Document:

ACORN ENERGY INC.

 

WARRANT

 

228,070 Shares of Common Stock

 

October __, 2013      

 

This WARRANT (this
“Warrant”) of Acorn Energy Inc., a Delaware corporation (the “Company”), pursuant
to that certain Underwriting Agreement, dated as of October 11, 2013, by and between the Company and Maxim Group LLC, the underwriter
(the “Underwriter”) relating to a firm commitment public offering (the “Offering”)
of common stock, par value $0.01 per share (the “Common Stock”), of the Company.

 

FOR VALUE RECEIVED,
the Company hereby grants to the Underwriter and its permitted successors and assigns (collectively, the “Holder”)
the right to purchase from the Company up to 228,070 (two hundred twenty eight thousand and seventy) shares of Common Stock
(such Common Stock underlying this Warrant, the “Warrant Shares”), at a per share purchase price equal
to $3.14 (the “Exercise Price”), subject to the terms, conditions and adjustments set forth below
in this Warrant.

 

1.          Exercisability
of Warrant. This Warrant shall become exercisable on the six month anniversary of the Base Date (the “Vesting Date”).
For purposes of this Warrant, the “Base Date” shall mean October 11, 2013. Except as otherwise provided
for herein or as permitted by applicable rules of the Financial Industry Regulatory Authority (“FINRA”), this
Warrant shall not be sold, transferred, assigned, pledged or hypothecated.

 

2.          Expiration
of Warrant. This Warrant shall expire on the five (5) year anniversary of the Base Date (the “Expiration Date”).

 

3.          Exercise
of Warrant. This Warrant shall be exercisable pursuant to the terms of this Section 3.

 

3.1           Manner
of Exercise

 

(a)          This
Warrant is exercisable in whole or in part at any time and from time to time after the Vesting Date. Such exercise shall be effectuated
by submitting to the Company (either by delivery to the Company or by facsimile transmission as provided in Section 12 hereof)
a completed and duly executed Notice of Exercise (substantially in the form attached to this Warrant, the “Notice of Exercise”)
as provided in this paragraph. The “Exercise Date” shall be determined based upon the date of delivery of the
Warrant as set forth in Section 12 hereof. Except that, if such Notice of Exercise is faxed to the Company, the Exercise Date shall
be the date of the facsimile transmission; provided that the Holder of this Warrant tenders this Warrant to the Company within
five (5) business days thereafter. The Notice of Exercise shall be executed by the Holder of this Warrant and shall indicate the
number of Warrant Shares then being purchased pursuant to such exercise. Upon surrender of this Warrant, together with appropriate
payment of the Exercise Price for the Warrant Shares purchased, the Holder shall be entitled to receive a certificate or certificates
for the Common Stock so purchased. The Exercise Price may be paid in a “cashless” or “cash” exercise or
a combination thereof pursuant to Section 3.1(b) and/or Section 3.1(c) below, as applicable.

 

(b)          If
the Notice of Exercise form elects a “cashless” exercise, the Holder shall thereby be entitled to receive a number
of shares of Common Stock determined as follows:

 

X = Y [(A – B)/A]

 

where:

 

X = the number of Warrant Shares to be issued to the
Holder.

 

Y = the number of Warrant Shares with respect to which
this Warrant is being exercised.

 

    	 

    	 

    

 

A = the Fair Market Value

 

B = the Exercise Price.

 

For purposes of this
Section 3.1(b), “Fair Market Value” shall be the closing price of the Common Stock as reported by the Nasdaq
Global Market or such other national securities exchange or automated quotation service on which the Common Stock may be listed
or quoted, on the trading date immediately prior to the Exercise Date. If the Common Stock is not then listed on a national stock
exchange or quoted on the OTC Bulletin Board or such other quotation system or association, the Fair Market Value of one share
of Common Stock as of the date of determination, shall be as determined in good faith by the Board of Directors of the Company
and the Holder. If the Common Stock is not then listed on a national securities exchange, the OTC 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
Holder prior to the exercise hereunder as to the Fair Market Value of one 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 Holder are unable to agree upon the Fair Market
Value, the Company and the Holder 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 Holder. Such adjustment
shall be made successively whenever such a payment date is fixed.

