Document:

Registration Rights Agreement

 Exhibit 10.4 
 REGISTRATION RIGHTS AGREEMENT 
 This Registration Rights Agreement (“Agreement”) is
entered into as of June 22, 2006, among ISCO International, Inc., a Delaware corporation with offices at 1001 Cambridge Drive, Elk Grove Village, Illinois 60007 (the “Company”) and the Purchasers set forth on the signature page
hereto (the “Purchasers”). 
 W I T N E S S E T H:

 WHEREAS, pursuant to the Securities Purchase Agreement, dated on or about the date hereof, by and between the Company and the
Purchasers (the “Purchase Agreement”), the Company has agreed to sell and issue to the Purchasers, and the Purchasers have agreed to purchase from the Company, $5,000,000 in aggregate principal amount of the Company’s 5% Senior
Secured Convertible Notes (the “Notes”), subject to the terms and conditions set forth therein; and 
 WHEREAS, the terms of
the 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 
 NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in the Purchase Agreements 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 Notes. As used in this Agreement, the following terms shall have the following respective meanings: 
 “Closing” and “Closing Date” shall mean the Closing and Closing Date with respect to the purchase of the Notes.

 “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 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 Notes) issued or issuable to each Holder (a)

 upon conversion of the Notes, (b) upon any distribution with respect to, any exchange for or any replacement of such
Notes, or (c) upon any conversion or exchange of any securities issued in connection with any such distribution, exchange or replacement; (ii) securities issued or issuable upon any stock split, stock dividend, recapitalization or similar
event with respect to the foregoing; and (iii) 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 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 Closing Date:

 (i) But in any event within 45 days of the Closing, 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 
  

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 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 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 18,510,000 and the Company shall 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 Purchase Agreement and the Notes in the event that the number of shares of Common Stock initially registered is insufficient. Nothing in the preceding sentence will limit the Company’s obligations to
reserve shares of Common Stock pursuant to Section 3(d) of the Notes. Thereafter the Company shall use its 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 Closing 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. 
  

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 (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 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 Purchasers considers will interfere with the full enjoyment of
their rights under this Agreement, the Purchase Agreement and the 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 Purchasers if an Interfering
Event occurs. 
 Paragraph (iv) provides, inter alia, that the Purchasers 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 Closing 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 Article V of the Purchase 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 Purchase Agreement, a Holder that is not a party
to, including as a permitted assignee bound to, the Purchase 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. 
  

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 (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 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 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 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 Purchasers providing information required for the Registration Statement or to the Purchasers 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 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 Closing 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 Notes. 
 (B) In the event that shares of Common Stock
of the Company are not listed the Principal Markets at all times following the Closing 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 Notes. 
  

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 (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 
  

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 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
Notes, the Purchase Agreement and this Agreement, including without limitation, the right to monetary contract damages and specific performance; provided that (x) no holder of Notes may collect default interest in addition to Monthly Delay
Payments and (y) no holder of 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

  

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 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 Closing, 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. 
  

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 (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. 
  

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 (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 
  

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 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). 
  

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 (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 pro
rata 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 
  

 12 

 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. 

 

 13 

 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 Purchasers 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 Notes or Registrable Securities, and all other rights granted to the Purchasers by the Company hereunder may be transferred or assigned to any permitted transferee or assignee of any
Notes or Registrable Securities; provided in each case that the Company must be given written notice by the Purchasers 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 Purchasers 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 
  

 14 

 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 Purchasers: 
 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. 
  

 15 

 (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 Purchase Agreement, the 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] 
  

 16 

 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:	 	 /s/ John Thode
  

	Name:	 	John Thode
	Title:	 	President and CEO
	
	MANCHESTER SECURITIES CORP.
		
	By:	 	 /s/ Elliot Greenberg
  

	Name:	 	Elliot Greenberg
	Title:	 	Vice President
	
	ALEXANDER FINANCE, L.P.
		
	By:	 	 /s/ Bradford Whitmore
  

	Name:	 	Bradford Whitmore
	Title:	 	President, Bun Partners
	its:	 	General Partner

  

 17 

 Schedule I 
  

			
	 Name of Purchasers
	  	 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.comFourth Amended & Restated Security Agreement

 Exhibit 10.5 
 FOURTH AMENDED AND RESTATED SECURITY AGREEMENT 
 Fourth Amended and Restated Security
Agreement, dated as of June 22, 2006 made by and among ISCO International, Inc., a Delaware Corporation with offices at 1001 Cambridge Drive, Elk Grove Village, Illinois 60007 and formerly known as Illinois Superconductor Corporation (the
“Company”), each of the Company’s undersigned subsidiaries (the ”Subsidiaries,” the Company and Subsidiaries are hereafter collectively referred to as the “Debtors” or individually as a
“Debtor”), Manchester Securities Corporation, a New York corporation with offices at 712 Fifth Avenue, 36th Floor, New York, New York 10019 (“Manchester”), Alexander Finance, LP, an Illinois limited partnership with offices at 1560 Sherman Avenue, Evanston, IL 60201 (“Alexander”; Manchester and Alexander
are sometimes individually referred to as a “Secured Party” or together referred to as “Secured Parties”), and Manchester Securities Corporation as collateral agent (the “Collateral Agent”). 
 This Agreement amends and restates the Third Amended and Restated Security Agreement, dated as of November 10, 2004, as amended (the
“Existing Security Agreement”). 
 NOW THEREFORE, in consideration of the foregoing, each Debtor hereby agrees with
the Secured Parties and Collateral Agent as follows: 
 SECTION 1. Grant of Security Interest. 
 (a) As collateral security for all of the Obligations (as defined in Section 2 hereof), the Debtors hereby jointly and severally pledge and
collaterally assign to the Collateral Agent and the Secured Parties, and grant to the Collateral Agent and the Secured Parties a continuing first priority security interest (subject to Permitted Liens (as defined in the Third Amended and Restated
Loan Agreement dated as of the date hereof by and among the Company and the Secured Parties (the “Loan Agreement”)) in the following (the “Collateral”): 
 “Collateral” means all assets of the Debtors (whether currently owned or hereafter acquired by a Debtor), including without limitation all presently existing and hereafter arising (i) accounts,
contract rights, and all other forms of obligations owing to the Debtors from any source, including, without limitation, from affiliates and insiders of the Debtors (“Accounts”); (ii) all of the Debtors’ books and records,
including ledgers, records indicating, summarizing, or evidencing the Debtors’ assets or liabilities, or the Collateral, all information relating to the Debtors’ business operations or financial condition, all computer programs, disc or
tape files, printouts, runs or other computer prepared information, and any equipment containing such information (the Debtors’ “Books”); (iii) all of the Debtors’ present and hereafter acquired equipment, wherever
located, and all attachments, accessories, accessions, replacements, substitutions, additions and improvements to any of the foregoing, wherever located (“Equipment”); (iv) all of the Debtors’ present and hereafter
acquired general intangibles and other personal property (including, but not limited to, contract rights, rights arising under common law, statutes or regulations, choses or things in action, goodwill, patents and patentable inventions, whether
described and claimed therein or otherwise, and all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, and all 

