FIRST AMENDMENT TO LOAN

AGREEMENT

 

This FIRST AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is dated as of June 3,
2019 (the “First Amendment Effective Date”) and is by and between CrowdOut
Capital, LLC, a Texas limited liability company (“Lender”), and Sunworks Inc., a
Delaware corporation (“Borrower”).

 

WITNESSETH:

 

WHEREAS, Lender and Borrower are parties to that certain Loan Agreement dated as
of April 27, 2018 (the “Loan Agreement”); and

 

WHEREAS, Borrower and Lender wish to amend the Loan Agreement to extend the
Maturity Date set forth therein in accordance with the terms and conditions
hereof;

 

NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Defined Terms. Unless otherwise defined herein, all capitalized terms used
herein have the meanings assigned to such terms in the Loan Agreement, as
amended hereby.

 

2. Amendment. The defined term “Maturity Date” in Section 1.1 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:

 

““Maturity Date” shall mean January 31, 2021.”

 

3. Amendment Fee. Upon Borrower’s execution hereof, Borrower shall pay Lender an
amendment fee (the “Amendment Fee”) of Four Hundred Thousand (400,000) shares of
Borrower’s common stock (the “Shares”), with such Amendment Fee to be payable
only to the holders of the Senior Note and not to the holders of the
Subordinated Note. Such Shares shall be registered pursuant to Borrower’s Form
S-3 Registration Statement filed with the United States Securities and Exchange
Commission on May 21, 2019. Borrower shall deliver or cause to be delivered to
Lender a certificate, or evidence of electronic book-entry, representing the
shares registered in Lender’s name with respect to the Shares promptly following
the First Amendment Effective Date.

 

4. Representations, Warranties and Covenants of Borrower. Borrower represents
and warrants to Lender and agrees that:

 

(a) the representations and warranties contained in the Loan Agreement (as
amended hereby) and the other outstanding Loan Documents are true and correct in
all material respects at and as of the date hereof as though made on and as of
the date hereof, except to the extent specifically made with regard to a
particular date;

 

(b) on the First Amendment Effective Date, no Event of Default will have
occurred and be continuing;

 

   

   

 

(c) the execution, delivery and performance of this Amendment have been duly
authorized by all necessary action on the part of, and duly executed and
delivered by Borrower and this Amendment is a legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as the enforcement thereof may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors’ rights generally and general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law); and

 

(d) the execution, delivery and performance of this Amendment do not conflict
with or result in a breach by Borrower of any term of any material contract,
loan agreement, indenture or other agreement or instrument to which Borrower is
a party or is subject.

 

5. Representations and Warranties of Lender. Lender represents and warrants to
Borrower and agrees that:

 

(a) Lender (either alone or together with its advisors) has sufficient knowledge
and experience in financial and business matters so as to be capable of
evaluating the merits and risks of its investment in the Shares, and is capable
of bearing the economic risks of such investment, including a complete loss of
its investment in the Shares acquired by it hereunder;

 

(b) Lender has been given the opportunity to ask questions of, and receive
answers from, Borrower regarding Borrower, the terms and conditions of the
Shares and related matters, and has been furnished with the information it deems
necessary or desirable to evaluate the merits and risks of its acquisition of
the Shares;

(c) Lender has, in connection with its decision to acquire the Shares, relied
solely upon Borrower’s filings with the Securities and Exchange Commission under
the Securities Act of 1933 and the Securities Exchange Act of 1934, each as
amended, and the representations and warranties of Lender contained in this
Agreement; and

 

(d) on the First Amendment Effective Date, no Event of Default will have
occurred and be continuing.

 

6. Costs and Expenses. Borrower hereby affirms its obligation under the Loan
Agreement to reimburse Lender for all out-of-pocket expenses paid or incurred by
Lender in connection with the preparation, negotiation, execution and delivery
of this Amendment, including but not limited to the external attorneys’ fees and
expenses of attorneys for Lender with respect thereto.

