Common Stock Purchase Warrant Agreement



 



EXHIBIT 10.9



THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR OTHERWISE. THIS WARRANT
SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. THE SECURITIES ARE “RESTRICTED” AND MAY NOT BE RESOLD OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.





COMMON STOCK PURCHASE WARRANT



No. A-3






To Purchase Shares of $.001 Par Value Common Stock of






ISCO INTERNATIONAL, INC.






     THIS CERTIFIES that, for value received, MANCHESTER SECURITIES
CORPORATION, a New York Corporation, (the “Purchaser”) is entitled, upon the
terms and subject to the conditions hereinafter set forth, at any time on or
after the date hereof and on or prior to 5:00 p.m. New York City time on April
15, 2004 (the “Termination Date”), but not thereafter, to subscribe for and
purchase from ISCO INTERNATIONAL, INC., a Delaware corporation (the “Company”),
2,809,500 shares (the “Warrant Shares”) of the Company’s common stock, $.001
par value (the “Common Stock”), at an exercise price equal to $.20 (the
“Exercise Price”). The Exercise Price and the number of Warrant Shares
purchasable upon exercise of this Warrant shall be subject to adjustment as
provided herein. This Warrant is being issued in connection with a loan made
by the Purchaser on the date hereof pursuant to the Loan Agreement dated
October 23, 2002 (the “Agreement”) entered into between the Company and the
Purchaser, among others. Capitalized terms used herein and not defined shall
have the meaning specified in the Agreement.






	1.	 	Title of Warrant. Prior to the expiration hereof and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in respect of the right to purchase any part of
the Warrant Shares, at the office or agency of the Company by the holder
hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with (a) the Assignment Form annexed hereto properly
endorsed, and (b) any other documentation reasonably necessary to satisfy
the Company that such transfer is in compliance with all applicable
securities laws.
	 
	2.	 	Authorization of Shares. The Company covenants that all shares of Common
Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant and
payment of the Exercise Price as set forth herein be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes,
liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue or
otherwise specified herein).





 







 






	3.	 	Exercise of Warrant.
	 
	(a)	 	Exercise of the purchase rights represented by this Warrant may be made
at any time or times, in whole or in part before 5:00 p.m. New York City
time on the Termination Date, or such earlier date on which this Warrant
may terminate as provided in Section 11 below, by the surrender (which may
be by fax) on any business day of this Warrant and the Notice of Exercise
annexed hereto duly completed and executed, at the principal office of the
Company (or such other office or agency of the Company as it may designate
by notice in writing to the registered holder hereof at the address of
such holder appearing on the books of the Company), and upon payment of
the full Exercise Price of the shares thereby purchased; whereupon the
holder of this Warrant shall be entitled to receive a certificate for the
number of shares of Common Stock so purchased. Certificates for shares
purchased hereunder shall be delivered to the holder hereof within three
(3) Trading Days (as defined below) after the date on which this Warrant
shall have been exercised as aforesaid. The certificates so delivered
shall be in such denominations as may be requested by the holder hereof
and shall be registered in the name of such holder or such other name as
shall be designated by such holder. Payment of the Exercise Price of the
shares shall be by certified check or cashier’s check or by wire transfer
(of same day funds) to an account designated by the Company in an amount
equal to the Exercise Price multiplied by the number of shares being
purchased.
	 
	(b)	 	Alternatively, the Warrant holder may exercise this Warrant, in whole or
in part in a “cashless” or “net-issue” exercise by delivering to the
offices of the Company or any transfer agent for the Common Stock this
Warrant, together with a Notice of Exercise specifying the number of
Warrant Shares to be delivered to such Warrant holder (“Deliverable
Shares”) and the number of Warrant Shares with respect to which this
Warrant is being surrendered in payment of the aggregate Exercise Price
for the Deliverable Shares (“Surrendered Shares”).
	 