 

(c)          If
the Notice of Exercise form elects a “cash” exercise, the Exercise Price per share of Common Stock for the shares then
being exercised shall be payable in cash or by certified or official bank check.

 

3.2           When
Exercise Effective. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business
on the business day on which this Warrant shall have been duly surrendered to the Company as provided in Sections 3.1 and 12 hereof,
and, at such time, the Holder in whose name any certificate or certificates for Warrant Shares shall be issuable upon exercise
as provided in Section 3.3 hereof shall be deemed to have become the holder or holders of record thereof of the number of Warrant
Shares purchased upon exercise of this Warrant.

 

3.3           Delivery
of Common Stock Certificates and New Warrant. As soon as reasonably practicable after each exercise of this Warrant, in whole
or in part, and in any event within five (5) business days thereafter, the Company, at its expense (including the payment by it
of any applicable issue taxes), will cause the name of the Holder (or as Holder may direct) to be entered in the register of holders
in respect of the Warrant Shares and further cause to be issued in the name of and delivered to the Holder hereof or, subject to
Sections 9 and 10 hereof, as the Holder (upon payment by the Holder of any applicable transfer taxes) may direct:

 

(a)          a
certificate or certificates (with appropriate restrictive legends, as applicable) for the number of duly authorized, validly issued,
fully paid and nonassessable Warrant Shares to which the Holder shall be entitled upon exercise; and

 

(b)          in
case exercise is in part only, a new Warrant document of like tenor, dated the date hereof, for the remaining number of Warrant
Shares issuable upon exercise of this Warrant after giving effect to the partial exercise of this Warrant (including the delivery
of any Warrant Shares as payment of the Exercise Price for such partial exercise of this Warrant).

 

4.          Certain
Adjustments. For so long as this Warrant is outstanding:

 

4.1           Mergers
or Consolidations. If at any time after the date hereof there shall be a capital reorganization (other than a combination or
subdivision of the Common Stock otherwise provided for herein) resulting in a reclassification to or change in the terms of securities
issuable upon exercise of this Warrant (a “Reorganization”), or a merger or consolidation of the Company
with another corporation, association, partnership, organization, business, individual, government or political subdivision thereof
or a governmental agency (a “Person” or the “Persons”) (other than a merger
with another Person in which the Company is the continuing corporation, or in which the holders of 50% or more of the capital stock
of the Company immediately preceding such merger hold no less than 50% of the capital stock in the continuing corporation immediately
following such merger and which does not result in any reclassification or change in the terms of securities issuable upon exercise
of this Warrant or a merger effected exclusively for the purpose of changing the domicile of the Company) (a “Merger”),
then, as a part of such Reorganization or Merger, lawful provision and adjustment shall be made so that the Holder shall thereafter
be entitled to receive, upon exercise of this Warrant, the number of shares of stock or any other equity or debt securities or
property receivable upon such Reorganization or Merger by a holder of the number of Common Stock which might have been purchased
upon exercise of this Warrant immediately prior to such Reorganization or Merger. In any such case, appropriate adjustment shall
be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the Reorganization
or Merger to the end that the provisions of this Warrant (including adjustment of the Exercise Price then in effect and the number
of Warrant Shares) shall be applicable after that event, as near as reasonably may be, in relation to any shares of stock, securities,
property or other assets thereafter deliverable upon exercise of this Warrant. The provisions of this Section 4.1 shall similarly
apply to successive Reorganizations and/or Mergers.

 

    	 

    	 

    

 

4.2           Splits
and Subdivisions; Dividends. In the event the Company should at any time or from time to time effectuate a split or subdivision
of the outstanding Common Stock or pay a dividend or make a distribution on the outstanding Common Stock that is payable, in each
case, in additional Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive, directly
or indirectly, additional Common Stock (hereinafter referred to as the “Common Stock Equivalents”) without
payment of any consideration by such holder for the additional Common Stock or Common Stock Equivalents (including the additional
Common Stock issuable upon conversion or exercise thereof), then, as of the applicable record date (or the date of such distribution,
split or subdivision if no record date is fixed), the per share Exercise Price shall be appropriately decreased and the number
of Warrant Shares shall be appropriately increased in proportion to such increase (or potential increase) of outstanding shares;
provided, however, that no adjustment shall be made in the event the split, subdivision, dividend or distribution is not effectuated.

