Document:

ex109.htm

    Exhibit
      10.9

    
 

    NEITHER
      THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE
      UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
      PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
      PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
      THE
      REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

    

    THIS
      NOTE
      DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A PARTIAL
      REDEMPTION OR CONVERSION.  AS A RESULT, FOLLOWING ANY REDEMPTION OR
      CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL AMOUNT
      REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL AMOUNT AND ACCRUED
      INTEREST SET FORTH BELOW.

    

    

    AMENDED
      AND RESTATED

    

    7%
      SENIOR SECURED CONVERTIBLE NOTE
      DUE AUGUST 1, 2009

    

    OF

    

    ISCO
      INTERNATIONAL, INC.

    

    

    Note
      No.:
      F-8 Current Principal Amount $550,000.00

    Original
      Issuance Date: October 23, 2002 Elk Grove Village, Illinois

    Amended
      & Restated Issuance Date: June 26, 2007

    

    

    This
      AMENDED AND RESTATED Note (“Note”) is one of a duly authorized issue of notes of
      ISCO INTERNATIONAL, INC., a corporation duly organized and existing under the
      laws of the State of Delaware (the “Company”), originally designated as part of
      the Company's 91⁄2% Secured Grid Notes due March 31, 2004, as amended from time to
      time, and is now amended and restated, with the other notes issued in that
      series and other notes issued pursuant to the Loan Agreement (as defined below),
      as a 7% Senior Secured Convertible Note Due August 1, 2009 (“Maturity Date”) of
      the Company.

     

    For
      Value
      Received, the Company hereby promises to pay to the order of ALEXANDER FINANCE
      L.P. or its registered assigns or successors-in-interest (“Holder”) the
      principal sum of FIVE HUNDRED FIFTY THOUSAND U.S. DOLLARS AND ZERO CENTS (U.S.
      $550,000.00) (representing the principal amount outstanding on the New Issuance
      Date (as defined below), plus all accrued but unpaid interest since October
      23,
      2002), together with all accrued but unpaid interest thereon, if any, on the
      Maturity Date, to the extent such principal amount and interest has not been
      converted into the Company's Common Stock, $0.001 par value per share (the
      “Common Stock”), in accordance with the terms hereof.  Interest on the
      unpaid principal balance hereof shall accrue at the rate of 7% per annum from
      the amended and restated issuance date of this Note, June 26, 2007 (the “New
      Issuance Date”), until the same becomes due and payable on the Maturity Date, or
      such earlier date upon acceleration or by conversion or redemption in accordance
      with the terms hereof or of the other Transaction Documents.  Interest
      on this Note shall accrue daily commencing on the New Issuance Date, shall
      be
      compounded monthly and shall be computed on the basis of a 360-day year, 30-day
      months and actual days elapsed and shall be payable in accordance with Section
      1
      hereof; provided, however, that nothing in the foregoing shall be deemed to
      modify the calculation of the Principal Amount based on a different rate of
      interest applied prior to the New Issuance Date.  Notwithstanding
      anything contained herein, this Note shall bear interest on the due and unpaid
      Principal Amount from and after the occurrence and during the continuance of
      an
      Event of Default pursuant to Section 5(a), at the rate (the “Default Rate”)
      equal to the lower of twenty percent (20%) per annum or the highest rate
      permitted by law.  Unless otherwise agreed or required by applicable
      law, payments will be applied first to any unpaid collection costs, then to
      unpaid interest and fees (including late charges, if applicable) and any
      remaining amount to principal.

     

    Except
      as
      otherwise provided herein, all payments of principal and interest (including
      late charges, if applicable) on this Note shall be made in lawful money of
      the
      United States of America by wire transfer of immediately available funds to
      such
      account as the Holder may from time to time designate by written notice in
      accordance with the provisions of this Note or by Company check.  This
      Note may not be prepaid in whole or in part except as otherwise provided
      herein.  Whenever any amount expressed to be due by the terms of this
      Note is due on any day which is not a Business Day (as defined below), the
      same
      shall instead be due on the next succeeding day which is a Business
      Day.

     

    Capitalized
      terms used herein and not otherwise defined shall have the meanings set forth
      in
      the Amendment Agreement dated on or about the New Issuance Date pursuant to
      which this Note was issued (the “Amendment Agreement”). For purposes hereof the
      following terms shall have the meanings ascribed to them below:

     

    “Business
      Day” shall mean any day other than a Saturday, Sunday or a day on which
      commercial banks in the City of New York are authorized or required by law
      or
      executive order to remain closed.

     

    “Change
      in Control Transaction” will be deemed to exist if (i) there occurs any
      consolidation, merger or other business combination of the Company with or
      into
      any other corporation or other entity or person (whether or not the Company
      is
      the surviving corporation), or any other corporate reorganization or transaction
      or series of related transactions in which in any of such events the voting
      stockholders of the Company prior to such event cease to own 50% or more of
      the
      voting stock, or corresponding voting equity interests, of the surviving
      corporation after such event (including without limitation any “going private”
transaction under Rule 13e-3 promulgated pursuant to the Exchange Act (as
      defined below) or tender offer by the Company under Rule 13e-4 promulgated
      pursuant to the Exchange Act for 20% or more of the Company's Common Stock),
      (ii) any person (as defined in Section 13(d) of the Exchange Act), together
      with
      its affiliates and associates (as such terms are defined in Rule 405 under
      the
      Securities Act), beneficially owns or is deemed to beneficially own (as
      described in Rule 13d-3 under the Exchange Act without regard to the 60-day
      exercise period) in excess of 50% of the Company's voting power, (iii) there
      is
      a replacement of more than one-half of the members of the Company’s Board of
      Directors which is not approved by those individuals who are members of the
      Company's Board of Directors on the date thereof, or (iv) in one or a series
      of
      related transactions, there is a sale or transfer of all or substantially all
      of
      the assets of the Company, determined on a consolidated basis, or (v) the
      execution by the Company of an agreement to which the Company is a party or
      which it is bound providing for an event set forth in (i), (ii), (iii) or (iv)
      above.

