Document:

CareView Communications, Inc. 8-k

Exhibit 10.129

 

Execution Version

 

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 13(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.

 

THIS NOTE IS SUBJECT TO A SUBORDINATION
AGREEMENT DATED AS OF AUGUST 31, 2011 AMONG THE COMPANY, THE HOLDER, HEALTHCOR PARTNERS
FUND, L.P. AND COMERICA BANK, AS COLLATERAL AGENT ("COMERICA"), WHICH, AMONG OTHER THINGS, SUBORDINATES
THE COMPANY’S OBLIGATIONS HEREUNDER TO THE COMPANY’S OBLIGATIONS TO COMERICA AND THE "LENDERS" (AS DEFINED
THEREIN), AS MORE FULLY DESCRIBED IN SAID SUBORDINATION AGREEMENT.

 

    	 

    	 

    

 

CAREVIEW
COMMUNICATIONS, INC.

 

SENIOR
SECURED CONVERTIBLE NOTE

 

	Issuance Date:  January 16, 2014	Principal Amount:  U.S. $$2,671,000
	 	(subject to Section 3(c)(iii) hereof)

 

FOR VALUE RECEIVED,
CareView Communications, Inc., a Nevada corporation (the “Company”), hereby promises to pay to HealthCor Hybrid
Offshore Master Fund, L.P. or the registered assign(s) thereof (“Holder”) the principal amount set forth above
(as increased and/or decreased pursuant to the terms hereof by reason of the accrual of Interest, partial conversion or otherwise,
and together with the principal amount of any additional convertible debt instruments issued by the Company to the Holder in accordance
herewith, the “Principal”) when due, whether upon the Maturity Date, acceleration or otherwise (in each case
in accordance with the terms hereof), together with accrued interest (“Interest”) on any outstanding Principal
at the First Five Year Interest Rate or the Second Five Year Interest Rate, as applicable, from the date hereof (the “Issuance
Date”) until the same becomes due and payable, whether upon the Maturity Date, acceleration, conversion 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 Note and Warrant Purchase Agreement, dated as of April 21, 2011, as amended by a Note and Warrant
Amendment Agreement entered into as of December 20, 2011, a Second Amendment to Note and Warrant Purchase Agreement dated as of
January 31, 2012, a Third Amendment to Note and Warrant Purchase Agreement dated as of August 20, 2013, and a Fourth Amendment
to Note and Warrant Purchase Agreement dated as of the date hereof, by and between the Company and the Holder (the “Purchase
Agreement”), and is entitled to the benefits of, and evidences obligations incurred under, the Purchase Agreement and
the other Transaction Documents (as defined in 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.

 

Certain capitalized terms
used herein are defined in Section 23.

 

(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, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section
19(b)), if any. The “Maturity Date” shall be January 15, 2024.

 

    	 

    	 

    

 

(2)          INTEREST; INTEREST
RATE.

 

(a)         So long as no Event
of Default has occurred and is continuing, the outstanding Principal balance of this Note shall accrue Interest from the Issuance
Date through January 15, 2019 (the “First Five Year Note Period”), at the rate of twelve and one-half percent
(12.5%) per annum (based on a 360-day year and the actual number of days elapsed in any partial year) (the “First Five
Year Interest Rate”), compounding quarterly, which accrued Interest shall be added to the outstanding Principal balance
of this Note on the last day of each calendar quarter and shall thereafter itself, as part of such Principal balance, accrue Interest
at the First Five Year Interest Rate (and, during the Second Five Year Note Period (as defined below), at the Second Five Year
Interest Rate (as defined below)), compounding quarterly. All such accrued Interest added to the outstanding Principal balance
pursuant to the immediately preceding sentence shall be payable on the same terms and subject to the same conditions set forth
herein. Upon the occurrence of an Event of Default, Interest shall be calculated at the Default Rate as set forth in Section 2(c)
below.

 

(b)         So long as no Event
of Default has occurred and is continuing, the outstanding Principal balance of this Note shall accrue Interest from and after
the end of the First Five Year Note Period through the Maturity Date (the “Second Five Year Note Period”), at
the rate of ten percent (10%) per annum (based on a 360-day year and the actual number of days elapsed in any partial year) (the
“Second Five Year Interest Rate”). The Interest accruing during the Second Five Year Note Period may be paid
quarterly in arrears in cash or, at the Company’s option, such Interest may be added to the outstanding Principal balance
of the Note on the last day of each calendar quarter and shall thereafter itself, as part of such Principal balance, accrue Interest
at the Second Five Year Interest Rate, compounding quarterly. All such accrued Interest added to the outstanding Principal balance
pursuant to the immediately preceding sentence shall be payable on the same terms and subject to the same conditions set forth
herein. Upon the occurrence of an Event of Default, Interest shall be calculated at the Default Rate as set forth in Section 2(c)
below.

 

(c)         From and after the
date such Event of Default occurred, the First Five Year Interest Rate or the Second Five Year Interest Rate, whichever is then
applicable, shall be increased by five percent (5%) and otherwise applied consistently with the provisions of Sections 2(a) and
2(b) (the “Default Rate”).

