Document:

Unassociated Document

     

    COALOGIX
      INC.

     

    COMMON
      STOCK PURCHASE AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

    

    
      	 	 	 	
              Page

            
	 	 	 	 
	
              1.

            	
              PURCHASE
                AND SALE OF COMMON STOCK

            	
              1

            
	 	
              1.1.

            	
              Sale
                and Issuance of Common Stock

            	
              1

            
	 	
              1.2.

            	
              Closing;
                Delivery

            	
              1

            
	 	
              1.3.

            	
              Defined
                Terms Used in this Agreement

            	
              1

            
	
              2.

            	REPRESENTATIONS
              AND WARRANTIES OF THE COMPANY	
              2

            
	 	
              2.1.

            	
              Organization,
                Good Standing, Corporate Power and Qualification

            	
              3

            
	 	
              2.2.

            	
              Capitalization

            	
              3

            
	 	
              2.3.

            	
              Subsidiaries
                and Affiliates

            	
              4

            
	 	
              2.4.

            	
              Authorization

            	
              4

            
	 	
              2.5.

            	
              Valid
                Issuance of Shares

            	
              4

            
	 	
              2.6.

            	
              Governmental
                Consents and Filings

            	
              4

            
	 	
              2.7.

            	
              Litigation

            	
              4

            
	 	
              2.8.

            	
              Compliance
                with Other Instruments

            	
              5

            
	 	
              2.9.

            	
              Rights
                of Registration and Voting Rights

            	
              5

            
	 	
              2.10.

            	
              No
                Company Operations or Material Liabilities

            	
              5

            
	 	
              2.11.

            	
              Changes

            	
              5

            
	 	
              2.12.

            	
              Corporate
                Documents

            	
              6

            
	 	
              2.13.

            	
              Offering

            	
              6

            
	 	
              2.14.

            	
              Preemptive
                Rights

            	
              6

            
	 	
              2.15.

            	
              Consents

            	
              6

            
	 	
              2.16.

            	
              Employment
                and Non-Competition Agreements

            	
              6

            
	
              3.

            	REPRESENTATIONS
              AND WARRANTIES OF THE PURCHASER	
              7

            
	 	
              3.1.

            	
              Authorization

            	
              7

            
	 	
              3.2.

            	
              Compliance
                with Other Instruments

            	
              7

            
	 	
              3.3.

            	
              Purchase
                Entirely for Own Account

            	
              7

            
	 	
              3.4.

            	
              Disclosure
                of Information

            	
              7

            
	 	
              3.5.

            	
              Restricted
                Securities

            	
              8

            
	 	
              3.6.

            	
              No
                Public Market

            	
              8

            
	 	
              3.7.

            	
              Suitability
                of Investment

            	
              8

            
	 	
              3.8.

            	
              Legends

            	
              8

            

    

     

    
      
        
        

      

      
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      TABLE
        OF CONTENTS

      (continued)

       

    

    
      	 	 	 	
              Page

            
	 	 	 	 
	 	
              3.9.

            	
              Accredited
                Investor

            	
              9

            
	 	
              3.10.

            	
              Foreign
                Investors

            	
              9

            
	 	
              3.11.

            	
              Residence

            	
              9

            
	
              4.

            	CONDITIONS
              TO THE PURCHASER’S OBLIGATIONS AT CLOSING	
              9

            
	 	
              4.1.

            	
              Qualifications

            	
              9

            
	 	
              4.2.

            	
              Representations
                and Warranties of Company

            	
              9

            
	 	
              4.3.

            	
              Opinion
                of Company Counsel

            	
              9

            
	 	
              4.4.

            	
              Covenants
                of the Company

            	
              9

            
	 	
              4.5.

            	
              Stockholders’
                Agreement

            	
              9

            
	 	
              4.6.

            	
              Secretary’s
                Certificate

            	
              9

            
	 	
              4.7.

            	
              Management
                Rights

            	
              10

            
	 	
              4.8.

            	
              Board
                of Directors

            	
              10

            
	
              5.

            	CONDITIONS
              TO THE COMPANY’S OBLIGATIONS AT CLOSING	
              10

            
	 	
              5.1.

            	
              Qualifications

            	
              10

            
	 	
              5.2.

            	
              Representations
                and Warranties of the Purchaser

            	
              10

            
	
              6.

            	COVENANTS
              OF THE COMPANY	
              10

            
	 	
              6.1.

            	
              Proceedings
                and Documents

            	
              10

            
	 	
              6.2.

            	
              Securities
                Laws Compliance

            	
              10

            
	 	
              6.3.

            	
              Use
                of Proceeds

            	
              10

            
	 	
              6.4.

            	
              Pre-Closing
                Access and Information

            	
              10

            
	 	
              6.5.

            	
              Conduct
                of the Company's Business.

            	
              11

            
	 	
              6.6.

            	
              Notices
                to Purchaser

            	
              11

            
	 	
              6.7.

            	
              Exclusivity

            	
              11

            
	
              7.

            	SURVIVAL
              PERIOD; INDEMNIFICATION	
              11

            
	 	
              7.1.

            	
              Survival
                of Representations, Warranties and Covenants

            	
              11

            
	 	
              7.2.

            	
              Indemnification

            	
              12

            
	 	
              7.3.

            	
              Limitations
                on Indemnification

            	
              12

            
	
              8.

            	MISCELLANEOUS	
              12

            
	 	
              8.1.

            	
              Transfer;
                Successors and Assigns

            	
              12

            
	 	
              8.2.

            	
              Governing
                Law

            	
              12

            

    

     

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    

     

    
      TABLE
        OF CONTENTS

      (continued)
 

    
      	 	 	 	
              Page

            
	 	 	 	 
	 	
              8.3.

            	
              Counterparts

            	
              12

            
	 	
              8.4.

            	
              Titles
                and Subtitles

            	
              13

            
	 	
              8.5.

            	
              Notices

            	
              13

            
	 	
              8.6.

            	
              No
                Finder’s Fees

            	
              14

            
	 	
              8.7.

            	
              Fees
                and Expenses

            	
              14

            
	 	
              8.8.

            	
              Amendments
                and Waivers

            	
              14

            
	 	
              8.9.

            	
              Severability

            	
              14

            
	 	
              8.10.

            	
              Delays
                or Omissions

            	
              14

            
	 	
              8.11.

            	
              Entire
                Agreement

            	
              14

            
	 	
              8.12.

            	
              Publicity

            	
              15

            
	 	
              8.13.

            	
              Right
                to Conduct Activities

            	
              15

            
	 	
              8.14.

            	
              Termination

            	
              16

            

    

    

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    
      	 	
              Page

            
	 	 
	
              Exhibit
                A

            	
              Schedule
                of Purchaser

            
	
              Exhibit
                B

            	
              Disclosure
                Schedule

            
	
              Exhibit
                C

            	
              Form
                of Stockholders’ Agreement

            
	
              Exhibit
                D

            	
              Form
                of Management Rights Letter

            
	
              Exhibit
                E

            	
              Form
                of Legal Opinion of Company Counsel

            

    

    

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

    COMMON
      STOCK PURCHASE AGREEMENT

     

    This
      Common Stock Purchase Agreement (the “Agreement”)
      is
      made as of February 29, 2008 by and among CoaLogix Inc., a Delaware corporation
      (the “Company”),
      Acorn
      Energy, Inc., a Delaware corporation (the “Parent”),
      and
      the investor listed on Exhibit
      A
      attached
      to this Agreement (the “Purchaser”).

     

    The
      parties hereby agree as follows:

     

    1. Purchase
      and Sale of Common Stock.

     

    1.1. Sale
      and Issuance of Common Stock.
      Subject
      to the terms and conditions of this Agreement, the Purchaser agrees to purchase
      at the Closing and the Company agrees to sell and issue to the Purchaser at
      the
      Closing that number of shares of the Company’s Common Stock, $0.001
      par value per share
      (the
“Common
      Stock”)
      set
      forth opposite the Purchaser's name on Exhibit
      A,
      at a
      purchase price of $126.1566 per share, payable as set forth on Exhibit
      A.
      The
      shares of Common Stock issued to the Purchaser pursuant to this Agreement shall
      be referred to in this Agreement as the “Shares.”

     

    1.2. Closing;
      Delivery.

     

    (a) The purchase
      and sale of the Shares shall take place at 10:00 a.m., on the date on the
      business day on which the last of the conditions set forth in Sections
      4
      and
5
      of this
      Agreement that are capable of being satisfied before the Closing are fulfilled
      or waived in accordance with this Agreement, at the offices of Dechert LLP,
      counsel to EnerTech Capital Partners III L.P., 2929 Arch Street, Philadelphia,
      PA 19104-2808 or at such other time and place as the Company and the Purchaser
      mutually agree upon, orally or in writing (which time and place are designated
      as the “Closing”).
      

     

    (b) At
      the
      Closing, the Company shall deliver to the Purchaser a certificate representing
      the Shares being purchased by the Purchaser at such Closing against payment
      of
      the purchase price therefor by wire transfer to a bank account designated by
      the
      Company.

     

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

     

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    “Management
      Rights Letter”
means
      the agreement between the Company and EnerTech Capital Partners III L.P., in
      the
      form of Exhibit
      D
      attached
      to this Agreement.

     

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

     

    “Purchaser”
means
      the Purchaser who is a party to this Agreement.

     

    “SCR-Tech
      Entities”
      means
      CESI-TECH Technologies, CESI-SCR, Inc. and SCR Tech LLC.

     

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

     

    “Shares”
means
      the shares of Common Stock of the Company issued at the Closing.

     

    “Stockholders’
      Agreement”
means
      the agreement between the Company, Parent and the Purchaser, dated as of the
      date hereof, in the form of Exhibit
      C
      attached
      to this Agreement.

     

    “Transaction
      Agreements”
means
      this Agreement, the Stockholders’ Agreement, the Management Rights Letter, and
      any other agreements, instruments or documents entered into in connection with
      this Agreement.

