stated on the face of this Note.

 

    	 	10	 

     

    

 

 

(b)     Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note,
the Company shall execute and deliver to the Holder a new Note (in accordance with Section 12(d)) representing the then outstanding Principal.

 

(c)     Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a new Note or Notes (in accordance with Section 12(d) and in Principal
amounts of at least $100,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent
such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

 

(d)     Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the
terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new
Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 12(a) or Section 12(c), the Principal
designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance,
does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have
an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, and (iv) shall have
the same rights and conditions as this Note.

 

(13)
REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual
and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein
with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and
shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for
any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder
shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing
economic loss and without any bond or other security being required.

 

(14)     PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note
or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings
affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the
Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding,
including, but not limited to, reasonable attorneys’ fees and disbursements.

 

    	 	11	 

     

    

 

(15)        CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and
the Holder of this Note and shall not be construed against any person as the drafter hereof. The headings of this Note are for convenience
of reference and shall not form part of, or affect the interpretation of, this Note.

 

(16)        FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise
of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

 

(17)        DISPUTE RESOLUTION. In the case of a dispute as to the arithmetic calculation of the Conversion
Rate, the Company shall submit the disputed arithmetic calculations via facsimile within three (3) Business Days of receipt, or deemed
receipt, of the Conversion Notice, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such calculation
within five (5) Business Days of such disputed arithmetic calculation being submitted to the Holder, then the Company shall, within one
Business Day submit via facsimile the disputed arithmetic calculation of the Conversion Rate to the Company’s independent, outside
accountant. The Company, at the Company’s expense, shall cause the accountant, as the case may be, to perform the calculations and
notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed calculations.
Such accountant’s calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

 

		(18)	NOTICES; PAYMENTS.

 

(a)     Notices. Whenever notice is required to be given under this Note, unless otherwise provided
herein, such notice shall be given in accordance with the Agreement. The Company shall provide the Holder with prompt written notice of
all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder of any adjustment of the Conversion Price,
setting forth in reasonable detail, and certifying, the calculation of such adjustment.

 

(b)     Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant
to this Note, such payment shall be made in lawful money of the United States of America by a check drawn on the account of the Company
and sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address,
in the case of each of the initial Holder of this Note, shall initially be as set forth on the signature page to the Agreement); provided
that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with
prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever any amount expressed to be due
by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which
is a Business Day. Any amount of Principal or other amounts due under the this Note or the Transaction Documents, which is not paid when
due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate
of five percent (5%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).

 

    	 	12	 

     

    

 

 

(19)        CANCELLATION. After all Principal and other amounts at any time owed on this Note have been
paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be
reissued.

 

(20)        WAIVER OF NOTICE. To the extent permitted by law, the Company hereby waives demand, notice,
presentment, protest and all other demands and notices (other than the notices expressly provided for in this Note) in connection with
the delivery, acceptance, default or enforcement of this Note and the Agreement.

 

(21)        GOVERNING LAW. This Note shall be construed and enforced in accor- dance with, and all questions
concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.

 

(22)        CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following
meanings:

 

(a)     “Business Day” means any day other than Saturday, Sunday or other day on which
commercial banks in The City of New York are authorized or required by law to remain closed.

 

(b)     “Change of Control” means the consummation of any transaction described in clauses
(i) through (v) of the definition of “Major Event”.

 

(c)     “Closing Sale Price” means, as of any date, the last closing trade price for the
Common Stock on the Eligible Market representing the principal securities exchange or trading market for the Common Stock, as reported
by Bloomberg, or, if such Eligible Market begins to operate on an extended hours basis and does not designate the closing trade price,
then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no Eligible Market is
the principal securities exchange or trading market for the Common Stock, the last closing trade price of such security on the principal
securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply,
the last trade price of such security in the over-the- counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for
such security as reported in the “pink sheets” by OTC Markets Group, Inc. or any successor thereto. If the Closing Sale Price
cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such
date shall be the fair market value as mutually determined by the Company and the Holder.

 

(d)     “Common Stock” means the shares of the Company’s common stock, par value
$0.001 per share, and any other securities of the Company which may be issued or issuable with respect to, in exchange for, or in substitution
of, such shares of common stock (including without limitation, by way of recapitalization, reclassification, reorganization, merger or
otherwise).

