ex1010.htm

Exhibit
    10.10

    REGISTRATION
      RIGHTS AGREEMENT

     

    This
      Registration Rights Agreement (“Agreement”) is entered into as of June
      ____, 2007, among ISCO International, Inc., a Delaware corporation with offices
      at 1001 Cambridge Drive, Elk Grove Village, Illinois 60007 (the
“Company”) and the Lenders set forth on the signature page hereto (the
“Lenders”).

     

    W
      I T
      N E S S E T H:

     

    WHEREAS,
      pursuant to the Amendment Agreement, dated on or about the date hereof, by
      and
      between the Company and the Lenders (the “Amendment Agreement”), the
      Company has agreed to amend and restate the Notes (the “Amended and Restated
      Notes”) issued to the Lenders pursuant to the Third Amended and Restated
      Loan Agreement, dated as of November 10, 2004, as amended (the “Loan
      Agreement”); and

     

    WHEREAS,
      the Amended and Restated Notes provide that they will be convertible into shares
      (the “Conversion Shares”) of the common stock, par value $0.001 per share
      (the “Common Stock”) of the Company; and

     

    WHEREAS,
      pursuant to the Amendment Agreement, each of the Lenders has agreed to convert
      $750,000 in principal amount outstanding of debt currently owed by the Company
      to each of the Lenders into shares of Common Stock (the “Initial Conversion
      Shares”); and

     

    NOW,
      THEREFORE, in consideration of the mutual promises, representations, warranties,
      covenants and conditions set forth in the Loan Agreement, Amendment Agreement
      and this Agreement, the Company and each Purchaser agree as
      follows:

     

    1.  Certain
      Definitions.  Capitalized terms used herein and not otherwise
      defined shall have the meaning ascribed thereto in the Purchase Agreements
      or
      the Amended and Restated Notes.  As used in this Agreement, the
      following terms shall have the following respective meanings:

     

    “Approval
      Date” shall mean the date on which both (i) the  Company’s
      stockholders shall have approved the issuance of the Conversion Shares and
      (ii)
      the American Stock Exchange (“AMEX”) shall have approved the Conversion
      Shares and the Initial Conversion Shares for listing on AMEX.

     

    “Commission”
      or “SEC” shall mean the Securities and Exchange Commission or any other
      federal agency at the time administering the Securities Act.

     

    “Holder”
      and “Holders” shall include each Purchaser and any transferee or
      transferees of Registrable Securities and/or Amended and Restated Notes which
      have not been sold to the public to whom the registration rights conferred
      by
      this Agreement have been transferred in compliance with this Agreement and
      the
      Purchase Agreement.

     

    “1934
      Act” shall mean the Securities Exchange Act of 1934, as
      amended.

     

    The
      terms
“register,” “registered” and “registration” shall refer to
      a registration effected by preparing and filing a registration statement in
      compliance with the Securities Act and applicable rules and regulations
      thereunder, and the declaration or ordering of the effectiveness of such
      registration statement.

     

    “Registrable
      Securities” shall mean:  (i) the Conversion Shares (without regard
      to any limitations on beneficial ownership contained in the Amended and Restated
      Notes) issued or issuable to each Holder (a) upon conversion of the Amended
      and
      Restated Notes, (b) upon any distribution with respect to, any exchange for
      or
      any replacement of such Amended and Restated Notes, or (c) upon any conversion
      or exchange of any securities issued in connection with any such distribution,
      exchange or replacement; (ii) the Initial Conversion Shares, (iii) securities
      issued or issuable upon any stock split, stock dividend, recapitalization or
      similar event with respect to the foregoing; and (iv) any other security issued
      as a dividend or other distribution with respect to, in exchange for or in
      replacement of the securities referred to in the preceding clauses, except
      that
      any such Conversion Shares, the Initial Conversion Shares or other securities
      shall cease to be Registrable Securities when (x) they have been sold to the
      public or (y) they may be sold by the Holder thereof under Rule
      144(k).

     

    “Registration
      Expenses” shall mean all reasonable expenses to be incurred by the Company
      in connection with each Holder’s registration rights under this Agreement (such
      amount not to exceed $5,000 in the aggregate), including, without limitation,
      all registration and filing fees, printing expenses, fees and disbursements
      of
      counsel for the Company, and blue sky fees and expenses, reasonable fees and
      disbursements of counsel to Holders (using a single counsel selected by a
      majority in interest of the Holders) for a review of the Registration Statement
      and related documents, and the expense of any special audits incident to or
      required by any such registration (but excluding the compensation of regular
      employees of the Company, which shall be paid in any event by the
      Company).

     

    “Registration
      Statement” shall have the meaning set forth in Section 2(a)
      herein.

     

    “Regulation
      D” shall mean Regulation D as promulgated pursuant to the Securities Act,
      and as subsequently amended.

     

    “Securities
      Act” or “Act” shall mean the Securities Act of 1933, as
      amended.

     

    “Selling
      Expenses” shall mean all underwriting discounts, selling commissions and
      transfer taxes applicable to the sale of Registrable Securities and all fees
      and
      disbursements of counsel for Holders not included within “Registration
      Expenses”.

