Document:

EXHIBIT 10.2

    
 

    
       

      As of
March 31, 2009

      

      Mr.
George Morgenstern

      5 Shalvah
Place

      Monsey,
New York 10952

      

      
        	
                Re: 

              	
                Amendment
      of Consulting Agreement

              

      

      

      Dear
George:

      

      This
letter will serve to confirm that at the meeting of the Board of Directors of
Acorn Energy, Inc. (the “Corporation”) on March 25, 2009 the Board authorized
that your Consulting Agreement with the Corporation dated as of March 9, 2006
(the “Agreement”) be, and hereby is, amended to provide for (i) payment of a
nonaccountable expense allowance one-half by each of  the Corporation
and DSIT Solutions, Ltd. (“DSIT”) of an aggregate of $75,000 per annum and (ii)
an extension of the term of the Agreement until March 31, 2011.  By
its execution of this amendment below DSIT agrees to its obligation to pay
one-half of such expense allowance, and acknowledges that such payment will
inure to its benefit.

       

      Very
Truly Yours,

       

       

      ACORN
ENERGY, INC.

       

       

      By: 
/s/ John A. Moore

        
          

        

      

      John A.
Moore

      President
and CEO

      

      AGREED
AND ACKNOWLEDGED:

      

      DSIT
SOLUTIONS, LTD.

      

      By: 
/s/ Benny Sela

        
          

        

      

      Name:  Benny
Sela

      Title:  CEO

      

      

      ACCEPTED
AND AGREED:

      

      /s/
George Morgenstern

        
          

        

      

      GEORGE
MORGENSTERN

       

       

       

       

       

      4 W.
Rockland Road, P.O. Box 9 , Montchanin, DE 19710 www.acornenergy.com  Tel:
(302) 656-1707   Fax: (302) 656-1703EXHIBIT
10.3

    

     

    COALOGIX
INC.

     

    COMMON
STOCK PURCHASE AGREEMENT

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      TABLE
OF CONTENTS

      

      Page

       

    

    
      	
              1.

            	
              PURCHASE
      AND SALE OF COMMON STOCK

            	
              1

            

    

    
      	 	
              1.1.

            	
              Sale
      and Issuance of Common Stock

            	
              1

            
	 	
              1.2.

            	
              Closing;
      Delivery

            	
              1

            
	 	
              1.3.

            	
              Defined
      Terms Used in this Agreement

            	
              2

            

    

     

    
      	
              2.

            	
              REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

            	
              3

            

    

    
      	 	
              2.1.

            	
              Organization,
      Good Standing, Corporate Power and Qualification

            	
              3

            
	 	
              2.2.

            	
              Capitalization

            	
              4

            
	 	
              2.3.

            	
              Subsidiaries
      and Affiliates

            	
              4

            
	 	
              2.4.

            	
              Authorization

            	
              5

            
	 	
              2.5.

            	
              Valid
      Issuance of Shares

            	
              5

            
	 	
              2.6.

            	
              Governmental
      Consents and Filings

            	
              5

            
	 	
              2.7.

            	
              Litigation

            	
              5

            
	 	
              2.8.

            	
              Compliance
      with Other Instruments

            	
              5

            
	 	
              2.9.

            	
              Rights
      of Registration and Voting Rights

            	
              6

            
	 	
              2.10.

            	
              No
      Company Operations or Material Liabilities

            	
              6

            
	 	
              2.11.

            	
              Changes

            	
              6

            
	 	
              2.12.

            	
              Corporate
      Documents

            	
              7

            
	 	
              2.13.

            	
              Offering

            	
              7

            
	 	
              2.14.

            	
              Preemptive
      Rights

            	
              7

            
	 	
              2.15.

            	
              Consents

            	
              7

            
	 	
              2.16.

            	
              Employment
      and Non-Competition Agreements

            	
              7

            
	 	
              2.17.

            	
              Qualified
      Business Stock

            	
              8

            

    

     

    
      	
              3.

            	
              REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASER

            	
              8

            

    

    
      	 	
              3.1.

            	
              Authorization

            	
              8

            
	 	
              3.2.

            	
              Compliance
      with Other Instruments

            	
              8

            
	 	
              3.3.

            	
              Purchase
      Entirely for Own Account

            	
              8

            
	 	
              3.4.

            	
              Disclosure
      of Information

            	
              8

            
	 	
              3.5.

            	
              Restricted
      Securities

            	
              9

            
	 	
              3.6.

            	
              No
      Public Market

            	
              9

            
	 	
              3.7.

            	
              Suitability
      of Investment

            	
              9

            

    

     

     

    
      
         

      

      
        -i-

        
          

        

      

      
         

      

    

     

    TABLE
OF CONTENTS

    
      (continued)

      Page

       

    

    
      	 	
              3.8.

            	
              Legends

            	
              9

            
	 	
              3.9.

            	
              Accredited
      Investor

            	
              10

            
	 	
              3.10.

            	
              Foreign
      Investors

            	
              10

            
	 	
              3.11.

            	
              Residence

            	
              10

            

    

     

    
      	
              4.

            	
              CONDITIONS
      TO THE PURCHASER’S OBLIGATIONS AT CLOSING

            	
              10

            

    

    
      	 	
              4.1.

            	
              Qualifications

            	
              10

            
	 	
              4.2.

            	
              Representations
      and Warranties of Company

            	
              10

            
	 	
              4.3.

            	
              Opinion
      of Company Counsel

            	
              10

            
	 	
              4.4.

            	
              Covenants
      of the Company

            	
              10

            
	 	
              4.5.

            	
              Secretary’s
      Certificate

            	
              10

            

    

     

    
      	
              5.

            	
              CONDITIONS
      TO THE COMPANY’S OBLIGATIONS AT CLOSING

            	
              11

            

    

    
      	 	
              5.1.

            	
              Qualifications

            	
              11

            
	 	
              5.2.

            	
              Representations
      and Warranties of the Purchasers

            	
              11

            

    

     

    
      	
              6.

            	
              COVENANTS
      OF THE COMPANY

            	
              11

            

    

    
      	 	
              6.1.

            	
              Proceedings
      and Documents

            	
              11

            
	 	
              6.2.

            	
              Securities
      Laws Compliance

            	
              11

            
	 	
              6.3.

            	
              Use
      of Proceeds

            	
              11

            
	 	
              6.4.

            	
              Pre-Closing
      Access and Information

            	
              13

            
	 	
              6.5.

            	
              Conduct
      of the Company's Business.

            	
              13

            
	 	
              6.6.

            	
              Notices
      to Purchasers

            	
              13

            
	 	
              6.7.

            	
              Exclusivity

            	
              14

            

    

     

    
      	
              7.

            	
              SURVIVAL
      PERIOD; INDEMNIFICATION

            	
              14

            

    

    
      	 	
              7.1.

            	
              Survival
      of Representations, Warranties and Covenants

            	
              14

            
	 	
              7.2.

            	
              Indemnification

            	
              14

            
	 	
              7.3.

            	
              Limitations
      on Indemnification

            	
              15

            

    

     

    
      	
              8.

            	
              MISCELLANEOUS

            	
              15

            

    

    
      	 	
              8.1.

            	
              Transfer;
      Successors and Assigns

            	
              15

            
	 	
              8.2.

            	
              Governing
      Law

            	
              15

            
	 	
              8.3.

            	
              Counterparts

            	
              15

            
	 	
              8.4.

            	
              Titles
      and Subtitles

            	
              15

            

    

     

     

    
      
         

      

      
        -ii-

        
          

        

      

      
         

      

    

     

    TABLE
OF CONTENTS

    
      (continued)

      Page

       

    

    
      	 	
              8.5.

            	
              Notices

            	
              15

            
	 	
              8.6.

            	
              No
      Finder’s Fees

            	
              16

            
	 	
              8.7.

            	
              Fees
      and Expenses

            	
              17

            
	 	
              8.8.

            	
              Default
      in Funding Commitment

            	
              17

            
	 	
              8.9.

            	
              Board
      of Directors

            	
              19

            
	 	
              8.10.

            	
              Management
      Option Pool

            	
              19

            
	 	
              8.11.