 

    	 

    	 

    

 

(d)         

 

(i)        In addition to the
foregoing, if any Major Event occurs at any time during the First Five Year Note Period, then all amounts of Interest that are
then scheduled to be paid or accrued pursuant to Section 2(a) through and including the last day of the First Five Year Note Period,
but that have not yet been paid pursuant to Section 2(a) (such amount, the “First Five Year Major Event Interest Amount”),
will accelerate and become immediately due and payable by the Company by the issuance to the Holder of an additional convertible
debt instrument with the same terms as this Note, in a principal amount equal to the First Five Year Major Event Interest Amount,
and, at any time from and after the occurrence of the Major Event, the Holder may, at its option, elect to (A) convert this Note
and such convertible debt instrument at the then effective Conversion Rate or (B) redeem all or any portion of the outstanding
Principal balance of this Note and such convertible debt instrument, provided that for so long as this Note or such convertible
debt instrument remain outstanding, subject to Section 2(d)(ii) below, no additional Interest shall accrue on this Note or such
additional convertible debt instrument until the commencement of the Second Five Year Note Period. If any Major Event occurs at
any time during the Second Five Year Note Period, then all amounts of Interest that are then scheduled to be paid or accrued pursuant
to Section 2(b) through and including the last day of the Second Five Year Note Period (assuming for this purpose that the Company
would elect to pay all such Interest in cash), but that have not yet been paid pursuant to Section 2(b) (such amount, the “Second
Five Year Major Event Interest Amount”), will accelerate and become immediately due and payable by the Company by the
issuance to the Holder of an additional convertible debt instrument with the same terms as this Note and in a principal amount
equal to the Second Five Year Major Event Interest Amount or, at the Company’s option, by cash payment in immediately available
funds of an amount equal to the Second Five Year Major Event Interest Amount paid within five (5) Business Days of the occurrence
of the Major Event. At any time following the occurrence of the Major Event, the Holder may, at its option, elect to (X) convert
this Note and such convertible debt instrument (if any) at the then effective Conversion Rate or (Y) redeem all or any portion
of the outstanding Principal balance of this Note and such convertible debt instrument (if any), provided that, for so long as
this Note or any such convertible debt instrument remain outstanding, subject to Section 2(d)(ii) below, no additional Interest
shall accrue on this Note or such additional convertible debt instrument for the duration of the Second Five Year Note Period.
For purposes of this Note, the term “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.

 

    	 

    	 

    

 

(ii)        Notwithstanding
the foregoing, in the event that, following a Major Event, an Event of Default occurs during the First Five Year Note Period while
any portion of this Note and/or any convertible debt instrument issued pursuant to Section 2(d)(i) remains outstanding (such outstanding
portion, the “Post EOD Principal”), the Company shall issue to the Holder an additional convertible debt instrument
with the same terms as this Note and with a face principal amount equal to the difference (to the extent such difference is positive)
between (A) the applicable EOD Accelerated Interest (as defined in Section 4(b)) on such Post EOD Principal, and (B) the First
Five Year Major Event Interest Amount attributable to the Post EOD Principal and paid under Section 2(d)(i), and at any time following
the occurrence of the Event of Default, the Holder may, at its option, elect to convert such additional convertible debt instrument
at the then effective Conversion Rate or redeem all or any portion of the outstanding Principal balance of such convertible debt
instrument. In the event that, following a Major Event, an Event of Default occurs during the Second Five Year Note Period while
any Post EOD Principal remains outstanding, the Company shall issue to the Holder an additional convertible debt instrument with
the same terms as this Note and with a face principal amount equal to the difference (to the extent such difference is positive)
between (X) the applicable EOD Accelerated Interest attributable to such Post EOD Principal and (Y) the Second Five Year Major
Event Interest Amount attributable to the Post EOD Principal and paid under Section 2(d)(i), and at any time following the occurrence
of the Event of Default, the Holder may, at its option, elect to convert such additional convertible debt instrument at the then
effective Conversion Rate or redeem all or any portion of the outstanding Principal balance of such convertible debt instrument,
provided, however, that the Company shall also have the option of paying the foregoing amount in cash upon the occurrence of such
Event of Default during the Second Five Year Note Period.

 

(e)         Notwithstanding
any other provision of this Note, the aggregate annual interest rate payable with respect to this Note (including all charges and
fees deemed to be interest pursuant to applicable law) shall not exceed the maximum annual rate permitted by applicable law. In
the event the aggregate annual interest rate payable with respect to this Note (including all charges and fees deemed to be interest
under applicable laws) exceeds the maximum legal rate, the Company shall only pay Interest to the Holder at the maximum permitted
rate and the Company shall continue to make such Interest payments at the maximum permitted rate until all amounts, fees and obligations
required to be paid hereunder have been paid in full.

 

(f)         This Note is one
of a series of notes issued by the Company pursuant to the Purchase 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 and Interest under this Note shall be pari passu with the rights of the other Investors
to receive payments of Principal and Interest 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 and Interest under each Note divided by the aggregate outstanding balance of Principal and Interest 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.

 

(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, (B) accrued and unpaid Interest with respect to such Principal and (C) accrued and unpaid Late Charges with respect
to such Principal and Interest.

 

(ii)        “Conversion
Price” means $0.40, 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 17(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.

 

(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, Interest 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 18.