     

    2.  Registration
      Requirements.  The Company shall use its best efforts to effect
      the registration of the resale of the Registrable Securities (including, without
      limitation, the execution of an undertaking to file post-effective amendments,
      appropriate qualification under applicable blue sky or other state securities
      laws and appropriate compliance with applicable regulations issued under the
      Securities Act) as would permit or facilitate the resale of all the Registrable
      Securities in the manner (including manner of sale) and in all states reasonably
      requested by the Holder.  Such best efforts by the Company shall
      include, without limitation, the following:

     

    (a)  The
      Company shall, as expeditiously as possible after the Approval
      Date:

     

    (i)  But
      in
      any event within 30 days of the Approval Date, prepare and file a registration
      statement with the Commission pursuant to Rule 415 under the Securities Act
      on
      Form S-3 under the Securities Act (or in the event that the Company is
      ineligible to use such form, such other form as the Company is eligible to
      use
      under the Securities Act provided that such other form shall be converted into
      an S-3 as soon as Form S-3 becomes available to the Company) covering resales
      by
      the Holders as selling stockholders (not underwriters) of the Registrable
      Securities and, to the extent practicable, no other securities (the
“Registration Statement”), which Registration Statement, to the extent
      allowable under the Securities Act and the rules promulgated thereunder
      (including Rule 416), shall state that such Registration Statement also covers
      the resale of such indeterminate number of additional shares of Common Stock
      as
      may be issued upon conversion of the Amended and Restated Notes by reason of
      stock splits, stock dividends or similar transactions.  The number of
      shares of Common Stock initially included in such Registration Statement shall
      be no less than [______________], unless the SEC instructs the Company that
      a
      lesser number of shares of Common Stock will be permitted to be included in
      such
      Registration Statement, in which case the Registration Statement shall include
      the number of shares of Common Stock permitted by the SEC.  The
      Company shall, in accordance with applicable SEC rules, regulations,
      interpretations and practices, amend such Registration Statement or file
      additional Registration Statements to cover the number of additional shares
      of
      Common Stock that may be issued or issuable pursuant to the terms of the Amended
      and Restated Notes in the event that the number of shares of Common Stock
      initially registered is insufficient or reduced in accordance with applicable
      SEC rules, regulations, interpretations and practices.  Nothing in the
      preceding sentence will limit the Company’s obligations to reserve shares of
      Common Stock pursuant to Section 3(d) of the Amended and Restated
      Notes.  Thereafter the Company shall use its reasonable best efforts
      to cause such Registration Statement and other filings to be declared effective
      as soon as possible, and in any event prior to 90 days (or, if the SEC elects
      to
      review the Registration Statement, 150 days) following the Approval Date (the
      “Effectiveness Deadline”).  Without limiting the foregoing, the
      Company will promptly respond to all SEC comments, inquiries and requests,
      and
      shall request acceleration of effectiveness at the earliest possible
      date.

     

    (ii)  Prepare
      and file with the SEC such amendments and supplements to such Registration
      Statement and the prospectus used in connection with such Registration Statement
      as may be necessary to comply with the provisions of the Act with respect to
      the
      disposition of all securities covered by such Registration Statement and notify
      the Holders of the filing and effectiveness of such Registration Statement
      and
      any amendments or supplements.

     

    (iii)  Furnish
      to each Holder such numbers of copies of a current prospectus conforming with
      the requirements of the Act, copies of the Registration Statement, any amendment
      or supplement thereto and any documents incorporated by reference therein and
      such other documents as such Holder may reasonably require in order to
      facilitate the disposition of Registrable Securities owned by such
      Holder.

     

    (iv)  Register
      and qualify the securities covered by such Registration Statement under the
      securities or “Blue Sky” laws of all domestic jurisdictions, to the extent
      required; provided that the Company shall not be required in connection
      therewith or as a condition thereto to qualify to do business or to file a
      general consent to service of process in any such states or
      jurisdictions.

     

    (v)  Notify
      each Holder immediately of the happening of any event (but not the substance
      or
      details of any such events unless specifically requested by a Holder) as a
      result of which the prospectus (including any supplements thereto or thereof)
      included in such Registration Statement, as then in effect, includes an untrue
      statement of material fact or omits to state a material fact required to be
      stated therein or necessary to make the statements therein not misleading in
      light of the circumstances then existing, and use its best efforts to promptly
      update and/or correct such prospectus.

     

    (vi)  Notify
      each Holder immediately of the issuance by the Commission or any state
      securities commission or agency of any stop order suspending the effectiveness
      of the Registration Statement or the threat or initiation of any proceedings
      for
      that purpose.  The Company shall use its best efforts to prevent the
      issuance of any stop order and, if any stop order is issued, to obtain the
      lifting thereof at the earliest possible time.

     

    (vii)  Permit
      Holders and counsel to the Holders to review the Registration Statement and
      all
      amendments and supplements thereto within a reasonable period of time (but
      not
      less than two (2) full Trading Days (as defined in the Amended and Restated
      Notes)) prior to each filing and will not request acceleration of the
      Registration Statement without prior notice to such counsel.

     

    (viii)  List
      the
      Registrable Securities covered by such Registration Statement with all
      securities exchange(s) and/or markets on which the Common Stock is then listed
      and prepare and file any required filings with the Principal
      Market.

     

    (b)  Set
      forth
      below in this Section 2(b) are (I) events that may arise that the Lenders
      consider will interfere with the full enjoyment of their rights under this
      Agreement, the Loan Agreement, the Amendment Agreement and the Amended and
      Restated Notes (the “Interfering Events”), and (II) certain remedies
      applicable in each of these events.

     

    Paragraphs
      (i) through (iii) of this Section 2(b) describe the Interfering Events, provide
      a remedy to the Lenders if an Interfering Event occurs.

     

    Paragraph
      (iv) provides, interalia, that the Lenders have the right to
      specific performance.

     

    The
      preceding paragraphs in this Section 2(b) are meant to serve only as an
      introduction to this Section 2(b), are for convenience only, and are not to
      be
      considered in applying, construing or interpreting this Section
      2(b).

     

    (i)  Delay
      in
      Effectiveness of Registration Statement.

     

    (A)  In
      the
      event that such Registration Statement has not been declared effective
      by:  (x) the Effectiveness Deadline if the SEC does not elect to
      review the Registration Statement or (y) within 150 days of the Approval Date,
      if the SEC elects to review the Registration Statement, or the Company at any
      time fails to issue unlegended Registrable Securities to the extent required
      by
      Section 7 of the Amendment Agreement, then the Company shall pay each Holder
      (other than (i) in the case of a Registration Statement not declared effective,
      a Holder of Registrable Securities that the Company could exclude from
      registration in accordance with Section 9 and (ii) in the case of a failure
      to
      issue unlegended certificates in accordance with the Amendment Agreement, a
      Holder that is not a party to, including as a permitted assignee bound to,
      the
      Amendment Agreement) a Monthly Delay Payment (as defined below) with respect
      to
      each successive 30-day period (or portion thereof appropriately prorated)
      thereafter that effectiveness of the Registration Statement is delayed or
      failure to issue such unlegended Registrable Securities persists.

