Document:

ex10-5.htm

Exhibit 10.5

MODIFICATION AND CONDITIONAL WAIVER UNDER

LOAN AND SECURITY AGREEMENT

This Modification and Conditional Waiver under Loan and Security Agreement (this “Modification”) is entered into on November 1, 2013 (the “Modification Effective Date”), by and between ISC8, Inc. (formerly Irvine Sensors Corporation), a Delaware corporation with its principal place of business at 3001 Red Hill Ave., Bldg. 4/108, Costa Mesa, Orange County, CA 92926 (“Borrower”) and Partners for Growth III, L.P. (“PFG”).  Except as otherwise specified herein, capitalized terms used herein without definition shall have the same meanings given them in the Loan Agreement (as defined below).

WHEREAS, Borrower and PFG entered into that certain Loan and Security Agreement dated as of December 14, 2011, as amended by the Forbearance (as defined below) (the “Loan Agreement”) and contemporaneously entered into that certain Unconditional Continuing Guaranty (“Guaranty”) for the benefit of PFG given by The Griffin Fund LP (“Griffin”) and Costa Brava Partnership III, L.P. (“Costa”) ;

WHEREAS, PFG provided the credit contemplated under the Loan Agreement as, when and how specified in the Loan Agreement;

WHEREAS, PFG and Borrower entered into that certain Forbearance, Limited Waiver and Consent under Loan and Security Agreement on August 21, 2012, to, inter alia, address financial covenant defaults by Borrower specified therein (the “Specified Defaults” and such Forbearance, Limited Waiver and Consent under Loan and Security Agreement on August 21, 2012, the “Forbearance”);

WHEREAS, PFG and Borrower entered into that certain Extension of Forbearance under Loan and Security Agreement on September 28, 2012 (the “First Forbearance Extension”) extending PFG’s forbearance until October 31, 2012;

WHEREAS, PFG and Borrower entered into that certain Extension of Forbearance under Loan and Security Agreement on October 31, 2012 (the “Second Forbearance Extension”) extending PFG’s forbearance until December 15, 2012;

WHEREAS, PFG and Borrower entered into that certain Extension of Forbearance under Loan and Security Agreement on December 15, 2012 (the “Third Forbearance Extension”) extending PFG’s forbearance until January 31, 2013;

WHEREAS, PFG and Borrower entered into that certain Extension of Forbearance under Loan and Security Agreement as of February 1, 2013 (the “Fourth Forbearance Extension”) extending PFG’s forbearance until February 28, 2013;

WHEREAS, PFG and Borrower entered into that certain Extension of Forbearance under Loan and Security Agreement as of March 1, 2013 (the “Fifth Forbearance Extension”) extending PFG’s forbearance until March 31, 2013;

WHEREAS, PFG and Borrower entered into that certain Extension of Forbearance under Loan and Security Agreement as of April 1, 2013 (the “Sixth Forbearance Extension”) extending PFG’s forbearance until April 30, 2013;

WHEREAS, PFG and Borrower entered into that certain Extension of Forbearance under Loan and Security Agreement as of May 1, 2013 (the “Seventh Forbearance Extension”) extending PFG’s forbearance until May 31, 2013;

  

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WHEREAS, in March 2013, Borrower resolved to and ceased to be engaged in its Government-focused business, terminating all of its employees and exiting the facilities associated with that business (the “Shutdown Transaction”), and Borrower treated the Shutdown Transaction as a disposition of obsolete or unneeded Equipment in the ordinary course of Borrower’s business not requiring PFG’s consent under the Loan Documents. Certain terminated employees of Borrower formed a new corporation named “Irvine Sensors Corporation” (“New ISC”) in an attempt to continue Borrower’s former government business; no ownership or security interest exists between Borrower and New ISC;

WHEREAS, PFG and Borrower entered into that certain Extension of Forbearance under Loan and Security Agreement as of June 1, 2013 (the “Eighth Forbearance Extension”) extending PFG’s forbearance until June 30, 2013;

WHEREAS, PFG and Borrower entered into that certain Ninth Extension of Forbearance under Loan and Security Agreement as of July 1, 2013 (the “Ninth Forbearance Extension” and, together with the Forbearance and the above-specified Forbearance extensions, the “Forbearance Agreements”);

WHEREAS, (i) Borrower, acknowledging that the Specified Defaults have occurred and are continuing, has requested, subject to the terms and conditions of this Modification, that PFG waive the Specified Defaults, modify the Loan Agreement and otherwise make the accommodations set forth herein;

WHEREAS, Borrower remains in default due to the Specified Defaults, but contemplates consummating a Next Equity Financing as contemplated in the Forbearance Agreements (the initial closing of such equity financing raising not less than the Minimum NEF Amount as defined in Section 6(h) (the “Initial NEF Closing”)) and PFG is willing to modify the Loan Agreement and conditionally waive the Specified Defaults in contemplation of such Initial NEF Closing;

NOW THEREFORE, the parties hereby agree as follows:

1.           Description of Existing Indebtedness. Among other Obligations and indebtedness which may be owing by Borrower to PFG, Borrower is indebted to PFG pursuant to, among other documents, the Loan Agreement and the Guaranty.  The Loan Agreement provides for a term loan in the principal amount of $5,000,000, receipt of which Borrower acknowledges and all of which is outstanding on the date hereof.  In addition to such principal outstanding amount, Borrower owes $76,667 in deferred interest (due at the Maturity Date or other termination of or acceleration of Obligations under the Loan Agreement), $46,875 in deferred fees (due as required in Section 7.10 of this Modification), and accrued and unpaid current interest due at the end of October 2013 in accordance with the terms of the Loan Agreement and PFG’s out-of-pocket fees and costs as set forth in Section 7.2. Defined terms used but not otherwise defined herein shall have the same meanings set forth in the Loan Agreement and the other Loan Documents, including the Warrants.

