exhitib102form8k0209.htm


    EXHIBIT
10.2

    


    AMENDMENT TO
NOTES

    


    


    This
AMENDMENT TO NOTES (the “Amendment”) is dated
as of February 17, 2009, by and
among ISCO International, Inc., a Delaware corporation (the “Company”), Alexander
Finance, L.P., an Illinois limited partnership (“Alexander”), and
solely for purposes of Sections 6, 7, 8, and 9 of this Amendment, Manchester
Securities Corporation, a New York corporation (“Manchester”).

     

    W
I T N E S S E T H:

     

    WHEREAS, on June 22, 2006, the
Company issued to Alexander that certain 5% Senior Secured Convertible Note,
Note No. E-2, dated June 22, 2006 (the “Note      No. E­-2”);

    


    WHEREAS, on June 26, 2007, the
Company issued to Alexander that certain Amended and Restated 7% Senior Secured
Convertible Note, Note No. F5, dated June 26, 2007 (the “Note No.
F5”);

    


    WHEREAS, on June 26, 2007, the
Company issued to Alexander that certain Amended and Restated 7% Senior Secured
Convertible Note, Note No. F6, dated June 26, 2007 (the “Note No.
F6”);

    


    WHEREAS, on June 26, 2007, the
Company issued to Alexander that certain Amended and Restated 7% Senior Secured
Convertible Note, Note No. F7, dated June 26, 2007 (the “Note No.
F7”);

    


    WHEREAS, on June 26, 2007, the
Company issued to Alexander that certain Amended and Restated 7% Senior Secured
Convertible Note, Note No. F8, dated June 26, 2007 (the “Note No.
F8”);

    


    WHEREAS, on January 3, 2008,
the Company issued to Alexander that certain New Amended and Restated 7% Senior
Secured Convertible Note, Note No. F9, dated January 3, 2008, as amended
effective as of January 2, 2009 (the “January 2008
Note”);

    


    WHEREAS, on August 18, 2008,
the Company issued to Alexander that certain 9 1⁄2% Secured Convertible Note dated
August 18, 2008 (the “9 1⁄2% Note,” together
with Note No. E-2, Note No. F5, Note No. F6, Note No. F7, Note No. F8, and 9 1⁄2%
Note shall be referred to collectively herein as the “Notes”);
and

    


    WHEREAS, the Company has
requested that Alexander amend the Notes and the January 2008 Note to provide
for certain changes as more fully set forth herein.

    


    


     

    


     

    A
G R E E M E N T:

     

    NOW, THEREFORE, in
consideration of the covenants and agreements herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Alexander agree as follows:

    


    1. Definitions.  All
capitalized terms used herein and not defined or amended herein shall have the
meanings ascribed to them in the Notes.

     

    2. The Notes are hereby amended
as follows: 

    


    
      	
              a.  

            	
              Replace
      the definition of “Fair Market
      Price” in its entirety with the
  following:

            


    

    


    “ “Fair Market Price”
shall mean the closing price or the closing bid price for the Common Stock on
the Trading Day immediately preceding the date on which the price is being
determined.”

    


    
      	
              b.  

            	
              Delete
      the definition of “Market Price”
      in its entirety.

            


    

    


    
      	
              c.  

            	
              Delete
      the definition of “Principal
      Market” in its entirety.

            


    

    


    
      	
              d.  

            	
              Replace
      the definition of “Trading Day” in
      its entirety with the following:

            


    

    


    “ “Trading Day” shall
mean (x) if the Common Stock is listed on the New York Stock Exchange, NASDAQ or
NYSE Alternext US, 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.”

    


    
      	
              e.  

            	
              Delete
      the definition of “VWAP” in its
      entirety.

            


    

    


    
      	
              f.  

            	
              Replace
      Section
      3(c)(ii)(D) in its entirety with the following, except that Section 3(c)(iii)(C)
      of the 9 1⁄2% Note is replaced in its entirety with the
      following:

            


    

    


    “D.  Calculation of Consideration
Received.  In case any option is issued in connection with the
issue or sale of other securities of the Company, together comprising one
integrated transaction in which no specific consideration is allocated to such
options by the parties thereto, then solely for purposes of this Section 3, the
options will be deemed to have been issued for a consideration of
$0.01.  If any Common Stock or Convertible Securities (other than
shares or options issued or which may be issued pursuant to the Incentive Plan
up to the Incentive Plan Limit) are issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor will be deemed to be the
gross amount received by the Company therefor.  If any Common Stock or
Convertible Securities (other than shares or options issued or which may be
issued pursuant to the Incentive Plan up to the Incentive Plan Limit) are issued
or sold for a consideration other than cash, the amount of the consideration
other than cash received by the Company will be the fair value of such
consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the arithmetic average of the Fair Market Prices of such securities
during the ten (10) consecutive Trading Days ending on the date of receipt of
such securities.  The fair value of any consideration other than cash
or securities will be determined jointly by the Company, the Holder, and
Manchester.  If such parties are unable to reach agreement within ten
(10) days after the occurrence of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be determined within five (5)
Business Days after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser selected by
the Company and the holders of the Notes.”

    


    
      	
              g.  

