Common use of Placement Clause in Contracts

Placement. (a) The securities of the Company which are the subject of the Placement shall be up to a maximum of Ten Million Dollars ($10,000,000) of 8% Senior Secured Convertible Debentures of at least at two year duration ("Debentures") and Warrants (the "Warrants") equal to 50% of the Conversion Shares (as defined in the Securities Purchase Agreement) (the Debentures and Warrants are referred to herein as the "Units") (the "MAXIMUM AMOUNT"). (i) The Units, the Debentures, the Warrants, the Warrant Shares and the Placement Agent Warrants (as both defined in the Securities Purchase Agreement) (and underlying securities) are sometimes referred to collectively herein as the "SECURITIES." (b) The Placement Agent will, on an exclusive basis, conduct the Placement on a "best efforts" basis, it being understood and agreed, however, that the Placement Agent shall have the right, in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay (or, with the reasonable agreement of the Company, cause the Company to pay) a portion of the compensation to be received by the Placement Agent pursuant to this Agreement to any such NASD member firm. The Company shall not pursue any other equity financing (including convertible securities) of the Company's securities during the term of this Agreement. Additionally, the Company and the Placement Agent may mutually agree to increase the amount of Debentures offered in the Placement up to a maximum of Thirteen Million Dollars ($13,000,000), without notice to the Investors (defined below). (c) The Initial Closing is expected to be on or before the Termination Date (hereinafter defined) (the "INITIAL CLOSING DATE"), subject to extension by the Placement Agent and the Company by mutual agreement without notice to investors in the Placement (the "INVESTORS"), and a subsequent closing shall be within 5 days after the Company's Certificate of Amendment to the Articles of Incorporation are filed with the State of Delaware pursuant to which the Maximum Amount shall subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATE"); provided, however, that the Final Closing Date shall be held prior to June 30, 2006. Unless terminated earlier in the Company's sole discretion, the offering period for the Placement (the "OFFERING PERIOD") will commence on the date hereof and expire on the earlier to occur of: (i) May 31, 2006 (the "TERMINATION DATE"), (ii) the date on which the Maximum Amount is subscribed for and accepted by the Company or (iii) the termination of the Placement pursuant to the terms of this Agreement. The Termination Date may be extended by an additional 30 days by mutual agreement of the Company and the Placement Agent without notice to the Investors. (d) The Placement will be made pursuant to the Securities Purchase Agreement (as defined in Section 2 below). The Securities will not be registered under the Securities Act of 1933, as amended, or any applicable successor statute (the "SECURITIES ACT"), but will be issued in reliance on the private offering exemption available under Section 4(2) of the Securities Act and the Rules and Regulations (as defined below) promulgated thereunder, including Regulation D ("REGULATION D"). The Placement Agent understands that all subscriptions for Units are subject to acceptance by the Company. The Company and the Placement Agent reserve the right in their discretion to accept or reject any or all subscriptions for Units, in whole or in part for any reason or for no reason whatsoever, regardless whether any funds have been deposited into an escrow account. As used herein, the term "RULES AND REGULATIONS" means the applicable rules and regulations promulgated under the Securities Act and the Exchange Act.

Placement. (a) The securities of the Company which are the subject of the Private Placement shall be a “best efforts” placement up to a maximum of Ten Million Dollars $4.499 million ($10,000,000the “Private Placement Maximum Amount”) of 8% Senior Secured Convertible Debentures Shares and Warrants, at an offering price equal to $1.05 per Share and accompanying one half of at least at two year duration ("Debentures") and Warrants a Warrant (the "Warrants") equal “Purchase Price”). Each Share purchased by an Investor shall be accompanied by one half of a Warrant. Each full Warrant will to 50% allow an Investor to purchase an additional share of Common Stock. The Warrants shall terminate five and one half years from their the Conversion Shares (as defined in the Securities Purchase Agreement) (the Debentures and Warrants are referred to herein as the "Units") (the "MAXIMUM AMOUNT")date of issuance. (i) The Units, the Debentures, the Warrants, the Warrant Shares and the Placement Agent Warrants (as both defined in the Securities Purchase Agreement) (and underlying securities) are sometimes referred to collectively herein as the "SECURITIES." (b) The Placement Agent will, on an exclusive basis, conduct the Private Placement on a "“best efforts" basis” basis to accredited investors only, it being understood and agreed, however, that the Placement Agent shall have the right, as defined in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay Regulation D (or, with the reasonable agreement of the Company, cause the Company to pay) a portion of the compensation to be received by the Placement Agent pursuant to this Agreement to any such NASD member firmas defined below). The Company shall not pursue any other equity financing conduct a closing (including convertible securitiesthe “Closing”) of the Company's securities during the term of this Agreement. Additionally, the Company and the Placement Agent may mutually agree to increase the amount of Debentures offered in the Placement up to on a maximum of Thirteen Million Dollars ($13,000,000), without notice date subsequent to the Investors (defined below). (c) The Initial Closing is expected to be date on or before the Termination Date (hereinafter defined) (the "INITIAL CLOSING DATE"), subject to extension by the Placement Agent and the Company by mutual agreement without notice to investors in the Placement (the "INVESTORS"), and a subsequent closing shall be within 5 days after the Company's Certificate of Amendment to the Articles of Incorporation are filed with the State of Delaware pursuant to which the Private Placement Maximum Amount shall is subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATE"“Closing Date”); provided, however, that the Final Closing Date shall be held prior to June 30, 2006. Unless terminated earlier in the Company's ’s sole discretion, the offering period for the Private Placement (the "OFFERING PERIOD"“Private Placement Offering Period”) will commence on the date hereof and expire on the earlier to occur of: (i) May 31, 2006 (the "TERMINATION DATE"), (ii) the date on which the Private Placement Maximum Amount is subscribed for and accepted by the Company at the Closing. The Closing shall be undertaken in a manner agreed to by the Company and Placement Agent. Unless, as of or (iii) prior to the termination Closing Date all conditions of the Private Placement pursuant to the terms of this Agreement. The Termination Date may be extended have been satisfied by an additional 30 days by mutual agreement of the Company and the Investors thereof, the Private Placement Agent will be terminated and all subscription proceeds will be returned to Investors without notice to the Investors.interest or deduction. Acorn Energy October 30, 2014 Page 2 of 31 (dc) The Private Placement will be made pursuant to the Securities Purchase Agreement Subscription Documents (as defined in Section 2 below)) to be entered into by the Investors. The Securities will not be registered under the Securities Act of 1933, as amended, or any applicable successor statute (the "SECURITIES ACT"“Securities Act”), but will be issued in reliance on the private offering exemption available under Section 4(2) of the Securities Act and the Rules and Regulations (Regulations, as defined below) , promulgated thereunder, including Regulation D ("REGULATION “Regulation D"”). The Placement Agent understands that all subscriptions for Units Shares and Warrants are subject to acceptance by the Company. The Company and the Placement Agent reserve reserves the right in their its sole discretion to accept or reject any or all subscriptions for UnitsSecurities, in whole or in part for any reason or for no reason whatsoeverpart, regardless whether any funds have been deposited into an escrow account. Any subscription monies received by Placement Agent from Investors will be handled in accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not Placement Agent is subject to the Exchange Act. As used herein, the term "RULES AND REGULATIONS" “Rules and Regulations” means the applicable rules and regulations promulgated under the Securities Act and the Exchange Act.