 

4.3           Combination
of Shares. If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination
of the outstanding Common Stock, the per share Exercise Price shall be appropriately increased and the number of shares of Warrant
Shares shall be appropriately decreased in proportion to such decrease in outstanding shares.

 

4.4           Adjustments
for Other Distributions. In the event the Company shall declare a distribution on the outstanding Common Stock that is payable
in securities of other Persons, evidences of indebtedness issued by the Company or other Persons, assets (excluding cash dividends
or distributions to the holders of Common Stock paid out of current or retained earnings and declared by the Company’s Board
of Directors) or options or rights not referred to in Sections 4.1, 4.2 or 4.3, then, in each such case for the purpose of this
Section 4.4, upon exercise of this Warrant, the Holder shall be entitled to a proportionate share of any such distribution as though
the Holder was the actual record holder of the number of shares of Common Stock which might have been purchased upon exercise of
this Warrant immediately prior to the record date fixed for the determination of the holders of Common Stock of the Company entitled
to receive such distribution (or the date of such distribution if no record date is fixed).

 

5.          No
Impairment. The Company will not, by amendment of its certificate of incorporation or through any consolidation, merger, reorganization,
transfer of assets, 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 Warrant, but will at all times in good faith assist in the carrying out of all of the
terms and in the taking of all actions necessary or appropriate in order to protect the rights of the Holder against impairment.

 

6.          Chief
Financial Officer’s Report as to Adjustments. With respect to each adjustment pursuant to Section 4 of this Warrant,
the Company, at its expense, will promptly compute the adjustment or re-adjustment in accordance with the terms of this Warrant
and cause its Chief Financial Officer to certify the computation (other than any computation of the fair value of property of the
Company, as the case may be). Such certification shall set forth, in reasonable detail, the event requiring the adjustment or re-adjustment
and the amount of such adjustment or re-adjustment, the method of calculation thereof and the facts upon which the adjustment or
re-adjustment is based, and the Exercise Price and the number of Warrant Shares or other securities purchasable hereunder after
giving effect to such adjustment or re-adjustment, which certification shall be mailed by first class mail, postage prepaid to
the Holder. The Company will also keep copies of all such certifications at its office maintained pursuant to Section 10.2(a) hereof
and will cause them to be available for inspection at the office during normal business hours upon reasonable notice by the Holder
or any permitted transferee of the Warrant designated by the Holder thereof.

 

    	 

    	 

    

 

7.          Reservation
of Shares. The Company shall, solely for the purpose of effecting the exercise of this Warrant, at all times during the term
of this Warrant, reserve and keep available out of its authorized Common Stock, free from all taxes, liens and charges with respect
to the issue thereof and not subject to preemptive rights or other similar rights of stockholders of the Company, such number of
shares of its Common Stock as shall from time to time be sufficient to effect in full the exercise of this Warrant. If at any time
the number of authorized but unissued Common Stock shall not be sufficient to effect in full the exercise of this Warrant, in addition
to such other remedies as shall be available to Holder, the Company will promptly take such corporate action as may, in the opinion
of its counsel, be necessary to increase the number of authorized but unissued Common Stock to such number of shares as shall be
sufficient for such purposes, including without limitation, using its best efforts to obtain the requisite stockholder approval
necessary to increase the number of authorized Common Stock. The Company hereby represents and warrants that all Common Stock issuable
upon exercise of this Warrant shall be duly authorized and, when sold, issued and delivered against payment therefor upon exercise
of this Warrant, shall be validly issued, fully paid and nonassessable.

 

8.          Intentionally
Omitted.

 

9.          Restrictions
on Transfer.

 

9.1           Restrictive
Legends. This Warrant and each warrant issued upon transfer or in substitution for this Warrant pursuant to Section 10 hereof,
each certificate for Common Stock issued upon the exercise of this Warrant and each certificate issued upon the transfer of any
such Common Stock shall be transferable only upon satisfaction of the conditions specified in this Section 9. Each of the foregoing
securities shall be stamped or otherwise imprinted with a legend reflecting the restrictions on transfer set forth herein and any
restrictions required under the Securities Act or other applicable securities laws.

