AMENDMENT NUMBER TWO TO CONSENT AND WAIVER UNDER LOAN DOCUMENTS
Exhibit 10.1
AMENDMENT
NUMBER TWO
TO
CONSENT AND
WAIVER UNDER LOAN
DOCUMENTS
This
AMENDMENT NUMBER TWO TO CONSENT AND WAIVER UNDER LOAN DOCUMENTS (the “Amendment”) is made
and entered into as of January 8, 2009 and effective as of January 2, 2009,
by and among ISCO International, Inc., a Delaware corporation (the “Company”), Alexander
Finance, L.P., an Illinois limited partnership (“Alexander”) and
Manchester Securities Corporation, a New York corporation (“Manchester”).
W
I T N E S S E T H:
WHEREAS, on January 3, 2008,
the Company, Alexander, Manchester, Spectral Solutions, Inc., a Colorado
corporation (“Spectral”), and
Illinois Superconductor Canada Corporation, a corporation organized under the
laws of Ontario, Canada (“ISCO Canada”) entered
into that certain Amendment to and Consent and Waiver under Loan Documents (the
“Consent and
Waiver”) whereby the parties (i) issued new Amended and Restated Notes to
Alexander, (ii) amended, consented to and waived certain provisions in that
certain Third Amended and Restated Loan Agreement dated as of November 10, 2004
(the “Loan
Agreement”), and (iii) amended that certain Fourth Amended and Restated
Security Agreement dated June 22, 2006 and those certain Fourth Amended and
Restated Guaranties dated as of June 21, 2006; and
WHEREAS, subsequent to the
date of the Consent and Waiver, each of Spectral and ISCO Canada were dissolved
under the laws of each respective entity’s jurisdiction;
WHEREAS, on January 3, 2008,
the Company issued to Alexander a New Amended and Restated 7% Senior Secured
Convertible Note (the “Restated Note”);
WHEREAS, as of the date
hereof, Alexander, the Company and Manchester Securities Corp. entered into the
First Amendment to Note (the “Note Amendment”), pursuant to which certain terms
of the Restated Note were amended (the Restated Note together with the Note
Amendment shall be referred to herein as the “New Amended and Restated
Note”);
WHEREAS, also on the date
hereof, the Company and Alexander entered into the First Amendment to
Registration Rights Agreement (the “Registration Rights Amendment”), which
amended certain terms of the Registration Rights Agreement dated as of January
3, 2008; and
WHEREAS, concurrent with
entrance into the Note Amendment and the Registration Rights Amendment, the
parties desire to amend the Consent and Waiver to provide for certain changes as
more fully set forth herein.
A
G R E E M E N T:
NOW, THEREFORE, in
consideration of the covenants and agreements herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Definitions. All
capitalized terms used herein and not defined or amended herein shall have the
meanings ascribed to them in the Consent and Waiver.
2. Amendments. The
Consent and Waiver shall be amended as follows:
|
a)
|
The
following shall be added to the end of Section
1:
|
“For
purposes of this Agreement, all references to the New Amended and Restated Note
shall mean the New Amended and Restated Note, as amended from time to
time. The term “New Conversion Shares,” as used in this Agreement,
shall mean the shares of the Company’s common stock underlying the New Amended
and Restated Note.”
|
b)
|
Replace
Section
6(c) in its entirety with the
following:
|
“Intentionally
Omitted.”
|
c)
|
Replace
Section
6(d) in its entirety with the
following:
|
“The
Company covenants to Alexander that upon issuance in accordance with this
Agreement, the Amendment to Loan Documents, the Loan Agreement, and the terms of
the New Amended and Restated Note, the New Conversion Shares into which the New
Amended and Restated Note is convertible will be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes (other than
transfer taxes where the New Amended and Restated Note has been
transferred and other than any taxes due because of actions by Alexander), liens
and charges with respect to the issue thereof and the holders of such New
Conversion Shares shall be entitled to all rights and preferences accorded to a
holder of shares of the Company’s common stock.”
|
d)
|
The
following shall be added as a new Section 7 and the subsequent sections of
the Consent and Waiver shall be renumbered
accordingly:
|
“7. Pending
Action of NYSE Alternext US.
(a) Definitions. For
purposes of this Section 7:
“Exchange”
shall mean NYSE Alternext US or such other national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934 on which the
Company’s common stock is listed for trading. For the avoidance of
doubt, the term “Exchange” shall not include the Over-the-Counter Bulletin Board
or the Pink Sheets.