	 	 	The number of Deliverable Shares shall be calculated as follows:




	 	 	 
	# of Deliverable Shares = # of Surrendered Shares x	 	
Fair Market Value of Common Stock less Exercise Price



Fair Market Value of Common Stock




	 	 	“Fair Market Value” shall have the meaning specified in Section 12(c)
below.
	 
	 	 	In the event that the Warrant is not exercised in full, the number of
Warrant Shares shall be reduced by the number of such Warrant Shares for
which this Warrant is exercised and/or surrendered, and the Company, at
its expense, shall within three (3) Trading Days issue and deliver to or
upon the order of the Warrant holder a new Warrant of like tenor in the
name of Warrant holder or as Warrant holder (upon payment by Warrant
holder of any applicable transfer taxes) may request, reflecting such
adjusted Warrant Shares.
	 
	 	 	All exercises will be deemed to occur as of the date of the Notice of
Exercise (or such later date as may be specified in the Notice of
Exercise), and certificates for shares of Common Stock purchased
hereunder shall be delivered to the holder hereof within three (3)
Trading Days after the date on which this Warrant shall have been
exercised as aforesaid. The Warrant holder may withdraw its Notice of
Exercise under Section 3(a) or





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	 	 	3(b) at any time thereafter if the Company
fails to timely deliver the applicable certificates to the Warrant holder
as provided in this Warrant.
	 
	 	 	The Warrant holder shall not be required to physically surrender this
Warrant to the Company unless this Warrant is being exercised for all of
the remaining Warrant Shares for which it is exercisable. The Warrant
holder and the Company shall maintain records showing the number of
Warrant Shares for which this Warrant has been exercised and the dates of
such exercises or shall use such other method, reasonably satisfactory to
the Warrant holder and the Company, so as not to require physical
surrender of this Warrant upon each such exercise. Notwithstanding the
foregoing, if this Warrant is exercised as aforesaid, the Warrant holder
may not transfer this Warrant unless it first physically surrenders this
Warrant to the Company, whereupon the Company will forthwith issue and
deliver upon the order of the Warrant holder a new Warrant of like tenor,
registered as the Warrant holder may request, representing in the
aggregate the remaining number of Warrant Shares for which this Warrant
may be exercised. The Warrant holder and any assignee, by acceptance of
this Warrant or a new Warrant, acknowledge and agree that, by reason of
the provisions of this paragraph, following any partial exercise of this
Warrant, the number of Warrant Shares for which this Warrant is
exercisable may be less than the number of Warrant Shares set forth on
the face hereof.
	 
	(c)	 	In lieu of delivering physical certificates representing the Common Stock
issuable upon exercise, provided the Company’s transfer agent is
participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, upon request of the Warrant holder,
the Company shall use its best efforts to cause its transfer agent to
electronically transmit the Common Stock issuable upon exercise to the
Warrant holder by crediting the account of Warrant holder’s prime broker
with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.
The time periods for delivery described in the immediately preceding
paragraph shall apply to the electronic transmittals described herein.
	 
	 	 	The term “Trading Day” means (x) if the Common Stock is listed on the New
York Stock Exchange or the American Stock Exchange, a day on which there
is trading on such stock exchange, or (y) if the Common Stock is not
listed on either of such stock exchanges but sale prices of the Common
Stock are reported on an automated quotation system, a day on which
trading is reported on the principal automated quotation system on which
sales of the Common Stock are reported, or (z) if the foregoing
provisions are inapplicable, a day on which quotations are reported by
National Quotation Bureau Incorporated.
	 
	4.	 	No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.
	 
	5.	 	Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without
charge to the holder hereof for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company; provided, however,
that in the event certificates for shares of Common Stock are to be issued
in a





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	 	 	name other than the name of the holder of this Warrant, this Warrant
when surrendered for exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the holder hereof; and provided further,
that the Company shall not be required to pay any tax or taxes which may
be payable in respect of any transfer involved in the issuance of any
Warrant certificates or any certificates for the Warrant Shares other than
the issuance of a Warrant certificate to the Purchaser in connection with
the Purchaser’s surrender of a Warrant certificate upon the exercise of
less than all of the Warrants evidenced thereby, and the Company shall not
be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the reasonable
satisfaction of the Company that such tax has been paid. The holder shall
be responsible for income taxes due under federal or state law, if any
such tax is due.
	 