Placement. (a) The securities of the Company which are the subject of the Placement shall be up to consist of a maximum minimum of Ten One Million Dollars ($10,000,0001,000,000) of 8% Senior Secured Convertible Debentures of at least at two year duration (the "DebenturesMinimum Amount") and Warrants a maximum of Two Million Five Hundred Thousand Dollars ($2,500,000) (the "WarrantsMaximum Amount"), subject to increase as set forth in Section (1)(b) below, of units (the "Units"), at a price per Unit of $50,000 (the "Unit Price"). It is expressly understood by the parties hereto that One Million Dollars ($1,000,000) of the Maximum Amount may include the Insider Amount (defined below). Each Unit shall consist of: (i) a number of shares (the "Shares") of common stock of the Company, par value $0.001 per share (the "Common Stock"), determined by dividing: (i) the Unit Price by (ii) a price equal to 50% of the Conversion 5-day average of the closing bid price of the shares of Common Stock on the OTC Bulletin Board (the "Common Stock Purchase Price") prior to the initial closing of the Placement (the "Initial Closing") or any subsequent closing of the Placement as contemplated hereby (each, a "Subsequent Closing" and together with the Initial Closing, each, a "Closing" and collectively, the "Closings"), with a floor (the "Lowest Permissible Purchase Price") on the Common Stock Purchase Price of Twenty Cents ($.20) and a ceiling (the "Maximum Purchase Price") on the Common Stock Purchase Price of Thirty Two and One Half Cents ($.325). If one or more Subsequent Closings occurs, the Common Stock Purchase Price for the Shares (as defined purchased in each prior Closing shall be adjusted to equal the lowest Common Stock Purchase Price for all of the Closings and the number of Shares and Warrants previously issued to purchasers in the Securities Placement shall be adjusted accordingly so that each purchaser in the Placement purchases the Units at the same Common Stock Purchase AgreementPrice; and (ii) a warrant (each a "Warrant" and, collectively, the "Warrants") to purchase, at any time prior to the fifth (5th) anniversary following the date of issuance of the Warrant, a number of shares of Common Stock equal to fifty percent (50%) of the number of Shares included within each Unit, at a price per share of Common Stock equal to two hundred percent (200%) of the of the 5-day average of the closing sales price of the shares of Common Stock on the OTC Bulletin Board prior to the applicable Closing (the Debentures and "Warrant Exercise Price"). If one or more Subsequent Closings occurs, the Warrant Exercise Price of the Warrants purchased in each prior Closing shall be adjusted to equal the lowest Warrant Exercise Price for all of the Closings. The shares of Common Stock underlying each Warrant are referred to herein as the "Units") (the "MAXIMUM AMOUNT")Warrant Shares. (i) " The Units, the DebenturesShares, the Warrants, the Warrant Shares and the Placement Agent Warrants (as both defined in the Securities Purchase Agreement) (and underlying securities) are sometimes referred to collectively herein as the "SECURITIESSecurities."" No fractional Shares or Warrants will be issued in connection with the Placement. All fractional Shares and Warrants to be issued in connection with the Placement, and all fractional Warrant Shares to be issued upon exercise of the Warrants, will be rounded up or down to the next full number of Shares, Warrants or Warrant Shares, as applicable. (b) The Placement Agent will, on an exclusive basis, conduct the Placement on a "best efforts" basis, it being understood and agreed, however, that the Placement Agent shall have the right, in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay (or, with the reasonable agreement of the Company, cause the Company to pay) a portion of the compensation to be received by the Placement Agent pursuant to this Agreement to any such NASD member firm. The Company shall not pursue any other equity financing (including convertible securities) of the Company's securities during the term of this Agreement. Additionally, the Company and the Placement Agent may mutually agree to increase the amount number of Debentures Units offered in the Placement up to a maximum of Thirteen Million Dollars sixty (60) Units ($13,000,0003,000,000), without notice to the Investors (defined below). (c) The Initial Closing is expected to be on or before the Termination Date (hereinafter defined) (the "INITIAL CLOSING DATEInitial Closing Date"), subject to extension by the Placement Agent and the Company by mutual agreement in its sole discretion without notice to investors in the Placement (the "INVESTORSInvestors"), and a subsequent closing shall Subsequent Closings may be within 5 days after conducted during the Company's Certificate of Amendment to Offering Period (defined below) until the Articles of Incorporation are filed with the State of Delaware pursuant to date on which the Maximum Amount shall is subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATEFinal Closing Date"); provided, however, that the Final Closing Date shall be held prior to June 30, 2006. Unless terminated earlier in the Company's sole discretion, the offering period for the Placement (the "OFFERING PERIODOffering Period") will commence on the date hereof and expire on the earlier to occur of: (i) May August 31, 2006 2005 (the "TERMINATION DATETermination Date"), (ii) the date on which the Maximum Amount is subscribed for and accepted by the Company or (iii) the termination of the Placement pursuant to the terms of this Agreement. The Termination Date may be extended by an additional 30 days by mutual agreement of the Company and the Placement Agent without notice to the Investors. The minimum subscription amount per Investor shall be Fifty Thousand Dollars ($50,000), except that the Company and the Placement Agent may, in their sole discretion and without notice to the Investors, accept subscriptions for a lesser amount. (d) The Placement will be made pursuant to the Securities Purchase Agreement Memorandum (as defined in Section 2 below). The Securities will not be registered under the Securities Act of 1933, as amended, or any applicable successor statute (the "SECURITIES ACTSecurities Act"), but will be issued in reliance on the private offering exemption available under Section 4(2) of the Securities Act and the Rules and Regulations (as defined below) promulgated thereunder, including Regulation D ("REGULATION Regulation D"). The Placement Agent understands that all subscriptions for Units are subject to acceptance by the Company. The Company and the Placement Agent reserve the right in their reasonable discretion to accept or reject any or all subscriptions for Units, in whole or in part for any reason or for no reason whatsoeverpart, regardless whether any funds have been deposited into an escrow account. Any subscription monies received by the Placement Agent from Investors will be handled in accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not the Placement Agent is subject to the Exchange Act, and as otherwise