Document:

PROMISSORY
NOTE

 

	Principal
    Amount: $75,000	Funding
    Date: March 28, 2016

 

FOR
VALUE RECEIVED, Acorn Energy, Inc., a Delaware corporation (the “Borrower”), hereby promises to pay to the order of
Christopher Clouser or the holder of this Note (the “Lender”), on the Maturity Date (as defined below) at such place
of payment as the holder of this Promissory Note (this “Note”) may specify from time to time in writing, in lawful
money of the United States of America, a single payment equal to 115% of the Principal Amount set forth above, which payment shall
be in full satisfaction of any and all obligations of the Borrower to Lender under this Note. The Maturity Date shall be the earlier
of (i) the third business day following the date of the receipt by the Borrower of proceeds upon the closing of the contemplated
sale by the Borrower of a portion of its shares of DSIT Solutions Ltd. (the “DSIT Closing Date”) or (ii) September
1, 2016.

 

By
written notice, the Lender, assuming that he is not at such time in possession of material inside information, may by written
notice to the Borrower on or prior to the day preceding Maturity Date, elect to all (but not part) of the amount payable to Lender
under this Note into Common Stock of the Borrower at a conversion price equal to the closing price of the Common Stock of the
Borrower on the principal market for such Common Stock on the trading day immediately preceding the Maturity Date.

 

This
Promissory Note has been negotiated and delivered to Lender and is payable in the State of Delaware. This Note shall be governed
by and construed and enforced in accordance with, the laws of the State of Delaware, excluding any conflicts of law rules or principles
that would cause the application of the laws of any other jurisdiction.

 

The
obligation to pay the principal of and any interest accrued on this Note shall be parri passu with the indebtedness of Acorn under
the Loan and Security Agreement with Leap Tide Capital Partners III, LLC.

 

	 	ACORN
    ENERGY, INC.
	 	 
	 	 	 
	 	By:	Jan
    Loeb
	 	Title:	Chief
    Executive Officer3844
Kennett Pike

Suite
204-4, Mall Building, Powder Mill Square

Greenville,
Delaware 19807

Phone:
(302) 656-1708

 

TO:
Edgar S. Woolard

 

Dear
Mr. Woolard:

 

Reference
is made to our promissory note payable to you in the principal amount of $200,000 with a Funding Date of January 14, 2016 (the
“Note”).

 

The
Note is modified by the addition of the following two paragraphs (shown below in bold) to be inserted at the end of the Note.

 

If
the DSIT Closing Date shall not have occurred by September 1, 2016, this Note and all interest accrued thereunder shall be payable
on September 1, 2016. 

 

The
obligation to pay the principal of and any interest accrued on this Note shall be parri passu with the indebtedness of Acorn under
the Loan and Security Agreement with Leap Tide Capital Partners III, LLC. 

The
Note as originally executed and delivered to you remains in full force and effect, as modified pursuant hereto. .

 

	 	Very
    truly yours,
	 	 
	 	Jan
    H Loeb
	 	President
    and CEO3844
Kennett Pike

Suite
204-4, Mall Building, Powder Mill Square

Greenville,
Delaware 19807

Phone:
(302) 656-1708

 

TO:
Visionary Enhancement, LLC

 

Dear
Sirs:

 

Reference
is made to our promissory note payable to you in the principal amount of $100,000 with a Funding Date of January 15, 2016 (the
“Note”).

 

The
Note is modified by the addition of the following two paragraphs (shown below in bold) to be inserted at the end of the Note.

 

If
the DSIT Closing Date shall not have occurred by September 1, 2016, this Note and all interest accrued thereunder shall be payable
on September 1, 2016. 

 

The
obligation to pay the principal of and any interest accrued on this Note shall be parri passu with the indebtedness of Acorn under
the Loan and Security Agreement with Leap Tide Capital Partners III, LLC. 

 

The
Note as originally executed and delivered to you remains in full force and effect, as modified pursuant hereto.

