Document:

10.9 - Stock Purchase Agreement by and between Registrant and US Seismic Systems, Inc. dated February 6, 2012

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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the “Agreement”) is made as of February _____, 2012 by and among US Seismic Systems, Inc., a Delaware corporation (the “Company”), and Acorn Energy, Inc., a Delaware corporation (the “Purchaser”).
Preliminary Statement
The Purchaser currently holds 2,515,170 shares of the Company's common stock, $0.001 par value per share (the “Common Stock”).  During 2011, the Purchaser advanced $2,250,000 to the Company (the “Advances”) to fund its working capital needs.  The Company requires additional working capital to implement its development.  The Purchaser desires to convert the Advances into a combination of Common Stock and Series A-1 Preferred Stock, $0.001 par value (the “Preferred Stock”), of the Company.  The Purchaser desires to provide additional working capital to the Company in exchange for shares of the Company's Preferred Stock.
The Company desires to convert the Advances to a combination of Common Stock and Preferred Stock and to accept the Purchaser's offer to acquire shares of Preferred Stock, all in accordance with the terms of this Agreement. The shares of Common Stock and Preferred Stock issued to the Purchaser pursuant to this Agreement and the shares of Common Stock which may be obtained upon conversion of the Preferred Stock shall be referred to in this Agreement as the “Shares.”

NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
1.Conversion of Advances.
1.Conversion of Advances to Common Stock.  Subject to the terms and conditions of this Agreement, at the Initial Closing (as hereinafter defined), the Purchaser shall convert $1,500,000 of the Advances to shares of Common Stock at a price of $0.8857 per share (the “Common Conversion”) and, in exchange therefor, the Company shall deliver 1,693,575 shares of Common Stock (the “Common Conversion Shares”) to the Purchaser registered in the Purchaser's name.
2.Conversion of Advances to Preferred Stock. Subject to the terms and conditions of this Agreement, at the Initial Closing, the Purchaser shall convert $750,000 of the Advances to shares of Preferred Stock at a price of $1.7864 per share (the “Preferred Conversion”) and, in exchange therefor, the Company shall deliver 419,838 shares of Preferred Stock (the “Preferred Conversion Shares”) to the Purchaser registered in the Purchaser's name.

2.Purchase and Sale of Preferred Stock.
1.Sale and Issuance of First Installment of Preferred Stock.  Subject to the terms and conditions of this Agreement, at the Initial Closing, the Purchaser shall purchase and the Company shall sell and issue to Purchaser 1,399,463 shares of the Company's Preferred Stock (the “First Installment Shares”) at a purchase price of $1.7864 per share (the “First Payment”) for an aggregate purchase price of $2,500,000.71.  The Company hereby acknowledges that it received $250,000 from the Purchaser immediately prior to the date hereof, which amount shall constitute a credit toward the First Payment (the “First Payment Credit”).  
2.Initial Closing; Delivery. The closing of the Common Conversion, the Preferred Conversion and the First Installment 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 such closing are fulfilled or waived in accordance with this Agreement, at the offices of the Purchaser, 4 W. Rockland Road, Montchanin, Delaware, or at such other time and place as the Company and the Purchaser mutually agree upon, orally or in writing (which time and place is designated as the  “Initial Closing”).
3.Sale and Issuance of Second Installment of Preferred Stock.  Subject to the terms and conditions of this Agreement, in the event that a Second Closing (as hereinafter defined) is determined to be held as provided under Section 5.6 below, then at the Second Closing, the Purchaser shall purchase and the Company shall sell and issue to the Purchaser 1,399,463 shares of the Company's Preferred Stock (the “Second Installment Shares”) at a purchase price of $1.7864 per share (the “Second Payment”) for an aggregate purchase price of $2,500,000.71. 
4.Second Closing; Delivery. The closing of the Second Installment 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 such closing are fulfilled or waived in accordance with this Agreement, at the offices of the Purchaser, 4 W. Rockland Road, Montchanin, Delaware, or at such other time and place as the Company and the Purchaser mutually agree upon, orally or in writing (which time and place is designated as the  “Second Closing”).
5.No Interest.  The Company and the Purchaser hereby acknowledge and confirm that no interest has accrued, is accruing or is otherwise due or payable with respect to any part or all of the Advances and/or the First Payment Credit and that issuance of the Common Conversion Shares, the Preferred Conversion Shares and the First Installment Shares, in the manner provided herein, shall be deemed to have discharged in full any and obligations of the Company to the Purchaser with respect to the Advances and/or the First Payment Credit.
6.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.
“Key Employee” means any of James Andersen, Gerald Baker, and Eric Goldner.
“Material Adverse Effect” means a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, results of operations, customers or orders of the Company.
“Purchaser” means the Purchaser who is a party to this Agreement.
“Rights Agreement” means the Amended and Restated Investors' Rights Agreement among 

the Company, the Purchaser and certain former stockholders of the Company named therein, dated as of February 23, 2010.
“Securities Act” means the Securities Act of 1933, as amended.
“Shares” means the shares of Common Stock and Preferred Stock of the Company issued to the Purchaser under this Agreement.
“Stock” shall mean all of the shares of the Company's Common Stock and Preferred Stock.
“Stockholders' Agreement” means the agreement among the Company, the Purchaser and the stockholders of the Company named therein, dated as of February 23, 2010.
3.Representations and Warranties of the Company2.    Representations and Warranties of the Company.  The Company hereby represents and warrants to the Purchaser 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, 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 3, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Section 3 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.
1.Organization, Good Standing, Corporate Power and Qualification    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.
2.Capitalization    2.2    Capitalization.  
(a)The authorized capital of the Company consists, as of the date hereof (unless otherwise noted), of (i) 11,000,000 shares of Common Stock, 4,814,370 shares of which are issued and outstanding as of the date hereof after giving effect to the First Closing, and (ii) 3,500,000 shares of Preferred Stock, 1,819,301 of which are issued and outstanding as of the date hereof after giving effect to the First 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 3.2(b) of the Disclosure Schedule sets forth the options that the Company intends to grant upon adoption and approval of the 2012 Stock Plan of the Company, which plan is to be in substantially the form delivered to the Purchaser (the “2012 Plan”).
(c)Section 3.2(c) of the Disclosure Schedule sets forth the capitalization of the Company as of the date of the First Closing including the following: (i) the names of the holders of the  issued and outstanding Common Stock and Preferred Stock (after giving effect to the First Closing); (ii) the name of each holder of options for 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 Section 3 of the Rights Agreement, (B) the rights provided in Section 2.5 of the Stockholders' Agreement, and (C) the securities and rights described in Section 3.2(b) of this Agreement 