2.           Description of Collateral. Repayment of the Obligations is secured by the Collateral, as described in the Loan Agreement, the Guaranty, an Intellectual Property Security Agreement and other documents of even date therewith. The above-described security documents, together with all other documents securing repayment of the Obligations, shall be referred to herein as the “Security Documents”. Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations are referred to as the “Existing Loan Documents”.

3.           Modification; Changes to Loan Agreement Terms. 

(a)  Reduction in Principal Obligations. On or prior to the earlier of October 28, 2013 and (ii) the Initial NEF Closing, Borrower shall indefeasibly repay $2,000,000 in principal Obligations, $1,000,000 of which shall be from Borrower’s available cash (including, if the Initial NEF Closing has occurred, from proceeds of the Initial NEF Closing), and $1,000,000 of which shall be credited as repaid by the application of a $1,000,000 deposit held by PFG from a PFG demand on Costa under the Guaranty.

(b)  Amendment of Guaranty. Contemporaneously with the execution of this Modification, PFG, Costa and Griffin will enter into an amendment of the Guaranty, releasing Costa as a Guarantor, reducing the Maximum Guaranteed Amount to $1,000,000, and affirming the obligations of Griffin under the Guaranty (as to the reduced Maximum Guaranteed Amount).

  

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(c)  Deposit. Within three (3) Business Days from the Modification Effective Date, Borrower shall deposit the cash sum of $500,000 with PFG, to be held by PFG as additional security for the Obligations (the “Deposit”). The Deposit (i) shall be held by PFG (A) without bearing interest for the benefit of Borrower, and (B) in PFG’s discretion, through the Maturity Date, and (ii) shall be increased by twenty-five percent (25%) of the excess over the Minimum NEF Amount (the “Additional Deposit”). For example only, if Borrower raises $10,625,000 in the Next Equity Financing, Borrower would promptly remit an additional $250,000 (25% * ($10,625,000 – [Minimum NEF Amount or $9,625,000]) as Deposit to PFG. This requirement would apply, without duplication, to successive closings of a Next Equity Financing, with such supplements to the Deposit to be due no less frequently than monthly, as and when proceeds of subsequent closings of the Next Equity Financing are received by Borrower; provided, however, the excess of Additional Deposit held by PFG at any time over the amount of $1,000,000 shall be credited by PFG to reduce a corresponding amount of outstanding principal Obligations.

(d)  Modification of Loan Agreement Terms. Subject to the terms of this Section 1 being timely satisfied and Borrower’s compliance with the conditions set forth in Section 7, so long as no Default or Event of Default has occurred and is continuing other than the Specified Defaults:

	
  

	
(i)

	
Waiver of Control Agreement Requirement. So long as no Event of Default occurs and is continuing after the Modification Effective Date, Borrower’s obligations under Section 8(a) of the Schedule to provide Control Agreements in respect of its Deposit Accounts is hereby waived; in addition, Borrower’s past failure to provide Control Agreements as required is hereby waived;

	
  

	
(ii)

	
Extension of Maturity Date. The Maturity Date specified in Section 4 of the Schedule is hereby amended to read “December 31, 2014”.

(e)  Fees and Warrant Stock Earned. Borrower confirms that (i) all fees payable to PFG under the Loan Agreement and Forbearance Agreements, regardless of when payable, have been earned by PFG and shall be paid as and when payable; and (ii) all shares of Warrant Stock under Warrants issued to PFG and its designees are fully vested and not subject to any reduction under Section 1.7 thereof.

(f)  Suspension of Financial Covenant Measurement; Financial Covenant Reset; Amendment and Restatement. Within twenty (20) Business Days from the Modification Effective Date, PFG shall, in consultation with Borrower and based upon Borrower’s post-Next Equity Financing financial projections, reset the Financial Covenants set forth in Section 5 of the Loan Agreement (thresholds and/or covenants) with a view to setting covenant levels within Borrower’s reasonable capability to achieve. Borrower shall continue to report as required under Section 7 of the Schedule, but PFG waives Borrower’s compliance with the Financial Covenants set forth in Section 5 of the Schedule for the months of August 2013, September 2013 and October 2013. After new Financial Covenants have been set, PFG may in its good faith business judgment and for the sake of clarity require that such reset Financial Covenants and the then relevant terms of this Modification be embodied in an Amended and Restated Loan Agreement.

(g)           Interest Rate. To the extent that Obligations are subject to the Default Rate due to the Specified Defaults or otherwise, as from the Modification Effective Date, so long as no Default has occurred and is continuing other than the Specified Defaults, Borrower has discharged its obligations under Section 1 of this Modification and has satisfied the conditions set forth in Section 7 of this Modification, the interest rate applicable to Obligations shall revert to the non-Default Rate.

(h)           Correction of Scrivener’s Error. The percentage set forth in Section 3(b) of the Ninth Forbearance Extension is hereby corrected from “0.077%” to read “7.7%”.

