FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
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