may be prescribed by the terms of the Memorandum. As used herein, the term "RULES AND REGULATIONSRules and Regulations" means the applicable rules and regulations promulgated under the Securities Act and the Exchange Act. (e) Until the Initial Closing is held, all subscription funds received shall be held by American Stock Transfer & Trust Company (the "Escrow Agent") in a non-interest bearing escrow account established for such purpose (the "Escrow Account"). The Placement Agent shall not have any independent obligation to verify the accuracy or completeness of any information contained in any Subscription Documents (as defined in Section 2 below) or the authenticity, sufficiency or validity of any check delivered by any prospective Investor in payment for the Units, nor shall the Placement Agent incur any liability with respect to any such verification or failure to verify. All subscription checks and funds shall be promptly and directly delivered without offset or deduction to the Escrow Agent for deposit into the Escrow Account. (f) The Company's management shall have the right to convert bridge financing debt to be incurred prior to the Initial Closing into Units and the Company's management, directors and 5% shareholders (the "Insiders") shall have the right to participate as investors in the Offering; provided, however, that the Units which Insiders shall be entitled to purchase (directly or through bridge conversion) shall not exceed $1,000,000 in the aggregate (the "Insider Amount"); provided further, however, that the Placement Agent shall not be entitled to the compensation set forth in this Agreement with respect to the Insider Amount. If management introduces non-Insider investors who purchase Units in the Offering, then the Placement Agent shall be entitled to the same compensation as set forth in this Agreement.

Placement. (a) The securities of the Company which are the subject of the Private Placement shall be a "best efforts" placement consisting of a minimum of thirteen (13) Units, or one million three hundred thousand dollars ($1,300,000) (the "PRIVATE PLACEMENT MINIMUM AMOUNT") and up to a maximum of Ten Million Dollars forty (40) Units, or four million dollars ($10,000,000) 4,000,000), at an offering price of 8% Senior Secured Convertible Debentures of at least at two year duration ("Debentures") and Warrants $100,000 per Unit (the "Warrants") equal to 50% of the Conversion Shares (as defined in the Securities Purchase Agreement) (the Debentures and Warrants are referred to herein as the "Units") (the "PRIVATE PLACEMENT MAXIMUM AMOUNT"). . The Company has granted the Placement Agent the option to exercise an over-allotment option to sell up to an additional six (i6) Units (the "OVER-ALLOTMENT OPTION"). The UnitsNotes and Warrants, or the other agreements or instruments entered into in connection with the Private Placement shall have such other features as are agreed to by the Company and Maxim and memorialized in the Offering Documents (as defined below) including, without limitation, the Debenturesregistration rights described in Section 1(e) below as well as those described in the subscription documents included in the Offering Documents, as defined below, for the shares of Common Stock receivable upon the conversion of the Notes, or upon the exercise of the Warrants, or issuable as part of the Warrant Shares and the Placement Agent Warrants (as both defined in the Securities Purchase Agreement) (and underlying securities) are sometimes referred to collectively herein as the "SECURITIESUnits." (b) The Placement Agent Maxim will, on an exclusive basis, conduct the Placement on a "best efforts" basisbasis to accredited investors, it being understood as meant in Regulation D. If at least the Private Placement Minimum Amount has been subscribed for and agreed, however, that the Placement Agent shall have the right, in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay (or, with the reasonable agreement of the Company, cause accepted by the Company to pay) a portion of the compensation to be received by the Placement Agent pursuant to this Agreement to at any such NASD member firm. The Company shall not pursue any other equity financing (including convertible securities) of the Company's securities time during the term of this Agreement. AdditionallyPrivate Placement Offering Period, as defined below, the Company and the Placement Agent may mutually agree to increase the amount of Debentures offered in the Placement up to a maximum of Thirteen Million Dollars ($13,000,000), without notice to the Investors (defined below). (c) The Initial Closing is expected to be on or before the Termination Date (hereinafter defined) will promptly conduct an initial closing (the "INITIAL CLOSING DATECLOSING") and may conduct subsequent closings (each, a "SUBSEQUENT CLOSING" and together with the Initial Closing, each, a "CLOSING" and collectively, the "CLOSINGS"), subject to extension by until the Placement Agent and the Company by mutual agreement without notice to investors in the Placement (the "INVESTORS"), and a subsequent closing shall be within 5 days after the Company's Certificate of Amendment to the Articles of Incorporation are filed with the State of Delaware pursuant to date on which the Maximum Amount shall is subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATE"); provided, however, that the Final Closing Date shall be held prior to June 30, 2006. Unless terminated earlier in the Company's or Maxim's sole discretion, the offering period for the Private Placement (the "PRIVATE PLACEMENT OFFERING PERIOD") will commence on the date hereof and expire on the earlier to occur of: (i) May 3127, 2006 2005, unless extended in the mutual discretion of the Company and Maxim (the "TERMINATION DATE"), (ii) the date on which the Private Placement Maximum Amount is subscribed for and accepted by the Company Company, or (iii) the termination of the Private Placement pursuant to the terms of or this Agreement, but in any event no later than July 26, 2005. The Termination Date may Any Closing shall be extended undertaken in a manner agreed to by an additional 30 days by mutual agreement of the Company and Maxim. Unless the Private Placement Agent Minimum Amount is subscribed for and accepted by the Company by the Termination Date, the Private Placement will be terminated and all subscription proceeds will be returned to Investors without notice to the Investorsinterest or deduction The minimum subscription amount per investor shall be One Hundred Thousand Dollars ($100,000.00). (dc) The Private Placement will be made pursuant to the Securities Purchase Agreement (Offering Documents, as defined in Section 2 below). The Securities will not be registered under the Securities Act of 1933, as amended, or any applicable successor statute (the "SECURITIES ACTAct"), but will be issued in reliance on the private offering exemption available under Section 4(2) of the Securities Act and the Rules and Regulations (Regulations, as defined below) , promulgated thereunder, including Regulation D ("REGULATION D"). The Placement Agent Maxim understands that all subscriptions for Units are subject to acceptance by the Company. The Company and the Placement Agent Maxim reserve the right in their reasonable discretion to accept or reject any or all subscriptions for Units, in whole or in part for any reason or for no reason whatsoeverpart, regardless whether any funds have been deposited into an escrow account. Any subscription monies received by Maxim from Investors will be handled in accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), whether or not Maxim is subject to the Exchange Act, and as otherwise may be prescribed by the terms of the Offering Documents (as defined in Section 2 below). As used herein, the term "RULES AND REGULATIONS" means the applicable rules and regulations promulgated under the Securities Act and the Exchange Act.