     

    (B)  Subject
      to subsection (C)(II) below, as used in this Agreement, a “Monthly Delay
      Payment” shall be a cash payment equal to 1% of the amount equal to (x) the
      conversion price of the Amended and Restated Notes multiplied by (y) the sum
      of
      the number of Conversion Shares that are Registrable Securities and held by
      the
      applicable Holder plus the number of Conversion Shares issuable upon conversion
      of Amended and Restated Notes held by such Holder.  Payment of the
      Monthly Delay Payments shall be due and payable from the Company to such Holder
      on the later of (I) the end of the applicable 30-day period or portion thereof
      and (II) 5 business days after demand therefor.  At the option of the
      Holder, Monthly Delay Payments may be added to the outstanding Principal Amount
      of the Amended and Restated Notes held by it.

     

    (C)  Notwithstanding
      the foregoing, (I) there shall be excluded from the calculation of the number
      of
      days that the Registration Statement has not been declared effective the delays
      which are solely attributable to delays in the Lenders providing information
      required for the Registration Statement or to the Lenders not having otherwise
      complied with their obligations hereunder; (II) the aggregate amount of Monthly
      Delay Payments payable to a Purchaser pursuant to this Agreement shall not
      exceed ten (10) times the amount of Monthly Delay Payment calculated for such
      Purchaser pursuant to subsection (B) above; and (III) no Monthly Delay Payments
      shall accrue as to any Registrable Securities from and after the date such
      security is no longer a Registrable Security.

     

    (ii)  No
      Listing; Suspension of Class of Shares

     

    (A)  In
      the
      event that the Company fails, refuses or for any other reason is unable to
      cause
      the Registrable Securities covered by the Registration Statement to be listed
      (subject to issuance) with the Principal Market (as defined in the Amended
      and
      Restated Notes) at all times during the period (“Listing Period”) from
      the date (“Effectiveness Commencement Date”) which is the earlier of the
      effectiveness of the Registration Statement and the 90th day following
      the
      Approval Date (or the 150th day if
      the SEC
      elects to review the Registration Statement) until such time as the registration
      period specified in Section 5 terminates, then the Holder shall have available
      the remedy set forth in Section 4(a) of the Amended and Restated
      Notes.

     

    (B)  In
      the
      event that shares of Common Stock of the Company are not listed on the Principal
      Markets at all times following the Approval Date, or are otherwise suspended
      from trading and remain unlisted or suspended for 3 consecutive days, then
      the
      Holder shall have available the remedy set forth in Section 4(a) of the Amended
      and Restated Notes.

     

    (iii)  Blackout
      Periods.

     

    (A)  In
      the
      event the Registration has become effective and, afterwards, any Holder’s
      ability to sell Registrable Securities under the Registration Statement is
      suspended for more than (i) 30 days in any 90-day period or (ii) 60 days in
      any
      calendar year (“Blackout Period”), including without limitation by reason
      of any suspension or stop order with respect to the Registration Statement
      or
      the fact that an event has occurred as a result of which the prospectus
      (including any supplements thereto) included in such Registration Statement
      then
      in effect includes an untrue statement of material fact or omits to state a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading in light of the circumstances then existing, then the
      Company shall provide to each Holder a Monthly Delay Payment for each 30-day
      period or portion thereof (appropriately prorated) from and after the expiration
      of the Blackout Period, on the terms set forth in Section 2(b)(i)(B)
      above.

     

    (B)  Notwithstanding
      anything to the contrary herein, the Company may suspend the filing or
      availability of a Registration Statement or prospectus or delay the disclosure
      of any material non-public information or pending development concerning the
      Company for a specified period if the disclosure of such information or
      development during such period would be materially detrimental, in the good
      faith judgment of the Company’s general counsel and one or more executive
      officers of the Company, to the Company (a “Grace Period”); provided,
      however, that the Company shall promptly (i) notify the Holders in writing
      of
      the existence of such material non-public information or pending development
      giving rise to a Grace Period (provided that the Company shall not disclose
      the
      content of such material non-public information or pending development to the
      Holders) and the date on which the Grace Period will begin, and (ii) notify
      the
      Holders in writing of the date on which the Grace Period ends. No single Grace
      Period shall, without incurring any liability to pay the Monthly Delay Payments
      pursuant to Section 2(b)(i)(B), exceed twenty (20) consecutive days and the
      aggregate duration of all Grace Periods shall not, without incurring any
      liability to pay the Monthly Delay Payments pursuant to Section 2(b)(i)(B),
      exceed forty (40) days during any three hundred sixty-five day period (each
      Grace Period complying with this Section 2(b)(iii)(B) being an “Allowable
      Grace Period”). For purposes of determining the length of a Grace Period,
      the Grace Period shall be deemed to begin on and include the date stated in
      the
      notice referred to in clause (i) above as the beginning of such Grace Period
      and
      shall end on and include the earlier of (I) the date stated in the notice
      referred to in clause (ii) above as the end of such Grace Period or, (II) to
      the
      extent considered appropriate by the Company in its sole discretion, such
      earlier date as to which the Company may advise the Holders in writing after
      the
      Company’s provision of the notices described above; provided, however, that no
      Grace Period shall be longer than an Allowable Grace Period without incurring
      any liability to pay the Monthly Delay Payments pursuant to Section 2(b)(i)(B).
      The Company agrees to use all reasonable efforts to ensure that the Holders
      may
      resume sales under the relevant Registration Statement as soon as such
      suspension, in the sole discretion of the Company, is no longer necessary.
      The
      provisions of Sections 2(a)(iii) and 2(a)(v) of this Agreement shall not be
      applicable, and the Company shall not have any obligation to pay any Monthly
      Delay Payments by reason of any delay pursuant to Section 2(b)(i) or Blackout
      Period, during the period of any Allowable Grace Period.