     

    “Conversion
      Ratio” means, at any time, a fraction, of which the numerator is the entire
      outstanding Principal Amount of this Note (or such portion thereof that is
      being
      redeemed or repurchased), and of which the denominator is the then applicable
      Conversion Price.

     

    “Conversion
      Price” shall equal $0.20 (which Conversion Price shall be subject to adjustment
      as set forth herein).

     

    “Conversion
      Shares” means the shares of Common Stock into which the Notes are convertible
      (including repayment in Common Stock as set forth herein) in accordance with
      the
      terms hereof and the Amendment Agreement and Loan Agreement.

     

    “Convertible
      Securities” means any convertible securities, warrants, options or other rights
      to subscribe for or to purchase or exchange for, shares of Common
      Stock.

     

    “Debt”
      shall mean indebtedness of any kind.

     

    “Effective
      Date” means the date on which a Registration Statement covering all the
      Conversion Shares and other Registrable Securities (as defined in the
      Registration Rights Agreement) is declared effective by the Securities and
      Exchange Commission.

     

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

     

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

     

    “Loan
      Agreement” shall mean the Third Amended and Restated Loan Agreement, dated as of
      November 10, 2004, as amended, by and among the Company, Manchester Securities
      Corporation and Alexander Finance, L.P.

     

    “Market
      Price” shall equal 90% of the average of the VWAP for each of the twenty (20)
      Trading Days, excluding the five (5) highest Trading Days (i.e.  the
      Trading Days with the highest VWAP) from the average, immediately preceding
      the
      date on which such Market Price is being determined.

     

    “MFN
      Transaction” shall mean a transaction in which the Company issues or sells any
      securities in a capital raising transaction or series of related transactions
      (the “MFN Offering”) which grants to the investor (the “MFN Investor”) the right
      to receive additional securities based upon future capital raising transactions
      of the Company on terms more favorable than those granted to the MFN Investor
      in
      the MFN Offering.

     

    “Per
      Share Selling Price” shall include the amount actually paid by third parties for
      each share of Common Stock in a sale or issuance by the Company.  In
      the event a fee is paid by the Company in connection with such transaction
      directly or indirectly to such third party or its affiliates, any such fee
      shall
      be deducted from the selling price pro rata to all shares sold in the
      transaction to arrive at the Per Share Selling Price.  A sale of
      shares of Common Stock shall include the sale or issuance of rights, options,
      warrants or convertible, exchangeable or exercisable securities, issued or
      sold
      on or subsequent to the Closing Date, under which the Company is or may become
      obligated to issue shares of Common Stock, and in such circumstances the Per
      Share Selling Price of the Common Stock covered thereby shall also include
      the
      exercise, exchange or conversion price thereof (in addition to the consideration
      received by the Company upon such sale or issuance less the fee amount as
      provided above).  In case of any such security issued or sold on or
      subsequent to the Closing Date in an MFN Transaction, the Per Share Selling
      Price shall be deemed to be the lowest conversion or exercise price at which
      such securities are converted or exercised, or the lowest adjustment price
      in
      the case of an MFN Transaction, over the life of such securities.  If
      shares are issued for a consideration other than cash, the Per Share Selling
      Price shall be the fair value of such consideration as determined in good faith
      by independent certified public accountants mutually acceptable to the Company
      and the Purchaser.  In the event the Company directly or indirectly
      effectively reduces the conversion, exercise or exchange price for any
      Convertible Securities issued or sold on or subsequent to the Closing Date
      which
      are currently outstanding (other than pursuant to the terms of the transaction
      documentation for such securities as in effect on the date hereof), then the
      Per
      Share Selling Price shall equal such effectively reduced conversion, exercise
      or
      exchange price.

     

    “Principal
      Amount” shall refer to the sum of (i) the original principal amount of this
      Note, (ii) all accrued but unpaid interest hereunder, and (iii) any default
      payments owing under the Transaction Documents but not previously paid or added
      to the Principal Amount.

     

    “Principal
      Market” shall mean the American Stock Exchange or such other principal market or
      exchange on which the Common Stock is then listed for trading.

     

    “Redemption
      Date” shall mean the date on which the Company has elected to redeem this Note
      pursuant to Section 1(c) below.

     

    “Registration
      Statement” shall have the meaning set forth in the Registration Rights
      Agreement.

     

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

     

    “Trading
      Day” shall mean (x) if the Common Stock is listed on the New York Stock Exchange
      or the American Stock Exchange, a day on which there is trading on such stock
      exchange, or (y) if the Common Stock is not listed on either of such stock
      exchanges but sale prices of the Common Stock are reported on an automated
      quotation system, a day on which trading is reported on the principal automated
      quotation system on which sales of the Common Stock are reported, or (z) if
      the
      foregoing provisions are inapplicable, a day on which quotations are reported
      by
      National Quotation Bureau Incorporated.

     

    “VWAP”
      shall mean the daily volume weighted average price of the Common Stock on the
      Principal Market as reported by Bloomberg Financial L.P. (based on a trading
      day
      from 9:30 a.m. Eastern Time to 4:00 p.m. Eastern Time) using the AQR function
      on
      the date in question.

     

    The
      following terms and conditions shall apply to this Note:

     

    Section
      1.  Payments
      of Principal and Interest.

     

    (a)  Interest.  Subject
      to Section 3(i) below, this Note shall accrue interest at a rate of 7% per
      annum
      daily commencing on the New Issuance Date, shall be compounded monthly and
      shall
      be computed on the basis of a 360-day year, 30-day months and actual days
      elapsed.  Accrued interest shall be added to the Principal Amount of
      this Note.

     

    (b)  Payment
      of Principal.  Subject to the provisions hereof, the Principal
      Amount of this Note shall be due and payable in cash on the Maturity
      Date.

