ISCO INTERNATIONAL INC
EX-10.8 AMENDED AND RESTATED LOAN AGREEMENT
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<TYPE>EX-10.8
<SEQUENCE>3
<FILENAME>c80335exv10w8.htm
<DESCRIPTION>EX-10.8 AMENDED AND RESTATED LOAN AGREEMENT
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<P align="right"><FONT size="2">Exhibit&nbsp;10.8
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<P align="center"><FONT size="2"><B>AMENDED AND RESTATED LOAN AGREEMENT</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>AMENDED AND RESTATED LOAN AGREEMENT </B>(&#147;<B>Agreement</B>&#148;) dated as of October&nbsp;24,
2003 (the &#147;<B>Closing Date</B>&#148;) by and among Manchester Securities Corporation, a New
York corporation (&#147;<B>Manchester</B>&#148;), Alexander Finance, L.P., an Illinois limited
partnership (&#147;<B>Alexander</B>&#148; and together with Manchester, the &#147;<B>Lenders</B>&#148;) and ISCO
International, Inc., a corporation organized and existing under the laws of
Delaware and formerly known as Illinois Superconductor Corporation (the
&#147;<B>Company</B>&#148;).
</FONT>
<P align="center"><FONT size="2"><B>WITNESSETH:</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Whereas, </B>the Lenders and the Company have entered into a Loan Agreement,
dated as of October&nbsp;23, 2002 (the &#147;<B>Original Loan Agreement</B>&#148;) pursuant to which,
among other things: (i)&nbsp;the Lenders provided aggregate loan commitments to the
Company of up to $4,000,000; (ii)&nbsp;warrants to purchase common stock of the
Company were to be issued concurrently with advances under the Original Loan
Agreement; and (iii)&nbsp;interest on loans thereunder bore interest at the rate of
9&nbsp;1/2% per annum; and
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Whereas, </B>the Lenders and the Company desire that the terms of the Original
Loan Agreement be amended and restated to reflect: (i)&nbsp;an increase in the
aggregate commitment of the Lenders to $6,000,000; (ii)&nbsp;the elimination of
warrant issuances from future loans; (iii)&nbsp;that future loans
will bear interest at the rate of 14% per annum; (iv)&nbsp;that future loans mature on October
31, 2004; (v)&nbsp;that such future loans be subject to the discretion of the Lenders and
(vi)&nbsp;such other matters as are set forth herein; and
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Whereas, </B>the Company and the Lenders desire that the amounts borrowed
hereunder (the &#147;<B>Loans</B>&#148;, which as used hereunder shall include all loans
advanced under the Original Loan Agreement) but after the date hereof be
evidenced by secured grid notes, having the rights and privileges set forth in
the notes in the form and substance of Exhibit&nbsp;A in the aggregate principal amount of
$2&nbsp;million (the
&#147;<B>New Notes)</B>&#148; hereto and
which will be secured by all of the assets of the Company and its subsidiaries
pursuant to an amended and restated Security Agreement in the form and
substance of Exhibit&nbsp;B hereto (the &#147;<B>Security Agreement</B>&#148;);
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Whereas, </B>pursuant to Guaranties in favor of the Lenders dated the date
hereof and each in the form and substance of Exhibit&nbsp;C hereto (together, the
&#147;<B>Guaranties</B>&#148;), the Company&#146;s subsidiaries, Spectral Solutions, Inc., a Colorado
corporation and Illinois Superconductor Canada Corporation (the &#147;<B>Guarantors</B>&#148;)
will guaranty the Company&#146;s obligations under this Agreement, the Security
Agreement and the New Notes.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Now, Therefore, </B>in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
</FONT>
<P align="center"><FONT size="2">&nbsp;
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<P align="center"><FONT size="2"><B>ARTICLE 1</B>
</FONT>

<P align="center"><FONT size="2"><B>AMOUNT AND TERMS OF LOANS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.1 The Advances; Commitment. Each Lender severally and further
subject to such Lender&#146;s sole and absolute discretion and not jointly with the
other Lender, agrees, on the terms and conditions hereinafter set forth, to
make advances (&#147;<B>Advances</B>&#148;) to the Company from time to time on any Business Day
(as defined below) during the Commitment Period. Any such Advances by a Lender
shall be in an aggregate amount outstanding not to exceed at any time such
Lender&#146;s Commitment; provided, however, that the aggregate amount available to
be borrowed under the &#147;Commitments&#148; shall not exceed $6,000,000. The aggregate
Commitments of the Lenders are set forth on Schedule&nbsp;A hereto. Within the
limits of each Lender&#146;s Commitment in effect from time to time, and subject to
both the Lenders&#146; discretion (as referred to above) and the terms and
conditions set forth above, the Company may borrow under this Section&nbsp;1.1. The
Loans shall be evidenced by the Notes, which in turn are guaranteed by the
Guaranties and secured pursuant to the Security Agreement.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used herein, &#147;Business Day&#148; shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in New York City are required or
authorized to close.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.2 The Subsequent Loan. Lenders shall, within twenty-four (24)
hours following the execution of this Agreement make a Loan to the Company in
the aggregate amount of one million dollars ($1,000,000) (the &#147;Subsequent
Loan&#148;), without any prior Borrowing Request (as defined below).