(i)           Next Equity Financing. Subject to the truth and accuracy of Borrower’s representation and warranty set forth in Section 6(h), PFG will deem the initial closing of the financing specified therein as a financing qualifying as the “Next Equity Financing” for purposes of the Loan Documents.

  

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           4.           Conditional Waiver of Specified Defaults.  If after the date hereof no Default or Event of Default has occurred and is continuing under the Loan Agreement, other than the Specified Defaults, and Borrower timely satisfies its obligations under Section 1 and the conditions set forth in Section 7, PFG shall be deemed to have irrevocably waived the Specified Defaults and, for all purposes and at all times thereafter, such Specified Defaults shall be deemed to never have occurred. The limited waivers given in this Modification shall be limited precisely as written and shall not be deemed (a) to be a forbearance, waiver or modification of any other term or condition of the Loan Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which PFG may now have or may have in the future under or in connection with the Loan Agreement or any instrument or agreement referred to therein; (b) to be a consent to any future amendment or modification, forbearance or waiver to any instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the provisions thereof; or (c) to limit or impair PFG’s right to demand strict performance of all terms and covenants as of any date, subject to this Modification.

5.           Ratification of Loan Documents.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and conditions of each of the Loan Documents to which it is a party. The authority and incumbency documents and certificates previously delivered to PFG in connection with the Loan Documents from time to time remain in full force and effect, unmodified, and are hereby ratified. The terms and conditions of the Loan Agreement remain in full force and effect, unmodified except as set forth herein.

6.           Representations and Warranties.  Borrower represents and warrants that:

 

(a)           immediately upon execution of this Modification and assuming Borrower’s satisfaction of the obligations set forth in Section 1 and the conditions set forth in Section 7 hereof (i) the representations and warranties contained in the Existing Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (ii) no Default or Event of Default (other than the Specified Defaults) has occurred and is continuing or would result from the performance of the Loan Documents;

 

(b)           Borrower has the corporate power and authority to deliver this Modification and to perform its Obligations under the Loan Documents and the person(s) executing this Modification on behalf of Borrower are duly empowered to do so;

 

(c)           the certificate of incorporation and other formation and organizational documents of Borrower provided to PFG on the date of the Loan Agreement remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect or, if any such documents have been amended, supplemented or restated or are no longer true, accurate and complete, Borrower shall provide true, complete, correct and current versions of such documents as additional conditions to this Modification under Section 7;

 

(d)           the execution and delivery by Borrower of this Modification and the performance by Borrower of its Obligations under the Loan Agreement have been duly authorized by all necessary corporate action on the part of Borrower;

 

(e)           this Modification, when executed and delivered by Borrower (i) constitutes the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights; and (ii) does not conflict with any law or regulation or judgment or the organizational documents of Borrower, or any agreement or document to which Borrower is a party or which is binding upon it or any of this assets; and (iii) does not require any authorization, approval, consent, licence or registration in any jurisdiction for its execution, performance, validity or enforceability that has not already been obtained by Borrower;

 

(f)           Borrower acknowledges that PFG has acted in good faith and has conducted in a commercially reasonable manner its relationship with Borrower in connection with this Modification and in connection with the Loan Documents and that, as of the date hereof, it has no defenses against its obligation to pay any and all Obligations;

 

(g)           the information set forth in the Representations, as updated by Borrower (as required) and delivered to PFG on or prior to the date hereof, continues to be true, correct, accurate and complete as of the Modification Effective Date; and

  

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(h)           as of the Modification Effective Date, Borrower has raised $9,625,000 in proceeds of its “Next Equity Financing” as contemplated in the Forbearance Agreements, consisting of (i) $4,500,000 in convertible investor debt cash proceeds received on or prior to the Ninth Forbearance Extension Effective Date, which will convert into Series D Preferred Stock on the Initial NEF Closing, (ii) $5,025,000 in convertible debt and equity cash proceeds received from the Ninth Forbearance Effective Date to the Modification Effective Date, and (iii) $100,000 in Next Equity Financing subscription from PFG (such amounts, the “Minimum NEF Amount”).

 

Borrower understands and acknowledges that PFG is entering into this Modification in reliance upon, and in partial consideration for, the above representations and warranties, and agrees that such reliance is reasonable and appropriate.

7.           Conditions.  Subject to the satisfaction of the conditions set forth below, this Modification shall become effective on the date it is executed by the parties hereto, but shall continue to be subject to the satisfaction of all the following conditions:

7.1           Execution and Delivery.  As a condition precedent, Borrower shall have duly executed and delivered an original counterpart of this Modification to PFG via electronic mail by 5:00 p.m. US Pacific Time on October 28, 2013, with the original of such counterpart not later than one Business Day thereafter via overnight courier.

 

7.2           Payment of PFG Expenses.  Borrower shall have paid upon demand all PFG Expenses (including all reasonable attorneys’ fees and expenses) incurred in connection with this Modification.

 

7.3           Updates to Borrower Information. If required to render the Representations identified in Section 5(g) hereof true, correct, accurate and complete as of the date hereof in all material respects, Borrower shall update the Representations.

 

7.4           Amendment of Guaranty. PFG shall have received the amendment to the Guaranty contemplated in Section 3(b), above, duly executed by Costa, Griffin and Borrower.