 

	 	Very
    truly yours,
	 	 
	 	Jan
    H Loeb
	 	President
    and CEOSERIES
A PREFERRED STOCK SUBSCRIPTION AGREEMENT

 

This
Series A Preferred Stock Subscription Agreement (this “Agreement”) is made as of November 23, 2015, between OMX Holdings,
Inc., a Georgia corporation (the “Company”) and Edgar Woolard (the “Purchaser”).

 

WHEREAS,
as of October 16, 2015, the Purchaser agreed to acquire shares of Series A Preferred Stock, par value $.001 per share (the “Series
A Stock”), to be created by the Company representing ten percent (10%) of the Company’s outstanding capital stock,
in consideration for payment of $500,000 to the Company (the “October Shares”); and

 

WHEREAS,
as of November 23, 2015, the Purchaser agreed to acquire Series A Preferred Stock representing an additional ten percent (10%)
of the Company’s outstanding capital stock in consideration for payment of $500,000 to the Company, together with the October
Shares representing twenty percent (20%) of the issued and outstanding capital stock of the Company (the “Shares”).

 

The
Company and the Purchaser hereby agree as follows:

 

SECTION
1

Purchase
and Sale of the Shares

 

The
Purchaser and the Company agree, subject to the terms and conditions hereof and in reliance upon the representations, warranties
and agreements contained herein, that the Purchaser will acquire the Shares at a price of $500.00 per share, an aggregate purchase
price of $1,000,000 (the “Purchase Price”). The provisions of the Series A Stock are summarized in Exhibit A
hereto and are fully set forth in the Amended and Restated Articles of Incorporation (the “Amended and Restated Articles”)
to be filed on or before the Closing (as hereinafter defined).

 

SECTION
2

Closing,
Payment and Delivery

 

2.1Closing
Date and Place of Closing. The closing (the “Closing”) of the purchase of the Shares shall take place on the date
hereof or at such time and location as is mutually agreed by the Purchaser and the Company (the “Closing Date”).

 

2.2Payment
and Delivery of the Shares. The Purchaser has paid the Purchase Price to the Company. At the Closing, the Company will deliver
to the Purchaser a certificate representing the Shares.

 

2.3Covenant
of Best Efforts and Good Faith. The Company and the Purchaser agree to use their respective best efforts and to act in good
faith to cause to occur all conditions to a closing which are in their respective control.

 

    	 	 	 

     

    

 

SECTION
3

Representations,
Warranties and Covenants of the Company

 

The
Company hereby represents and warrants to the Purchaser that:

 

3.1Organization
and Authority. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State
of Georgia. The Company has all requisite corporate power and authority to own or lease and operate its properties, if any, and
to carry on its business as now conducted and as proposed to be conducted.

 

3.2Corporate
Power; Binding Effect. The Company has all requisite power and full legal right to execute and deliver this Agreement, and
to perform all of its obligations hereunder in accordance with the terms hereof. This Agreement and the transactions contemplated
hereby have been duly approved and authorized by all requisite corporate action on the part of the Company, and this Agreement
has been duly executed and delivered by the Company and constitutes a legal, valid, and binding obligation of the Company, enforceable
against it in accordance with its respective terms. The execution, delivery, and performance by the Company of this Agreement
in accordance with its terms, and the consummation by the Company of the transactions contemplated hereby, will not result (with
or without the giving of notice or the lapse of time or both) in any conflict, violation, breach, or default, or the creation
of any lien, or the termination, acceleration, vesting, or modification of any right or obligation, under or in respect of (x)
the charter documents or by-laws of the Company, (y) any judgment, decree, order, statute, rule, or regulation binding on or applicable
to the Company or (z) any agreement or instrument to which the Company is a party or by which it or any of its assets is or are
bound.

 

3.4Foreign
Qualification. The Company is not qualified to do business in any jurisdiction other than Georgia.

 

3.5.Subsidiaries.
The Company does not have any subsidiaries other than OmniMetrix LLC.

 

3.6.Capitalization.

 

(a)Immediately
after the Closing contemplated hereunder, giving effect to the sale and purchase of the Shares provided for in this Agreement,
the authorized and the outstanding capital stock of the Company will be as set forth in Exhibit B hereto, and all
such outstanding shares of capital stock will be owned (of record and beneficially) by the persons and in the amounts there indicated.
All of the Shares, when acquired in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully
paid, and nonassessable, and free and clear of liens.