            	
              Stockholders’
      Agreement

            	
              19

            
	 	
              8.12

            	
              Amendments
      and Waivers

            	
              20

            
	 	
              8.13.

            	
              Severability

            	
              20

            
	 	
              8.14.

            	
              Delays
      or Omissions

            	
              20

            
	 	
              8.15.

            	
              Entire
      Agreement

            	
              20

            
	 	
              8.16.

            	
              Publicity

            	
              20

            
	 	
              8.17.

            	
              Right
      to Conduct Activities

            	
              21

            
	 	
              8.18.

            	
              Termination

            	
              21

            

    

    

    
      	
              ExhibitA 

            	
              Schedule
      of Purchasers

            

    

    
      	
              ExhibitB 

            	
              Disclosure
      Schedule

            

    

    
      	
              ExhibitC 

            	
              Form
      of Legal Opinion of Company Counsel

            

    

    
      	
              ExhibitD 

            	
              New
      Options

            

    

     

     

    
      
         

      

      
        -iii-

        
          

        

      

      
         

      

    

     

    COMMON STOCK PURCHASE
AGREEMENT

     

    This
Common Stock Purchase Agreement (the “Agreement”) is made as of
April 8, 2009 by and among CoaLogix Inc., a Delaware corporation (the “Company”), Acorn Energy, Inc.,
a Delaware corporation (“Acorn”), EnerTech Capital
Partners III L.P., a Delaware limited partnership (“EnerTech”) and the persons who
are designated as “Management Stockholders” on the signature pages to this
Agreement (collectively, “Management Stockholders” and
individually “Management
Stockholder”).

     

    RECITALS

     

    A.           The
Company, Acorn and EnerTech previously entered into that certain Common Stock
Purchase Agreement dated as of February 29, 2008 pursuant to which EnerTech
purchased 15,441 shares of the Company’s Common Stock, $0.001 par value per
share (the “Common
Stock”) at a price of $126.1566 per share, and that certain Common Stock
Purchase Agreement dated as of May 13, 2008 pursuant to which Acorn purchased
12,464 shares of Common Stock and EnerTech purchased 2,200 shares of Common
Stock at a price of $126.1566 per share.

     

    B.           Acorn
presently owns 85% of the issued and outstanding shares of Common Stock, and
EnerTech presently owns 15% of the issued and outstanding shares of Common
Stock.

     

    C.           Acorn
and EnerTech desire to purchase additional shares of Common Stock, and the
Company desires to issue additional shares of Common Stock to Acorn and EnerTech
on the terms as set forth herein below.  The Management Stockholders
desire to purchase shares of Common Stock, and the Company desires to issue
shares of Common Stock to the Management Stockholders on the terms as set forth
herein below.

     

    The
parties hereby agree as follows:

     

    1.           Purchase and Sale of Common
Stock.

     

    1.1.           Sale and Issuance of Common
Stock.  Subject to the terms and conditions of this Agreement,
Acorn, EnerTech and the Management Stockholders (hereinafter collectively
referred to as the “Purchasers” or individually as
a “Purchaser”) agree to
purchase at the Closing and the Company agrees to sell and issue to Acorn,
EnerTech and the Management Stockholders at each Closing (as hereinafter
defined) that number of shares of the Company’s Common Stock set forth opposite
Acorn’s, EnerTech’s and the Management Stockholders’ names on Exhibit A, pro rated for
each Installment (as hereinafter defined) related to such Closing, at a
purchase price of $7.20 per share, payable as set forth in Section 1.2(b) (the
“Purchase
Price”).  The shares of Common Stock issued to the Purchasers
pursuant to this Agreement shall be referred to in this Agreement as the “Shares.”

     

    1.2.           Closing;
Delivery.

     

    (a)           The closing of each purchase
and sale of the Shares shall take place at 10:00 a.m., on the date on the
business day on which the last of the conditions set forth in Sections 4 and 5 of this Agreement
that are capable of being satisfied before each Closing are fulfilled
or waived in accordance with this Agreement, at the offices of the Company,
11701 Mt. Holly Road, Charlotte, NC 28214 or at such other time and place as the
Company, Acorn and EnerTech mutually agree upon, orally or in writing (which
time and place are each designated as a “Closing”).

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (b)           At
each Closing, the Purchase Price will be funded by the Purchasers in
installments (individually, an “Installment” and collectively, the
“Installments”) in accordance with the schedule of Use of Proceeds as set forth
in Section 6.3
and the terms of such Section.  The Purchasers covenant and agree that
at each Closing they will fund and pay to the Company each Installment described
in Section 6.3
within three business days of receiving from the Company a written request for
funding (the “Funding
Notice”) which satisfies the requirements for the applicable Installments
set forth in Section
6.3.  In connection with the Purchasers’ payment of any
Installment, the Company shall promptly deliver to each of the Purchasers a
certificate representing the Shares being purchased by each of the Purchasers at
a particular Closing against payment of the respective Installment therefor by
wire transfer to a bank account designated by the Company.

     

    1.3.           Defined Terms Used in this
Agreement.  In addition to the terms defined above, the
following terms used in this Agreement shall be construed to have the meanings
set forth or referenced below.

     

    “Affiliate” means with respect
to any person or entity (a “Person”) any Person which,
directly or indirectly, controls, is controlled by, or is under common control
with such Person, including, without limitation, any partner, officer, director,
or member of such Person and any venture capital fund now or hereafter existing
which is controlled by or under common control with one or more general partners
or shares the same management company with such Person.

     

    “Code” means the Internal
Revenue Code of 1986, as amended.

     

    “Company Intellectual Property”
means all trademarks, service marks, tradenames, copyrights, trade secrets,
licenses, information and proprietary rights and processes and all patents and
patent rights owned or possessed by the Company.

     

    “EES Suit” shall have the
meaning given to it in Section
6.3.

     

    “Evonik Suit” shall have the
meaning given to it in Section
6.3.

     

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

     

    “Funding Notice” shall have the
meaning given to it in Section
1.2(b).

     

     “Key Employee” means any
executive-level employee (including Vice President level positions) as well as
any employee who either alone or in concert with others develops, invents,
programs or designs any Company Intellectual Property.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    “Management Stockholders” has
the meaning assigned to it in the opening paragraph of the
Agreement.

     

     “Material Adverse Effect” means
a material adverse effect on the business, assets (including intangible assets),
liabilities, financial condition, property, prospects or
results of operations of the Company or any of the SCR-Tech
Entities.

     

    “Original Purchasers” means
Acorn and EnerTech.

     

     “Purchasers” has the meaning
assigned to it in Section
1.1.

     

    “SCR-Tech Entities” means
CoaLogix Tech inc. (formerly known as CESI-TECH Technologies, Inc.), CoaLogix
Solutions Inc. (formerly known as CESI-SCR, Inc.), SCR-Tech LLC and MetalliFix
LLC.

     

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

     

    “Shares” has the meaning
assigned to it in Section
1.1.

     

    “Stockholders’ Agreement” means
that certain agreement by and among the Company and the Original Purchasers,
dated as of February 29, 2008 and as amended and restated effective the date
hereof.

     

    “Transaction Agreements” means
this Agreement, the Funding Notices and any other agreements, instruments or
documents entered into in connection with this Agreement.

     

    “Use of
Proceeds”  means the amounts and uses of the Installments as
set forth in the table  in Section
6.3.

     

    2.           Representations and
Warranties of the Company.  The Company
hereby represents and warrants to the Purchasers that, except as set forth on
the Disclosure
Schedule attached to this Agreement which exceptions shall be deemed to
be part of the representations and warranties made hereunder, the following
representations are true and complete as of the date hereof and will be true and
correct as of the date of each Closing following any Funding Notice, except as
otherwise indicated. The Disclosure
Schedule shall be arranged in sections corresponding to the numbered and
lettered sections and subsections contained in this Section 2, and the
disclosures in any section or subsection of the Disclosure
Schedule shall qualify other sections and subsections in this Section 2 only to the
extent it is readily apparent from a reading of the disclosure that such
disclosure is applicable to such other sections and subsections.

     

    For
purposes of these representations and warranties, the phrase “to the Company’s
knowledge” shall mean the knowledge after reasonable investigation of the Key
Employees of the Company.