 

7.5           Principal Reduction. Borrower shall have made the principal payment contemplated in Section 3(a), above.

7.6           Deposit.  Borrower shall have paid over to PFG the Deposit contemplated in Section 3(c), above, including (as a condition subsequent) any increases in the Deposit required in accordance with the terms of Section 3(c).

7.7           Officer’s Certificate Regarding Next Equity Financing. Borrower shall promptly (in no event later than one (1) Business Day) notify PFG of the consummation of the Initial NEF Closing and the Next Equity Financing Effective Price. If so requested by PFG at any time thereafter, Borrower’s chief financial officer shall certify in writing to PFG the Number of Shares of Next Equity Financing Stock (or Common Stock, as the case may be) and relevant Exchange Price for each Warrant held by PFG and its designee holders of Warrants based upon such Next Equity Financing Effective Price.

7.8           Waiver Fee. As a condition subsequent, Borrower shall have paid PFG a Waiver Fee equal to $125,000 in consideration of this Modification, payable at the earliest of the Maturity Date, other termination of this Modification or the Loan Agreement or upon any acceleration of the due date of Obligations due to the occurrence and continuation of a Default or Event of Default.

7.9           Consummation of Initial NEF Closing. Borrower shall have consummated the Initial NEF Closing on or before October 28, 2013.

7.10           Payment of Ninth Forbearance Extension Deferred Cash Fee. Without duplication for the dollar amount stated in Section 1, Borrower shall have paid PFG the cash component of the deferred Ninth Forbearance Extension Fee sum of $46,875, which shall be deemed “paid” by such amount being added to outstanding principal Obligations on the Modification Effective Date, and such additional principal Obligation shall bear interest in the same manner as Loan principal and be repayable as and when Loan principal is required to be paid.

  

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        7.11           Payment of Ninth Forbearance Extension Deferred Fee in Warrants. Borrower shall have issued Warrants to PFG and its designees to purchase (in the aggregate) 2,232,143 shares of Borrower common stock at an exercise price of $0.01 per share.

For the avoidance of doubt, the failure of any of the conditions set forth in this Section 7 at any time, unless waived by PFG in its sole discretion, shall constitute an Event of Default.

 

8.           Terms Related to Shutdown Transaction.  The terms set forth in the Ninth Forbearance Extension related to the Shutdown Transaction and pay-over of sum to PFG are incorporated by reference as if set forth herein and remain in full force and effect.

9.           No Defenses; Release. NO DEFENSES.  Borrower agrees that, as of the date hereof, it has no defenses against its  obligations to pay any and all Obligations. Borrower, for itself, its Subsidiaries and any Persons related or associated by ownership or effective control (each, a “Releasor”) hereby forever relieves, releases, and discharges PFG and each of its present or former employees, officers, directors, agents, representatives, attorneys (the “Indemnitees”), from any and all possible claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses, actions and causes of action, of every type, kind, nature, description or character, whether known or unknown, suspected or unsuspected, absolute or contingent, arising out of or in any manner connected with or related to facts, circumstances, issues, controversies or claims existing or arising from the beginning of time through and including the date of execution of this Modification, which any Releasor or any of their respective partners, members, officers, agents or employees may now or hereafter have against the Indemnitees, if any, and irrespective of whether any of the foregoing arise out of contract, tort, violation of laws or regulations or otherwise, breach of fiduciary duty, breach of any duty of fair dealing, breach of confidence, breach of funding commitment, undue influence, duress, economic coercion, violation of any federal or state securities or Blue Sky laws or regulations, conflict of interest, negligence, bad faith, malpractice, violations of the racketeer Influenced and Corrupt Organizations Act, intentional or negligent infliction of mental distress, tortious interference with contractual relations, tortious interference with corporate governance or prospective business advantage, deceptive trade practices, libel, slander, conspiracy or any claim relating to the Existing Loan Documents or the transactions contemplated therein (collectively “Released Claims”). Without limiting the foregoing, the Released Claims shall include any and all liabilities or claims arising out of or in any manner connected with or related to the Existing Loan Documents, the Recitals hereto, any instruments, agreements or documents executed in connection with any of the foregoing or the origination, negotiation, administration, servicing and/or enforcement of any of the foregoing.  In furtherance of this release, each Releasor expressly acknowledges and waives any and all rights under Section 1542 of the California Civil Code, which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” By entering into this release, each Releasor recognizes that no facts or representations are ever absolutely certain and it may hereafter discover facts in addition to or different from those which it presently knows or believes to be true, but that it is the intention of each Releasor hereby to fully, finally and forever settle and release all matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if any Releasor should subsequently discover that any fact that it relied upon in entering into this release was untrue, or that any understanding of the facts was incorrect, no Releasor shall be entitled to set aside this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances. Each Releasor acknowledges that it is not relying upon and has not relied upon any representation or statement made by PFG with respect to the facts underlying this release or with regard to any of such party’s rights or asserted rights. This release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against any action, suit, or other proceeding that may be instituted, prosecuted or attempted in breach of this release. Each Releasor acknowledges that the release contained herein constitutes a material inducement to PFG to enter into this Modification, and that PFG would not have done so but for PFG’s expectation that such release is valid and enforceable in all events.  Each Releasor hereby represents and warrants to PFG, and PFG is relying thereon, as follows: (i) except as expressly stated in this Modification, neither PFG nor any agent, employee or representative of PFG has made any statement or representation to any Releasor regarding any fact relied upon by any Releasor in entering into this Modification; (ii) each Releasor has made such investigation of the facts pertaining to this Modification and all of the matters appertaining thereto, as it deems necessary; (iii) the terms of this Modification are contractual and not a mere recital; (iv) this Modification has been carefully read by each Releasor, the contents hereof are known and understood by each Releasor, and this Modification is signed freely, and without duress, by each Releasor; (v) each Releasor represents and warrants that it is the sole and lawful owner of all right, title and interest in and to every claim and every other matter which it releases herein, and that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or entity any claims or other matters herein released. Obligor shall indemnify PFG, defend and hold it harmless from and against all claims based upon or arising in connection with prior assignments or purported assignments or transfers of any claims or matters released herein.