 

9.2           Notice
of Proposed Transfer. Prior to any transfer of any securities which are not registered under an effective registration statement
under the Securities Act (“Restricted Securities”), which transfer may only occur if there is an exemption from
the registration provisions of the Securities Act and all other applicable securities laws, the Holder will give written notice
to the Company of the Holder’s intention to effect a transfer (and shall describe the manner and circumstances of the proposed
transfer). The following provisions shall apply to any proposed transfer of Restricted Securities:

 

(i)          If
in the opinion of counsel for the Holder reasonably satisfactory to the Company the proposed transfer may be effected without registration
of the Restricted Securities under the Securities Act (which opinion shall state in detail the basis of the legal conclusions reached
therein), the Holder shall thereupon be entitled to transfer the Restricted Securities in accordance with the terms of the notice
delivered by the Holder to the Company. Each certificate representing the Restricted Securities issued upon or in connection with
any transfer shall bear the restrictive legends required by Section 9.1 hereof.

 

(ii)         If
the opinion called for in (i) above is not delivered, the Holder shall not be entitled to transfer the Restricted Securities
until either (x) receipt by the Company of a further notice from such Holder pursuant to the foregoing provisions of this
Section 9.2 and fulfillment of the provisions of clause (i) above, or (y) such Restricted Securities have been effectively
registered under the Securities Act.

 

9.3           Certain
Other Transfer Restrictions. Notwithstanding any other provision of this Section 9: (i) prior to the Vesting Date, this Warrant
or the Restricted Securities thereunder may only be transferred or assigned to the persons permitted under FINRA Rule 5110(g),
and (ii) no opinion of counsel shall be necessary for a transfer of Restricted Securities by the holder thereof to any Person employed
by or owning equity in the Holder, if the transferee agrees in writing to be subject to the terms hereof to the same extent as
if the transferee were the original purchaser hereof and such transfer is permitted under applicable securities laws. This Warrant
shall not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put,
or call transaction that would result in the effective economic disposition of this Warrant by any person prior to the Vesting
Date, except as provided in FINRA Rule 5110(g)(2).

 

9.4           Termination
of Restrictions. Except as set forth in Section 9.3 hereof, the restrictions imposed by this Section 9 upon the transferability
of Restricted Securities shall cease and terminate as to any particular Restricted Securities: (a) which shall have been effectively
registered under the Securities Act, or (b) when, in the opinions of both counsel for the holder thereof and counsel for the
Company, such restrictions are no longer required in order to insure compliance with the Securities Act or Section 10 hereof, including,
but not limited to, the imposition of the restrictive legend required by Section 9.1 hereof. Whenever such restrictions shall cease
and terminate as to any Restricted Securities, the Holder thereof shall be entitled to receive from the Company, without expense
(other than applicable transfer taxes, if any), new securities of like tenor not bearing the applicable legends required by Section
9.1 hereof.

 

    	 

    	 

    

 

10.         Ownership,
Transfer and Substitution of Warrant.

 

10.1         Ownership
of Warrant. The Company may treat any Person in whose name this Warrant is registered in the warrant register maintained pursuant
to Section 10.2(b) hereof as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, except
that, if and when this Warrant is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer
thereof as the owner of such Warrant for all purposes, notwithstanding any notice to the contrary. Subject to Sections 9 and 10
hereof, this Warrant, if properly assigned, may be exercised by a new holder without a new Warrant first having been issued.

 

10.2         Office;
Exchange of Warrant.

 

(a)          The
Company will maintain its principal office at the location identified in the prospectus relating to the Offering or at such other
offices as set forth in the Company’s most current filing (as of the date notice is to be given) under the Securities Exchange
Act of 1934, as amended, or as the Company otherwise notifies the Holder.