 

(b)The
Company does not have, is not bound by, and has no obligation to grant or enter into, any (i) outstanding subscriptions, options,
warrants, calls, commitments, pre-emptive rights or agreements of any character calling for it to issue, deliver, or sell, or
cause to be issued, delivered, or sold, any shares of its capital stock or any other equity security, or any securities described
in the following clause, or (ii) securities convertible into, exchangeable for, or representing the right to subscribe for, purchase,
or otherwise acquire any shares of its capital stock or any other equity security.

 

    	 	 	 

     

    

 

(c)The
Company (i) has no outstanding obligations, contractual or otherwise, to repurchase, redeem, or otherwise acquire any shares of
capital stock, or other equity securities of the Company, (ii) is not a party to or bound by, and has no knowledge of, any agreement
or instrument relating to the voting of any of its securities, and (iii) is not a party to or bound by any agreement or instrument
under which any person has the right to require it to effect, or to include any securities held by such person in, any registration
under the Securities Act of 1933, as amended (the “Securities Act”).

 

(d)The
Company has reserved and will continue to reserve, solely for the purpose of issuance upon conversion of shares of Series A Preferred
Stock, a number of shares of Common Stock sufficient to cover the conversion of all such shares of Series A Preferred Stock. The
shares Common Stock reserved for issuance upon conversion of the Series A Preferred Stock will be duly authorized, validly issued,
fully paid and non-assessable and free and clear of any lien.

 

3.7.Valid
Issuance of Purchased Securities. The Shares being issued and sold by the Company hereunder shall upon issuance pursuant
to the terms hereof be duly authorized and validly issued, fully paid and non-assessable and free and clear of any lien. The issuance
of the Shares will not be subject to any pre-emptive rights or similar rights with respect to the Shares.

 

3.8Use
of Proceeds. The Company shall use the proceeds from the sale of the Shares to the Purchaser for working capital needs of
the Company’s Omnimetrix LLC subsidiary (“Omnimetrix”) and for the repayment of indebtedness Omnimetrix owed
to the Company’s parent, Acorn Energy, Inc. (“Acorn”).

 

3.9Board
Seat. The holders of the Series A Preferred Stock shall be entitled to designate one member of the Board of Directors of the
Company and one manager to serve on the Board of Managers of Omnimetrix.

 

SECTION
4

Representations
and Warranties of the Purchaser

 

The
Purchaser represents and warrants to the Company that:

 

4.1Sufficient
Resources. Purchaser has sufficient available financial resources to provide adequately for Purchaser’s current needs
and can bear the economic risk of a complete loss of Purchaser’s investment hereunder without materially affecting Purchaser’s
financial condition.

 

4.2Access
to Information. Purchaser is familiar with the Company from his service as director of the Company’s parent. Purchaser
has been provided with all materials relating to the Company and its proposed activities which Purchaser has requested and has
been afforded the opportunity to obtain any additional information necessary to verify the accuracy of any representations or
information relating to the Company, its proposed activities and the purchase of the Shares.

 

    	 	 	 

     

    

 

4.3Answers
to Inquiries. The Company has answered all inquiries made by Purchaser concerning the Company and its proposed activities,
or any other matters relating to the offering and sale of the Shares and the proposed operations of the Company.

 

4.4Reliance
on Information. The Purchaser has not been furnished any offering literature other than any materials and/or information made
available to the Purchaser by the Company as described in subparagraph 4.2 above, and the Purchaser has relied only on such materials
and/or information. Furthermore, other than as set forth in this Agreement, no representations or warranties have been made to
the Purchaser by the Company, or by its officers or employees with respect to the intended business of the Company, the financial
condition, prospects, profitability, operations and/or potential of the Company, and/or the economic or any other aspects of the
consequences of an investment in the Shares, and the Purchaser has not relied upon any information concerning the offering, written
or oral, other than information contained in this Agreement or provided by the Company to the Purchaser.