  

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10.           Counterparts.  This Modification may be signed in any number of counterparts, and by different parties hereto in separate counterparts, delivered in original or in facsimile form (e.g., PDF of original sent via electronic mail) with the same effect as if the signatures to each such counterpart were upon a single instrument and delivered with original signatures.  All counterparts shall be deemed an original of this Modification.

11.           Integration; Construction.  This Modification, the Forbearance Agreements, the Loan Agreement, the other Loan Documents and any documents executed in connection herewith or therewith or pursuant hereto or thereto contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, offers and negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding, if any, involving this Modification; except that any financing statements or other agreements or instruments filed by PFG with respect to Borrower shall remain in full force and effect. The title of this Modification and section headings are for the readers’ convenience only and shall be ignored for purposes of integration into the Loan Agreement. The quotation marks around modified clauses set forth herein and any differing font styles, if any, in which such clauses are presented herein are for ease of reading only and shall be ignored for purposes of construing and interpreting this Modification. The Recitals to this Modification are expressly incorporated by reference herein. The General Provisions set forth in Section 9 of the Loan Agreement are incorporated herein by reference.

 

12.           Consistent Changes.  The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

13.           Governing Law; Venue.  THIS MODIFICATION SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.  Borrower and PFG each submit to the exclusive jurisdiction of the State and Federal courts in San Francisco County, California.

 

[Signature Page Follows]

  

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IN WITNESS WHEREOF, the parties hereto have caused this Modification to be executed as of the Modification Effective Date.

 

 

Borrower:                                                           ISC8, Inc.

a Delaware corporation

 

By:/s/ Marcus A. Williams

Name: Marcus A. Williams

Title: Secretary and Senior Vice President

 

 

PFG:                                                           Partners for Growth III, L.P.

 

By: /s/ Andrew Kahn

Name: Andrew Kahn

Title:   Manager, Partners for Growth III, LLC,

its General Partnerexhibit10-1.htm

 

 

Exhibit 10.1

 

FORM OF INDEMNIFICATION AGREEMENT

 

Indemnification Agreement, dated as of _______________, 201_, is made by and between Axiom Oil and Gas Corp., a Nevada corporation (the “Company”), and _____________ (the “Indemnitee”).

 

RECITALS

 

A.           The Company and Indemnitee recognize the difficulties associated with obtaining liability insurance for the Company’s directors, officers, employees and other agents, including the rising cost of such insurance and the general reductions in the coverage of such insurance;

B.           The Company and Indemnitee recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees and other agents to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited;

C.           The Company desires to attract and retain the services of talented and experienced individuals, such as Indemnitee, to serve as directors, officers, employees and agents of the Company and its subsidiaries and wishes to indemnify its directors, officers, employees and other agents to the maximum extent permitted by law;

D.           The Nevada Revised Staues, under which the Company is organized (“NRS”), empowers the Company to indemnify its directors, officers, employees and agents by agreement and to indemnify persons who serve, at the request of the Company, as the directors, officers, employees or agents of other corporations or enterprises, and expressly provides that the indemnification provided by the NRS is not exclusive; and

E.           In order to induce Indemnitee to serve or continue to serve as a director, officer, employee or agent of the Company and/or one or more subsidiaries of the Company free from undue concern for claims for damages arising out of or related to such services to the Company and/or one or more subsidiaries of the Company, the Company has determined and agreed to enter into this Agreement with Indemnitee.

 

AGREEMENT

 

NOW, THEREFORE, Indemnitee and the Company hereby agree as follows:

 

1.           Definitions.  As used in this Agreement:

(a)           “Agent” means any person who is or was a director, officer, employee or other agent of the Company or a subsidiary of the Company; or is or was serving at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company as a director, officer, employee or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, employee benefit plan, trust, nonprofit entity or other enterprise; or was a director, officer, employee or agent of a foreign or domestic corporation which was a predecessor corporation of the Company or a subsidiary of the Company, or was a director, officer, employee or agent of another enterprise at the request of, for the convenience of, or to represent the interests of such predecessor corporation.

  

  

  

(b)           “ Board” means the Board of Directors of the Company.

(c)           A “ Change in Control” shall be deemed to have occurred if (i) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the total voting power represented by the Company’s then outstanding voting securities, (ii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board, together with any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination was previously so approved, cease for any reason to constitute a majority of the Board, (iii) the stockholders of the Company approve a merger or consolidation or a sale of all or substantially all of the Company’s assets with or to another entity, other than a merger, consolidation or asset sale that would result in the holders of the Company’s outstanding voting securities immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least a majority of the total voting power represented by the voting securities of the Company or such surviving or successor entity outstanding immediately thereafter, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company.