 

    	 	13	 

     

    

  

(e)     “Contingent Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee
of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that
the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

 

(f)     “Convertible Securities” means any stock or securities (other than Options) directly
or indirectly convertible into or exercisable or exchangeable for Common Stock.

 

(g)     “Eligible Market” means The New York Stock Exchange (NYSE), the NYSE MKT, or The
Nasdaq Stock Market, or their successors.

 

(h)     “Exchange Act” means the United States Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.

 

(i)     “GAAP” means United States generally accepted accounting principles, consistently
applied, or successor conventions.

 

(j)     “Indebtedness” of any Person means, without duplication (a) all indebtedness for
borrowed money, (b) all obligations issued, undertaken or assumed as the deferred purchase price of property or services including, without
limitation, “capital leases” in accordance with GAAP (other than trade payables entered into in the ordinary course of business),
(c) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (d) all obligations
evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (e) all indebtedness created or arising under any conditional sale or other title retention agreement,
or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale
of such property), (f) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently
applied for the periods covered thereby, is classified as a capital lease, (g) any amount raised by acceptance under any acceptance credit
facility, (h) receivables sold or discounted (other than within the framework of factoring, securitization or similar transaction where
recourse is only to such receivables or proceeds), (i) any derivative transaction, (j) any counter-indemnity obligation in respect of
a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution
(excluding commercial letters of credit issued in the ordinary course of business), (k) all indebtedness referred to in clauses (a) through
(j) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment
of such indebtedness, and (l) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to
in clauses (a) through (k) above.

 

    	 	14	 

     

    

  

(k)     “Major Event” shall mean the occurrence of (i) the signing of a definitive agreement
or a series of agreements for the transfer, sale, lease or license of all or substantially all of the Company’s assets or capital
securities; (ii) the signing of a definitive agreement to consolidate or merge with or into another Person (whether or not the Company
is the Successor Entity) that results or would result, after giving effect to the consummation of the transactions contemplated by such
agreement, in such other Person (or the holders of such other Person’s capital stock immediately prior to the transaction) (other
than the Holder or its Affiliates) being or becoming the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of thirty-five percent (35%) or more of any class of the Company’s or the Successor Entity’s outstanding capital securities;
(iii) the signing of a definitive agreement or a series of agreements to consummate a stock acquisition or sale or other business combination
(including, without limitation, a reorganization, recapitalization, or spin-off), or series thereof, with any other Person or Persons
(other than the Holder or its Affiliates) that results or would result, after giving effect to the consummation of the transactions contemplated
by such agreement or agreements, in such other Person or Persons being or becoming the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of thirty-five percent (35%) or more of any class of the Company’s outstanding capital securities;
(iv) the commencement or other public announcement by any Person (other than the Company, the Holder or the Holder’s Affiliates)
of a purchase, tender or exchange offer for 35% or more of the outstanding shares of Common Stock (not including any shares of Common
Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase,
tender or exchange offer), (v) any “person” or “group” (as these terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act) (other than the Holder or its Affiliates) is or shall become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of either (x) 35% or more of the aggregate ordinary voting power represented
by issued and outstanding Common Stock or (y) 35% or more of the aggregate ordinary voting power represented by issued and outstanding
Common Stock not held by such Person or Persons as of the date hereof or (vi) the public announcement by any Person, Persons or group
(other than the Company, the Holder or the Holder’s Affiliates) of a bona fide intention to enter into any of the agreements
or to engage in or commence any of the actions described in clauses (i) through (v) above, or otherwise reflecting an intent to acquire
the Company or all or substantially all of its assets or capital securities, or the public announcement by the Company of its receipt
of a communication from such a Person, Persons or group evidencing the same.

 

(l)         “Options” means any rights, warrants or options to subscribe for or purchase Common
Stock or Convertible Securities.

(m)     “Person” means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

 

(n)     “Purchase Agreement” means that certain Note and Warrant Purchase Agreement,
dated as of April 21, 2011 (as amended, modified, or supplemented 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.

 

    	 	15	 

     

    

 

(o)     “Reclassification” means any reclassification or change of shares of Common Stock
issuable upon conversion of this Note (other than a change in par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination).

 

(p)     “Rule
144” means Rule 144 promulgated under the Securities Act and any successor provision thereto.

(q)   “SEC”meanstheUnitedStatesSecuritiesandExchange
Commission.

 

(r)     “Securities Act” means the Securities Act of 1933, as amended.