and Section 3.2(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 Stock, or contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue Stock or any securities convertible into or exchangeable for shares of Stock.  Except as set forth on Section 3.2(c) of the Disclosure Schedule, no current or former stockholder 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 stockholder's shares of Stock.  Except as provided in this Agreement or the Stockholders' Agreement, no stockholder 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 3.2(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 3.2(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.  
3.Subsidiaries and Affiliates    2.3    Subsidiaries and Affiliates.  Except as set forth on Section 3.3 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.
4.Authorization    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 this Agreement, and to issue the Shares at the First Closing and, other than approval of the Board of Directors required by Section 5.6 below, the Second Closing has been taken.  This Agreement, when executed and delivered by the Company, shall constitute a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its 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 Rights Agreement may be limited by applicable federal or state securities laws. 
5.Valid Issuance of Shares    2.5    Valid Grant of Option and Issuance of Shares. The Shares, when issued 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 Purchaser.  Assuming the accuracy of the representations of the Purchaser in Section 4 of this Agreement, the Shares will be issued in compliance with all applicable federal and state securities laws. All certificates representing all issued and outstanding shares of Stock contain a restrictive legend similar to that set forth in Section 4.8(a).
6.Rights of Registration and Voting Rights    2.9    Rights of Registration and Voting Rights.  Except as provided in the Rights Agreement and as set forth in Section 3.6 of the Disclosure Schedule, 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 Rights Agreement and the Stockholders' Agreement, no stockholder of the Company has entered into any agreements with respect to the voting of capital shares of the Company.
7.Changes    2.11    Changes.  To the Company's knowledge, since January 1, 2011, the Company has carried on and operated its business in the ordinary course of business and has not suffered a Material Adverse Effect.
8.Corporate Documents    2.12    Corporate Documents.  The Amended and Restated Certificate of Incorporation and Bylaws of the Company are in the form provided to the Purchaser.  The copy 

of the minute books of the Company provided to the Purchaser contains minutes of all material meetings of directors and stockholders and all material actions by written consent without a meeting by the directors and stockholders since incorporation of the Company and accurately reflects in all material respects all material actions by the directors (and any committee of directors) and stockholders with respect to all material transactions referred to in such minutes. 
9.Offering    2.13    Offering.  Subject in part to the truth and accuracy of the Purchaser's representations set forth in Section 4 of this Agreement, the issuance of the Shares as contemplated by this Agreement is exempt from the registration requirements of the Securities Act, 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. 
10.Preemptive Rights    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.
11.Consents    2.15    Consents.  All consents, approvals, releases, filings, terminations and waivers by third parties necessary to complete the transactions contemplated hereby that are material are set forth in Section 3.11 of the Disclosure Schedule and have been obtained and delivered to the Purchaser and such consents, approvals, releases, filings, terminations and waivers have not expired or been withdrawn.
4.Representations and Warranties of the Purchaser3.    Representations and Warranties of the Purchaser.  The Purchaser hereby represents and warrants to the Company that:
1.Authorization    3.1    Authorization.  The Purchaser has full power and authority to enter into this Agreement.  This Agreement, when executed and delivered by the Purchaser, will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its 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 Rights Agreement may be limited by applicable federal or state securities laws.
2.Compliance with Other Instruments    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 certificate of incorporation, bylaws 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 its 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.Purchase Entirely for Own Account    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 Common Conversion Shares, the Preferred Conversion Shares, the First Installment Shares and the Second Installment Shares to be acquired by the Purchaser (collectively, the “Securities”) 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 any of the Securities.  The Purchaser has not been formed for the specific purpose of acquiring the Securities.
4.Disclosure of Information    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 Securities with the Company's management. Except as set forth in this Agreement, 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 3 of this Agreement or the right of the Purchaser to rely thereon.
5.Restricted Securities    3.5    Restricted Securities.  The Purchaser understands that the issuance of the Securities has 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 Securities are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the Securities (and any shares of Common Stock issuable upon conversion of any of the foregoing) 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 any of the Securities (or any shares of Common Stock issuable upon conversion of any of the Securities) for resale except as set forth in the Rights Agreement.  The Purchaser further acknowledges that if an exemption from registration or qualification is available, any sale or transfer of any of the Securities may be conditioned on various requirements including, but not limited to, the time and manner of sale and the holding period for such Securities 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.
6.No Public Market    3.6    No Public Market.  The Purchaser understands that no public market now exists for either the Common Stock or the Preferred Stock and that the Company has made no assurances that a public market will ever exist for the Common Stock or the Preferred Stock.
7.Suitability of Investment    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 Securities (or any shares of Common Stock issuable upon conversion of any of the Securities) 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 this Agreement. 
8.Legends    3.8    Legends.  The Purchaser understands that the certificates representing the Securities and any securities issued in respect of, exchange for or conversion of the Securities, 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.”
(b)Any legend set forth in, or required by, the Rights Agreement and/or the Stockholders' Agreement.
(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.
9.Accredited Investor    3.9    Accredited Investor.  The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
10.Residence; Waiver    3.11    Residence.  The Purchaser is a United States person.  The Purchaser hereby waives any requirement for prior notice of the offer, sale and/or issuance of the Securities 