     

    2. 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 and will be true and correct as of
      the
      Closing, except as otherwise indicated. The Disclosure
      Schedule
      shall be
      arranged in sections corresponding to the numbered and lettered sections and
      subsections contained in this Section
      2,
      and the
      disclosures in any section or subsection of the Disclosure
      Schedule
      shall
      qualify other sections and subsections in this Section
      2
      only to
      the extent it is readily apparent from a reading of the disclosure that such
      disclosure is applicable to such other sections and subsections.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    (a) 150,000 shares
      of
      Common Stock, 87,500 shares of which are issued and outstanding immediately
      prior to the Closing. All of the outstanding shares of Common Stock have been
      duly authorized, are fully paid and nonassessable and were issued in compliance
      with all applicable federal and state securities laws. The Company holds no
      treasury stock.

     

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

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    2.6. Governmental
      Consents and Filings.
      Assuming the accuracy of the representations made by the Purchaser in
Section
      4
      of this
      Agreement, no consent, approval, order or authorization of, or registration,
      qualification, designation, declaration or filing with, any federal, state
      or
      local governmental authority is required on the part of the Company in
      connection with the consummation of the transactions contemplated by this
      Agreement, except for filings, if any, pursuant to Regulation D of the
      Securities Act, and applicable state securities laws, which have been made
      or
      will be made in a timely manner.

     

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    2.11. Changes.
      To the
      Company’s knowledge, since November 7, 2007, there has not been:

     

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

     

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

     

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

     

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

     

    (e) any
      material change to a material contract or agreement by which the SCR-Tech
      Entities or any of their assets is bound or subject;

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    To
      the
      Company’s knowledge, since November 7, 2007 (x) the SCR-Tech Entities have
      carried on and operated their business in the ordinary course of business and
      (y) the SCR-Tech Entities have not suffered a Material Adverse
      Effect.

     

    2.12. Corporate
      Documents.
      The
      Certificate of Incorporation 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 meetings of directors and stockholders and
      all
      actions by written consent without a meeting by the directors and stockholders
      since November 7, 2007 and accurately reflects in all material respects all
      actions by the directors (and any committee of directors) and stockholders
      with
      respect to all transactions referred to in such minutes.

     

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

     

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

     

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

     

    2.16. Employment
      and Non-Competition Agreements.
      William
      McMahon, Michael Mattes, Frank Wenz and Michael Cooper are bound by and have
      executed employment agreements with the Company and the SCR-Tech Entities.
      All
      other employees of the SCR-Tech Entities have entered into non-competition
      agreements with the SCR-Tech Entities.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    3. Representations
      and Warranties of the Purchaser.
      The
      Purchaser hereby represents and warrants to the Company that:

     

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

     

    3.2. Compliance
      with Other Instruments.
      The
      execution and delivery of this Agreement by the Purchaser, and the performance
      by the Purchaser of its obligations hereunder, will not conflict, or result
      in
      any violation of, or default under, any provision of any charter, bylaws, trust
      agreement, partnership agreement or other governing instrument applicable to
      the
      Purchaser, or any agreement or other instrument to which the Purchaser is a
      party or by which the Purchaser or any of 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.

     

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

     

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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    4. Conditions
      to the Purchaser’s Obligations at Closing.
      The
      obligations of the Purchaser to purchase Shares at the Closing are subject
      to
      the fulfillment, on or before Closing, of each of the following conditions,
      unless otherwise waived:

     

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

     

    4.2. Representations
      and Warranties of Company.
      The
      representations and warranties of the Company contained in Section 2 shall
      be
      true and correct in all material respects as of Closing, except that any such
      representation and warranties shall be true and correct in all respects where
      such representation and warranty is qualified with respect to materiality in
      Section 2, and the Company shall have performed and complied with all covenants,
      agreements, obligations and conditions contained in this Agreement that are
      required to be performed or complied with by it on or before
      Closing.

     

    4.3. Opinion
      of Company Counsel.
      The
      Purchaser shall have received from Eilenberg Krause & Paul LLP, counsel for
      the Company, an opinion, dated as of the Closing, in substantially the form
      of
      Exhibit E (but without assumptions related to issuance of the
      Shares).

     

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

     

    4.5. Stockholders’
      Agreement.
      The
      Company and the Purchaser and the other stockholders of the Company named as
      parties thereto have executed and delivered the Stockholders’
Agreement.

     

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

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    4.7. Management
      Rights.
      A
      Management Rights Letter has been executed by the Company and delivered to
      EnerTech Capital Partners III L.P. 

     

    4.8. Board
      of Directors.
      The
      Company’s Board of Directors shall be comprised of John A. Moore, Scott Ungerer
      and William McMahon.

     

    5. Conditions
      to the Company’s Obligations at Closing.
      The
      obligations of the Company to sell Shares to the Purchaser at the Closing are
      subject to the fulfillment, on or before the Closing, of each of the following
      conditions, unless otherwise waived:

     

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

     

    5.2. Representations
      and Warranties of the Purchaser.
      The
      representations and warranties of the Purchaser contained in Section
      3
      shall be
      true and correct in all material respects as of 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,
      and the
      Company shall have performed and complied with all covenants, agreements,
      obligations and conditions contained in this Agreement that are required to
      be
      performed or complied with by it on or before Closing.

     

    6. Covenants
      of the Company.

     

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

     

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

     

    6.3. Use
      of
      Proceeds.
      As set
      forth on Section
      6.3
      of the Disclosure Schedule,
      the
      Company agrees that the purchase price paid by the Purchaser shall be used
      by it
      for working capital expenses only, and shall not be used to reduce any
      outstanding indebtedness of the Company or to make payments to any stockholder
      or affiliate of the Company.

     

    6.4. Pre-Closing
      Access and Information.
      From
      the date hereof to the Closing, the Company will give the Purchaser and their
      authorized representatives (including accountants, legal counsel and
      environmental consultants) full access at all reasonable times, upon reasonable
      notice, to all of the offices and other facilities of the Company, to all
      contracts, agreements, commitments, books and records of the Company, to the
      personnel (including auditors) of the Company and to the customers and suppliers
      of the Company.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    6.5. Conduct
      of the Company's Business. 

     

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

     

    (b) Without
      limiting the foregoing, during the period from the date of this Agreement to
      the
      Closing Date, the Company shall not take any of the actions specified in
Section
      2.11
      without
      the prior written consent the Purchaser.

     

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

     

    6.7. Exclusivity.
      From
      the date hereof to the 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. If the Company receives a Financing Proposal prior
      to the Closing, the Company shall notify the Purchaser immediately and shall
      provide to the Purchaser a copy of any written documentation of such Financing
      Proposal.

     

    7. Survival
      Period; Indemnification.

     

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

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

     

    7.3. Limitations
      on Indemnification.
      The
      Company or the Purchaser, as the case may be, shall not have liability under
      Section 7.2 until the aggregate amount of Losses of the Indemnitees exceeds
      $50,000, in which case the Indemnitees shall be entitled to Losses in an amount
      up to the purchase price of $1,947,983.55 in the aggregate.

     

    8. Miscellaneous.

     

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

     

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

     

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

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

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

     

    8.5. Notices.
      All
      notices and other communications given or made pursuant to this Agreement shall
      be in writing and shall be deemed effectively given: (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 on the signature page or Exhibit A,
      or to
      such e-mail address, facsimile number or address as subsequently modified by
      written notice given in accordance with this Section
      8.5.

     

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

     

    CoaLogix

    11701
      Mt.
      Holly Road

    Charlotte,
      NC 28214

    

    Acorn
      Energy, Inc.

    4
      W.
      Rockland Road

    P.O.
      Box
      9

    Montchanin,
      Delaware 19710

    

    A
      copy
      shall also be sent to:

     

    Eilenberg
      Krause & Paul LLP

    11
      East
      44th Street, 19th Floor

    New
      York,
      New York 10017

    Fax
      No.
      (212) 986-2399

    Attention:
      Sheldon Krause, Esq.

    

    Womble
      Carlyle Sandridge & Rice, PLLC 

    One
      Wachovia Center, Suite 3500 

    301
      South
      College Street 

    Charlotte,
      NC 28202-6037 

    Fax
      No.
      (704) 338-7819

    Attention:
      Joe B. Cogdell

    

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

     

    Dechert
      LLP

    Cira
      Centre

    2929
      Arch
      St.

    Philadelphia,
      PA 19104-2808

    Fax
      No.
      (215) 994-2222

    Attention:
      Ian A. Hartman, Esq.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    8.6. No
      Finder’s Fees.
      Except
      as set forth in Section
      8.6
      of the Disclosure Schedule,
      each
      party represents that it neither is nor will be obligated for any finder’s fee,
      commission or other compensation in connection with this transaction. 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.

     

    8.7. Fees
      and Expenses.
      At
      Closing, the Company shall pay the reasonable fees and expenses of Dechert
      LLP,
      special counsel to EnerTech Capital Partners III L.P., as well as other costs
      and expenses incurred by EnerTech Capital Partners III L.P., in connection
      with
      the financing.

     

    8.8. 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 8.8
      shall be
      binding upon the Company, the Purchaser, and each transferee of the Shares,
      each
      future holder of all such securities and the Company. In the event a nonmaterial
      provision of this Agreement is required to be amended by the Purchaser after
      the
      Closing, the Company will not unreasonably withhold its consent to such
      amendment.

     

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

     

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

     

    8.11. Entire
      Agreement.
      This
      Agreement (including the Exhibits hereto, if any), and the other Transaction
      Agreements 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.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    8.12. Publicity.
      The
      Company may disclose the existence of the financing, as well as the investment
      in the Company by the Purchaser, solely to the Company’s investors, investment
      bankers, lenders, accountants, legal counsel, bona fide prospective investors
      and employees, in each case only where such persons or entities were under
      appropriate nondisclosure obligations. In addition, the Company may disclose
      to
      third parties that the Purchaser is an investor in the Company without the
      requirement for nondisclosure agreements. The Company is permitted to issue
      a
      press release within 60 days of the Closing disclosing that the Purchaser has
      invested in the Company; provided that the release does not disclose the amount
      or other specific terms of the investment and the final form of the press
      release is approved in advance in writing by the Purchaser. The Company may
      not
      use the name of the Purchaser, or any of its Affiliates in any trade
      publication, in any marketing materials or otherwise to the general public
      without the prior written consent of the Purchaser, which consent may be
      withheld in the sole discretion of the Purchaser. Notwithstanding the foregoing,
      nothing in this Section
      8.12
      shall
      prevent the Company from taking any action required to assist Parent in
      complying with its obligations under the Exchange Act or under the rules or
      regulations of any stock exchange or other market on which the Parent’s
      securities are listed for trading.