 

(s)     “Subsidiary” means with respect to any Person, any corporation, association or
other business entity of which 50% or more of the total voting power of equity entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees or other governing body thereof is at the time owned or controlled by such
Person (regardless of whether such equity is owned directly or through one or more other Subsidiaries of such Person or a combination
thereof).

 

(t)     “Successor Entity” means the Person, which may be the Company, formed by, resulting
from or surviving any Change of Control or the person with which such Change of Control transaction shall have been made. In the event
that the Person resulting from or surviving any Change of Control is a Subsidiary, Successor Entity shall be the parent of such Subsidiary.

 

(u)     “Transaction Documents” has the meaning given to such term in the Purchase Agreement.

 

    	 	16	 

     

    

IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed as of the Issuance Date set forth above.

 

CAREVIEW COMMUNICATIONS,
INC.

 

 

By: ____________________

Name:

Title:

 

 

    	 

     

    

EXHIBIT I

 

CAREVIEW COMMUNICATIONS, INC.
CONVERSION NOTICE

 

Reference is made to the Convertible
Note (the “Note”) issued to the undersigned by CareView Communications, Inc. (the “Company”). In
accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the
Note indicated below into shares of Common Stock par value $0.001 per share (the “Common Stock”) of the Company, as
of the date specified below.

 

Date of Conversion: __________________________________________________________________________

Aggregate Conversion Amount to
be converted: _____________________________________________________

 

Please confirm the following information:

 

Conversion Price: ___________________________________________________________________________

Number of shares of Common Stock to be issued: ___________________________________________________

 

Please issue the Common Stock into which the Note is being
converted in the following name and to the following address:

 

Issue to: ___________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

 

Facsimile Number: ___________________________________________________________________________

Authorization: _______________________________________________________________________________

By: _______________________________________________________________________________________

Title: ______________________________________________________________________________________

Dated: _____________________________________________________________________________________

 

Account Number: ____________________________________________________________________________

 (if electronic book entry
transfer)

Transaction Code Number: _____________________________________________________________________

(if electronic book entry transfer)

 

    	 

     

    

 

EXHIBIT II

[***]

[Omitted pursuant to Instruction 4 to
Item 1.01 of Form 8-K]Exhibit 10.1

      

    

      Execution Version

    

     

      

    
      PURCHASE AGREEMENT

       

      This PURCHASE AGREEMENT (this "Agreement") is made and
        entered into effectively as of December 28, 2022 (the “Effective Date”), by and among VKSS Capital, LLC., a Delaware limited liability company (the “Acquirer”), Kernel Group Holdings Inc., a Cayman Island exempted company (“SPAC”), and Kernel Capital Holdings, LLC (“Sponsor”) (each a "Party" and, collectively, the "Parties").

       

      WHEREAS, SPAC is a Special Purpose Acquisition Company that closed on its initial public offering on February 2nd,
        2021, with 24 months to complete an initial business combination;

       

      WHEREAS, as of the date of this Agreement, SPAC has not completed or announced a business combination;

       

      WHEREAS Sponsor owns 7,187,500 shares of Class B ordinary shares of SPAC (the “Class B Shares”) and 8,750,000 Private Placement Warrants (the “Warrants”) to acquire one share of Class A ordinary shares of SPAC (the “Class A Shares”) (collectively, the “SPAC Securities”); and

       

      WHEREAS, in accordance with the terms and conditions of this Agreement, Acquirer, or an entity designated by Acquirer, will
        purchase all the SPAC Securities from Sponsor for a total purchase price of $1 (one dollar) (the “Purchase Price”) payable at the time SPAC effects a merger, share
        exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (the “Initial Business
          Combination”).

       

      NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set
        forth below, and the representations, warranties, covenants and agreement contained in this Agreement, and intending to be legally bound hereby, the Parties hereby agree as follows:

       

      1.            Purchase and Sale.

       

      (a)          Upon the execution of this Agreement Sponsor shall (A) transfer, deliver, and assign the SPAC Securities to Acquirer, free and clear of all liens and encumbrances; and (B) SPAC shall record such transfer.

       

      (b)          Upon the closing of the Initial Business Combination:

       

      
        	 	
                (i)

              	
                Acquirer shall pay Sponsor $1 (one dollar).