	6.	 	Closing of Books. The Company will at no time close its shareholder
books or records in any manner which interferes with the timely exercise
of this Warrant.
	 
	7.	 	No Rights as Shareholder until Exercise. Subject to Section 12 of this
Warrant and the provisions of any other written agreement between the
Company and the Purchaser, the Purchaser (or any subsequent holder hereof)
shall not be entitled to vote or receive dividends or be deemed the holder
of Warrant Shares or any other securities of the Company that may at any
time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the Purchaser, as
such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no
par value, consolidation, merger, conveyance or otherwise) or to receive
notice of meetings, or to receive dividends or subscription rights or
otherwise until the Warrant shall have been exercised as provided herein.
However, at the time of the exercise of this Warrant pursuant to Section 3
hereof, the Warrant Shares so purchased hereunder shall be deemed to be
issued to such holder as the record owner of such shares as of the close
of business on the date on which this Warrant shall have been exercised.
	 
	8.	 	Assignment and Transfer of Warrant. This Warrant may be assigned in
whole or in part by the surrender of this Warrant and the Assignment Form
annexed hereto duly executed at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing
to the registered holder hereof at the address of such holder appearing on
the books of the Company); provided, however, that this Warrant may not be
resold or otherwise transferred except (i) in a transaction registered
under the Securities Act, or (ii) in a transaction pursuant to an
exemption, if available, from registration under the Securities Act and
whereby, if requested by the Company, an opinion of counsel is obtained by
the holder of this Warrant to the effect that the transaction is so
exempt.
	 
	9.	 	Loss, Theft, Destruction or Mutilation of Warrant. In the event that the
holder hereof notifies the Company that its Warrant has been mutilated,
lost, stolen or destroyed, then a replacement Warrant identical in all
respects to the original Warrant (except for any





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	 	 	registration number and
any adjustments to the Exercise Price or the number of Warrant Shares
issuable thereunder if different than that shown on the original Warrant)
shall be delivered to the holder by the Company within three (3) Trading
Days of such notice; provided, that in case of loss, theft or destruction,
the holder has provided the Company with an agreement reasonably
satisfactory to the Company to indemnify the Company against any loss in
connection with such lost, stolen or destroyed Warrant.
	 
	10.	 	Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action
may be taken or such right may be exercised on the next succeeding day not
a legal holiday.
	 
	11.	 	[Intentionally Omitted]
	 
	12.	 	Adjustments of Exercise Price and Number of Warrant Shares.
	 
	 	 	The number of and kind of securities purchasable upon exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time
to time as follows:
	 
	(a)	 	Subdivisions, Combinations and other Issuances. If the Company shall at
any time after the date hereof but prior to the expiration of this Warrant
subdivide its outstanding securities as to which purchase rights under
this Warrant exist, by split-up, spin-off or otherwise, or combine its
outstanding securities as to which purchase rights under this Warrant
exist, the number of Warrant Shares as to which this Warrant is
exercisable as of the date of such subdivision, split-up, spin-off or
combination shall forthwith be proportionately increased in the case of a
subdivision, or proportionately decreased in the case of a combination.
Appropriate proportional adjustments (decrease in the case of subdivision,
increase in the case of combination) shall also be made to the Exercise
Price payable per share, so that the aggregate Exercise Price payable for
the total number of Warrant Shares purchasable under this Warrant as of
such date shall remain the same as it would have been before such
subdivision or combination.
	 