     

    8.13. 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 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 partner, officer 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, unless such claim arises directly from the Purchaser’s misuse of
      confidential information in material breach of Section
      3.4
      of the
      Stockholders’ Agreement.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    8.14. Termination.
      Except
      with respect to provisions that expressly survive the termination of this
      Agreement, this Agreement may be terminated at any time prior to Closing: (a)
      by
      the Purchaser if a court of competent jurisdiction or governmental or regulatory
      body shall have issued an order, decree or ruling, or taken any other action,
      restraining, enjoining or otherwise prohibiting the Closing of the transactions
      contemplated hereby and such order, decree, ruling or other action shall have
      become final and non-appealable; or (b) by either the Purchaser or the Company
      if the Closing shall not have occurred by 8:00 p.m., New York City Time, on
      March 3, 2008 and the terminating parties are not in material breach of this
      Agreement.

     

    [Remainder
      of Page Intentionally Left Blank]

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

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

     

    
      	 	
              COALOGIX
                INC.

            
	 	 	 
	
               

            	
              By:

            	
              /s/William
                J. McMahon

            
	 	
              Name: William
                J. McMahon

            
	 	
              Title:   President
                & CEO

            
	 	 	 
	 	
              ACORN
                ENERGY, INC.

            
	 	 	 
	 	
              By:

            	
              /s/John
                A. Moore

            
	 	
              Name: John
                A. Moore

            
	 	
              Title:   CEO

            

    

    

    
      	 	
              PURCHASER:

            
	 	 	 
	 	
              ENERTECH
                CAPITAL PARTNERS III L.P.

            
	 	 	 
	 	
              By:

            	
              ECP
                III Management L.P.,

            
	 	 	
              Its
                general partner

            
	 	 	 
	 	
              By:

            	
              ECP
                III Management LLC,

            
	 	 	
              Its
                general partner

            

    

    

    
      	 	
              By:

            	
              /s/
                Scott Ungerer

            
	 	
              Name: Scott
                Ungerer

            
	 	
              Title:   CEOUnassociated Document

     

    COALOGIX
      INC.

     

    STOCKHOLDERS’
      AGREEMENT

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	 	 	 	
              Page

            
	
              1.

            	
              Definitions.

            	
              1

            
	 	 	 
	
              2.

            	
              Registration
                Rights.

            	
              3

            
	 	 	 	 
	 	
              2.1.

            	
              Participation
                in Subsequent Registration Rights.

            	
              3

            
	 	 	 
	
              3.

            	
              Information
                Rights

            	
              3

            
	 	 	 	 
	 	
              3.1.

            	
              Delivery
                of Financial Statements

            	
              3

            
	 	 	 	 
	 	
              3.2.

            	
              Inspection.

            	
              5

            
	 	 	 	 
	 	
              3.3.

            	
              Termination
                of Information and Inspection Covenants

            	
              5

            
	 	 	 	 
	 	
              3.4.

            	
              Confidentiality

            	
              6

            
	 	 	 
	
              4.

            	
              Right
                of First Offer on Company Offerings

            	
              6

            
	 	 	 	 
	 	
              4.1.

            	
              Right
                of First Offer.

            	
              6

            
	 	 	 	 
	 	
              4.2.

            	
              Termination.

            	
              7

            
	 	 	 
	
              5.

            	
              Rights
                of Refusal and Co-Sale 

            	
              8

            
	 	 	 	 
	 	
              5.1.

            	
              Company
                Right of First Refusal

            	
              8

            
	 	 	 	 
	 	
              5.2.

            	
              Secondary
                Refusal Right of Key Holders

            	
              8

            
	 	 	 	 
	 	
              5.3.

            	
              Consideration;
                Closing

            	
              9

            
	 	 	 	 
	 	
              5.4.

            	
              Right
                of Co-Sale.

            	
              9

            
	 	 	 	 
	 	
              5.5.

            	
              Drag-Along
                Right

            	
              10

            
	 	 	 	 
	 	
              5.6.

            	
              Effect
                of Failure to Comply

            	
              11

            
	 	 	 	 
	 	
              5.7.

            	
              Assistance
                with Pledging of Interests

            	
              12

            
	 	 	 
	
              6.

            	
              Exempt
                Transfers.

            	
              12

            
	 	 	 	 
	 	
              6.1.

            	
              Transfers
                to Affiliates, Etc

            	
              12

            
	 	 	 	 
	 	
              6.2.

            	
              Public
                Offering

            	
              13

            
	 	 	 
	
              7.

            	
              Key
                Holder Buy/Sell

            	
              13

            
	 	 	 	 
	 	
              7.1.

            	
              Triggering
                Notice

            	
              13

            
	 	 	 	 
	 	
              7.2.

            	
              Response
                Notice

            	
              13

            
	 	 	 	 
	 	
              7.3.

            	
              Cure
                Period

            	
              13

            
	 	 	 	 
	 	
              7.4.

            	
              Closing

            	
              13

            
	 	 	 
	
              8.

            	
              Management
                Option Plan

            	
              14

            
	 	 	 
	
              9.

            	
              Additional
                Covenants

            	
              14

            
	 	 	 	 
	 	
              9.1.

            	
              Insurance.

            	
              14

            
	 	 	 	 
	 	
              9.2.

            	
              Employee
                Agreements.

            	
              14

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              9.3. 

            	
              Employee
                Vesting 

            	
              14

            
	 	 	 	 
	 	
              9.4.

            	
              Board
                of Directors

            	
              14

            
	 	 	 	 
	 	
              9.5.

            	
              Meetings
                of the Board of Directors

            	
              15

            
	 	 	 	 
	 	
              9.6.

            	
              Successor
                Indemnification

            	
              15

            
	 	 	 	 
	 	
              9.7.

            	
              Transactions
                with Related Parties

            	
              15

            
	 	 	 	 
	 	
              9.8.

            	
              Actions
                Requiring Majority Stockholder Approval

            	
              15

            
	 	 	 	 
	 	
              9.9.

            	
              Actions
                Requiring Super-Majority Stockholder Approval

            	
              15

            
	 	 	 	 
	 	
              9.10.

            	
              Termination
                of Covenants.

            	
              16

            
	 	 	 
	
              10.

            	
              Miscellaneous

            	
              16

            
	 	 	 	 
	 	
              10.1.

            	
              Transfers,
                Successors and Assigns.

            	
              16

            
	 	 	 	 
	 	
              10.2.

            	
              Governing
                Law.

            	
              17

            
	 	 	 	 
	 	
              10.3.

            	
              Counterparts.

            	
              17

            
	 	 	 	 
	 	
              10.4.

            	
              Titles
                and Subtitles.

            	
              17

            
	 	 	 	 
	 	
              10.5.

            	
              Notices

            	
              17

            
	 	 	 	 
	 	
              10.6.

            	
              Amendments
                and Waivers.

            	
              18

            
	 	 	 	 
	 	
              10.7.

            	
              Severability.

            	
              18

            
	 	 	 	 
	 	
              10.8.

            	
              Additional
                Stockholders

            	
              18

            
	 	 	 	 
	 	
              10.9.

            	
              Entire
                Agreement.

            	
              18

            
	 	 	 	 
	 	
              10.10.

            	
              Transfers
                of Rights

            	
              18

            
	 	 	 	 
	 	
              10.11.

            	
              Delays
                or Omissions

            	
              19

            
	 	 	 	 
	 	
              10.12.

            	
              Effectiveness

            	
              19

            
	 	 	 	 
	 	
              10.13.

            	
              Legend
                on Stock Certificates

            	
              19

            
	 	 
	
              Schedule
                A      
                -       Schedule of
                Investors

            	
               

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    STOCKHOLDERS’
      AGREEMENT

     

    THIS
      STOCKHOLDERS’ AGREEMENT
      (the
“Agreement”)
      is
      made as of February 29, 2008 by and among CoaLogix Inc., a Delaware corporation
      (the “Company”),
      and
      each of the stockholders or option holders listed on Schedule A hereto,
      each person to whom the rights of a Stockholder are assigned pursuant to Section
      10.1 and each person who hereafter becomes a signatory to this Agreement
      pursuant to Section 10.9 (each, a “Stockholder”
and,
      collectively, the “Stockholders”).

     

    RECITALS

     

    WHEREAS,
      the
      Company and EnerTech (as defined below) are parties to the Common Stock Purchase
      Agreement of even date herewith (the “Purchase
      Agreement”);
      and

     

    WHEREAS,
      in
      order to induce EnerTech to enter into the Purchase Agreement and to induce
      EnerTech to invest funds in the Company pursuant to the Purchase Agreement,
      the
      Stockholders and the Company hereby agree that this Agreement shall govern
      the
      rights of the Stockholders to receive certain information from the Company,
      to
      participate in future equity offerings by the Company and certain other matters
      as set forth in this Agreement;

     

    1. Definitions. For
      purposes of this Agreement:

     

    “Acorn
      Energy”
shall
      mean Acorn Energy, Inc and it Affiliates.

     

    “Affiliate”
shall
      mean with respect to any individual, corporation, partnership, association,
      trust, or any other entity (in each case, a “Person”),
      any
      Person which, directly or indirectly, controls, is controlled by or is under
      common control with such Person, including, without limitation any general
      partner, officer or director 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.

     

    “Common
      Stock”
shall
      mean shares of the Company’s common stock, $0.001 par value per
      share.

     

    “Company
      Notice”
means
      written notice from the Company notifying a selling Stockholder that the Company
      intends to exercise its Right of First Refusal as to some or all of the Transfer
      Stock with respect to any Proposed Transfer.

     

    “EnerTech”
shall
      mean EnerTech Capital Partners III L.P. and its Affiliates.

     

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

     

    “GAAP”
shall
      mean U.S. generally accepted accounting principles.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “IPO”
means
      the Company’s first underwritten public offering of its Common Stock under the
      Securities Act.

     

    “Key
      Holders”
means
      Acorn Energy and EnerTech, so long as they are Stockholders owning at least
      five
      percent (5.0%) of the issued and outstanding capital stock of the Company.
      If
      either Acorn Energy or EnerTech no longer owns at least five percent of the
      issued and outstanding capital stock of the Company, but still owns some capital
      stock of the Company, such former Key Holder shall still be a Stockholder.
      