 

    	 

    	 

    

 

(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 Holder any amount of Principal when and as due under
this Note (including, without limitation, upon a redemption request pursuant to Section 2(d));

 

(ii)        the Company’s
failure to pay to the Holder any amount of Interest, Late Charges or other amounts (other than the amounts specified in clause
(i)) when and as due under this Note 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 this Note remains 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);

 

(x)     
  the failure of the Company for a period of ninety (90) days following the resignation and/or departure of
either Samuel Greco or Steven Johnson to engage a replacement thereof that is reasonably acceptable to the Holder;

 

(xi)     
   [Intentionally omitted];

 

(xii)        the Company or
any Subsidiary shall fail to make any payment (whether of principal, interest or otherwise and regardless of amount) in respect
of any Indebtedness in excess of $250,000 (“Material Indebtedness”), when and as the same shall become due and
payable, after giving effect to any grace period with respect thereto;

 

(xiii)       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;

 

(xiv)       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 Holder shall have approved) by insurance; or

 

    	 

    	 

    

 

(xv)        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)(xv) would also create or constitute a separate Event of Default under this Note,
the cure period set forth in this Section 4(a)(xv) 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.

 

(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 Holder may, at its 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 Interest and Late Charges, together with all future Interest (calculated at the Default Rate pursuant to Section 2(c))
scheduled to accrue during the First Five Year Note Period (if such Acceleration occurred during the First Five Year Note Period)
or the Second Five Year Note Period (if such Acceleration occurred during the Second Five Year Note Period) (such future Interest
amount the “EOD Accelerated Interest”), 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”). In the event a Demand Notice is not immediately given upon the occurrence of
an Event of Default, or the Company otherwise does not immediately pay the Default Amount when due, interest shall continue to
accrue on the Note as provided herein, provided that (i) upon an Acceleration that occurs during the First Five Year Note Period,
such Default Amount shall not accrue additional Interest until the commencement of the Second Five Year Note Period, and (ii) upon
an Acceleration that occurs during the Second Five Year Note Period, such Default Amount shall not accrue any additional Interest
for the duration of the Second Five Year Note Period. 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 and interest
rate equal to the principal amounts and the interest rates 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.

 

(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.

 

(d)         [Intentionally
omitted.]

 

(e)         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.

 

    	 

    	 

    

 

(f)         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)          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 Delaware, and as expressly provided in this Note, the Company’s Charter or any of
the other Transaction Documents.

 

    	 

    	 

    

 

(10)        OTHER COVENANTS.

 

(a)         Listing.
The Company shall promptly secure the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement)
upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed (subject
to official notice of issuance) and shall maintain such listing of all Registrable Securities from time to time issuable under
the terms of the Transaction Documents. The Company shall maintain the Common Stock’s authorization for quotation on the
principal exchange or market in which it is listed. Neither the Company nor any of its Subsidiaries shall take any action which
would be reasonably expected to result in the delisting or suspension of the Common Stock on the principal market in which it is
listed, other than in connection with a transfer of listing to an Eligible Market. The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section 10(a).

 

(b)         Quarterly
Report of Outstanding Principal and Interest. The Company covenants to deliver to the Holder, within 30 days following the
end of each calendar quarter while any portion of this Note remains outstanding, a written statement signed by an authorized officer
of the Company certifying (i) the amount of the outstanding Principal balance of this Note, including any Interest added to Principal
pursuant to Section 2(a) and 2(b) above, and (ii) all accrued but unpaid Interest on such outstanding Principal balance, and (iii)
all remaining scheduled payments of Interest through the Maturity Date, in each case as of the end of such calendar quarter. The
parties agree that the scheduled Interest payments through the Maturity Date as of the Issuance Date are reflected in Exhibit
II attached hereto (which schedule is based on the assumptions outlined therein) and that each such quarterly statement delivered
by the Company under this Section 10(b) shall update such schedule to take into account any conversions, Events of Default, Major
Events or other events.

 

(c)         Waiver
of Usury Defense. The Company covenants (to the extent that it may lawfully do so) that it shall not assert, plead
(as a defense or otherwise) or in any manner whatsoever claim (and shall actively resist any attempt to compel it to assert, plead
or claim) in any action, suit or proceeding that the interest rate on this Note violates present or future usury or other laws
relating to the interest payable on any Indebtedness and shall not otherwise avail itself (and shall actively resist any attempt
to compel it to avail itself) of the benefits or advantages of any such laws.

 

    	 

    	 

    

 