“Conversion”
shall mean the conversion of the New Amended and Restated Note into the New
Conversion Shares.
|
(b)
|
Stockholder
Approval. Notwithstanding anything to the contrary
contained in the New Amended and Restated Note or the Registration Rights
Agreement dated January 3, 2008, as amended, if the rules of the Exchange
require stockholder approval to issue the New Conversion Shares, the
Company shall submit to its stockholders for approval the issuance of the
New Conversion Shares at the earlier of (i) the regularly scheduled 2009
Annual Meeting of the Company’s stockholders, or (ii) such other time as
the Company may seek the consent or approval of its stockholders through a
proxy solicitation (the “Stockholder Approval Date”). After
approval by the Company’s stockholders of the issuance of the New
Conversion Shares, the Company shall use its reasonable best efforts to
seek approval by the Exchange to list the New Conversion Shares on the
Exchange, if such approval is required by the
Exchange.
|
|
|
(c)
|
Conversion
Limitation. Notwithstanding anything to the contrary
contained in the New Amended and Restated Note or the Registration Rights
Agreement dated January 3, 2008, as amended, the New Amended and Restated
Note shall not be converted into shares of the Company’s common stock
until the issuance of such shares has been approved by the Company’s
stockholders and the New Conversion Shares have been approved for listing
on the Exchange, if applicable.
|
|
|
(d)
|
Termination of this
Section. This Section 7 shall be null and void and of no
further force or effect if, and when, the Company is delisted from the
Exchange.”
|
3. Exchange
Limitation. If, and when, the Company is delisted from NYSE Alternext US,
the Company hereby covenants and agrees that each agreement with or note issued
to Manchester or Alexander, as the case may be, shall be amended such that any
provision limiting the number of shares of the Company's common stock that may
be issued pursuant to such agreement or note at prices below the book or market
value (as such terms are used in Section 713 of the AMEX Company Guide) of such
common stock shall be of no further force and effect. Notwithstanding the
foregoing, the Company, Manchester and Alexander agree that if any Exchange on
which the Company’s common stock may be listed imposes any similar limitation
regarding the number of shares of common stock that may be issued, the parties
shall amend any note or agreement, as applicable, to comply with the
requirements of the Exchange.
4. Entire Agreement;
Amendment. This Amendment, together with the Consent and
Waiver, the Loan Documents and the agreements and documents contemplated hereby
and thereby, contains the entire understanding and agreement of the
parties.
5. Non-Contravention.
The Company’s execution, delivery and performance
of this Amendment does not violate any material term, provision or covenant of
any agreement that is currently in effect between the Company and either of Alexander or Manchester.
6. Governing
Law. This Amendment shall be construed in accordance with and
governed by the internal laws of the State of New York, without regard to choice
of laws principles.
7. Counterparts. This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which, when so executed and delivered,
shall be deemed an original, but all of which counterparts together shall
constitute but one agreement.
8. Full Force and
Effect. Except as specifically modified or amended by the
terms of this Amendment, the Consent and Waiver and all provisions contained
therein are, and shall continue, in full force and effect. Except
with respect to the Amendment to Consent and Waiver Under Loan Documents,
nothing contained in this Amendment shall be deemed to be or construed as a
waiver or modification of any terms or provisions of any agreement between
Alexander and the Company or Manchester and the Company, or any rights of
Alexander or Manchester arising theruender as a result of the Company’s execution, delivery and performance of
this Amendment.
{Signature
Page Follows}
IN WITNESS WHEREOF, the
undersigned have caused this Amendment to be duly executed as of the date first
written above.
| ISCO INTERNATIONAL, INC. | |||
|
|
By:
|
/s/ Xxxx Xxxxxx | |
| Name : Xxxx Xxxxxx | |||
| Its: Chief Financial Officer | |||
| ALEXANDER FINANCE, L.P. | |||
|
|
By:
|
/s/ Xxxxxxxx Xxxxxxxx | |
| Name: Xxxxxxxx Xxxxxxxx | |||
| Title: President of Bun Partners, Inc., | |||
| General Partner of Alexander Finance, L.P. | |||
| MANCHESTER SECURITIES CORPORATION | |||
|
|
By:
|
/s/ Xxxxxx Xxxxxxxxx | |
| Name: Xxxxxx Xxxxxxxxx | |||
| Its: Vice President | |||
COLLATERAL
AGENT
UNDER
SECURITY AGREEMENT:
| MANCHESTER SECURITIES CORPORATION | |||
|
|
By:
|
/s/ Xxxxxx Xxxxxxxxx | |
| Name: Xxxxxx Xxxxxxxxx | |||
| Its: Vice President | |||