as may be required under the Rights Agreement.
5.Conditions to the Purchaser's Obligations at each Closing and Funding.  Except as otherwise indicated, the obligations of the Purchaser to purchase First Installment Shares at First Closing and to purchase the Second Installment Shares and the Second Closing and to fund First Payment and the Second Payment in accordance with the terms of Section 2.1 and Section 2.3, respectively, are subject to the fulfillment, on or before each of the First Closing and Second Closing, of each of the following conditions, unless otherwise waived or inapplicable:
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 the First Closing or the Second Closing, whichever is applicable.
2.Representations and Warranties of Company.  The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects as of each the First Closing and the Second 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 3.
3.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 each of the First Closing and the Second Closing.
4.Compliance Certificate    4.2    Representations and Warranties of Company.  At the First Closing, the Company shall deliver to the Purchaser a certificate of its President stating that the Company has complied with the conditions set forth in each of Sections 5.2 and 5.3 above to the extent applicable to the First Closing.  At the Second Closing, the Company shall deliver to the Purchaser a certificate of a senior officer stating that the Company has complied with the conditions set forth in each of Sections 5.2 and 5.3 above to the extent applicable to the Second Closing, except to the extent set forth in any update to the Disclosure Schedule delivered at the Second Closing and covering the period of time from the date of the First Closing to the Second Closing.
5.Secretary's Certificate.  At the First Closing, the Secretary of the Company shall deliver to the Purchaser a certificate certifying (i) the Amended and Restated Certificate of Incorporation, as amended to the date of the First Closing, and Bylaws of the Company (as then in effect), and (ii) the resolutions of the Board of Directors of the Company approving this Agreement and the transactions contemplated hereunder.  At the Second Closing, the Secretary of the Company shall deliver to the Purchaser a certificate certifying (i) the Amended and Restated Certificate of Incorporation, as amended to the date of the Second Closing, and Bylaws of the Company (as then in effect), and (ii) that the Company has not experienced any event, occurrence or circumstances that could be deemed to have had a Material Adverse Effect on the Company since the date of the First Closing.
6.Second Closing.  On or before the date of the Second Closing, the Company's Board of Directors shall have determined that the Company has the need for additional working capital and the Company shall have notified the Purchaser in writing of such need, which notice shall be accompanied by the related resolutions of the Board of Directors.
6.Conditions to the Company's Obligations at Closing.  The obligations of the Company to issue and sell the Shares to the Purchaser in accordance with Section 1 and Section 2 are subject to the fulfillment, on or before each of the First Closing and the Second Closing, of each of the following conditions, unless otherwise waived:
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 issuance and sale of the Stock pursuant to this Agreement shall be obtained and effective as of the Closing.
2.Representations and Warranties of the Purchasers.  The representations and warranties of the Purchasers contained in Section 4 shall be true and correct as of each of the First Closing and the 

Second Closing.
7.Covenants of the Company4.    Covenants of the Company.  
1.Qualifications    4.1    Qualifications.  The Company shall use its commercially reasonable efforts to assure that 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 of the Shares pursuant to this Agreement shall be obtained and effective prior to the First Closing and the Second Closing.
2.Proceedings and Documents    4.7    Proceedings and Documents.  The Company shall have provided to the Purchaser all such counterpart original and certified or other copies of such documents as reasonably requested.  Such documents may include good standing certificates.
3.Securities Laws Compliance4.8        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.
4.Use of Proceeds    4.9    Use of Proceeds.  The Company agrees that the purchase price paid by the Purchaser to acquire the First Installment Shares and the Second Installment Shares shall be used by it for working capital expenses only, and shall not be used to make payments to any stockholder or affiliate of the Company, other than salary payments.
5.Conduct of the Company's Business    4.11    Conduct of the Company's Business.    
(a)Without the prior written consent of the Purchaser, and except as contemplated by this Agreement, during the period from the date of this Agreement until the date of the Second Closing, 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 such period of time, the Company agrees that, without the prior written consent of the Purchaser, the Company 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 such period of time, the Company shall not alter or change its capitalization in any manner including, without limitation, issuing any additional shares of Stock except in accordance with this Agreement, issue or grant any options, warrants or other rights, other than in connection with the 2012 Plan, accept any contributions to capital, engage in any stock split or recapitalization, and amend or revise its Amended and Restated Certificate of Incorporation or Bylaws in effect as of the date hereof without the prior written consent of the Purchaser.
6.Notices to Purchaser    4.12    Notices to Purchaser.  Prior to the date of the Second Closing, the Company shall give prompt written notice to the Purchaser of: (a) 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; (b) any notice or other communication from any governmental authority in connection with the transactions contemplated by this Agreement; (c) any Material Adverse Effect; and (d) any claim, action, or proceeding against the Company which could reasonably be expected to have a Material Adverse Effect.
7.Exclusivity    4.13    Exclusivity.  From the date hereof to the date of the Second Closing, 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.  A Financing Proposal shall not include any bank or similar financing described in Section 7.9 hereof.  If the Company receives a Financing Proposal during such period of time, the Company shall notify the Purchaser immediately and shall provide to the Purchaser a copy of any written documentation of such Financing Proposal.
8.Confidentiality Agreements.  The Company covenants and agrees that it shall use its reasonable best efforts to cause all employees of the Company to promptly and without delay execute the confidentiality agreements described in Section 6.1 of the Stockholders' Agreement.
9. Bank or Similar Financing.  On or before the date of the Second Closing, the Company shall make a good faith effort to obtain bank or similar financing of no less than $1,000,000, such financing to be on commercially reasonable terms.
8.Rights Agreement and Stockholders' Agreement Modifications.  
1.The Company and the Purchaser, as the sole remaining parties to the Rights Agreement, hereby agree to deem the Shares to be “Registrable Securities”, as such term is defined under the Rights Agreement.
2.The Purchaser, who holds sufficient shares of the Common Stock to amend the Stockholders' Agreement on behalf of the Stockholders (as defined in the Stockholders' Agreement), and the Company hereby agree that, effective as of the First Closing, the term “Preferred Stock” as used therein shall mean and refer to the Series A-1 Preferred Stock, par value $0.001 per share, of the Company and further agree that:
(a)Notwithstanding anything to the contrary set forth in the Stockholders' Agreement, the number of shares that may be subject to the “Management Option Pool” (as defined under the Stockholders' Agreement) shall be not less than 1,180,000 (subject to adjustment for stock splits, stock dividends and other similar recapitalizations), which amount may be increased at any time or from time to time with the consent of the Purchaser.
(b)Section 4(a) of the Stockholders' Agreement shall be amended to read in its entirety as follows:
“Each Stockholder agrees to vote all of his, her or its shares of voting securities in the Company, whether now owned or hereafter acquired or which such Stockholder may be empowered to vote, from time to time and at all times, in whatever manner shall be necessary to ensure that, at each annual or special meeting of stockholders at which an election of directors is held or pursuant to any written consent of the stockholders, (i) at least two of the members of the Board of Directors shall be individuals each of whom is then an officer or senior-level management employee of the Company and (ii) a majority of the total number of directors comprising the Board of Directors shall be designated by Acorn Energy.”