(d)         Registration
Rights. The Company agrees that the Holder, as a holder of Registrable Securities (as defined in the Registration Rights Agreement,
dated as of April 21, 2011, by and among the Company and the Investors identified therein, as may be amended and/or restated from
time to time (the “Registration Rights Agreement”)), is entitled to the benefits of the Registration Rights
Agreement. Further, if (i) the Registration Statement (as defined in Registration Rights Agreement) required by Section 2(a) of
the Registration Rights Agreement, covering the Registrable Securities required to be covered thereby is (A) not filed with the
SEC on or before thirty (30) calendar days after the applicable Registration Request (as defined in Registration Rights Agreement)
(a “Filing Failure”) or (B) not declared effective by the SEC on or before the date that is one hundred and
eighty (180) calendar days after the applicable Registration Request, in each case to the extent required under the Registration
Rights Agreement (an “Effectiveness Failure”) or (ii) after the effective date of any Registration Statement,
after the second (2nd) consecutive Business Day (other than during an allowable blackout period pursuant to Section 3(g) of the
Registration Rights Agreement (“Blackout Period”)) on which sales of all of the Registrable Securities required
to be included on such Registration Statement cannot be made pursuant to such Registration Statement (including, without limitation,
because of a failure to keep such Registration Statement effective, to disclose such information as is necessary for sales to be
made pursuant to such Registration Statement, or to maintain a listing of the Common Stock required for sales to be made under
the Registration Statement) (a “Maintenance Failure”), then, as relief for the damages to the Holder by reason
of any such delay in or reduction of its ability to sell the Registrable Securities, the Company shall pay to the Holder an amount
in cash equal to (A) one percent (1%) of the outstanding Principal balance of this Note on each of the following dates: (i) the
day of a Filing Failure; (ii) the day of an Effectiveness Failure; and (iii) the initial day of a Maintenance Failure, and (B)
one percent (1%) of the outstanding Principal balance of this Note on each of the following dates: (i) on every thirtieth (30th)
day after the initial day of a Filing Failure (prorated for periods totaling less than thirty (30) days) until such Filing Failure
is cured; (ii) on every thirtieth (30th) day after the initial day of an Effectiveness Failure (prorated for periods totaling less
than thirty (30) days) until such Effectiveness Failure is cured; (iii) on every thirtieth (30th) day after the initial day of
a Maintenance Failure (prorated for periods totaling less than thirty (30) days) until such Maintenance Failure is cured. The payments
to which the Holder shall be entitled pursuant to this Section 10(d) are referred to herein as “Registration Default Payments.”
Registration Default Payments shall be paid on the earlier of (I) the last day of the calendar month during which such Registration
Default Payments are incurred and (II) the third (3rd) Business Day after the event or failure giving rise to the Registration
Default Payments is cured. In the event the Company fails to make Registration Default Payments in a timely manner, such Registration
Default Payments shall bear interest at the rate of one and one-half percent (1.5%) per month (prorated for partial months) until
paid in full. If the Company has declared a Blackout Period, a Maintenance Failure shall be deemed not to have occurred and be
continuing in relation to the Registration Statement during the period specified in Section 3(g) of the Registration Rights Agreement.
Registration Default Payments shall be payable from the first day any Blackout Period exceeds the period specified in Section 3(g)
of the Registration Rights Agreement. Registration Default Payments shall cease to accrue at the end of the Effectiveness Period
(as defined in Registration Rights Agreement); provided that the foregoing shall not affect the Company’s obligation
to make Registration Default Payments for any period prior to such time. Whenever in this Note there is mentioned, in any context,
the payment of interest on, or in respect of, this Note, such mention shall be deemed to include mention of the payment of liquidated
damages on this Note to the extent that, in such context, such liquidated damages are, were or would be payable in respect thereof
pursuant to this Section 10(d). For the avoidance of doubt, the Registrable Securities required to be included in any Registration
Statement referred to in this Section 10(d) shall be determined according to the provisions of the Registration Rights Agreement,
including all references to exceptions therein in such provisions related to the “Rule 415 Amount,” as applicable.

 

(11)        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 Holder.

 

    	 

    	 

    

 

(12)        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.

 

(13)        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 and Interest hereon 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
13, 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 13. 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 13(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 13(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.

 

(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 13(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 13(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 13(a) or Section 13(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, (iv) shall have the same rights
and conditions as this Note, and (v) shall represent accrued Interest and Late Charges on the Principal and Interest of this
Note, from the Issuance Date.

 

    	 

    	 

    

 

(14)        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.

 

(15)        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.

 

(16)        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.

 

(17)        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.

 

(18)        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.

 

    	 

    	 

    

 

(19)        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 Purchase 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 Purchase 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, other than Interest,
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”).

 

(20)        CANCELLATION.
After all Principal, accrued Interest 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.

 

(21)        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 Purchase Agreement.

 

(22)        GOVERNING LAW.
This Note shall be construed and enforced in accordance 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.

 

    	 

    	 

    

 

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

 

(a)         [Intentionally
omitted.]

 

(b)         “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.

 

(c)         “Change
of Control” means the consummation of any transaction described in clauses (i) through (v) of the definition of “Major
Event” in Section 2(d)(i).

 

(d)         “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.

 

(e)         “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).

 

(f)        “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.

 

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

 

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

 

    	 

    	 

    

 

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

 

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

 

(k)         “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.

 

(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)         “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).

 

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

 

    	 

    	 

    

 

(p)         “SEC”
means the United States Securities and Exchange Commission.

 

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

 

(r)         “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).

 

(s)         “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.

 

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

 

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

 

	 	CareView Communications, Inc.
	 	 