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.3 Making the Advances.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Each set of Advances made by the Lenders (a &#147;Borrowing&#148;), other than
the Initial Loan under the Original Loan Agreement and the Subsequent Loan,
shall be made on notice (a &#147;<B>Borrowing Request</B>&#148;), given not later than 11:00
A.M. (New York City time) on the first or fifteenth day of the month, by the
Company to the Lenders, which date shall be five (5)&nbsp;Business Days prior to the
date of the proposed Borrowing. Each Borrowing Request shall be by telecopier
and email, in substantially the form of Exhibit&nbsp;G hereto, specifying therein
the requested (i)&nbsp;date of such Borrowing and (ii)&nbsp;aggregate amount of such
Borrowing. The amount of such Borrowing shall be at least $250,000. In the
event that no Default (as defined below) or Event of Default (as defined in the
Notes) shall have occurred and be continuing and all conditions to a Borrowing
(including those set forth in Article&nbsp;III) shall have been satisfied and each
Lender, in its sole and absolute discretion, shall have deemed it advisable to
make the requested Advance, then the Company shall be entitled to make
Borrowings under the Financing Documents (as defined below).
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Notwithstanding the foregoing, no Loan shall be made unless both
Lenders shall have agreed to fund their respective Advances. If either Lender
does not agree to make its Advance, then the other shall not make its Advance.
</FONT>
<P align="center"><FONT size="2">2
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The aggregate indebtedness of the Company hereunder to each Lender
shall be evidenced by: (i)&nbsp;the existing note, dated as of
October&nbsp;23, 2002, issued to such Lender under the
Original Loan Agreement (an <B>&#147;Original Note&#148;</B>); and (ii)&nbsp;a New Note (the
&#147;<B>Original Notes&#148; </B>and the &#147;<B>New Notes&#148; </B>shall be collectively referred to as
&#147;<B>Notes</B>&#148;).
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.4 Repayment. On March&nbsp;31, 2004 (the &#147;First Termination Date&#148;),
the Company shall repay to the Lenders the outstanding principal amount of the
Advances evidenced by the Original Notes, together with (a) all accrued interest
(such interest accruing whether or not allowable under any applicable
bankruptcy laws after a bankruptcy filing by the Company) and (b) all other amounts
due under the financing documents under the Original Loan Agreement. On
October&nbsp;31, 2004 (the &#147;Second Termination Date&#148;), the
Company shall (without duplication), repay to
the Lenders the outstanding principal amount of Advances evidenced by the New
Notes, together with (a) all accrued interest (such interest accruing whether or
not allowable under any applicable bankruptcy laws after a bankruptcy filing by
the Company) and (b) all other amounts due under the Financing Documents (as
defined below); provided however, that any Event of Default under an Original
Note shall be an Event of Default with respect to the New Notes and any Event
of Default under a New Note shall be on Event of Default under the Original
Notes. Upon any of the Company&#146;s obligations hereunder or under the other Loan
Documents (as defined in Section&nbsp;4.1 below) becoming due and payable (by
acceleration or otherwise), the Lenders shall be entitled to immediate payment
of such obligations.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.5 Termination of the Commitments. On the Second Termination
Date the Commitments of the Lenders shall be terminated in whole and the New
Notes shall be due and payable in their entirety.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.6 Prepayments.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Optional. The Company may, upon 30&nbsp;days&#146; prior written notice to the
Lenders, which notice shall state the proposed date and aggregate principal
amount of any proposed prepayment, prepay outstanding amounts under the Loans,
provided that the minimum amount of such prepayment shall be $250,000 and if
such notice is given the Company shall prepay on the proposed repayment date
such proposed prepayment amount, together with accrued interest to the date of
such prepayment on the principal amount prepaid.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Mandatory. (i)&nbsp;The Company shall, on the date of receipt of cash
proceeds (net of reasonable legal expenses and taxes payable as a result of
such transaction) from (X)&nbsp;the sale, lease, transfer or other disposition of
any assets of the Company, any Guarantor, or any affiliate of the Company or
Guarantor other than in the ordinary course of the Company&#146;s or the Guarantor&#146;s
business, consistent with past practices, (Y)&nbsp;the incurrence or issuance by the
Company, any Guarantor, or any affiliate of the Company or Guarantor of any
debt to parties other than the Lenders, (Z)&nbsp;the sale or issuance by the
Company, any Guarantor, or any affiliate of the Company or any Guarantor of any
capital stock (including, without limitation, preferred stock) or any warrants,
rights or options to acquire capital stock, or any other securities other than
upon the exercise of outstanding options and warrants or the issuance of
options pursuant to the
</FONT>