Placement. (a) The securities of the Company which are the subject of the Private Placement shall be a “best efforts” placement consisting of a minimum of seventy-five (75) Units, or four million fifty thousand dollars ($4,050,000) (the “Private Placement Minimum Amount”) and up to a maximum of Ten Million Dollars one hundred fifty (150) Units, or eight million dollars ($10,000,000) 8,100,000), at an offering price of 8% Senior Secured Convertible Debentures of at least at two year duration ("Debentures") and Warrants $54,000 per Unit (the "“Private Placement Maximum Amount”). The Company has granted the Placement Agent the option to exercise an over-allotment option to sell up to an additional twenty-two and five tenths (22.5) Units (the “Over-Allotment Option”). The Shares and Warrants") equal , or the other agreements or instruments entered into in connection with the Private Placement shall have such other features as are agreed to 50% of by the Conversion Shares Company and Maxim and memorialized in the Offering Documents (as defined below) including, without limitation, the registration rights described in Section 1(e) below as well as those described in the Securities Purchase Agreement) (subscription documents included in the Debentures and Warrants are referred to herein Offering Documents, as defined below, for the "Units") (shares of Common Stock receivable upon the "MAXIMUM AMOUNT"). (i) The Units, the Debentures, exercise of the Warrants, or issuable as part of the Warrant Shares and the Placement Agent Warrants (as both defined in the Securities Purchase Agreement) (and underlying securities) are sometimes referred to collectively herein as the "SECURITIES." Units. (b) The Placement Agent Maxim will, on an exclusive basis, conduct the Placement on a "“best efforts" basis” basis to accredited investors, it being understood only, as meant in Regulation D. If at least the Private Placement Minimum Amount has been subscribed for and agreed, however, that the Placement Agent shall have the right, in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay (or, with the reasonable agreement of the Company, cause accepted by the Company to pay) a portion of the compensation to be received by the Placement Agent pursuant to this Agreement to at any such NASD member firm. The Company shall not pursue any other equity financing (including convertible securities) of the Company's securities time during the term of this Agreement. AdditionallyPrivate Placement Offering Period, as defined below, the Company will promptly conduct an initial closing (the “Initial Closing”) and may conduct subsequent closings (each, a “Subsequent Closing” and together with the Placement Agent may mutually agree to increase Initial Closing, each, a “Closing” and collectively, the amount of Debentures offered in the Placement up to a maximum of Thirteen Million Dollars ($13,000,000“Closings”), without notice to until the Investors (defined below). (c) The Initial Closing is expected to be date on or before the Termination Date (hereinafter defined) (the "INITIAL CLOSING DATE"), subject to extension by the Placement Agent and the Company by mutual agreement without notice to investors in the Placement (the "INVESTORS"), and a subsequent closing shall be within 5 days after the Company's Certificate of Amendment to the Articles of Incorporation are filed with the State of Delaware pursuant to which the Maximum Amount shall is subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATE"); provided, however, that the “Final Closing Date shall be held prior to June 30, 2006Date”). Unless terminated earlier in the Company's ’s or Maxim’s sole discretion, the offering period for the Private Placement (the "OFFERING PERIOD"“Private Placement Offering Period”) will commence on the date hereof and expire on the earlier to occur of: (i) May 31September 30, 2006 2009, unless extended in the mutual discretion of the Company and Maxim (the "TERMINATION DATE"“Termination Date”), (ii) the date on which the Private Placement Maximum Amount is subscribed for and accepted by the Company Company, or (iii) the termination of the Private Placement pursuant to the terms of or this Agreement, but in any event no later than December 31, 2009. Any Closing shall be undertaken in a manner agreed to by the Company and Maxim. Unless the Private Placement Minimum Amount is subscribed for and accepted by the Company by the Termination Date, the Private Placement will be terminated and all subscription proceeds will be returned to Investors without interest or deduction The Termination Date minimum subscription amount per investor shall be Fifty Four Thousand Dollars ($54,000.00) which amount may be extended by an additional 30 days by mutual agreement reduced and partial Units may be issued and sold at the discretion of the Company and the Placement Agent without notice to the InvestorsAgent. (dc) The Private Placement will be made pursuant to the Securities Purchase Agreement (Offering Documents, as defined in Section 2 below). The Securities will not be registered under the Securities Act of 1933, as amended, or any applicable successor statute (the "SECURITIES ACT"“Act”), but will be issued in reliance on the private offering exemption available under Section 4(2) of the Securities Act and the Rules and Regulations (Regulations, as defined below) , promulgated thereunder, including Regulation D ("REGULATION “Regulation D"”). The Placement Agent Maxim understands that all subscriptions for Units are subject to acceptance by the Company. The Company and the Placement Agent Maxim reserve the right in their reasonable discretion to accept or reject any or all subscriptions for Units, in whole or in part for any reason or for no reason whatsoeverpart, regardless whether any funds have been deposited into an escrow account. Any subscription monies received by Maxim from Investors will be handled in accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not Maxim is subject to the Exchange Act, and as otherwise may be prescribed by the terms of the Offering Documents (as defined in Section 2 below). As used herein, the term "RULES AND REGULATIONS" “Rules and Regulations” means the applicable rules and regulations promulgated under the Securities Act and the Exchange Act.