     

    2.1.           Organization, Good Standing,
Corporate Power and Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as presently conducted and as proposed to be
conducted.  The Company is duly qualified
to transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a Material Adverse Effect.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    2.2.           Capitalization.  The
authorized capital of the Company consists, immediately prior to the Closing
(unless otherwise noted), of:

     

    (a)           5,300,000 shares of Common Stock,
2,940,125 shares of which are issued and outstanding immediately prior to the
Closing.  All of the outstanding shares of Common Stock have been duly
authorized, are fully paid and nonassessable and were issued in compliance with
all applicable federal and state securities laws.  The Company holds
no treasury stock.

     

    (b)           Section
2.2(c) of the Disclosure
Schedule sets forth the options that the Company is committed to granting
following the Closing.

     

    (c)           Section
2.2(c) of the Disclosure
Schedule sets forth the capitalization of the Company immediately
following the Closing relating to the initial Installment including the number
of shares of the following: (i) issued and outstanding Common Stock;
(ii) the name of each holder of options for Common Stock, together with the
number of shares for which such options are exercisable with respect to each
holder, the applicable vesting schedule, if any, and the applicable exercise
price; (iii) stock options not yet issued but reserved for issuance; and
(iv) warrants or stock purchase rights, if any.  Except for (A)
the rights provided in Sections 4 and 5 of the
Stockholders’ Agreement, and (B) the securities and rights described in Section 2.2(b) of
this Agreement and Section
2.2(c) of the Disclosure
Schedule, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal or similar rights)
or agreements, orally or in writing, to purchase or acquire from the Company, or
sell to the Company, any shares of Common Stock, or contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue Common Stock or any securities convertible into or exchangeable for shares
of Common Stock.  Except as set forth on Section
2.2(c) of the Disclosure
Schedule, no current or former shareholder of the Company's capital stock
has, or with the giving of notice or any other actions may have, any appraisal
rights or the right to obtain payment of the fair value of that shareholder's
shares of Common Stock.  Except for as provided in the Stockholders’
Agreement, no shareholder of the Company or other person has any right to
designate members to serve on the Company's board of directors or any committee
thereof.

     

    (d)           Except
as set forth on Section
2.2(d) of the Disclosure
Schedule, all outstanding shares of the Company’s Common Stock and all
shares of the Company’s Common Stock underlying outstanding options are subject
to a right of first refusal in favor of the Company upon any proposed transfer
(other than transfers for estate planning purposes).  Except as set
forth on Section
2.2(d) of the
Disclosure Schedule, none of the Company’s stock purchase agreements or
stock option documents contains a provision for acceleration of vesting (or
lapse of a repurchase right) upon the occurrence of any event or combination of
events. Except as set forth on Section
2.2(d) of the Disclosure
Schedule, the Company has never adjusted or amended the exercise price of
any stock options previously awarded, whether through amendment, cancellation,
replacement grant, repricing, or any other means.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    2.3.           Subsidiaries and
Affiliates.  Except as set forth on Section
2.3 of the Disclosure Schedule, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any corporation or
have any direct or indirect equity ownership in any business.

     

    2.4.           Authorization.  All
corporate action required to be taken by the Company’s Board of Directors and
stockholders in order to authorize the Company to enter into the Transaction
Agreements, and to issue the Shares at each Closing, has been taken or, in the
case of the stockholders, will be taken prior to each
Closing.  Subject to the terms of Sections 1.2(b) and
6.3, all action on the part of the officers of the Company necessary for
the execution and delivery of the Transaction Agreements, the performance of all
obligations of the Company under the Transaction Agreements to be performed as
of each Closing, and the issuance and delivery of the Shares has been taken or
will be taken prior to each Closing.  The Transaction Agreements, when
executed and delivered by the Company, shall constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or
other laws of general application relating to or affecting the enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies, or (iii) to the extent the indemnification provisions contained
in the Stockholders’ Agreement may be limited by applicable federal or state
securities laws. 

     

    2.5.           Valid Issuance of
Shares.  The Shares, when issued, sold and delivered in
accordance with the terms and for the consideration set forth in this Agreement,
will be validly issued, fully paid and nonassessable and free of restrictions on
transfer other than restrictions on transfer under this Agreement, the
Stockholders’ Agreement, applicable state and federal securities laws and liens
or encumbrances created by or imposed by the Purchasers.  Assuming the
accuracy of the representations of the Purchasers in Section 3 of this
Agreement, the Shares will be issued in compliance with all applicable federal
and state securities laws. 

     

    2.6.           Governmental Consents and
Filings.  Assuming the accuracy of the representations made by
the Purchasers in Section 3 of this
Agreement, no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority is required on the part of the Company in
connection with the consummation of the transactions contemplated by this
Agreement, except for  filings, if any, pursuant to Regulation D of
the Securities Act, and applicable state securities laws, which have been made
or will be made in a timely manner.

     

    2.7.           Litigation.  There
is no claim, action, suit, proceeding, arbitration, complaint, charge or
investigation pending or, to the Company’s knowledge, currently threatened that
questions the validity of the Transaction Agreements or the right of the Company
to enter into them, or to consummate the transactions contemplated by the
Transaction Agreements.

     

    2.8.           Compliance with Other
Instruments.  The execution, delivery and performance of the
Transaction Agreements and the consummation of the transactions contemplated by
the Transaction Agreements will not result in any violation or be in conflict
with or constitute, with or without the passage of time and giving of notice,
either (i) a default under any
instrument, judgment, order, writ, decree, contract or agreement to which the
Company is a party or by which it is bound or (ii) an event which results in the
creation of any lien, charge or encumbrance upon any property or assets of the
Company or the suspension, revocation, forfeiture, or nonrenewal of any permit
or license applicable to the Company.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    2.9.           Rights of Registration and
Voting Rights.  Except as provided in the Stockholders’
Agreement, the Company is not under any obligation to register under the
Securities Act any of its currently outstanding securities or any securities
issuable upon exercise or conversion of its currently outstanding
securities.  Except as contemplated in the Stockholders’ Agreement, no
stockholder of the Company has entered into any agreements with respect to the
voting of capital shares of the Company.

     

    2.10.                      No Company Operations or
Material Liabilities.  The Company is a holding company without
operations other than the ownership of stock of its
subsidiaries.  The Company, excluding its subsidiaries, has no
material liabilities or obligations, contingent or otherwise, other than
liabilities (i) under that certain Stock Purchase Agreement, dated November 7,
2007, by and among the Company, Acorn, Catalytica Energy Systems, Inc. and with
respect to Article 11 thereof only, Renegy Holdings, Inc., (ii) under this
Agreement and the Common Stock Purchase Agreements by and among the parties
hereto dated February 29, 2008 and May 13, 2008, or (iii) as set forth on Section
2.10 of the Disclosure
Schedule.

     

    2.11.                      Changes.  To
the Company’s knowledge, since May 13, 2008, there has not been:

     

    (a)           any
change in the assets, liabilities, financial condition or operating results of
the SCR-Tech Entities, except changes in the ordinary course of business that
have not caused, in the aggregate, a Material Adverse Effect on the SCR-Tech
Entities;

     

    (b)           any
damage, destruction or loss, whether or not covered by insurance, that would
have a Material Adverse Effect on the SCR-Tech Entities;

     

    (c)           any
waiver or compromise by the Company of a valuable right or of a material debt
owed to any of the SCR-Tech Entities;

     

    (d)           any
satisfaction or discharge of any lien, claim, or encumbrance or payment of any
obligation by the Company, except in the ordinary course of business and the
satisfaction or discharge of which would not have a Material Adverse Effect on
the SCR-Tech Entities;

     

    (e)           any
material change to a material contract or agreement by which CoaLogix or the
SCR-Tech Entities or any of their assets is bound or subject, except changes in
the ordinary course of business that have not caused, in the aggregate, a
Material Adverse Effect on the SCR-Tech entities;

     

    (f)           any
mortgage, pledge, transfer of a security interest in, or lien, created by the
Company, with respect to any of the material properties or assets of the
SCR-Tech Entities, except (i) liens for taxes not yet due or payable and liens
that arise in the ordinary course of
business and do not materially impair the Company’s or the SCR-Tech Entities’
ownership or use of such property or assets or (ii) as set forth on Section
2.11(f) of the
Disclosure Schedule;

     

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    (g)           any
sale, assignment or transfer of any Company Intellectual Property that could reasonably be
expected to result in a Material Adverse Effect to the SCR-Tech
Entities;

     

    (h)           receipt
of notice that there has been a loss of, or material order cancellation by, any
major customer of any of the SCR-Tech Entities; or

     

    (i)           except
as set forth on Section
2.11(i) of the
Disclosure Schedule, any other event or condition of any character, other
than events affecting the economy or the Company’s industry generally, that
could reasonably be expected to result in a Material Adverse Effect to the
SCR-Tech Entities.