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<P align="left"><FONT size="2">Company&#146;s stock option plan, provided that the number of shares of Common
Stock issuable thereunder does not exceed 5% of the outstanding shares of
Common Stock, (AA)&nbsp;the receipt by the Company, any Guarantor or any affiliate
of the Company or any Guarantor, of any judgment, award or settlement, or (BB)
a merger or share exchange pursuant to which 50% of the Company&#146;s voting power
is transferred, prepay an aggregate amount of the Loans equal to the lesser of
(a)&nbsp;the amount of outstanding Loans and (b)&nbsp;the amount of such net cash
proceeds.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Application of Prepayments. Any payments or prepayments by the
Company or any Guarantor permitted or required hereunder shall be applied to
each Lender, pro rata in relation to the total amount then outstanding under
the Loan Documents, in the following order: first, to the payment of any fees,
costs, expenses, or charges of the Lenders arising under the Loan Documents,
second, to the payment of interest accrued on the outstanding Advances
represented by the New Notes; third, to the payment of the principal amount of
the outstanding Advances represented by the New Notes, fourth, to the payment
of interest accrued on outstanding Advances represented by the Original Notes
and fifth, to the payment of the principal amount of the outstanding Advances
represented by the Original Notes. Any prepayments, whether optional or
mandatory, shall permanently reduce the Lenders&#146; Commitments, pro rata, to the
extent of such prepayments.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.7 Interest. Interest shall accrue on the Advances as set forth
in the Notes.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.8 Payments and Computations.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Company shall make each payment hereunder and under the Notes not
later than 3 P.M. (New York City time) on the day when due, in U.S. dollars, to
the Lenders at accounts designated by the Lenders to the Company.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;All computations of interest, fees, and charges shall be made by the
Lenders on the basis of a year of 360&nbsp;days, in each case for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest, fees, or charges are payable. Each
determination by the Lenders of an interest rate, fee, or charge hereunder
shall be conclusive and binding for all purposes, absent manifest error.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest or fees, as the case may
be.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.9 Financing Documents. Concurrently with the execution and
delivery of this Agreement and the New Notes, the Company is delivering to the
Lenders the following additional documents, each dated as of the date hereof,
the execution and delivery of which are a condition to the Lenders&#146; Commitments
set forth in Section&nbsp;1.1(a) above:
</FONT>
<P align="center"><FONT size="2">4
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<P align="left" style="margin-left:3%; margin-right:0%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;the Guaranties;
</FONT>

<P align="left" style="margin-left:3%; margin-right:0%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;the Security Agreement;
</FONT>

<P align="left" style="margin-left:3%; margin-right:0%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;Amendments to UCC financing statements, naming Lenders as the
secured parties and the Company as the debtor (the &#147;<B>UCC
Financing Statements</B>&#148;) if required by Lenders;
</FONT>

<P align="left" style="margin-left:3%; margin-right:0%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;Amendments to Patent and Trademark financing statements naming
the Lenders as secured parties and the Company as the debtor (the
&#147;<B>Patent and Trademark Financing Statements</B>&#148;) if required by Lenders;
</FONT>

<P align="left" style="margin-left:3%; margin-right:0%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;Legal Opinion of outside counsel to the Company, in the form of
Exhibit&nbsp;F hereto delivered not later than five (5) Business Days
after the date hereof;
</FONT>

<P align="left" style="margin-left:3%; margin-right:0%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;Secretary&#146;s Certificate and Incumbency Certificate; and
</FONT>

<P align="left" style="margin-left:3%; margin-right:0%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;UCC Lien Searches
</FONT>
<P align="left" style="margin-left:3%; margin-right:0%"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It shall be an Event of Default under the Notes if the Legal opinion referred
to in clause (v) above is not delivered within five (5) Business Days of the date hereof.</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;1.10 This Agreement, the Guaranties, the Security Agreement, the
New Notes, the Amended UCC Financing Statements and the Amended Patent and Trademark Financing Statements are collectively referred to herein as the
&#147;<B>Financing Documents.</B>&#148;
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE 2</B>
</FONT>
<P align="center"><FONT size="2"><b>REPRESENTATIONS AND WARRANTIES</b>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;2.1 Representations, Warranties and Agreements of the Company.
