Document:

Exhibit
10.1

 

NOTE
PURCHASE AGREEMENT

 

THIS
NOTE PURCHASE AGREEMENT (this “Agreement”) is entered into as of October 28, 2016, by and between YA
II PN, LTD., a Cayman Islands exempt limited partnership (the “Investor”), MICRONET ENERTEC TECHNOLOGIES,
INC., a corporation organized and existing under the laws of the State of Nevada (the “Company” or a “Borrower”),
and ENERTEC ELECTRONICS LTD, a corporation organized and existing under the laws of the State of Israel (“Enertec”
or a “Borrower” and collectively with the Company, the “Borrowers”).

 

WITNESSETH

 

WHEREAS,
on June 30, 2016 the parties entered into a note purchase agreement (the “Original Purchase Agreement”) pursuant
to which the Borrowers issued and sold to the Investor, and the Investor purchased from the Borrowers, a secured promissory note
in an aggregate principal amount of $600,000 (the “Original Note”);

 

WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Borrowers shall issue and sell to
the Investor, and the Investor shall purchase from the Borrowers, additional secured promissory notes, each substantially in the
form attached hereto as Exhibit A (each a “Note” and all such Notes collectively along with the Original
Note, the “Notes”), in an aggregate principal amount of up to $500,000, or such other amount as may be mutually
agreed upon by the parties; and

 

WHEREAS,
in connection with the Original Note the parties entered in a pledge agreement and escrow deed on June 30, 2016 (collectively,
the “Pledge Agreements”) pursuant to which Enertec provided a first priority lien and security interest over
certain shares of Micronet Ltd. (“Micronet”) and deposited such pledged shares into a bank account in Israeli
controlled by an escrow agent appointed by the parties pursuant to an escrow deed dated June 30, 2016 (the “Escrow Deed”);

 

WHEREAS,
as of the date hereof, the number of Ordinary Share of Micronet pledged as collateral security by Enertec is 1,700,000 (the “Micronet
Stock” and such additional shares of Micronet Stock as required from time to time in accordance with Section 1(f) below,
collectively, the “Pledged Shares”); and

 

WHEREAS,
as used herein the term “Transaction Documents” shall mean this Agreement, the Original Purchase Agreement,
the Original Note, any Note or Notes executed by a Borrower, any guarantees by third parties (if applicable), the Pledge Agreements,
and any other agreement entered into in connection with this Agreement, all as amended or extended from time to time.

 

     

     

    

 

NOW,
THEREFORE, in consideration of the mutual covenants and other agreements contained in this Agreement the Borrowers and the
Investor hereby agree as follows:

 

1.            PURCHASE
AND SALE OF NOTES;

 

(a)         Purchase
of Note. The Investor shall purchase, and the Borrowers shall sell, an aggregate of $500,000 in principal amount of Notes,
or such additional amount as may be agreed upon by the parties in writing, which shall be purchased for 100% of the face amount
of the Notes issued and sold. The purchase and sale of these Notes will occur in one, or more tranches, each tranche which shall
take place on the dates set forth herein or on such other date or dates as may be agreed upon by the parties (each a “Closing”
and the date of each Closing shall be referred to as a “Closing Date”), subject to the satisfaction of all
the conditions precedent set forth below. At the first Closing the Investor shall purchase, and the Borrowers shall sell, an aggregate
of $500,000 in principal amount of Notes, which shall be purchased for 100% of the face amount of the Notes issued and sold. The
purchase and sale of the first tranche of Notes will take place as soon as possible after the first date that all the conditions
precedent to the Closing set forth in Section 1(e) hereof have been satisfied (or such other date as may be agreed upon by the
parties).

 

(b)         Form
of Payment. Subject to the satisfaction of the terms and conditions of this Agreement, on each Closing Date (i) the Investor
shall deliver to the Borrowers as set forth herein the principal amount of the Notes to be issued and sold to the Investor on
such Closing, and (ii) the Borrowers shall deliver to the Investor, the Notes duly executed on behalf of the Borrowers in the
principal amount so purchased.

 

(c)         Warrants.
In connection with the first Closing the Company shall grant to the Investor a warrant in the form of Exhibit B attached
hereto to purchase 66,000 shares of common stock of the Company at an exercise price of $3.00 per share and a term of 5 years.

 

(d)         Fees.
On each Closing Date, the Borrowers shall pay to YA Global II SPV LLC (as designee of the Investor) a commitment fee in the amount
equal to 5% of the principal amount of the Notes purchase at such Closing.

 

(e)         Conditions
Precedent to each Closing. The obligation of the Investor hereunder to purchase Notes at a Closing is subject to the satisfaction,
at or before each Closing Date, of each of the following conditions, provided that these conditions are for the Investor’s
sole benefit and may be waived by the Investor at any time in its sole discretion:

 

(i)        There
shall not have been any “Material Adverse Effect,” where “Material Adverse Effect” shall mean any condition,
circumstance, or situation that may result in, or reasonably be expected to result in (1) a material adverse effect on the legality,
validity or enforceability of this Agreement or the transactions contemplated herein, (2) a material adverse effect on the results
of operations, assets, business or condition (financial or otherwise) of the Borrowers, taken as a whole, or (3) a material adverse
effect on any Borrowers’ ability to perform in any material respect on a timely basis its obligations under the Transaction
Documents; All except for any change, event, occurrence, fact, condition, circumstances, development or effect (i) resulting from
general economic conditions, or resulting from conditions or circumstances generally affecting the industry in which the of the
Borrowers operates, (ii) resulting from or arising as a result of this Agreement, or (iii) arising from or relating to any change
in applicable accounting requirements or principles, or any change in applicable Laws.