 

4.5Investment
Intent. The Purchaser is acquiring the Shares for which the Purchaser hereby subscribes for the Purchaser’s own account,
as principal, for investment and not with a view to the resale or distribution of all or any part of such Shares. The Purchaser
has no contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participation to such person
or to any third person, with respect to any of the Shares.

 

4.6Accredited
Investor. The Purchaser is an “accredited investor” within the meaning of Rule 501 of Regulation D of the rules
and regulations promulgated under the Securities Act, specifically that the Purchaser has (i) individual net worth, or joint net
worth with the Purchaser’s spouse that exceeds $1,000,000 or (ii) individual income in excess of $200,000 in each of the
two most recent years or joint income with the Purchaser’s spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current year.

 

SECTION
5

Acknowledgments
of Purchaser

 

The
Purchaser understands and acknowledges that:

 

5.1The
offering of the Shares to the Purchaser has not been registered under the Securities Act, or any state securities laws or regulations,
and the Shares will be restricted securities which must be held for an indefinite period of time unless they are subsequently
so registered or an exemption from such registration is available.

 

5.2The
Shares are being offered and sold without registration under the Securities Act in reliance upon applicable exemptions under the
Securities Act and similar exemptions under state securities laws for private offerings. The availability of the aforesaid exemptions
depends in part upon the accuracy of certain of the representations, declarations and warranties which are made by the Purchaser
herein and in any other information furnished by the Purchaser to the Company, and the same may be relied upon in determining
the suitability of the Purchaser to invest in the Company.

 

    	 	 	 

     

    

 

5.3There
is no established market for the Shares or the shares of Common Stock issuable upon the conversion thereof and a significant probability
exists that no public market for the Shares or shares of Common Stock will develop.

 

SECTION
6

Legend
on Stock Certificate

 

The
certificate representing the Shares shall be stamped or otherwise imprinted with a legend substantially in the following form
(in addition to any legend required under any applicable state securities laws):

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED
FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Upon
request of a holder of Shares, the Company shall remove the foregoing legend or issue to such holder a new certificate therefor
free of any such legend, if the Company shall have received either an opinion of counsel or a “no-action” letter of
the Securities and Exchange Commission, in either case reasonably satisfactory in substance to the Company and its counsel, to
the effect that such legend is not longer required.

 

SECTION
7

Redemption

 

Commencing
on the first anniversary of the Closing, the Company may, at any time that the value of the Company exceeds $6 million as determined
by the Board of Directors of the Company, redeem all, but not less than all, of the Shares on ten (10) days written notice to
the Purchaser, by payment to the Purchaser of the entire Purchase Price plus all accrued and unpaid dividends on the Shares. Purchaser
may, during the ten (10) day period following notice of redemption, elect to remain as an investor in the Company by converting
the Shares to Common Stock.

 

SECTION
8

Drag
Along/Tag Along Rights

 

At
any time that Acorn holds at least fifty percent (50%) of the outstanding capital stock of the Company, there shall be a sale
of the Company (by way of a merger, recapitalization, sale of stock or all or substantially all of its assets or otherwise) in
which Acorn intends to sell all of its capital stock of the Company (“Significant Transaction”), the Purchaser hereby
agrees that if requested by the Acorn, the Purchaser shall be required to transfer all of the Shares pursuant to such sale and
take any and all other steps required to consummate such sale. In the event that Acorn or the Company proposes to enter into a
Significant Transaction, Acorn and the Company each agree to provide at least ten (10) days’ notice to the Purchaser of
such proposed Significant Transaction and each further agrees that Purchaser shall be permitted to sell all of the Shares on the
same terms as Acorn in such Significant Transaction if the Purchaser so chooses.

 

    	 	 	 

     

    

 

SECTION
9

Miscellaneous

 

9.1Governing
Law. This Agreement shall be governed by and interpreted and construed in accordance with the internal laws of the State of
Delaware (without reference to principles of conflicts or choice of law).

 

9.2Successors
and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of and be binding
upon the successors and assigns of the parties.

 

9.3Entire
Agreement; Amendment. This Agreement (including any exhibits hereto) and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. Neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated except by a written instrument signed by the Company
and the Purchaser.

