FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

 

This First Amendment to Loan and Security Agreement (the “Amendment”) is entered
into as of February 26, 2013, by and between SQUARE 1 BANK (the “Bank”) and
GRIDSENSE INC. (the “Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated
as of November 2, 2012 (as amended from time to time, the “Agreement”). The
parties desire to amend the Agreement in accordance with the terms of this
Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1) Bank hereby waives Borrower’s existing violations of the Minimum EBITDA
covenant, as more particularly described in Section 6.7 of the Agreement (as in
effect immediately prior to the date of this Amendment), for the reporting
periods ending November 30, 2012 and December 31, 2012.     2) Section 6.7 of
the Agreement is hereby amended and restated, as follows:

 

6.7 Minimum EBITDA. Borrower shall achieve EBITDA, determined in accordance with
GAAP and measured as of the last day of each month on a trailing 3-months basis,
of not less that the amounts set forth below for the corresponding reporting
periods. Covenant levels for subsequent reporting periods shall be determined by
Bank based upon Borrower’s Board-approved operating plan, which shall be
provided to Bank on or before January 15th during the term of this Agreement,
and incorporated into an amendment to this Agreement which Borrower hereby
agrees to execute.

 

For the 3 months ending:   Minimum EBITDA  February 28, 2013   $(1,400,000)
March 31, 2013   $(1,100,000) April 30, 2013   $(1,100,000) May 31, 2013  
$(1,200,000) June 30, 2013   $(1,000,000) July 31, 2013   $(900,000) August 31,
2013   $(700,000) September 30, 2013   $(500,000) October 31, 2013   $(500,000)
November 30, 2013   $(500,000) December 31, 2013   $(500,000)

 

Gridsense Inc. – 1 st Amendment to LSA

 

 

 

 

3) Subsection (d) of the definition of “Eligible Accounts” in Exhibit A to the
Agreement is hereby amended and restated, as follows:

 

(d) Accounts with respect to an account debtor, including the account debtor’s
subsidiaries and Affiliates, whose total obligations to Borrower exceed 25% of
all Accounts, to the extent such obligations exceed the aforementioned
percentage, except (i) with respect to Accounts where San Diego Gas & Electric
Company is the account debtor, such percentage shall instead be 50% or (ii) as
approved in writing by Bank;

 

4) Unless otherwise defined, all initially capitalized terms in this Amendment
shall be as defined in the Agreement. The Agreement, as amended hereby, shall be
and remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof. Borrower
ratifies and reaffirms the continuing effectiveness of all agreements entered
into in connection with the Agreement.     5) Borrower represents and warrants
that the representations and warranties contained in the Agreement are true and
correct as of the date of this Amendment.     6) This Amendment may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one instrument.     7) As a condition to the
effectiveness of this Amendment, Bank shall have received, in form and substance
satisfactory to Bank, the following:

 

  a) this Amendment, duly executed by Borrower;         b) payment of a $1,000
facility fee, which may be debited from any of Borrower’s accounts;         c)
payment for all Bank Expenses incurred through the date of this Amendment,
including Bank’s expenses for the documentation of this Amendment, which may be
debited from any of Borrower’s accounts; and         d) such other documents and
completion of such other matters, as Bank may reasonably deem necessary or
appropriate.

 

[Signature Page Follows]

 

Gridsense Inc. – 1 st Amendment to LSA

 

 

 

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

 

GRIDSENSE INC.   SQUARE 1 BANK           By:     By:   Name:     Name:   Title:
    Title:  

 

[Signature Page to First Amendment to Loan and Security Agreement]

 

Gridsense Inc. – 1 st Amendment to LSA