     

    (c)  Redemption
      Right of Company.  Beginning on the two (2) year anniversary of
      the New Issuance Date, the Company shall have the right to redeem this Note
      in
      full (but not less than full) in cash upon delivering notice in writing sixty
      (60) days prior to such Redemption Date.  Nothing in this Section 1(c)
      shall prohibit the Holder from converting this Note prior to the Redemption
      Date.

     

    Section
      2.  Seniority.  The
      obligations of the Company hereunder shall rank pari passu to the Company’s
      notes issued under and governed by the Loan Agreement and the Securities
      Purchase Agreement, dated as of June 22, 2006, by and among the Company and
      the
      Holder and Alexander Finance, L.P. (the “Purchase Agreement”), and shall be
      senior to the Company’s unsecured indebtedness.

     

    Section
      3.  Conversion.

     

    (a)  Conversion
      by Holder.  Subject to the terms hereof and restrictions and
      limitations contained herein, the Holder shall have the right, at such Holder's
      option, at any time and from time to time to convert the outstanding Principal
      Amount under this Note in whole or in part by delivering to the Company a fully
      executed notice of conversion in the form of conversion notice attached hereto
      as Exhibit A (the “Conversion Notice”), which may be transmitted by
      facsimile  or electronic transmission (with the original mailed on the
      same day be certified or registered mail, postage prepaid and return receipt
      requested), on the date of conversion (the “Conversion Date”).  A
      Conversion Notice shall be deemed sent on the date of delivery if delivered
      before 5:00 p.m. Eastern Standard Time on such date, or the day following such
      date if delivered after 5:00 p.m. Eastern Standard
      Time.  Notwithstanding anything to the contrary herein, this Note and
      the outstanding Principal Amount hereunder shall not be convertible into Common
      Stock to the extent that such conversion would result in the Holder hereof
      exceeding the limitations contained in, or otherwise violating the provisions
      of
      Section 3(i) below.

     

    (b)  Conversion
      Date Procedures.  Upon conversion of this Note pursuant to this
      Section 3, the outstanding Principal Amount hereunder shall be converted into
      such number of fully paid, validly issued and non-assessable shares of Common
      Stock, free of any liens, claims and encumbrances, as is determined by dividing
      the outstanding Principal Amount (and, at the election of the Holder, any
      accrued interest or applicable late charges) being converted by the then
      applicable Conversion Price.  If a conversion under this Note cannot
      be effected in full for any reason, or if the Holder is converting less than
      all
      of the outstanding Principal Amount hereunder pursuant to a Conversion Notice,
      the Company shall, upon request by the Holder, promptly deliver to the Holder
      (but no later than five Trading Days after the Conversion Date) a Note for
      such
      outstanding Principal Amount (and, at the election of the Holder, any accrued
      interest or applicable late charges) as has not been converted if this Note
      has
      been surrendered to the Company for partial conversion.  The Holder
      shall not be required to physically surrender this Note to the Company upon
      any
      conversion hereunder unless the full outstanding Principal Amount (and, at
      the
      election of the Holder, any accrued interest or applicable late charges)
      represented by this Note is being converted or repaid.  The Holder and
      the Company shall maintain records showing the outstanding Principal Amount
      (and, at the election of the Holder, any accrued interest or applicable late
      charges) so converted and repaid and the dates of such conversions or repayments
      or shall use such other method, reasonably satisfactory to the Holder and the
      Company, so as not to require physical surrender of this Note upon each such
      conversion or repayment.

     

    (i)  Stock
      Certificates or DWAC.  The Company will deliver to the Holder not
      later than three (3) Trading Days after the Conversion Date, a certificate
      or
      certificates which shall be free of restrictive legends and trading restrictions
      (assuming that the Registration Statement has been declared effective),
      representing the number of shares of Common Stock being acquired upon the
      conversion of this Note.  In lieu of delivering physical certificates
      representing the shares of Common Stock issuable upon conversion of this Note,
      provided the Company's transfer agent is participating in the Depository Trust
      Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon
      request of the Holder, the Company shall use commercially reasonable efforts
      to
      cause its transfer agent to electronically transmit such shares issuable upon
      conversion to the Holder (or its designee), by crediting the account of the
      Holder’s (or such designee’s) prime broker with DTC through its Deposit
      Withdrawal Agent Commission system (provided that the same time periods herein
      as for stock certificates shall apply).  If in the case of any
      conversion hereunder, such certificate or certificates are not delivered to
      or
      as directed by the Holder by the third Trading Day after the Conversion Date,
      the Holder shall be entitled by written notice to the Company at any time on
      or
      before its receipt of such certificate or certificates thereafter, to rescind
      such conversion, in which event the Company shall immediately return this Note
      tendered for conversion.

     

    (c)  Conversion
      Price Adjustments.

     

    (i)  Stock
      Dividends and Splits.  If the Company or any of its subsidiaries, at
      any time while the Notes are outstanding (A) shall pay a stock dividend or
      otherwise make a distribution or distributions on any equity securities
      (including instruments or securities convertible into or exchangeable for such
      equity securities) in shares of Common Stock, or (B) subdivide outstanding
      Common Stock into a larger number of shares, then the applicable then Conversion
      Price shall be multiplied by a fraction, the numerator of which shall be the
      number of shares of Common Stock outstanding before such event and the
      denominator of which shall be the number of shares of Common Stock outstanding
      after such event.  Any adjustment made pursuant to this Section
      3(c)(i) shall become effective immediately after the record date for the
      determination of stockholders entitled to receive such dividend or distribution
      and shall become effective immediately after the effective date in the case
      of a
      subdivision.