	 	By:	/s/ Steven G. Johnson
	 	 	Name: Steven G. Johnson
	 	 	Title: President

 

    	 

    	 

    

 

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

 

Schedule
OF Interest Payments as of Issuance Date

 

See attached.CareView Communications, Inc. 8-k

Exhibit 10.130

 

Execution Version

 

THE SECURITIES REPRESENTED HEREBY MAY
NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED,
(II) SUCH SECURITIES MAY BE SOLD WITHOUT RESTRICTION PURSUANT TO RULE 144, OR (III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

 

SUBJECT TO THE PROVISIONS OF SECTION
10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON JANUARY 15, 2024 (THE “EXPIRATION DATE”).

 

No. __________

 

CareView
Communications, Inc.

 

WARRANT TO PURCHASE 1,863,200 SHARES
OF

 

COMMON STOCK, PAR VALUE $0.001 PER
SHARE

 

For VALUE RECEIVED,
HealthCor Partners Fund, L.P. (“Warrantholder”), is entitled to purchase, subject to the provisions of this
Warrant, from CareView Communications, Inc., a Nevada corporation (“Company”), from and after January 16, 2014
and at any time not later than 5:00 P.M., Eastern time, on the Expiration Date (as defined above), at an exercise price per share
equal to $0.40 (the exercise price in effect being herein called the “Warrant Price”), 1,863,200 shares
(“Warrant Shares”) of the Company’s Common Stock, par value $0.001 per share (“Common Stock”).
The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from
time to time as described herein. This Warrant is being issued pursuant to the Note and Warrant Purchase Agreement, dated as of
April 21, 2011, as previously amended on December 20, 2011, January 31, 2012, August 20, 2013, and January 16, 2014, and as the
same may be amended and/or restated from time to time (the “Purchase Agreement”), among the Company and the
initial holder of the Supplemental Company Warrants (as defined below). Capitalized terms used herein have the respective meanings
ascribed thereto in the Note and Warrant and Purchase Agreement unless otherwise defined herein.

 

Section 1.             Registration.
The Company shall maintain books for the transfer and registration of the Warrant. Upon the initial issuance of this Warrant, the
Company shall issue and register the Warrant in the name of the Warrantholder.

 

Section 2.             Transfers.
As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act of
1933, as amended (the “Securities Act”), or an exemption from such registration. Subject to such restrictions,
the Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose, upon
surrender hereof for transfer, properly endorsed or accompanied by appropriate instructions for transfer and such other documents
as may be reasonably required by the Company, including, if required by the Company, an opinion of its counsel to the effect that
such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made
in accordance with the terms hereof, and a new Warrant shall be issued to the transferee and the surrendered Warrant shall be canceled
by the Company.

 

    	 

    	 

    

 

Section 3.             Exercise
of Warrant. Subject to the provisions hereof, the Warrantholder may exercise this Warrant, in whole or in part, at any time
from and after January 16, 2014 and prior to its expiration upon surrender of the Warrant, together with delivery of a duly executed
Warrant exercise form, in the form attached hereto as Appendix A (the “Exercise Agreement”) and payment by cash,
certified check or wire transfer of funds (or, in certain circumstances, by cashless exercise as provided below) of the aggregate
Warrant Price for that number of Warrant Shares then being purchased, to the Company during normal business hours on any business
day at the Company’s principal executive offices or such other office or agency of the Company as it may designate by notice
to the Warrantholder (such date, the “Exercise Date”). The Warrant Shares so purchased shall be deemed to be
issued to the Warrantholder or the Warrantholder’s designee, as the record owner of such shares, as of the close of business
on the date on which this Warrant shall have been surrendered (or the date evidence of loss, theft or destruction thereof and security
or indemnity satisfactory to the Company has been provided to the Company), the Warrant Price shall have been paid and the completed
Exercise Agreement shall have been delivered. Execution and delivery of the Exercise Agreement with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares. On or before the first (1st) business day following the
Exercise Date, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Agreement (or
Net Issue Election Notice, if applicable, pursuant to Section 18) to the Warrantholder and the Company’s transfer agent (the
“Transfer Agent”).  On or before the third (3rd) business day following the Exercise Date (the
“Share Delivery Date”), the Company shall (A) provided that the Transfer Agent is participating in The
Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Warrantholder,
credit such aggregate number of Warrant Shares to which the Warrantholder is entitled pursuant to such exercise to the Warrantholder’s
or its designee’s balance account with DTC through its Deposit Withdrawal At Custodian system, or (B) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver by overnight courier to the
address as specified in the Exercise Agreement or Net Issue Election Notice, a certificate, registered in the Company’s share
register in the name of the Warrantholder or its designee, for the number of shares of Common Stock to which the Warrantholder
is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent and all
fees and expenses with respect to the issuance of Warrant Shares via DTC, if any.  Any certificates so delivered shall be
in such denominations as may be requested by the Warrantholder and shall be registered in the name of the Warrantholder or such
other name as shall be designated by the Warrantholder, as specified in the Exercise Agreement or Net Issue Election Notice, if
applicable. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at
its expense, at the time of delivery of such certificates (or of crediting the Warrantholder’s balance account with DTC),
deliver to the Warrantholder a new Warrant representing the right to purchase the number of shares with respect to which this Warrant
shall not then have been exercised. As used herein, “business day” means a day, other than a Saturday or Sunday,
on which banks in New York City are open for the general transaction of business. Each exercise hereof shall constitute the re-affirmation
by the Warrantholder that the representations and warranties contained in Section 3 of the Purchase Agreement are true and correct
in all material respects with respect to the Warrantholder as of the time of such exercise.