 

(ii)       The
representations and warranties contained in Section 3 shall be true and correct in all material respects on and as of the Closing
Date as though made at the end of such date, and no event of default shall have occurred and be continuing, or would exist after
giving effect to the Closing;

 

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(iii)      The
Company’s common stock (“Common Stock”) shall be authorized for quotation or trading on the Nasdaq Capital
Market (the “Principal Market”) and trading in the Common Stock shall not have been suspended for any reason;

 

(iv)      The
parties have signed a closing statement with respect to the Closing in an agreed upon form; and

 

(v)       The
Pledge Agreements shall remain in full force and effect and (i) with respect to the first Closing Enertec shall have granted a
first priority perfected lien and security interest over at least 2,700,000 Pledged Shares and (ii) with respect to subsequent
Closings, Enertec shall have granted a first priority perfected lien and security interest over at least such number of shares
Pledged Shares with a market value (as determined by the most recently available closing price of Micronet on the TASE as of the
Closing Date) of at least 200% of the total amount of the obligations owed under all Notes that remain outstanding, including
the Note to be issued at such Closing, unless otherwise agreed by the parties.

 

(f)          In
the event that the Market Value (as defined herein) of the Pledged Shares is less than (i) 66%, or (ii) in the case Micronet shares
are moved to the maintenance list on the TASE, 78% of the balance of all the Notes outstanding at any time for five consecutive
trading days, then Enertec shall promptly (but in either case no later than seven trading days) increase the number of Pledged
Shares such that immediately after such increase in Pledged Shares the Market Value of the Pledged Securities shall be greater
than or equal to 100% of the then balance of all the Notes outstanding, or make a repayment of a portion of the amount outstanding
such that after application of such payment, the value of the Pledged Shares is at least equal to 100% of the balance of all the
Notes that are outstanding. For purposes hereof, “Market Value” shall be calculated by multiplying the last closing
price of Micronet Stock on the TASE by the number of Pledged Securities.

 

2.           INVESTOR’S
REPRESENTATIONS AND WARRANTIES.

 

Investor
hereby represents and warrants to the Company that the following are true and correct as of the date hereof, and as of the Closing
Date:

 

(a)         Organization
and Authorization. The Investor is duly organized, validly existing and in good standing under the laws of the Cayman Islands
and has all requisite power and authority to purchase and hold the Notes. The decision to invest and the execution and delivery
of this Agreement by such Investor, the performance by such Investor of its obligations hereunder and the consummation by such
Investor of the transactions contemplated hereby have been duly authorized and requires no other proceedings on the part of the
Investor. The undersigned has the right, power and authority to execute and deliver this Agreement and all other instruments on
behalf of the Investor. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery
hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable
against the Investor in accordance with its terms.

 

(b)         Evaluation
of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating
the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests
in connection with this transaction. It recognizes that its investment in the Company involves a high degree of risk.

 

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(c)         Investment
Purpose. The Note is purchased by the Investor for its own account, and for investment purposes. The Investor agrees not to
assign or in any way transfer the Investor’s rights to the Note or any interest therein and acknowledges that the Company
will not recognize any purported assignment or transfer of the Note except in accordance with applicable Federal and state securities
laws. No other person has or will have a direct or indirect beneficial interest in the Note. The Investor agrees not to sell,
hypothecate or otherwise transfer the Note unless the Note is registered under Federal and applicable state securities laws or
unless, in the opinion of counsel satisfactory to the Company, an exemption from such laws is available.

 

(d)         Accredited
Investor. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation
D of the Securities Act of 1933 (the “Securities Act”).

 

(e)         Information.
The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances
and operations of the Company and information it deemed material to making an informed investment decision. The Investor and its
advisors, if any, have been afforded the opportunity to ask questions of the Company and its management. Neither such inquiries
nor any other due diligence investigations conducted by such Investor or its advisors, if any, or its representatives shall modify,
amend or affect the Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.
The Investor understands that its investment involves a high degree of risk. The Investor has sought such accounting, legal and
tax advice, as it has considered necessary to make an informed investment decision with respect to this transaction.

 

(f)         No
General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection
with the offer or sale of the Note offered hereby.

 

(g)         Not
an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with the Company or any “Affiliate” of the Company
(as that term is defined in Rule 405 of the Securities Act).

 

3.           REPRESENTATIONS
AND WARRANTIES OF THE BORROWERS.

 

Each
Borrower hereby represents and warrants to the Investor that the following are true and correct as of the date hereof, and as
of the Closing Date:

 

(a)         Organization
and Qualification. Each Borrower is duly incorporated, validly existing and in good standing under the laws of its place of
incorporation and has all requisite corporate power to own its properties and to carry on its business as now being conducted.
Each Borrower is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which
the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect.

 

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(b)         Authorization,
Enforcement, Compliance with Other Instruments. (i) Each Borrower has the requisite corporate power and authority to enter
into and perform this Agreement and any other Transaction Document, and to issue the Note in accordance with the terms hereof
and thereof, (ii) the execution and delivery of this Agreement and any other Transaction Document by each Borrower and the consummation
by each of the transactions contemplated hereby and thereby, have been duly authorized by each Borrower’s Board of Directors
and no further consent or authorization is required by any Borrower, (iii) this Agreement, the Note (when issued) and any
related agreements have been duly executed and delivered by the each Borrower, (iv) this Agreement, the Note (when issued), and
any other Transaction Document, constitute the valid and binding obligations of each Borrower enforceable against it in accordance
with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies.

 

(c)         No
Conflict. The execution, delivery and performance of this Agreement by each Borrower and the consummation by the Borrowers
of the transactions contemplated hereby will not (i) result in a violation of such Borrower’s organizational documents or
(ii) conflict with or constitute a default (or an event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which such Borrower or any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market)
applicable to such Borrower or any of its subsidiaries or by which any material property or asset of such Borrower or any of its
subsidiaries is bound or affected and which would cause a Material Adverse Effect.

 

(d)         SEC
Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)
during the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file
such material) (all of the foregoing filed within the two years preceding the date hereof as amended after the date hereof and
all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein,
being hereinafter referred to as the “SEC Documents”) on a timely basis or has received a valid extension of
such time of filing and has filed any such SEC Document prior to the expiration of any such extension (including pursuant to SEC
from 12b-25). The Company has delivered to the Investor or its representatives, or made available through the SEC’s website
at http://www.sec.gov, true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates,
the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have
been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other information
provided by or on behalf of the Company to the Investor which is not included in the SEC Documents contains any untrue statement
of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.