            	
              Replace
      Section
      3(e) in its entirety with the
following:

            


    

    


    “No
Fractions.  Upon a conversion hereunder the Company shall not
be required to issue stock certificates representing fractions of shares of
Common Stock, but may if otherwise permitted, make a cash payment in respect of
any final fraction of a share based on the Fair Market Price of a share of
Common Stock at such time.  If the Company elects not, or is unable,
to make such cash payment, the Holder shall be entitled to receive, in lieu of
the final fraction of a share, one whole share of Common Stock.”

    


    
      	
              h.  

            	
              Replace
      Section
      4(b) in its entirety with the
following:

            


    

    


    “(b)  Remedies.  If
an Event of Default occurs and is continuing with respect to any of the ISCO
Notes, the Holder may declare all of the then outstanding Principal Amount of
this Note and all other ISCO Notes held by the Holder, including any interest
due thereon, to be due and payable immediately, except that in the case of an
Event of Default arising from events described in clauses (vii) and (viii) of
Section 4(a) hereof, this Note shall become due and payable without further
action or notice.  In the event of an acceleration, the amount due and
owing to the Holder shall be the greater of (1) 110% of the outstanding
Principal Amount of the ISCO Notes held by the Holder (plus all accrued and
unpaid interest, if any) and (2) the product of (A) the highest Fair Market
Price for the five (5) Trading Days immediately preceding the Holder’s
acceleration and (B) the Conversion Ratio.  In either case the Company
shall pay interest on such amount in cash at the Default Rate to the Holder if
such amount is not paid within seven days of Holder’s request.  The
remedies under this Note shall be cumulative.”

    


    3. The Notes
and the January 2008 Note are hereby amended as follows:

    


    Replace
Section 3(d) in
its entirety with the following:

    


    “(d)  Reservation and Issuance of
Underlying Securities.  The Company covenants that it will at
all times reserve and keep available out of its authorized and unissued Common
Stock solely for the purpose of issuance upon conversion of this Note (including
repayments in stock), free from preemptive rights or any other actual contingent
purchase rights of persons other than the Holder and the holders of the Amended
and Restated Notes, not less than an amount equal to the number of Conversion
Shares.  The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly authorized, validly issued,
fully paid and nonassessable.”

    


    4. The 9 1⁄2%
Note is hereby amended as follows:

    


    Include
in the definitions section:

    


    “ISCO
Notes means collectively the Notes and the Prior ISCO Notes.”

    


    5. The 9 1/2 % Note is hereby amended by deleting
Section
3(i) thereof in its
entirety.

     

    6. The Company, Alexander and Manchester agree and
acknowledge that any delisting or deregistration of the Company’s Common Stock
by the NYSE Alternext US does not constitute a “going private” transaction under
the definition of “Change of Control Transaction,” in the Notes and the January
2008 Note.

     

    7. The
Company, Alexander and Manchester agree and acknowledge that this Amendment has
been made and entered into in compliance with Section 6(c) of the Notes and the
January 2008 Note.

     

    8. The Company’s execution, delivery and performance of
this Amendment does not violate any material term, provision or covenant of any
agreement that is currently in effect between the Company and either of
Alexander or Manchester.

     

    9. The Notes
and the January 2008 Note, as amended hereby, shall remain in full force and
effect and all terms hereof are hereby ratified and confirmed by the Company.
Except for specifically provided herein, all other terms and conditions of the
Notes shall remain in full force and effect.  Except with respect to
the Notes and the January 2008 Note, nothing
contained in this Amendment shall be deemed to be or construed as a waiver or
modification of any terms or provisions of any agreement between Alexander and
the Company or Manchester and the Company, or any rights of Alexander or
Manchester arising thereunder as a result of the Company’s execution, delivery
and performance of this Amendment.

     

    10. Any and
all references to the Notes and the January 2008 Note and any instrument
previously and now hereafter executed by the Company shall be deemed to refer to
the Notes and the January 2008 Note as amended by this Amendment and any
future amendments hereafter entered into between the Company and
Alexander.

     

    


    


    


    {Signature
Page Follows}


    
      
        
           

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, the
parties hereto have executed this Amendment as of the date and year first
written above.

     

     

    
       

      
        
          	 WITNESS:
      	ISCO INTERNATIONAL, INC.
      	 
	 	 	 	 
	
                  By:
      /s/Evi Sukandi 

                	
                  By:
      

                	/s/ Gary
      Berger 	 
	 Name:
      Evi Sukandi 	 	Name :
      Gary Berger	 
	 	 	Title :   
      Chief Financial Officer 	 
	 	 	 	 


        

         

      

      
        
          	 	ALEXANDER FINANCE, L.P.
      	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Bradford
      Whitmore	 
	 	 	Name :
      Bradford Whitmore 	 
	 	 	Title:   
      President of Bun Partners, Inc. 	 
	 	 	            
      General Partner of Alexander Finance, L.P. 	 


        

         

      

      
        
          	 	MANCHESTER SECURITIES
      CORPORATION (in respect of Sections 6, 7, 8 and 9 only)	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Elliot
      Greenberg	 
	 	 	Name :
      Elliot Greenberg	 
	 	 	Title  
      : Vice President 	 
	 


        

      

    

     

     

    
      
        	 This
      Amendment is agreed to and acknowledged, in its entirety,
    by:	MANCHESTER SECURITIES
      CORPORATION 	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Elliot
      Greenberg	 
	 	 	Name :
      Elliot Greenberg	 
	 	 	Title  
      : Vice President 	 
	 	 	 	 


      

    

     

     

    
 


    
      
        
          [Signature
Page to Amendment to Notes]