 

(b)          The
Company shall cause to be kept at its office maintained pursuant to Section 10.2(a) hereof a warrant register for the registration
and transfer of the Warrant. The name and address of the holder of the Warrant, the transfers thereof and the name and address
of the transferee of the Warrant shall be registered in such warrant register. The Person in whose name the Warrant shall be so
registered shall be deemed and treated as the owner and holder thereof for all purposes of this Warrant, and the Company shall
not be affected by any notice or knowledge to the contrary.

 

(c)          Upon
the surrender of this Warrant, properly endorsed, for registration of transfer or for exchange at the office of the Company maintained
pursuant to Section 10.2(a) hereof, the Company at its expense will (subject to compliance with Section 9 hereof, if applicable)
execute and deliver to or upon the order of the holder thereof a new Warrant of like tenor, in the name of such holder or as such
holder (upon payment by such holder of any applicable transfer taxes) may direct, calling in the aggregate on the face thereof
for the number of Common Stock called for on the face of the Warrant so surrendered (after giving effect to any previous adjustment(s)
to the number of Warrant Shares).

 

10.3         Replacement
of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this Warrant, upon delivery of indemnity reasonably satisfactory
to the Company in form and amount or, in the case of any mutilation, upon surrender of this Warrant for cancellation at the office
of the Company maintained pursuant to Section 10.2(a) hereof, the Company, at its expense, will execute and deliver, in lieu thereof,
a new Warrant of like tenor and dated the date hereof.

 

    	 

    	 

    

 

11.         No
Rights or Liabilities as Stockholder. No holder shall be entitled to vote or receive dividends or be deemed the holder of any
Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the holder, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action (whether upon any recapitalization, issuance of shares, reclassification of shares,
change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends
or subscription rights or otherwise until this Warrant shall have been exercised and the Common Stock purchasable upon the exercise
hereof shall have become deliverable, as provided herein. The holder of this Warrant will not be entitled to share in the assets
of the Company in the event of a liquidation, dissolution or the winding up of the Company.

 

12.         Notices.
Any notice or other communication in connection with this Warrant shall be given in writing and directed to the parties hereto
as follows: (a) if to the Holder, c/o Maxim Group LLC, 405 Lexington Avenue, New York, NY 10174, Attn: Cliff Teller, Fax No:
(212) 895-3783; or (b) if to the Company, to the attention of its Chief Executive Officer at its office maintained pursuant
to Section 10.2(a) hereof; provided, that the exercise of the Warrant shall also be effected in the manner provided in Section
3 hereof. Notices shall be deemed properly delivered and received when delivered to the notice party (i) if personally delivered,
upon receipt or refusal to accept delivery, (ii) if sent via facsimile, upon mechanical confirmation of successful transmission
thereof generated by the sending telecopy machine, (iii) if sent by a commercial overnight courier for delivery on the next
business day, on the first business day after deposit with such courier service, (iv) if sent by electronic mail to an address
designated by the recipient without any notice to the sender that the message was undeliverable, or (v) if sent by registered
or certified mail, five (5) business days after deposit thereof in the U.S. mail.

 

13.         Payment
of Taxes. The Company will pay all documentary stamp taxes attributable to the issuance of Common Stock underlying this Warrant
upon exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax which may be payable
in respect of any transfer involved in the transfer or registration of this Warrant or any certificate for Common Stock underlying
this Warrant in a name other that of the Holder. The Holder is responsible for all other tax liability that may arise as a result
of holding or transferring this Warrant or receiving Common Stock underlying this Warrant upon exercise hereof.

 

14.         Miscellaneous.
This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination is sought. This Warrant shall be construed and
enforced in accordance with and governed by the laws of the State of Delaware, without regard to conflict of law principles that
would result in the application of any law other than the laws of the State of Delaware. The section headings in this Warrant are
for purposes of convenience only and shall not constitute a part hereof.

 

[Signature Page Follows]

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to be duly executed as of the date first above written.

 

	 	ACORN ENERGY INC.	 
	 	 	 