     

    (iv)  Cumulative
      Remedies.  The Monthly Delay Payments provided for above are in
      addition to and not in lieu or limitation of any other rights the Holders may
      have at law, in equity or under the terms of the Amended and Restated Notes,
      the
      Amendment Agreement, the Loan Agreement and this Agreement, including without
      limitation, the right to monetary contract damages and specific performance;
      provided that (x) no holder of Amended and Restated Notes may collect default
      interest in addition to Monthly Delay Payments and (y) no holder of Amended
      and
      Restated Notes may collect more than one Monthly Delay Payment with respect
      to
      the same 30-day period or portion thereof.  Each Holder shall be
      entitled to specific performance of any and all obligations of the Company
      in
      connection with the registration rights of the Holders hereunder.

     

    (c)  The
      Holders agree to cooperate as reasonably requested by the Company in connection
      with the preparation and filing of the Registration Statement.

     

    (d)  If
      the
      Holder(s) intend to distribute the Registrable Securities by means of an
      underwriting, the Holder(s) shall so advise the Company.  Any such
      underwriting may only be administered by nationally or regionally recognized
      investment bankers reasonably satisfactory to the Company.

     

    (e)  The
      Company shall enter into such customary agreements for secondary offerings
      (including a customary underwriting agreement with the underwriter or
      underwriters, if any) and take all such other reasonable actions reasonably
      requested by the Holders in connection with any underwritten offering or when
      the SEC has required that the Holders be identified as underwriters in the
      Registration Statement in order to expedite or facilitate the disposition of
      such Registrable Securities and in such connection:

     

    (i)  make
      such
      representations and warranties to the Holders and the underwriter or
      underwriters, if any, in form, substance and scope as are customarily made
      by
      issuers to underwriters in secondary offerings;

     

    (ii)  cause
      to
      be delivered to the sellers of Registrable Securities and the underwriter or
      underwriters, if any, opinions of independent counsel to the Company, on and
      dated as of the effective day (or in the case of an underwritten offering,
      dated
      the date of delivery of any Registrable Securities sold pursuant thereto) of
      the
      Registration Statement, and within ninety (90) days following the end of each
      fiscal year thereafter, which counsel and opinions (in form, scope and
      substance) shall be reasonably satisfactory to the Holders and the
      underwriter(s), if any, and their counsel and covering such matters that are
      customarily given to underwriters in underwritten offerings, addressed to the
      Holders and each underwriter, if any;

     

    (iii)  cause
      to
      be delivered, immediately prior to the effectiveness of the Registration
      Statement (and, in the case of an underwritten offering, at the time of delivery
      of any Registrable Securities sold pursuant thereto), and at the beginning
      of
      each fiscal year following a year during which the Company’s independent
      certified public accountants shall have reviewed any of the Company’s books or
      records, a “comfort” letter from the Company’s independent certified public
      accountants addressed to each underwriter (including the Holders, if the SEC
      has
      required them to be identified as underwriters in the Registration Statement),
      if any, to the extent requested by such underwriters, stating that such
      accountants are independent public accountants within the meaning of the
      Securities Act and the applicable published rules and regulations thereunder,
      and otherwise in customary form and covering such financial and accounting
      matters as are customarily covered by letters of the independent certified
      public accountants delivered in connection with secondary offerings; such
      accountants shall have undertaken in each such letter to update the same during
      each such fiscal year in which such books or records are being reviewed so
      that
      each such letter shall remain current, correct and complete throughout such
      fiscal year; and each such letter and update thereof, if any, shall be
      reasonably satisfactory to such underwriters;

     

    (iv)  if
      an
      underwriting agreement is entered into, the same shall include customary
      indemnification and contribution provisions to and from the underwriters and
      procedures for secondary underwritten offerings; and

     

    (v)  deliver
      such documents and certificates as may be reasonably requested by the Holders
      of
      the Registrable Securities being sold or the managing underwriter or
      underwriters, if any, to evidence compliance with clause (i) above and with
      any
      customary conditions contained in the underwriting agreement, if
      any.

     

    (f)  The
      Company shall make available for inspection by the Holders, representative(s)
      of
      all the Holders together, any underwriter participating in any disposition
      pursuant to a Registration Statement, and any attorney or accountant retained
      by
      any Holder or underwriter, all financial and other records customary for
      purposes of the Holders’ due diligence examination of the Company and review of
      any Registration Statement, all SEC Documents (as defined in the Purchase
      Agreement) filed subsequent to the Approval Date, pertinent corporate documents
      and properties of the Company, and cause the Company’s officers, directors and
      employees to supply all information reasonably requested by any such
      representative, underwriter, attorney or accountant in connection with such
      Registration Statement, provided that such parties agree to keep such
      information confidential.  Notwithstanding the foregoing, the
      foregoing right shall not extend to any Holder (i) who is not a financial
      investor or entity or (ii) who, itself or through any affiliate, has any
      strategic business interest that would reasonably be expected to be in conflict
      with any business of the Company or its subsidiaries.

     

    (g)  Subject
      to Section 2(b) above and to clause (i) below, the Company may suspend the
      use
      of any prospectus used in connection with the Registration Statement only in
      the
      event, and for such period of time as, (i) such a suspension is required by
      the
      rules and regulations of the Commission or (ii) it is determined in good faith
      by the Board of Directors of the Company that because of valid business reasons
      (not including the avoidance of the Company’s obligations hereunder), it is in
      the best interests of the Company to suspend such use, and prior to suspending
      such use in accordance with this clause (ii) the Company provides the Holders
      with written notice of such suspension, which notice need not specify the nature
      of the event giving rise to such suspension.  The Company will use
      reasonable best efforts to cause such suspension to terminate at the earliest
      possible date.  This provision shall not affect the right of Holders
      to receive Monthly Delay Payments pursuant to Section 2(b) above.