 

    	 

    	 

    

 

If (1) the Company
shall fail for any reason or no reason to issue to the Warrantholder within three (3) business days (such third business day, a
“Warrant Share Delivery Date”) of after the Exercise Date, in compliance with the terms of this Section 3, a
certificate for the number of Warrant Shares to which the Warrantholder is entitled and register such shares on the Company’s
share register or to credit the Warrantholder’s balance account at DTC for such number of Warrant Shares to which the Warrantholder
is entitled upon the exercise of this Warrant, and (2) on or after the Warrant Share Delivery Date, the Warrantholder, or any third
party on behalf of the Warrantholder or for the Warrantholder’s account, purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Warrantholder of shares issuable upon exercise that the Warrantholder
anticipated receiving from the Company (a “Buy-In”), then the Company shall pay in cash to the Warrantholder
(for costs incurred either directly by such Warrantholder or on behalf of a third party) the amount by which the total purchase
price paid for Common Stock as a result of the Buy-In (including brokerage commissions, if any) exceeds the proceeds received by
such Warrantholder as a result of the sale to which such Buy-In relates. The Warrantholder shall provide the Company written notice
indicating the amounts payable to the Warrantholder in respect of the Buy-In.

 

Section 4.             Compliance
with the Securities Act. Except as provided in the Purchase Agreement, the Company may cause the legend set forth on the first
page of this Warrant to be set forth on each Warrant, and a similar legend on any security issued or issuable upon exercise of
this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary.

 

Section 5.             Payment
of Taxes. The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant Shares issuable
upon the exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may
be payable in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other
than that of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required
to issue or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid to the Company
the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid. The Warrantholder
shall be responsible for income taxes due under federal, state or other law, if any such tax is due.

 

Section 6.             Mutilated
or Missing Warrants. In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange
and substitution of and upon surrender and cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant
lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect to a lost,
stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company.

 

    	 

    	 

    

 

Section 7.             Reservation
of Common Stock. The Company hereby represents and warrants that there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares of
Common Stock, sufficient shares to provide for the exercise of the rights of purchase represented by this Warrant. The Company
agrees that all Warrant Shares issued upon due exercise of this Warrant shall be, at the time of delivery of the certificates for
such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company.

 

Section 8.             Adjustments.
Subject and pursuant to the provisions of this Section 8, the Warrant Price and number of Warrant Shares subject to this Warrant
shall be subject to adjustment from time to time as set forth hereinafter.

 

(a)          If the Company
shall, at any time or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its
outstanding shares of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common
Stock any shares of its capital stock (including any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then (i) the Warrant Price in effect immediately prior to the date on which such change
shall become effective shall be adjusted by multiplying such Warrant Price by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to such change and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after giving effect to such change and (ii) the number of Warrant Shares purchasable upon
exercise of this Warrant shall be adjusted by multiplying the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior to the date on which such change shall become effective by a fraction, the numerator of which is shall be the
Warrant Price in effect immediately prior to the date on which such change shall become effective and the denominator of which
shall be the Warrant Price in effect immediately after giving effect to such change, calculated in accordance with clause (i) above.
Such adjustments shall be made successively whenever any event listed above shall occur.

 

    	 

    	 

    

 

(b)          If any capital
reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation
in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company’s
assets to another corporation shall be effected, then, as a condition of such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby each Warrantholder shall thereafter
have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant
Shares immediately theretofore issuable upon exercise of this Warrant, such shares of stock, securities or assets as would have
been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately
theretofore issuable upon exercise of this Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer
or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests
of each Warrantholder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant
Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof. The Company shall not effect any such consolidation, merger, sale, transfer
or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other
appropriate corporation or entity shall assume the obligation to deliver to the Warrantholder, at the last address of the Warrantholder
appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions,
the Warrantholder may be entitled to purchase, and the other obligations under this Warrant. The provisions of this paragraph (b)
shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions.

 

(c)          In case the
Company shall fix a payment date for the making of a distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness
or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned surplus or dividends
or distributions referred to in Section 8(a)), or subscription rights or warrants, the Warrant Price to be in effect after such
payment date shall be determined by multiplying the Warrant Price in effect immediately prior to such payment date by a fraction,
the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price (as defined
below) per share of Common Stock immediately prior to such payment date, less the fair market value (as determined by the Company’s
Board of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or
warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market
Price per share of Common Stock immediately prior to such payment date. “Market Price” as of a particular date
(the “Valuation Date”) shall mean the following: (a) if the Common Stock is then listed on The NASDAQ Stock
Market or any other national stock exchange, the closing sale price of one share of Common Stock on such exchange on the last trading
day prior to the Valuation Date; (b) if the Common Stock is then quoted on a tiered marketplace of the OTC Markets Group Inc. (the
“Bulletin Board”) or a similar quotation system or association, the closing sale price of one share of Common
Stock on the Bulletin Board or such other quotation system or association on the last trading day prior to the Valuation Date or,
if no such closing sale price is available, the average of the high bid and the low asked price quoted thereon on the last trading
day prior to the Valuation Date; or (c) if the Common Stock is not then listed on a national stock exchange or quoted on the Bulletin
Board or such other quotation system or association, the fair market value of one share of Common Stock as of the Valuation Date,
as determined in good faith by the Board of Directors of the Company and the Warrantholder. If the Common Stock is not then listed
on a national securities exchange, the Bulletin Board or such other quotation system or association, the Board of Directors of
the Company shall respond promptly, in writing, to an inquiry by the Warrantholder prior to the exercise hereunder as to the fair
market value of a share of Common Stock as determined by the Board of Directors of the Company. In the event that the Board of
Directors of the Company and the Warrantholder are unable to agree upon the fair market value in respect of subpart (c) of this
paragraph, the Company and the Warrantholder shall jointly select an appraiser, who is experienced in such matters. The decision
of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne equally by the Company and the Warrantholder.
Such adjustment shall be made successively whenever such a payment date is fixed.