The Company hereby makes the following representations and warranties to the
Lenders as of the date hereof:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Organization and Qualification. The Company is a corporation, duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own and use
its properties and assets and to carry on its business as currently conducted.
The Company has no subsidiaries other than the Guarantors. The Company is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not, individually
or in the aggregate, (x)&nbsp;adversely affect the legality, validity or
enforceability of any of the Loan Documents in any material respect, (y)&nbsp;have a
material adverse effect on the results of operations, assets, or financial
condition of the Company or (z)&nbsp;adversely impair in any material respect the
Company&#146;s ability to perform fully on a timely basis its obligations under the
Loan Documents (a &#147;<B>Material Adverse Effect</B>&#148;).
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
</FONT>
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<P align="left"><FONT size="2">contemplated by the Financing Documents, and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Financing
Documents by the Company and the consummation by it of the transactions
contemplated thereby, have been duly authorized by all requisite corporate
action on the part of the Company. Each of the Financing Documents has been
duly executed and delivered by the Company and constitutes the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors&#146; rights and
remedies or by other equitable principles of general application.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Capitalization. The authorized, issued and outstanding capital stock
of the Company is set forth in Schedule&nbsp;2.1(c). No shares of Common Stock are
entitled to preemptive or similar rights, nor is any holder of the Common Stock
entitled to preemptive or similar rights arising out of any agreement or
understanding with the Company by virtue of any of the Financing Documents.
Except as disclosed in Schedule&nbsp;2.1(c), there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any character
whatsoever relating to, securities, rights or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for or acquire
any shares of Common Stock, or contracts, commitments, understandings, or
arrangements by which the Company is or may become bound to issue additional
shares of Common Stock, or securities or rights convertible or exchangeable
into shares of Common Stock.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(d) &#091;Intentionally Omitted.&#093;</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;No Conflicts. The execution, delivery and performance of the
Financing Documents by the Company and the consummation by the Company of the
transactions contemplated thereby, do not and will not (i)&nbsp;conflict with or
violate any provision of its Certificate of Incorporation or By-laws or (ii)
conflict with, constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or (iii)&nbsp;result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company
is subject (including Federal and state securities laws and regulations), or by
which any material property or asset of the Company is bound or affected,
except in the case of each of clauses (ii)&nbsp;and (iii), such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as could
not, individually or in the aggregate, have or result in a Material Adverse
Effect. The business of the Company is not being conducted in violation of any
law, ordinance or regulation of any governmental authority, except for
violations which, individually or in the aggregate, do not have a Material
Adverse Effect.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, or make any filing or registration
with, any court or other federal, state, local or other governmental authority
or other person in connection with the execution, delivery and performance by
the Company of the
</FONT>
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<P align="left"><FONT size="2">Financing Documents other than: (i)&nbsp;the filing of the Amendments to the
UCC and Patent and Trademark Financing Statements, if any are
required by Lenders; and (ii)&nbsp;in all other cases,
where the failure to obtain such consent, waiver, authorization or order, or to
give or make such notice or filing, would not materially impair or delay the
ability of the Company to effect the transactions contemplated by this
Agreement free and clear of all liens and encumbrances of any nature whatsoever
or would not otherwise have a Material Adverse Effect (the approvals referred
to in clause (i)&nbsp;are hereinafter referred to as the &#147;Required Approvals&#148;). The
Company has no reason to believe that it will be unable to obtain the Required
Approvals.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Private Offering. Assuming (without any independent investigation or
verification by or on behalf of the Company) the accuracy of the
representations and warranties of Lenders set forth herein, the offer and sale
of the New Notes are exempt from registration under Section&nbsp;5 of the Securities
Act of 1933, as amended (the &#147;<B>Securities Act</B>&#148;). Neither the Company nor any