Placement. (a) The securities of the Company which are the subject of the Placement shall be up to consist of a maximum minimum of Ten Two Million Dollars ($10,000,0002,000,000) of 8% Senior Secured Convertible Debentures of at least at two year duration (the "DebenturesMinimum Amount") and a maximum of Six Million Dollars ($6,000,000) (the "Maximum Amount") of units (the "Units"), at a price per Unit of $100,000 (the "Unit Price"), with each Unit consisting of: (i) a number of shares (the "Shares") of common stock of the Company, par value $0.01 per share (the "Common Stock"), determined by dividing: (i) the Unit Price by (ii) a price equal to 70% of the closing bid price of the shares of Common Stock on the OTC Bulletin Board (the "Common Stock Purchase Price") on the last trading day immediately prior to the initial closing of the Placement (the "Initial Closing") or on the last trading day immediately prior to any subsequent closing of the Placement as contemplated hereby (each, a "Subsequent Closing" and, together with the Initial Closing, each, a "Closing" and collectively, the "Closings"), with a floor (the "Lowest Permissible Purchase Price") on the Common Stock Purchase Price of Two Dollars ($2.00) and a ceiling (the "Maximum Purchase Price") on the Common Stock Purchase Price of Two Dollars and Forty Cents ($2.40). If one or more Subsequent Closings occurs, the Common Stock Purchase Price for the Shares purchased in each prior Closing shall be adjusted to equal the lowest Common Stock Purchase Price for all of the Closings and the number of Shares and Warrants previously issued to purchasers in the Placement shall be adjusted accordingly so that each purchaser in the Placement purchases the Units at the same Common Stock Purchase Price; and (ii) a warrant (each a "Warrant" and, collectively, the "Warrants") to purchase, at any time prior to the fifth (5th) anniversary following the date of issuance of the Warrant, a number of shares of Common Stock equal to fifty percent (50% %) of the Conversion number of Shares included within each Unit, at a price per share of Common Stock equal to two hundred percent (as defined in 200%) The Sagemark Companies, Ltd. October 14, 2004 Page 2 of 35 of the Securities Common Stock Purchase Agreement) Price (the Debentures and "Warrant Exercise Price"). If one or more Subsequent Closings occurs, the Warrant Exercise Price of the Warrants purchased in each prior Closing shall be adjusted to equal the lowest Warrant Exercise Price for all of the Closings. The shares of Common Stock underlying each Warrant are referred to herein as the "Units") (the "MAXIMUM AMOUNT")Warrant Shares. (i) " The Units, the DebenturesShares, the Warrants, the Warrant Shares and the Placement Agent Warrants (as both defined in the Securities Purchase Agreement) (and underlying securities) are sometimes referred to collectively herein as the "SECURITIESSecurities."" No fractional Shares or Warrants will be issued in connection with the Placement. All fractional Shares and Warrants to be issued in connection with the Placement, and all fractional Warrant Shares to be issued upon exercise of the Warrants, will be rounded up or down to the next full number of Shares, Warrants or Warrant Shares, as applicable. (b) The Placement Agent will, on an exclusive basis, conduct the Placement on a "best efforts" basis, it being understood and agreed, however, that the Placement Agent shall have the right, in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay (or, with the reasonable agreement of the Company, cause the Company to pay) a portion of the compensation to be received by the Placement Agent pursuant to this Agreement to any such NASD member firm. The Company shall not pursue any other equity financing (including convertible securities) of the Company's securities during the term of this Agreement. Additionally, the Company and the Placement Agent may mutually agree to increase the amount number of Debentures Units offered in the Placement up to a maximum of Thirteen Million Dollars seventy-five (75) Units ($13,000,0007,500,000), without notice to the Investors (defined below). (c) The Initial Closing is expected to be on or before the Termination Date (hereinafter defined) (the "INITIAL CLOSING DATEInitial Closing Date"), subject to extension by the Placement Agent and the Company by mutual agreement in its sole discretion without notice to investors in the Placement (the "INVESTORSInvestors"), and a subsequent closing shall Subsequent Closings may be within 5 days after conducted during the Company's Certificate of Amendment to Offering Period (defined below) until the Articles of Incorporation are filed with the State of Delaware pursuant to date on which the Maximum Amount shall is subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATEFinal Closing Date"); provided, however, that the Final Closing Date shall be held prior to June 30, 2006. Unless terminated earlier in the Company's sole discretion, the offering period for the Placement (the "OFFERING PERIODOffering Period") will commence on the date hereof and expire on the earlier to occur of: (i) May 31November 29, 2006 2004 (the "TERMINATION DATETermination Date"), (ii) the date on which the Maximum Amount is subscribed for and accepted by the Company or (iii) the termination of the Placement pursuant to the terms of this Agreement. The