     

    (ii)  Distributions.  If
      the Company or any of its subsidiaries, at any time while the Notes are
      outstanding, shall distribute to all holders of Common Stock evidences of its
      indebtedness or assets or cash or rights or warrants to subscribe for or
      purchase any security of the Company or any of its subsidiaries (excluding
      those
      referred to in Section 3(c)(i) above), then concurrently with such distributions
      to holders of Common Stock, the Company shall distribute to holders of the
      Notes
      the amount of such indebtedness, assets, cash or rights or warrants which the
      holders of the Notes would have received had the Notes been converted into
      Common Stock.

     

    (iii)  Common
      Stock Issuances.  In the event that the Company or any of its
      subsidiaries on or subsequent to the date of the Amendment Agreement (A) issues
      or sells any securities which are convertible into or exercisable or
      exchangeable for Common Stock (other than Notes issued under the Loan Agreement
      or Purchase Agreement or shares or options issued or which may be issued
      pursuant to the Company’s 2003 Equity Incentive Plan, as amended (the “Incentive
      Plan”), up to the Incentive Plan Limit (as defined below)), or any warrants or
      other rights to subscribe for or to purchase or any options for the purchase
      of
      its Common Stock, (B) directly or indirectly effectively reduces the conversion,
      exercise or exchange price for any Convertible Securities (other than shares
      or
      options issued or which may be issued pursuant to the Incentive Plan up to
      the
      Incentive Plan Limit) which are currently outstanding (other than pursuant
      to
      terms existing on the date hereof) or (C) issues or sells any Common Stock
      at or
      to an effective Per Share Selling Price which is less than the Conversion Price
      in effect immediately prior to such issue or sale or record date, as applicable,
      then the Conversion Price shall be reduced by multiplying the existing
      Conversion Price by a fraction (x) the numerator of which shall be the sum
      of
      (i) the number of shares of Common Stock outstanding immediately prior to such
      sale or issuance or reduction and (ii) the number of shares of Common Stock
      which the aggregate consideration received by the Company would purchase at
      such
      Conversion Price; and (y) the denominator of which shall be the number of shares
      of Common Stock outstanding (or deemed outstanding, as discussed below)
      immediately after such issue, sale or reduction. effective concurrently with
      such issue or sale to equal such lower Per Share Selling Price.

     

    “Incentive
      Plan Limit” shall mean an amount, with respect to each calendar year, equal to
      2.5% of the number of the Company’s outstanding shares of Common Stock, provided
      that (AA) this amount shall be net of any shares or options issued under the
      Incentive Plan which are cancelled, forfeited, expired or redeemed, and (BB)
      for
      purposes of calculating this amount, restricted shares shall count as two shares
      of Common Stock and option shares shall count as one share of Common
      Stock.  To the extent that the Company issues securities under the
      Incentive Plan beyond the Incentive Plan Limit, such issuances shall not be
      exempt from the adjustment provisions of this Note.

     

    For
      the
      purposes of the foregoing adjustment, in the case of any Convertible Securities,
      the maximum number of shares of Common Stock issuable upon exercise, exchange
      or
      conversion of such Convertible Securities shall be deemed to be outstanding,
      provided that no further adjustment shall be made upon the actual issuance
      of
      Common Stock upon exercise, exchange or conversion of such Convertible
      Securities.

     

    In
      the
      event a fee is paid by the Company in connection with a transaction described
      in
      this clause (iii), the portion of such fee in excess of 3% of the purchase
      price
      in such transactions shall be deducted from the selling price pro rata to all
      shares sold in the transaction to arrive at the Per Share Selling
      Price.

     

    For
      purposes of this Section 3(c)(iii), if an event occurs that triggers more than
      one of the above adjustment provisions, then only one adjustment shall be made
      and the calculation method which yields the greatest downward adjustment in
      the
      Conversion Price shall be used.

     

    For
      purposes of making the foregoing adjustments, the following provisions shall
      apply.

     

    A.  [Intentionally
      Omitted]

     

    B.  Issuance
      of Convertible Securities.  If the Company in any manner issues or
      sells any Convertible Securities (other than shares or options issued or which
      may be issued pursuant to the Incentive Plan up to the Incentive Plan Limit)
      and
      the lowest price per share for which one share of Common Stock is issuable
      upon
      such conversion, exchange or exercise thereof is less than the Conversion Price
      in effect immediately prior to such issuance, then such share of Common Stock
      shall be deemed to be outstanding and to have been issued and sold by the
      Company at the time of the issuance of sale of such Convertible Securities
      for
      such price per share.  For the purposes of this Section 3(c)(iii)(B),
      the “lowest price per share for which one share of Common Stock is issuable upon
      such conversion, exchange or exercise” shall be equal to the sum of the lowest
      amounts of consideration (if any) received or receivable by the Company with
      respect to any one share of Common Stock upon the issuance or sale of the
      Convertible Security and upon the conversion, exchange or exercise of such
      Convertible Security.  No further adjustment of the Conversion Price
      shall be made upon the actual issuance of such Common Stock upon conversion,
      exchange or exercise of such Convertible Securities, and if any such issue
      or
      sale of such Convertible Securities is made upon exercise of any options for
      which adjustment of the Conversion Price had been or are to be made pursuant
      to
      other provisions of this Section 3(c)(iii)(B), no further adjustment of the
      Conversion Price shall be made by reason of such issue or sale.

     

    C.  Change
      in Option Price or Rate of Conversion.  Except for shares or
      options issued or which may be issued pursuant to the Incentive Plan up to
      the
      Incentive Plan Limit, if the purchase or exercise price provided for in any
      Convertible Securities, the additional consideration, if any, payable upon
      the
      issue, conversion, exchange or exercise of any Convertible Securities, or the
      rate at which any Convertible Securities are convertible into or exchangeable
      or
      exercisable for Common Stock changes at any time, the Conversion Price in effect
      at the time of such change shall be adjusted to the Conversion Price that would
      have been in effect at such time had such Convertible Securities provided for
      such changed purchase price, additional consideration or changed conversion
      rate, as the case may be, at the time initially granted, issued or
      sold.  For purposes of this Section 3(c)(iii)(C), if the terms of any
      option or Convertible Security that was outstanding as of the date of issuance
      of the Notes are changed in the manner described in the immediately preceding
      sentence, then such option or Convertible Security and the Common Stock deemed
      issuable upon exercise, conversion or exchange thereof shall be deemed to have
      been issued as of the date of such change.  No adjustment shall be
      made if such adjustment would result in an increase of the Conversion Price
      then
      in effect.