person acting on its behalf has taken or will take any action which might
subject the offering, issuance or sale of the New Notes to the registration
requirements of Section&nbsp;5 of the Securities Act.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;SEC Documents. The Company has filed all reports or other filings
required to be filed by it under Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the three years preceding the
date hereof (the foregoing materials being collectively referred to herein as
the &#147;<B>SEC Documents</B>&#148;), on a timely basis. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder, and none of the SEC
Documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company
included in the SEC Documents comply in all material respects with applicable
accounting requirements and the published rules and regulations of the
Securities and Exchange Commission with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved, except as
may be otherwise indicated in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Company as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements,
to normal year-end audit adjustments. Since the date of the financial
statements included in the Company&#146;s last filed Annual Report on Form 10-K and
except as disclosed on Schedule&nbsp;2.1(h), there has been no event, occurrence or
development that has had a Material Adverse Effect which is not specifically
disclosed in any of the SEC Documents.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Brokers. The Company has taken no action which would give rise to any
claim by any person for brokerage commissions, finder&#146;s fees or similar
payments by the Company or the Lenders relating to the Financing Documents or
the transactions contemplated thereby.
</FONT>
<P align="center"><FONT size="2">7
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;Compliance with Obligations to the Lenders. The Company is in
compliance with all of its obligations to the Lenders, including without
limitation, pursuant to prior agreements.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;2.2 Representations and Warranties of Lenders. Each Lender
severally hereby makes the following representations and warranties to the
Company as to itself only as of the date hereof:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Organization; Authority. The Lender is a corporation or partnership
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite legal power and authority
to enter into and to consummate the transactions contemplated hereby, by the
Security Agreement and by the New Notes and otherwise to carry out its
obligations hereunder and thereunder. The purchase by the Lender of its New
Notes and the Commitments, if any, under this Agreement and the making of Loans
from time to time hereunder at such Lender&#146;s discretion, has been duly
authorized by all necessary action on the part of the Lender. This Agreement
has been duly executed and delivered by the Lender and constitutes its valid
and legally binding obligation, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors&#146; rights generally and to general principles of equity.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Investment Intent. Each Lender is acquiring its Notes for its own
account and without a present intention to distribute or resell it in violation
of applicable securities laws. No Lender will offer, sell, transfer, assign,
pledge or hypothecate any portion of the New Notes in the absence of a
registration under, or pursuant to an applicable exemption from, federal and
applicable state securities laws.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Experience. The Lender has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in its New Notes and has so
evaluated the merits and risks of such investment.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Ability of Lender to Bear Risk of Investment; Accredited Investor.
The Lender is able to bear the economic risk of an investment in its New Notes
at the present time, is able to afford a complete loss of such investment. The
Lender is an &#147;accredited investor&#148; as such term is defined in Rule&nbsp;501 under
the Securities Act.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Access to Information. The Lender acknowledges that it has been
afforded (i)&nbsp;the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the
terms and conditions of its New Notes and the merits and risks of investing in
its New Notes; (ii)&nbsp;access to information about the Company and the Company&#146;s
financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment; and (iii)&nbsp;the
opportunity to obtain such additional information which the Company possesses
or can acquire without unreasonable effort or expense that is necessary to make
an informed investment decision with respect to the investment.
</FONT>
<P align="center"><FONT size="2">8
</FONT>
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<P align="center"><FONT size="2"><B>ARTICLE 3</B>
</FONT>
<P align="center"><FONT size="2"><B>CONDITIONS TO ADVANCES</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any making of any Advance by each Lender is subject to the satisfaction at
or before the date of such Advance of each of the conditions set forth below.