              

      

       

      	

            	(ii)	
              Acquirer shall convey 2,000,000 (two million) Class B Shares (the “Closing Shares”) to the equityholders of Sponsor as of the
                date hereof (the “Sponsor Equityholders”) pro rata based on the Sponsor Equityholders’ underlying interest in Class B Shares as of the date hereof. The Closing Shares
                shall not be subject in any respect to any forfeiture, earnout, clawback, reduction or similar restrictive provision.

            

       

      	

            	(iii)	
              Without limiting Acquirer’s assumption of obligatios as set forth in paragraph (iv) below, Acquirer shall settle the outstanding obligations set forth on Exhibit A with the parties named therein.
                Mark Gross, Rakesh Tondon, Brett Northart and Mike Newbold (the “Initial Sponsor Founders”) shall provide an updated Exhibit A two (2) business days prior to the
                closing of the Initial Business Combination.

            

       

      
        
          

      

      
      	

            	(iv)	
              Acquirer shall:  (a)  pay each of the Initial Sponsor Founders $250,000 (two hundred and fifty thousand dollars), and (b) convey to each of the Initial Sponsor Founders 125,000 (one hundred twenty
                five thousand) thousand) Class B shares, as an advisor fee (“Advisor Fee”) for their transition support and input towards the Initial Business Combination, and such shares conveyed as part of the Advisor Fee shall not be subject in any
                respect to any forfeiture, earnout, clawback, reduction or similar restrictive provision

            

       

      (g)          The closing of the transactions contemplated herein shall take place on Dec 27, 2022, or on such earlier date as the Parties agree in writing.

       

      2.           Assumption of Obligations. In addition to the payment of the Purchase Price, Acquirer shall also assume the following obligations: (i) to cause SPAC to make all of its public
            company reporting requirements, (ii) and all other obligations of Sponsor related to the SPAC. To the extent the SPAC’s duration is extended for more than two years from the date of the Prospectus, Acquirer shall purchase an extension of
            directors’ and officers’ insurance substantially equivalent to the existing directors’ and officers’ insurance for the duration of the SPAC, which insurance coverage terms and insurance provider shall be substantially comparable to the
            directors’ and officers’ insurance policy currently in effect.

       

      3.           Management; Name Change. SPAC acknowledges and agrees that Acquirer shall have the right to replace SPAC’s current
            directors with any such directors as Acquirer may select in its sole discretion. Concurrently with the execution of this Agreement, SPAC’s officers shall submit resignation letters, which letters shall take effect with the execution of this
            Agreement. Accordingly, at the request of Acquirer, SPAC shall take such actions as necessary to effectuate the removal and replacement of SPAC’s existing directors and officers and the existing directors and officers of SPAC shall resign from
            their respective positions. Additionally, Acquirer shall use its best efforts to file a formal public vehicle name change on behalf of SPAC, and SPAC shall reasonably cooperate with Acquirer
            in connection therewith; provided that Acquirer shall not be obligated to solicit separate proxies to effect such name change.

       

      4.            Liabilities.  SPAC confirms to Acquirer that it will provide a true and correct (a) copy of its balance sheet as of December 31, 2022, as soon as reasonably practicable
            following execution, to be set forth on Exhibit B to this Agreement , (b) list of invoices received by SPAC since December 31, 2022 shall be set forth on Exhibit C-1 to this Agreement as soon as reasonably practicable following execution, and that all invoices from September 30, 2022 through the date of this Agreement are attached as Exhibit C-2 to this
            Agreement (c) exhibit setting forth bank account balances for SPAC and Sponsor, respectively, and all transactions in such bank accounts since the formation of the SPAC are set forth on Exhibit
                D to this Agreement and (d) capitalization table of Sponsor is set forth on Exhibit E. Sponsor represents that the SPAC Securities represent all the of the outstanding
            securities of SPAC held by Sponsor. 

       

      5.           Limitation on Transfer.  Acquirer acknowledges and agrees that the SPAC Securities are subject to the limitations on
            transfer set forth in Section 8 of this Agreement.

       

      6.           Title. Sponsor represents and warrants to Acquirer that Sponsor has good and marketable title to the SPAC Securities free and clear of all liens and encumbrances and that,
            upon updating the records of ownership, Acquirer will have good and marketable title to the SPAC Securities.