     

    “Key
      Holder Secondary Notice”
means
      written notice from a Key Holder notifying the Company and the selling Key
      Holder or Stockholder, as the case may be, that such Key Holder intends to
      exercise its Secondary Refusal Right as to a portion of the Transfer Stock
      with
      respect to any Proposed Transfer.

     

    “Key
      Holder Stock”
means
      any Common Stock now owned or subsequently acquired by any Key Holder or such
      Key Holder’s permitted transferees or assigns.

     

    “Management
      Stockholder”
means
      a
      Stockholder currently employed in the management of the Company, for so long
      as
      such Stockholder is employed in such a capacity.

     

    “New
      Securities”
shall
      mean equity securities of the Company, whether now authorized or not, or rights,
      options, or warrants to purchase said equity securities, or securities of any
      type whatsoever that are, or may become, convertible into or exchangeable into
      or exercisable for said equity securities (collectively “New
      Securities”).

     

    “Proposed
      Transfer”
means
      any proposed assignment, sale, offer to sell, pledge, mortgage, hypothecation,
      encumbrance, disposition of or any other like transfer or encumbering of any
      Common Stock (or any interest therein) proposed by any of the Stockholders;
      provided
      that
      Proposed Transfer shall not include any merger, consolidation or like transfer
      effected pursuant to a vote of the Stockholders of Common Stock of the
      Company.

     

    “Proposed
      Transfer Notice”
means
      written notice from a Stockholder setting forth the terms and conditions of
      a
      Proposed Transfer.

     

    “Prospective
      Transferee”
means
      any Person to whom a Stockholder proposes to make a Proposed
      Transfer.

     

    “Registrable
      Securities”
means
      (i) the Common Stock owned by either Key Holder, and (ii) any Common Stock
      of
      the Company issued as (or issuable upon the conversion or exercise of any
      warrant, right or other security which is issued as) a dividend or other
      distribution with respect to, or in exchange for or in replacement of the shares
      referenced in clause (i),
      excluding in all cases, however, any Registrable Securities sold by a Person
      in
      a transaction in which such Person’s rights under Section 2
      hereof
      are not assigned or any shares for which registration rights have
      terminated.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Right
      of Co-Sale”
means
      the right, but not an obligation, of a Key Holder or Management Stockholder
      to
      participate in a Proposed Transfer on the terms and conditions specified in
      the
      Proposed Transfer Notice.

     

    “Right
      of First Refusal”
means
      the right, but not an obligation, of a Key Holder or the Company, as the case
      may be, or his, her or its permitted transferees or assigns, to purchase some
      or
      all of the Transfer Stock with respect to a Proposed Transfer, on the terms
      and
      conditions specified in the Proposed Transfer Notice.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

     

    “Secondary
      Notice”
means
      written notice from the Company notifying the selling Key Holder and the other
      Key Holder that the Company does not intend to exercise its Right of First
      Refusal as to all shares of Transfer Stock with respect to any Proposed
      Transfer.

     

    “Secondary
      Refusal Right”
means
      the right, but not an obligation, of each Key Holder to purchase up to its
      pro
      rata portion (based upon the total number of shares of Common Stock then held
      by
      all Key Holders) of Transfer Stock not purchased pursuant to the Company’ s
      Right of First Refusal, on the terms and conditions specified in the Proposed
      Transfer Notice.

     

    “Transfer
      Stock”
means
      shares of Common Stock subject to a Proposed Transfer.

     

    2. Registration
      Rights. The
      Company covenants and agrees as follows:

     

    2.1. Participation
      in Subsequent Registration Rights. So
      long
      as either Key Holder remains a Key Holder, from and after the date of this
      Agreement, the Company shall not, without the prior written consent of each
      Key
      Holder, enter into any agreement with any stockholder or prospective stockholder
      of any securities of the Company which would grant such stockholder or
      prospective stockholder registration rights in respect of Registrable
      Securities, unless the Company shall thereunder grant each Key Holder
      registration rights identical to the most favorable registration rights provided
      to any other stockholder or prospective stockholder of any securities of the
      Company.

     

    3. Information
      Rights.

     

    3.1.  Delivery
      of Financial Statements. So long as EnerTech owns one percent (1.0%) of the
      issued and outstanding capital stock of the Company, the
      Company shall deliver to EnerTech or its Affiliate, as the case may
      be:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (a) as
      soon
      as practicable, but in any event within ninety (90) days after the end of each
      fiscal year of the Company, a balance sheet and income statement as of the
      last
      day of such year; a statement of cash flows for such year and a comparison
      between the actual figures for such year, the comparable figures for the prior
      year and the comparable figures included in the Budget (as defined below) for
      such year, with an explanation of any material differences between them and
      a
      schedule as to the sources and applications of funds for such year, such
      year-end financial reports to be in reasonable detail, prepared in accordance
      with GAAP, of the Company; 

     

    (b) as
      soon
      as practicable, but in any event within forty-five (45) days after the end
      of
      each of the first three (3) quarters of each fiscal year of the Company, an
      unaudited income statement, schedule as to the sources and application of funds
      for such fiscal quarter, an unaudited balance sheet and a statement of
      stockholder’s equity as of the end of such fiscal quarter;

     

    (c) as
      soon
      as practicable, but in any event with forty-five (45) days after the end of
      each
      of the first three (3) quarters of each fiscal year of the Company, a statement
      showing the number of shares of each class and series of capital stock and
      securities convertible into or exercisable for shares of capital stock
      outstanding at the end of the period, the number of common shares issuable
      upon
      conversion or exercise of any outstanding securities convertible or exercisable
      for common shares and the exchange ratio or exercise price applicable thereto
      and number of shares of issued stock options and stock options not yet
      issued but reserved for issuance, if any, all in sufficient detail as to permit
      EnerTech or its Affiliate to calculate its percentage equity ownership in the
      Company and certified by the Chief Financial Officer or Chief Executive Officer
      of the Company as being true, complete and correct;

     

    (d) as
      soon
      as practicable, but in any event within thirty (30) days of the end of each
      month, an unaudited income statement, an unaudited profit or loss statement;
      

     

    (e) as
      soon
      as practicable, but in any event thirty (30) days prior to the end of each
      fiscal year, a budget and business plan for the next fiscal year (collectively,
      the “Budget”),
      prepared on a monthly basis, including balance sheets and sources and
      applications of funds statements for such months and, as soon as prepared,
      any
      other budgets or revised budgets prepared by the Company;

     

    (f) with
      respect to the financial statements called for in subsections
      (a) and(b)
      of this
Section 3.1,
      an
      instrument executed by the Chief Financial Officer and President or Chief
      Executive Officer of the Company and certifying that such financials were
      prepared in accordance with GAAP consistently applied with prior practice for
      earlier periods (with the exception of footnotes that may be required by GAAP)
      and fairly present the financial condition of the Company and its results of
      operation for the periods specified therein, subject to year-end audit
      adjustment;

     

    (g) such
      other information relating to the financial condition, business, prospects
      or
      corporate affairs of the Company as EnerTech or any assignee of EnerTech may
      from time to time reasonably request, provided,
      however,
      that
      the Company shall not be obligated under this subsection (g)
      or any
      other subsection of Section 3.1
      to (i)
      provide information which the Company reasonably deems in good faith to be
      a
      trade secret or similar confidential information (unless covered by an
      enforceable confidentiality agreement, in form acceptable to the Company) or
      (ii) would adversely affect the attorney-client privilege between the Company
      and its counsel; 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (h) if
      for
      any period the Company shall have any subsidiary whose accounts are consolidated
      with those of the Company, then in respect of such period the financial
      statements delivered pursuant to the foregoing sections shall be the
      consolidated and consolidating financial statements of the Company and all
      such
      consolidated subsidiaries. 

     

    (i)
      notices describing in reasonable detail any claim, action, suit, proceeding,
      arbitration, complaint, charge or investigation pending or to the knowledge
      of
      the Company threatened against the Company or any officer or director of the
      Company involving the Company or any default or breach by any party under any
      agreement of the Company as soon as practicable, but in any event within five
      (5) days after the Company becomes aware of such litigation or contract default.
      

     

    3.2.  Inspection. So
      long
      as EnerTech owns one percent (1.0%) of the issued and outstanding capital stock
      of the Company,
      the
      Company shall permit, at EnerTech’s expense, EnerTech to visit and inspect the
      Company’s properties, to examine its books of account and records and to discuss
      the Company’s affairs, finances and accounts with its officers, all at such
      reasonable times as may be reasonably requested by at EnerTech; provided,
      however,
      that
      the Company shall not be obligated pursuant to this Section 3.2
      to
      provide access to any information which it reasonably considers to be a trade
      secret or similar confidential information (unless covered by an enforceable
      confidentiality agreement in a form acceptable to the Company) or would
      adversely affect the attorney-client privilege between the Company and its
      counsel.

     

    3.3.  Termination
      of Information and Inspection Covenants. The
      covenants set forth in Section
      3.1
      and
Section 3.2
      shall
      terminate as to EnerTech and be of no further force or effect immediately prior
      to the consummation of the sale of shares of Common Stock in the Company’s IPO
      or when the Company first becomes subject to the periodic reporting requirements
      of Sections 12(g) or 15(d) of the Exchange Act, unless EnerTech ceases to
own
      one
      percent (1.0%) of the issued and outstanding capital stock of the Company
prior
      to
      the occurrence of such events, in which case the covenants shall terminate
      as of
      the date that EnerTech no longer owns
      one
      percent (1.0%) of the issued and outstanding capital stock of the
      Company.
      

