Amendment and Termination and Release of Guaranty
Exhibit 10.1
THIS
AMENDMENT AND TERMINATION AND
RELEASE OF GUARANTY (this "Release") is made as of
January 31, 2008 by and among MANCHESTER SECURITIES CORPORATION (“Manchester”) and ALEXANDER
FINANCE L.P. (“Alexander” and together with
Manchester, the “Lenders”), ILLINOIS
SUPERCONDUCTOR CANADA CORPORATION (“ISCC”) and SPECTRAL SOLUTIONS,
INC. (“Spectral” and together with ISCC the "Guarantors") and ISCO
INTERNATIONAL, INC. (the "Borrower").
WITNESSETH:
WHEREAS,
Borrower has borrowed
funds (collectively, the “Notes”) from the Lenders pursuant to a Third Amended
and Restated Loan Agreement, dated November 10, 2004, as amended (the “Loan
Agreement”), and a Securities Purchase Agreement, dated June 22, 2006 (the
“Securities Purchase Agreement”), each such agreement by and among Borrower and
the Lenders;
WHEREAS,
the Borrower’s
obligations to the Lenders under the Notes are secured by a perfected first
lien
on certain assets of the Borrower and the Guarantors, as wholly-owned
subsidiaries of the Borrower, under a Fourth Amended and Restated Security
Agreement, dated June 22, 2006 as amended (the “Security Agreement”) by and
among the Borrower, the Lenders, the Guarantors, and Manchester as collateral
agent;
WHEREAS,
each of the
Guarantors guaranteed and became surety for the obligations of the Borrower
to
the Lenders (the "Obligations") on the terms
and conditions set forth in a separate Fourth Amended and Restated Guaranty,
dated June 22, 2006, as amended (each a “Guaranty” and together, the
"Guaranties");
WHEREAS,
neither of the
Guarantors has any assets and the Company intends to dissolve each of the
Guarantors as promptly as practicable following execution of this
Release;
WHEREAS,
the Borrower and the
Guarantors have requested that the Lenders release each of the Guarantors from
their obligations under the Security Agreement and the Guaranties, and the
Lenders are willing to do so on the terms and conditions set forth in this
Release;
NOW,
THEREFORE, in
consideration of the premises and for other good and valuable consideration,
and
intending to be legally bound hereby, the parties hereto agree as
follows:
1. Borrower
and each of the
Guarantors represent and warrant that each such Guarantor has no
assets.
2.
Effective on the date hereof, the Lenders, jointly and severally, hereby forever
and irrevocably release and discharge each of the Guarantors from each and
every
one of the terms and conditions of their respective Guaranties and agree that
the Guaranties are forever and irrevocably released and terminated in their
entirety including those provisions of the Guaranties which, by their terms,
survive the termination of the Guaranties.
3. Effective
on the date
hereof, (i) each Lender hereby releases the security interest in any and all
assets of each Guarantor, and (ii) the terms and conditions, relating to, and
the obligations of, the Guarantors under the Security Agreement are hereby
irrevocably terminated, including, without limitation, the termination of any
security interest in Collateral, as that term is defined in the Loan Documents,
owned or hereafter acquired by any one or both Guarantors, and the Security
Agreement, the Loan Agreement, and the Securities Purchase Agreement shall
each
be amended to delete any and all references to the Guarantors, whether or not
in
such capacity as guarantor of the Borrower’s obligations to the
Lenders.
4. Borrower
and its counsel are hereby
authorized by each Lender to file any UCC financing statement termination or
release deemed reasonably necessary by Borrower to reflect the release and
termination of the Guaranties and the Lenders’ security interests under the
Security Agreement.
5. The
Lenders shall as soon
as practicable following execution of this Agreement return to Borrower all
certificates representing capital stock and/or other securities of each of
the
Guarantors and related stock powers that have been pledged to the Lenders as
collateral under the Security Agreement.
6. The
Borrower hereby
represents and warrants that (a) all of its representations and warranties
in
the agreements, instruments and documents evidencing or securing the
Obligations, including the Security Agreement, the Loan Agreement and the
Securities Purchase Agreement (collectively, the "Loan Documents") are true and
correct, (b) no default or Event of Default exists under the Loan Documents
and
no circumstances exist which, with the passage of time or the giving of notice
or both, would become or constitute a default or an Event of Default under
the
Loan Documents, and (c) this Release has been duly authorized, executed and
delivered and constitutes the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.