 

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(e)         No
Default. No Borrower is in default in the performance or observance of any material obligation, agreement, covenant or condition
contained in any indenture, debenture, mortgage, deed of trust or other material instrument or agreement to which it is a party
or by which it or its property is bound and neither the execution, nor the delivery by such Borrower, nor the performance by such
Borrower of its obligations under this Agreement or any of the Transaction Documents will conflict with or result in the breach
or violation of any of the terms or provisions of, or constitute a default or result in the creation or imposition of any lien
or charge on any assets or properties of such Borrower under its organizational documents, any material indenture, mortgage, deed
of trust or other material agreement applicable to such Borrower or instrument to which such Borrower is a party or by which it
is bound, or any statute, or any decree, judgment, order, rule or regulation of any court or governmental agency or body having
jurisdiction over such Borrower or its properties, in each case which default, lien or charge is likely to cause a Material Adverse
Effect.

 

(f)           Internal
Accounting Controls. Each Borrower maintains a system of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.

 

(g)         Absence
of Litigation. Except as disclosed in the Company’s Form 10-Q for the period ended March 31, 2016 filed on May 16, 2016
in connection with the Novatel claim, there is no action, suit, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending against or affecting any Borrower or the Common Stock,
wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.

 

(h)         Tax
Status. Each Borrower has made or filed all federal and state income and all other tax returns, reports and declarations required
by any jurisdiction to which it is subject and (unless and only to the extent that such Borrower has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of each Borrower know of no basis for any such
claim.

 

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(i)           Foreign
Corrupt Practices. No Borrower nor any subsidiary, nor to the knowledge of any Borrower or any subsidiary, any agent or other
person acting on behalf of such Borrower or any subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by a Borrower or any subsidiary (or made by any person acting on its
behalf of which such Borrower is aware) which is in violation of law or (iv) violated in any material respect any provision of
the Foreign Corrupt Practices Act of 1977, as amended.

 

(j)           Sanctions.
No Borrower, nor any subsidiary of any Borrower, nor, to the Borrower’s knowledge, any director, officer, agent, employee
or affiliate of a Borrower or any subsidiary of a Borrower, is a Person that is, or is owned or controlled by a Person that is:

 

		(a)	on
                                         the list of Specially Designated Nationals and Blocked Persons maintained by the U.S.
                                         Department of Treasury’s Office of Office of Foreign Asset Control (“OFAC”)
                                         from time to time;

 

		(b)	the
                                         subject of any sanctions administered or enforced by OFAC, the U.S. State Department,
                                         the United Nations Security Council, the European Union, Her Majesty’s Treasury,
                                         or other relevant sanctions authority (collectively, “Sanctions”);

 

		(c)	has
                                         a place of business in, or is operating, organized, resident or doing business in a country
                                         or territory that is, or whose government is, the subject of OFAC economic sanction program
                                         (including, without limitation, programs related to Crimea, Cuba, Iran, North Korea,
                                         Sudan and Syria).

 

(k)          Except
with respect to the material terms and conditions of the transactions contemplated by this Agreement, all of which shall be publicly
disclosed by the Company as soon as possible after the date hereof, each Borrower covenants and agrees that neither it, nor any
other person acting on its behalf, will provide the Investor or its agents or counsel with any information that such Borrower
believes constitutes material non-public information, unless prior thereto the Investor shall have entered into a written agreement
with such Borrower regarding the confidentiality and use of such information. Each Borrower understands and confirms that the
Investor shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

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4.           INDEMNIFICATION.
Each Borrower will indemnify and hold the Investor and its directors, officers, shareholders, members, partners, employees and
agents (and any other persons with a functionally equivalent role of a person holding such titles notwithstanding a lack of such
title or any other title), each person who controls the Investor, and the directors, officers, shareholders, agents, members,
partners or employees (and any other persons with a functionally equivalent role of a person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from
any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party
may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements
made by the Company in this Agreement, the Note, or any other Transaction Document or (b) any action instituted against the Purchaser
Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Purchaser Party, with respect to any of the transactions contemplated by herein (unless such action is based upon a breach
of such Purchaser Party’s representations, warranties or covenants under this Agreement or any agreements or understandings
such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities
laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance).

 

The
representations and warranties of the Parties contained in this Agreement or in any certificates or other writing delivered pursuant
to this Agreement or in connection herewith will survive the Closing for 36 months except for in the event of fraud, all except
for claims for any Damages resulting from fraud.

 

Notwithstanding
anything to the contrary under this Agreement or applicable law, (i) the Purchaser Party shall not be entitled to any indemnification
pursuant to Section 4 (other than claims for any Damages resulting from fraud) until
the aggregate amount of all such Damages that would otherwise be indemnifiable equals or exceeds $50,000 (the “Basket”),
at which time the Purchaser Party shall be entitled to indemnification for the full amount of all Damages (including all Damages
incurred prior to exceeding the Basket), and (ii) Borrowers aggregate liability in connection with breach of representations and
warranties hereunder pursuant to Section 4 shall not exceed the amounts actually paid to Borrower under the Note; other than claims
for any Damages resulting from fraud. Notwithstanding anything herein or in any applicable law to the contrary, Borrowers shall
not be liable under this Agreement or in connection thereto for any Damages relating to indirect, consequential or punitive damages,
including lost profit, loss of a business opportunity or loss of goodwill.

 

If
any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Borrowers in writing, and the Borrowers shall have the right to assume the defense
thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right
to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized
by the Company in writing, (ii) the Borrowers have failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between
the position of a Borrower and the position of such Purchaser Party, in which case the Borrowers shall be responsible for the
reasonable fees and expenses of no more than one such separate counsel. The Borrowers will not be liable to any Purchaser Party
under this Agreement (y) for any settlement by a Purchaser Party effected without a Borrower’s prior written consent, which
shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability
is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or any other Transaction Document. The indemnification required by this Section 4 shall
be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received
or are incurred. The indemnity agreements contained herein shall the sole and exclusive remedies or cause of action or similar
right of any Purchaser Party against a Borrower.