     

    (h)  The
      Company shall file a Registration Statement with respect to any newly authorized
      and/or reserved Registrable Securities consisting of Conversion Shares described
      in clause (i) of the definition of Registrable Securities within five (5)
      business days of any stockholders meeting authorizing same and shall use its
      best efforts to cause such Registration Statement to become effective within
      sixty (60) days of such stockholders meeting.  If the Holders become
      entitled, pursuant to an event described in clause (ii) and (iii) of the
      definition of Registrable Securities, to receive any securities in respect
      of
      Registrable Securities that were already included in a Registration Statement,
      subsequent to the date such Registration Statement is declared effective, and
      the Company is unable under the securities laws to add such securities to the
      then effective Registration Statement, the Company shall promptly file, in
      accordance with the procedures set forth herein, an additional Registration
      Statement with respect to such newly Registrable Securities.  The
      Company shall use its best efforts to (i) cause any such additional Registration
      Statement, when filed, to become effective under the Securities Act, and (ii)
      keep such additional Registration Statement effective during the period
      described in Section 5 below and cause such Registration Statement to become
      effective within 90 days of that date that the need to file the Registration
      Statement arose.  All of the registration rights and remedies under
      this Agreement shall apply to the registration of the resale of such newly
      reserved shares and such new Registrable Securities, including without
      limitation the provisions providing for default payments contained
      herein.

     

    (i)  The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to a Registration Statement and
      the
      prospectus used in connection with such Registration Statement, which prospectus
      is to be filed pursuant to Rule 424 promulgated under the Securities Act, as
      may
      be necessary to keep such Registration Statement effective at all times during
      the Registration Period (as defined below), and, during such period, comply
      with
      the provisions of the Securities Act with respect to the disposition of all
      Registrable Securities of the Company covered by such Registration
      Statement.  In the case of amendments and supplements to a
      Registration Statement which are required to be filed pursuant to this Agreement
      (including pursuant to this Section 2(h)) by reason of the Company filing a
      report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
      1934 Act, the Company shall have incorporated such report by reference into
      such
      Registration Statement, if applicable, or shall file such amendments or
      supplements with the SEC on the same day on which the 1934 Act report is filed
      which created the requirement for the Company to amend or supplement such
      Registration Statement.

     

    (j)  Each
      Holder agrees by its acquisition of the Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of any event of the
      kind
      described in Sections 2(a)(v) or 2(a)(vi), such Holder will forthwith
      discontinue disposition of such Registrable Securities under the Registration
      Statement until such Holder’s receipt of the copies of the supplemented
      Prospectus and/or amended Registration Statement contemplated by Section 3(h),
      or until it is advised in writing (the “Advice”) by the Company that the
      use of the applicable Prospectus may be resumed, and, in either case, has
      received copies of any additional or supplemental filings that are incorporated
      or deemed to be incorporated by reference in such Prospectus or Registration
      Statement.  The Company may provide appropriate stop orders to enforce
      the provisions of this paragraph.

     

    (k)  If
      requested by a Holder, the Company shall (i) as soon as practicable incorporate
      in a prospectus supplement or post-effective amendment such information as
      a
      Holder reasonably requests to be included therein relating to the sale and
      distribution of Registrable Securities, including, without limitation,
      information with respect to the number of Registrable Securities being offered
      or sold, the purchase price being paid therefor and any other terms of the
      offering of the Registrable Securities to be sold in such offering; (ii) as
      soon
      as practicable make all required filings of such prospectus supplement or
      post-effective amendment after being notified of the matters to be incorporated
      in such prospectus supplement or post-effective amendment; and (iii) as soon
      as
      practicable, supplement or make amendments to any Registration Statement if
      reasonably requested by a Holder holding any Registrable
      Securities.

     

    3.  Expenses
      of Registration.  All Registration Expenses in connection with any
      registration, qualification or compliance with registration pursuant to this
      Agreement shall be borne by the Company, and all Selling Expenses of a Holder
      shall be borne by such Holder.

     

    4.  Registration
      on Form S-3.  The Company shall use its best efforts to remain
      qualified for registration on Form S-3 or any comparable or successor form
      or
      forms, or in the event that the Company is ineligible to use such form, such
      form as the Company is eligible to use under the Securities Act, provided that
      if such other form is used, the Company shall convert such other form to a
      Form
      S-3 as soon as the Company becomes so eligible, provided that the Company shall
      maintain the effectiveness of the Registration Statement then in effect until
      such time as a Registration Statement or Form S-3 covering the Registrable
      Securities has been declared effective by the SEC.

     

    5.  Registration
      Period.  In the case of the registration effected by the Company
      pursuant to this Agreement, the Company shall keep such registration effective
      until the earlier of (a) the date on which all the Holders have completed the
      sales or distribution described in the Registration Statement relating thereto
      or, (b) until such Registrable Securities may be sold by the Holders under
      Rule
      144(k) (provided that the Company’s transfer agent has accepted an instruction
      from the Company to such effect) (the “Registration
      Period”).  Subject to Section 8 below, this Agreement shall be
      terminated automatically without further action by any party hereto upon the
      expiration of the Registration Period.

     

    6.  Indemnification.

     