	 	By:	 	 	 
	 	 	Name:	John Moore	 
	 	 	Title:	Chief Executive Officer	 

 

[Signature Page to Underwriter’s Warrant]

    	 

    	 

    

 

EXHIBIT
A

FORM OF EXERCISE NOTICE

[To be executed only upon exercise of Warrant]

 

To Acorn Energy Inc.,

 

The undersigned registered
holder of the within Warrant hereby irrevocably exercises the Warrant pursuant to Section 3.1 of the Warrant with respect toWarrant
Shares, at an exercise price per share of $         , and requests that the certificates
for such Warrant Shares be issued, subject to Sections 9 and 10, in the name of, and delivered to:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

The undersigned is hereby
making payment for the Warrant Shares in the following manner:

                                          [describe desired payment method as provided for in 3.1 of the Warrant].

 

The undersigned hereby
represents and warrants that it is, and has been since its acquisition of the Warrant, the record and beneficial owner of the Warrant.

 

	Dated:	 	 	 

 

	 	 	 
	 	Print or Type Name	 
	 	 	 
	 	 	 
	 	(Signature must conform in all respects to name of holder as specified on the face of Warrant)
	 	 	 
	 	 	 
	 	(Street Address)	 
	 	 	 
	 	 	 
	 	(City)          (State)      (Zip Code)	 

 

    	 

    	 

    

 

EXHIBIT
B

FORM OF ASSIGNMENT

[To be executed only upon transfer of Warrant]

 

For value received, the undersigned
registered holder of the within Warrant hereby sells, assigns and transfers unto                                           
[include name and addresses] the rights represented by the Warrant to purchase                                     
Common Stock of Acorn Energy Inc. to which the Warrant relates, and appoints                                     
Attorney to make such transfer on the books of Acorn Energy Inc. maintained for the purpose, with full power of substitution in
the premises.

 

	Dated:	 	 
	 	(Signature must conform in all respects to name of holder as specified on the face of Warrant)	 
	 	 	 
	 	 	 
	 	(Street Address)	 
	 	 	 
	 	 	 
	 	(City)          (State)       (Zip Code)	 
	 	 	 
	Signed in the presence of:	 
	 	 	 
	 	 	 
	 	(Signature of Transferree)	 
	 	 	 
	 	 	 
	 	(Street Address)	 
	 	 	 
	 	 	 
	 	(City)          (State)       (Zip Code)	 

 

Signed in the presence of:Convertible
Promissory Note

 

No. 2012-1-20000

 

	$20,000.00	New York, New York
	 	March 28, 2012

 

For
Value Received, Premier Beverage Group Corp.,
a Nevada corporation, (“Borrower”) promises to pay to the order of [ ]
(“Lender”) the principal amount (“Principal Amount”) of TWENTY THOUSAND AND
00/100 DOLLARS ($20,000.00), together with interest payable at the rate and in the manner provided in Sections 1 and 2 of this
Convertible Promissory Note (“Note”), and any costs and expenses, including reasonable attorneys’ fees,
incurred by Lender in collection of this Note.

 

1.           Interest
Rate. Interest on the unpaid principal balance hereof shall be payable at the rate (calculated on the basis of a 360-day year
consisting of twelve 30-day months) of eight percent (8%) per annum from the date hereof until the Maturity Date or the earlier
repayment of this Note.

 

2.           Balloon Payment.
The Principal Amount and all accrued and unpaid interest and any other amounts due hereunder shall be due and payable on December
31, 2013 (the “Maturity Date”). Payments from Borrower hereunder shall be applied first to expenses, if any,
then to late charges, if any, then to accrued interest, and then to the unpaid Principal Amount.

 

3.           Default Rate
of Interest. In the event the Principal Amount and all accrued interest are not fully paid on the Maturity Date, then interest
shall accrue on all amounts outstanding thereafter at an annual interest rate equal to fifteen percent (15%) per annum (the “Default
Rate”). The Default Rate shall be applicable from the date the applicable Event of Default occurs until it is cured, or,
if not first cured, until all amounts owing have been unconditionally and irrevocably paid full.

 

4.           Prepayment.
Borrower may prepay this Note in whole or in part at any time without premium or penalty. All prepayments shall be applied as provided
in Section 2 of this Note.