     

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

     

    E.  Record
      Date.  If the Company takes a record of the holders of Common
      Stock for the purpose of entitling them (A) to receive a dividend or other
      distribution payable in Common Stock, options or Convertible Securities or
      (B)
      to subscribe for or purchase Common Stock, options or Convertible Securities,
      then such record date will be deemed to be the date of the issue or sale of
      the
      shares of Common Stock deemed to have been issued or sold upon the declaration
      of such dividend or the making of such other distribution or the date of the
      granting of such right of subscription or purchase, as the case may
      be.

     

    (iv)  Rounding
      of Adjustments.  All calculations under this Section 3 shall be made
      to the nearest cent or the nearest 1/100th of a share, as the case may
      be.

     

    (v)  Notice
      of
      Adjustments.  Whenever any Affected Conversion Price is adjusted
      pursuant to Section 3(c)(ii) or (iii) above, the Company shall promptly deliver
      to each holder of the Notes, a notice setting forth the Affected Conversion
      Price after such adjustment and setting forth a brief statement of the facts
      requiring such adjustment, provided that any failure to so provide such notice
      shall not affect the automatic adjustment hereunder.

     

    (vi)  Change
      in
      Control Transactions.  In case of any Change in Control Transaction,
      the Holder shall have the right thereafter to, at its option, (A) convert this
      Note, in whole or in part, at the then applicable Conversion Price into the
      shares of stock and other securities, cash and/or property receivable upon
      or
      deemed to be held by holders of Common Stock following such Change in Control
      Transaction, and the Holder shall be entitled upon such event to receive such
      amount of securities, cash or property as the shares of the Common Stock of
      the
      Company into which this Note could have been converted immediately prior to
      such
      Change in Control Transaction would have been entitled if such conversion were
      permitted, subject to such further applicable adjustments set forth in this
      Section 3 (provided that the limitations in Section 3(i) shall not apply to
      the
      extent that Holder shall have waived them) or (B) require the Company or its
      successor to redeem this Note, in whole or in part, at a redemption price equal
      to 110% of the outstanding Principal Amount (plus any accrued interest or
      applicable late charges) being redeemed.  The terms of any such Change
      in Control Transaction shall include such terms so as to continue to give to
      the
      Holders the right to receive the amount of securities, cash and/or property
      upon
      any conversion or redemption following such Change in Control Transaction to
      which a holder of the number of shares of Common Stock deliverable upon such
      conversion would have been entitled in such Change in Control Transaction,
      and
      interest payable hereunder shall be in cash or such new securities and/or
      property, at the Holder’s option.  This provision shall similarly
      apply to successive reclassifications, consolidations, mergers, sales, transfers
      or share exchanges.  Notwithstanding any other provisions of this
      Note, the Holder shall be permitted to convert all or any portion of the
      Principal Amount (plus any accrued interest or late charges, if applicable)
      at
      the Conversion Price described in Section 3(c) herein at any time until the
      consummation of the Change in Control Transaction.

     

    (vii)  Notice
      of
      Certain Events.  If:

     

    
      	
               

            	
              A.

            	
              the
                Company shall declare a dividend (or any other distribution) on its
                Common
                Stock; or

            

    

    

    
      	
               

            	
              B.

            	
              the
                Company shall declare a special nonrecurring cash dividend on or
                a
                redemption of its Common Stock; or

            

    

    

    
      	
               

            	
              C.

            	
              the
                Company shall authorize the granting to all holders of the Common
                Stock
                rights or warrants to subscribe for or purchase any shares of capital
                stock of any class or of any rights;
                or

            

    

    

    
      	
               

            	
              D.

            	
              the
                approval of any stockholders of the Company shall be required in
                connection with any reclassification of the Common Stock of the Company,
                any consolidation or merger to which the Company is a party, any
                sale or
                transfer of all or substantially all of the assets of the Company,
                of any
                compulsory share of exchange whereby the Common Stock is converted
                into
                other securities, cash or property;
                or

            

    

    

    
      	
               

            	
              E.

            	
              the
                Company shall authorize the voluntary or involuntary dissolution,
                liquidation or winding up of the affairs of the
                Company;

            

    

    

    then
      the
      Company shall cause to be filed at each office or agency maintained for the
      purpose of conversion of this Note, and shall cause to be mailed to the Holder
      at its last address as it shall appear upon the books of the Company, on or
      prior to the date notice to the Company's stockholders generally is given,
      a
      notice stating (x) the date on which a record is to be taken for the purpose
      of
      such dividend, distribution, redemption, rights or warrants, or if a record
      is
      not to be taken, the date as of which the holders of Common Stock of record
      to
      be entitled to such dividend, distributions, redemption, rights or warrants
      are
      to be determined or (y) the date on which such reclassification, consolidation,
      merger, sale, transfer or share exchange is expected to become effective or
      close, and the date as of which it is expected that holders of Common Stock
      of
      record shall be entitled to exchange their shares of Common Stock for
      securities, cash or other property deliverable upon such reclassification,
      consolidation, merger, sale, transfer or share exchange.

     

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

     

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

     

    (f)  Charges,
      Taxes and Expenses.  Issuance of certificates for shares of Common
      Stock upon the conversion of this Note (including repayment in stock) shall
      be
      made without charge to the holder hereof for any issue or transfer tax or other
      incidental expense in respect of the issuance of such certificate, all of which
      taxes and expenses shall be paid by the Company, and such certificates shall
      be
      issued in the name of the Holder or in such name or names as may be directed
      by
      the Holder; provided, however, that in the event certificates for
      shares of Common Stock are to be issued in a name other than the name of the
      Holder, this Note when surrendered for conversion shall be accompanied by an
      assignment form; and providedfurther, that the Company shall not
      be required to pay any tax or taxes which may be payable in respect of any
      such
      transfer.