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    3.4.  Confidentiality.
      Each
      Stockholder agrees that such Stockholder will keep confidential and will not
      disclose, divulge or use for any purpose, other than to monitor its investment
      in the Company, any confidential information obtained from the Company pursuant
      to the terms of this Agreement, unless such confidential information (i) is
      known or becomes known to the public in general (other than as a result of
      a
      breach of this Section
      3.4
      by such
      Stockholder), (ii) is or has been independently developed or conceived by the
      Stockholder without use of the Company's confidential information or (iii)
      is or
      has been made known or disclosed to the Stockholder by a third party without
      a
      breach of any obligation of confidentiality such third party may have to the
      Company; provided,
      however,
      that a
      Stockholder may disclose confidential information (a) to its attorneys,
      accountants, consultants, and other professionals to the extent necessary to
      obtain their services in connection with monitoring its investment in the
      Company, (b) to any prospective purchaser of any Registrable Securities
      from such Stockholder as long as such prospective investor agrees to be bound
      by
      the provisions of this Section
      3.4,
      (c) to any Affiliate, partner, member, stockholder or wholly owned
      subsidiary of such Stockholder in the ordinary course of business, as long
      as
      such Affiliate, partner, member stockholder or wholly owned subsidiary of such
      Stockholder agrees to be bound by the provisions of this Section
      3.4,
      or (d)
      as may otherwise be required by law, provided that the Stockholder takes
      reasonable steps to minimize the extent of any such required disclosure. The
      Company, EnerTech, and the Stockholders hereby acknowledge that EnerTech invests
      in numerous companies, some of which may be competitive with the Company’s
      business. The Company, EnerTech and the Stockholders agree that EnerTech shall
      not be liable for any claim arising out of, or based upon, (i) the investment
      by
      EnerTech in any entity competitive to the Company, (ii) actions taken by any
      partner, officer or other representative of EnerTech to assist any such
      competitive company, whether or not such action was taken as a board member
      of
      such competitive company, or otherwise, and whether or not such action has
      a
      detrimental effect on the Company, unless such claim arises directly from the
      EnerTech’s misuse of confidential information in material breach of this
Section
      3.4.

     

    4. Right
      of
      First Offer on Company Offerings

     

    4.1. Right
      of First Offer. Subject
      to the terms and conditions specified in this Section 4.1,
      and
      applicable securities laws, in the event the Company proposes to offer or sell
      any New Securities, the Company shall first make an offering of such New
      Securities to EnerTech in accordance with the following provisions of this
      Section
      4.1.
      EnerTech shall be entitled to apportion the right of first offer hereby granted
      it among itself and its partners, members and Affiliates in such proportions
      as
      it deems appropriate.

     

    (a) The
      Company shall deliver a notice, in accordance with the provisions of
Section
      10.5
      hereof,
      (the “Offer
      Notice”)
      to
      EnerTech stating (i) its bona fide intention to offer such New Securities,
      (ii) the number of such New Securities to be offered, and (iii) the
      price and terms, if any, upon which it proposes to offer such New
      Securities.

     

    (b) By
      written notification received by the Company, within twenty (20) calendar days
      after mailing of the Offer Notice, EnerTech may elect to purchase or obtain,
      at
      the price and on the terms specified in the Offer Notice, up to that portion
      of
      such New Securities which equals the proportion that the number of shares of
      Common Stock issued and then held by EnerTech bears to the total number of
      shares of Common Stock of the Company issued and then
      held by
      all the Stockholders.

     

    (c) In
      the
      event that the Company proposes to offer New Securities contingently, EnerTech
      will be issued warrants (“Contingent
      Warrants”)
      to
      purchase its pro rata portion of equity securities which may be purchased
      pursuant to such New Securities, or into which such New Securities may become
      convertible, as the case may be, in lieu of receiving such New Securities on
      the
      same terms as stated in the Offer Notice. The exercise of such Contingent
      Warrants will be subject to the same contingencies as the New Securities
      proposed to be offered. EnerTech must exercise such Contingent Warrants within
      twenty (20) calendar days after the Company has properly delivered a notice
      to
      EnerTech, in accordance with Section
      10.5
      hereof,
      that such Contingent Warrants may be exercised. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (d) If
      the
      consideration proposed to be paid for New Securities is in property, services
      or
      other non-cash consideration, the value of the consideration shall be as agreed
      in good faith by EnerTech and the Company. If EnerTech and the Company fail
      to
      agree in good faith as to the value of such consideration, the price paid for
      such offered New Securities shall be deemed to be the value of such
      consideration as calculated in accordance with GAAP.

     

    (e) The
      right
      of first offer in this Section
      4.1
      shall
      not be applicable to: (i) up to 14,706 shares of Common Stock properly issued
      or
      deemed issued to employees or directors of, or consultants to, the Company
      or
      any of its subsidiaries pursuant to the Management Option Plan (as defined
      in
Section
      8);
      or
      (ii) securities issued in connection with any stock split or stock dividend
      of
      the Company.

     

    (f) The
      right
      of first offer set forth in this Section 4.1
      may not
      be assigned or transferred except that such right is assignable by EnerTech
      to any of its Affiliates.

     

    (g) If
      (i)
      the Company proposes to issue New Securities at any time before the provisions
      of this Section
      4
      have
      terminated pursuant to Section
      4.2,
      (ii)
      EnerTech has been issued Contingent Warrants pursuant to Section 4.1(c), and
      (iii) EnerTech would be barred from exercising its rights under this
Section
      4,
      pursuant
      to Section
      4.2
      had the
      Contingent Warrants been exercised prior to the delivery of the Offer Notice
      because Acorn Energy’s ownership of the Company’s Common Stock would be less
      than seventy-five percent (75%) of the Company’s capital stock calculated on a
      fully diluted basis, then EnerTech shall not have the right to purchase or
      obtain New Securities proposed to be offered, but rather EnerTech will be issued
      warrants (“Secondary
      Contingent Warrants”)
      to
      purchase its pro rata portion of equity securities which may be purchased
      pursuant to such New Securities, or into which such New Securities may become
      convertible, as the case may be, in lieu of receiving such New Securities on
      the
      same terms as stated in the Offer Notice. Any Secondary Contingent Warrants
      shall become exercisable upon the lapse of Contingent Warrants referenced in
      subsection
      (iii)
      of this
Section
      4.1(g).
      EnerTech must exercise such Secondary Contingent Warrants within twenty (20)
      calendar days after the Company has properly delivered a notice to EnerTech,
      in
      accordance with Section
      10.5
      hereof,
      that such Secondary Contingent Warrants may be exercised.

     

    4.2.  Termination. The
      provisions of this Section
      4
      shall
      terminate upon the first to occur of (i) the consummation of an IPO, (ii) a
      failure by EnerTech to elect to purchase a portion of New Securities to which
      it
      is entitled under Section
      4.1(b),
      or to
      exercise its Contingent Warrants or Secondary Contingent Warrants, if any,
      as
      provided under Sections
      4.1(c)
      and
4.1(g),
      respectively and (iii) the point at which Acorn Energy’s ownership of the
      Company’s Common Stock is equal to seventy-five percent (75%) of the Company’s
      capital stock calculated on a fully diluted basis after giving effect to any
      proposed issuance of New Securities and the corresponding exercise by EnerTech
      of its rights under this Section
      4,
      but
      excluding shares issued or reserved for issuance under the Management Option
      Plan (as hereinafter defined). For the avoidance of doubt, Enertech shall have
      the ability to exercise such right with respect to the proposed issuance of
      New
      Securities to the extent that the exercise of such right will not reduce Acorn
      Energy’s ownership of the Company’s Common Stock below seventy-five percent
      (75%) of the Company’s capital stock. For illustrative purpose, in the event of
      a proposed issuance of New Securities that would reduce Acorn Energy’s ownership
      of the Company’s Common Stock below seventy-five percent (75%) of the Company’s
      capital stock, EnerTech shall have the right to purchase or obtain only that
      portion of such New Securities as it would be entitled to purchase or obtain
      if
      the size of the proposed issuance of New Securities were such that it would
      result in Acorn Energy owning exactly seventy-five percent (75%) of the
      Company’s capital stock calculated on a fully diluted basis after giving effect
      to any proposed issuance of New Securities and the corresponding exercise by
      EnerTech of its rights under this Section
      4.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    5. Rights
      of
      Refusal and Co-Sale 

     

    5.1.  Company
      Right of First Refusal.
      Each
      Stockholder hereby unconditionally and irrevocably grants to the Company a
      Right
      of First Refusal to purchase all or any portion of Transfer Stock that such
      Stockholder may propose to transfer in a Proposed Transfer, at the same price
      and on the same terms and conditions as those offered to the Prospective
      Transferee. Each Stockholder proposing to make a Proposed Transfer must deliver
      a Proposed Transfer Notice to the Company and the Key Holders, not later than
      10
      days prior to the consummation of such Proposed Transfer. Such Proposed Transfer
      Notice shall contain the material terms and conditions of the Proposed Transfer
      and the identity of the Prospective Transferee. The Company must exercise its
      Right of First Refusal under this Section
      5.1
      by
      giving a Company Notice to such selling holder of Common Stock within fifteen
      (15) days after delivery of the Proposed Transfer Notice.

     

    5.2.  Secondary
      Refusal Right of Key Holders.
      

     

    (a) Each
      Key
      Holder hereby unconditionally and irrevocably grants to the other Key Holder
      a
      Secondary Refusal Right to purchase the shares of Key Holder Stock not purchased
      by the Company pursuant to the Company’s Right of First Refusal under
Section
      5.1,
      as
      provided in this Section
      5.2.
      If the
      Company does not intend to exercise its Right of Refusal under Section
      5.1
      with
      respect to all Key Holder Stock subject to a Proposed Transfer, the Company
      must
      deliver a Secondary Notice to the other Key Holder to that effect no later
      than
      fifteen (15) days after the selling Key Holder delivers the Proposed Transfer
      Notice to the Company. To exercise its Secondary Refusal Right, a Key Holder
      must deliver a Key Holder Secondary Notice to the selling Key Holder and the
      Company within ten (10) days after the deadline for delivery of the Secondary
      Notice.