 improvements thereon and all other rights of any kind whatsoever accruing thereunder or pertaining thereto, trade names,
trademarks, patent and trademark applications, service marks, copyrights, copyright applications, blueprints, drawings, purchase orders, customer lists, monies due under any royalty or licensing agreements, infringements, claims, computer programs,
discs or tapes, deposit accounts, insurance premium rebates, tax refunds, and tax refund claims, as well as all cash collateral that is hypothecated to secure letters of credit or bonding obligations and the right to sue or otherwise recover for any
and all past, present and future infringements and misappropriations thereof, and all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto) (“General Intangibles”); (v) all
present and future inventory in which a Debtor has any interest, and all of the Debtors’ present and future raw materials, work in process, finished goods, and packing and shipping material, wherever located, any documents of title representing
any of the above (“Inventory”); (vi) all of the Debtors’ negotiable collateral, including all of the Debtors’ present and future letters of credit, notes, drafts, instruments, certificated securities (including but
not limited to, the “Pledged Securities” as defined below), documents, personal property leases (where a Debtor is the lessor), chattel paper and the Debtors’ books and records relating to any of the foregoing (“Negotiable
Collateral”); and (vii) any money or other assets of the Debtors which hereafter come into the possession, custody or control of the Debtors, and the proceeds and products, whether tangible or intangible, of any of the foregoing
including proceeds of insurance covering any or all of the Collateral, and any and all Accounts, Equipment, General Intangibles, Inventory, Negotiable Collateral, money, deposit accounts or other tangible or intangible, real or personal, property
resulting from the sale, exchange, collection or other disposition of the Collateral, or any portion thereof or interest therein, and the proceeds and products thereof; 
 in each case howsoever a Debtor’s interest therein may arise or appear (whether by ownership, security interest, claim or otherwise). For purposes of this Security Agreement, the term “Pledged
Securities” means (i) all capital stock and all other securities issued or issuable by all current and future subsidiaries, whether currently issued or issued in the future, including, without limitation, the promissory note issued by
Illinois Superconductor Canada Corporation to the Company (“Subsidiary Securities”); (ii) any capital stock or other securities currently owned or received by the Debtors in the future (“Further Securities”);
(iii) all other securities which may be issued or issuable in exchange for or in respect of the Further Securities and Subsidiary Securities pursuant to the terms hereof; (iv) all dividends, cash, instruments, securities and other property
from time to time received, receivable or otherwise distributed, in respect of, in, for, or upon the exchange or conversion of the securities referred to in clauses (i), (ii) and (iii) above; and (v) all rights and privileges of the
Debtors with respect to the Pledged Securities and other properties referred to in clauses (i), (ii), (iii) and (iv). 
 (b) Any pledge,
collateral assignment or grant of a security interest to the Collateral Agent and Secured Parties in the Collateral pursuant to the Existing Security Agreement shall continue in full force and effect. 
 (c) Upon the future receipt of any certificated securities by any Debtor, such Debtor shall immediately deliver the certificates representing such
securities, together with stock powers duly executed in blank to the Collateral Agent and corporate resolutions of a type reasonably acceptable to the Secured Parties. 
  

 2 

 (d) A reasonably detailed list of the Collateral existing as of the date hereof is set forth on Schedule
A attached hereto. For each item of Collateral, Schedule A provides the location, description and ownership and, for items of Collateral which have a certificate of title, the jurisdiction of such certificates, and for those items of Collateral
which are mobile goods (goods that are mobile and generally used in more than one jurisdiction such as motor vehicles, trailers and similar items) the present location of such goods. Schedule A also identifies any liens and encumbrances with respect
to any items of Collateral and sets forth the jurisdiction of incorporation of each Debtor. Schedule A further lists all patents and trademarks and patent and trademark applications owned by the Debtors. 
 SECTION 2. Security for Obligations. The security interest created hereby in the Collateral constitutes continuing collateral security for
the (a) prompt payment by the Debtors, as and when due and payable, of all amounts from time to time owing by them to the Secured Parties under the Third Amended and Restated Loan Agreement, dated as of November 10, 2004, as amended (the
“Loan Agreement”); (ii) the Company’s 9 1/2 secured grid notes, due April 1,
2005, as amended, issued on October 23, 2002 (the “2002 Notes”); (iii) the Company’s 14% secured grid notes due April 1, 2005, as amended, issued on October 24, 2003 (the “2003 Notes”);
(iv) the Company’s 14% secured grid notes due April 1, 2005, as amended, issued on July 23, 2004 (the “July 2004 Notes”); (v) the Company’s 14% secured grid notes due April 1, 2005, as amended,
issued on November 10, 2004 (the “November 2004 Notes”); (vi) the Company’s 5% Senior Secured Convertible Notes due June 22, 2010 issued on June 22, 2006 (the “June 2006 Notes”), (vii) the
amended and restated guaranties dated as of the date hereof (the “Restated Guaranties”) (the Loan Agreement, the 2002 Notes, the 2003 Notes, the July 2004 Notes, the November 2004 Notes, the June 2006 Notes, the Restated Guaranties
and the Existing Security Agreement are hereinafter collectively referred to as the “Transaction Documents”) with the obligations under this clause (a) being referred to as “Indebtedness” and (b) prompt
performance by the Debtors of each of their respective covenants and duties under the Transaction Documents (the covenants and obligations referred to in clauses (a) and (b) above hereafter collectively referred to as the
“Obligations”). The Debtors further jointly and severally agree that the Collateral Agent and the Secured Parties shall have the rights stated in this Security Agreement with respect to the Collateral in addition to all other rights
which the Secured Parties may have by law. 
 SECTION 3. Representations and Obligations of the Debtors. Each of the
Debtors jointly and severally represents, warrants and covenants to the Collateral Agent and the Secured Parties as follows: 
 (a)
Perfection of Security Interest. Each of the Debtors agrees to execute at any time and from time to time such financing statements and to take whatever other actions are requested by the Collateral Agent to perfect and continue the Collateral
Agent and the Secured Parties’ security interest in the Collateral including, without limitation, any filings in the United States Patent and Trademark Office or foreign recordal offices. Upon request of the Collateral Agent, each Debtor will
deliver to the Collateral Agent any and all documents evidencing or constituting the Collateral, possession of which is required in order for the Collateral Agent and the Secured Parties’ to perfect their security interest therein. Upon request
of the Collateral Agent, the Debtors will note Collateral Agent’s and Secured Parties’ interest, as the case may be, upon any and all Accounts if not delivered to Collateral Agent for possession by the Collateral Agent. The 
  