 

7. Jurisdiction; Governing Law. This Amendment shall be governed by and
construed, interpreted and enforced in accordance with the internal, substantive
laws of the State of Texas, without giving effect to conflicts of laws
principles. The parties voluntarily and irrevocably submit to the jurisdiction
of the courts of the State of Texas located in Travis County, Texas, and the
Federal Courts of the United States of America located in Travis County, Texas,
over any dispute between or among the parties related to or arising out of this
Amendment, and each party irrevocably agrees that all such claims in respect of
such dispute shall be heard and determined exclusively in such courts. The
parties hereby irrevocably consent to the jurisdiction of such courts and hereby
waive, to the fullest extent permitted by law, any objection which they may now
or hereafter have to the venue of such dispute related to or arising out of this
Amendment brought in such court or any defense of inconvenient forum for the
maintenance of such dispute.

 

 2 

   

 

8. Effect of Amendment; Reaffirmation of Loan Documents.

 

(a) Nothing contained in this Amendment in any manner or respect limits or
terminates any of the provisions of the Loan Agreement or the other outstanding
Loan Documents other than as expressly set forth herein. The Loan Agreement (as
amended hereby) and each of the other outstanding Loan Documents remain and
continue in full force and effect and are hereby ratified and reaffirmed in all
respects. Borrower hereby further ratifies and reaffirms the validity and
enforceability of all of the Liens heretofore granted, pursuant to and in
connection with the Loan Agreement or any other Loan Document to Lender as
collateral security for the Obligations under the Loan Documents, in accordance
with their respective terms, and acknowledges that all of such Liens, and all
collateral heretofore pledged as security for such Obligations, continues to be
and remain collateral for such obligations from and after the date hereof. Upon
the effectiveness of this Amendment, each reference in the Loan Agreement to
“this Agreement”, “hereunder”, “hereof”, “herein” or words of similar import
shall mean and be a reference to the Loan Agreement as amended hereby.

 

(b) Execution of this Amendment by Lender (i) shall not constitute a waiver of
any Event of Default that may arise under the Loan Agreement or any of the other
Loan Documents, (ii) shall not impair, modify, restrict or limit any right,
power, privilege or remedy of Lender with respect to any Event of Default that
may arise under the Loan Agreement or any of the other Loan Documents, and (iii)
shall not constitute any custom, course of dealing or other basis for altering
any obligation of Borrower or any right, power, privilege or remedy of Lender
under the Loan Agreement or any of the other Loan Documents.

 

(c) The amendments, consents, modifications and other agreements set forth
herein are limited to the specifics hereof, shall not apply with respect to any
facts or occurrences other than those on which the same are based, shall neither
excuse any future non- compliance with the Loan Agreement or any other Loan
Document, nor operate as a waiver of any future Event of Default.

 

(d) This Amendment is a Loan Document.

 

(e) To the extent that any terms and conditions in any of the Loan Documents
shall contradict or be in conflict with any terms or conditions of the Loan
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Loan Agreement and the Loan Documents as modified or amended
hereby.

 

9. Headings. Section headings in this Amendment are included herein for
convenience of any reference only and shall not constitute a part of this
Amendment for any other purposes.

 

 3 

   

 

10. Severability. In case any provision in this Amendment shall be invalid,
illegal or unenforceable, such provision shall be severable from the remainder
of this Amendment and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

11. Entire Agreement. This Amendment, and terms and provisions hereof, the Loan
Agreement and the other Loan Documents constitute the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any and all prior or contemporaneous amendments or understandings
with respect to the subject matter hereof, whether express or implied, oral or
written and is the final expression and agreement of the parties hereto with
respect to the subject matter hereof

 

12. Execution in Counterparts. This Amendment may be executed in counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.

 

[Signature page follows]

 

 4 

   

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered as of the First Amendment Effective Date.

 

  BORROWER:         Sunworks Inc.,  

a Delaware corporation

      By: /s/ Charles F. Cargile     Charles F. Cargile,     Chief Executive
Officer         LENDER:       CrowdOut Capital, LLC,   a Texas limited liability
company         By: /s/ Alexander Schoenbaum   Name: Alexander Schoenbaum  
Title: Chief Executive Officer

 

Signature Page – First Amendment to Loan Agreement – Project Summer