Document:

exhibit102form86k011309.htm

              

    Exhibit
10.2

     

    FIRST AMENDMENT TO
NOTE

    

    

    This
FIRST AMENDMENT TO NOTE (the “Amendment”) is made
as of January 8, 2009 and effective as of January 2, 2009, by and among ISCO
International, Inc., a Delaware corporation (the “Company”), Alexander
Finance, L.P., an Illinois limited partnership (“Alexander”), and
solely for purposes of Sections 4, 5  and 6 of this Amendment,
Manchester Securities Corporation, a New York corporation
(“Manchester”).

     

    W
I T N E S S E T H:

     

    WHEREAS, on January 3, 2008,
the Company issued to Alexander that certain New Amended and Restated 7% Senior
Secured Convertible Note dated January 3, 2008 (the “Note”); and

    

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

    

    A
G R E E M E N T:

     

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

    

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

    

    
      	
              2.  

            	
              The
      Note is hereby amended as follows:

            

    

    

    
      	
              a.  

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

            

    

    

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

    

    
      	
              b.  

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

            

    

    

    
      	
              c.  

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

            

    

    

    
      	
              d.  

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

            

    

    

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

    

    
      	
              e.  

            	
              Delete
      the definition of “VWAP” in its
      entirety.

            

    

    

    
      	
              f.  

            	
              Replace
      Section
      3(c)(ii)(D) in its entirety with the
  following:

            

    

    

    “D.  Calculation of Consideration
Received.  In case any option is issued in connection with the
issue or sale of other securities of the Company, together comprising one
integrated transaction in which no specific consideration is allocated to such
options by the parties thereto, then solely for purposes of this Section 3, the
options will be deemed to have been issued for a consideration of
$0.01.  If any Common Stock or Convertible Securities (other than
shares or options issued or which may be issued pursuant to the Incentive Plan
up to the Incentive Plan Limit) are issued or sold or deemed to have been issued
or sold for cash, the consideration received therefor will be deemed to be the
gross amount received by the Company therefor.  If any Common Stock or
Convertible Securities (other than shares or options issued or which may be
issued pursuant to the Incentive Plan up to the Incentive Plan Limit) are issued
or sold for a consideration other than cash, the amount of the consideration
other than cash received by the Company will be the fair value of such
consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the arithmetic average of the Fair Market Prices of such securities
during the ten (10) consecutive Trading Days ending on the date of receipt of
such securities.  The fair value of any consideration other than cash
or securities will be determined jointly by the Company, the Holder, and the
holders of the Amended and Restated 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.”

    

    
      	
              g.  

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

            

    

    

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

    

    
      	
              h.  

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

            

    

    

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

    

    
      	
              i.  

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

            

    

    

    “(i)  If
the Conversion Shares are not registered under the Registration Rights Agreement
by September 30, 2009, if the registration statement is not reviewed by the SEC,
or by November 30, 2009 if the registration statement is reviewed by the SEC,
then the then-current interest rate shall increase by a rate of 1% per annum
each month thereafter until such shares are registered, up to the Default Rate;
provided however if the Securities and Exchange Commission (the “Commission”) instructs the
Company that less than all, or none, of the Conversion Shares may be included in
the Registration Statement, there shall be no increase in the interest rate
pursuant to this Section 3(i) unless and until
the Commission instructs the Company that such Conversion Shares may be
permitted to be included in the Registration Statement and the Company has
failed to register such Conversion Shares.”

    

    
      	
              j.  

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

            

    

    

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

    

    3. The
Company and Alexander acknowledge that each of Spectral Solutions, Inc. and
Illinois Superconductor Canada Corporation has been voluntarily dissolved, and
no longer guarantees the Company’s obligations under the Note.

    

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

     

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

     

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

     

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

     

    

    

    

    

    

    {Signature
Page Follows}

    
      
        
           

          

        

         

      

      
         

        
          

        

      

      
         

      

    

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

     

    

    

    

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

              	 	 	
                By:
      /s/ Gary Berger 

              	 
	
                Name:
      Evi Sukandi 

              	 	 	
                Name:
      Gary Berger 

              	 
	
                 

              	 	 	
                Its:
      Chief Financial Officer 

              	 

      

    

    
       

      
        
          	 	ALEXANDER FINANCE, L.P.
      	 
	 	 	 	 
	
                   

                	
                  By:
      

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

        

      

      
        
          	 	MANCHESTER SECURITIES
      CORPORATION (in respect of Sections 4, 5 and 6 only)	 
	 	 	 	 
	
                   

                	
                  By:
      

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

        

      

      

    

     

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

    

     

     

    
      

      
        
          	 	MANCHESTER SECURITIES
      CORPORATION 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Elliot
      Greenberg	 
	 	 	Name:
      Elliot Greenberg 	 
	 	 	Its:
      Vice Presidentexhibit103form8k011309.htm

     

    
Exhibit
10.3

                                                                                                                            

    FIRST AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT

     

    

    This
FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT (the “Amendment”) is made
and entered into as of January 8, 2009 and effective as of January 2, 2009, by
and between ISCO International, Inc., a Delaware corporation (the “Company”) and
Alexander Finance, L.P., an Illinois limited partnership (“Alexander”).