     

    To the
Company’s knowledge, since May 13, 2008 (x) the SCR-Tech Entities have carried
on and operated their business in the ordinary course of business and (y) the
SCR-Tech Entities have not suffered a Material Adverse Effect.

     

    2.12.                      Corporate
Documents.  The Certificate of Incorporation, amendments
thereto, and Bylaws of the Company are in the form provided to the
Purchasers.  The copy of the minute books of the Company provided to
the Purchasers contains minutes of all meetings of directors and stockholders
and all actions by written consent without a meeting by the directors and
stockholders since May 13, 2008 and accurately reflects in all material respects
all actions by the directors (and any committee of directors) and stockholders
with respect to all transactions referred to in such minutes.

     

    2.13.                      Offering.  Subject
in part to the truth and accuracy of the Purchasers’ representations set forth
in Article III of this Agreement, the offer, sale and issuance of the Shares as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act of 1933, as amended, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption. 

     

    2.14.                      Preemptive
Rights.  The Company has fully satisfied (including with
respect to rights of timely notification) or obtained enforceable waivers in
respect of any preemptive or similar rights directly or indirectly affecting any
of its securities.

     

    2.15.                      Consents.  All
consents, approvals, releases, filings, terminations and waivers by third
parties necessary to complete the transactions contemplated hereby that are set
forth in Section
2.15 of the Disclosure
Schedule have been obtained and delivered to the Purchasers and such
consents, approvals, releases, filings, terminations and waivers have not
expired or been withdrawn.

     

    2.16.                      Employment and
Non-Competition Agreements.  William McMahon, Michael Mattes,
Frank Wenz, Michael Cooper, Eric Dana and Joe Cogdell are bound by and have
executed employment agreements with the Company and the SCR-Tech Entities, as
applicable as well as joinder agreements to become parties to the Stockholders’
Agreement.  All other
employees of the SCR-Tech Entities have entered into non-competition agreements
with applicable SCR-Tech Entities.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    2.17.                      Qualified Business
Stock.  The Shares when issued in accordance with the terms and
conditions hereof, will be “Qualified Business Stock” as defined in Section
1202(c) of the Code for qualifying holders.

     

    3.           Representations and
Warranties of the Purchasers.  Each of the Purchasers hereby
represents and warrants, individually and not jointly, to the Company that with
respect to only itself:

     

    3.1.           Authorization.  The
Purchaser has full power, authority and capacity to enter into the Transaction
Agreements.  The Transaction Agreements to which the Purchaser is a
party, when executed and delivered by the Purchaser, will constitute valid and
legally binding obligations of the Purchaser, enforceable in accordance with
their terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors’ rights generally, and as limited
by laws relating to the availability of a specific performance, injunctive
relief, or other equitable remedies, or (b) to the extent the
indemnification provisions contained in the Stockholders’ Agreement may be
limited by applicable federal or state securities laws.

     

    3.2.           Compliance with Other
Instruments.  The execution and delivery of this Agreement by
the Purchaser, and the performance by the Purchaser of its obligations
hereunder, will not conflict, or result in any violation of, or default under,
any provision of any charter, bylaws, trust agreement, partnership agreement or
other governing instrument applicable to the Purchaser, or any agreement or
other instrument to which the Purchaser is a party or by which the Purchaser or
any of the Purchaser’s properties are bound, or any permit, franchise, judgment,
decree, order, rule or regulation applicable to the Purchaser or the Purchaser’s
business or properties.

     

    3.3.           Purchase Entirely for Own
Account.  This Agreement is made with the Purchaser in reliance
upon the Purchaser’s representation to the Company, which by the Purchaser’s
execution of this Agreement, the Purchaser hereby confirms, that the Shares to
be acquired by the Purchaser will be acquired for investment for the Purchaser’s
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the same.  By executing this Agreement, the Purchaser further
represents that the Purchaser does not presently have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Shares. The Purchaser has not been formed for the specific purpose of acquiring
the Shares.

     

    3.4.           Disclosure of
Information.  The Purchaser has had an opportunity to discuss
the Company’s business, management, financial affairs and the terms and
conditions of the offering of the Shares with the Company’s management. Except
as set forth in the Transaction Agreements, no representations or warranties,
whether written or oral, have been made to the Purchaser by the Company or any
officer, employee, affiliate or agent of the Company.  The
foregoing, however, does not limit or modify the representations and warranties
of the Company in Section 2 of this
Agreement or the right of the Purchaser to rely thereon.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    3.5.           Restricted
Securities.  The Purchaser understands that the Shares have not
been, and will not be, registered under the Securities Act, by reason of a
specific exemption from the registration provisions of the Securities Act which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of the Purchaser’s representations as expressed
herein.  The Purchaser understands that the Shares are “restricted
securities” under applicable U.S. federal and state securities laws and that,
pursuant to these laws, the Purchaser must hold the Shares indefinitely
unless they are registered with the Securities and Exchange Commission and
qualified by state authorities, or an exemption from such registration and
qualification requirements is available.  The Purchaser acknowledges
that the Company has no obligation to register or qualify the Shares for resale
except as set forth in the Stockholders’ Agreement.  The Purchaser
further acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and
on requirements relating to the Company which are outside of the Purchaser’s
control, and which the Company is under no obligation and may not be able to
satisfy.

     

    3.6.           No Public
Market.  The Purchaser understands that no public market now
exists for the Shares, and that the Company has made no assurances that a public
market will ever exist for the Shares.

     

    3.7.           Suitability of
Investment.  The Purchaser has such knowledge and experience in
financial, business and tax matters that the Purchaser is capable of evaluating
the merits and risks relating to the Purchaser’s investment in the Shares and
making an investment decision with respect to the Company.  The
Purchaser acknowledges that it has had the opportunity to review this Agreement
and the transactions contemplated by this Agreement with its own legal
counsel.  The Purchaser is not relying on any statements or
representations of the Company or any of its agents for legal advice with
respect to this investment or the transactions contemplated by this Agreement
other than as set forth in the Transaction Agreements. 

     

    3.8.           Legends.  The
Purchaser understands that the Shares and any securities issued in respect of or
exchange for the Shares, may bear one or all of the following
legends:

     

    (a)           “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”), AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF.  NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE ACT, UNLESS SUCH TRANSFER SHALL (I) CONSTITUTE A ROUTINE SALE UNDER RULE 144
OF THE ACT OR (II) BE OF SHARES THAT ARE ELIGIBLE FOR RESALE UNDER RULE
144(B)(1) OF THE ACT.”

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    (b)           Any
legend set forth in, or required by, the other Transaction
Agreements.

     

    (c)           Any
legend required by the securities laws of any state to the extent such laws are
applicable to the Shares represented by the certificate so
legended.

     

    3.9.           Accredited
Investor.  The Purchaser is an accredited investor as defined
in Rule 501(a) of Regulation D promulgated under the Securities
Act.

     

    3.10.                      Foreign
Investors.  If the Purchaser is not a United States person (as
defined by Section 7701(a)(30) of the Code), such Purchaser hereby
represents that it has satisfied itself as to the full observance of the laws of
its jurisdiction in connection with any invitation to subscribe for the Shares
or any use of this Agreement, including (i) the legal requirements within
its jurisdiction for the purchase of the Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other
tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale, or transfer of the Shares.  Such Purchaser’s
subscription and payment for and continued beneficial ownership of the Shares,
will not violate any applicable securities or other laws of the Purchaser’s
jurisdiction.