 3 

 Collateral Agent may at any time and from time to time, and without further authorization from the Debtors, file a
carbon, photographic or other reproduction of any financing statement or of this Security Agreement for use as a financing statement to the extent permitted by applicable law. The Debtors will reimburse the Collateral Agent for all reasonable
expenses for the perfection and the continuation of the perfection of Secured Parties’ security interest in the Collateral. Each Debtor will promptly notify the Collateral Agent of any change in its name including any change to the assumed
business names of such Debtor. This is a continuing Security Agreement and will continue in effect until all Indebtedness is paid in full and any other Obligations are satisfied and the Secured Parties shall release their interest in the Collateral
upon the full and final payment and satisfaction of the Indebtedness and other Obligations. If payment is made by a Debtor, whether voluntarily or otherwise, or by any third party, on the Indebtedness and thereafter a Secured Party is forced to
remit the amount of that payment to such Debtor’s trustee in bankruptcy or to any similar person under any federal, state or foreign bankruptcy law or other law for the relief of debtors, the Indebtedness shall be considered unpaid for the
purpose of enforcement of this Security Agreement. If permitted or required under applicable law, the Collateral Agent may file any financing statements with respect to the Collateral without the signatures of the Debtors. Any financing statements
must state that the Collateral Agent and the Secured Parties have a lien on all of the Debtors’ assets. 
 (b) Power of Attorney.
Each Debtor hereby irrevocably makes, constitutes, and appoints the Collateral Agent (and all of such Collateral Agent’s officers, employees or agents designated by such Collateral Agent) as its true and lawful attorney, with power to:
(i) sign such Debtor’s name on any of the documents described hereunder or on any other similar documents to be executed, recorded, or filed in order to perfect or continue perfected the Collateral Agent’s and Secured Parties’
security interest in the Collateral; (ii) at any time that an Event of Default has occurred and is continuing, execute, sign and endorse such Debtor’s name on any invoice or bill of lading relating to any Account, drafts against Account
Debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to Account Debtors; (iii) send requests for verification of Accounts; (iv) at any time that an Event of Default has occurred and is continuing, execute,
sign and endorse such Debtor’s name on any checks, notices, instruments, acceptances, money orders, drafts, warrants or other item of payment or security that may come into the Collateral Agent’s possession; (v) at any time that an
Event of Default has occurred and is continuing, demand, collect, receive, receipt for, sue and recover all sums of money or other property which may now or hereafter become due, owing or payable from the Collateral; (vi) file any claim or
claims or, following an Event of Default, take any action or institute or take part in any proceedings, either in its own name or in the name of such Debtor, or otherwise, which in the discretion of the Collateral Agent may seem to be necessary or
advisable; (vii) at any time that an Event of Default has occurred and following acceleration of the Indebtedness, direct the Account Debtors and other persons sending mail to the Debtors to send all mail relating to the Collateral to the
Collateral Agent; (viii) at any time that an Event of Default has occurred and is continuing, make, settle, and adjust all claims under the Debtors’ policies of insurance and make all determinations and decisions with respect to such
policies of insurance; and (ix) at any time that an Event of Default has occurred and is continuing, settle and adjust disputes and claims respecting the Accounts directly with Account Debtors, for amounts and upon terms which the Collateral
Agent determines to be reasonable, and the Collateral Agent may cause to be executed and delivered any documents and releases which the Collateral Agent determines to be necessary. The appointment of the Collateral Agent as such Debtor’s
attorney, and each and 
  

 4 

 every one of the Collateral Agent’s and Secured Parties’ rights and powers, being coupled with an interest, is
irrevocable and shall remain in full force and effect until all of the Indebtedness has been fully repaid and the other Obligations satisfied and the Collateral Agent renounces such appointment. 
 (c) No Violation. The execution and delivery of this Security Agreement does not violate any law or agreement governing any Debtor or to which any
Debtor is a party, and the Debtors’ certificates or articles of incorporation and bylaws or other organizational documents do not prohibit any term or condition of this Security Agreement. The execution and delivery hereof is in the interest of
each of the Debtors. 
 (d) Enforceability of Collateral. With respect to the Accounts, and General Intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and complies in all material respects with applicable laws concerning form, content and manner of preparation and execution, and, to the best of the knowledge of the Debtors, all persons
appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral, except as such enforcement may be limited by bankruptcy, insolvency, moratorium, fraudulent
conveyance or other laws applicable to creditors’ rights generally and by generally applicable equitable principles, whether considered in an action at law or in equity. 
 (e) Accounts. All Accounts existing as of the date hereof are good and valid Accounts representing an undisputed, bona fide indebtedness incurred
by the Account Debtors, and there exists no set-offs or counterclaims against any such Accounts and no agreements under which any deductions or discounts may be claimed with any Account Debtor except as disclosed to the Collateral Agent and the
Secured Parties in writing. 
 (f) Removal of Collateral; Transactions Involving Collateral. To the extent the Collateral consists of
Accounts, General Intangibles, Negotiable Collateral or Debtors’ Books the records and other documents pertaining to the Collateral shall be kept at the principal office of the Debtor that owns such collateral, or at such other locations as are
reasonably acceptable to the Collateral Agent. Except as provided below, the Debtors shall keep the non-mobile tangible Collateral at the location(s) at which they are kept specified on Schedule A and shall maintain any certificate of title of any
tangible Collateral in the same jurisdiction as indicated on Schedule A. Except for transactions in the ordinary course of business in accordance with past practice or for sales or dispositions on arm’s length terms and for fair equivalent
value, the Debtors shall not sell, offer to sell, or otherwise transfer, dispose of or encumber any tangible Collateral. Without the prior written consent of the Secured Parties, Debtors shall not sell, offer to sell, or otherwise transfer, dispose
of or encumber any intangible Collateral other than pursuant to license agreements made in the ordinary course of Debtor’s business and consistent with past business practice. Without the prior written consent of the Secured Parties, no
Collateral that is located in the United States shall be moved outside of the United States. 
 (g) Title. As of the date hereof, the
Debtors hold good and marketable title to all the Collateral, free and clear of all liens and encumbrances except for the lien of this Security Agreement and Permitted Liens (as defined in the Loan Agreement). No financing statement or other
evidence of a lien or transfer covering any of the Collateral is on file in any public office in 
  

