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:


 


6.7Minimum
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