Exhibit 10.2

 

STOCK PURCHASE AGREEMENT

 

This STOCK PURCHASE AGREEMENT (this “Purchase Agreement”) is made as of this
15th day of December, 2003, by and between ISCO International, Inc., a Delaware
corporation (the “Company”), and Morgan & Finnegan, L.L.P. (the “Purchaser”).

 

BACKGROUND

 

Upon the terms and conditions set forth in this Agreement, the Company desires
to sell to the Purchaser, and the Purchaser desires to acquire from the Company,
the number of shares of the Company’s common stock set forth below as
consideration for the resolution of all claims that the Company and Purchaser
have or may have against each other in accordance with the terms of the
Settlement and Release of even date herewith (the “Settlement and Release” and
together with the Purchase Agreement, the “Agreements”)).

 

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby and in
consideration of the premises and mutual covenants contained herein, agree as
follows:

 

ARTICLE 1

PURCHASE AND SALE OF THE SHARES

 

1.1 Purchase and Sale. Subject to the terms and conditions herein set forth, the
Company agrees that it will issue to the Purchaser and the Purchaser agrees that
it will acquire from the Company, on the Closing Date, 1,000,000 shares of
common stock of the Company (the “Shares”) in consideration of the execution of
the Settlement and Release.

 

1.2 Closing. The issuance and purchase of the Shares shall occur at such time
and place as the Company and the Purchaser may agree in writing (the “Closing
Date”). At the Closing, the Company shall deliver to the Purchaser the Shares
against delivery by the Purchaser of the Settlement and Release.

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

 

2.1 Company Representations and Warranties.

 

The Company hereby represents, warrants, acknowledges and/or agrees as follows:

 

(a) The Company is duly organized and validly existing in good standing under
the laws of the jurisdiction of its organization. The Company has full power and
authority to own, operate and occupy its properties, and no proceeding has been
instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification.

 

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(b) The Company has all requisite power and authority to execute, deliver and
perform its obligations under the Agreements, and the Agreements have been duly
authorized and validly executed and delivered by the Company and constitute
legal, valid and binding agreements of the Company enforceable against the
Company in accordance with their terms, except as rights to indemnity and
contribution may be limited by state or federal securities laws or the public
policy underlying such laws, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

(c) The Shares being sold hereunder have been duly authorized, and when issued
and paid for in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable.

 

(d) None of the execution and delivery of the Agreements, the issuance and sale
of the Shares by the Company hereunder, the fulfillment of the terms hereof or
the consummation of the transactions contemplated herein, will (i) violate any
law, rule, regulation, judgment, injunction, decree, determination, award or
order of any court or governmental agency or instrumentality, domestic or
foreign, or (ii) conflict with or result in any breach of any of the terms of or
constitute a default (with or without the giving of notice or the passage of
time or otherwise) under, or result in the termination of or the creation or
imposition of any mortgage, lien, security interest or other charge or
encumbrance of any nature under the terms of: (A) any material contract or
agreement to which the Company is a party or by which the Company or any of the
assets and properties of the Company is bound, other than any such conflict,
breach or default that would not have a material adverse effect; or (B) the
Company’s Certificate of Incorporation or Bylaws. None of the execution and
delivery of the Agreements, the issuance and sale of the Shares by the Company
hereunder, the fulfillment of the terms hereof or the consummation of the
transactions contemplated herein, requires any consent, approval, order or
authorization of, or registration with, or the giving of notice to, any
governmental or public body or authority or any other person, except for such
notices, consents or approvals which have previously been obtained or which will
be obtained on or before the Closing Date and notices and filings that may be
required under applicable state and federal securities laws that will be
undertaken by the Company after the Closing Date.

 

2.2 Purchaser Representations and Warranties.

 

The Purchaser hereby represents, warrants, acknowledges and/or agrees as
follows:

 

(a) The Purchaser is duly organized and validly existing in good standing under
the laws of the jurisdiction of its organization. The Purchaser has full power
and authority to own, operate and occupy its properties, and no proceeding has
been instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification.

 

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(b) The Purchaser has all requisite power and authority to execute, deliver and
perform its obligations under the Agreements, and the Agreements have been duly
authorized and validly executed and delivered by the Purchaser and constitute
legal, valid and binding agreements of the Purchaser enforceable against the
Purchaser in accordance with their terms, except as rights to indemnity and
contribution may be limited by state or federal securities laws or the public
policy underlying such laws, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

(c) (i) The Purchaser is purchasing the Shares for investment purposes only for
the account of the Purchaser and not with any view toward a distribution
thereof, (ii) the Purchaser has no contract, undertaking, agreement or
arrangement with any person to sell, transfer or pledge to such person or anyone
else any of the Shares, and the Purchaser has no present plans to enter into any
such contract, undertaking, agreement or arrangement, and (iii) the Purchaser
understands, acknowledges and consents that it will have to bear the economic
risk of its investment in the Shares for an indefinite period of time.