(d)           “ Disinterested Director” means a director of the Company who is not and was not a party to the matter in respect of which indemnification is sought by Indemnitee.

(e)           “ Expenses” shall include all out-of-pocket costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements), actually and reasonably incurred by Indemnitee in connection with either the investigation, defense or appeal of a Proceeding or establishing or enforcing a right to indemnification under this Agreement, or Section 145 or otherwise; provided, however, that Expenses shall not include any judgments, fines, ERISA excise taxes or penalties, or amounts paid in settlement of a Proceeding.

(f)           “ Independent Counsel” means a law firm, or a partner (or, if applicable, member) of such a law firm, or an independent practitioner, that is experienced in matters of corporation law.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

(g)           “ Proceeding” means any threatened, pending, or completed action, suit or other proceeding, whether civil, criminal, administrative, or investigative.

(h)           “ Subsidiary” means any corporation of which more than 50% of the outstanding voting securities is owned directly or indirectly by the Company, by the Company and one or more other subsidiaries, or by one or more other subsidiaries.

2.           Agreement to Serve.  Indemnitee agrees to serve and/or continue to serve as an Agent of the Company, at its will (or under separate agreement, if such agreement exists), in the capacity Indemnitee serves as an Agent of the Company as of the date of this Agreement, so long as Indemnitee is duly appointed or elected and qualified in accordance with the applicable provisions of the By-laws of the Company or any subsidiary of the Company or until such time as Indemnitee tenders his or her resignation in writing; provided, however, that nothing contained in this Agreement is intended to create any right to continued employment or other service with the Company by Indemnitee.

  

  

  

3.           Liability Insurance.

(a)           Maintenance of D&O Insurance.  The Company hereby covenants and agrees that, so long as Indemnitee shall continue to serve as an Agent of the Company and thereafter so long as Indemnitee shall be subject to any possible Proceeding by reason of the fact that Indemnitee was an Agent of the Company, the Company, subject to Section 3(c), shall promptly obtain and maintain in full force and effect directors’ and officers’ liability insurance (“D&O Insurance”) in reasonable amounts from established and reputable insurers, as more fully described below.

(b)           Rights and Benefits.  In all policies of D&O Insurance, Indemnitee shall qualify as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s independent directors (as defined by the insurer) if Indemnitee is such an independent director; of the Company’s non-independent directors if Indemnitee is not an independent director; of the Company’s officers if Indemnitee is an officer of the Company; or of the Company’s key employees, if Indemnitee is not a director or officer but is a key employee.  If Indemnitee is not a director, officer or an employee of the Company, but rather is another agent of the Company, Indemnitee shall have rights and benefits under the D&O Policy as are reasonable and customary for agents serving in such a capacity.

(c)           Limitation on Required Maintenance of D&O Insurance.  Notwithstanding the provisions of Sections 3(a) and 3(b) hereof, the Company shall have no obligation to obtain or maintain D&O Insurance if the Company determines in good faith that: such insurance is not reasonably available; the premium costs for such insurance are disproportionate to the amount of coverage provided; the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit; Indemnitee is covered by similar insurance maintained by a subsidiary of the Company; the Company is to be acquired and a tail policy of reasonable terms and duration is purchased for pre-closing acts or omissions by Indemnitee; or the Company is to be acquired and D&O Insurance will be maintained by the acquirer that covers pre-closing acts and omissions by Indemnitee.

4.           Mandatory Indemnification.  Subject to the terms of this Agreement:

(a)           Third Party Actions.  If Indemnitee is a person who was or is a party or is threatened to be made a party to, or is otherwise involved in, any Proceeding (other than an action by or in the right of the Company) by reason of the fact that Indemnitee is or was an Agent of the Company, or by reason of anything done or not done by Indemnitee in any such capacity, the Company shall indemnify Indemnitee against all Expenses and liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes and penalties, and amounts paid in settlement) actually and reasonably incurred by Indemnitee in connection with the investigation, defense, settlement or appeal of such Proceeding.

(b)           Derivative Actions.  If Indemnitee is a person who was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Company by reason of the fact that Indemnitee is or was an Agent of the Company, or by reason of anything done or not done by Indemnitee in any such capacity, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with the investigation, defense, settlement or appeal of such Proceeding; except that no indemnification under this Section 4(b) shall be made in respect to any claim, issue or matter as to which Indemnitee shall have been finally adjudged to be liable to the Company by a court of competent jurisdiction unless and only to the extent that the Delaware Court of Chancery or the court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such amounts which the Delaware Court of Chancery or such other court shall deem proper.

  

  

  

(c)           Actions where Indemnitee is Deceased.  If Indemnitee is a person who was or is a party or is threatened to be made a party to any Proceeding by reason of the fact that Indemnitee is or was an Agent of the Company, or by reason of anything done or not done by Indemnitee in any such capacity, and if, prior to, during the pendency of or after completion of such Proceeding Indemnitee is deceased, the Company shall indemnify Indemnitee’s heirs, executors and administrators against all Expenses and liabilities of any type whatsoever to the extent Indemnitee would have been entitled to indemnification pursuant to this Agreement were Indemnitee still alive.