 

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5.          COVENANTS
OF THE BORROWERS.

 

(a)         Compliance
with Laws. The Borrowers shall comply with all applicable laws, statutes, rules, regulations, orders, executive orders, directives,
policies, guidelines and codes having the force of law, whether local, national, or international, as amended from time to time,
including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial record keeping
and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls,
including the United States Foreign Corrupt Practices Act of 1977, and (iii) any Sanctions laws, and will not take any action
which will cause the Investor to be in violation of any such laws.

 

(b)         Use
of Proceeds. The Borrowers shall use the proceeds from the issuance of the Notes hereunder for working capital and other general
corporate purposes. Neither the Borrowers nor any subsidiary will, directly or indirectly, use the proceeds of the transactions
contemplated herein, or lend, contribute, facilitate or otherwise make available such proceeds to any Person (i) to fund,
either directly or indirectly, any activities or business of or with any Person that is identified on the list of Specially Designated
Nationals and Blocker Persons maintained by OFAC, or in any country or territory, that, at the time of such funding, is, or whose
government is, the subject of Sanctions or Sanctions Programs, or (ii) in any other manner that will result in a violation of
Sanctions.

  

6.          GOVERNING
LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard
to the principles of conflict of laws. Each of the parties consents to the jurisdiction of the state courts of the State of New
York and the U.S. District Court for the District of New York sitting in Manhattan, for the adjudication of any civil action
asserted pursuant to this paragraph.

  

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7.          NOTICES.
Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or
(iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed
to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

	If
    to the Borrowers, to:	Micronet
    Enertec Technologies, Inc.
	 	28
    West Grand Avenue, Suite 3
	 	Montvale,
    NJ 07645
	 	Attention:
    David Lucatz
	 	Email:
    David@micronet-enertec.com
	 

        With
        a copy to:
	 

        Zysman,
        Aharoni, Gayer and Sullivan & Worcester LLP

	 	1633
        Broadway

        New
        York, NY 10019

        Attention:
        Oded Har-Even, Esq.

        Telephone:
        (212) 660-5002

        Email:
        ohareven@zag-sw.com

 

	If
    to the Investor:	YA
    II PN, Ltd.
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ 07092
	 	Attention:Mark
    Angelo
	 	Telephone:(201)
    985-8300
	 	 
	With
    a copy to:	David
    Gonzalez, Esq. 
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ 07092
	 	Telephone:(201)
    985-8300
	 	Email:
    dgonzalez@yorkvilleadvisors.com

 

or
at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party three Business Days prior to the effectiveness of such change. Written confirmation
of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.

 

8.           MISCELLANEOUS.

 

(a)         Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party.

 

(b)         This
Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Borrowers
may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor (other
than by merger). The Investor may assign any or all of its rights under this Agreement to any person to whom the Investor assigns
or transfers any Notes, or a portion thereof, provided that such transferee agrees in writing to be bound, with respect to the
Notes, by the provisions of the this Agreement that apply to the Investor.

 

    10

     

    

 

(c)         Usury.
To the extent it may lawfully do so, each Borrower hereby agrees not to insist upon or plead or in any manner whatsoever claim,
and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any claim, action or proceeding that may be brought by the Investor in order to
enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction
Document, it is expressly agreed and provided that the total liability of the Borrowers under the Transaction Documents for payments
in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated
with any other sums in the nature of interest that the Borrowers may be obligated to pay under the Transaction Documents exceed
such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction
Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date
thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess
of the Maximum Rate is paid by the Borrowers to the Investor with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by the Investor to the unpaid principal balance of any such indebtedness or be refunded to the Company,
the manner of handling such excess to be at the Investor’s election.

 

(d)         Entire
Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor and the Borrowers
with respect to the matters discussed herein, and this Agreement, and the instruments referenced herein, contain the entire understanding
of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein,
neither the Borrowers nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged
with enforcement.

 

9.          CO-BORROWERS.

 

(a)         Borrowers
are jointly and severally liable for all debt, principal, interest, and other amounts owed to the Investor by Borrowers pursuant
to this Agreement, the Transaction Documents, or any other agreement, whether absolute or contingent, due or to become due, now
existing or hereafter arising (the “Obligations”) and the Investor may proceed against one Borrower to enforce
the Obligations without waiving its right to proceed against the other Borrower. This Agreement and the Notes are a primary and
original obligation of each Borrower and shall remain in effect notwithstanding future changes in conditions, including any change
of law or any invalidity or irregularity in the creation or acquisition of any Obligations or in the execution or delivery of
any agreement between the Investor and any Borrower. Each Borrower shall be liable for existing and future Obligations as fully
as if all of the funds advanced by the Investor hereunder were advanced to such Borrower. The Investor may rely on any certificate
or representation made by any Borrower as made on behalf of, and binding on, all Borrowers. Each Borrower appoints each other
Borrower as its agent with all necessary power and authority to give and receive notices, certificates or demands for and on behalf
of all Borrowers, to act as disbursing agent for receipt of any funds advanced by the Investor hereunder on behalf of each Borrower.
This authorization cannot be revoked, and the Investor need not inquire as to one Borrower’s authority to act for or on
behalf of another Borrower.

 

(b)         Notwithstanding
any other provision of this Agreement or any other Transition Documents, each Borrower irrevocably waives, until all obligations
are paid in full, all rights that it may have at law or in equity (including, without limitation, any law subrogating a Borrower
to the rights of Investor under the Transaction Documents) to seek contribution, indemnification, or any other form of reimbursement
from any other Borrower, or any other person now or hereafter primarily or secondarily liable for any of the Obligations, for
any payment made by a Borrower with respect to the Obligations in connection with the Transaction Documents or otherwise and all
rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made
by a Borrower with respect to the Obligations in connection with the Transaction Documents or otherwise. Any agreement providing
for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void. If any payment
is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for the Investor and such
payment shall be promptly delivered to the Investor for application to the Obligations, whether matured or unmatured.