    (a)  Company
      Indemnity.  The Company will indemnify and hold harmless each
      Holder, each of its officers, directors, agents and partners, and each person
      controlling of each of the foregoing, within the meaning of Section 15 of the
      Securities Act and the rules and regulations thereunder with respect to which
      registration, qualification or compliance has been effected pursuant to this
      Agreement, and each underwriter, if any, and each person who controls, within
      the meaning of Section 15 of the Securities Act and the rules and regulations
      thereunder, any underwriter, against all claims, losses, damages and liabilities
      (or actions in respect thereof) arising out of or based on any untrue statement
      (or alleged untrue statement) of a material fact contained in any prospectus,
      offering circular or other document (including any related registration
      statement, notification or the like) incident to any such registration,
      qualification or compliance, or based on any omission (or alleged omission)
      to
      state therein a material fact required to be stated therein or necessary to
      make
      the statements therein not misleading in light of the circumstances under which
      they were made, or any violation by the Company of the Securities Act or any
      state securities law or in either case, any rule or regulation thereunder
      applicable to the Company and relating to action or inaction required of the
      Company in connection with any such registration, qualification or compliance,
      and will reimburse each Holder, each of its officers, directors, agents and
      partners, and each person controlling each of the foregoing, each such
      underwriter and each person who controls any such underwriter, for any legal
      and
      any other expenses reasonably incurred in connection with investigating and
      defending any such claim, loss, damage, liability or action, provided that
      the
      Company will not be liable in any such case to a Holder to the extent that
      any
      such claim, loss, damage, liability or expense arises out of or is based (i)
      on
      any untrue statement or omission based upon written information furnished to
      the
      Company by such Holder or the underwriter (if any) therefor and stated to be
      specifically for use therein or (ii) the failure of a Holder to deliver at
      or
      prior to the written confirmation of sale, the most recent prospectus, as
      amended or supplemented.  The indemnity agreement contained in this
      Section 6(a) shall not apply to amounts paid in settlement of any such loss,
      claim, damage, liability or action if such settlement is effected without the
      consent of the Company (which consent will not be unreasonably
      withheld).

     

    (b)  Holder
      Indemnity.  Each Holder will, severally and not jointly, if
      Registrable Securities held by it are included in the securities as to which
      such registration, qualification or compliance is being effected, indemnify
      and
      hold harmless the Company, each of its directors, officers, agents and partners,
      and each underwriter, if any, of the Company’s securities covered by such a
      registration statement, each person who controls the Company or such underwriter
      within the meaning of Section 15 of the Securities Act and the rules and
      regulations thereunder, each other Holder (if any), and each of their officers,
      directors and partners, and each person controlling of such other Holder(s)
      against all claims, losses, damages and liabilities (or actions in respect
      thereof) arising out of or based on any untrue statement (or alleged untrue
      statement) of a material fact contained in any such registration statement,
      prospectus, offering circular or other document, or any omission (or alleged
      omission) to state therein a material fact required to be stated therein or
      necessary to make the statement therein not misleading in light of the
      circumstances under which they were made, and will reimburse the Company and
      such other Holder(s) and their directors, officers and partners, underwriters
      or
      control persons for any legal or any other expenses reasonably incurred in
      connection with investigating and defending any such claim, loss, damage,
      liability or action, in each case to the extent, but only to the extent, that
      such untrue statement (or alleged untrue statement) or omission (or alleged
      omission) is made in such registration statement, prospectus, offering circular
      or other document in reliance upon and in conformity with written information
      furnished to the Company by such Holder and stated to be specifically for use
      therein, and provided that the maximum amount for which such Holder shall be
      liable under this indemnity shall not exceed the net proceeds received by such
      Holder from the sale of the Registrable Securities pursuant to the registration
      statement in question.  The indemnity agreement contained in this
      Section 6(b) shall not apply to amounts paid in settlement of any such claims,
      losses, damages or liabilities if such settlement is effected without the
      consent of such Holder (which consent shall not be unreasonably
      withheld).

     

    (c)  Procedure.  Each
      party entitled to indemnification under this Section 6 (the “Indemnified
      Party”) shall give notice to the party required to provide indemnification
      (the “Indemnifying Party”) promptly after such Indemnified Party has
      actual knowledge of any claim as to which indemnity may be sought, and shall
      permit the Indemnifying Party to assume the defense of any such claim in any
      litigation resulting therefrom, provided that counsel for the Indemnifying
      Party, who shall conduct the defense of such claim or any litigation resulting
      therefrom, shall be approved by the Indemnified Party (whose approval shall
      not
      be unreasonably withheld), and the Indemnified Party may participate in such
      defense at its own expense, and provided further that the failure of any
      Indemnified Party to give notice as provided herein shall not relieve the
      Indemnifying Party of its obligations under this Section 6 except to the extent
      that the Indemnifying Party is materially and adversely affected by such failure
      to provide notice.  No Indemnifying Party, in the defense of any such
      claim or litigation, shall, except with the consent of each Indemnified Party,
      consent to entry of any judgment or enter into any settlement which does not
      include as an unconditional term thereof the giving by the claimant or plaintiff
      to such Indemnified Party of a release from all liability in respect to such
      claim or litigation.  Each Indemnified Party shall furnish such
      non-privileged information regarding itself or the claim in question as an
      Indemnifying Party may reasonably request in writing and as shall be reasonably
      required in connection with the defense of such claim and litigation resulting
      therefrom.

     

    7.  Contribution.  If
      the indemnification provided for in Section 6 herein is unavailable to the
      Indemnified Parties in respect of any losses, claims, damages or liabilities
      referred to herein (other than by reason of the exceptions provided therein),
      then each such Indemnifying Party, in lieu of indemnifying such Indemnified
      Party, shall contribute to the amount paid or payable by such Indemnified Party
      as a result of such losses, claims, damages or liabilities as between the
      Company on the one hand and any Holder on the other, in such proportion as
      is
      appropriate to reflect the relative fault of the Company and of such Holder
      in
      connection with the statements or omissions which resulted in such losses,
      claims, damages or liabilities, as well as any other relevant equitable
      considerations.  The relative fault of the Company on the one hand and
      of any Holder on the other shall be determined by reference to, among other
      things, whether the untrue or alleged untrue statement of a material fact or
      omission or alleged omission to state a material fact relates to information
      supplied by the Company or by such Holder.

     

    In
      no
      event shall the obligation of any Indemnifying Party to contribute under this
      Section 7 exceed the amount that such Indemnifying Party would have been
      obligated to pay by way of indemnification if the indemnification provided
      for
      under Section 6(a) or 6(b) hereof had been available under the
      circumstances.