     

    (g)  Cancellation.  After
      all of the Principal Amount (including accrued but unpaid interest and default
      payments (including any applicable late charges) at any time owed on this Note)
      have been paid in full or converted into Common Stock, this Note shall
      automatically be deemed canceled and the Holder shall promptly surrender the
      Note to the Company at the Company’s principal executive offices.

     

    (h)  Notices
      Procedures.  Any and all notices or other communications or
      deliveries to be provided by the Holder hereunder, including, without
      limitation, any Conversion Notice, shall be in writing and delivered personally,
      by confirmed facsimile, electronic transmission, or by a nationally recognized
      overnight courier service to the Company at the facsimile telephone number
      or
      address of the principal place of business of the Company as set forth in the
      Loan Agreement.  Any and all notices or other communications or
      deliveries to be provided by the Company hereunder shall be in writing and
      delivered personally, by facsimile, electronic transmission, or by a nationally
      recognized overnight courier service addressed to the Holder at the facsimile
      telephone number or address of the Holder appearing on the books of the Company,
      or if no such facsimile telephone number or address appears, at the principal
      place of business of the Holder.  Any notice or other communication or
      deliveries hereunder shall be deemed delivered (i) upon receipt, when delivered
      personally, (ii) when sent by facsimile, upon receipt if received on a Business
      Day prior to 5:00 p.m. (Eastern Time), or on the first Business Day following
      such receipt if received on a Business Day after 5:00 p.m. (Eastern Time) or
      (iii) upon receipt, when deposited with a nationally recognized overnight
      courier service.

     

    (i)  Required
      Approvals.  The Holder acknowledges that the Company is required
      to seek the approval of its stockholders to (i) increase the number of
      authorized shares of Common Stock available for issuance under its Certificate
      of Incorporation, as amended (the “Certificate of Incorporation”) and (ii) issue
      the shares of Common Stock issuable upon conversion of the Notes pursuant to
      the
      rules of the American Stock Exchange (“AMEX”).  Notwithstanding
      anything contained herein to the contrary, the Notes shall not be convertible
      into shares of Common Stock until (A) the Certificate of Incorporation shall
      have been amended to increase the number of shares of Common Stock available
      for
      issuance in sufficient number to include the shares of Common Stock issuable
      pursuant to the Notes, (B) the issuance of such shares shall have been approved
      by the Company’s stockholders and (C) such shares shall have been approved for
      listing on AMEX (“collectively, the “Required Approvals”).  The
      Company shall use its reasonable best efforts to seek the approval of its
      stockholders to amend the Certificate of Incorporation to increase the number
      of
      shares of Common Stock available for issuance in sufficient number to include
      the shares of Common Stock issuable pursuant to the Notes, approve the issuance
      of the shares of Common Stock issuable upon conversion of the Notes, and the
      approval by AMEX to list such shares on AMEX.  Notwithstanding the
      above, the Required Approvals shall be obtained within one (1) year of the
      New
      Issuance Date (the “Approval Deadline”).  In the event that the
      Required Approvals are not obtained by the first anniversary of the New Issuance
      Date, then the interest rate shall thereafter be increased to accrue at a rate
      of 15% per annum.  If the Initial Conversion Shares and Conversion
      Shares are not registered under the Registration Rights Agreement by the fifteen
      (15) month anniversary of the New Issuance Date, then the then-current interest
      rate shall increase by a rate of 1% per annum each month thereafter (commencing
      on the day immediately following such 15-month anniversary date) until such
      shares are registered, up to the Default Rate.

     

    Section
      4.  Defaults
      and Remedies.

     

    (a)  Events
      of
      Default.                                           An
“Event of Default” is:  (i) a default in the payment of any Principal
      Amount of the Notes; (ii) default in payment of the principal amount or accrued
      but unpaid interest thereon of any of the June 2006 Notes issued to Holder
      (as
      defined in the Purchase Agreement), or the Amended and Restated Notes (as
      defined in the Amendment Agreement) other than this Note (collectively, this
      Note, the other Amended and Restated Notes and the June 2006 Notes shall be
      referred to as the “ISCO Notes”), on or after the date such payment is due,
      (iii) failure by the Company for ten (10) days after notice to it, to comply
      with any other material provision of any of the ISCO Notes, the Registration
      Rights Agreement or the Purchase Agreement or the Loan Agreement; (iv) an Event
      of Default under the Security Agreement or the ISCO Notes; (v) a breach by
      the
      Company of its representations or warranties in the Loan Agreement, Amendment
      Agreement or under any of the Guaranties (as defined below); (vi) any default
      under or acceleration prior to maturity of any mortgage, indenture or instrument
      under which there may be issued or by which there may be secured or evidenced
      any indebtedness for money borrowed by the Company or a subsidiary of the
      Company or for money borrowed the repayment of which is guaranteed by the
      Company or a subsidiary of the Company, whether such indebtedness or guarantee
      now exists or shall be created hereafter, provided that the obligations with
      respect to any such borrowed or accelerated amount exceeds, in the aggregate,
      $500,000; (vii) any money judgment, writ or warrant of attachment, or similar
      process in excess of $500,000 in the aggregate shall be entered or filed against
      the Company or a subsidiary of the Company or any of their respective properties
      or other assets and shall remain unpaid, unvacated, unbonded and unstayed for
      a
      period of 45 days; (viii) if the Company or any subsidiary of the Company
      pursuant to or within the meaning of any Bankruptcy Law:  (A)
      commences a voluntary case; (B) has an involuntary case commenced against it,
      and such case is not dismissed within 30 days of such commencement or consents
      to the entry of an order for relief against it in an involuntary case; (C)
      consents to the appointment of a Custodian of it for all or substantially all
      of
      its property; (D) makes a general assignment for the benefit of its creditors;
      or (E) admits in writing that it is generally unable to pay its debts as the
      same become due; or (ix) a court of competent jurisdiction enters an order
      or
      decree under any Bankruptcy Law that:  (1) is for relief against the
      Company in an involuntary case; (2) appoints a Custodian of the Company or
      for
      all or substantially all of its property; or (3) orders the liquidation of
      the
      Company or any subsidiary, and the order or decree remains unstayed and in
      effect for ninety (90) days.  The terms “Bankruptcy Law” means Title
      11, U.S. Code, or any similar federal or state law for the relief of
      debtors.  The term “Custodian” means any receiver, trustee, assignee,
      liquidator or similar official under any Bankruptcy Law.