Termination Date may be extended by an additional 30 45 days by mutual agreement at the sole discretion of the Company and the Placement Agent without notice to the Investors. The minimum subscription amount per Investor shall be One Hundred Thousand Dollars ($100,000), except that the Company and the Placement Agent may, in their sole discretion and without notice to the Investors, accept subscriptions for a lesser amount. (d) The Placement will be made pursuant to the Securities Purchase Agreement Memorandum (as defined in Section 2 below). The Securities will not be registered under the Securities Act of 1933, as amended, or any applicable successor statute (the "SECURITIES ACTSecurities Act"), but will be issued in reliance on the private offering exemption available under Section 4(2) of the Securities Act and the Rules and Regulations (as defined below) promulgated thereunder, including Regulation D ("REGULATION Regulation D"). The Placement Agent understands that all subscriptions for Units are subject to acceptance by the Company. The Company and the Placement Agent reserve the right in their discretion to accept or reject any or all subscriptions for UnitsSagemark Companies, in whole or in part for any reason or for no reason whatsoeverLtd. October 14, regardless whether any funds have been deposited into an escrow account. As used herein, the term "RULES AND REGULATIONS" means the applicable rules and regulations promulgated under the Securities Act and the Exchange Act.2004 Page 3 of 35

Placement. (a) The securities of the Company which are the subject of the Placement shall be up to a maximum of Ten Six Million Dollars ($10,000,0006,000,000) of 87% Senior Secured Convertible Debentures of at least at two year duration ("Debentures") and Warrants (the "Warrants") equal to 50100 % of the Conversion Shares (as defined in the Securities Purchase Agreement) (the Debentures and Warrants are referred to herein as the "Units") (the "MAXIMUM AMOUNT"). (i) The Units, the Debentures, the Warrants, the Warrant Shares and the Placement Agent Warrants (as both defined in the Securities Purchase Agreement) (and underlying securities) are sometimes referred to collectively herein as the "SECURITIES." (b) The Placement Agent will, on an exclusive basis, conduct the Placement on a "best efforts" basis, it being understood and agreed, however, that the Placement Agent shall have the right, in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay (or, with the reasonable agreement of the Company, cause the Company to pay) a portion of the compensation to be received by the Placement Agent pursuant to this Agreement to any such NASD member firm. The Company shall not pursue any other equity financing (including convertible securities) of the Company's securities during the term of this Agreement. Additionally, the Company and the Placement Agent may mutually agree to increase the amount of Debentures offered in the Placement up to a maximum of Thirteen Million Dollars ($13,000,000), without notice to the Investors (defined below). (c) The Initial Closing is expected to be on or before the Termination Date (hereinafter defined) (the "INITIAL CLOSING DATE"), subject to extension by the Placement Agent and the Company by mutual agreement in its sole discretion without notice to investors in the Placement (the "INVESTORS"), and a subsequent closing shall Subsequent Closings may be within 5 days after conducted during the Company's Certificate of Amendment to Offering Period (defined below) until the Articles of Incorporation are filed with the State of Delaware pursuant to date on which the Maximum Amount shall is subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATE"); provided, however, that the Final Closing Date shall be held prior to June 30, 2006. Unless terminated earlier in the Company's sole discretion, the offering period for the Placement (the "OFFERING PERIOD") will commence on the date hereof and expire on the earlier to occur of: (i) May March 31, 2006 (the "TERMINATION DATE"), (ii) the date on which the Maximum Amount is subscribed for and accepted by the Company or (iii) the termination of the Placement pursuant to the terms of this Agreement. The Termination Date may be extended by an additional 30 days by mutual agreement of the Company and the Placement Agent without notice to the Investors. (d) The Placement will be made pursuant to the Securities Purchase Agreement (as defined in Section 2 below). The Securities will not be registered under the Securities Act of 1933, as amended, or any applicable successor statute (the "SECURITIES ACT"), but will be issued in reliance on the private offering exemption available under Section 4(2) of the Securities Act and the Rules and Regulations (as defined below) promulgated thereunder, including Regulation D ("REGULATION D"). The Placement Agent understands that all subscriptions for Units are subject to acceptance by the Company. The Company and the Placement Agent reserve the right in their reasonable discretion to accept or reject any or all subscriptions for Units, in whole or in part for any reason or for no reason whatsoeverpart, regardless whether any funds have been deposited into an escrow account. As used herein, the term "RULES AND REGULATIONS" means the applicable rules and regulations promulgated under the Securities Act and the Exchange Act.

