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