(c)Upon adoption of the 2012 Plan by the Company's Board of Directors and any related policies concerning vesting schedules or other matters pertaining to the granting of options thereunder, the Company and the Purchaser shall amend the Stockholders' Agreement to include conforming changes to reflect all matters adopted by the Board of Directors regarding the 2012 Plan.
9.Miscellaneous6.    Miscellaneous.
1.Transfer; Successors and Assigns    6.1    Transfer
2.; 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 Purchaser.  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.   

3.Governing Law    6.2    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.
4.Counterparts    6.3    Counterparts.  This Agreement may be executed in two, 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 or email of scanned original signatures and in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
5.Titles and Subtitles    6.4    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.
6.Notices    6.5    Notices.  All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given:  (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 to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 9.5.
If notice is given to Purchaser, it shall be sent to:
Acorn Energy, Inc.
4 W. Rockland Road
P.O. Box 9
Montchanin, Delaware 19710
Attn:  President & CEO
A copy shall also be sent to:

4 W. Rockland Road
P.O. Box 9
Montchanin, Delaware 19710
Attn:  General Counsel

If notice is given to the Company, it shall be sent to the address set forth below:
US Seismic Systems, Inc.
9601 Variel Avenue
Chatsworth, CA 91311
Attn:  President

A copy shall also be sent to:

Reed Smith LLP
1901 Avenue of the Stars, Suite 700
Los Angeles, CA 90067
Attn:  Deborah Gunny, Esq.

7.No Finder's Fees    6.6    No Finder's Fees.  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.  The 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 the 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.Amendments and Waivers    6.7    Amendments and Waivers.  Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Purchaser.  Any amendment or waiver effected in accordance with this Section 9.7 shall be binding upon the Company, the Purchaser, and their respective successors and assigns.  In the event a nonmaterial provision of this Agreement is required to be amended by the Purchaser after the date hereof, the Company will not unreasonably withhold its consent to such amendment.
9.Severability    6.8    Severability.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
10.Delays or Omissions    6.9    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.
11.Entire Agreement    6.10    Entire Agreement.  This Agreement (including the Disclosure Schedule and any Exhibits hereto) 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.
12.Right to Conduct Activities    6.12    Right to Conduct Activities.  The Company acknowledges and agrees that (i) the Purchaser and its 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 Purchaser's designees to the Company's Board of Directors, except as waived by the Company pursuant to this Section, it is critical that the Purchaser be permitted to continue to develop its current and future business and investment activities without any restriction arising from an investment by the Purchaser in the Company, the right of the Purchaser to designate directors of the Company or any other relationship, contractual or otherwise, between the Purchaser, 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 Purchaser (collectively, the “Activities”), the Purchaser 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 or members of the Company's Board of Directors designated by the Purchaser), and neither the Purchaser 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 Purchaser shall not be liable for any claim arising out of, or based upon, (i) the investment by the Purchaser in any entity competitive to the Company, (ii) actions taken by any officer, 

director, stockholder or other representative of the Purchaser 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.
The parties have executed this Stock Purchase Agreement as of the date first written above.
US SEISMIC SYSTEMS, INC.

By:________________________________
Name:  James Andersen
Title:    President
                        
ACORN ENERGY, INC.

By:________________________________
Name:  John A. Moore
Title:    President & CEO

DISCLOSURE SCHEDULE10.10 - Employment Agreement - Redding (OmniMetrix)

12

OMNIMETRIX, LLC
AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION, 
NON-COMPETITION AND INVENTION ASSIGNMENT AGREEMENT
In consideration of, and as a condition of, my employment with OmniMetrix, LLC, a Georgia limited liability company (“OmniMetrix”), and in further consideration of my receipt of the compensation now and hereafter paid to me by the Company (as hereinafter defined), I agree as follows: 

OmniMetrix and its parent company, Acorn Energy, Inc., a Delaware corporation (“Acorn”), are hereinafter collectively and together with their respective parents, subsidiaries, affiliates, successors or assigns referred to as the “Company.”  

The Company and I acknowledge and agree that I am currently employed by OmniMetrix pursuant to the terms of that certain Employment Agreement dated January 1, 2011 (the “Prior Agreement”), and that this At-Will Employment, Confidential Information, Non-Competition and Invention Assignment Agreement (this “Agreement”) in exchange for a one-time payment of $50,000.00 payable upon execution of this Agreement shall replace and supersede the terms and conditions of the Prior Agreement. 

I acknowledge that the Company has made a substantial investment of time and resources in developing its business, products, services, goodwill, client relationships, and Confidential Information (as defined below) and trade secrets, and that it is a legitimate business interest of the Company to protect this investment and to retain its Confidential Information and trade secrets and the goodwill of its clients.  I further acknowledge that I have or will come into possession of specialized skills, learning, or abilities, or customer contacts, customer information, and/or confidential information that is important to the business of the Company by reason of having worked for the Company.

1.At-Will Employment.
I UNDERSTAND AND ACKNOWLEDGE THAT MY EMPLOYMENT WITH THE COMPANY IS FOR AN UNSPECIFIED DURATION AND CONSTITUTES “AT-WILL” EMPLOYMENT.  I ALSO UNDERSTAND THAT ANY REPRESENTATION TO THE CONTRARY IS UNAUTHORIZED AND NOT VALID UNLESS IN WRITING AND SIGNED BY THE CEO OF ACORN.  ACCORDINGLY, I ACKNOWLEDGE THAT MY EMPLOYMENT RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT GOOD CAUSE OR FOR ANY OR NO CAUSE, AT MY OPTION OR AT THE OPTION OF THE COMPANY, WITH OR WITHOUT NOTICE UNLESS I HAVE AN EXISTING AGREEMENT WITH THE COMPANY REGARDING NOTICE, AND IF SO THE NOTICE PROVISION IN SUCH AGREEMENT SHALL CONTROL.