 5 

 any jurisdiction other than those which reflect the security interest created by this Security Agreement or Permitted
Liens. The Debtors shall defend the Collateral Agent’s and Secured Parties’ rights in the Collateral against any and all claims and demands. 
 (h) Prepayments. None of the Collateral has been prepaid by any Account Debtor for any Accounts. 
 (i) Collateral Schedules and Locations. On a monthly basis, the Debtors shall deliver to the Collateral Agent schedules of the Collateral, including such information as the Collateral Agent may require, including without limitation
names and addresses of Account Debtors, the location of mobile goods or changes in any certificates of title and descriptions of any after-acquired general intangibles. The Debtors represent and warrant to the Collateral Agent and the Secured
Parties that Schedule A is true, accurate and complete in all material respects and shall be updated monthly by the Debtors to reflect any changes thereto. 
 (j) Application of Payments Received With Respect to Collateral. Unless an Event of Default (as defined in Section 4 below) has occurred and is continuing, any amounts received by or on behalf of any
Debtor with respect to any Account pledged as Collateral hereunder may be used by such Debtor in the ordinary course of its business. Following the occurrence and during the continuance of an Event of Default, any amounts received by or on behalf of
any Debtor with respect to any Account shall be applied in the following order: (i) costs and expenses of the Collateral Agent and the Secured Parties reasonably incurred in connection with collecting the Indebtedness and enforcing this
Agreement and the Transaction Documents; (ii) accrued and unpaid interest due and owing on the Indebtedness as of such date; (iii) unpaid principal due and owing with respect to the Indebtedness as of such date; and (iv) any excess to
the Debtors or other party or parties in accordance with applicable law or court order. 
 (k) Possession and Collection of Accounts.
Following an Event of Default and during the continuance thereof or following acceleration of any Indebtedness, the records and documents evidencing the Accounts pledged as Collateral hereunder shall, upon the Collateral Agent’s request, be
delivered to the Collateral Agent or its agent and held in accordance with the terms of this Security Agreement. 
 (l) Maintenance and
Inspection of Collateral. The Debtors shall maintain or cause to be maintained all tangible Collateral in good condition and repair except for ordinary wear and tear. The Debtors will not commit or permit damage to or destruction of the
Collateral or any part of the Collateral. The Collateral Agent and its designated representatives and agents shall have the right at all reasonable times, upon reasonable advance notice, to examine, inspect, and audit the Collateral wherever located
and the books, records or any property which is otherwise used in connection with the Collateral. The Debtors shall immediately notify the Collateral Agent of all material cases involving the return, rejection, repossession, loss or damage of or to
any Collateral; of any request for credit or adjustment or of any other dispute arising with respect to the Collateral; and generally of all happenings and events materially adversely affecting the Collateral or the value or the amount of the
Collateral. 
 (m) Taxes, Assessments and Liens. The Debtors will pay when due all taxes, assessments and liens upon the Collateral,
its use or operation and upon the Transaction 
  

 6 

 Documents. A Debtor may withhold any such payment or may elect to contest any lien if such Debtor is in good faith
conducting an appropriate proceeding to contest the obligation to pay and so long as the Collateral Agent’s and Secured Parties’ interest in the Collateral is not jeopardized in the Collateral Agent’s sole reasonable opinion. If any
of the Collateral is subjected to a lien which is not discharged or bonded, or the enforcement thereof stayed (in either case without granting any security interests in any of the assets of any Debtor) within fifteen (15) days or such longer
period as is provided by applicable law, but not to exceed thirty (30) days, the Debtors shall deposit with the Collateral Agent cash, a sufficient corporate surety bond or other security satisfactory to the Collateral Agent (in its discretion)
in an amount adequate to provide for the discharge of the lien plus any interest, reasonable costs, attorneys’ fees or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any contest the Debtor or Debtors
shall defend itself or themselves, the Secured Parties and the Collateral Agent and shall satisfy any final adverse judgment before enforcement against the Collateral. The Debtors shall name the Collateral Agent as an additional obligee under any
surety bond furnished in such contest proceedings. 
 (n) Incorporation by Reference. The Debtors hereby restate and affirm all
representations, warranties and agreements contained in the other Transaction Documents (as of each date and time such representations and warranties are made under each of the other Transaction Documents), the terms and conditions of which are
hereby incorporated herein by reference. 
 (o) Compliance With Governmental Requirements. The Debtors shall comply promptly with all
laws, ordinances and regulations of all governmental authorities applicable to the production, disposition, or use of the Collateral. The Debtors may contest in good faith any such law, ordinance or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as the Collateral Agent’s interest in the Collateral, in the Collateral Agent’s sole reasonable opinion, is not jeopardized. 
 (p) Insurance. The Debtors shall maintain insurance with respect to their assets and businesses that is customary for other similarly situated
companies. 
 (q) The Debtors’ Right to Possession and to Collect Accounts. Except as otherwise provided herein, until the
occurrence of an Event of Default or acceleration of Indebtedness, the Debtors may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Security
Agreement or the other Transaction Documents, provided that the Debtors’ right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by the Collateral Agent is required by law to perfect the
Collateral Agent’s and Secured Parties’ security interest in such Collateral. At any time an Event of Default exists or following acceleration of Indebtedness, the Collateral Agent may exercise its right to directly collect the Accounts
and to notify Account Debtors to make payments directly to the Collateral Agent for application to the Indebtedness, and the Debtors authorize and direct the Account Debtors, if the Collateral Agent exercises such right, to make payments on the
Accounts to the Collateral Agent. If the Collateral Agent at any time has possession of any Collateral, whether before or after an Event of Default, the Collateral Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if the Collateral Agent takes such action for that purpose as the Debtors shall 
  

 7 

 reasonably request or as the Collateral Agent, in the Collateral Agent’s sole reasonable discretion, shall deem
appropriate under the circumstances, but failure to honor any request by the Debtors shall not of itself be deemed to be a failure to exercise reasonable care. The Collateral Agent shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or maintain any security interest given to secure the Collateral. The Collateral Agent shall have the right to direct who shall collect and service the Accounts in accordance
with reasonable commercial practices. 
 (r) Transactions with Others. After the occurrence and during the continuation of any Event
of Default, the Collateral Agent may (i) extend the time for payment or other performance, (ii) grant a renewal or change in terms or conditions, or (iii) compromise, compound or release any obligation with an Account Obligor as the
Collateral Agent deems advisable, without obtaining the prior written consent of the Debtors, and no such act or failure to act shall affect the Collateral Agent’s or Secured Parties’ rights against the Debtors or the Collateral.