       

      7.           Representations and Warranties. Each Party hereby represents and warrants to each other Party as of the Effective Date and as of the Closing that:

       

      
        2

        
          

      

      (a)          such Party has the power and authority to execute and deliver this Agreement and to carry out its obligations hereunder;

       

      (b)        the execution, delivery and performance by the Party of this Agreement and the consummation of the transfer have been duly authorized by all necessary action on the part of the relevant Party, and no further approval or authorization
            is required on the part of such Party;

       

      (c)          this Agreement will be valid and binding on each Party and enforceable against such Party in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer or
            conveyance, moratorium or similar laws affecting the enforcement of creditors rights generally and general equitable principles, regardless of whether such enforceability is considered in a proceeding at law or in equity; and

       

      (d)          SPAC and Sponsor have received all third-party consents to the transfer of the SPAC Securities and such consents have been shared with Acquirer.

       

      8.         Acknowledgements. Each Party acknowledges and agrees that the transfer has not been registered under the Securities Act or under any state securities laws and Acquirer
            represents that it:

       

      (a)         is acquiring the SPAC Securities pursuant to an exemption from registration under the Securities Act with no present intention to distribute them to any person in violation of the Securities Act or any applicable U.S. state securities
            laws;

       

      (b)          will not sell or otherwise dispose of any of the SPAC Securities, except in compliance with the registration requirements or exemption provisions of the Securities Act and any applicable U.S. state securities laws and in accordance
            with any limitations set forth in any agreements described in the Prospectus dated Feb 2nd , 2021 relating to the initial public offering of the SPAC;

       

      (c)          has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of the SPAC Securities and of making an informed investment decision, and has
            conducted a review of the business and affairs of SPAC that it considers sufficient and reasonable for purposes of making the transfer; and

       

      (d)          is an "accredited investor" (as defined by Rule 501 of the Securities Act).

       

      9.           Injunctive Relief. It is hereby understood and agreed that damages shall be an inadequate remedy in the event of a breach
            by any Party of any covenants or obligations herein, and that any such breach by a Party will cause the other Parties great and irreparable injury and damage. Accordingly, the breaching Party agrees that the other Parties shall be entitled,
            without waiving any additional rights or remedies otherwise available to such other Parties at law or in equity or by statute, to injunctive and other equitable relief in the event of a breach or intended or threatened breach by the breaching
            Party of any of said covenants or obligations.

       

      10.        Severability. In case any one or more of the provisions contained herein shall, for any reason, be held to be invalid,
            illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such provision(s) had never been contained herein,
            provided that such provision(s) shall be curtailed, limited or eliminated only to the extent necessary to remove the invalidity, illegality or unenforceability in the jurisdiction where such provisions have been held to be invalid, illegal, or
            unenforceable.

       

      
        3

        
          

      

      11.         Titles and Headings. The titles and section headings in this Agreement are included strictly for convenience purposes.

       

      12.         No Waiver. It is understood and agreed that no failure or delay in exercising any right, power or privilege hereunder
            shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder.

       

      13.        Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, without regard to its
            conflicts of laws rules. Each Party (a) irrevocably submits to the exclusive jurisdiction of the state courts situated in the County of New York, State of New York or, to the extent such court does not have subject matter jurisdiction, the
            United States District Court for the Southern District of New York (collectively, the "Courts"), for purposes of any action, suit or other proceeding arising out of this Agreement; and (b)
            agrees not to raise any objection at any time to the laying or maintaining of the venue of any such action, suit or proceeding in any of the Courts, irrevocably waives any claim that such action, suit or other proceeding has been brought in an
            inconvenient forum and further irrevocably waives the right to object, with respect to such action, suit or other proceeding, that such Court does not have any jurisdiction over such Party. Any Party may serve any process required by such
            Courts by way of notice.

       

      14.        WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION
            DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
            OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
            CERTIFICATIONS IN THIS SECTION.

       

      15.         Entire Agreement. This Agreement contains the entire agreement between the Parties and supersedes any previous understandings, commitments or agreements, oral or written, with
            respect to the subject matter hereof. No modification of this Agreement or waiver of the terms and conditions hereof shall be binding upon either Party, unless mutually approved in writing.

       

      16.        Counterparts.  This Agreement may be executed in counterparts (delivered by email or other means of electronic transmission), each of which shall be deemed an original and
            which, when taken together, shall constitute one and the same document.

       

      17.        Notices.  All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii)
            by email or other electronic means, with affirmative confirmation of receipt, (iii) one business day after being sent, if sent by reputable, nationally recognized overnight courier service or (iv) three (3) business days after being mailed, if
            sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable Party at the following addresses (or at such other address for a Party as shall be specified by like notice.