	(b)	 	Stock Dividend. If at any time after the date hereof the Company
declares a dividend or other distribution on Common Stock payable in
Common Stock or other securities or rights convertible into Common Stock
(“Common Stock Equivalents”) without payment of any consideration by
holders of Common Stock for the additional shares of Common Stock or the
Common Stock Equivalents (including the additional shares of Common Stock
issuable upon exercise or conversion thereof), then the number of shares
of Common Stock for which this Warrant may be exercised shall be increased
as of the record date (or the date of such dividend distribution if no
record date is set) for determining which holders of Common Stock shall be
entitled to receive such dividends, in proportion to the increase in the
number of outstanding shares (and shares of Common Stock issuable upon
conversion of all such securities convertible into Common Stock) of Common
Stock as a result of such dividend, and the Exercise Price shall be
proportionately reduced so that the aggregate Exercise Price for all the
Warrant Shares issuable hereunder immediately after the record date (or on
the date of such distribution,





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	 	 	if applicable), for such dividend shall
equal the aggregate Exercise Price so payable immediately before such
record date (or on the date of such distribution, if applicable).
	 
	(c)	 	Other Distributions. If at any time after the date hereof the Company
distributes to holders of its Common Stock, other than as part of its
dissolution, liquidation or the winding up of its affairs, any cash,
shares of its capital stock, any evidence of indebtedness or any of its
assets (other than Common Stock), then the number of Warrant Shares for
which this Warrant is exercisable shall be increased to equal: (i) the
number of Warrant Shares for which this Warrant is exercisable immediately
prior to such event, (ii) multiplied by a fraction, (A) the numerator of
which shall be the Fair Market Value (as defined below) per share of
Common Stock on the record date for the dividend or distribution, and (B)
the denominator of which shall be the Fair Market Value price per share of
Common Stock on the record date for the dividend or distribution minus the
amount allocable to one share of Common Stock of the value (as jointly
determined in good faith by the Board of Directors of the Company and the
Warrant holder) of any and all such evidences of indebtedness, shares of
capital stock, other securities or property, so distributed. For purposes
of this Warrant, “Fair Market Value” shall equal the daily volume weighted
average closing trading price of the Common Stock on the Principal Market
(as defined below) for the five (5) Trading Days preceding the date of
determination or, if the Common Stock is not listed or admitted to trading
on any Principal Market, the average of the closing bid and asked prices
on the over-the-counter market as furnished by any New York Stock Exchange
member firm reasonably selected from time to time by the Company for that
purpose and reasonably acceptable to the holder hereof, or, if the Common
Stock is not listed or admitted to trading on the Principal Market or
traded over-the-counter and the average price cannot be determined as
contemplated above, the Fair Market Value of the Common Stock shall be as
reasonably determined in good faith by the Company’s Board of Directors
with the concurrence of the Holder. The Exercise Price shall be reduced
to equal: (i) the Exercise Price in effect immediately before the
occurrence of any event (ii) multiplied by a fraction, (A) the numerator
of which is the number of Warrant Shares for which this Warrant is
exercisable immediately before the adjustment, and (B) the denominator of
which is the number of Warrant Shares for which this Warrant is
exercisable immediately after the adjustment.
	 
	 	 	For purposes of this Warrant, “Principal Market” shall mean the Approved
Market or such other market or exchange on which the Common Stock is then
principally traded.
	 
	(d)	 	Merger, etc. If at any time after the date hereof there shall be a merger
or consolidation of the Company with or into, or a transfer of all or
substantially all of the assets of the Company to, another entity, or a
transaction (by merger or otherwise) in which more than 50% of the
Company’s voting power is transferred, then the Warrant holder shall be
entitled to receive upon or after such transfer, merger or consolidation
becoming effective, and upon payment of the Exercise Price then in effect,
the number of shares or other securities or property of the Company or of
the successor corporation resulting from such merger or consolidation,
which would have been received by the Warrant holder for the shares of
stock subject to this Warrant had this Warrant been exercised just prior
to such transfer, merger or consolidation becoming effective or to the
applicable





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	 	 	record date thereof, as the case may be. The Company will not
merge or consolidate with or into any other corporation, or sell or
otherwise transfer its property, assets and business substantially as an
entirety to another corporation or enter into a transaction transferring
more than 50% of the Company’s voting powers, unless the corporation
resulting from such merger or consolidation (if not the Company), or such
transferee corporation, as the case may be, shall expressly assume in
writing the due and punctual performance and observance of each and every
covenant and condition of this Warrant and the Registration Rights
Agreement (as defined in the Agreement) to be performed and observed by
the Company.
	 