 

5.           Convertibility.
At any time at the election of the Holder before the Principal Amount of the Note is repaid in full, the Holder may convert the
then unpaid Principal Amount and all accrued interest into restricted shares of the Company’s common stock, par value $.00015
per share (“Common Stock”), at a conversion price of $0.05 per share.

 

6.           Exchange
of Note. This Note shall be automatically cancelled and a new convertible promissory note (“New Note”) issued
if, in connection with a convertible debt financing of the Company after the date hereof and on or before the Maturity Date, such
debt financing provides for a price at which the Principal Amount and accrued interest of this Note may be converted into shares
of Common Stock of less than $0.05 per share of Common Stock. The New Note shall in all other respects be identical to this Note,
and any accrued interest through the date of cancellation of this Note shall carry over and be deemed for all purposes to be accrued
interest with respect to the New Note.

 

    	 

    	 

    

 

7.           Payment
Obligation. The obligations to make the payments provided for in this Note are absolute and unconditional and not subject
to any defense, set-off, counterclaim, rescission, recoupment, or adjustment whatsoever. Borrower hereby expressly waives demand
and presentment for payment, notice of non-payment, notice of dishonor, protest, notice of protest, bringing of suit, and diligence
in taking any action to collect any amount called for hereunder, and shall be directly and primarily liable for the payment of
all sums owing and to be owing hereon, regardless of and without any notice, diligence, act, or omission with respect to the collection
of any amount called for hereunder. No delay by Lender in exercising any
of the rights he may have hereunder shall operate as a waiver of any his rights under this Note, and any waiver granted for one
occasion shall not operate as a waiver in the event of any subsequent default.

 

9.           Amendment.
No agreement by the holder to change, waive or release the terms of this Note will be valid unless it is in writing and signed
by Borrower and Lender.

 

10.         Governing
Law. This Note has been negotiated and consummated in the State of New York and shall be construed in accordance with
and governed by the internal laws of the State of New York without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the State of New York to the rights and duties of the
parties. All disputes and controversies arising out of or in connection with this Note shall be resolved exclusively by the state
or federal courts located in New York County in the State of New York, and the Company and the Holder by his acceptance hereof
agrees to submit to the jurisdiction of said courts and agrees that venue shall lie exclusively with such courts.

 

BORROWER HEREBY IRREVOCABLY
AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE FEDERAL COURTS SITTING IN THE
STATE OF NEW YORK. THE COMPANY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS
CONTEMPLATED HEREBY MUST BE LITIGATED EXCLUSIVELY IN ANY SUCH STATE OR FEDERAL COURT THAT SITS IN THE CITY OF NEW YORK, AND ACCORDINGLY,
BORROWER IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH LITIGATION
IN ANY SUCH COURT.

 

BORROWER HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE.

 

In the event that any
suit or action is instituted to enforce any provision in this Note, the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this
Note, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.

 

    	2

    	 

    

 

11.         Usury. Regardless
of any other provision of this Note or any other agreement, document or instrument pertaining to this Note, if, for any reason,
the effective interest payable on this Note should exceed the maximum lawful interest, the effective interest payable on this
Note shall be deemed reduced to, and shall be, such maximum lawful interest, and (i) the amount which would be excessive interest
shall be deemed applied to the reduction of the principal balance of this Note and not to the payment of interest, and (ii) if
the Principal Amount and all accrued interest of this Note has been or is thereby paid in full, the excess shall be returned to
the party paying same, such application to the Principal Amount of this Note or the refunding of excess to be a complete settlement
and acquittance thereof.

 

12.         Severability.
In case any one or more of the provisions contained in this Note, or any of the documents or agreements contemplated hereby, should
be invalid, illegal or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

 

12.         Captions.
The articles and section captions are inserted herein only as a matter of convenience and for reference, and in no way define,
limit or describe the scope or intent of any such article or section, nor in any way affect this Note.

 

* * *

 

In
Witness Whereof, Borrower has caused this Note to be executed on its behalf by its officer who has been duly authorized
for that purpose.

 

	 	Borrower:
	 	 
	 	Premier Beverage Group Corp.
	 	 
	 	By:	 
	 	 	Fouad Kallamni
	 	 	President

 

    	3

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