If my employment terminates for any of the following reasons then I shall be entitled to receive my then current Base Salary (defined below) through the termination date and thereafter the Company shall have no further obligations under this Agreement, provided that I shall continue to be bound by Section 7 and all other post-termination obligations contained in this Agreement:  
a)my death;

b)my disability which renders me unable to substantially perform the essential functions of my job for a continuous period of ninety (90) days, taking into account reasonable accommodation for physical disability; 
c)mutual written agreement between myself and the Company at any time; 
d)neglect of my obligations and duties hereunder (other than as result of physical or mental incapacity) which is not cured within ten (10) business days after written notice by the Company specifying the details of such neglect;
e)my material breach of this Agreement which is not cured within ten (10) business days after written notice by the Company specifying the details of such breach;
f)any material act or omission by me which is, or is likely to be, injurious to the Company or the business reputation of the Company;
g)my dishonesty, fraud or material malfeasance or misconduct in the performance of my duties;
h)my failure (i) to perform my duties satisfactorily under this Agreement, (ii) to follow the direction (consistent with my duties) of the Company, or (iii) to follow the policies, procedures, and rules of the Company, following notice of such failure to me from the Company specifying the details of such failure; provided, however, that I shall have ten (10) business days from receipt of such notice to cure such any such failure;
i)      my conviction of, or my entry of a plea of guilty to, a felony or crime involving moral turpitude; or 
j)      my resignation for other than Good Reason (as defined below).

If my employment terminates for any of the following reasons:

a)my resignation for “Good Reason” which shall exist if the Company, without my written consent; (i) reduces my then current Base Salary; (ii) materially reduces the benefits to which I am entitled on the date hereof; (iii) materially reduces my responsibilities or (iv) commits a material breach of this Agreement which is not remedied by the Company within ten (10) business days of receiving notice of such breach.  

b)the Company terminates my employment, at any time and for any reason not defined in sub-sections a-j, above,   

then the Company shall pay me, (i) on the effective date of such termination, my then current Base Salary pro rata for services rendered up to and including the date of termination, and reimbursement for expenses incurred by me pursuant to Section 2.4 through the effective date of termination, (ii) six (6) months of Base Salary in effect as of the date of termination, payable in accordance with the Company's normal payroll practices with normal payroll deductions.  To the extent I participate in the COBRA coverage required to be offered by the Company under applicable law, the Company shall all pay insurance premiums for such COBRA coverage for a period of time equal to twelve (12) months following the date of termination.    The Company's obligation to make the separation payments shall be conditioned upon:
1.Execution of a Separation and Release Agreement in a form prepared by the Company whereby I release the Company from any and all liability and claims of any kind.
2.Compliance with the restrictive covenants (Section 7) and all post-termination obligations contained in this Agreement.
The Company's obligation to make the severance payments set forth in this Section 1 shall terminate immediately upon any material breach by me of any post-termination obligations to which I am subject or upon obtaining full-time employment upon terms reasonably comparable to or more favorable to me than the severance payment; provided, however, under no circumstances shall I be required to return any payments received by me prior thereto.

2.Compensation.

2.1.  Base Salary.  For all services rendered by me under this Agreement, the Company shall pay me an annualized base salary of $200,000, as may be increased by the Company from time to time during the term hereof (the “Base Salary”), payable in equal installments on the Company's semi-monthly payroll dates. 

2.2.  Benefits.  In addition to the Base Salary, during the term of this Agreement, I shall also be entitled to participate in or receive benefits under all of the benefit plans, programs, arrangements and practices, including such retirement plans, disability, and group life, sickness, accident or health insurance programs, if any, as may be established from time to time by the Company for the benefit of executive employees serving in similar capacities with the Company, in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that the Company has and will maintain health and dental insurance covering myself, my spouse and children.  The Company acknowledges and agrees to maintain a life insurance policy in the amount of $500,000.00 with the beneficiary as designated by me from time to time.  The Company shall pay any costs associated with such life insurance policy and benefit programs.  A monthly car allowance of five hundred dollars ($500.00) payable in accordance with customary practices of the Company.  The Company further agrees to establish and maintain a management incentive compensation plan in which I will be eligible to participate, the terms of which shall be determined in the sole discretion of the board of directors of the Company (the “Board”) and the units of which shall represent 15% in the aggregate of the fully-diluted equity of the Company as of the date hereof; provided, however, that the aggregate percentage of ownership represented by such units shall not be subject to further dilution with respect to the first $1,500,000 of additional investment by the Company's equity holders.  

2.3  Vacation.  During the term of this Agreement, I will be entitled to four (4) weeks of paid vacation per annum.  

2.4.  Expenses.  I shall be reimbursed for all reasonable and approved “out‐of‐pocket” business expenses for business travel except as provided below and business entertainment incurred in connection with the performance of my duties under this Agreement.  The reimbursement of my business expenses shall be upon monthly presentation to and approval by the Company of valid receipts and other appropriate documentation for such expenses. 

2.5.  Bonus.  I shall have the opportunity to earn a bonus of thirty percent (30%) of my Base Salary, payable on or before January 15th of the year following the year in which the bonus was earned.  To qualify for this bonus the Company shall achieve fiscal year financial performance targets established in January of each fiscal year by the Board in its discretion, provided that the 2012 financial performance targets shall be determined by the Board in its discretion as soon as reasonably practicable following the date hereof and shall take into account the 2012 proposed budget and Acorn's 2012 capital funding of the Company.  
        
3.Confidential Information.