Placement. (a) The securities Simultaneously with payment for and delivery of the Company which are Units at the subject closing of the Placement shall be up and subject to the following sentence, the Company shall: (A) pay to the Placement Agent a maximum of Ten Million Dollars ($10,000,000) of 8% Senior Secured Convertible Debentures of at least at two year duration ("Debentures") and Warrants (the "Warrants") placement agent fee equal to 506% of the Conversion Shares (as defined gross proceeds of Units sold in the Securities Purchase AgreementPlacement; and (B) (the Debentures and Warrants are referred issue to herein as the "Units") (the "MAXIMUM AMOUNT"). (i) The Units, the Debentures, the Warrants, the Warrant Shares and the Placement Agent Warrants (as both defined or its designees five-year warrants in the Securities Purchase Agreement) (and underlying securities) are sometimes referred to collectively herein as the "SECURITIES." (b) The Placement Agent will, on an exclusive basis, conduct the Placement on a "best efforts" basis, it being understood and agreed, however, that the Placement Agent shall have the right, in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay (or, with the reasonable agreement of the Company, cause the Company to pay) a portion of the compensation form to be received agreed to by the Placement Agent pursuant to this Agreement to any such NASD member firm. The Company shall not pursue any other equity financing (including convertible securities) of the Company's securities during the term of this Agreement. Additionally, the Company and the Placement Agent may mutually agree to increase purchase that number of Shares as equals 8% of the amount of Debentures offered Shares and Warrant Shares underlying the Units sold in the Placement up to a maximum of Thirteen Million Dollars ($13,000,000), without notice at exercise prices per Share equal to the Investors (defined below). (c) The Initial Closing is expected to be on or before the Termination Date (hereinafter defined) Per Share Purchase Price and Market Price, respectively (the "INITIAL CLOSING DATE"), subject to extension by the Placement Agent and the Company by mutual agreement without notice to investors in the Placement (the "INVESTORS"), and a subsequent closing shall be within 5 days after the Company's Certificate of Amendment to the Articles of Incorporation are filed with the State of Delaware pursuant to which the Maximum Amount shall subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATE"“Agent’s Warrants”); provided, however, that the Final Closing Date shall be held prior to June 30, 2006. Unless terminated earlier in the Company's sole discretion, the offering period for the Placement (the "OFFERING PERIOD") will commence on the date hereof and expire on the earlier to occur of: (i) May 31, 2006 (the "TERMINATION DATE"), (ii) the date on which the Maximum Amount is subscribed for and accepted by the Company or (iii) the termination if affiliates of the Placement Agent have been appointed to the Board prior to the Closing pursuant to the terms provisions of this Agreement. The Termination Date Section 4(j) hereof, the Agent’s Warrants will be placed into escrow and issued to the Placement Agent upon receipt of the Approval; provided, however, that the Company may be extended by an additional 30 days by mutual agreement of issue the Agent’s Warrants earlier if the directors affiliated with the Placement Agent thereafter resign from the Board and the Company and Commonwealth determine, after conferring with Nasdaq, that such issuance will not violate the applicable listing requirements of the Nasdaq. The Company shall also, upon presentation of appropriate receipts and invoices, reimburse the Placement Agent without notice for up to $50,000 of its accountable expenses, including legal fees. With respect to Units purchased upon the conversion of Bridge Notes held by ComVest, the fees due to the Investors. (d) The Placement will be made Agent pursuant to clauses (A) and (B) above shall be 4% and 6%, respectively; with respect to Units purchased by Kinecta Corporation, the Securities Purchase Agreement fees due to the Placement Agent pursuant to clauses (as defined in Section 2 below). The Securities will not A) and (B) above shall be registered under the Securities Act of 19333% and 4%, as amended, or respectively; and with respect to Units purchased by any applicable successor statute (the "SECURITIES ACT"), but will be issued in reliance on the private offering exemption available under Section 4(2) of the Securities Act investors listed on Exhibit A to the Term Sheet dated April 12, 2002, no fees shall be due to the Placement Agent pursuant to clauses (A) and (B) above unless the Placement Agent and the Rules and Regulations (as defined below) promulgated thereunder, including Regulation D ("REGULATION D"). The Placement Agent understands that all subscriptions for Units are subject to acceptance by the CompanyCompany have entered into a fee-sharing arrangement with Ladenburg Xxxxxxxx. The Company and shall also pay all expenses in connection with the qualification of the Units under the securities or Blue Sky laws of the states which the Placement Agent reserve the right shall designate, including reasonable legal fees, filing fees and disbursements of Placement Agent’s counsel in their discretion to accept or reject any or all subscriptions for Units, in whole or in part for any reason or for no reason whatsoever, regardless whether any funds have been deposited into an escrow account. As used herein, the term "RULES AND REGULATIONS" means the applicable rules and regulations promulgated under the Securities Act and the Exchange Actconnection with such Blue Sky matters.

Placement. (a) The securities of the Company which are the subject of the Placement shall be up to a maximum of Ten Million Dollars ($10,000,000) of 8% Senior Secured Convertible Debentures of at least at a two year duration ("Debentures") and Class A Warrants and Class B Warrants (the "Warrants") equal to 50to, in the aggregate, 100% of the Conversion Shares (as defined in the Securities Purchase Agreement) (the Debentures and Warrants are referred to herein as the "Units") (the "MAXIMUM AMOUNT"). (i) The Units, the Debentures, the Warrants, the Warrant Shares and the Placement Agent Warrants (as both defined herein or in the Securities Purchase Agreement) (and underlying securities) are sometimes referred to collectively herein as the "SECURITIES." (b) The Placement Agent will, on an exclusive basis, conduct the Placement on a "best efforts" basis, it being understood and agreed, however, that the Placement Agent shall have the right, in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay (or, with the reasonable agreement of the Company, cause the Company to pay) a portion of the compensation to be received by the Placement Agent pursuant to this Agreement to any such NASD member firm. The Company shall not pursue any other equity financing (including convertible securities) of the Company's securities during the term of this Agreement. Additionally, the Company and the Placement Agent may mutually agree to increase the amount of Debentures offered in the Placement up to a maximum of Thirteen Million Dollars ($13,000,000), without notice to the Investors (defined below). (c) The Initial Closing is expected to be on or before the Termination Date (hereinafter defined) (the "INITIAL " CLOSING DATE"), subject to extension by the Placement Agent and the Company by mutual agreement without notice to investors in the Placement (the "INVESTORS"), and a subsequent closing shall be within 5 days after the Company's Certificate of Amendment to the Articles of Incorporation are filed with the State of Delaware pursuant to which the Maximum Amount shall subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATE"); provided, however, that the Final Closing Date shall be held prior to June 30, 2006. Unless terminated earlier in the Company's sole discretion, the offering period for the Placement (the "OFFERING PERIOD") will commence on the date hereof and expire on the earlier to occur of: (i) May 31June 30, 2006 (the "TERMINATION DATE"), (ii) the date on which the Maximum Amount is subscribed for and accepted by the Company or (iii) the termination of the Placement pursuant to the terms of this Agreement. The Termination Date may be extended by an additional 30 days by mutual agreement of the Company and the Placement Agent without notice to the Investors. (d) The Placement will be made pursuant to the Securities Purchase Agreement (as defined in Section 2 below). The Securities will not be registered under the Securities Act of 1933, as amended, or any applicable successor statute (the "SECURITIES ACT"), but will be issued in reliance on the private offering exemption available under Section 4(2) of the Securities Act and the Rules and Regulations (as defined below) promulgated thereunder, including Regulation D ("REGULATION D"). The Placement Agent understands that all subscriptions for Units are subject to acceptance by the Company. The Company and the Placement Agent reserve the right in their discretion to accept or reject any or all subscriptions for Units, in whole or in part for any reason or for no reason whatsoever, regardless whether any funds have been deposited into an escrow account. As used herein, the term "RULES AND REGULATIONS" means the applicable rules and regulations promulgated under the Securities Act and the Exchange Act.