     

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

     

    Section
      5.  Loan
      Agreement; Amendment Agreement; Security Agreement;
      Guaranties.  This Note is being issued to the Holder in connection
      with the Loan Agreement and Amendment Agreement and is entitled to the benefits
      thereof.  In addition the Company’s obligations under this Note are
      guaranteed by the Guaranties (the “Guaranties”) of Spectral Solutions, Inc. and
      Illinois Superconductor Canada Corporation, subsidiaries of the Company (the
      together, the “Guarantors”) and this Note is entitled to the benefits
      thereof.  The Company’s obligations under this Note are also secured,
      pursuant to the terms of the Security Agreement by all the assets of the Company
      and the Guarantors.

     

    Section
      6.  General.

     

    (a)  Payment
      of Expenses.  The Company agrees to pay all reasonable charges and
      expenses, including reasonable attorneys' fees and expenses, which may be
      incurred by the Holder in successfully enforcing this Note and/or collecting
      any
      amount due under this Note.

     

    (b)  Savings
      Clause.  In case any provision of this Note is held by a court of
      competent jurisdiction to be excessive in scope or otherwise invalid or
      unenforceable, such provision shall be adjusted rather than voided, if possible,
      so that it is enforceable to the maximum extent possible, and the validity
      and
      enforceability of the remaining provisions of this Note will not in any way
      be
      affected or impaired thereby.  In no event shall the amount of
      interest paid hereunder exceed the maximum rate of interest on the unpaid
      principal balance hereof allowable by applicable law.  If any sum is
      collected in excess of the applicable maximum rate, the excess collected shall
      be applied to reduce the principal debt.  If the interest actually
      collected hereunder is still in excess of the applicable maximum rate, the
      interest rate shall be reduced so as not to exceed the maximum allowable under
      law.

     

    (c)  Amendment.  Neither
      this Note nor any term hereof may be amended, waived, discharged or terminated
      other than by a written instrument signed by the Company and holders of 75%
      of
      the Principal Amount of all Notes.

     

    (d)  Assignment,
      Etc.  The Holder may assign or transfer this Note to any
      transferee.  The Holder shall notify the Company of any such
      assignment or transfer promptly.  This Note shall be binding upon the
      Company and its successors and shall inure to the benefit of the Holder and
      its
      successors and permitted assigns.

     

    (e)  No
      Waiver.  No failure on the part of the Holder to exercise, and no
      delay in exercising any right, remedy or power hereunder shall operate as a
      waiver thereof, nor shall any single or partial exercise by the Holder of any
      right, remedy or power hereunder preclude any other or future exercise of any
      other right, remedy or power.  Each and every right, remedy or power
      hereby granted to the Holder or allowed it by law or other agreement shall
      be
      cumulative and not exclusive of any other, and may be exercised by the Holder
      from time to time.

     

    (f)  Governing
      Law; Jurisdiction.

     

    (i)  Governing
      Law.  THIS NOTE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
      THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS
      PROVISIONS THEREOF THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW
      OF
      ANY OTHER JURISDICTION.

     

    (ii)  Jurisdiction.  The
      Company irrevocably submits to the exclusive jurisdiction of any State or
      Federal Court sitting in the State of New York, County of New York, over any
      suit, action, or proceeding arising out of or relating to this
      Note.  The Company irrevocably waives, to the fullest extent permitted
      by law, any objection which it may now or hereafter have to the laying of the
      venue of any such suit, action, or proceeding brought in such a court and any
      claim that suit, action, or proceeding has been brought in an inconvenient
      forum.

     

    The
      Company agrees that the service of process upon it mailed by certified or
      registered mail, postage prepaid and return receipt requested (and service
      so
      made shall be deemed complete three days after the same has been posted as
      aforesaid) or by personal service shall be deemed in every respect effective
      service of process upon it in any such suit or proceeding.  Nothing
      herein shall affect Holder's right to serve process in any other manner
      permitted by law.  The Company agrees that a final non-appealable
      judgment in any such suit or proceeding shall be conclusive and may be enforced
      in other jurisdictions by suit on such judgment or in any other lawful
      manner.

     

    (iii)  No
      Jury
      Trial.  The Company hereby knowingly and voluntarily waives any and
      all rights it may have to a trial by jury with respect to any litigation based
      on, or arising out of, under, or in connection with, this Note.

     

    (g)  Replacement
      Notes.  This Note may be exchanged by Holder at any time and from
      time to time for a Note or Notes with different denominations representing
      an
      equal aggregate outstanding Principal Amount, as reasonably requested by Holder,
      upon surrendering the same.  No service charge will be made for such
      registration or exchange.  In the event that Holder notifies the
      Company that this Note has been lost, stolen or destroyed, a replacement Note
      identical in all respects to the original Note (except for registration number
      and Principal Amount, if different than that shown on the original Note), shall
      be issued to the Holder, provided that the Holder executes and delivers to
      the
      Company an agreement reasonably satisfactory to the Company to indemnify the
      Company from any loss incurred by it in connection with the Note.