 

[signature
page follows]

 

    11

     

    

 

IN
WITNESS WHEREOF, each of the Investor and the Company have caused their respective signature page to this Note
Purchase Agreement to be duly executed as of the date first written above.

 

	 	BORROWERS:
	 	 
	 	MICRONET
    ENERTEC TECHNOLOGIES, INC.
	 	 	 	 
	 	By:	/s/
    David Lucatz
	 	Name:	David
    Lucatz
	 	Title:	Chairman
    President and CEO
	 	 	 	 
	 	ENERTEC
    ELECTRONICS LTD
	 	 	 	 
	 	By:	/s/
    Tali Dinar
	 	Name:	Tali
    Dinar
	 	Title:	CFO
    of Enertec Electronics Ltd.
	 	 	 	 
	 	INVESTOR:	 
	 	 	 
	 	YA
    II PN, LTD.
	 	 
	 	By:	Yorkville
        Advisors Global LP

        

	 	Its:	Investment
    Manager
	 	 	 	 
	 	 	By:	Yorkville
    Advisors Global LLC
	 	 	Its:	General
    Partner
	 	 	 	 
	 	By:	/s/
    David Gonzales
	 	Name:	David
Gonzales 

	 	Title:	Managing
    Member and General Council

 

    12

     

    

 

Exhibit
A

Form
of Note

 

THIS
NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THIS NOTE
HAS BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

MICRONET
ENERTEC TECHNOLOGIES, INC

ENERTEC
ELECTRONICS LTD

 

Secured
Promissory Note

 

	No.
    MICT-2	Original
    Principal Amount:   $500,000
	 	 

 

FOR
VALUE RECEIVED, MICRONET ENERTEC TECHNOLOGIES, INC., a corporation organized and existing under the laws of the State of Nevada
(the “Company” or a “Borrower”), and ENERTEC ELECTRONICS LTD, a corporation organized and
existing under the laws of the State of Israel (“Enertec” or a “Borrower” and collectively
with the Company, the “Borrowers”), hereby promise to pay to the order of YA II PN, Ltd. or its registered
assigns (the “Holder”) (i) the outstanding portion of the amount set out above as the Original Principal Amount
(as reduced pursuant to the terms hereof pursuant to scheduled payment, redemption, conversion, or otherwise, the “Principal”)
when due, whether upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance
with the terms hereof) and (ii) to pay interest (“Interest”) on any outstanding Principal at the applicable
Interest Rate (as defined below) from the date defined in Section 17 hereof as the Issuance Date (the “Issuance Date”)
until the same is paid, whether upon the Maturity Date or acceleration, redemption or otherwise (in each case in accordance with
the terms hereof) pursuant to the terms of this Promissory Note (the “Note”).

 

This
Note is being issued pursuant to that certain Note Purchase Agreement dated as of October 28, 2016 (the “Note Purchase
Agreement“) among the Holder and the Borrowers. Certain capitalized terms used herein but otherwise not defined herein
are defined in Section 17 or in the Note Purchase Agreement.

 

(1)          GENERAL
TERMS

 

(a)       Maturity
Date. All amounts owed under this Note shall be due and payable on November 20, 2017 (the “Maturity Date”).
On the Maturity Date, the Borrowers shall pay to the Holder an amount in cash representing all then outstanding Principal and
accrued and unpaid Interest.

 

    Ex-A-1

     

    

 

(b)       Interest.
Interest shall accrue on the outstanding Principal balance hereof at a rate equal to 7% per annum (“Interest Rate”).
Interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed, to the extent permitted by
applicable law.

 

(c)       Payments
of Principal and Interest. On each of (i) March 20, 2017, (ii) June 20, 2017, (iii) September 20, 2017, and (iv) November
20, 2017 (each such date, a “Payment Due Date”), the Borrowers shall make a payment to the Holder in the amount
of $125,000 of Principal plus all accrued and unpaid Interest outstanding under this Note as of such payment date by wire transfer
of immediately available funds to the account listed on Schedule I hereto (or to any other account specified by the Holder to
the Borrowers in writing) to be received on or before such Payment Due Date.

 

(2)         NO
PREPAYMENT PENALTY. The Borrowers may prepay all or any part of the balance outstanding hereunder at any time without penalty.

 

(3)         REPRESENTATIONS
AND WARRANTIES. The Borrowers hereby represents and warrants to the Investor that the following are true and correct as of
the date hereof:

 

(a)       (i)
The Borrowers have the requisite corporate power and authority to enter into and perform its obligations under this Note and any
related agreements, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Note and any related
agreements by the Borrowers and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized
by the each Borrower’s Board of Directors and no further consent or authorization is required by any Borrower, Board of
Directors, or stockholders, (iii) this Note and any related agreements have been duly executed and delivered by the Borrowers,
(iv) this Note and any related agreements, constitute the valid and binding obligations of the Borrowers enforceable against each
Borrower in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors’ rights and remedies.

 

(b)       The
execution, delivery and performance by the Borrowers of its obligations under this Note will not (i) result in a violation of
any Borrower’s incorporation documents or any certificate of designation of any outstanding series of preferred stock or
(ii) conflict with or constitute a default (or an event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Borrower or any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market on
which the Common Stock is quoted) applicable to the Borrower or any of its subsidiaries or by which any material property or asset
of the Borrower is bound or affected and which would cause a Material Adverse Effect.

 

    Ex-A-2

     

    

 

(4)         EVENTS
OF DEFAULT. 