     

    W
I T N E S S E T H:

     

    WHEREAS, on January 3, 2008,
the Company and Alexander entered into that certain Registration Rights
Agreement (the “Registration Rights
Agreement”); and

    

    WHEREAS, the parties desire to
amend the Registration Rights Agreement to provide for certain changes as more
fully set forth herein.

    

    A
G R E E M E N T:

     

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

    

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

    

    2. Amendments.  The
parties hereby agree to amend the Registration Rights Agreement as
follows:

    

    
      	
              a)  

            	
              Delete
      the definition of “Approval Date”
      in Section 1 in its entirety.

            

    

    

    
      	
              b)  

            	
              Replace
      the lead-in to Section 2(a)
      and Section
      2(a)(i) their entirety with the
  following:

            

    

    

    “(a) The
Company shall:

    

    
      	
               
      

            	
              (i)

            	
              prepare
      and file a registration statement with the Commission no later than June
      30, 2009 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 (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
      7,500,000, 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 New Note 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 New Note.  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 on
      or prior to September 30, 2009, if Registration Statement is not reviewed
      by the Commission, or by November 30, 2009 if the Registration Statement
      is reviewed by the Commission (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.”

            

    

    

    
      	
              c)  

            	
              Replace
      Section
      2(a)(viii) in its entirety with the
  following:

            

    

    

    “(viii)
If applicable, list the Registrable Securities covered by such Registration
Statement with any and all securities exchange(s) and/or market(s) on which the
Common Stock is then listed or quoted, and prepare and file any required filings
with any such exchange(s) or market(s), if applicable.”

    

    
      	
              d)  

            	
              Replace
      Section
      2(b)(i)(A) in its entirety with the
  following:

            

    

    

    “(A)  In
the event that such Registration Statement has not been declared effective by
the Effectiveness Deadline, 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.”

    

    
      	
              e)  

            	
              Replace
      Section 2(b)(ii)
      in its entirety with the
following:

            

    

    

    “(ii)
Intentionally Omitted.”

    

    
      	
              f)  

            	
              Replace
      Section 2(f) in its entirety with the
following:

            

    

    

    “(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 January 2, 2009, 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)  

            	
              Replace
      Section 2(h) in its entirety with the
following:

            

    

    

    “(h) 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.”

    

    
      	
              h)  

            	
              Replace
      Section
      13(c) in its entirety with the
following:

            

    

    

    “(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:  Gary
Berger

    E-mail:
gary.berger@iscointl.com

     

    with a
copy to:

     

    McGuireWoods
LLP

    77 West
Wacker Drive

    Suite
4100

    Chicago, Illinois

    Telephone:  (312)
321-7652

    Facsimile:  (312)
698-4585

    Attention:  Scott
L. Glickson, Esq.

    E-mail:
sglickson@mcguirewoods.com

    

    to the
Lender:

     

    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

     

    with a
copy to:

     

    Reed
Smith LLP

    10 South
Wacker Drive

    Chicago,
IL 60606-7507

    Telephone:  (312)
207-1000

    Facsimile:   (312)
207-6400

    Attention:  Evelyn
C. Arkebauer, Esq.

    E-Mail:
earkebauer@reedsmith.com

     

    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.”

    

    3. Governing
Law.  This Amendment shall be construed in accordance with and
governed by the internal laws of the State of New York, without regard to choice
of laws principles.

     

    4. Counterparts.  This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which, when so executed and delivered,
shall be deemed an original, but all of which counterparts together shall
constitute but one agreement.

     

    5. Full Force and
Effect.  Except as specifically modified or amended by the
terms of this Amendment, the Registration Rights Agreement and all provisions
contained therein are, and shall continue, in full force and
effect.

     

    

    

    

    {Signature
Page Follows}

    
      
        
           

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
undersigned have caused this Amendment to be duly executed as of the date first
written above.

    
       

      
        
          	 	ISCO INTERNATIONAL, INC.
      	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Gary
      Berger	 
	 	 	Name :
      Gary Berger	 
	 	 	Its:
      Chief Financial Officer 	 
	 	 	 	 

        

      
        
          	 	ALEXANDER FINANCE, L.P.
      	 
	 	 	 	 
	
                   

                	
                  By:
      

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

        

      

    

    

    

    
      
         

      

      
         

        
          

          
            [Signature
Page to First Amendment to Registration Rights Agreement]

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