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April 30, 2015

 

Gridsense Inc.

2568 Industrial Boulevard, Suite 110

West Sacramento, CA 95691

Attn: Joe Musanti, CEO

 

Re: Side Letter Agreement

 

Dear Joe:

 

Gridsense Inc. (“Borrower”) and Square 1 Bank (“Bank”) are parties to that
certain Loan and Security Agreement dated November 2, 2012 (as amended from time
to time, including without limitation by that certain Seventh Amendment to Loan
and Security Agreement dated April 23, 2015, the “Loan Agreement”). Acorn
Energy, Inc. (“Guarantor”) has executed for the benefit of the Bank that certain
Unconditional Guaranty dated as of December 30, 2013 (as amended from time to
time, including without limitation by that certain Amendment to and Affirmation
of Unconditional Guaranty dated on or about July 16, 2014 and that certain
Amendment to and Affirmation of Unconditional Guaranty dated April 23, 2015, the
“Guaranty”).

 

This letter agreement is entered into in connection therewith and confirms the
following:

 

  (a) Pursuant to Section 11(d) of the Seventh Amendment to Loan and Security
Agreement dated April 23, 2015 (the “Seventh Amendment”), a condition to the
effectiveness of the Seventh Amendment was (i) receipt by Bank of a Pledge and
Security Agreement, duly executed by the Guarantor (the “Pledge Agreement
Condition”), and (ii) the opening and funding by Guarantor of a segregated
deposit account (the “Account”) with at least $500,000 (the “Cash Collateral
Funding Condition”).         (b) Bank has waived the Cash Collateral Funding
Condition, on the conditions that (i) the Guarantor agrees that (1) on or before
May 4, 2015 (the “First Post-Closing Funding Deadline”) the Guarantor shall have
funded the Account with at least $250,000 (the “First Post-Closing Funding
Condition”), and (2) on or before May 14, 2015 (the “Second Post-Closing Funding
Deadline”) the Guarantor shall have funded the Account with an additional
$250,000 (so that, for the sake of clarity, the Account shall, on and after May
14, 2015, be funded with at least $500,000) (the “Second Post-Closing Funding
Condition”).         (c) Bank, Borrower, and the Guarantor hereby acknowledge
and agree that (i) the failure of the Guarantor to satisfy the First
Post-Closing Funding Condition by the First Post-Closing Funding Deadline shall
constitute an Event of Default under the Agreement and the Guaranty, and (ii)
the failure of the Guarantor to satisfy the Second Post-Closing Funding
Condition by the Second Post-Closing Funding Deadline shall constitute an Event
of Default under the Agreement and the Guaranty, and (ii) in the event of such
an Event of Default under the Agreement and the Guaranty, Bank shall be entitled
to exercise all of its rights and remedies in accordance with the terms and
conditions of the Agreement, the Guaranty, and any other documents entered into
in connection therewith.

 

406 Blackwell Street, Suite 240, Durham, NC 27701

Tel. (919) 314-3040

 

 

 

 

Except as expressly set forth herein, the Loan Agreement and the Guaranty shall
remain unmodified and in full force and effect.

 

Sincerely,               SQUARE 1 BANK         By:     Name:     Title:        
  Acknowledged and agreed to by:         GRIDSENSE INC.         By:     Name:  
  Title:           ACORN ENERGY, INC.         By:     Name:     Title:    

 

406 Blackwell Street, Suite 240, Durham, NC 27701

Tel. (919) 314-3040