     

    3.11.                      Residence.  The
office or offices of the Purchaser in which its principal place of business is
located is the address or addresses of the Purchaser set forth on Exhibit
A.

     

    4.           Conditions to the
Purchasers’ Obligations at Closing and Funding.  Except as
otherwise indicated, the obligations of the Purchasers to purchase Shares at
each Closing and fund each Installment in accordance with the terms of Section 1.2(b) are
subject to the fulfillment, on or before each Closing, of each of the following
conditions, unless otherwise waived:

     

    4.1.           Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Shares pursuant to this
Agreement shall be obtained and effective as of such Closing.

     

    4.2.           Representations and
Warranties of Company.  The representations and warranties of
the Company contained in Section 2 shall be true and correct in all material
respects as of each Closing, except that any such representation and warranties
shall be true and correct in all respects where such representation and warranty
is qualified with respect to materiality in Section 2, and the
Company shall have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or before each Closing.  An
officer of the Company has delivered a certificate to the Purchasers certifying
compliance with this Section 4.2 at each Closing, and such certificate shall
contain an update to the Disclosure Schedule covering
the period of time from the date of the last such certificate, if
needed.

     

    4.3.           Opinion of Company
Counsel.  At the Closing relating to the initial Installment,
the Purchasers shall have received from General Counsel of the Company, Joe B.
Cogdell,
an opinion, dated as of the date of such Closing, in substantially the form of
Exhibit C (but without assumptions related to issuance of the
Shares).

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    4.4.           Covenants of the
Company.  The Company shall have in all material respects
performed the obligations and complied with the covenants required by this
Agreement to be performed or complied with by it at or prior to the
Closing.

     

    4.5.           Secretary’s
Certificate.  The Secretary of the Company has delivered to the
Purchasers at the Closing a certificate certifying (i) the Certificate of
Incorporation, as amended and Bylaws of the Company and (ii) resolutions of the
Board of Directors of the Company approving the Transaction Agreements and the
transactions contemplated under the Transaction Agreements.

     

    5.           Conditions to the Company’s
Obligations at Closing.  The obligations of the Company to sell
Shares to the Purchasers in accordance with Section 1.2(b) are
subject to the fulfillment, on or before each Closing, of each of the following
conditions, unless otherwise waived:

     

    5.1.           Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Stock pursuant to this
Agreement shall be obtained and effective as of the Closing.

     

    5.2.           Representations and
Warranties of the Purchasers.  The representations and
warranties of the Purchasers contained in Section 3 shall be
true and correct in all material respects as of Closing, except that any such
representation and warranty shall be true and correct in all respects where such
representation and warranty is qualified with respect to materiality in Section 3, and the
Company shall have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or before Closing.

     

    6.           Covenants of the
Company.

     

    6.1.           Proceedings and
Documents.  The Purchasers shall receive all such counterpart
original and certified or other copies of such documents as reasonably
requested.  Such documents may include good standing
certificates.

     

    6.2.           Securities Laws
Compliance.  The Company shall make in a timely manner any
filings required by applicable federal or state securities or Blue Sky laws, or
those of any other applicable jurisdiction.

     

    6.3.           Use of
Proceeds.  The Company agrees that the Installments shall be
used by it for the purposes set forth below in this Section, and shall not be
used to reduce any outstanding indebtedness of the Company (other than in
accordance with the terms of the documents
governing the Company’s outstanding senior indebtedness to Square 1 Bank) or to
make payments to any stockholder or affiliate of the Company.  The
conditions for funding each Installment, if any, which must be satisfied before
the Company can send a Funding Notice to the Purchasers with respect to any
Installment are set forth opposite each Installment below.  Once the
conditions for funding, if any, have been satisfied for any particular
Installment, the Company may send a Funding Notice to the
Purchasers.  If there are no conditions for funding a particular
Installment, the Company may send a Funding Notice to the Purchasers for such
Installment at any time after Closing.  The Company may send a Funding
Notice for any part or all of a particular Installment, provided that the amount
requested to be funded by the Purchasers shall have satisfied any applicable
conditions for funding, if any.  In the event that less than all of an
Installment is the subject of a Funding Notice, the Shares delivered at the
related Closing shall be reduced proportionately.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

     

    Use
of Proceeds

     

    
      	
              Amount
      and Use of Installment

            	
              Conditions
      for Installment Funding

            
	
              $5,500,000
      – Plant Expansion

            	
              None

            
	
              $200,000
      – ERP System

            	
              None

            
	
              $500,000
      – Database Optimization Software

            	
              If
      CoaLogix proceeds with the database optimization software, DSIT Solutions
      Ltd. (“DSIT”) will be the preferred vendor, and CoaLogix will use its best
      efforts to work with DSIT to structure a contract that will be prudent and
      feasible for CoaLogix and DSIT.

            
	
              $400,000
      – Micro-Bench Reactor

            	
              None

            
	
              $575,000
      – Technology Development

            	
              None

            
	
              $2,506,000
      – Additional Technology Development

            	
              The
      Company shall prepare development and commercialization plans for each
      technology which the Company desires to pursue, with each such development
      and commercialization plan hereinafter referred to as a “Plan”.  The
      Plan shall contain performance milestones for funding this
      Installment.  Each Plan must be approved by the Company’s Board
      of Directors (the “Board
      of Directors”).  The Company will submit a Funding Notice
      for the applicable installment to the Purchasers upon determination by the
      Board of Directors that one or more funding milestones as set forth in the
      approved Plan has been satisfied.

            
	
              $1,827,000
      – Legal Expense for the lawsuit filed by SCR-Tech against Evonik Energy
      Services, LLC, et al. (the “Evonik Suit”) and the
      lawsuit filed by Environmental Energy Systems, Inc. against the Company
      (the “EES
      Suit”).

            	
              Management
      of the Company will apprise the Board of Directors on a quarterly basis of
      the status and developments with respect to the Evonik Suit and EES
      Suit.  The Board of Directors shall assess on a quarterly basis
      at the Company’s regularly scheduled meetings of the Board of Directors
      the cost-benefit justification presented by management and the merits and
      probability of outcomes supplied by lead litigation counsel in the Evonik
      Suit and EES Suit.  Upon the Board of Directors determining and
      approving the amount of funding required for each of the Evonik Suit and
      EES Suit, the Company will send a Funding Notice to the Purchasers for the
      dollar amount of funding so approved by the Board of
      Directors.

            

    

     

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    
 

    6.4.           Access and
Information.  From the date hereof through the date of payment
of all the Purchase Price by the Purchasers, the Company will give the
Purchasers and their authorized representatives (including accountants, legal
counsel and environmental consultants) full access at all reasonable times, upon
reasonable notice, to all of the offices and other facilities of the Company, to
all contracts, agreements, commitments, books and records of the Company, and to
the personnel (including auditors) of the Company.

     

    6.5.           Conduct of the Company's
Business.                                                                                     

     

    (a)           Except
as contemplated by this Agreement, during the period from the date of this
Agreement through the date of payment of all the Purchase Price by the
Purchasers, the Company shall conduct the operations of the Company according to
its ordinary course of business and consistent with past practice, and shall use
commercially reasonable efforts to preserve intact its business organization,
keep available the services of its officers and employees, and maintain
satisfactory relationships with suppliers, contractors, distributors, customers
and others having business relationships with the Company.  During the
period from the date of this Agreement through the date of payment of all the
Purchase Price by the Purchasers, the Company agrees that it will not take any
action reasonably within its control, or omit to take any action reasonably
within its control, which would cause any of the representations and warranties
of the Company in this Agreement to become untrue.

     

    (b)           Without
limiting the foregoing, during the period from the date of this Agreement
through the date of payment of all the Purchase Price by the Purchasers, the
Company shall not take any of the actions specified in Section 2.11 without
the prior written consent of the Purchasers.

     

    6.6.           Notices to
Purchasers.  Prior to the date of payment of all the Purchase
Price by the Purchasers, the Company shall give prompt written notice to the
Purchasers of: (a) any breach or default by the Company of the representations,
warranties, covenants or agreements hereunder or under any document or
instrument contemplated hereby; (b) any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement; (c) any
notice or other communication from any governmental authority in connection with
the transactions contemplated by this Agreement; (d) any Material Adverse
Effect; and (e) any claim, action, or proceeding against the Company which could
reasonably be expected to have a Material Adverse Effect.