     

    (b) Each
      Stockholder that is not a Key Holder hereby unconditionally and irrevocably
      grants to the Key Holders a Secondary Refusal Right to purchase up to each
      Key
      Holder’s pro rata portion (based upon the total number of shares of each Key
      Holder’s Stock) of the Stockholder’s stock not purchased by the Company pursuant
      to the Company’s Right of First Refusal under Section
      5.1,
      as
      provided in this Section
      5.2.
      If the
      Company does not intend to exercise its Right of Refusal under Section
      5.1
      with
      respect to all of the selling Stockholder’s Common Stock subject to a Proposed
      Transfer, the Company must deliver a Secondary Notice to the Key Holders to
      that
      effect no later than fifteen (15) days after the selling Stockholder delivers
      the Proposed Transfer Notice to the Company. To exercise its Secondary Refusal
      Right, a Key Holder must deliver a Key Holder Secondary Notice to the selling
      Stockholder and the Company within ten (10) days after the deadline for delivery
      of the Secondary Notice.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    5.3.  Consideration;
      Closing.
      If the
      consideration proposed to be paid for the Transfer Stock is in property,
      services or other non-cash consideration, the fair market value of the
      consideration shall be determined in good faith by the Company’s Board of
      Directors. If the Company or any Key Holder cannot for any reason pay for the
      Transfer Stock in the same form of non-cash consideration, the Company or such
      Key Holder may pay the cash value equivalent thereof, as determined by the
      Board
      of Directors. The closing of the purchase of Transfer Stock by the Company
      and/or the other Key Holder, as the case may be, shall take place, and all
      payments from the Company and/or the other Key Holder, as the case may be,
      shall
      have been delivered to the selling Stockholder by the later of (i) the date
      specified in the Proposed Transfer Notice as the intended date of the Proposed
      Transfer and (ii) forty-five (45) days after delivery of the Proposed Transfer
      Notice. 

     

    5.4.  Right
      of Co-Sale. 

     

    (a) If
      any
      Transfer Stock subject to a Proposed Transfer by a Stockholder is not purchased
      pursuant to Sections
      5.1
      and
5.2
      above
      and thereafter is to be sold to a Prospective Transferee, a Key Holder or
      Management Stockholder may elect to exercise its Right of Co-Sale and
      participate on a pro-rata basis in the Proposed Transfer on the same terms
      and
      conditions specified in the Proposed Transfer Notice. A Key Holder or Management
      Stockholder who desires to exercise its Right of Co-Sale must give the selling
      Stockholder written notice to that effect within fifteen (15) days after the
      deadline for delivery of the Key Holder Secondary Notice as described above,
      and
      upon giving such notice such Key Holder or Management Stockholder shall be
      deemed to have effectively exercised the Right of Co-Sale.

     

    (b) Each
      Key
      Holder or Management Stockholder who timely exercises its Right of Co-Sale
      by
      delivering the written notice provided for above in Section
      5.4(a)
      may
      include in the Proposed Transfer all or any part of his, her or its Common
      Stock
      equal to the product obtained by multiplying (i) the aggregate number of shares
      of Stockholder Common Stock subject to the Proposed Transfer (excluding shares
      purchased by the Company pursuant to the Right of First Refusal of the Company)
      by (ii) a fraction, the numerator of which is the number of shares of Common
      Stock owned by such Key Holder or Management Stockholder immediately before
      consummation of the Proposed Transfer and the denominator of which is the total
      number of shares of Common Stock owned, in the aggregate, by all Stockholders
      immediately prior to the consummation of the Proposed Transfer. To the extent
      a
      Key Holder or Management Stockholder exercises such right of participation
      in
      accordance with the terms and conditions set forth herein, the number of shares
      of Common Stock that the selling Stockholder may sell in the Proposed Transfer
      shall be correspondingly reduced.

     

    (c) Each
      participating Key Holder or Management Stockholder shall effect its
      participation in the Proposed Transfer by delivering to the transferring
      Stockholder, no later than fifteen (15) days after such Key Holder’s or
      Management Stockholder’s exercise of the Right of Co-Sale, one or more stock
      certificates, properly endorsed for transfer to the Prospective Transferee,
      representing the number of shares of Common Stock that such Key Holder or
      Management Stockholder elects to include in the Proposed Transfer.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (d) The
      terms
      and conditions of any sale pursuant to this Section
      5.4
      will be
      memorialized in, and governed by, a written purchase and sale agreement with
      customary terms and provisions for such a transaction.

     

    (e) Each
      stock certificate a participating Key Holder or Management Stockholder delivers
      to the selling Stockholder pursuant to subparagraph (c) above will be
      transferred to the Prospective Transferee against payment therefor in
      consummation of the sale of the Transfer Stock pursuant to the terms and
      conditions specified in the Proposed Transfer Notice and the purchase and sale
      agreement, and the selling Stockholder shall concurrently therewith remit to
      the
      appropriate Key Holder or Management Stockholder the portion of the sale
      proceeds to which such Key Holder or Management Stockholder is entitled by
      reason of its participation in such sale. If any Prospective Transferee or
      Transferees refuse(s) to purchase securities subject to the Right of Co-Sale
      from a Key Holder or Management Stockholder exercising its Right of Co-Sale
      hereunder, no Stockholder may sell any Common Stock to such Prospective
      Transferee or Transferee unless and until, simultaneously with such sale, such
      selling Stockholder purchases all securities subject to the Right of Co-Sale
      from such other Stockholders.

     

    (f) If
      any
      Proposed Transfer is not consummated within forty-five (45) days after receipt
      of the Proposed Transfer Notice by the Key Holders, the Management Stockholders,
      or the Company, as the case may be, the Stockholder proposing the Proposed
      Transfer may not sell any of its Common Stock unless it first complies in full
      with each provision of this Section
      5.
      The
      exercise or election not to exercise any right by any Key Holder or Management
      Stockholder hereunder shall not adversely affect its right to participate in
      any
      other sales of Transfer Stock subject to this Section
      5.4.

     

    5.5.  Drag-Along
      Right.
      

     

    (a) In
      the
      event that any Key Holder owns more than fifty percent (50%) of the Company’s
      issued and outstanding capital stock and such Key Holder desires to accept
      a
      bona fide offer (a "Purchase
      Offer")
      from
      any person or persons, other than an Affiliate or another Stockholder, to
      purchase all (a "Divestiture")
      the
      shares of Common Stock then held by such Key Holder, then such Key Holder shall
      promptly deliver to each of the other Stockholders a written notice (the
      "Purchase
      Offer Notice")
      stating such Key Holder’s intention to sell such shares pursuant to such
      Purchase Offer and setting forth the terms and conditions of such Purchase
      Offer, including, without limitation, the identity of the proposed purchaser
      and
      the amount and type of consideration to be paid therefor. The Purchase Offer
      Notice shall include a copy of any written offer, letter of intent, term sheet
      or contract of sale pertaining to the Purchase Offer.

     

    (b) 
      In
      connection with a Divestiture, any Key Holder owning more than fifty percent
      (50%) of the Company’s issued and outstanding capital stock shall have the right
      ("Drag
      Along Right")
      to
      require each other Stockholder to participate in such sale of Common Stock
      by
      such Key Holder on the terms and conditions set forth in the Purchase Offer
      Notice (which shall be the same terms and conditions (on a per share basis)
      as
      are applicable to such Key Holder’s sale of shares of Common Stock to the
      proposed purchaser). Such Drag Along Right shall be exercisable by such Key
      Holder including in its Purchase Offer Notice a statement to the effect that
      such Key Holder elects to exercise its Drag Along Right in connection with
      the
      proposed sale. At any time prior to the closing of such sale, such Key Holder
      may withdraw its election to exercise its Drag Along Right upon written notice
      to the Stockholders.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (c) The
      closing of the purchase and sale of any shares of Common Stock to be sold
      pursuant to the Drag Along Right shall occur concurrently with the closing
      of
      the sale of the shares of the Common Stock by the Key Holder owning more than
      fifty percent (50%) of the Company’s issued and outstanding capital stock, which
      shall be a date not less than sixty (60) days after the giving of the Purchase
      Offer Notice. At any such closing, each Stockholder shall deliver to the
      purchaser a certificate or certificates representing the number of shares of
      Common Stock to be sold by such Stockholder, duly endorsed in blank or
      accompanied by a duly executed stock power in blank, with signatures duly
      guaranteed and all requisite stock transfer stamps affixed thereto. All
      Stockholders shall be treated equally under this Section
      5.5.
      It
      shall be a condition of the obligation to sell under this Section
      5.5
      that all
      facts and circumstances and all material aspects of any transaction under this
      Section
      5.5
      shall be
      disclosed. The provisions of this Section
      5.5
      shall
      terminate upon an IPO. 

     

    5.6.  Effect
      of Failure to Comply.
      

     

    (a) Any
      Proposed Transfer not made in compliance with the requirements of this Agreement
      shall be null and void ab initio, shall not be recorded on the books of the
      Company or its transfer agent and shall not be recognized by the Company. Each
      party hereto acknowledges and agrees that any breach of this Agreement would
      result in substantial harm to the other parties hereto for which monetary
      damages alone could not adequately compensate. Therefore, the parties hereto
      unconditionally and irrevocably agree that any non-breaching party hereto shall
      be entitled to seek protective orders, injunctive relief and other remedies
      available at law or in equity (including, without limitation, seeking specific
      performance or the rescission of purchases, sales and other transfers of Common
      Stock not made in strict compliance with this Agreement).

     

    (b) If
      any
      Stockholder becomes obligated to sell any Common Stock to the Company under
      this
      Agreement and fails to deliver such Common Stock in accordance with the terms
      of
      this Agreement, the Company may, at its option, in addition to all other
      remedies it may have, send to such Stockholder the purchase price for such
      Common Stock as is herein specified and cancel on its books the certificate
      or
      certificates representing the Common Stock to be sold.

     

    (c) If
      any
      Stockholder purports to sell any Common Stock in contravention of the terms
      of
      this Agreement (a “Prohibited
      Transfer”),
      the
      Company or a Key Holder, as the case may be, in addition to such remedies as
      may
      be available by law, in equity or hereunder, is entitled to require the
      following actions of such Stockholder, and such Stockholder will be bound by
      the
      terms of such option:

     

    (i) If
      a
      Stockholder makes a Prohibited Transfer, a Key Holder or the Company, as the
      case may be, who timely exercises his, her or its Right of First Refusal under
      Sections
      5.1
      and
5.2
      may
      require such Stockholder, to sell to the other Key Holder or the Company, as
      the
      case may be, the number of shares of Common Stock that such other Key Holder
      or
      the Company, as the case may be, would have been entitled to purchase under
      Sections
      5.1
      and
5.2
      had the
      Prohibited Transfer been effected pursuant to and in compliance with the terms
      of Sections
      5.1
      and
5.2.
      

