FIRST AMENDMENT OF LOAN AGREEMENT
THIS FIRST AMENDMENT OF LOAN AGREEMENT (the "Amendment") is entered
into effective September 16, 2005 between XXXXXXX INVESTMENTS, LLC ("Lender"),
and JMW GROUP, LLC ("Borrower").
RECITALS:
A. Borrower and Lender entered into a Loan Agreement dated April
19, 2004 (the "Loan Agreement") whereby Lender provided a loan to finance the
purchase of 2,631.579 Series 4 Preferred shares of Microfield Group, Inc.
("Microfield"). A portion of such shares have been distributed to the members of
Borrower. As a result, Borrower now owns 1,052.632 Series 4 Preferred shares of
Microfield (the "Microfield Stock").
B. Borrower and Lender desire to modify the Loan Agreement in
certain respects as set forth below.
C. Capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Loan Agreement.
AGREEMENT:
1. CONDITIONS TO AGREEMENT. Subject to (a) the Loan being paid in
full without a default, and (b) full repayment of the unreturned cash
contributions (plus Priority Return) of Preferred Members as provided in Section
3(d) of the Second Amendment to Amended and Restated Operating Agreement of
Borrower, Lender agrees as follows:
1.1 PREPAYMENT FEE. Section 3.3 of the Loan Agreement
(providing for a prepayment fee for early payment of the Loan) is deleted.
1.2 STOCK OPTION. Section 11 of the Loan Agreement is
modified to provide that Lender has the option to purchase up to 526.316 Series
4 Preferred shares of the Microfield Stock owned by Borrower. The purchase
option may be exercised at any time during the period the Loan is outstanding
and for twelve (12) months thereafter. In addition to exercising the option for
cash, Lender may elect to receive from Borrower, without the payment of any
additional consideration, shares of Series 4 Preferred stock equal to the value
of this option calculated in the following manner:
X = Y (1000*A - 380)
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1000*A
where X = the number of shares to be delivered to Lender by
Borrower
Y = the number of option shares underlying the option
which Lender elects to purchase pursuant to this net
exercise provision.
1 - FIRST AMENDMENT OF LOAN AGREEMENT
PDX/112816/141153/DLH/1384697.1
A = the average closing ask price for one share of
Microfield common stock for the 10 trading days preceding
the day the net exercise election is made.
2. COLLATERAL RELEASE. Pursuant to Section 4.1 of the Loan
Agreement, Borrower pledged the Series 4 Preferred shares referenced in Recital
A above in favor of Lender. Lender acknowledges and confirms that it has
released its security interest in the 1,578.947 Series 4 Preferred shares
previously transferred to Borrower's members. The pledge of all the remaining
Series 4 Preferred shares owned by Borrower, all the outstanding shares of
Aequitas Capital Management, Inc. and 1,500 Series 3 Preferred shares owned by
Xxxxxxxxxxx Leasing Company, LLC remains in effect. The Commercial Pledge
Agreement dated April 19, 2004 between Borrower and Lender is hereby modified to
reflect the release of the 1,578.947 Series 4 Preferred shares from the pledge
arrangement.
3. XXXX STOCK PLEDGE. As set forth in Section 5.2 of the Loan
Agreement, 70.42 shares of the stock of Aequitas Capital Management, Inc.
("Aequitas") had been pledged in favor of Xxxxxx Xxxx to secure payment of an
obligation due to be paid in September 2004. Borrower represents that this
obligation has now been paid in full, the pledge of such shares has terminated,
and all outstanding shares are now pledged in favor of Lender.
4. NOTE REPAYMENT AND WARRANTS. As set forth in Section 12 of the
Loan Agreement, Borrower and Lender acknowledge and confirm that Lender was
repaid amounts due from Destination Capital, LLC. Borrower and Lender further
acknowledge and confirm that Microfield issued a warrant to Destination Capital,
LLC to purchase 1,403,548 common shares of Microfield (two-thirds of the warrant
shares potentially issuable) and that Destination Capital, LLC assigned the
warrant to Lender as to 701,774 shares.
5. GUARANTY. Borrower acknowledges that this Amendment will not
affect the liability or obligations of any guarantor under the Unconditional
Guaranty executed in connection with the Loan Agreement and the Loan. By their
signatures below, each Guarantor reaffirms, ratifies and confirms that the
Unconditional Guaranty remains in full force and effect.
6. FURTHER EFFECT. Except as set forth herein, the Loan Agreement
will remain in full force and effect.
7. COUNTERPARTS. 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 and the same instrument. Facsimile signatures
shall be considered original signatures for purposes of this Agreement.
2 - FIRST AMENDMENT OF LOAN AGREEMENT
PDX/112816/141153/DLH/1384697.1
IN WITNESS WHEREOF, the parties have executed this Amendment, or caused
their duly authorized representatives to execute this Amendment, as of the date
first above written.
LENDER: BORROWER:
XXXXXXX INVESTMENTS, LLC JMW GROUP, LLC
By: Aequitas Capital Management, Inc.,
its Manager
By: /s/ XXXXXXX XXXXXXX By: /s/ XXXXXX X. JESENIK
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Xxxxxxx Xxxxxxx, Managing Member Xxxxxx X. Jesenik, CEO
The terms of the Unconditional Guaranty are hereby ratified and reaffirmed, and
remain in full force and effect:
/s/ XXXXXX X. JESENIK
--------------------------------------
Xxxxxx X. Jesenik
/s/ XXXXXXXXX X. JESENIK
--------------------------------------
Xxxxxxxxx X. Jesenik
/s/ XXXXX X. XXXXXX
--------------------------------------
Xxxxx X. Xxxxxx
/s/ XXXXXX X. XXXXXX
--------------------------------------
Xxxxxx X. Xxxxxx
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