	(e)	 	Reclassification, etc. If at any time after the date hereof there shall
be a reorganization or reclassification of the securities as to which
purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, then the Warrant
holder shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the
Exercise Price then in effect, the number of shares or other securities or
property resulting from such reorganization or reclassification, which
would have been received by the Warrant holder for the shares of stock
subject to this Warrant had this Warrant at such time been exercised.
	 
	(f)	 	Exercise Price Adjustment. In the event that the Company issues or sells
any Common Stock or securities which are convertible into or exchangeable
for its Common Stock or any convertible securities, or any warrants or
other rights to subscribe for or to purchase or any options for the
purchase of its Common Stock (“Convertible Securities”) or any such
Convertible Securities (other than shares or options issued or which may
be issued pursuant to the Company’s current or future employee or director
option plans provided that the number of shares issuable thereunder does
not exceed 5% of the outstanding shares of Common Stock or shares issued
upon exercise of options, warrants or rights outstanding on the date of
the Loan Agreement) at an effective Exercise Price per share which is less
than the Exercise Price then in effect, then the Exercise Price in effect
immediately prior to such issue or sale or record date, as applicable,
shall be reduced to such lower price.
	 
	 	 	The number of shares which may be purchased hereunder shall be increased
proportionately to any reduction in Exercise Price pursuant to this
paragraph 12(f), so that after such adjustments the aggregate Exercise
Price payable hereunder for the increased number of shares shall be the
same as the aggregate Exercise Price in effect just prior to such
adjustments.
	 
	(g)	 	If:




	 	 	 
	 	(i)	
the Company shall declare a dividend (or any
other distribution) on its Common Stock; or
	 
	 	(ii)	
the Company shall declare a special nonrecurring
cash dividend on or a redemption of its Common Stock; or





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	 	(iii)	
the Company shall authorize the granting to all
holders of the Common Stock rights or warrants to subscribe
for or purchase any shares of capital stock of any class or of
any rights; or
	 
	 	(iv)	
the approval of any stockholders of the Company
shall be required in connection with any reclassification of
the Common Stock of the Company, any consolidation or merger
to which the Company is a party, any sale or transfer of all
or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is
converted into other securities, cash or property; or
	 
	 	(v)	
the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the
affairs of the Company.




	 	 	then the Company shall cause to be filed at each office or agency
maintained for the purpose of exercise of this Warrant, and shall cause
to the Purchaser at its last address as it shall appear upon the books of
the Company, at least 30 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants
are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to
become effective or close, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided, however, that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the
validity of the corporate action required to be specified in such notice.
	 
	13.	 	Voluntary Adjustment by the Company. The Company may at its option, at
any time during the term of this Warrant, reduce but not increase the then
current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company. In such event, the
number of Warrant Shares shall be increased proportionately such that the
product of the adjusted Exercise Price and the number of Warrant Shares
shall equal such product prior to the adjustment of the Exercise Price.
	 
	14.	 	Notice of Adjustment. Whenever the number of Warrant Shares or number or
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, the Company shall promptly mail
to the holder of this Warrant a notice setting forth the number of Warrant
Shares (and other securities or property) purchasable upon the exercise of
this Warrant and the Exercise Price of such Warrant Shares after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.
	 
	15.	 	Authorized Shares. The Company covenants that during the period the
Warrant is outstanding and exercisable, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of the Warrant Shares





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	 	 	upon the exercise of any
purchase rights under this Warrant. The Company further covenants that
its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon
the exercise of the purchase rights under this Warrant. The Company will
take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the American Stock
Exchange or, if no longer listed on the American Stock Exchange, any other
domestic securities exchange or trading market upon which the Common Stock
is primarily traded.
	 
