iscoreleaseguaranty.htm

Exhibit 10.1

    Amendment
      and Termination and Release of Guaranty

          

    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/ Frank 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/ Frank Cesario__________________

     (SEAL)

    Title:__CTO
      and
      COO____________________                                                                                                
Title:_CFO__________________________

     

    
 

    ILLINOIS
      SUPERCONDUCTOR CANADA CORPORATION

    


    _/s/
      Amr
      Abdelmonem___________________                                                                                                
By:__/s/ Frank Cesario_________________

     (SEAL)

    Title:__CTO
      and
      COO____________________                                                                                                
Title:_CFO___________________________

    


    


    LENDERS:

     

    
 

    MANCHESTER
      SECURITIES                                                                                     
ALEXANDER FINANCE L.P.

    CORPORATION

    


    


    By:_/s/
      Elliot Greenberg_________________                             By:______/s/
      Brad
      Whitmore______________

    Print
      Name:_Elliot
      Greenberg_____________                                                                                     
Print Name:_Brad Whitmore_________________

    Title:__Vice
      President_____________                                                                                                
Title:_President_____________________