 (s) Expenditures by the Collateral Agent. If not discharged or paid when due, and provided that such items have not been contested
as permitted herein, the Collateral Agent may (but shall not be obligated to) discharge or pay any amounts required to be discharged or paid by the Debtors under this Security Agreement, including without limitation all taxes, liens, security
interests, encumbrances, and other claims, at any time levied or placed on the Collateral. The Collateral Agent also may (but shall not be obligated to) pay all reasonable costs for insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by the Collateral Agent for such purposes will then bear interest at the then rate charged under the Notes from the date incurred or paid by the Collateral Agent to the date of repayment by the Debtors. All such
expenses shall become a part of the Indebtedness and, at the Collateral Agent’s option, will (i) be payable on demand or (ii) upon notice to Debtors be added to the balance of the Notes becoming a part of the outstanding principal
amount due and payable on the maturity date of the Notes. This Security Agreement also will secure payment of these amounts. Such right under this subsection shall be in addition to all other rights and remedies to which the Collateral Agent and the
Secured Parties may be entitled upon the occurrence of an Event of Default. 
 (t) Sale or Factoring of Accounts; Release of Accounts.
Except with respect to Permitted Liens (as defined in the Loan Agreement), or as otherwise expressly permitted herein, the Debtors shall not sell or otherwise transfer or encumber any of the Accounts, or other Collateral without the Collateral
Agent’s written consent. It is expressly agreed that the Collateral Agent is under no obligation to grant such a consent and will do so only in its sole and absolute discretion on terms and conditions they deem acceptable in their sole and
absolute discretion. 
 (u) In the event that in the future, any Collateral is held by subsidiaries, affiliates or joint ventures of the
Debtors who are not a party to this Agreement, then the Debtors shall cause such entities to grant the Collateral Agent an exclusive first priority lien in such Accounts and Inventory, to cause such entities to enter into security agreements
reasonably satisfactory to the Collateral Agent and the Secured Parties, and to take all actions necessary to perfect such security interests. 
  

 8 

 (v) Debt. The Company has no Debt other than Debt created under the Transaction Documents or as
disclosed on Schedule 3(v) hereto. None of the Subsidiaries have any Debt other than that disclosed on Schedule 3(v) hereto. 
 (w)
Monthly Compliance Certificate. On the last business day of each calendar month, the Company shall deliver to the Collateral Agent a certificate executed by the Chief Financial Officer of the Company stating that each of the representations
made by the Debtors in this Security Agreement are true as of the date of such certificate and no default or Event of Default has occurred under this Security Agreement. 
 (x) Additional Guarantors. The Company shall cause each of its subsidiaries formed or acquired on or subsequent to the date hereof to deliver a guarantee to the Secured Parties substantially in the form of the
Subsidiary Guarantees being delivered on the date hereof. 
 SECTION 4. Events of Default; Remedies. 
 Events of Default. Each of the following shall constitute an Event of Default under this Security Agreement: 
 (a) Event of Default under the 2002 Notes, 2003 Notes, July 2004 Notes, November 2004 Notes or the June 2006 Notes. An Event of Default shall have
occurred under the 2002 Notes, 2003 Notes, July 2004 Notes, November 2004 Notes, June 2006 Notes, the Loan Agreement or the Securities Purchase Agreement between the Company and the Secured Parties entered into as of the date hereof. 
 (b) Other Defaults. Failure of any Debtor to comply with or to perform when due or required (after the expiration of any applicable stated cure
periods) any term, obligation, covenant or condition contained in this Security Agreement. 
 (c) False Statements. Any warranty,
representation or statement made or furnished to the Collateral Agent or the Secured Parties by or on behalf of the Debtors under this Security Agreement or any certificate or schedule required thereby is false or misleading in any material respect,
either now or at the time made or furnished. 
 (d) Defective Collateralization. This Security Agreement ceases to be in full force
and effect at any time and for any reason (other than by reasons caused solely by actions of the Collateral Agent); or the security interest intended to be created by this Security Agreement is not created and perfected, or such security interest
ceases to be valid and perfected at any time and for any reason. 
 (e) Material Adverse Change. The Secured Parties shall have
determined in good faith (which determination shall be conclusive) that a material adverse change has occurred in the condition, value or operation of a material portion of the Collateral. 
 SECTION 5. Rights and Remedies on Default. If an Event of Default occurs and is continuing under this Security Agreement, at any time
thereafter, the Collateral Agent and the Secured Parties shall have all the rights of a secured party under the New York Uniform Commercial Code. In addition and without limitation, the Collateral Agent and the Secured Parties may exercise any one
or more of the following rights and remedies: 
 (a) Accelerate Indebtedness. The Collateral Agent may declare the entire Indebtedness
immediately due and payable, without notice. 
  

 9 

 (b) Assemble Collateral. The Collateral Agent may require the Debtors to deliver to the Collateral
Agent all or any portion of the Collateral and other documents relating to the Collateral. The Collateral Agent may require the Debtors to assemble the Collateral and make it available to the Collateral Agent at a place to be designated by the
Collateral Agent. The Collateral Agent also shall have full power to enter upon the property of the Debtors to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Security Agreement at the time of
repossession, the Debtors agree that the Collateral Agent may take such other goods, provided that the Collateral Agent makes reasonable efforts to return them to the Debtors after repossession. 
 (c) Sell the Collateral. The Collateral Agent shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds
thereof in its own name or that of the Debtors. The Collateral Agent may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or is of a type customarily sold on a recognized market, the
Collateral Agent will give the Debtors reasonable notice of the time after which any private sale or any other intended disposition of the Collateral is to be made. The requirements of reasonable notice shall be met if such notice is given at least
ten (10) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall
become a part of the Indebtedness secured by this Security Agreement and shall be payable on demand, with interest at the lower of twenty percent (20%) per annum or the highest rate permitted by law from date of expenditure until repaid.