A.Company Information. I acknowledge and agree that during and as a consequence of my employment with the Company the Company will disclose, or has already disclosed, to me for use in my employment, and that I will be provided access to and otherwise make use of, acquire, create, or add to certain valuable, confidential, proprietary, and/or secret information relating to the business of the Company (whether tangible or intangible and whether or not electronically kept or stored). I agree at all times during my employment with the Company and thereafter for the greater of five (5) years or, if longer, for so long as the Confidential Information 

remains confidential, to hold in the strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm, or corporation without written authorization of the Board of Directors of Acorn, any Company Confidential Information.  I understand that my unauthorized use or disclosure of Company Confidential Information during my employment may lead to disciplinary action, up to and including immediate termination and legal action by the Company.  I understand and agree that “Company Confidential Information” means any non-public information that relates to the actual or anticipated business, research, or development of the Company, or to the Company's technical data, trade secrets, or know-how, including, but not limited to formulas, research, product plans, or other information regarding the Company's products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company on which I called or with which I may become acquainted during the term of my employment), software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances and other business information; provided, however Company Confidential Information does not include any of the foregoing items to the extent the same have become publicly known and made generally available through no wrongful act of mine or of others.
B.Former Employer Information. I agree that during my employment with the Company, I will not improperly use, disclose, or induce the Company to use any proprietary information or trade secrets of any former or concurrent employer or other person or entity.  I further agree that I will not bring onto the premises of the Company or transfer onto the Company's technology systems any unpublished document, proprietary information, or trade secrets belonging to any such employer, person, or entity unless consented to in writing by both Company and such employer, person, or entity.
C.Third Party Information. I recognize that the Company may have received and in the future may receive from third parties associated with the Company, e.g., the Company's customers, suppliers, licensors, licensees, partners, or collaborators (“Associated Third Parties”) their confidential or proprietary information (“Associated Third Party Confidential Information”).  By way of example, Associated Third Party Confidential Information may include the habits or practices of Associated Third Parties, the technology of Associated Third Parties, requirements of Associated Third Parties, and information related to the business conducted between the Company and such Associated Third Parties.  I agree at all times during my employment with the Company and thereafter, to hold in the strictest confidence, and not to use or to disclose to any person, firm, or corporation any Associated Third Party Confidential Information, except as necessary in carrying out my work for the Company consistent with the Company's agreement with such Associated Third Parties.  I understand that my unauthorized use or disclosure of Associated Third Party Confidential Information during my employment will lead to disciplinary action, up to and including immediate termination and legal action by the Company.
4.Inventions.
A.Inventions Retained and Licensed.  I have attached hereto as Exhibit A, a list describing all inventions, discoveries, original works of authorship, developments, improvements, and trade secrets, which were conceived in whole or in part by me prior to my employment with the Company to which I claim any right, title or interest, and which could relate to the Company's proposed business, products, or research and development (“Prior Inventions”); or, if no such list is attached, I represent and warrant that there are no such Prior Inventions.  Furthermore, I represent and warrant that the inclusion of any Prior Inventions from Exhibit A of this At-Will Employment, Confidential Information, Non-Competition and Invention Assignment Agreement (the “Agreement”) will not materially affect my ability to perform all obligations under this Agreement.  If, in the course of my employment with the Company, I or the Company incorporate into or use in connection with any product, process, service, technology, or other work by or on behalf of Company any Prior Invention, I hereby grant to the Company a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual, worldwide license, with the right to grant and authorize sublicenses, to make, have made, modify, use, import, offer for sale, and sell such Prior Invention as part of or in 

connection with such product, process, service, technology, or other work and to practice any method related thereto.
B.Assignment of Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks, or trade secrets, whether or not patentable or registrable under patent, copyright, or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (including during my off-duty hours), or with the use of Company's equipment, supplies, facilities, or Company Confidential Information (collectively referred to as “Inventions”), provided that any Inventions that are not related to or useful to the business or proposed business of the Company may be promptly disclosed in writing by me to the Company, and if the Company does not notify me in writing within ninety (90) days of its intent to pursue any such Inventions, than I shall own such Inventions and may further develop and pursue such Inventions subject to my continued compliance with my obligations under this Agreement.  I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act.  I understand and agree that the decision whether or not to commercialize or market any Inventions is within the Company's sole discretion and for the Company's sole benefit and that no royalty or other consideration will be due to me as a result of the Company's efforts to commercialize or market any such Inventions.
C.Maintenance of Records. I agree to keep and maintain adequate, current, accurate, and authentic written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company.  The records will be in the form of notes, sketches, drawings, electronic files, reports, or any other format that may be specified by the Company.  The records are and will be available to and remain the sole property of the Company at all times.
D.Patent and Copyright Registrations. I agree to assist the Company, or its designee, at the Company's expense, in every proper way to secure the Company's rights in the Inventions and any rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem proper or necessary in order to apply for, register, obtain, maintain, defend, and enforce such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions and any rights relating thereto, and testifying in a suit or other proceeding relating to such Inventions and any rights relating thereto.  I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement.  If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature with respect to any Inventions including, without limitation, to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering such Inventions, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any papers, oaths and to do all other lawfully permitted acts with respect to such Inventions with the same legal force and effect as if executed by me.
E.Acknowledgement of Pre-existing obligations Regarding Inventions.  I acknowledge that I have been an employee, owner, and/or co-owner of the Company for a period of time prior to execution of this Agreement (hereinafter “the Period”).  I acknowledge and agree that, to the fullest extent allowed by applicable law, Sections 4A-4D of this Agreement shall also apply to the Period.   As a non-limiting example, to the extent that I have not already made such assignment, I hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all Inventions, which I have solely or jointly 