 

(d) The Purchaser has sufficient financial resources available to sustain the
loss of all or a portion of the Purchaser’s investment in the Company, has no
need for liquidity in the investment in the Company and is able to bear the
economic risk of the investment.

 

(e) The Purchaser acknowledges receipt and review of the Company’s filings with
the Securities and Exchange Commission. The Purchaser acknowledges that it has
been furnished any and all materials that it has requested relating to the
Company or the Shares and that the Purchaser has been afforded the opportunity
to ask questions of, and receive answers from, the management of the Company
concerning the Company and to obtain any additional information, to the extent
that the Company possesses such information or can acquire it without
unreasonable effort or expense, necessary to verify the accuracy of the
information provided to the Purchaser or otherwise to make an informed
investment decision. The Purchaser understands that such information constitutes
current information about the Company and does not in any way guarantee future
performance or the completion of future proposed events discussed in such
material.

 

(f) The Purchaser is sophisticated and experienced in investment matters, and,
as a result, the Purchaser is in a position to evaluate an investment in the
Company and has the capacity to protect the Purchaser’s own interests in
connection with this transaction.

 

(g) The Purchaser is an “accredited investor” as such term is defined in Rule
501(a) of Regulation D under the Securities Act.

 

(h) The Purchaser understands that (i) the Shares have not been registered under
the Securities Act or the securities laws of any state, based upon an exemption
from such registration requirements for non-public offerings pursuant to
Regulation D under the

 

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Securities Act or other exemption thereunder, (ii) the Shares (or any part
thereof) may not be sold, transferred or otherwise disposed of in the absence of
an effective registration statement for the Shares under the Securities Act and
all applicable state securities laws, or unless an exemption from such
registration is available, (iii) the Shares are and will be “restricted
securities,” as defined in Rule 144 of the Rules and Regulations promulgated
under the Securities Act, and (iv) the Company has no obligation or intention to
register any of Shares for resale under the Securities Act or any state
securities laws, or to take any action (including the filing of reports or the
publication of information required by Rule 144 under the Securities Act) which
would make available any exemption from the registration requirements of such
laws.

 

(i) The Purchaser agrees that it will not sell, transfer, assign or otherwise
dispose of any Shares or any interest therein unless and until the Purchaser (i)
complies with all applicable requirements of the Securities Act and all
applicable state securities laws and (ii) in the absence of an effective
registration statement, provides the Company with an opinion of counsel which is
satisfactory to the Company (both as to the issuer of the opinion and the form
and substance thereof) that the Shares may be sold, transferred, assigned or
disposed of without registration of the Shares under the Securities Act, and
without violation of any applicable state securities laws (including any
investor suitability standards).

 

(j) The Purchaser understands that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings set forth herein in order to determine the applicability of
specific exemptions from the registration requirements of the Securities Act and
applicable state securities laws and the suitability of the Purchaser to acquire
the Shares.

 

(k) The Purchaser understands that no federal or state agency has passed on, has
recommended or has endorsed the merits of the Shares.

 

(l) No broker or finder has acted for the Purchaser in connection with its
purchase of the Shares and no broker or finder is entitled to any broker’s or
finder’s fees or other commissions in connection therewith based on agreements
between the Purchaser and any broker or finder.

 

(m) The Purchaser understands that appropriate restrictive endorsement(s)
substantially as set forth below, will be placed upon the certificates
evidencing the Shares subscribed to hereby to reflect the foregoing and that the
Company will give appropriate stop transfer instructions to the person(s) in
charge of the transfer of its securities.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND

 

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APPLICABLE STATE SECURITIES LAWS OR A SATISFACTORY OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH PLEDGE, HYPOTHECATION, SALE OR TRANSFER IS
EXEMPT THEREFROM UNDER ANY SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.