 (d) Foreclosure. Maintain a judicial suit for foreclosure and sale of the Collateral. 
 (e) Appoint Receiver. To the extent permitted by applicable law, the Collateral Agent shall have the following rights and remedies regarding the
appointment of a receiver: (i) the Collateral Agent may have a receiver appointed as a matter of right, (ii) the receiver may be an employee of the Collateral Agent and may serve without bond, and (iii) all fees of the receiver and
the receiver’s attorney shall become part of the Indebtedness secured by this Security Agreement and shall be payable on demand, with interest at the lower of twenty percent (20%) per annum or the highest rate permitted by law from date of
expenditure until repaid. 
 (f) Transfer Title. Effect transfer of title upon sale of all or part of the Collateral. For this
purpose, the Debtors irrevocably appoint the Collateral Agent, acting singly, as its attorneys-in-fact to execute endorsements, assignments and instruments in the name of the Debtors as shall be necessary or reasonable. With respect to any such
transfer of trademarks, the applicable Debtor hereby transfers all goodwill associated therewith. 
 (g) Collect Revenues, Apply
Accounts. The Collateral Agent, either itself or through a receiver, may collect the payments, rents, income, and revenues from the Collateral. The 
  

 10 

 Collateral Agent may at any time in its discretion transfer any Collateral into its own names or that of its nominees and
receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as the Collateral Agent may determine. The Collateral Agent may
demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as the Collateral Agent may determine, whether or not the Indebtedness is then due. For these purposes, the Collateral Agent may, on behalf of
and in the name of the Debtors, open and dispose of mail addressed to any Debtor; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, instruments and items pertaining to
payment, shipment or storage of any Collateral. To facilitate collection, the Collateral Agent may, notify Account Debtors and obligors on any Collateral to make payments directly to the Collateral Agent. 
 (h) Obtain Deficiency. If the Collateral Agent chooses to sell any or all of the Collateral and/or pursue any other remedy available hereunder,
under any other agreement, at law or in equity, the Collateral Agent may obtain a judgment against the Debtors for any deficiency remaining on the Indebtedness due to the Secured Parties after application of all amounts received from the exercise of
the rights provided in this Security Agreement. The Debtors shall be liable for a deficiency even if the transaction described in this Subsection is a sale of accounts or chattel paper. 
 (i) Application of Proceeds. The proceeds of any foreclosure or realization upon the Collateral shall be applied: 
  

	 	(i)	First, to the costs and expenses of collection; 

  

	 	(ii)	Second, to overdue interest; 

  

	 	(iii)	Third, to the outstanding principal amount of the Indebtedness; and 

  

	 	(iv)	Fourth, any excess to the Debtors or other party or parties in accordance with applicable law or court order. 

 (j) Other Rights and Remedies. The Collateral Agent and the Secured Parties shall have all the rights and remedies of a secured creditor under the
provisions of the New York Uniform Commercial Code, as may be amended from time to time. In addition, the Collateral Agent and the Secured Parties shall have and may exercise any or all rights and remedies they may have available at law, in equity,
or otherwise. 
 SECTION 6. Cumulative Remedies. All of the Collateral Agent’s and the Secured Parties’ rights and
remedies, whether evidenced by this Security Agreement, or the other Transaction Documents or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by the Collateral Agent or the Secured Parties to
pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of a Debtor under this Security Agreement, after such Debtor’s failure to perform, shall not affect
the Collateral Agent’s and Secured Parties’ right to declare a default and to exercise their remedies. 
  

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 SECTION 7. Pledged Securities. 
 (a) So long as no Event of Default shall have occurred and be continuing: 
 (i) The Debtors shall be entitled to exercise any and all voting and other consensual rights pertaining to the Pledged Securities or any part thereof for any purpose not inconsistent with the terms of this Security
Agreement or the Transaction Documents; provided, however, that the Debtors shall not exercise or refrain from exercising any such right if such action would have a material adverse effect on the value of the Pledged Securities or any part thereof;
and provided further that the Debtors shall give the Collateral Agent at least five days’ prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right. 
 (ii) The Debtors shall be entitled to receive and retain any and all dividends and interest paid in respect of the Pledged Securities; provided, however,
that any and all 
 (A) (I) dividends and other distributions paid or payable in cash in respect of any Pledged
Securities in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, (II) cash paid, payable or otherwise distributed in respect of principal of, or in
redemption of, or in exchange for, any Pledged Securities or (III), cash dividends resulting from transactions outside the ordinary course of business, shall be used to prepay first the June 2006 Notes, then the November 2004 Notes, then the July
2004 Notes, then the 2003 Notes, then the 2002 Notes (on a pro rata basis based on the Principal Amount (as defined in the June 2006 Notes, November 2004 Notes, July 2004 Notes, 2003 Notes and 2002 Notes, as applicable) outstanding on each such
Note), or 
 (B) dividends and interest paid or payable other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Securities shall be, and shall be forthwith delivered to the Collateral Agent to hold as, Collateral and shall, if received by the Debtors, be received in
trust for the benefit of the Secured Parties, be segregated from the other property or funds of the Debtors and be forthwith delivered to the Collateral Agent as Collateral in the same form as so received (with any necessary endorsement).

 The Debtors, promptly upon the request of the Collateral Agent, shall execute such documents and do such acts as may be necessary or
desirable in the reasonable judgment of the Collateral Agent to give effect to this Section 7(a)(ii). 
 (iii) The Debtors shall deliver
to the Collateral Agent any distribution consisting of Subsidiary Securities or Further Securities immediately upon receipt, together with executed stock powers and corporate resolutions authorizing the transfer of title of such shares after an
Event of Default pursuant to the terms of this Security Agreement. 
 (iv) The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Debtors all such proxies and other instruments as Debtors may reasonably 
  

 12 

 request for the purpose of enabling the Debtors to exercise the voting and other rights that it is entitled to exercise
pursuant to clause (i) above and to receive the dividends or interest payments that it is authorized to receive and retain pursuant to clause (ii) above. 
 (b) Upon the occurrence and during the continuance of an Event of Default: 
 (i) All rights of Debtors
(x) to exercise or refrain from exercising the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to Debtors by the Secured Parties, cease and (y) to
receive the dividends and interest payments that it would otherwise be authorized to receive and retain pursuant to Section 7(a)(ii) shall automatically cease, and all such rights shall thereupon become vested in the Collateral Agent, which
shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights and to receive and hold as Pledged Securities such dividends, interest payments and other distributions. For the avoidance of doubt,
the Collateral Agent is hereby granted an irrevocable proxy coupled with an interest to exercise all voting power with respect to the Subsidiary Securities and/or the Further Securities, effective upon the occurrence of an Event of Default.