 

(a)       An
“Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether
it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court,
or any order, rule or regulation of any administrative or governmental body) shall have occurred and be continuing:

 

(i)       the
Borrowers’ failure to pay to the Holder any amount of Principal, Interest or other amounts when and as due and payable under
this Note and such failure was not cure within 5 days following the Holder’s written notice to such effect;

 

(ii)       any
Borrower or any subsidiary of any Borrower shall commence, or there shall be commenced against any Borrower or any subsidiary
of any Borrower under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or
any Borrower or any subsidiary of any Borrower commences, or there shall be commenced against any Borrower or any subsidiary of
any Borrower, any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to any Borrower or any
subsidiary of any Borrower, in each case which remains un-dismissed for a period of 61 days; or any Borrower or any subsidiary
of any Borrower is adjudicated insolvent or bankrupt pursuant to a final, non-appealable order; or any order of relief or other
order approving any such case or proceeding is entered; or any Borrower or any subsidiary of any Borrower suffers any appointment
of any custodian, private or court appointed receiver or the like for it or any substantial part of its property which continues
un-discharged or un-stayed for a period of 61 days; or any Borrower or any subsidiary of any Borrower makes a general assignment
for the benefit of creditors; or any Borrower or any subsidiary of any Borrower shall admit in writing that it is unable to pay
its debts generally as they become due; or any Borrower or any subsidiary of any Borrower shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its debts; or any corporate or other action is taken by
any Borrower or any subsidiary of any Borrower for the purpose of effecting any of the foregoing;

 

(iii)       the
common stock of the Company shall cease to be authorized for quotation or trading on the Nasdaq Capital Market, or trading in
the common stock of the Company has been suspended for any reason, for a period of more than ten Trading Days, or the ordinary
shares of Micronet Ltd. shall cease to be authorized for trading on the Tel-Aviv Stock Exchange, or trading in the ordinary shares
of Micronet Ltd. has been suspended for any reason, for a period of more than ten Trading Days and in any such case the failure
was not cured within 20 days.

 

(iv)       the
Company is a party to any agreement memorializing (1) the consummation of any transaction or event (whether by means of a share
exchange or tender offer applicable to the Common Stock, a liquidation, consolidation, recapitalization, reclassification, combination
or merger of the Company or a sale, lease or other transfer of all or substantially all of the consolidated assets of the Company)
or a series of related transactions or events pursuant to which all of the outstanding shares of Common Stock are exchanged for,
converted into or constitute solely the right to receive, cash, securities or other property, (2) a consolidation or merger in
which the Company is not the surviving corporation, or (3) a sale, assignment, transfer, conveyance or other disposal of all or
substantially all of the properties or assets of the Company to another person or entity (each of (1), (2) and (3) a “Change
in Control”) unless in connection with such Change in Control, all Principal and accrued and unpaid Interest due under
this Note will be paid in full or the Holder consents to such Change in Control;

 

    Ex-A-3

     

    

 

(v)       a
material event of default or material breach by any Borrower under the Note Purchase Agreement, any other Transaction Documents,
or any other material obligation, instrument, debenture, note or agreement for borrowed money occurring after the Issuance Date
of this Note and continuing beyond any applicable notice and/or grace period.

 

(5)         REMEDIES
UPON DEFAULT.

 

(a)       During
the time that any portion of this Note is outstanding, if (i) any Event of Default has occurred, the Holder, by notice in writing
to any Borrower, may at any time and from time to time declare the full unpaid Principal of this Note or any portion thereof,
together with Interest accrued thereon to be due and payable immediately (the “Accelerated Amount”) or (ii)
any Event of Default specified in Section 4(a)(ii) has occurred, the unpaid Principal of the Note and the Interest accrued thereon
shall be immediately and automatically due and payable without necessity of further action.

 

(6)         REISSUANCE
OF THIS NOTE. Upon receipt by any Borrower of evidence reasonably satisfactory to such Borrower of the loss, theft, destruction
or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the Holder to
such Borrower in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Borrowers shall
execute and deliver to the Holder a new Note representing the outstanding Principal which Note (i) shall be of like tenor with
this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (iii) shall have
an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have
the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest from the Issuance Date.

 

(7)         NOTICES.
Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or
(iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed
to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 

	If
    to the Borrowers, to:	Micronet
    Enertec Technologies, Inc.
	 	28
    West Grand Avenue, Suite 3
	 	Montvale,
    NJ 07645
	 	Attention:  David
    Lucatz
	 	Email:
    David@micronet-enertec.com
	 	 
	With
    a copy to:	 

        Zysman,
        Aharoni, Gayer and Sullivan & Worcester LLP

	 	1633
        Broadway

        New
        York, NY 10019

        Attention:
        Oded Har-Even, Esq.

        Telephone:
        (212) 660-5002

        Email:
        ohareven@zag-sw.com

 

    Ex-A-4

     

    

 

	If
    to the Holder:	YA
    II PN, Ltd.
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ  07092
	 	Attention:     Mark
    Angelo
	 	Telephone:   (201)
    985-830
	 	 
	With
    a copy to:	David
    Gonzalez, Esq.
	 	1012
    Springfield Avenue
	 	Mountainside,
    NJ  07092
	 	Telephone:    (201)
    985-8300
	 	Email:  dgonzalez@yorkvilleadvisors.com

 

or
at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified
by written notice given to each other party three Business Days prior to the effectiveness of such change. Written confirmation
of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.

 

(8)         No
provision of this Note shall alter or impair the obligations of the Borrowers, which are absolute and unconditional, to pay the
Principal of or Interest (if any) on, this Note at the time, place, and rate, and in the currency, herein prescribed. This Note
is a direct obligation of each Borrower. As long as this Note is outstanding, the Borrowers shall not and shall cause its subsidiaries
not to, without the consent of the Holder, (i) amend its articles of incorporation, bylaws or other charter documents so as to
adversely affect any rights of the Holder under this Note; or (ii) enter into any agreement with respect to any of the foregoing.

 

(9)         This
Note shall be governed by and interpreted in accordance with the laws of the State of New York, without regard to the principles
of conflict of laws. Each of the parties consents to the jurisdiction of the state courts of the State of New York and the U.S. District
Court for the District of New York sitting in Manhattan, in connection with any dispute arising under this Note and hereby waives,
to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens to the bringing of
any such proceeding in such jurisdictions.

 

    Ex-A-5

     

    

 

(10)         If
an Event of Default has occurred, then the Borrowers shall reimburse the Holder promptly for all reasonable out-of-pocket fees,
costs and expenses, including, without limitation, reasonable attorneys’ fees and expenses incurred by the Holder in any
action in connection with this Note, including, without limitation, those incurred: (i) during any workout, attempted workout,
and/or in connection with the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting
any sums which become due to the Holder in accordance with the terms of this Note, (iii) defending or prosecuting any proceeding
or any counterclaim to any proceeding or appeal; or (iv) the protection, preservation or enforcement of any rights or remedies
of the Holder.