     

    The
      Company and the Holders agree that it would not be just and equitable if
      contribution pursuant to this Section 7 were determined by prorata
      allocation (even if the Holders or the underwriters were treated as one entity
      for such purpose) or by any other method of allocation which does not take
      account of the equitable considerations referred to in the immediately preceding
      paragraphs.  The amount paid or payable by an Indemnified Party as a
      result of the losses, claims, damages and liabilities referred to in the
      immediately preceding paragraphs shall be deemed to include, subject to the
      limitations set forth above, any legal or other expenses reasonably incurred
      by
      such Indemnified Party in connection with investigating or defending any such
      action or claim.  Notwithstanding the provisions of this section, no
      Holder or underwriter shall be required to contribute any amount in excess
      of
      the amount by which (i) in the case of any Holder, the net proceeds received
      by
      such Holder from the sale of Registrable Securities pursuant to the registration
      statement in question or (ii) in the case of an underwriter, the total price
      at
      which the Registrable Securities purchased by it and distributed to the public
      were offered to the public exceeds, in any such case, the amount of any damages
      that such Holder or underwriter has otherwise been required to pay by reason
      of
      such untrue or alleged untrue statement or omission or alleged
      omission.  No person guilty of fraudulent misrepresentation (within
      the meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation.

     

    8.  Survival.  The
      indemnity and contribution agreements contained in Sections 6 and 7 and the
      representations and warranties of the Company referred to in Section 2(d)(i)
      shall remain operative and in full force and effect regardless of (i) any
      termination of this Agreement or the Purchase Agreement or any underwriting
      agreement, (ii) any investigation made by or on behalf of any Indemnified Party
      or by or on behalf of the Company, and (iii) the consummation of the sale or
      successive resales of the Registrable Securities.

     

    9.  Information
      by Holders.  Each Holder shall promptly furnish to the Company
      such information regarding such Holder and the distribution and/or sale proposed
      by such Holder as the Company may from time to time reasonably request in
      writing in connection with any registration, qualification or compliance
      referred to in this Agreement, and the Company may exclude from such
      registration the Registrable Securities of any Holder who unreasonably fails
      to
      furnish such information within a reasonable time after receiving such
      request.  The intended method or methods of disposition and/or sale
      (Plan of Distribution) of such securities as so provided by such Purchaser
      shall
      be included without alteration in the Registration Statement covering the
      Registrable Securities and shall not be changed without written consent of
      such
      Holder.  Each Holder agrees that, other than ordinary course brokerage
      arrangements, in the event it enters into any arrangement with a broker dealer
      for the sale of any Registrable Securities through a block trade, special
      offering, exchange distribution or secondary distribution or a purchase by
      a
      broker or dealer, such Holder shall promptly deliver to the Company in writing
      all applicable information required in order for the Company to be able to
      timely file a supplement to the Prospectus pursuant to Rule 424(b) under the
      Securities Act, to the extent that such supplement is legally
      required.  Such information shall include a description of (i) the
      name of such Holder and of the participating broker dealer(s), (ii) the number
      of Registrable Securities involved, (iii) the price at which such Registrable
      Securities were or are to be sold, and (iv) the commissions paid or to be paid
      or discounts or concessions allowed or to be allowed to such broker dealer(s),
      where applicable.

     

    10.  Replacement
      Certificates.  The certificate(s) representing the Registrable
      Securities held by any Purchaser (or then Holder) may be exchanged by such
      Purchaser (or such Holder) at any time and from time to time for certificates
      with different denominations representing an equal aggregate number of
      Registerable Securities, as reasonably requested by such Purchaser (or such
      Holder) upon surrendering the same.  No service charge will be made
      for such registration or exchange.  Upon receipt by the Company of
      evidence reasonably satisfactory to it of the loss, theft, destruction or
      mutilation of any certificates representing a Registrable Security and, in
      the
      case of loss, theft or destruction, of indemnity reasonably satisfactory to
      it,
      or upon surrender and cancellation of such certificate if mutilated, the Company
      will make and deliver a new certificate of like tenor and dated as of such
      cancellation at no charge to the holder.

     

    11.  Transfer
      or Assignment.  Except as otherwise provided herein, this
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns.  The rights granted to the
      Lenders by the Company under this Agreement to cause the Company to register
      Registrable Securities may be transferred or assigned (in whole or in part)
      to a
      permitted transferee or assignee of Amended and Restated Notes or Registrable
      Securities, and all other rights granted to the Lenders by the Company hereunder
      may be transferred or assigned to any permitted transferee or assignee of any
      Amended and Restated Notes or Registrable Securities; provided in each case
      that
      the Company must be given written notice by the Lenders at the time of or within
      a reasonable time after said transfer or assignment, stating the name and
      address of said transferee or assignee and identifying the securities with
      respect to which such registration rights are being transferred or assigned;
      and
      provided further that the transferee or assignee of such rights agrees in
      writing to be bound by the registration provisions of this
      Agreement.

     

    12.  Reports
      Under The 1934 Act.

     

    With
      a
      view to making available to the Holders the benefits of Rule 144 promulgated
      under the Securities Act or any other similar rule or regulation of the SEC
      that
      may at any time permit the Holders to sell securities of the Company to the
      public without registration (“Rule 144”), the Company agrees
      to:

     

    (a)  make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

     

    (b)  file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Securities Act and the 1934 Act so long as the Company remains
      subject to such requirements and the filing of such reports and other documents
      is required for the applicable provisions of Rule 144; and

     

    (c)  furnish
      to each Holder so long as such Holder owns Registrable Securities, promptly
      upon
      request, (i) a written statement by the Company, if true, that it has complied
      with the reporting requirements of Rule 144, the Securities Act and the 1934
      Act, (ii) a copy of the most recent annual or quarterly report of the Company
      and such other reports and documents so filed by the Company, and (iii) such
      other information as may be reasonably requested to permit the Holders to sell
      such securities pursuant to Rule 144 without registration.

     

    13.  Miscellaneous.

     

    (a)  Remedies.  The
      Company and the Lenders acknowledge and agree that irreparable damage would
      occur in the event that any of the provisions of this Agreement were not
      performed in accordance with their specific terms or were otherwise
      breached.  It is accordingly agreed that the parties shall be entitled
      to an injunction or injunctions to prevent or cure breaches of the provisions
      of
      this Agreement and to enforce specifically the terms and provisions hereof,
      this
      being in addition to any other remedy to which any of them may be entitled
      by
      law or equity.