     

    6.7.           Exclusivity.  From
the date hereof through the date of Closing of the initial Installment, the
Company shall not, nor shall it authorize or permit any officer, director or
employee of or any investment banker, broker, attorney, accountant, or other
representative retained by the Company to, solicit, initiate or encourage
(including by way of furnishing information) submission of any proposal or offer
from any person which constitutes, or may reasonably be expected to lead to, a
Financing Proposal.  As used herein, a “Financing Proposal” shall mean
any proposal for a merger or other business combination involving the Company,
or any proposal or offer to acquire in any manner an equity interest in or a
material portion of the assets of the Company (other than sales in the ordinary
course of business consistent with past practice) or to extend indebtedness to
the Company.  If the Company receives a Financing Proposal prior to
the Closing, the Company shall notify the Purchasers immediately and shall
provide to the Purchasers a copy of any written documentation of such Financing
Proposal.  In addition, the Company shall not entertain or enter into
any agreement which would permit any party to obtain an equity interest in the
Company prior to the earlier of January 1, 2011 or the date of payment of all of
the Purchase Price other than the Company granting stock options in the normal
course, exercise of stock options and sale of the Shares under this
Agreement.

     

    7.           Survival Period;
Indemnification.

     

    7.1.           Survival of Representations,
Warranties and Covenants.  Unless otherwise set forth in this
Agreement, the representations and warranties of the Company and the Purchasers
contained in or made pursuant to this Agreement  (x) shall survive the
execution and delivery of this Agreement and the Closing until the date that is
one year after the date of payment of all the Purchase Price by the Purchasers,
except that the representations and warranties in Sections 2.1, 2.2, 2.3,
2.4 and 2.5 shall survive the
Closing indefinitely, and (y) shall in no way be affected by any investigation
of the subject matter thereof made by or on behalf of the Purchasers or the
Company and shall bind the parties’ successors and assigns (including, without
limitation, any successor to the Company by way of acquisition, merger or
otherwise), whether so expressed or not.  This Section 7 shall survive
the Closing and the covenants
contained in this Agreement shall survive the Closing for the periods
contemplated by their terms.

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

     

    7.2.           Indemnification.  The Company and each
Purchaser shall, with respect to the representations, warranties and agreements
made by them herein, indemnify, pay, defend and hold the Company or each
Purchaser, as the case may be, and each of the Company or each Purchaser’s
officers, directors, partners, employees and agents and their respective
Affiliates, as the case may be, (the “Indemnitees”) harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding
(collectively, “Losses”), whether or not such Indemnitees
shall be designated a party thereto, which may be (a) imposed on such
Indemnitee, or (b) incurred by such Indemnitee, as a result of (i) the violation
or breach of any representation, warranty or covenant of the Company or a
Purchaser, as the case may be, under this Agreement or the Stockholders’
Agreement; (ii) a Purchaser’s investment in or ownership of the Shares; or (iii)
actions or omissions by any agent, representative or employee of the Company or
a Purchaser, as the case may be.  

     

    7.3.           Limitations on
Indemnification.  The Company or each Purchaser, as the case
may be, shall not have liability under Section 7.2 until the
aggregate amount of Losses of the Indemnitees exceeds $50,000, in which case the
Indemnitees shall be entitled to Losses as follows: in the case of the Company
as an Indemnitee, an amount up to the Purchase Price of the Shares paid by the
indemnifying party for its Shares, and in the case of a Purchaser as an
Indemnitee, an amount up to the Purchase Price of the Shares paid by such
Purchaser for its Shares.

     

    8.           Miscellaneous.

     

    8.1.           Transfer; Successors and
Assigns.  The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties.  The Company may not assign this Agreement or
any rights or obligations hereunder without the prior written consent of a
majority of the Shares.  Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.   

     

    8.2.           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without regard to
its principles of conflicts of laws.

     

    8.3.           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.  This Agreement may also be executed and delivered by
facsimile signature and in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    8.4.           Titles and
Subtitles.  The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

     

    8.5.           Notices.  All
notices and other communications given or made pursuant to this Agreement shall
be in writing and shall be deemed effectively given (the “Effective
Date”):  (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the
next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.  All
communications shall be sent to the respective parties at their address as set
forth below or on the signature page or Exhibit A, or to
such e-mail address, facsimile number or address as subsequently modified by
written notice given in accordance with this Section
8.5.

     

    If notice
is given to the Company, it shall be sent to:

     

    CoaLogix

    11701 Mt.
Holly Road

    Charlotte,
NC 28214

    Attn:
CEO

    

    A copy
shall also be sent to:

    

    CoaLogix

    11701 Mt.
Holly Road

    Charlotte,
NC 28214

    Attn:
General Counsel

    

    If notice
is given to Acorn, it shall be sent to:

    

    Acorn
Energy, Inc.

    4 W.
Rockland Road

    P.O. Box
9

    Montchanin,
Delaware 19710

    

    A copy
shall also be sent to:

     

    Acorn
Energy, Inc.

    11701 Mt.
Holly Road

    Charlotte,
NC 28214

    Attn:
General Counsel

     

     

    
      
         

      

      
        -15-

        
          

        

      

      
         

      

    

    

    If notice
is given to EnerTech, it shall be sent to the address set forth on Exhibit A. A copy
shall also be sent to:

     

    Dechert
LLP

    Cira
Centre

    2929 Arch
St.

    Philadelphia,
PA 19104-2808

    Fax No.
(215) 994-2222

    Attention:  Ian
A. Hartman, Esq.

    

    If notice
is given to a Management Stockholder, it shall be sent to the address set forth
on Exhibit
A.

    

    8.6.           No Finder’s
Fees.  Except as set forth in Section
8.6 of the Disclosure
Schedule, each party represents that it neither is nor will be obligated
for any finder’s fee, commission or other compensation in connection with this
transaction.  Each Purchaser agrees to indemnify and to hold harmless
the Company from any liability for any commission or compensation in the nature
of a finder’s fee arising out of this transaction (and the costs and
expenses of defending against such liability or asserted liability) for which
the Purchaser or any of its officers, employees, or representatives is
responsible.  The Company agrees to indemnify and hold harmless each
Purchaser from any liability for any commission or compensation in the
nature of a finder’s or broker’s fee arising out of this transaction (and the
costs and expenses of defending against such liability or asserted liability)
for which the Company or any of its officers, employees or representatives
is responsible.

     

    8.7.           Fees and
Expenses.  At Closing, the Company shall pay the reasonable
fees and expenses of Dechert LLP, special counsel to EnerTech Capital Partners
III L.P., and Eilenberg Kraus & Paul LLP, counsel to Acorn, in connection
with the financing; provided, however, the amount of such legal fees and
expenses the Company shall be liable to pay will be limited to an aggregate of
$15,000.

     

    8.8.           Default in Funding
Commitment.

     

    (a)           In
the event an Original Purchaser does not pay an Installment after receipt of a
Funding Notice per the terms of Section 1.2(b) (the
“Defaulting Original
Purchaser”), the Original Purchaser will be in default of its obligation
to pay such Installment (a “Default”).  Upon the
occurrence of a Default, the Company will notify both Original Purchasers in
writing of the existence of the Default (the “Default
Notice”).  The Defaulting Original Purchaser will have three
(3) business days from the Effective Date of the Default Notice to pay its
Installment and cure the Default.  In the event the Defaulting
Original Purchaser does not cure the Default and pay the Installment (the “Defaulted Installment”), then
the non-defaulting Original Purchaser shall have the right to assume part or all
of the Defaulting Original Purchaser’s funding obligation under the Defaulted
Installment and take delivery of the Shares purchased with payment for same no
later than ten (10) business days after the Effective Date of the Default
Notice.  The percentage of the amount of the Defaulted Installment
paid by the non-defaulting Original Purchaser shall be known as the “Payment
Percentage”.