7. The
Lenders, jointly and
severally, hereby completely remise, release, relinquish, waive and discharge,
jointly and severally, the Borrower and the Guarantors, and each such
corporation’s respective officers, directors, shareholders, partners, members,
employees, agents, affiliates and successors and assigns (collectively, the
“Borrower Released
Parties”) from all suits, charges, debts, dues, losses, bills, covenants,
contracts, promises, agreements, variances, trespasses, expenses, claims,
liabilities, demands and causes of action, known or unknown, filed or
contingent, whether in law or equity, direct or indirect, matured or not matured
(“Liabilities”), which
the Lenders ever had, now have, or hereinafter can or may have, against the
Borrower Released Parties, with respect to any Liabilities incurred in
connection with, relating to or otherwise arising out of the Guarantors’
obligations under the Guarantees and the other Loan Documents.
8. The
Borrower and the
Guarantors, jointly and severally, hereby completely remise, release,
relinquish, waive and discharge, jointly and severally, the Lenders, each
Lender’s parents and subsidiaries and each such corporation’s respective
officers, directors, shareholders, partners, members, lenders, employees,
agents, affiliates and successors and assigns (collectively, the “Lender Released Parties”) from
all Liabilities which the Borrower or the Guarantors ever had, now have, or
hereinafter can or may have, against the Lender Released Parties with respect
to
any Liabilities incurred in connection with, relating to or otherwise arising
out of the Lenders respective obligations to the Guarantors under the Guarantees
and the other Loan Documents.
9. Borrower
covenants to
dissolve each of the Guarantors as promptly as practicable following execution
of this Release.
10. In
case any provision of this Release shall be invalid, illegal, or unenforceable,
it shall to the extent practicable be modified so as to make it valid, legal
and
enforceable and to retain as nearly as practicable the intent of the parties,
and the validity, legality, and enforceability of the remaining provisions
shall
not in any way be affected or impaired thereby.
11. This
Release will be
binding upon and inure to the benefit of the Guarantors, the Borrower and the
Lenders and their respective heirs, executors, administrators, successors and
assigns.
12. This
Release shall not
become effective and each of the Guarantors shall continue to be liable to
the
Lenders under all of the terms and provisions of their respective Guaranties
until such time as the Lenders shall have received a copy of this Release
executed by the Borrower and each of the Guarantors.
13. Except
as modified
hereby, the terms and provisions of the Loan Documents remain unchanged and
in
full force and effect. Except as expressly provided herein, this
Release shall not constitute an amendment, waiver, consent or release with
respect to any provision of the Loan Documents, a waiver of any default or
Event
of Default thereunder, or a waiver or release of any of the Lenders’ rights and
remedies (all of which are hereby reserved). The Borrower expressly
ratifies and confirms the confession of judgment and waiver of jury trial
provisions (if applicable).
14. Each
Lender agrees to
promptly deliver all documents and take all actions reasonably necessary and
requested by Borrower or any Guarantor to effect the terms of this
Release.
15. This
Release may be
signed in any number of counterpart copies and by the parties hereto on separate
counterparts, but all such copies shall constitute one and the same
instrument.
WITNESS
the due execution
hereof as a document under seal, as of the date first written
above.
BORROWER:
WITNESS
/
ATTEST:
ISCO INTERNATIONAL,
INC.
__/s/
Amr
Abdelmonem_________________
By:_/s/ Xxxxx Cesario_________________
(SEAL)
Print
Name:_Amr
Abdelmonem____________
Print Name:__Frank Cesario_____________
Title:__CTO
and
COO___________________
Title:____CFO________________________
GUARANTORS:
WITNESS
/
ATTEST:
SPECTRAL SOLUTIONS, INC.
__/s/
Amr
Abdelmonem__________________
By:_/s/ Xxxxx Cesario__________________
(SEAL)
Title:__CTO
and
COO____________________
Title:_CFO__________________________
ILLINOIS
SUPERCONDUCTOR CANADA CORPORATION
_/s/
Amr
Abdelmonem___________________
By:__/s/ Xxxxx Cesario_________________
(SEAL)
Title:__CTO
and
COO____________________
Title:_CFO___________________________
LENDERS:
MANCHESTER
SECURITIES
ALEXANDER FINANCE L.P.
CORPORATION
By:_/s/
Elliot Greenberg_________________ By:______/s/
Xxxx
Whitmore______________
Print
Name:_Elliot
Greenberg_____________
Print Name:_Brad Whitmore_________________
Title:__Vice
President_____________
Title:_President_____________________