conceived or developed or reduced to practice, or caused to be conceived or developed or reduced to practice, during the Period (including during my off-duty hours during the Period), or with the use of Company's equipment, supplies, facilities, or Company Confidential Information during the Period, except for those Inventions, described on the list attached hereto as Exhibit C, which do not relate to the Company's business, products, or research and development.
5.Conflicting Employment.  I represent that I have no other agreements, relationships, or commitments to any other person or entity that conflict with my obligations to the Company under this Agreement or my ability to become employed and perform the services for which I am being hired by the Company.  I further agree that if I have signed a confidentiality agreement or similar type of agreement with any former employer or other entity, I will comply with the terms of any such agreement to the extent that its terms are lawful under applicable law.  If any such agreement with a third party, including any former employer, exists, I agree to immediately furnish a copy to the Company for its evaluation.  I represent and warrant that after undertaking a careful search (including searches of my computers, cell phones, electronic devices and documents), I have returned all property and confidential information belonging to all prior employers.  Moreover, I agree to fully indemnify the Company, its directors, officers, agents, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns for all verdicts, judgments, settlements, and other losses incurred by any of them resulting from my breach of my obligations under any agreement to which I am a party or obligation to which I am bound, as well as any reasonable attorneys' fees and costs if the plaintiff is the prevailing party in such an action.
6.Returning Company Documents.  Upon separation from employment with the Company or on demand by the Company during my employment, I will immediately deliver to the Company, and will not keep in my possession, recreate or deliver to anyone else, any and all Company property, including, but not limited to, Company Confidential Information, Associated Third Party Confidential Information, as well as all devices and equipment belonging to the Company (including computers, handheld electronic devices, telephone equipment, and other electronic devices), Company credit cards, records, data, notes, notebooks, reports, files, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, photographs, charts, all documents and property, and reproductions of any of the aforementioned items that were developed by me pursuant to my employment with the Company, obtained by me in connection with my employment with the Company, or otherwise belonging to the Company, its successors, or assigns, including, without limitation, those records maintained pursuant to Section 4.C.  I also consent to an exit interview to confirm my compliance with this Section 6.
7.Non-Competition and Non-Solicitation.
(a)Employee's Covenants.  In consideration of my employment by the Company hereunder and other good and valuable consideration, I hereby agree that during the Non-Competition Period (as defined below), I shall not in the Non-Competition Territory (as defined below), on my own behalf or through an entity of which I am a partner, shareholder, officer, director, employee, manager, associate, agent, consultant, independent contractor or owner, (i) solicit Business (as defined below) from any customer or potential customer of the Company or any customer or potential customer with which I have had material contact during the term of my employment, (ii) employ or recruit for employment, or cause the inducement of same, on my own behalf or for any company engaged in the Business, any person employed by the Company as of the date of the termination of my employment or with whom I have had material contact during my employment, (iii) serve in the Business in a capacity identical to or similar to that capacity in which I worked at the Company, (iv) serve in the Business in a management level position with any company which is a competitor of the Company or (v) otherwise engage in the Business.  
“Business” shall mean:
(i)the business of designing, manufacturing, marketing and selling (A) wireless remote systems that monitor standby power generation, backup power generators, remote powered 

equipment, cellular towers, emergency towered communications and remote tower sites, (B) wireless remote systems that monitor landfill gas and (C) cathodic protection products to monitor pipeline integrity; and 
(ii)     any other businesses engaged in by the Company including, but not limited to, activities, products, services or lines of business acquired, developed by or engaged in by the Company or any of their affiliates on or after the date hereof and at any time during the employment of Employee.
The “Non-Competition Period” shall mean a period of eighteen months following the termination, for any reason, of my employment.  
“Non-Competition Territory” means:
(ii)The countries of the United States, Canada and Mexico and any additional country in the world in which the Company conducts Business after the date of commencement of my employment; or
(iii)If the preceding subdivision is determined by a court of competent jurisdiction to be too broad, the territory shall be the United States, Canada and Mexico; or
(iv)If the preceding subdivision is determined by a court of competent jurisdiction to be too broad, the territory shall be the United States; or
(v)If the preceding subdivision is determined by a court of competent jurisdiction to be too broad, the territory shall be an area encompassing the following states of the United States of America: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.  
Notwithstanding the foregoing, I may, without violating this Section 7, own, as a passive investment, shares of capital stock of a publicly-held corporation that engages in the Business where the number of shares, options or warrants of such corporation's capital stock that are owned by me represent less than five percent of the total number of shares of such corporation's capital stock outstanding.  Further, I agree to notify the CEO or the Board of Directors of Acorn in writing about any potential employment that may be construed as in the Business, so that the Company may determine whether such potential employment may be construed as in the Business and, if it so chooses, to take whatever steps it deems appropriate to protect its legitimate business interests.  
(b)Consideration.  I acknowledge and understand that my employment is conditioned upon me agreeing to the terms of this Section 7 and other terms of this Agreement and me complying with all covenants set forth in this Section 7 and this Agreement, and I am willingly entering into the covenants set forth in this Section 7 and this Agreement in consideration of the Company hiring me.
(c)Understanding of Covenants.  I represent and agree that I (i) am familiar with the foregoing covenants not to compete and not to solicit and (ii) am fully aware of my obligations hereunder, including, without limitation, the reasonableness of the length of time, scope and geographic coverage of these covenants.  I acknowledge and agree that the provisions of this Section are reasonable and an integral part of my employment relationship with the Company and that the restrictions contained within this Section are part of the consideration received by the Company in connection with the entering into the employer-employee relationship with me, and that the restrictions are necessary to protect the Company's legitimate business interests and to prevent me from unfairly taking advantage of those contacts established or strengthened and the knowledge gained while with the Company.