(d)           Certain Terminations.  The termination of any Proceeding or of any claim, issue, or matter therein by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal action or Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

(e)           Limitations.  Notwithstanding the provisions of Sections 4(a), 4(b), 4(c) and 4(d) hereof, the Company shall not be obligated to indemnify Indemnitee for Expenses or liabilities of any type whatsoever for which payment (and the Company’s indemnification obligations under this Agreement shall be reduced by such payment) is actually made to or on behalf of Indemnitee, by the Company or otherwise, under an insurance policy, or under a valid and enforceable indemnity clause, by-law or agreement; and, in the event the Company has previously made a payment to Indemnitee for an Expense or liability of any type whatsoever for which payment is actually made to or on behalf of Indemnitee under an insurance policy, or under a valid and enforceable indemnity clause, by-law or agreement, Indemnitee shall return to the Company the amounts subsequently received by the Indemnitee from such other source of indemnification.

 

5.           Indemnification for Expenses in a Proceeding in Which Indemnitee is Wholly or Partly Successful. 

 

 (a)           Successful Defence.  Notwithstanding any other provisions of this Agreement, to the extent Indemnitee has been successful, on the merits or otherwise, in defense of any Proceeding (including, without limitation, an action by or in the right of the Company) in which Indemnitee was a party by reason of the fact that Indemnitee is or was an Agent of the Company at any time, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with the investigation, defense or appeal of such Proceeding.

(b)           Partially Successful Defence.  Notwithstanding any other provisions of this Agreement, to the extent that Indemnitee is a party to or a participant in any Proceeding (including, without limitation, an action by or in the right of the Company) in which Indemnitee was a party by reason of the fact that Indemnitee is or was an Agent of the Company at any time and is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by or on behalf of Indemnitee in connection with each successfully resolved claim, issue or matter.

(c)           Dismissal.  For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

6.           Mandatory Advancement of Expenses.  Subject to the terms of this Agreement and following notice pursuant to Section 7(a) below, the Company shall advance all Expenses actually and reasonably incurred by Indemnitee in connection with the investigation, defense, settlement or appeal of any Proceeding to which the Indemnitee is a party or is threatened to be made a party by reason of the fact that the Indemnitee is or was an Agent of the Company (unless there has been a final judicial decision from which there is no further right of appeal (a final determination that Indemnitee is not entitled to indemnification for such Expenses) upon receipt of (i) an undertaking by or on behalf of Indemnitee to repay the amount advanced in the event that there shall be a final determination that Indemnitee is not entitled to indemnification by the Company and (ii) satisfactory documentation supporting such Expenses.  Such advances are intended to be an obligation of the Company to Indemnitee hereunder and shall in no event be deemed to be a personal loan.  The advances to be made hereunder shall be paid by the Company to Indemnitee within sixty (60) days following delivery of a written request therefor by Indemnitee to the Company.

  

  

  

7.           Notice and Other Indemnification Procedures.

(a)           Notice by Indemnitee.  Promptly after receipt by Indemnitee of notice of the commencement of or the threat of commencement of any Proceeding, Indemnitee shall, if Indemnitee believes that indemnification with respect thereto may be sought from the Company under this Agreement, notify the Company in writing of the commencement or threat of commencement thereof.

(b)           Insurance.  If the Company receives notice pursuant to Section 7(a) hereof of the commencement of a Proceeding that may be covered under D&O Insurance then in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.  

(c)           Defence.  In the event the Company shall be obligated to pay the Expenses of any Proceeding against Indemnitee, the Company shall be entitled to assume the defense of such Proceeding, with counsel selected by the Company and approved by Indemnitee (which approval shall not be unreasonably withheld), upon the delivery to Indemnitee of written notice of its election so to do.  After delivery of such notice, and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee shall have the right to employ his or her own counsel in any such Proceeding at Indemnitee’s expense; and (ii) Indemnitee shall have the right to employ his or her own counsel in any such Proceeding at the Company’s expense if (A) the Company has authorized the employment of counsel by Indemnitee at the expense of the Company, (B) Indemnitee shall have reasonably concluded based on the written advice of Indemnitee’s legal counsel that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense, (C) after a Change in Control not approved by a majority of the members of the Board who were directors immediately prior to such Change in Control, the employment of counsel by Indemnitee has been approved by Independent Counsel, or (D) the Company shall not, in fact, have employed counsel to assume the defense of such Proceeding.

8.           Right to Indemnification.

(a)           Determination of Right to Indemnification.  To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is (i) reasonably available to Indemnitee, (ii) reasonably necessary and (iii) not privileged or otherwise protected from disclosure to determine whether and to what extent Indemnitee is entitled to indemnification.  Upon written request by Indemnitee for indemnification pursuant to the preceding sentence, a determination with respect to Indemnitee’s entitlement thereto shall be made as follows:  (i) if requested by Indemnitee, by Independent Counsel, or (ii) if no request is made by Indemnitee for a determination by Independent Counsel, (A) by the Board by a majority vote of a quorum consisting of the Disinterested Directors, or (B) if a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (C) if a quorum of Disinterested Directors so directs, by the stockholders of the Company.  In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of Indemnitee, the Independent Counsel shall be selected by the Board unless there shall have occurred within two (2) years prior to the date of the commencement of the action, suit or proceeding for which indemnification is claimed a “Change in Control”, in which case the Independent Counsel shall be selected by Indemnitee unless Indemnitee shall request that such selection be made by the Board.  Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding Indemnitee’s entitlement to indemnification under this Agreement.