 (ii) All dividends, interest payments and other distributions that are received by the Debtors contrary to the provisions of clause
(i) of this Section 7(b) shall be received in trust for the benefit of the Secured Parties, shall be segregated from other funds of Debtors and shall be forthwith paid over to the Collateral Agent as Collateral in the same form as so
received (with any necessary endorsement). 
 SECTION 8. The Collateral Agent’s Duties. 
 (a) Other than as specified in this Security Agreement and any amendment hereto, the Collateral Agent shall not be required to take or refrain from taking
any actions, to exercise or refrain from exercising any rights, or to make or refrain from making any requests unless it shall first receive proper instructions from Secured Parties holding at least 75% of the outstanding principal amount of the
Obligations (or their respective successors or assigns). 
 (b) The Collateral Agent shall hold all Collateral received by it, and shall make
disposition thereof, only in accordance with this Security Agreement or any amendment thereto. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Securities, whether or not the Collateral Agent or any of the
Secured Parties has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Collateral. 
 (c) The Collateral Agent shall not be under any duty or obligation to inspect, review or examine any document, instrument, certificate, agreement or
other papers to determine that they are enforceable or that they are other than what they purport to be on their face. The Collateral Agent shall hold any Collateral delivered to the Collateral Agent as the agent of the and for the benefit of each
Secured Party, without preference as to any Secured Party. 
  

 13 

 (d) The duties and obligations of the Collateral Agent shall be determined solely by the express
provisions of this Security Agreement or any amendment hereto or any instructions permitted hereby. The Collateral Agent shall have no obligation with respect to any other matters covered in any other document other than as expressly provided
herein, or any amendment hereto. The Collateral Agent shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Security Agreement or as set forth in a written amendment to this Security
Agreement executed by the parties hereto or their successors or assigns. No representations, warranties, covenants or obligations of the Collateral Agent or any Secured Party shall be implied with respect to this Agreement or the Collateral
Agent’s services hereunder. Without limiting the generality of the foregoing, the Collateral Agent: 
 (i) shall use the same degree of
care and skill as a reasonably prudent person would use in similar circumstances (without limiting the generality of the foregoing, the Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property of like tenor); 
 (ii) shall not be obligated to take any legal action hereunder that might in its reasonable judgment involve any expense or liability unless it has been furnished with reasonable indemnity from the Secured Parties;

 (iii) may rely on and shall be protected in acting in good faith upon any certificate, instrument, opinion, notice, letter, telegram or
other document, or any security, delivered to it and in good faith believed by it to be genuine and to have been signed by the proper party or parties; 
 (iv) may rely on and shall be protected in acting in good faith upon the written instructions of Secured Parties holding at least 75% of the outstanding principal amount of the Obligations; 
 (v) may consult its own independent counsel satisfactory to it and the opinion of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered, or omitted by it hereunder in good faith and in furtherance of its duties hereunder, in accordance with the opinion of such counsel; 
 (vi) may execute any of the powers hereunder or perform any duties hereunder either directly or through agents or attorneys; and 
 (vii) will be regarded as making no representation and having no responsibilities (except as expressly set forth herein) as to the validity, sufficiency,
value, genuineness, ownership or transferability of any portion of the Collateral, and will not be required to and will not make any representations as to the validity, value or genuineness of any portion of the Collateral. 
 (e) Neither the Collateral Agent nor any of its partners, agents or employees, shall be liable for any error in judgment, for any mistake of fact or for
any action taken or omitted to be taken by it or them hereunder or in connection herewith in good faith and believed by it or them to be within the purview of this Security Agreement, except for its or their own gross negligence, 
  

 14 

 lack of good faith or willful misconduct. In no event shall the Collateral Agent or its partners, officers, agents and
employees be held liable for any special, indirect or consequential damages resulting from any action taken or omitted to be taken by it or them hereunder in connection herewith even if advised of the possibility of such damages. 
 (f) Whenever, in the administration of this Security Agreement, the Collateral Agent reasonably shall deem it necessary that a matter be proved or
established prior to taking, suffering or omitting any action under this Security Agreement, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a
certificate of the Secured Parties, and such certificate shall be full warranty to the Collateral Agent for any action taken, suffered or omitted under the provisions of this Agreement, upon the faith thereof. 
 SECTION 9. Miscellaneous Provisions. 
 (a) Entire Agreement; Amendments. This Security Agreement, together with the other Transaction Documents, constitute the entire understanding and agreement of the parties as to the matters set forth in this Security Agreement. No
alteration of or amendment to this Security Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. 
 (b) CHOICE OF LAW AND VENUE; MUTUAL JURY TRIAL WAIVER. THE VALIDITY OF THIS SECURITY AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT,
AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. 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. EACH DEBTOR, THE COLLATERAL AGENT AND THE SECURED PARTIES 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 9(b). EACH DEBTOR, THE COLLATERAL AGENT AND THE SECURED PARTIES HEREBY WAIVES THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SECURITY AGREEMENT OR ANY OF THE ACTIONS CONTEMPLATED HEREIN, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH DEBTOR, THE COLLATERAL AGENT AND THE SECURED PARTIES REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 
  

 15 

 (c) Attorneys’ Fees; Expenses. The Debtors agree to pay, jointly and severally upon demand,
all of the Collateral Agent’s and Secured Parties’ costs and expenses, including without limitation reasonable attorneys’ fees and legal expenses, incurred in connection with the enforcement of this Security Agreement. The Collateral
Agent or any Secured Party may pay someone else to help enforce this Security Agreement, and the Debtors shall pay the costs and expenses of such enforcement. Costs and expenses include without limitation the Collateral Agent’s and Secured
Parties’ reasonable attorneys’ fees and legal expenses whether or not there is a lawsuit, reasonable attorneys’ fees and legal expenses for bankruptcy proceedings (and including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services. The Debtors also shall pay all court costs and such additional fees as may be directed by the court. 
 (d) Caption Headings. Caption headings in this Security Agreement are for convenience purposes only and are not to be used to interpret or define
the provisions of this Security Agreement. 
 (e) Notices. All notices required to be given under this Security Agreement shall be
given in writing and shall be effective when actually delivered or two (2) days after being deposited in the United States mail, first class, postage prepaid, addressed to the party to whom the notice is to be given or, if via facsimile, when
sent via facsimile transmission to the party to whom the notice is to be given and confirmation of such transmission has been received, at the address and/or facsimile number shown below: 
 If to Elliott or the Collateral Agent: 
 Manchester Securities Corporation 
 712 Fifth Avenue, 36th Floor 
 New York, New York 10019 
 Telephone: (212) 974-6000 
 Facsimile:
(212) 974-2092 
 Attention: Dave Miller 
 With a copy to: 
 Kleinberg, Kaplan, Wolff & Cohen, P.C. 
 551 Fifth Avenue, 18th Floor 
 New York, New
York 10176 
 Telephone: (212) 986-6000 
 Facsimile: (212) 986-8866 
 Attention: Lawrence D. Hui, Esq. 
  