 

(11)         Any
waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this Note. The failure of the Holder to insist upon strict
adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver must be in writing.

 

(12)         If
any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision
is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
If it shall be found that any Interest or other amount deemed Interest due hereunder shall violate applicable laws governing usury,
the applicable rate of Interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.
The Borrowers covenant (to the extent that it may lawfully do so) that each Borrower shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Borrowers from paying all or any portion of the Principal of or Interest on this Note as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this
Note, and the Borrowers (to the extent they may lawfully do so) hereby expressly waive all benefits or advantage of any such law,
and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to
the Holder, but will suffer and permit the execution of every such as though no such law had been enacted.

 

(13)         Whenever
any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.

 

(14)         Assignment
of this Note by the Borrowers shall be prohibited without the prior written consent of the Holder. Holder shall be entitled to
assign this Note in whole or in part to any person or entity without the consent of the Borrowers.

 

(15)         THE
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’
ACCEPTANCE OF THE NOTE PURCHASE AGREEMENT AND THIS NOTE.

 

    Ex-A-6

     

    

 

(16)         CERTAIN
DEFINITIONS For purposes of this Note, the following terms shall have the following meanings:

 

(a)       
“Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in
the United States or a day on which banking institutions in the United States are authorized or required by law or other government
action to close.

 

(b)       “Issuance
Date” means the date this Note is executed and delivered by the Borrowers to the Holder.

 

(c)       “Trading
Day” means a day on which the principal Trading Market is open for trading.

 

(d)       “Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, OTCBB, or the OTC Markets (or any successors to any of the foregoing).

 

(e)       “Transaction
Documents” shall have the meaning set forth in the Note Purchase Agreement.

 

[Signature
Page Follows]

 

    Ex-A-7

     

    

 

IN
WITNESS WHEREOF, each Borrower has caused this Note to be duly executed by a duly authorized officer as of October 28, 2016.

 

	 	BORROWERS:
	 	 
	 	MICRONET ENERTEC TECHNOLOGIES, INC.
	 	 	 
	 	By:	/s/
David Lucatz
	 	Name:	David
    Lucatz
	 	Title:	Chairman
    President and CEO
	 	 	 
	 	ENERTEC ELECTRONICS LTD
	 	 	 
	 	By:	/s/
    Tali Dinar
	 	Name:	Tali
    Dinar
	 	Title:	CFO
    of Enertec Electronics Ltd.

 

    Ex-A-8

     

    

 

Schedule
II

(Holder
Account Information)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Ex-A-9

     

    

 

Exhibit
B

Form
of Warrantgfe_Current_Folio _8-K_EX_101

		
			 
		

		
			 
		

		
			PROMISSORY NOTE
		

		
			 
		

		
			 
		

		
			Borrower:  Granite Falls Energy, LLCLender:Fagen Energy, LLC 
		

		
			15045 Hwy. 23 SE501 W Hwy 212, PO Box 159

P. O. Box 216Granite Falls, MN  56241-0159
		

		
			Granite Falls, MN  56241-0216
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			Principal Amount:  $7,500,000.00    Date of Note:  November 1, 2016
		

		
			 
		

		
			 
		

		
			PROMISE TO PAY.  Granite Falls Energy, LLC (“Borrower”) promises to pay to Fagen Energy, LLC (“Lender”), or order, in lawful money of the United States of America, the principal amount of Seven Million Five Hundred Thousand and no/100 Dollars ($7,500,000.00), or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance. 
		

		
			 
		

		
			PAYMENT.  This is a nonrecourse loan and Lender’s only remedy in case of default by Borrower is to seize the Ringneck Energy, LLC units owned by Granite Falls Energy, LLC, including any rights to payment to Borrower corresponding to those units.  Borrower will purchase 1,500 units in Ringneck Energy, LLC with the funds extended pursuant to this Promissory Note.  Lender shall have no right of recourse against Borrower for payment or collection, except for Borrower’s right to funds from and ownership of units in Ringneck Energy, LLC.  
		

		
			 
		

		
			Subject to the above nonrecourse provisions, interest only payments shall occur for years one (1) and two (2) of this Promissory Note, such payments due on the first and second anniversary of this Promissory Note.  The Promissory Note shall be equally amortized thereafter on a seven (7) year term (years three (3) through nine (9) of this Promissory Note), based upon monthly payments due on the first day of each month, with the first monthly payment due on the 26th month anniversary of this Promissory Note.  The amortized payments will be re-amortized (reset) based upon any change in interest rate.  
		

		
			 
		

		
			Based upon the current interest rate, the amortized monthly payments beginning on the 26th month anniversary of this Promissory Note, shall be $89,285.72 each month.  
		

		
			 
		

		
			Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any unpaid collection costs; and then to any late charges.  The annual interest rate for this Promissory Note is computed on a 365/360 

		 

 

accrual basis; that is, by applying the ratio of the annual interest rate over a period of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.  Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing.
		

		
			 
		

		
			 
		

		
			 
		

		
			VARIABLE INTEREST RATE.  The interest rate on this Promissory Note is subject to change from time to time based on changes to the interest rate on the revolving loan that Granite Falls Energy, LLC currently has with CoBank (currently 3.05%+ one month LIBOR, with a floor of 3.55%).  The interest rate will be established based upon that interest rate charged on said revolving loan as of the date funds are first advanced on this Promissory Note.  If that formula for determining an interest rate becomes unavailable during the term of this loan, Lender may set the interest rate based upon the interest rate then being charged by CoBank on revolving loans similar to the revolving loan currently in effect between CoBank, as Lender and Granite Falls Energy, LLC, as Borrower.  The interest rate change will not occur more than once a month.  The interest rate as determined shall not be less than 3.55% per annum.  NOTICE:  Under no circumstances will the interest rate on this Promissory Note be more than the maximum rate allowed by applicable law.  
		