 

9.4Notices.
All notices and other communications required or permitted hereunder shall be mailed by first-class mail, postage prepaid, or
sent by recognized overnight courier, or delivered either by hand or by messenger, addressed (a) if to the Purchaser, at the address
set forth below or at such other address as the Purchaser shall have furnished to the Company in writing, or (b) if to any other
holder of any Shares, at the address of such holder as shown on the records of the Company, or (c) if to the Company, at its address
set forth below or at such other address as the Company shall have furnished to the Purchaser and each such other holder in writing.
All such notices or communications shall be deemed given when actually delivered by hand, overnight courier, messenger, facsimile
or, if mailed, three days after deposit in the U.S. mail.

 

9.5Delays
or Omission. No delay or omission to exercise any right, power or remedy accruing to any party to this Agreement, upon any
breach or default of another party under this Agreement, shall impair any such right, power or remedy of such 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. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.

 

9.6Severability.
In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

 

9.7Titles
and Subtitles. The titles of the Sections and Subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.

 

    	 	 	 

     

    

 

9.8Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall
constitute one instrument.

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized officers or partners,
as the case may be, as of the day and year first above written.

 

	 	 	OMX
    HOLDINGS, INC.
	 	 	 
	 	 	By:	 
	 	 	Name:	John
    A. Moore
	 	 	Title:	 
	 	 	 
	 	 	 
	 	 	Edgar
    Woolard
	 	 	 
	 	 	Address:
    
	 	 	
	 	 	

 

	With respect to Section 8 only:	 	 
	 	 	 
	ACORN ENERGY, INC. 	 	 
	 	 	 
	By:	 	 	 
	Name:	John A. Moore	 	 
	Title:	President and Chief Executive Officer	 	 

 

    	 	 	 

     

    

 

EXHIBIT
A

 

SERIES
A PREFERRED STOCK TERMS

 

	Dividend	 	Dividend
    of 10% per annum will accrue on the Series A Preferred Stock from the date of investment. The dividend will be payable on
    the first anniversary of closing of the initial funding of the investment and quarterly thereafter for so long as the Series
    A Preferred Stock shall be outstanding and shall not have been converted to Common Stock. The dividend and will be payable
    in cash or the form of additional shares of Series A Preferred Stock at the election of the Purchaser. 
	 	 	 
	Redemption	 	Commencing
    12 months after funding, the Company may, at any time that the value of Omnimetrix exceeds $6 million, redeem the Series A
    Preferred Stock on 10 days written notice, by payment of the entire amount invested plus all accrued dividends. The Purchaser
    may, during the 10 day period, elect to remain as an investor by converting the Series A Preferred Stock to Common Stock
	 	 	 
	Conversion;
    Antidilution Protection	 	Series
    A Preferred Stock will convert at the option of the Purchaser on a one-for-one basis into Common Stock, subject to appropriate
    adjustments for corporate reorganizations, mergers, stock splits, etc. The Series A Preferred Stock shall have full ratchet
    anti-dilution protection, except for certain excluded issuances, and will not be diluted by any issuances below a pre-money
    equity valuation of $5.5 million for Omnimetrix.
	 	 	 
	Ranking	 	Equivalent
    to the Common Stock, except for the dividend and the anti-dilution protection

 

    	 	 	 

     

    

 

EXHIBIT
B

 

CAPITALIZATION

 

Authorized
Capital

 

	Common Stock	 	 	30,000	 
	Series A Preferred Stock	 	 	5,000	 
	Preferred Stock (undesignated)	 	 	5,000	 
	 	 	 	40,000	 

 

Issued
Capital

 

	Stockholder	 	Shares of Series A Preferred Stock	 	 	Shares of Common Stock	 
	 	 	 	 	 	 	 
	Acorn Energy, Inc.	 	 	0	 	 	 	8,000	 
	Purchaser	 	 	2,000	 	 	 	0	 
	 	 	 	2,000	 	 	 	8,000	 

 

Share
numbers set forth in this Exhibit B reflect an 80:1 common stock split effected as a dividend on October 15, 2015.

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