 

    	 

    	 

    

 

(d)          An adjustment
to the Warrant Price shall become effective immediately after the payment date in the case of each dividend or distribution and
immediately after the effective date of each other event which requires an adjustment.

 

(e)          In the event
that, as a result of an adjustment made pursuant to this Section 8, the Warrantholder shall become entitled to receive any shares
of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise
of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Warrant Shares contained in this Warrant.

 

(f)          [Intentionally
Omitted.]

  

(g)          To the extent
permitted by applicable law and the listing requirements of any stock market or exchange on which the Common Stock is then listed,
the Company from time to time may decrease the Warrant Price by any amount for any period of time if the period is at least twenty
(20) days, the decrease is irrevocable during the period and the Board shall have made a determination that such decrease would
be in the best interests of the Company, which determination shall be conclusive. Whenever the Warrant Price is decreased pursuant
to the preceding sentence, the Company shall provide written notice thereof to the Warrantholder at least five (5) days prior to
the date the decreased Warrant Price takes effect, and such notice shall state the decreased Warrant Price and the period during
which it will be in effect.

 

Section 9.             Fractional
Interest. The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant. If any
fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9, be deliverable upon
such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder an amount in
cash equal to the Market Price of such fractional share of Common Stock on the date of exercise.

 

Section 10.           Extension
of Expiration Date. If the Company fails to cause any Registration Statement covering Registrable Securities (as defined in
the Registration Rights Agreement) to be declared effective prior to the applicable dates set forth therein, or if any of the events
specified in Section 3(b) of the Registration Rights Agreement occurs, and the Blackout Period (as defined in the Registration
Rights Agreement) (whether alone, or in combination with any other Blackout Period) continues for more than 60 days in any 12 month
period, or for more than a total of 90 days, then the Expiration Date of this Warrant shall be extended one day for each day beyond
the 60-day or 90-day limits, as the case may be, that the Blackout Period continues.

 

    	 

    	 

    

 

Section
11.           Benefits. Nothing in this Warrant shall be
construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal or equitable
right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company and the
Warrantholder.

 

Section 12.           Notices
to Warrantholder. Upon the happening of any event requiring an adjustment of the Warrant Price, the Company shall promptly
give written notice thereof to the Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant
Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Failure to give such notice to the Warrantholder or any defect
therein shall not affect the legality or validity of the subject adjustment.

 

Section 13.           Identity
of Transfer Agent. The Transfer Agent for the Common Stock is Holladay Stock Transfer, Inc. Upon the appointment of any subsequent
transfer agent for the Common Stock or other shares of the Company’s capital stock issuable upon the exercise of the rights
of purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting forth the name and address
of such transfer agent.

 

Section 14.           Notices.
Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively
given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii)
if given by telex or facsimile, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii)
if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B)
three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices shall
be addressed as follows: if to the Warrantholder, at its address as set forth in the Company’s books and records and, if
to the Company, at the address as follows, or at such other address as the Warrantholder or the Company may designate by ten days’
advance written notice to the other:

 

If to the Company:

 

CareView Communications, Inc.

405 State Highway 121

Suite B-240 

Lewisville, TX 75067

Attention: Chief Executive Officer

Fax: (972) 403-7659

 

    	 

    	 

    

 

With a copy to:

 

Law Offices of Carl A. Generes 

4358 Shady Bend Drive 

Dallas, Texas 75244-7447 

Attn: Carl A. Generes 

Fax: (972) 715-5700

 

Section 15.          Registration
Rights. The initial Warrantholder is entitled to the benefit of certain registration rights with respect to the shares of Common
Stock issuable upon the exercise of this Warrant as provided in the Registration Rights Agreement, and any subsequent Warrantholder
may be entitled to such rights.

 

Section 16.          Successors. All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the
benefit of its respective successors and permitted assigns hereunder.