     

     [Signature
      Page Follows]

    
      
              

                  
      
      

                  #9046433
            v1      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly executed on June
      ___, 2007.

    

    

    ISCO
      INTERNATIONAL,
      INC.

    

    

    By:                                                                                      

    Name:

    Title:

    

    

    

    

    Attest:

    

    

    

    Sign:                                                    

    Print
      Name:

    
      
              

                  --      
      

                  #9046433
            v1      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    FORM
      OF CONVERSION NOTICE

    

    (To
      be
      Executed by the Holder

    in
      order
      to Convert a Note)

    

    The
      undersigned hereby elects to convert the aggregate outstanding Principal Amount
      (as defined in the Note) indicated below of this Note into shares of Common
      Stock, $0.001 par value per share (the “Common Stock”), of ISCO INTERNATIONAL,
      INC. (the “Company”) according to the conditions hereof, as of the date written
      below.  If shares are to be issued in the name of a person other than
      the undersigned, the undersigned will pay all transfer taxes payable with
      respect thereto and is delivering herewith such certificates and opinions as
      reasonably requested by the Company in accordance therewith.  No fee
      will be charged to the holder for any conversion, except for such transfer
      taxes, if any.  The undersigned represents as of the date hereof that,
      after giving effect to the conversion of this Note pursuant to this Conversion
      Notice, the undersigned will not exceed the “Restricted Ownership Percentage”
contained in Section 3(i) of this Note and will remain in compliance with
      Section 3(i) of this Note.

    

    
      	
              Conversion
                information:

            	 	 

    

    Date
      to Effect
      Conversion

    

    
      	
               

            	 

    

    
      	
               

            	
              Aggregate
                Principal Amount of Note Being
                Converted

            

    

    

    
      	
               

            	 

    

    
      	
               

            	
              Aggregate
                Interest (plus any applicable late charges) Being
                Converted

            

    

    

    
      	
               

            	 

    

    
      	
               

            	
              Number
                of shares of Common Stock
                to be Issued

            

    

    

    
      	
               

            	 

    

    Applicable
      Conversion
      Price

    

    
      	
               

            	 

    

    Signature

    

    
      	
               

            	 

    

    Name

    

    
      	
               

            	 

    

    Address

    

    

     

    

    

    
      
              

                  #9046433
            v1ex1010.htm

Exhibit
    10.10

    REGISTRATION
      RIGHTS AGREEMENT

     

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

     

    W
      I T
      N E S S E T H:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (i)  Delay
      in
      Effectiveness of Registration Statement.

     

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

     

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

     

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

     

    (ii)  No
      Listing; Suspension of Class of Shares

     

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

     

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

     

    (iii)  Blackout
      Periods.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    6.  Indemnification.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    12.  Reports
      Under The 1934 Act.

     

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

     

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

     

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

     

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

     

    13.  Miscellaneous.

     

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

     

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

     

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

     

    to
      the
      Company:

     

    ISCO
      International, Inc.

    1001
      Cambridge Drive

    Elk
      Grove
      Village, Illinois  60007

    Telephone:  (847)
      391-9400

    Facsimile:   (847)
      391-5015

    Attention::  Frank
      Cesario

    E-mail:
      frank.cesario@iscointl.com

    

    with
      a
      copy to:

     

    Pepper
      Hamilton LLP

    400
      Berwyn Park

    899
      Cassatt Road

    Berwyn,
      Pennsylvania 19312

    Telephone:  (610)
      640-7800

    Facsimile:  (610)
      640-7835

    Attention:  Michael
      P. Gallagher, Esq.

    E-mail:
      GALLAGMP@pepperlaw.com

    

    to
      the
      Lenders:

     

    As
      set
      forth on Schedule I hereto

     

    with
      a
      copy to:

     

    As
      set
      forth on Schedule I hereto

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    [Signature
      Page Follows]

     

    
      
              

                  
      
      

                            JRAPP\120275.3
            -
            6/26/07              
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    ISCO
      INTERNATIONAL, INC.

    

    

    

    By:                                                                           

    Name:

    Title:

    

    

    MANCHESTER
      SECURITIES CORP.

    

    

    By:                                                                           

    Name:

    Title:

    

    

    ALEXANDER
      FINANCE, L.P.

    

    

    By:                                                                           

    Name:

    Title:

    

     

    
      
              

                            
                          
      

                            JRAPP\120275.3
            -
            6/26/07              
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      I

     

    

     

    

     

    
      	
              Name
                of Lenders

            	
              Contact
                Information

               

            
	
              Manchester
                Securities Corp.

            	
              712
                Fifth Avenue

              36th
                Floor

              New
                York, New York 10019

              Attn:  Dave
                Miller

              Tel:           (212)
                506-2999

              Fax:           (212)
                586-9467

              E-Mail:
                dmiller@elliottmgmt.com

               

            
	
              Copy
                to:

               

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

              551
                Fifth Avenue

              New
                York, New York 10176

              Telephone:
                (212) 986-6000

              Facsimile:
                (212) 986-8866

              Attn:
                Lawrence D. Hui, Esq.

              E-Mail:
                lhui@kkwc.com

               

            
	
              Alexander
                Finance, L.P.

            	
              Alexander
                Finance, LP

              1560
                Sherman Avenue

              Evanston,
                Illinois

              Telephone:  (847)
                733-0232

              Facsimile:   (847)
                733-0339

              Attention:  Bradford
                T. Whitmore

              E-Mail:
                bwhitmore@gbros.com

               

            
	
              Copy
                to:

            	
              Sachnoff
                & Weaver

              30
                S. Wacker Drive

              Chicago,
                Illinois 60606

              Telephone:  (312)
                207-3879

              Facsimile:   (312)
                207-6400

              Attention:  Evelyn
                C. Arkebauer, Esq.

              E-Mail:
                earkeba@sachnoff.com

               

            

    

    

     

    

    

    
      
              

                  
      
      

                            JRAPP\120275.3
            -
            6/26/07

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