Placement. (a) The securities of the Company Preferred Stock, which are is the subject of the Placement Placement, shall be consist of that number of shares (i) equal to a minimum aggregate amount of $2,500,000 (the “Minimum Amount”) divided by a purchase price of the lower of: (A) $2.80 per share of Preferred Stock or (B) the price equal to a thirty (30) percent discount to the ten (10) day volume weighted average price of the Common Stock as reported by the NASDAQ Capital Market as of the close of business on the business day immediately preceding the date of the initial closing of the Placement, but in no event less than $2.00 per share of Preferred Stock (the “Purchase Price”), rounded up to the nearest whole share, and (ii) up to a maximum aggregate amount of Ten Million Dollars ($10,000,000) of 8% Senior Secured Convertible Debentures of at least at two year duration ("Debentures") and Warrants 15,000,000 (the "Warrants"“Maximum Amount”) equal divided by the Purchase Price, rounded up to 50% the nearest whole share, with such Minimum Amount subject to a decrease at the joint discretion of the Conversion Shares (as defined in the Securities Purchase Agreement) (the Debentures and Warrants are referred to herein as the "Units") (the "MAXIMUM AMOUNT"). (i) The Units, the Debentures, the Warrants, the Warrant Shares and the Placement Agent Warrants (as both defined in and the Securities Purchase Agreement) (Company and underlying securities) are sometimes referred such Maximum Amount subject to collectively herein as an increase at the "SECURITIES." (b) The Placement Agent will, on an exclusive basis, conduct the Placement on a "best efforts" basis, it being understood and agreed, however, that joint discretion of the Placement Agent shall have the right, in its sole discretion, to invite other NASD member firms to participate in the Placement, and to pay (or, with the reasonable agreement of the Company, cause the Company equal to pay) a portion that number of the compensation shares of Preferred Stock equal to be received $10,000,000 divided by the Placement Agent pursuant Purchase Price, rounded up to this Agreement to any the nearest whole share (such NASD member firmpotential increase, the “Over-Allotment Option”). The Company minimum individual subscription amount shall not pursue any other equity financing (including convertible securities) be $50,000 in aggregate amount of the Company's securities during the term of this Agreement. AdditionallyPreferred Stock, provided that the Company and the Placement Agent may mutually agree agree, in their discretion, to increase allow subscriptions for less than $50,000. The Preferred Stock, together with the amount of Debentures offered in Warrants, the Conversion Shares, the Warrant Shares, the Placement up to a maximum of Thirteen Million Dollars Agent Warrants ($13,000,000), without notice to the Investors (as defined below). (c) The Initial Closing is expected to be on or before , and the Termination Date (hereinafter defined) (the "INITIAL CLOSING DATE"), subject to extension by Common Stock issuable upon exercise of the Placement Agent and the Company by mutual agreement without notice to investors in the Placement Warrants (the "INVESTORS"“Placement Agent Conversion Shares”), and a subsequent closing shall be within 5 days after are referred to herein as the Company's Certificate of Amendment to the Articles of Incorporation are filed with the State of Delaware pursuant to which the Maximum Amount shall subscribed for by Investors and accepted by the Company (the "FINAL CLOSING DATE"); provided, however, that the Final Closing Date shall be held prior to June 30, 2006. Unless terminated earlier in the Company's sole discretion, the offering period for the Placement (the "OFFERING PERIOD") will commence on the date hereof and expire on the earlier to occur of: (i) May 31, 2006 (the "TERMINATION DATE"), (ii) the date on which the Maximum Amount is subscribed for and accepted by the Company or (iii) the termination of the Placement pursuant to the terms of this Agreement. The Termination Date may be extended by an additional 30 days by mutual agreement of the Company and the Placement Agent without notice to the Investors“Securities.” (db) The Placement will be made by the Company solely pursuant to the Securities Purchase Agreement Offering Documents (as defined in Section 2 below). The Securities will not be registered under the Securities Act of 1933, as amended, or any applicable successor statute (the "SECURITIES ACT"“Act”), but will be issued in reliance on the private offering exemption available under Section 4(24(a)(2) of the Securities Act and the Rules rules and Regulations (as defined below) regulations promulgated thereunder, including Regulation D of the Act ("REGULATION “Regulation D"”). The Placement Agent understands that all subscriptions for Units the Investor Securities are subject to acceptance by the Company. The Each of the Company and the Placement Agent reserve the right in their sole discretion to accept or reject any or all subscriptions for Units, Investor Securities in whole or in part for any reason or for no reason whatsoeverpart, regardless of whether any funds have been deposited into an escrow account. As used herein, Any subscription monies received by the term "RULES AND REGULATIONS" means the applicable rules and regulations promulgated Placement Agent from Investors will be handled in accordance with Rule 15c2-4 under the Securities Exchange Act and of 1934, as amended (the “Exchange Act”), whether or not the Placement Agent is subject to the Exchange Act, and as otherwise may be prescribed by the terms of the Offering Documents (as defined in Section 2 below). (c) Until the Initial Closing (as defined below) is held, all subscription funds received shall be held by Collegiate Peaks Bank or such other escrow agent as the Company and Placement Agent may mutually agree (the “Escrow Agent”). The Placement Agent shall use reasonably commercial effort to obtain accurate and complete information from Investors in the Subscription Documents (as defined in Section 2 below), but shall not have any independent obligation to verify the accuracy or completeness of any information contained in any Subscription Documents or the authenticity, sufficiency or validity of any check delivered by any prospective Investor in payment for the Investor Securities, nor shall the Placement Agent incur any liability with respect to any such verification or failure to verify. All subscription checks and funds shall be promptly and directly delivered without offset or deduction to the Escrow Agent.