(d)Cessation of Payments and Benefits Upon Breach.  Upon any breach of this Agreement by me, any severance payments which I may be entitled to, if any, shall immediately cease and terminate, and I shall be obligated to immediately return to the Company the full amount of any severance payments and the value of any severance benefits previously paid to or received by me.  I acknowledge and agree this subsection does not entitle me to receipt of any severance payments or benefits.
(e)Modification and Survival of Restrictions.  In the event that any provision of this Section 7 relating to the time period of the restrictions, the definition of Business, the breadth of restricted activities or geographic area, or related matters, is declared by a court of competent jurisdiction to exceed the maximum restrictiveness such court deems reasonable and enforceable, then such aspects of this Section 7 as would be deemed reasonable and enforceable by the court will become and thereafter be the maximum restriction in such regard, and such restriction will remain enforceable to the fullest extent deemed reasonable by such court.  I expressly agree that the court shall so modify any such provision so as to provide for the maximum permissible scope of protection for the Company, including by rewriting such provision to make it sufficiently limited.  The restrictions set forth in this Section 7 shall survive the termination of this Agreement or Employee's termination of employment.  
(f)Inadequacy of Monetary Damages.  I acknowledge and agree that monetary damages alone would not adequately compensate the Company in the event of a breach by me of any of the provisions of this Section 7 or Sections 3, 4 or 6 of this Agreement.  In the event of a breach or threatened breach by the me of any of the provisions of this Section 7 or Sections 3, 4 or 6 of this Agreement, the Company will have the right to seek both monetary damages for any past breach and equitable relief, including specific performance by means of an injunction or other action against me or against my partners, agents, representatives, servants, employers, employees, associates or any and all other persons acting directly or indirectly by or with me, to prevent or restrain any breach.
8.Termination Certification.  Upon separation from employment with the Company, I agree to immediately sign and deliver to the Company the “Termination Certification” attached hereto as Exhibit B. I also agree to keep the Company advised of my home and business address for a period of one (1) year after termination of my employment with the Company, so that the Company can contact me regarding my continuing obligations provided by this Agreement.
9.Notification of New Employer.  In the event that I leave the employ of the Company, I hereby grant consent to notification by the Company to my new employer about my obligations under this Agreement.
10.Code of Conduct and Ethics.  I agree to diligently adhere to all policies of the Company including, but not limited to, its Code of Conduct and Ethics, all of which may be revised from time to time during my employment.
11.Representations.  I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement.  I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company.  I hereby represent and warrant that I have not entered into, and I will not enter into, any oral or written agreement in conflict herewith.
12.Audit.  I acknowledge that I have no reasonable expectation of privacy in any computer, technology system, software, handheld device or telephone owned or licensed by the Company, or any documents or emails that are used in the conduct the business of the Company.  As such, the Company has the right to audit and search all such items and systems, without further notice to me, to ensure that the Company is licensed to use the software on the Company's devices in compliance with the Company's software licensing policies, to ensure compliance with the Company's policies, and for any other business-related purposes in the Company's sole discretion.  I understand that I am not permitted to add any unlicensed, unauthorized, or non-compliant applications to the Company's technology systems and that I shall refrain from copying unlicensed software onto the Company's technology systems or using non-licensed software or web sites.  I understand that it is my responsibility to comply with the Company's policies governing use of the Company's documents and the internet, email, telephone, and technology systems to which I will have 

access in connection with my employment.
13.General Provisions.
A.Governing Law; Consent to Personal Jurisdiction.  This Agreement will be construed under and governed by the laws of the State of Georgia without giving effect to any choice-of-law rules or principles that may result in the application of the laws of any jurisdiction other than Georgia.  Any proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement shall be brought exclusively in the Fulton County Superior Court Business Case Division, or if such Division is no longer available or such agreement by the parties regarding venue for its disputes shall be deemed unenforceable, in any court of competent jurisdiction located in Metropolitan Atlanta, Georgia and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such lawsuit or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding in any such court or that any such proceeding that is brought in any such court has been brought in an inconvenient forum.  Process in any such proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.   
B.Entire Agreement.  This Agreement, together with any Exhibits hereto, set  forth the entire agreement and understanding between the Company and me relating to the subject matter herein and supersede all prior agreements, discussions or representations between us relating to this subject matter including, but not limited to, any representations made during my interview(s) or relocation negotiations (if any), whether written or oral.  Any restrictive covenants contained in any prior employment agreement between me and the Company are hereby expressly superseded and shall be of no force or effect.  Provided, however, notwithstanding anything to the contrary herein, neither this Agreement nor the covenants contained herein shall supersede the restrictive covenants contained in the OmniMetrix, LLC, Limited Liability Company Interest Purchase Agreement if I am a party to that agreement, it being my intent that the covenants contained in such purchase agreement and the covenants contained in this employment agreement are for different purposes, contain different terms, and are intended to both be enforceable against me according to their respective terms. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by the Manager of the Company and me.  Any subsequent change or changes in my duties, salary, or compensation will not affect the validity or scope of this Agreement.
C.Severability.  If one or more of the provisions in this Agreement are deemed void or unenforceable as written, then such unenforceability shall not affect any other provisions or subparts of provisions, which shall remain in full force and effect, and the court may modify any offending provisions so as to make them enforceable to the fullest extent permitted by law.
D.Successors and Assigns.  This Agreement will be binding upon my heirs, executors, assigns, administrators, and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.  
E.Waiver.  Waiver by the Company of a breach of any provision of this Agreement will not operate as a waiver of any other or subsequent breach.
F.Survivorship.  The rights and obligations of the parties to this Agreement will survive termination of my employment with the Company.  
G.Signatures.  This Agreement may be signed in two counterparts, each of which shall be deemed an original, with the same force and effectiveness as though executed in a single document.
[Signature Page to Follow]

SIGNATURE PAGE TO

AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION, 
NON-COMPETITION AND INVENTION ASSIGNMENT AGREEMENT

Date: February 15, 2012                                        
Signature
  Deena P. Redding                
Typed or Printed Name of Employee
ACCEPTED AND AGREED TO:

OMNIMETRIX, LLC
By: XYZ HOLDINGS, INC., it's Manager

By:                         
Name:                         
Title:                         

Exhibit A
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP

	
			
	Title
	Date
	Identifying Number or Brief Description

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

___ No inventions or improvements
___ Additional Sheets Attached
Signature of Employee:                 
Print Name of Employee:                   
Date:                             

Exhibit B
OMNIMETRIX, LLC
TERMINATION CERTIFICATION
This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents, or property, or reproductions of any aforementioned items belonging to OmniMetrix, LLC, its subsidiaries, parents, affiliates, successors, or assigns (together, the “Company”).
I further certify that I have complied with all the terms of the Company's At-Will Employment, Confidential Information, Non-Competition and Invention Assignment Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.
I further agree that, in compliance with the At-Will Employment, Confidential Information, Non-Competition and Invention Assignment Agreement, I will preserve as confidential all Company Confidential Information and Associated Third-Party Confidential Information, including trade secrets, confidential knowledge, data, or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information, or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants, or licensees.
After leaving the Company's employment, I will be employed by ___________________ in the position of:                 .
    
Signature of employee
    
Print name
    
Date
Address for Notifications:        

Exhibit C
LIST OF INVENTIONS
NOT RELATED TO THE BUSINESS OF THE COMPANY

	
			
	Title
	Date
	Identifying Number or Brief Description

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

___ No inventions or improvements
___ Additional Sheets Attached
Signature of Employee:                 
Print Name of Employee:                   
Date:

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