		
			 
		

		
			PREPAYMENT; MINIMUM INTEREST CHARGE.  Borrower may pay without penalty all or a portion of the amount owed earlier than it is due.  Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments under the payment schedule.  Rather, early payments will reduce the principal balance due and may result in Borrower’s making fewer payments.  Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language.  If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender.  
		

		
			 
		

		
			DEFAULT.  Each of the following shall constitute an event of default (“Event of Default”) under this Note:
		

		
			 
		

		
			Payment Default.  Borrower fails to make any payment when due under this Note.
		

		
			 
		

		
			Other Defaults.  Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.
		

		
			 
		

		
			Default in Favor of Third Parties.  Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s property or Borrower’s ability to repay this Promissory Note or perform Borrower’s obligations under this Promissory Note or any of the related documents.
		

		
			 
		

		
			

		 

		

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			False Statements.  Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Promissory Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			Insolvency.  The dissolution of Borrower (regardless of whether election to continue is made) or any other termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.
		

		
			 
		

		
			Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan.  This includes a garnishment of any of Borrower’s accounts, including deposit accounts.  However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.
		

		
			 
		

		
			Adverse Change.  A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of this Promissory Note is impaired.
		

		
			 
		

		
			LENDER’S RIGHTS.  Upon default, Lender may declare the entire unpaid balance on this Promissory Note and all accrued unpaid interest immediately due.  This is a nonrecourse loan and Lender’s only remedy in case of default by Borrower is to seize the Ringneck Energy, LLC units owned by Granite Falls Energy, LLC, including any rights to payment to Borrower corresponding to those units.  Borrower will purchase 1,500 units in Ringneck Energy, LLC with the funds extended pursuant to this Promissory Note.  Lender shall have no right of recourse against Borrower for payment or collection, except for Borrower’s right to funds from and ownership of units in Ringneck Energy, LLC.  Lender’s sole remedy will be against the assets of Borrower in Ringneck Energy, LLC.  Lender shall have no right to collect funds from Borrower or execute on assets of Borrower, except for the right of Lender to execute on Borrower’s interests in Ringneck Energy, LLC (a South Dakota ethanol facility).  
		

		
			 
		

		
			ATTORNEYS’ FEES; EXPENSES.  Lender may hire or pay someone else to help collect this Promissory Note if Borrower does not pay.  Any such costs will be added to amounts owed pursuant to this Promissory Note.  This includes, subject to any limits under applicable law, Lender’s reasonable attorneys’ fees and Lender’s legal expenses, whether or not there is a 

		 

		

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lawsuit, including reasonable attorneys’ fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals.  If not prohibited by applicable law, any court costs, in addition to all other sums provided by law, may be added to amounts owed and due pursuant to this Note.  
		

		
			 
		

		
			JURY WAIVER.  Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.
		

		
			 
		

		
			GOVERNING LAW.  This Note will be governed by, construed and enforced in accordance with federal law and the laws of the State of Minnesota.  This Note has been accepted by Lender in the State of Minnesota.  
		

		
			 
		

		
			DISHONORED ITEM FEE.  Borrower will pay a fee to Lender of $15.00 if Borrower makes a payment on Borrower’s loan and the check or preauthorized charge with which Borrower pays is later dishonored.  
		

		
			 
		

		
			LINE OF CREDIT.  This Note evidences a revolving line of credit.  Advances under this Note may be requested either orally or in writing by Borrower or as provided in this paragraph.  Lender may, but need not, require that all oral requests be confirmed in writing.  All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender’s office shown above.  The following persons currently are authorized to request advances and authorize payments under the line of credit until Lender received from Borrower, at Lender’s address shown above, written notice of revocation of their authority:  Steve Christensen.  Borrower agrees to be liable for all sums either:  (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower’s accounts.  The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on the Note or by Lender’s internal records, including daily computer print-outs.  Lender will have no obligation to advance funds under this Note if: (A) Borrower is in default under the terms of this Promissory Note or any agreement that Borrower has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower ceases doing business or is insolvent; (C) Borrower has applied funds provided pursuant to this note for purposes other than those authorized by Lender – specifically the purchase of 1,500 units in Ringneck Energy, LLC.  
		

		
			 
		

		
			SUCCESSOR INTERESTS.  The terms of this Promissory Note shall be binding upon Borrower, and upon Borrower’s, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.
		

		
			 
		

		
			GENERAL PROVISIONS.  Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them.  Borrower and any other person who signs, guarantees or endorses this Promissory Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor.  Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Promissory Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability.  All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without 

		 

		

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the consent of or notice to anyone.  All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made.  The obligations under this Promissory Note are joint and several.
		

		
			 
		

		
			THIS IS A NONRECOURSE LOAN, LENDER’S SOLE REMEDY IF BORROWER DOES NOT PAY OR OTHERWISE DEFAULTS IS TO EXECUTE ON ANY AND ALL OWNERSHIP INTERESTS AND RIGHTS HELD BY BORROWER IN RINGNECK ENERGY, LLC (A SOUTH DAKOTA ETHANOL FACILITY).  SIMULTANEOUSLY HEREWITH, BORROWER IS EXECUTING A COMMERCIAL SECURITY AGREEMENT AND A SEPARATE PLEDGE AGREEMENT IN FAVOR OF LENDER SECURING ALL OF BORROWER’S RIGHT, TITLE AND INTEREST IN AND TO RINGNECK ENERGY, LLC TO LENDER TO SECURE ALL AMOUNTS AND OBLIGATIONS EVIDENCED BY THIS PROMISSORY NOTE.  
		

		
			 
		

		
			 
		

		
			 
		

		
			PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.  BORROWER AGREES TO THE TERMS OF THE NOTE.
		

		
			 
		

		
			BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
		

		
			 
		

		
			 
		

		
			BORROWER:
		

		
			GRANITE FALLS ENERGY, LLC
		

		
			 
		

		
			 
		

		
			By:/s/ Stacie Schuler
		

		
			 
		

		
			Its:CFO
		

		
			 
		

		 

		

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