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (ii) If
      a Key
      Holder makes a Prohibited Transfer, the other Key Holder that timely exercises
      its Right of Co-Sale under Section
      5.4
      may
      require such Key Holder to purchase from it the number of shares of Common
      Stock
      that such Key Holder would have been entitled to sell to the Prospective
      Transferee under Section
      5.4
      had the
      Prohibited Transfer been effected pursuant to and in compliance with the terms
      of Section
      5.4.
      

     

    In
      each
      case, the sale will be made on the same terms and subject to the same conditions
      as would have applied had the Stockholder not made the Prohibited Transfer,
      except that the sale (including, without limitation, the delivery of the shares
      or the purchase price, as the case may be) must be made within ninety (90)
      days
      after the Company or the other Key Holder, as the case may be, learns of the
      Prohibited Transfer, as opposed to the timeframe proscribed in Sections
      5.1,
      5.2,
      5.3,
      5.4,
      or
5.5
      as the
      case may be. Such Stockholder shall also reimburse the other Key Holder and
      the
      Company, as the case may be, for any and all fees and expenses, including legal
      fees and expenses, incurred pursuant to the exercise or the attempted exercise
      of the Key Holder’s or the Company’s, as the case may be, rights under
Sections
      5.1,
      5.2,
      5.3,
      5.4,
      or
5.5
      as the
      case may be.

     

    5.7.  Assistance
      with Pledging of Interests.
      The
      rights of the Company and the Key Holders under this Section
      5
      shall
      not pertain or apply to any pledge by a Key Holder of its Common Stock which
      creates a mere security interest in such Common Stock. The Company shall consent
      to any pledging of any Key Holder’s Common Stock and other matters customarily
      requested of the Key Holders by the Key Holders’ lenders; provided
      that any
      pledge of Common Stock shall be contingent upon the pledgee providing a written
      instrument to the Company agreeing in writing that its lien is subject to the
      terms of this Agreement.

     

    6. Exempt
      Transfers.

     

    6.1.  Transfers
      to Affiliates, Etc.
      Notwithstanding the foregoing or anything to the contrary herein, the provisions
      of Sections
      5.1,
      5.2
      and
5.4
      shall
      not apply: (i) in the case of a Key Holder that is an entity, upon a transfer
      by
      such Key Holder to its stockholders, members, partners or other equity holders,
      (ii) to a repurchase of Common Stock from a Key Holder by the Company at a
      price
      no greater than that originally paid by such Key Holder for such Common Stock
      and pursuant to an agreement containing vesting and/or repurchase provisions
      approved by a majority of the Board of Directors, or (iii) to the sale or
      transfer of Common Stock between Key Holders and their respective Affiliates;
      provided,
      however,
      that
      such transfer shall be contingent upon the transferee providing a written
      instrument to the Company notifying the Company of such transfer and assignment
      and agreeing in writing to be bound by the terms of this Agreement; and
provided further,
      notwithstanding any such permitted transfer, such transferred Common Stock
      shall
      remain Common Stock and Key Holder Stock for all purposes hereunder, and such
      transferee shall be treated as a Key Holder, as the case may be, (but only
      with
      respect to the securities so transferred to the transferee) for all purposes
      of
      this Agreement (including the obligations of a Key Holder with respect to
      Proposed Transfers of such Capital Stock pursuant to Section
      5);
      and
provided,
      further,
      in the
      case of any transfer pursuant to clause (i), that such transfer is made pursuant
      to a transaction in which there is no consideration actually paid for such
      transfer. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    6.2.  Public
      Offering.
      Notwithstanding the foregoing or anything to the contrary herein, the provisions
      of Section
      5
      shall
      not apply to the sale of any Common Stock to the public in an IPO, and the
      provisions of Section
      5
      shall
      terminate and be of no further force or effect upon (a) the consummation of
      the
      IPO, or (b) the Company first becoming subject to the periodic reporting
      requirements of Sections 12(g) or 15(d) of the Exchange Act, whichever event
      shall first occur.

     

    7. Key
      Holder Buy/Sell.

     

    7.1.  Triggering
      Notice.
      At any
      time following the first anniversary of the Closing of the Purchase Agreement
      (as defined therein), either Key Holder (such Key Holder, the “Triggering
      Key Holder”)
      may
      deliver a written notice in accordance with the provisions of Section 10.5
      hereof, (a “Triggering
      Notice”)
      to the
      other Key Holder (the “Responding
      Key Holder”)
      stating: (i) its intent to commence a purchase or sale of Key Holder Stock
      under
      this Section
      7
      and (ii)
      the per-share price (the “Per-Share
      Buy/Sell Price”)
      which
      will be applicable to such transaction.

     

    7.2.  Response
      Notice.
      Within
      90 days of the delivery of a Triggering Notice, the Responding Key Holder shall
      deliver a written notice in accordance with the provisions of Section 10.5
      (the
“Response
      Notice”)
      to the
      Triggering Key Holder stating whether the Responding Key Holder has elected:
      (i)
      to purchase the entirety of the Triggering Key Holder’s Common Stock at the
      Per-Share Buy/Sell Price or (ii) to sell the entirety of its Common Stock to
      the
      Triggering Key Holder at the Per-Share Buy/Sell Price.

     

    7.3.  Cure
      Period.
      If no
      Response Notice is delivered within 90 days of a Triggering Notice, the
      Triggering Key Holder shall deliver a written notice in accordance with the
      provisions of Section 10.5 (the “Cure
      Period Notice”)
      to the
      Responding Key Holder stating that the Responding Key Holder has failed to
      deliver a Response Notice and stating that the Responding Key Holder has 15 days
      from delivery of the Cure Period Notice (the “Cure
      Period”)
      to
      deliver a Response Notice to the Triggering Key Holder. If the Responding Key
      Holder does not deliver a Response Notice within the Cure Period, the Triggering
      Key Holder shall, at its sole option, within ten days of the conclusion of
      the
      Cure Period elect: (i) to purchase the entirety of the Responding Key Holder’s
      Common Stock at the Per-Share Buy/Sell Price or (ii) to sell the entirety of
      its
      Common Stock to the Responding Key Holder at the Per-Share Buy/Sell Price.
      The
      Key Holders shall thereupon effect a Closing of a sale or purchase in accordance
      with the provisions of Section 7.4 pursuant to the terms of the preceding
      sentence.

     

    7.4.  Closing.
      The
      closing of a sale or purchase under this Section
      7
      shall
      take place, and stock certificates representing all of the shares of Common
      Stock of the Selling Key Holder, properly endorsed for transfer to the
      purchasing Key Holder, as well as all payments from the purchasing Key Holder
      shall have been delivered to the selling Key Holder within forty-five (45)
      days
      after delivery of the Response Notice, the Cure Period Notice or the expiration
      of the Cure Period, as the case may be.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    8. Management
      Option Plan.
      Notwithstanding the foregoing or anything to the contrary herein, the provisions
      of Sections
      4
      and
5
      shall
      not apply to the issuance of options under a management option plan (the
“Management
      Option Plan”),
      provided that: (i) the total Company equity available for issuance under the
      Management Option Plan will be 14,706 shares of Common Stock, equivalent to
      12.5% ownership of the Company, on a fully diluted basis following Closing
      (as
      defined in the Purchase Agreement); (ii) the exercise price per share for any
      options issued under the Management Option Plan will be equal to or greater
      than
      the price per share paid by EnerTech under the Purchase Agreement; and (iii)
      the
      option pool under the Management Option Plan shall not be increased without
      EnerTech’s written consent.

     

    9. Additional
      Covenants.
      

     

    9.1. Insurance. Acorn
      Energy maintains Directors and Officers Errors and Omissions insurance
      pursuant to a policy of insurance substantially in the form provided to
      EnerTech. The Company and Acorn Energy will use reasonable best efforts to
      cause
      such insurance policy to be maintained until such time as the Board of Directors
      of the Company determines that such insurance should be discontinued. The policy
      shall not be cancelable by Acorn Energy without prior approval of the Board
      of
      Directors. 

     

    9.2.  Employee
      Agreements. The
      Company will cause each person now or hereafter employed by it or any subsidiary
      (or engaged by the Company or any subsidiary as a consultant/independent
      contractor) with access to confidential information and/or trade secrets to
      enter into a proprietary information, inventions, non-competition and
      non-solicitation agreement substantially in the form approved by the Board
      of
      Directors and satisfactory to the Stockholders. 

     

    9.3.  Employee
      Vesting.
      All
      future employees and consultants of the Company who shall purchase, or receive
      options to purchase, shares of the Company’s capital stock following the date
      hereof shall be required to execute stock purchase or option agreements
      providing for vesting of shares over a four-year period with the first 25%
      of
      such shares vesting following 12 months of continued employment or services
      after the grant date of each such security, and the remaining shares vesting
      in
      equal monthly installments over the following 36 months. The issuance or
      transfer of any options to purchase shares of the Company’s capital stock shall
      be contingent upon the holder or transferee becoming a party to this Agreement
      by executing and delivering an additional counterpart signature page to this
      Agreement, and thereafter such holder or transferee shall be deemed a
“Stockholder” for all purposes hereunder.

     

    9.4.  Board
      of Directors.
      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, the following persons shall be elected
      to
      the Board: five to seven individuals designated in the following proportions:
      (i) one designee of EnerTech, which individual shall initially be Scott Ungerer,
      for so long as EnerTech remains a Key Holder , (ii) two designees of Acorn
      Energy, one of which individuals shall initially be John Moore, Chairman, (iii)
      one to three outside directors designated by the Stockholders voting together
      as
      a single class, and (iv) the chief executive officer of the Company, which
      individual shall initially be Bill McMahon.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    9.5.  Meetings
      of the Board of Directors.
      The
      Board shall meet no less frequently than once every quarter, with monthly
      telephone conversations on an as-needed basis. Each authorized committee of
      the
      Board shall include the director elected by EnerTech. EnerTech shall be entitled
      to appoint an observer, who is approved by the Company’s Chief Executive, to all
      Board meetings. The Company will reimburse non-employee directors for all
      reasonable out-of-pocket expenses incurred in attending board and committee
      meetings.