	16.	 	Compliance with Securities Laws.
	 
	(a)	 	The holder hereof acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered (or if no exemption from
registration exists), will have restrictions upon resale imposed by state
and federal securities laws. Each certificate representing the Warrant
Shares issued to the holder hereof upon exercise (if not registered or if
no exemption from registration exists) will bear the following legend:
	 
	 	 	THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.
	 
	(b)	 	Without limiting the Purchaser’s right to transfer, assign or otherwise
convey the Warrant or Warrant Shares in compliance with all applicable
securities laws, the Purchaser, by acceptance hereof, acknowledges that
this Warrant and the Warrant Shares to be issued upon exercise hereof are
being acquired solely for the Purchaser’s own account and not as a nominee
for any other party, and that the Purchaser will not offer, sell or
otherwise dispose of this Warrant or any Warrant Shares to be issued upon
exercise hereof except under circumstances that will not result in a
violation of applicable federal and state securities laws.
	 
	(c)	 	Neither this Warrant nor any Share of Common Stock issued upon exercise
of this Warrant may be offered for sale or sold, or otherwise transferred
or sold in any transaction which would constitute a sale thereof within
the meaning of the Securities Act, unless (i) such security has been
registered for sale under the Securities Act and registered or qualified
under applicable state securities laws relating to the offer an sale of
securities, or (ii) exemptions from the registration requirements of the
Securities Act and the registration or qualification requirements of all
such state securities laws are available and the Company shall have
received an opinion of counsel that the proposed sale or





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	 	 	other disposition
of such securities may be effected without registration under the
Securities Act.
	 
	17.	 	Registration Rights. The initial holder of this Warrant is entitled to
the benefit of certain registration rights in respect of the Warrant
Shares as provided in the Registration Rights Agreement.
	 
	18.	 	Replacement Warrants. The Company agrees that within ten (10) Trading
Days after any request from time to time of the Warrant holder, it shall
deliver to such holder a new Warrant in substitution of this Warrant which
is identical in all respects except that the then Exercise Price shall be
appropriately specified in the Warrant, and the Warrant shall specify the
fixed number of Warrant Shares into which this Warrant is then
exercisable. Such changes are intended not as amendments to the Warrant
but only as clarification of the foregoing numbers for convenience
purposes, and such changes shall not affect any provisions concerning
adjustments to the Exercise Price or number of Warrant Shares contained
herein.
	 
	19.	 	Absolute Obligation to Issue Warrant Shares. The Company’s obligations
to issue and deliver Warrant Shares in accordance with the terms hereof
are absolute and unconditional, irrespective of any action or inaction by
the holder hereof to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person
or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by
the holder hereof or any other Person of any obligation to the Company or
any violation or alleged violation of law by the holder or any other
Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the holder hereof in connection
with the issuance of Warrant Shares. The Company will at no time close
its stockholder books or records in any manner which interferes with the
timely exercise of this Warrant.
	 
	20.	 	Miscellaneous.
	 
	(a)	 	Issue Date; Choice Of Law; Venue; Jurisdiction. THE PROVISIONS OF THIS
WARRANT SHALL BE CONSTRUED AND SHALL BE GIVEN EFFECT IN ALL RESPECTS AS IF
IT HAD BEEN ISSUED AND DELIVERED BY THE COMPANY ON THE DATE HEREOF. THIS
WARRANT SHALL BE BINDING UPON ANY SUCCESSORS OR ASSIGNS OF THE COMPANY.
THIS WARRANT WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, EXCEPT FOR MATTERS ARISING
UNDER THE SECURITIES ACT, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW. EACH OF THE PARTIES CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE
U.S. DISTRICT COURT SITTING IN THE CITY OF NEW YORK IN THE STATE OF NEW
YORK IN CONNECTION WITH ANY DISPUTE ARISING UNDER THIS WARRANT AND HEREBY
WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING
ANY OBJECTION BASED ON FORUM NON CONVENIENS, TO THE BRINGING OF ANY SUCH
PROCEEDING IN SUCH JURISDICTION. EACH PARTY HEREBY