     

    (b)           After
the occurrence of a Default by an Original Purchaser, the non-defaulting
Original Purchaser shall thereafter have the right, but not the obligation, to
purchase (on an Installment by Installment basis) up to that number of Shares
that is derived by multiplying the Payment Percentage by the total number of
Shares that the Defaulting Original Purchaser
could have acquired in connection with such Installment had there not been a
Default by the non-defaulting Original Purchaser serving written notice of such
election to the Company and the Defaulting Original Purchaser no later than two
(2) business days after the Effective Date of any future Funding
Notice.  In the event the non-defaulting Original Purchaser does not
have the right to or does not elect to assume the entire funding obligation of a
remaining Installment as specified in a future Funding Notice, the Defaulting
Original Purchaser will have the right and obligation to purchase that portion
of the Shares covered by such future Funding Notice not purchased by the
non-defaulting Original Purchaser.

     

    
      
         

      

      
        -16-

        
          

        

      

      
         

      

    

     

    (c)           In
the event of a Default by an Original Purchaser and the non-defaulting Original
Purchaser does not elect to assume the obligation of paying any of the Defaulted
Installment, then the Defaulting Original Purchaser shall have the right and
obligation to make payment of any remaining Installments after receipt of
applicable Funding Notices; provided, however, the provisions of subparagraphs
(a) and (b) above shall continue to apply in the case of any additional Default
by the Defaulting Original Purchaser.

     

    (d)           In
the event a Management Stockholder Defaults (the “Defaulting Management
Stockholder”), the Company will send the Defaulting Management
Stockholder and all non-defaulting Purchasers a Default Notice.  The
Defaulting Management Stockholder will have three (3) business days from the
Effective Date of the Default Notice to pay its Installment and cure the
Default.  In the event the Defaulting Management Stockholder does not
cure the Default, then the non-defaulting Management Stockholders shall have the
right to pay part or all of the Defaulted Installment in the proportion of the
number of Shares which they have agreed to purchase under this Agreement as
adjusted to reflect any additional Shares purchased pursuant to this Section
8.8.  In the event the non-defaulting Management Stockholders
do not pay any or all of the Defaulted Installment, the non-defaulting
Management Stockholders may agree among themselves as to which Management
Stockholders, including Management Stockholders who are not parties to this
Agreement, may pay any portion of the Defaulted Installment not paid by the
non-defaulting Management Stockholders.  In the event the
non-defaulting Management Stockholders do not agree to pay all of the Defaulted
Installment, then the Original Purchasers may purchase any portion of the
Defaulted Installment not paid by the non-defaulting Management Stockholders in
the proportion of the number of shares of Common Stock held by each or in any
other proportion to which they agree.  Any party desiring to elect to
assume the obligation of payment of any portion of a Defaulted Installment in
accordance with the terms of this subparagraph shall serve written notice of
same upon all other Purchasers.  Any right to elect to make payment on
a Defaulted Installment shall expire three (3) business days after the date of
the occurrence giving rise to elect such right to make payment on a Defaulted
Installment, and payment of same shall be made no later than ten (10) business
days after the Effective Date of the Default Notice or the occurrence giving
rise to such right to elect payment on a Defaulted Installment.

     

    (e)             After
the occurrence of a Default by a Management Stockholder, each non-defaulting
Management Stockholder shall thereafter have the right, but not the obligation,
to purchase (on an Installment by Installment basis) up to that number of Shares
that is derived by multiplying the Management Stockholder’s Payment Percentage
by the total number of Shares that the Defaulting Management Stockholder could
have acquired in connection with such Installment had there not been a Default
by the non-defaulting Management
Stockholder serving written notice of such election to the Company and the
Defaulting Management Stockholder no later than two (2) business days after the
Effective Date of any future Funding Notice.  In the event the
non-defaulting Management Stockholders do not have the right to or do not elect
to assume the entire funding obligation of a remaining Installment as specified
in a future Funding Notice, the Defaulting Management Stockholder will have the
right and obligation to purchase that portion of the Shares covered by such
future Funding Notice not purchased by the non-defaulting Management
Stockholders.

     

    
      
         

      

      
        -17-

        
          

        

      

      
         

      

    

     

    (f)           In
the event of a Default by a Management Stockholder and the non-defaulting
Management Stockholders do not elect to assume the obligation of paying any of
the Defaulted Installment, then the Defaulting Management Stockholder shall have
the right and obligation to make payment of any remaining Installments after
receipt of applicable Funding Notices; provided, however, the provisions of
subparagraphs (d) and (e) above shall continue to apply in the case of any
additional Default by the Defaulting Management Stockholder.

     

    (g)           The
remedies described above in this Section 8.8 regarding
a Default shall be the exclusive remedies available to the parties hereto with
respect to a Default.

     

    8.9.           Board of
Directors.  The parties agree that the Board of Directors shall
search for and elect as soon as possible an additional member to the Board of
Directors, and that such additional member shall be an independent director in
accordance with Section 9.4 (iii) of the Stockholders Agreement.  In
addition, consistent with Acorn’s right under Section 9.4 (ii) of the
Stockholders Agreement, Acorn will designate immediately Richard Giacco to serve
as an additional member of the Board of Directors.

     

    8.10.                      Management Option
Pool.

     

    (a)           The
Purchasers agree that the number of shares of Common Stock available for
issuance to employees of the Company under the Company’s stock option plan shall
be increased by 115,063 shares of Common Stock.  The Company shall
grant to the senior officers of the Company (the “Senior Officers”) listed in
Exhibit D the
additional stock options set forth opposite their respective names on Exhibit D (the “New Options”).  The
grant of the New Options will occur at Closing and the exercise price shall be
$7.20 per share.  The Company shall have the appropriate legal
documents prepared to properly document the granting and the terms of the New
Options in accordance with this Section
8.10.

     

    (b)           The
New Options will be subject to the following double trigger vesting schedule: as
to each Senior Officer, the New Options will vest over a four-year term with 25%
vesting after one year and 6.25% vesting quarterly over the following three
years; provided, however, the maximum cumulative number of New Options that may
vest at any applicable vesting date will be limited to the number of New Options
granted to the Senior Officer multiplied by a fraction, the numerator of which
is the total Purchase Price paid by the Purchasers as of the applicable vesting
date for their Shares with respect to the Installments dedicated for Plant
Expansion (up to $2,750,000), Technology Development and Additional Technology
Development and the denominator of which is $5,831,000 (which is 50% of the
Plant Expansion of $5,500,000 ($2,750,000) and 100% of the Technology
Development ($575,000) and Additional Technology Development
($2,506,000)).

     

    
      
         

      

      
        -18-

        
          

        

      

      
         

      

    

     

     

    (c)           In
the event a change of control (as defined in the Senior Officers’ current stock
option agreements) should occur, then vesting shall accelerate on account of
such change of control with respect to that number of a Senior Officers’ New
Options determined by multiplying the number of a Senior Officers’ New Options
by the fraction described in the immediately preceding subparagraph and
utilizing the date of the occurrence of the change of control to determine the
amount of the numerator.

     

    (d)           Any
New Options that shall not have satisfied the double trigger vesting schedule
described above by the end of the four-year vesting period shall expire and not
be exercisable.  The New Options will be subject to the terms of the
Company’s stock option plan and the Senior Officers’ individual stock option
agreement.

     

    8.11.                      Stockholders’
Agreement.  The Stockholders’ Agreement shall be amended and
restated effective the date hereof as necessary to reflect the terms of this
Agreement as well as the terms set forth in this paragraph.  Section 7
of the Stockholders’ Agreement shall be amended to permit Management
Stockholders, as defined in the Stockholders’ Agreement, to tag along and sell
their shares of Common Stock purchased by them hereunder on the same terms the
selling Key Holder is selling its shares of Common Stock.  A provision
shall be added to the Stockholders’ Agreement providing the parties thereto with
the right to purchase securities offered for sale by the Company in the future
on a pro rata basis.

     

    8.12.                      Amendments and
Waivers.  Any term of this Agreement may be amended, terminated
or waived only with the written consent of the Company and the
Purchasers.  Any amendment or waiver effected in accordance with this
Section 8.12
shall be binding upon the Company, the Purchasers, and each transferee of the
Shares, each future holder of all such securities and the Company.  In
the event a nonmaterial provision of this Agreement is required to be amended by
the Purchasers after the Closing, the Company will not unreasonably withhold its
consent to such amendment.