     

    9.6.  Successor
      Indemnification.  In
      the
      event that the Company or any of its successors or assigns (i) consolidates
      with
      or merges into any other entity and shall not be the continuing or surviving
      corporation or entity of such consolidation or merger or (ii) transfers or
      conveys all or substantially all of its properties and assets to any person
      or
      entity, then, and in each such case, to the extent necessary, proper provision
      shall be made so that the successors and assigns of the Company assume the
      obligations of the Company with respect to indemnification of members of the
      Board of Directors as in effect immediately prior to such transaction, whether
      in the Company’s bylaws, Certificate of Incorporation, or elsewhere, as the case
      may be.

     

    9.7.  Transactions
      with Related Parties.
      The
      Company shall not enter into any business dealing, undertaking, contract,
      agreement, lease or other arrangement for the furnishing to or by the Company
      of
      goods, services or space or any other transaction with any Stockholder or any
      Affiliate of any Stockholder (an “Affiliate
      Contract”)
      and
      shall not take any action pertaining to the rights and obligations of the
      Company under such Affiliate Contract, without the approval of a majority of
      the
      disinterested members of the Company’s Board of Directors.

     

    9.8.  Actions
      Requiring Majority Stockholder Approval.
      Consent
      of the Stockholders holding a majority of the outstanding voting shares of
      Common Stock, which Stockholders must include EnerTech, provided that (x)
      EnerTech holds 5% or more of the Company’s issued and outstanding Common Stock
      and (y) EnerTech has exercised all of its rights under Section
      4
      to
      acquire New Securities prior to the termination of such rights under
Section
      4.2,
      shall
      be required for any action that (including by way of merger, consolidation,
      reclassification, reorganization or other similar event) creates, authorizes,
      or
      issues: (i) any class of stock or securities of the Company having any right,
      preference, privilege, power or priority superior to the Common Stock, or (ii)
      any debt or lease transaction resulting in an obligation to the Company, in
      the
      aggregate, in excess of $3,000,000.

     

    9.9.  Actions
      Requiring Super-Majority Stockholder Approval.
      Consent
      of the holders of more than 67% of the outstanding voting shares of the Common
      Stock shall be required for any action that (including by way of merger,
      consolidation, reclassification, reorganization or other similar
      event):

     

    (a) increases
      or decreases the number of authorized shares of Common Stock or creates or
      authorizes any obligation or security convertible into shares of Common
      Stock,

     

    (b) liquidates,
      dissolves or winds up the business and affairs of the Company or consents to
      any
      of the foregoing,

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (c) amends
      or
      waives any provision of the charter, by-laws or articles of the Company in
      a
      manner which adversely affects the holders of the Common Stock,

     

    (d) acquires
      any other corporation or entity, 

     

    (e) adversely
      alters, affects or changes the rights, preferences, privileges, powers, or
      interests of, or the restrictions provided for the benefit of, the holders
      of
      the Common Stock,

     

    (f) creates,
      authorizes shares of, or issues shares of any class or series of shares stock
      having any right, preference, privilege, power or priority on parity with the
      Common Stock, 

     

    (g) effects
      or authorizes any merger, recapitalization, reorganization, acquisition,
      consolidation, liquidation, winding up, or sale of all or substantially all
      of
      the assets of the Company, 

     

    (h) makes
      any
      loan or advance to, or own any stock or other securities of, any subsidiary
      or
      other corporation, partnership, or other entity unless it is wholly owned by
      the
      Company; 

     

    (i) makes
      any
      loan or advance to any person, including, any employee or director,

     

    (j) guarantees
      any indebtedness except for trade accounts of the Company or any subsidiary
      arising in the ordinary course of business,

     

    (k) makes
      any
      investment other than investments in prime commercial paper, money market funds,
      certificates of deposit in any United States bank having a net worth in excess
      of $100,000,000 or obligations issued or guaranteed by the United States of
      America, in each case having a maturity not in excess of two years,
      or

     

    (l) enters
      into or causes the Company to be a party to any transaction with any director,
      officer or employee of the Company or any “associate” (as defined in Rule 12b-2
      promulgated under the Exchange Act) of any such person or any Affiliate of
      the
      Company.

     

    9.10. Termination
      of Covenants. The
      covenants set forth in this Section
      9,
      shall
      terminate and be of no further force or effect upon (a)
      the
      consummation of the IPO, or (b) the Company first becoming subject to the
      periodic reporting requirements of Sections 12(g) or 15(d) of the Exchange
      Act,
      whichever event shall first occur.

     

    10.  Miscellaneous.
      

     

    10.1. Transfers,
      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. 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.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    10.2. 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.

     

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

     

    10.4. 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.

     

    10.5. 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 on the signature page or Schedule A
      hereto,
      or to such email address, facsimile number or address as subsequently modified
      by written notice given in accordance with this Section
      10.5.
      

     

    If
      notice
      is given to the Company or Acorn Energy, a copy shall also be sent
      to:

     

    Eilenberg
      Krause & Paul LLP

    11
      East
      44th Street, 19th Floor

    New
      York,
      New York 10017

    Fax
      No.
      (212) 986-2399

    Attention:
      Sheldon Krause, Esq.

     

    Womble
      Carlyle Sandridge & Rice, PLLC 

    One
      Wachovia Center, Suite 3500 

    301
      South
      College Street 

    Charlotte,
      NC 28202-6037 

    Fax
      No.
      (704) 338-7819

    Attention:
      Joe B. Cogdell

     

    If
      notice
      is given to EnerTech, a copy shall also be sent to:

     

    Dechert
      LLP

    Cira
      Centre

    2929
      Arch
      St.

    Philadelphia,
      PA 19104-2808

    Fax
      No.
      (215) 994-2222

    Attention:
      Ian A. Hartman, Esq.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    10.6. Amendments
      and Waivers. This
      Agreement may be amended or modified and the observance of any term hereof
      may
      be waived (either generally or in a particular instance and either retroactively
      or prospectively) only by a written instrument executed by each of the Key
      Holders, provided that such consent shall not be required if the Key Holders
      do
      not then own shares representing at least 50% of the outstanding Common Stock.
      Any amendment or waiver so effected shall be binding upon the Company, the
      Stockholders and all of their respective successors and permitted assigns
      whether or not such party, assignee or other shareholder entered into or
      approved such amendment or waiver. Notwithstanding the foregoing, (a) this
      Agreement may not be amended or terminated and the observance of any term
      hereunder may not be waived with respect to any Stockholder without the written
      consent of such Stockholder unless such amendment, termination or waiver applies
      to all Stockholders, respectively, in the same fashion and (b) the consent
      of
      the Key Holders shall not be required for any amendment or waiver if such
      amendment or waiver does not apply to the Key Holders. The Company shall give
      prompt written notice of any amendment or termination hereof or waiver hereunder
      to any party hereto that did not consent in writing to such amendment,
      termination or waiver. No waivers of or exceptions to any term, condition or
      provision of this Agreement, in any one or more instances, shall be deemed
      to
      be, or construed as, a further or continuing waiver of any such term, condition
      or provision.

     

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

     

    10.8. Additional
      Stockholders.
      Notwithstanding anything to the contrary contained herein, if the Company shall
      issue additional shares of Common Stock or options under the Management Option
      Plan after the date hereof, the Company’s issuance to any purchaser of such
      shares of Common Stock or recipient of stock options shall be contingent on
      such
      purchaser or option holder becoming a party to this Agreement by executing
      and
      delivering an additional counterpart signature page to this Agreement and
      thereafter such purchaser shall be deemed a “Stockholder” for all purposes
      hereunder.

     

    10.9. Entire
      Agreement. This
      Agreement (including the Exhibits hereto, if any) and the other Transaction
      Agreements (as defined in the Purchase Agreement) 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.

     

    10.10. Transfers
      of Rights. Each
      Stockholder hereto hereby agrees that it will not, and may, not assign any
      of
      its rights and obligations hereunder, unless such rights and obligations are
      assigned by such Stockholder to (a) any person or entity to which Registrable
      Securities are transferred by such Stockholder, or (b) to any Affiliate of
      such
      Stockholder, and, in each case, such transferee shall be deemed a “Stockholder”
for purposes of this Agreement; provided
      that
      such assignment of rights shall be contingent upon the transferee providing
      a
      written instrument to the Company notifying the Company of such transfer and
      assignment and agreeing in writing to be bound by the terms of this Agreement
      or
      such transfer or assignment shall be void.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    10.11. 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.

     

    10.12. Effectiveness.
      This
      Agreement shall be effective as of the Closing (as defined in the Purchase
      Agreement).

     

    10.13. Legend
      on Stock Certificates.
      Each
      certificate representing shares of Common Stock shall bear a legend
      substantially in the following form:

     

    “THE
      SALE, TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF THE SECURITIES REPRESENTED
      BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A STOCKHOLDERS’
AGREEMENT DATED AS OF FEBRUARY 29, 2008 BY AND AMONG THE ISSUER OF THIS SECURITY
      AND CERTAIN HOLDERS OF THE STOCK OF SUCH CORPORATION. COPIES OF SUCH AGREEMENT
      MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD
      OF
      THIS CERTIFICATE TO THE CORPORATION AT ITS PRINCIPAL EXECUTIVE
      OFFICE.”

     

    [Remainder
      of Page Intentionally Left Blank]

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      above written.

     

    
      	 	
              COALOGIX
                INC.:

            
	 	 	 	 
	 	
              By:
                

            	 	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 	 
	 	
              
                ACORN
                  ENERGY, INC.:

              

            
	 	 	 	 
	 	
              By:
                

            	 	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 	 
	 	
              
                ENERTECH
                  CAPITAL PARTNERS III L.P.

              

            
	 	 	 	 
	 	
              By:

            	 	
              ECP
                III Management L.P.,

            
	 	 	 	
              Its
                general partner

            
	 	 	 	 
	 	
              By:
                

            	 	
              ECP
                III Management LLC,

            
	 	 	 	
              Its
                general partner

            
	 	 	 	 
	 	
              By:
                

            	 	 
	 	Name: 
              	
              Scott
                Ungerer

            
	 	Title:  	
              CEO

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              /s/William
                McMahon

            	 
	
              William
                McMahon

            	 
	 	 
	 	 
	 	 
	
              /s/Michael
                Mattes

            	 
	
              Michael
                Mattes

            	 
	 	 
	 	 
	
              /s/Frank
                Wenz

            	 
	
              Frank
                Wenz

            	 
	 	 
	 	 
	
              /s/Michael
                Cooper

            	 
	
              Michael
                Cooper

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