10







 






	 	 	AGREES THAT IF THE
OTHER PARTY TO THIS WARRANT OBTAINS A JUDGMENT AGAINST IT IN SUCH A
PROCEEDING, THE PARTY WHICH OBTAINED SUCH JUDGMENT MAY ENFORCE SAME BY
SUMMARY JUDGMENT IN THE COURTS OF ANY COUNTRY HAVING JURISDICTION OVER THE
PARTY AGAINST WHOM SUCH JUDGMENT WAS OBTAINED, AND EACH PARTY HEREBY
WAIVES ANY DEFENSES AVAILABLE TO IT UNDER LOCAL LAW AND AGREES TO THE
ENFORCEMENT OF SUCH A JUDGMENT. EACH PARTY TO THIS WARRANT IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
SUCH PARTY AT ITS ADDRESS IN ACCORDANCE WITH SECTION 18(C). NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW. EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY.
	 
	(b)	 	Modification and Waiver. This Warrant and any provisions hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought. Any
amendment effected in accordance with this paragraph shall be binding upon
the Purchaser, each future holder of this Warrant and the Company. No
waivers of, or exceptions to, any term, condition or provision of this
Warrant, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such term, condition or
provision.
	 
	(c)	 	Notices. Any notice, request or other document required or permitted to
be given or delivered to the Purchaser or future holders hereof or the
Company shall be personally delivered or shall be sent by certified or
registered mail, postage prepaid or by an internationally recognized
courier service by overnight or two-day service, to the Purchaser or each
such holder at its address as shown on the books of the Company or to the
Company at the address set forth in the Agreement. All notices under this
Warrant shall be deemed to have been given when received.
	 
	 	 	A party may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance with the
provisions of this Section 20(c).
	 
	(d)	 	Severability. Whenever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of any other provision of
this Warrant in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this
Warrant shall be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision had never been
contained herein.
	 
	(e)	 	No Impairment. The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue





11







 






	 	 	or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking
of all such action as may be necessary or appropriate in order to protect
the rights of the Warrant holder against impairment. Without limiting the
generality of the foregoing, the Company (a) will not increase the par
value of any Warrant Shares above the amount payable therefore on such
exercise, and (b) will take all such action as may be reasonably necessary
or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares on the exercise of this
Warrant.





12







 





     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officers thereunto duly authorized.





Dated: November 15, 2002







	 	 	 
	 	
ISCO INTERNATIONAL, INC.
	 
	 	By:	
/s/ Amr Abdelmonem



Name:  Amr Abdelmonem, Ph.D.

Title: Chief Executive Officer





13







 


NOTICE OF EXERCISE






To: ISCO INTERNATIONAL, INC.





(1)  The undersigned hereby elects:





     (A)  to purchase
           shares of Common Stock of ISCO International,
Inc., a Delaware corporation, pursuant to the terms of the attached Warrant,
and tenders herewith payment of the Exercise Price in full, together with all
applicable transfer taxes, if any.





     (B)  in a “cashless” or “net-issue exercise” for, and to purchase
thereunder,
           shares of Common Stock, and herewith makes payment therefore
with
           Surrendered Shares.





(2)  Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:






	 	 



(Name)	 




	 	 



(Address)

 


	 







(3)  Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:






	 	Other Name:	 


	 








	 	 	 
	 	 	 



(Name)
	 
	 



(Date)	 	 



(Signature)
	 
	 	 	 



(Address)





 







 


ASSIGNMENT FORM






(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)






     FOR VALUE RECEIVED, the foregoing Warrant of ISCO International, Inc. and
all rights evidenced thereby are hereby assigned to






	 


	whose address is



	 


	.






 






	 	 	 	 	 	 
	 	 	 	 	Dated:	 


	 	 	
Holder’s Signature:	 


	 	 	
Holder’s Address:
	 


 


	 
	Signature Guaranteed:	 





NOTE: The signature to this Assignment Form must correspond with the name as
it appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.