       

          

       
        	 	
                If to Acquirer:

                    

              	
                Suren Ajjarapu

              	

              
	 	

              	

              	

              
	 	 	 	 

        	 	

              	
                Attn: 

                

              	 	

              
	 	

              	
                Email: 

              	 	

              

      

       

          

      
        4

        
          

      

      
      
        	 	With a copy to:	Nelson Mullins Riley & Scarborough LLP
	 	

              	101 Constitution Avenue, Suite 900
	 	 	Washington, DC 20001
	 	 	Attn:  Andrew M. Tucker
	 	 	Email: andy.tucker@nelsonmullins.com

        

        

        	 	If to SPAC: 

                	KERNEL GROUP HOLDINGS, INC
	 	

                	Attn:  Michael Newbold
	 	 	Email:	
                
                  mike@downanotch.com

                

              	 

        

        

        	 	With a copy to:	
                
                  Brett Northart

                

              	 

        	 	 	Email:	
                
                   bnorthart@gmail.com

                

              	 

      

       

      	 	If to Sponsor:	KERNEL CAPITAL HOLDINGS, LLC

      	 	 	Email:	
              
                
                  
                    
                      
                        
                          
                            
                               Michael

                            

                          

                        

                      

                    

                  

                

              

            	
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    Newbold

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

      

      

      	mike@downanotch.com	 	 

                 

          

      	 	With a copy to:

              	
              
                 Brett Northart

              

            	 

      

      

      	 	 	Email:	
              
                
                  bnorthart@gmail.com

                

              

            	 

            

      
      18.    Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and
            permitted assigns. This Agreement shall not be assigned by operation of law or otherwise without the prior written consent of the other Parties, and any assignment without such consent shall be null and void; provided that no such assignment
            shall relieve the assigning Party of its obligations hereunder.

       

      19.        Third Parties. Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions contemplated hereby shall create
            any rights in or be deemed to have been executed for the benefit of, any person or entity that is not a Party hereto or thereto or a successor or permitted assign of such a Party.

       

      20.        Specific Performance. Each Party acknowledges that the rights of each Party to consummate the transactions contemplated hereby are unique, recognizes and affirms that in the
            event of a breach of this Agreement by any Party, money damages may be inadequate and the non-breaching Parties may have not adequate remedy at law, and agree that irreparable damage would occur in the event that any of the provisions of this
            Agreement were not performed by an applicable Party in accordance with their specific terms or were otherwise breached. Accordingly, each Party shall be entitled to seek an injunction or restraining order to prevent breaches of this Agreement
            and to seek to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to any other right or remedy to which
            such Party may be entitled under this Agreement, at law or in equity.

       

      [remainder of page intentionally left blank; signature page follows]

      

      

      
        5

        
          

      

      
        Execution Version

         

        

      

      IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered, all as of the Effective Date.

       

      	 	
              ACQUIRER:

            
	 	 
	 	
              /s/ Surendra Ajjarapu

            
	 	
              VKSS Capital, LLC

            
	 	 
	 	
              SPAC:

            
	 	 
	 	
              KERNEL GROUP HOLDINGS, INC

            
	 	 
	 	
              By: 

                

            	/s/ Michael Newbold 

              
	 	
              Name:  Michael Newbold

            
	 	
              TitleCAO

            

      

      

      	 	
              SPONSOR:

            
	 	 
	 	
              KERNEL CAPITAL HOLDINGS, LLC

            
	 	 
	 	
              By:  

              

            	/s/ Mark Gross
	 	
              Name:  Mark Gross

            
	 	
              Title:  Member and Director

            

      

      

      
        
          

      

      EXHIBIT B

       

      DECEMBER 31, 2022 BALANCE SHEET

       

      [TO BE PROVIDED POST-SIGNING]

       

      

      
        
          

      

       

      EXHIBIT C-1

       

      INVOICES

       

      [TO BE PROVIDED POST-SIGNING]

       

      EXHIBIT C-2

       

      INVOICES POST 9-30-22

       

      [See attached]

       

      

      
        
          

      

      EXHIBIT D

       

      BANK BALANCES

       

      [See attached]

       

      
        
          

      

      EXHIBIT E

       

      CAPITALIZATION TABLE

       

      [See attached]

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