 

ARTICLE 3

REGISTRATION RIGHTS

 

3.1 Registration Rights.

 

(a) The Company shall undertake to use its best efforts to prepare and file with
the Securities and Exchange Commission a registration statement on Form S-3 (or
such other form as the Company deems appropriate) (the “Registration Statement”)
to effect the registration under the Securities Act of 1933, as amended (the
“Securities Act”) and relevant state securities laws of the Shares in connection
with the disposition of the Shares by the Purchaser, from time to time in the
open market, in one or more transactions (which may involve block transactions),
in negotiated, underwritten, or other transactions or through a combination of
such methods of sale, at market prices prevailing at the time of sale, at prices
relating to such prevailing market prices or at negotiated prices. The Company
shall use its best commercially reasonable efforts to obtain effectiveness of
the Registration Statement as soon as practicable, and shall notify the
Purchaser promptly upon the Registration Statement being declared effective by
the SEC.

 

(b) All expenses of the Company associated with the preparation of the
Registration Statement and the filing thereof shall be borne by the Company,
including the payment of any applicable listing, blue sky compliance and
printing fees. The Purchaser shall be responsible for fees and expenses of its
own counsel and any broker fees and commissions or underwriting discounts, and
transfer taxes, if any, payable with respect to any resale of the Shares. In
connection with the Registration Statement, but subject to the limitations of
Section 3.2 hereof, the Company will prepare and file with the SEC and any state
securities commissions such amendments and supplements to the Registration
Statement and the prospectus used in connection therewith as may be necessary to
keep such Registration Statement effective and to comply with the provisions of
the Securities Act and Rule 415 thereunder with respect to the disposition of
all the Shares covered by such Registration Statement. Notwithstanding the
foregoing, the Company will only be required to maintain the effectiveness of
the Registration Statement with respect to the Shares registered thereunder for
resale by the Purchaser, until the earlier of (i) such time as all of such
Shares have been disposed of in accordance with the intended methods of
disposition by the Purchaser set forth in such Registration Statement, or (ii)
one year from the effective date of the Registration Statement.

 

(c) The Company shall furnish to the Purchaser such number of copies of the
Registration Statement and of each amendment and supplement thereto, such number
of copies of the prospectus included in such Registration Statement and such
other related

 

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documents as such Purchaser may reasonably request in order to facilitate the
disposition of the Shares by such Purchaser.

 

3.2 Information from Purchaser. The Purchaser shall furnish to the Company such
information regarding such Purchaser and its proposed method of distribution of
the Shares as the Company may from time to time request and as shall be required
by law to effect and maintain the registration of such Shares under the
Securities Act and any state securities laws.

 

3.3 Agreements of the Company. The Company shall use reasonable efforts to (i)
register and qualify the Shares under such other securities or “blue sky” laws
of such jurisdictions in the United States as the Purchaser shall reasonably
request, and (ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the effectiveness of the Registration Statement; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to (A) qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3.3, (B) subject itself to general
taxation in any jurisdiction, (C) file a general consent to service of process
in any such jurisdiction, (D) provide any undertakings that cause the Company
undue expense or burden, or (E) make any change in its charter or bylaws, which
in each case the Company’s Board of Directors determines to be contrary to the
best interests of the Company and its shareholders.

 

3.4 Transfer of Shares After Registration; Suspension.

 

(a) The Purchaser agrees that it will not effect any disposition of the Shares
or its right to purchase the Shares that would constitute a sale within the
meaning of the Securities Act except as contemplated in the Registration
Statement referred to in Section 3.1 and as described below or as permitted by
the Securities Act, and that it will promptly notify the Company of any changes
in the information set forth in the Registration Statement regarding the
Purchaser or its plan of distribution.

 

(b) Except in the event that paragraph (c) below applies, the Company shall: (A)
if deemed necessary by the Company, prepare and file from time to time with the
SEC a post-effective amendment to the Registration Statement or a supplement to
the related prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and so that, as thereafter delivered
to purchasers of the Shares being sold thereunder, such prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; (B)
provide the Purchaser copies of any documents filed pursuant to Section
3.4(b)(ii)(A); and (C) inform the Purchaser that the Company has complied with
its obligations in Section 3.4(b)(ii)(A) (or that, if the Company has filed a
post-effective amendment to the Registration Statement which has not yet been
declared effective, the Company will notify the Purchaser to that effect, will
use its reasonable efforts to secure the effectiveness of such

 

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post-effective amendment as promptly as possible and will promptly notify the
Purchaser pursuant to Section 3.4(b)(ii)(A) hereof when the amendment has become
effective).