 16 

 If to Alexander: 
 Alexander Finance, LP 
 1560 Sherman Avenue 
 Evanston, Illinois 
 Telephone:
(847) 733-0232 
 Facsimile: (847) 733-0339 
 Attention: Bradford T. Whitmore 
 With a copy to: 
 Sachnoff & Weaver 
 30 S. Wacker
Drive 
 Chicago, Illinois 60606 
 Telephone: (312) 207-3879 
 Facsimile: (312) 207-6400 
 Attention: Evelyn C. Arkebauer, Esq. 
 If to
the Company or a Subsidiary: 
 ISCO International, Inc. 
 1001 Cambridge Drive 
 Elk Grove Village, Illinois 60007 
 Telephone: (847) 391-9400 
 Facsimile:
(847) 391-5015 
 Attention:: Frank Cesario 
 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. 
 Any party may change its address for notices under this Security
Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party’s address. For notice purposes, the Debtors agrees to keep the Collateral Agent informed at all times of the
Debtors’ current addresses. 
 (f) Severability. The parties acknowledge and agree that the Collateral Agent and the Secured
Parties are not agents or partners of each other, that all representations, warranties, covenants and agreements of the Collateral Agent and the Secured Parties hereunder are several and not joint, that the Collateral Agent and the Secured Parties
shall not have any responsibility or liability for the representations, warranties, agreements, acts or omissions of the other and that any rights granted to the Collateral Agent and the Secured Parties hereunder shall be enforceable by each of the
Collateral Agent and the Secured Parties hereunder. If a court of competent jurisdiction finds any provision of this Security Agreement to be invalid or unenforceable as to 
  

 17 

 any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons
or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken, and all other
provisions of this Security Agreement in all other respects shall remain valid and enforceable and such offending provision shall not be affected in any other jurisdiction. 
 (g) Successor Interests. Subject to the limitations set forth above on transfer of the Collateral, this Security Agreement shall be binding upon
and inure to the benefit of the parties, their successors and assigns to the extent permitted by Section 5.6 of the Loan Agreement. The Debtors shall not, however, have the right to assign this Security Agreement without the prior written
consent of the Secured Parties which may be withheld for any reason in the Secured Parties’ sole discretion. 
 (h) Waiver. The
Collateral Agent and the Secured Parties shall not be deemed to have waived any rights under this Security Agreement unless such waiver is given in writing and signed by the Collateral Agent and the Secured Parties. No delay or omission on the part
of the Collateral Agent or Secured Parties in exercising any right shall operate as a waiver of such right or any other right. A waiver by the Collateral Agent or Secured Parties of a provision of this Security Agreement shall not prejudice or
constitute a waiver of the Collateral Agent’s or the Secured Parties’ right otherwise to demand strict compliance with that provision or any other provision of this Security Agreement. No prior waiver by the Collateral Agent or Secured
Parties, nor any course of dealing between the Secured Parties and the Debtors, shall constitute a waiver of any of the Collateral Agent’s or the Secured Parties’ rights or of any of the Debtors’ obligations as to any future
transactions. Whenever the consent of the Collateral Agent and/or the Secured Parties is required under this Security Agreement, the granting of such consent in any instance shall not constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted or withheld in the sole discretion of the Collateral Agent and/or the Secured Parties. 
 (i) Indemnity. The Debtors agree, jointly and severally, to indemnify, pay and hold the Collateral Agent, each Secured Party and the officers, partners, directors, employees, agents and affiliates thereof
(collectively, the “indemnitees”) harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel) that may be imposed on, incurred by, or asserted against any indemnitee, in any manner relating to or arising out of this Security Agreement and any action undertaken
or contemplated hereby. This indemnification shall survive the satisfaction and payment of the Indebtedness and termination of this Security Agreement. 
 (j) Subsidiary Liability. Notwithstanding anything in this Security Agreement to the contrary, each Subsidiary’s obligations hereunder shall not exceed the maximum amount that would not be subject to
avoidance under fraudulent conveyance, fraudulent transfer, and other similar laws. 
 (k) No Subrogation. Notwithstanding any payment
made by any Debtor hereunder or any set-off or application of funds of any Debtor by the Secured Parties, no Debtor shall be 
  

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 entitled to be subrogated to any of the rights of the Secured Parties against a Debtor or any collateral security or
guarantee or right of offset held by the Secured Parties for the payment of the Indebtedness, nor shall any Debtor seek or be entitled to seek any contribution or reimbursement from another Debtor in respect of payments made by such Debtor
hereunder, until all amounts owing to the Secured Parties by the Debtors under any Transaction Documents are paid in full. If any amount shall be paid to any Debtor on account of such subrogation rights at any time when any such amounts shall not
have been paid in full, such amount shall be held by such Debtor in trust for the Secured Parties, segregated from other funds of such Debtor, and shall, forthwith upon receipt by such Debtor, be turned over to the Secured Parties in the exact form
received by such Debtor (duly indorsed by such Debtor to Secured Parties, if required), to be applied against the Indebtedness of the Debtors under the Transaction Documents, whether matured or unmatured, in such order as the Secured Parties may
determine. 
 (l) The actions of the holders of 75% of the outstanding principal amount of the Obligations shall be deemed the actions of
Secured Parties for purposes of giving any notice or enforcing any rights or remedies. 
 [Signature Page Follows] 
  

 19 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their
respective officers thereunto duly authorized, as of the date first above written. 
  

			
	ISCO INTERNATIONAL, INC.
		
	By:	    	 /s/ John Thode

	Name:	    	John Thode
	Title:	    	Chief Executive Officer
	
	SPECTRAL SOLUTIONS, INC.
		
	By:	    	 /s/ John Thode

	Name:	    	John Thode
	Title:	    	CEO
	
	ILLINOIS SUPERCONDUCTOR CANADA CORPORATION
		
	By:	    	 /s/ John Thode

	Name:	    	John Thode
	Title:	    	CEO
	
	MANCHESTER SECURITIES CORPORATION
		
	By:	    	 /s/ Elliot Greenberg

	Name:	    	Elliot Greenberg
	Title:	    	Vice President
	
	ALEXANDER FINANCE, L.P.
		
	By:	    	 /s/ Bradford Whitmore

	Name:	    	Bradford Whitmore
	Title:	    	President, Bun Partners
	its:	    	General Partner
	
	COLLATERAL AGENT:
	
	MANCHESTER SECURITIES CORPORATION
		
	By:	    	 /s/ Elliot Greenberg

	Name:	    	Elliot Greenberg
	Title:	    	Vice President

  

 20 

 SCHEDULE A 
 Identification, Ownership and Location of Collateral and Liens

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