 

Section 17.          Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of Delaware, without reference to the choice of law provisions thereof. The Company and, by accepting
this Warrant, the Warrantholder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware
and the United States District Court for the District of Delaware for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Warrant and the transactions contemplated hereby. Service of process in connection with any such suit,
action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Warrant. The Company and, by accepting this Warrant, the Warrantholder, each irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. The Company and,
by accepting this Warrant, the Warrantholder, each irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.  EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY
WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

    	 

    	 

    

 

Section 18.          Cashless
Exercise. Notwithstanding any other provision contained herein to the contrary, the Warrantholder may elect to receive, without
the payment by the Warrantholder of the aggregate Warrant Price in respect of the shares of Common Stock to be acquired, shares
of Common Stock of equal value to the value of this Warrant, or any specified portion hereof, by the surrender of this Warrant
(or such portion of this Warrant being so exercised) together with a Net Issue Election Notice, in the form annexed hereto as Appendix
B (the “Net Issue Election Notice”), duly executed, to the Company. Thereupon, the Company shall issue to the
Warrantholder such number of fully paid, validly issued and nonassessable shares of Common Stock as is computed using the following
formula:

 

X = Y (A - B)

     A

 

where

 

X =          the number
of shares of Common Stock to which the Warrantholder is entitled upon such cashless exercise;

 

Y =          the total
number of shares of Common Stock covered by this Warrant for which the Warrantholder has surrendered purchase rights at such time
for cashless exercise (including both shares to be issued to the Warrantholder and shares as to which the purchase rights are to
be canceled as payment therefor);

 

A =          the “Market
Price” of one share of Common Stock as at the date the net issue election is made; and

 

B =          the Warrant
Price in effect under this Warrant at the time the net issue election is made.

 

Section 19.           [Intentionally Omitted].

 

Section 20.           No
Rights as Shareholder. Prior to the exercise of this Warrant, the Warrantholder shall not have or exercise any rights as a
shareholder of the Company by virtue of its ownership of this Warrant.

 

Section 21.           Amendment;
Waiver; Termination. This Warrant is one of a series of Warrants of like tenor issued by the Company pursuant to Section 1.3
of the Purchase Agreement and initially covering an aggregate of up to four million (4,000,000) shares of Common Stock (collectively,
the “Supplemental Company Warrants”). Any term of this Warrant may be amended or waived (including the
adjustment provisions included in Section 8 of this Warrant) and the Warrant may be terminated upon the written consent of the
Company and the holders of Supplemental Company Warrants representing at least a majority of the number of shares of Common Stock
then subject to all outstanding Supplemental Company Warrants; provided, that (x) any such amendment or waiver or termination
must apply to all Supplemental Company Warrants; and (y) except as provided in the adjustment provisions of this Warrant, the number
of Warrant Shares subject to this Warrant, the Warrant Price and the Expiration Date may not be amended, and the right to exercise
this Warrant may not be altered or waived, without the written consent of the Warrantholder.

 

    	 

    	 

    

 

Section 22.           Section
Headings. The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way alter,
modify, amend, limit or restrict the provisions hereof.

 

[Signature Page Follows.]

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the Company has caused this Warrant to
be duly executed, as of the 16th day of January, 2014.

 

	 	CAREVIEW COMMUNICATIONS, INC.
	 	 
	 	By:	/s/ Steven G. Johnson
	 	Name: Steven G. Johnson
	 	Title: President

 

    	 

    	 

    

 

APPENDIX A

CAREVIEW COMMUNICATIONS, INC.

WARRANT EXERCISE FORM

 

To Careview Communications, Inc.:

 

The undersigned hereby irrevocably elects
to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase thereunder
by the payment of the Warrant Price and surrender of the Warrant, _______________ shares of Common Stock (“Warrant Shares”)
provided for therein, and requests that certificates for the Warrant Shares be issued as follows:

 

	 	 	 
	 	 	 
	 	Name	 
	 	 	 
	 	 	 
	 	 	 
	 	Address	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	Federal Tax ID or Social Security No.	 

  

	and delivered by	(certified mail to the above address, or
	 	 	 
	 	(electronically (provide DWAC Instructions:___________________), or
	 	 	 
	 	(other (specify): __________________________________________).

 

and, if the number of Warrant Shares shall not be all the
Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon
exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned’s Assignee as below
indicated and delivered to the address stated below.

 

    	 

    	 

    

 

	Dated:	 	,	 	 	 	 

  

	 	 	Signature:	 	 
	 	 	 	 	 
	Note: The signature must correspond with	 	 	 	 
	the name of the Warrantholder as written	 	 	 	 
	on the first page of the Warrant in every	 	 	 	 
	particular, without alteration or enlargement	 	 	 	 
	or any change whatever, unless the Warrant	 	 	Name
(please print)	 
	has been assigned.	 	 	 	 
		 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	Address	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	Federal Identification or	 
	 	 	 	Social Security No.	 
	 	 	 	 	 
	 	 	 	Assignee:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

    	 

    	 

    

 

APPENDIX B

 

CAREVIEW COMMUNICATIONS, INC.

 

NET ISSUE ELECTION NOTICE

 

To: CareView Communications, Inc.

  

Date:[_________________________]

 

The undersigned hereby elects under Section
18 of this Warrant to surrender the right to purchase [____________] shares of Common Stock pursuant to this Warrant and hereby
requests the issuance of [_____________] shares of Common Stock. The certificate(s) for the shares issuable upon such net issue
election shall be issued in the name of the undersigned or as otherwise indicated below.

 

	 	 
	 	 
	Signature	 
	 	 
	 	 
	 	 
	Name for Registration	 
	 	 
	 	 
	 	 
	Mailing Address

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