 

(c) Subject to paragraph (d) below, in the event: (A) of any request by the SEC
or any other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to a
Registration Statement or related prospectus or for additional information; (B)
of the issuance by the SEC or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose; (C) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Shares for sale in any
jurisdiction or the initiation of any proceeding for such purpose; (D) of any
event or circumstance which necessitates the making of any changes in the
Registration Statement or prospectus, or any document incorporated or deemed to
be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the
prospectus, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading or (E) the occurrence or existence of any pending
corporate development that, in the reasonable discretion of the Company, makes
it appropriate to suspend the effectiveness of the Registration Statement and
the related prospectus; then the Company shall immediately deliver a certificate
in writing to the Purchaser (the “Suspension Notice”) to the effect of the
foregoing and, upon receipt of such Suspension Notice, the Purchaser will
refrain from selling any Shares pursuant to the Registration Statement (a
“Suspension”) until the Purchaser’s receipt of copies of a supplemented or
amended prospectus prepared and filed by the Company, or until it is advised in
writing by the Company that the current prospectus may be used, and has received
copies of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such prospectus. In the event of any
Suspension, the Company will use its best efforts to cause the use of the
prospectus so suspended to be resumed as soon as reasonably practicable within
30 calendar days after delivery of a Suspension Notice to the Purchaser.

 

(d) Notwithstanding the foregoing paragraphs of this Section 3.4, the Purchaser
shall not be prohibited from selling Shares under the Registration Statement as
a result of Suspensions on more than four occasions of not more than 30 days
each in any twelve month period.

 

(e) If a Suspension is not then in effect, the Purchaser may sell Shares under
the Registration Statement, provided that the Purchaser arranges for delivery of
a current prospectus to the transferee of such Shares. Upon receipt of a request
therefor, the Company agrees to provide an adequate number of current
prospectuses to the Purchaser and to supply copies to any other parties
requiring such prospectuses.

 

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ARTICLE 4

MISCELLANEOUS

4.1 Notices. All notices and other communications provided for herein shall be
in writing and delivered by hand, mailed (registered or certified mail) or sent
by facsimile transmission to the Purchaser at the address set forth on the
signature page hereof and to the Company at the addresses or facsimile number
set forth below:

 

If to the Company:

 

451 Kingston Ct

Mount Prospect Il 60056

8473919400

Attention: Chief Executive Officer

Facsimile: (847) 299-9609

with a copy to:

 

Pepper Hamilton LLP

400 Berwyn Park

899 Cassatt Road

Berwyn, PA 19312-1183

Attention: Michael P. Gallagher, Esq.

Facsimile: (610) 640-7835

 

The address of the Company for the purposes of such notice may be changed from
time to time by a similar notice to be effective ten (10) days after such change
is supplied.

 

4.2 Supplements and Amendments. Any amendment or supplement to this Agreement
shall require the written consent of the Company and the Purchaser.

 

4.3 Successors. Except as otherwise specified in this Agreement, all the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Purchaser shall bind and inure to the benefit of their respective
successors and assigns hereunder.

 

4.4 Benefits of this Agreement. Nothing in this Agreement shall be construed to
give to any Person other than the Company and the Purchaser, any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company and the Purchaser.

 

4.5 Counterparts; Effectiveness. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument. This Agreement shall become effective on the date on which
each party hereto shall have received counterparts hereof executed by each of
the parties hereto. Delivery of a photocopy or telecopy of an executed
counterpart of a signature page to this Agreement shall be as effective as
delivery of a manually executed counterpart of this Agreement.

 

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4.6 Entire Agreement. This Agreement, the Settlement and Release embody the
entire agreement and understanding among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings relating to
the subject matter hereof.

 

4.7 Severability. If any provision of this Agreement shall be held or deemed to
be, or shall in fact be, invalid, inoperative, illegal or unenforceable as
applied to any particular case in any jurisdiction because of the conflict of
such provision with any constitution or statute or rule of public policy or for
any other reason, such circumstance shall not have the effect of rendering the
provision or provisions in question invalid, inoperative, illegal or
unenforceable in any other jurisdiction or in any other case or circumstance or
of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative, legal and enforceable to the maximum extent permitted
in such jurisdiction or in such case.

 

4.8 Governing Law. All issues and questions concerning the construction,
validity, interpretation and enforcement of this Agreement shall be governed by
the laws of the State of Delaware without regard to principles of conflicts of
laws.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement
to be duly executed under seal, as of the day and year first above written.

 

ISCO INTERNATIONAL, INC. By:   /s/    Frank Cesario  

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Name:   Frank Cesario

Title:     Chief Financial Officer

 

MORGAN & FINNEGAN, L.L.P By:   /s/    John F. Sweeney  

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Name:   John F. Sweeney

Title:     Partner

 

 

Address:

345 Park Ave.

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New York, NY 10154-0053

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Facsimile:

 

 (212) 751-6849

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