     

    8.13.                      Severability.  The
invalidity of unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.

     

    8.14.                      Delays or
Omissions.  No delay or omission to exercise any right, power
or remedy accruing to any party under this Agreement, upon any breach or default
of any other party under this Agreement, shall impair any such right, power or
remedy of such non-breaching or non-defaulting party nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring.  Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such
writing.  All remedies, either under this Agreement or by law or
otherwise afforded to any party, shall be cumulative and not
alternative.

     

    8.15.                      Entire
Agreement.  This Agreement (including the Exhibits hereto, if
any), the other Transaction Agreements, the Stockholders’ Agreement and the
Management Rights Letter
entered into by and among the parties hereto as of February 29, 2008 constitute
the full and entire understanding and agreement between the parties with respect
to the subject matter hereof, and any other written or oral agreement relating
to the subject matter hereof existing between the parties are expressly
canceled.  In the event of any conflict between the terms of this
Agreement and the Common Stock Purchase Agreement dated February 29, 2008 and
the Common Stock Purchase Agreement dated May 13, 2008, the terms and conditions
of this Agreement shall control.

     

    
      
         

      

      
        -19-

        
          

        

      

      
         

      

    

     

    8.16.                      Publicity.  The
Company may disclose the existence of the financing, as well as the investment
in the Company by the Purchasers, solely to the Company’s investors, investment
bankers, lenders, accountants, legal counsel, bona fide prospective investors
and employees, in each case only where such persons or entities were under
appropriate nondisclosure obligations.  In addition, the Company may
disclose to third parties that the Purchasers are investors in the Company
without the requirement for nondisclosure agreements.  The Company is
permitted to issue a press release within 60 days of the Closing disclosing that
the Purchasers have invested in the Company; provided that the release does not
disclose the amount or other specific terms of the investment and the final form
of the press release is approved in advance in writing by the
Purchasers.  The Company may not use the name of EnerTech, or any of
its Affiliates in any trade publication, in any marketing materials or otherwise
to the general public without the prior written consent of EnerTech, which
consent may be withheld in the sole discretion of EnerTech. Notwithstanding the
foregoing, nothing in this Section 8.16 shall
prevent Acorn from complying with its obligations under the Exchange Act or
under the rules or regulations of any stock exchange or other market on which
the Acorn’s securities are listed for trading or the Company from taking any
action required to assist Acorn in such matters.

     

    8.17.                      Right to Conduct
Activities.  The Company acknowledges and agrees that (i) the
Original Purchasers and each of their respective partners, affiliates and
affiliates of its partners engage in a wide variety of activities and have
investments in many other companies, some of which may be competitive with the
business of the Company; (ii) subject to any fiduciary obligations of the
Original Purchasers’ designees to the Company’s Board of Directors, except as
waived by the Company pursuant to this Section, it is critical that the Original
Purchasers be permitted to continue to develop their current and future business
and investment activities without any restriction arising from an investment by
the Original Purchasers in the Company, the rights of the Original Purchasers to
designate directors of the Company or any other relationship, contractual or
otherwise, between the Original Purchasers, on the one hand, and the Company or
any of its affiliates, on the other hand; and (iii) from time to time, in
connection with the foregoing activities of the Purchasers (collectively, the
“Activities”), the
Original Purchasers may have information that may be useful to the Company or
its other stockholders (which information may or may not be known by the member
of the Company’s Board of Directors designated by the Original Purchasers), and
neither the Original Purchasers nor any director so designated shall have any
duty to disclose any information known to such person or entity to the Company
or any of its other stockholders. In addition, the Original Purchasers shall not
be liable for any claim arising out of, or based upon, (i) the investment by the
Original Purchasers in any entity competitive to the Company, (ii) actions taken
by any partner, officer or other representative of the Original Purchasers to
assist any such competitive company, whether or not such action was taken as a
board member of such competitive company,
or otherwise, and whether or not such action has a detrimental effect on the
Company, unless such claim arises directly from the Original Purchasers’ misuse
of confidential information in material breach of Section 3.4 of the
Stockholders’ Agreement.

     

    
      
         

      

      
        -20-

        
          

        

      

      
         

      

    

     

    8.18.                      Termination.  Except
with respect to provisions that expressly survive the termination of this
Agreement, this Agreement may be terminated at any time:  (a) by the
Purchasers prior to a Closing if a court of competent jurisdiction or
governmental or regulatory body shall have issued an order, decree or ruling, or
taken any other action, restraining, enjoining or otherwise prohibiting the
Closing of the transactions contemplated hereby and such order, decree, ruling
or other action shall have become final and non-appealable; or (b) with respect
to the initial Closing, by either the Purchasers or the Company if the initial
Closing shall not have occurred by 8:00 p.m., New York City Time, on July 1,
2009 and the terminating parties are not in material breach of this
Agreement.

     

    [Remainder
of Page Intentionally Left Blank]

     

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

    The
parties have executed this Common Stock Purchase Agreement as of the date first
written above.

     

    COALOGIX
INC.

     

     

    By: 
/s/ William J.
McMahon

    Name:  William
J. McMahon

    Title:    CEO

     

     

    ACORN
ENERGY, INC.

     

     

    By: 
/s/ John A. Moore

    Name:  John
A. Moore

    Title:    CEO

     

     

    ENERTECH
CAPITAL PARTNERS III L.P.

     

     

    By: 
ECP III Management L.P.,

    Its
general partner

     

    By: 
ECP III Management LLC,

    Its
general partner

     

    By: 
/s/ Scott Ungerer

    Name:
Scott Ungerer

    Title:   CEO

     

     

    MANAGEMENT
STOCKHOLDERS

     

     

    /s/
William J. McMahon

    WILLIAM
J. MCMAHON

     

     

    /s/
Michael F. Mattes

    MICHAEL
F. MATTES

     

     

    /s/
Eric B. Dana

    ERIC
B. DANA

     

     

    /s/
Joe B.  Cogdell, Jr.

    JOE
B. COGDELL, JR.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBITS

     

    
      	
              Exhibit A
      -

            	
              Schedule
      of Purchasers

            
	
              Exhibit B
      -

            	
              Disclosure
      Schedule

            
	
              Exhibit
      C -

            	
              Form
      of Legal Opinion of Company Counsel

            
	
              Exhibit
      D-

            	
              New
      Options

            

    

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    SCHEDULE
OF PURCHASERS

     

    

    

    

    
      	
              Purchaser

            	
              Shares
      of Common Stock

            	
              Purchase
      Price

            
	
              Acorn
      Energy, Inc.

              4
      W. Rockland Road

              P.O.
      Box 9

              Montchanin,
      DE 19710

            	
              781,111

            	
              $5,623,999.20

            
	
              EnerTech
      Capital Partners III L.P.

              435
      Devon Park Drive

              700
      Building

              Wayne,
      PA  19087

            	
              781,111

            	
              $5,623,999.20

            
	
              William
      J. McMahon

              3937
      Cindy Lane

              Denver,
      NC 28037

            	
              6,944

            	
              $49,996.80

            
	
              Michael
      F. Mattes

              142
      Lake Pointe Drive

              Fort
      Mill, SC 29708

            	
              8,333

            	
              $59,997.60

            
	
              Eric
      B. Dana

              219
      Hobbs Street

              Davidson,
      NC 28036

            	
              10,417

            	
              $75,002.40

            
	
              Joe
      B. Cogdell, Jr.

              3100
      Valencia Terrace

              Charlotte,
      NC 28211

            	
              10,417

            	
              $75,002.40

            

    

     

     

    
 

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    DISCLOSURE
SCHEDULE

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
C

     

    FORM
OF LEGAL OPINION

    OF

    COMPANY
COUNSEL

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
D

     

    NEW
OPTIONS

     

    

     

    
      	
              Senior
      Officer

            	
              No.
      of New Options

            
	
              William
      J. McMahon

            	
              40,513

            
	
              Michael
      F. Mattes

            	
              20,256

            
	
              Frank
      Wenz

            	
              5,069

            
	
              Michael
      Cooper

            	
              5,069

            
	
              Eric
      B. Dana

            	
              5,069

            
	
              Joe
      B. Cogdell, Jr.

            	
              5,069

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