     

    (b)  Jurisdiction.  THE
      PARTIES MUTUALLY IRREVOCABLY AND UNCONDITIONALLY AGREE (I) THAT ALL ACTIONS
      OR
      PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
      LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEW
      YORK,
      NEW YORK COUNTY AND THAT THE PARTIES SHALL BE SUBJECT TO THE JURISDICTION OF
      SUCH COURTS, AND (II) THAT SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT
      REQUESTED, SHALL CONSTITUTE PERSONAL SERVICE.  NOTHING IN THIS SECTION
      13(b) SHALL AFFECT OR LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
      PERMITTED BY LAW.  THE COMPANY AND EACH PURCHASER WAIVES, TO THE
      EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
      DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
      PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(b).

     

    (c)  Notices.  Any
      notice or other communication required or permitted to be given hereunder shall
      be in writing by facsimile, electronic transmission, mail or personal delivery
      and shall be effective upon actual receipt of such notice.  The
      addresses for such communications shall be:

     

    to
      the
      Company:

     

    ISCO
      International, Inc.

    1001
      Cambridge Drive

    Elk
      Grove
      Village, Illinois  60007

    Telephone:  (847)
      391-9400

    Facsimile:   (847)
      391-5015

    Attention::  Frank
      Cesario

    E-mail:
      frank.cesario@iscointl.com

    


    with
      a
      copy to:

     

    Pepper
      Hamilton LLP

    400
      Berwyn Park

    899
      Cassatt Road

    Berwyn,
      Pennsylvania 19312

    Telephone:  (610)
      640-7800

    Facsimile:  (610)
      640-7835

    Attention:  Michael
      P. Gallagher, Esq.

    E-mail:
      GALLAGMP@pepperlaw.com

    


    to
      the
      Lenders:

     

    As
      set
      forth on Schedule I hereto

     

    with
      a
      copy to:

     

    As
      set
      forth on Schedule I hereto

     

    Any
      party
      hereto may from time to time change its address for notices by giving at least
      five days’ written notice of such changed address to the other parties
      hereto.

     

    (d)  Waivers.  No
      waiver by any party of any default with respect to any provision, condition
      or
      requirement of this Agreement shall be deemed to be a continuing waiver in
      the
      future or a waiver of any other provision, condition or requirement hereof,
      nor
      shall any delay or omission of any party to exercise any right hereunder in
      any
      manner impair the exercise of any such right accruing to it
      thereafter.

     

    (e)  Execution
      in Counterpart.  This Agreement may be executed in two or more
      counterparts, all of which shall be considered one and the same agreement,
      it
      being understood that all parties need not sign the same
      counterpart.

     

    (f)  Signatures.  Facsimile
      signatures shall be valid and binding on each party submitting the
      same.

     

    (g)  Entire
      Agreement; Amendment.  This Agreement, together with the Amendment
      Agreement, the Amended and Restated Notes and the agreements and documents
      contemplated hereby and thereby, contains the entire understanding and agreement
      of the parties.

     

    (h)  Governing
      Law.  This Agreement and the validity and performance of the terms
      hereof shall be governed by and construed in accordance with the laws of the
      State of New York applicable to contracts executed and to be performed entirely
      within such state.

     

    (i)  Jury
      Trial.  EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY
      JURY.

     

    (j)  Titles.  The
      titles used in this Agreement are used for convenience only and are not to
      be
      considered in construing or interpreting this Agreement.

     

    (k)  No
      Strict Construction.  The language used in this Agreement will be
      deemed to be the language chosen by the parties to express their mutual intent,
      and no rule of strict construction will be applied against any
      party.

     

    [Signature
      Page Follows]

     


    
      
              

                  
      
      

                            JRAPP\120275.3
            -
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    In
      Witness Whereof, the parties hereto have caused this Agreement to be duly
      executed as of the date first above written.

     

    ISCO
      INTERNATIONAL, INC.

    


    


    


    By:                                                                           

    Name:

    Title:

    


    


    MANCHESTER
      SECURITIES CORP.

    


    


    By:                                                                           

    Name:

    Title:

    


    


    ALEXANDER
      FINANCE, L.P.

    


    


    By:                                                                           

    Name:

    Title:

    


     


    
      
              

                            
                          
      

                            JRAPP\120275.3
            -
            6/26/07              
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Schedule
      I

     

    


     

    


     

    
      	
              Name
                of Lenders

            	
              Contact
                Information

               

            
	
              Manchester
                Securities Corp.

            	
              712
                Fifth Avenue

              36th
                Floor

              New
                York, New York 10019

              Attn:  Dave
                Miller

              Tel:           (212)
                506-2999

              Fax:           (212)
                586-9467

              E-Mail:
                dmiller@elliottmgmt.com

               

            
	
              Copy
                to:

               

            	
              Kleinberg,
                Kaplan, Wolff & Cohen, P.C.

              551
                Fifth Avenue

              New
                York, New York 10176

              Telephone:
                (212) 986-6000

              Facsimile:
                (212) 986-8866

              Attn:
                Lawrence D. Hui, Esq.

              E-Mail:
                lhui@kkwc.com

               

            
	
              Alexander
                Finance, L.P.

            	
              Alexander
                Finance, LP

              1560
                Sherman Avenue

              Evanston,
                Illinois

              Telephone:  (847)
                733-0232

              Facsimile:   (847)
                733-0339

              Attention:  Bradford
                T. Whitmore

              E-Mail:
                bwhitmore@gbros.com

               

            
	
              Copy
                to:

            	
              Sachnoff
                & Weaver

              30
                S. Wacker Drive

              Chicago,
                Illinois 60606

              Telephone:  (312)
                207-3879

              Facsimile:   (312)
                207-6400

              Attention:  Evelyn
                C. Arkebauer, Esq.

              E-Mail:
                earkeba@sachnoff.com

               

            


    

    


     

    


    



    
      
              

                  
      
      

                            JRAPP\120275.3
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            6/26/07