(b)           Application to Court.  If (i) the claim for indemnification or advancement of Expenses is denied, in whole or in part, (ii) no disposition of such claim is made by the Company within sixty (60) days after the request therefor, (iii) the advancement of Expenses is not timely made pursuant to Section 6 of this Agreement or (iv) payment of indemnification is not made pursuant to Section 5 of this Agreement, Indemnitee shall have the right to apply to the Delaware Court of Chancery, the court in which the Proceeding is or was pending or any other court of competent jurisdiction, for the purpose of enforcing Indemnitee’s right to indemnification (including the advancement of Expenses) pursuant to this Agreement.

  

  

  

(c)           Expenses Related to the Enforcement or Interpretation of this Agreement.  The Company shall indemnify Indemnitee against all reasonable Expenses incurred by Indemnitee in connection with any hearing or proceeding under this Section 8 involving Indemnitee and against all reasonable Expenses incurred by Indemnitee in connection with any other proceeding between the Company and Indemnitee involving the interpretation or enforcement of the rights of Indemnitee under this Agreement, unless a court of competent jurisdiction finds that each of the claims and/or defences of Indemnitee in any such proceeding was frivolous or made in bad faith.

9.           Exceptions.  Any other provision herein to the contrary notwithstanding, the Company shall not be obligated:

(a)           Claims Initiated by Indemnitee.  To indemnify or advance Expenses to Indemnitee with respect to Proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of defense, with a reasonable allocation where appropriate, unless (i) such indemnification is expressly required to be made by law, (ii) the Proceeding was authorized by the Board, (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under the General Corporation Law of the State of Delaware or (iv) the Proceeding is brought to establish or enforce a right to indemnification under this Agreement or any other statute or law or otherwise as required under Section 145 in advance of a final determination;

(b)           Lack of Good Faith.  To indemnify Indemnitee for any Expenses incurred by Indemnitee with respect to any Proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such Proceeding was not made in good faith or was frivolous;

(c)           Unauthorized Settlements.  To indemnify Indemnitee under this Agreement for any amounts paid in settlement of a Proceeding unless the Company provides its prior written consent to such settlement, which consent shall not be unreasonably withheld;

(d)           Claims Under Section 16(b).  To indemnify Indemnitee for Expenses associated with any Proceeding related to, or the payment of profits made from, the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or

(e)           Payments Contrary to Law.  To indemnify or advance Expenses to Indemnitee for which payment is prohibited by applicable law.

10.           Non-Exclusivity.  The provisions for indemnification and advancement of Expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may have under any provision of law, the Company’s Certificate of Incorporation or By-laws, the vote of the Company’s stockholders or disinterested directors, other agreements, or otherwise, both as to action in Indemnitee’s official capacity and as to action in another capacity while occupying Indemnitee’s position as an Agent of the Company, and Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting as an Agent of the Company and shall inure to the benefit of the heirs, executors and administrators of Indemnitee.

11.           Permitted Defences.  It shall be a defense to any action for which a claim for indemnification is made under this Agreement (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the Indemnitee has made an undertaking to repay any amounts advanced in the event that there shall be a final determination that Indemnitee is not entitled to indemnification by the Company) that the Indemnitee has not met the standard of conduct which makes it permissible under the General Corporation Law of the State of Delaware for the Company to indemnify the Indemnitee for the amount claimed (but the burden of proving such defense shall be on the Company) or that Indemnitee is not entitled to indemnification because of the limitations set forth in Section 9 hereof.  Neither the failure of the Company (including its Board, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the Indemnitee is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Company (including its Board, Independent Counsel or stockholders) that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct.

  

  

  

12.           Subrogation.  In the event the Company is obligated to make a payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery under an insurance policy or any other indemnity agreement covering Indemnitee, who shall execute all documents required and take all action that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights (provided that the Company pays Indemnitee’s costs and expenses of doing so), including without limitation by assigning all such rights to the extent of such indemnification or advancement of Expenses.  

13.           Survival of Rights.

(a)           All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an Agent of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible claim or threatened, pending or completed Proceeding by reason of the fact that Indemnitee was serving in the capacity referred to herein.

(b)           The Company shall require any successor to the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

14.           Interpretation of Agreement.  It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent permitted by law, including those circumstances in which indemnification would otherwise be discretionary.

15.           Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality and enforceability of the remaining provisions of the Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable and to give effect to Section 15 hereof.

16.           Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless it is in a writing signed by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

17.           Notice.  All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) upon delivery if delivered by hand to the party to whom such notice or other communication shall have been directed, (b) if mailed by certified or registered mail with postage prepaid, return receipt requested, on the third business day after the date on which it is so mailed, (c) one business day after the business day of deposit with a nationally recognized overnight delivery service, specifying next day delivery, with written verification of receipt, or (d) on the same day as delivered by confirmed facsimile transmission if delivered during business hours or on the next successive business day if delivered by confirmed facsimile transmission after business hours.  Addresses for notice to either party shall be as shown on the signature page of this Agreement, or to such other address as may have been furnished by either party in the manner set forth above.

18.           Governing Law.  This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware.  This Agreement is intended to be an agreement of the type contemplated by Section 145 (f) of the General Corporation Law of the State of Delaware.

19.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforcement is sought needs to be produced to evidence the existence of this Agreement.

[SIGNATURE PAGE TO FOLLOW]

  

  

  

The parties hereto have entered into this Indemnification Agreement effective as of the date first above written.

 

	  	  
	
Indemnitee:

 

 

 

 

Address:

	
The Company:

 

 

 

By:   

 

Title:

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