These conditions are for the benefit of each Lender and may be waived by such
Lender at any time at its discretion.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>(a)&nbsp;Discretion of Lender. </I>The Lender shall have determined, in its sole
and absolute discretion that the making of such Advance is desirable;
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>(b)&nbsp;Absence of Default or Event of Default. </I>There shall be no Event of
Default (as defined in the Notes) or any event which, with the passage of time
and/or the giving of notice, would constitute an Event of Default (&#147;Default&#148;);
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>(c)&nbsp;Accuracy of the Company&#146;s Representations and Warranties. </I>The
representations and warranties of the Company under this Agreement shall be
true and correct in all material respects as of the date of this Agreement, as
of the date on which the Borrowing Request with respect to such Borrowing was
delivered by the Company to the Lenders, and as of the date of such Borrowing
as though made at that time (except for representations and warranties as of an
earlier date, which shall be true and correct in all material respects as of
such date); provided, that any representations and warranties which are limited
by their terms to materiality shall have been or shall be (as applicable) true
and correct in all respects.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>(d)&nbsp;Performance by the Company. </I>The Company shall have performed all
agreements and satisfied all conditions required to be performed or satisfied
by the Company at or prior to the delivery of the Borrowing Request and at or
prior to the Borrowing.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>(e)&nbsp;Legality and Possibility. </I>No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by the Financing Documents.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>(f)&nbsp;Security. </I>No changes to the type, validity and sufficiency of the
Lender&#146;s collateral security shall have occurred, in the good faith judgment of
the Lender, to cause the value of such collateral to be impaired.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>(g)&nbsp;Miscellaneous. </I>The Company shall have delivered to the Lenders such
other documents relating to the transactions contemplated by this Agreement and
the other Financing Documents as the Lenders may reasonably request.
</FONT>
<P align="center"><FONT size="2">9
</FONT>
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<P align="center"><FONT size="2"><B>ARTICLE 4</B>
</FONT>
<P align="center"><FONT size="2"><b>COVENANTS</b>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;4.1 Affirmative Covenants. The Company covenants that from the
date hereof and for so long as any portion of the Loans or other obligation
under the Financing Documents, the Registration Rights Agreement dated October
23, 2002 between the Company and the Lenders (the &#147;<B>Registration Rights
Agreement</B>&#148;), the Security Agreement dated as of October&nbsp;23, 2002 by and between
the Company and the Lenders (&#147;the Original Security Agreement&#148;), the UCC
Financing Statements and Patent and Trademark Financing Statements executed in
connection with the Original Loan Agreement (the &#147;Original Financing
Statements&#148;), the Original Notes, the Guaranties of the Original Notes, and the
Warrants issued in connection with the Original Loan Documents (&#147;<B>Warrants</B>&#148; and
collectively with the Registration Rights Agreement, the Original Notes, the
Guaranties of the Original Notes, the Original Security Agreement, the Original
Financing Statements and the Financing Documents, the &#147;<B>Loan Documents</B>&#148;) shall
remain outstanding, it will observe or perform each of the following unless
such observance or performance is expressly waived by the Lenders in writing:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Corporate Existence. It will maintain its corporate existence in good
standing and remain qualified to do business as a foreign corporation in each
jurisdiction in which the nature of its activities or the character of the
properties it owns or leases makes such qualification necessary.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Continuation of Business. Except as set forth on Schedule&nbsp;4.1(b), it
will continue to conduct its business, in all material aspects, as conducted on
the day hereof in compliance in all material respects with all applicable rules
and regulations of applicable governmental authorities.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;4.2 Dividends; Stock Repurchases. So long as any Notes remain
outstanding, the Company will not declare any dividends on any shares of any
class of its capital stock (other than dividends consisting solely of Common
Stock or rights to purchase Common Stock of the Company), or apply any of its
property or assets to the purchase, redemption or other retirement of, or set
apart any sum for the payment of any dividends on, or for the purchase,
redemption or other retirement of, or make any other distribution by reduction
of capital or otherwise in respect of, any shares of any class of its capital
stock.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;4.3 Incurrence of Debt; Liens; Transfer of Assets to Subsidiaries.
For so long as any Commitments or portion of the Loans (or any other
obligation under the Loan Documents) remain outstanding, neither the Company
nor any subsidiary of the Company shall:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Directly or indirectly create, incur, assume, guarantee, or otherwise
become or remain directly or indirectly liable with respect to, any
indebtedness of any kind, other than (i)&nbsp;indebtedness under the Notes; (ii)
other indebtedness to the Lenders which indebtedness is expressly subordinated
in writing to the indebtedness under the Loan Documents; or (iii)&nbsp;indebtedness to trade creditors in the ordinary
course of business consistent with past practice.
</FONT>
<P align="center"><FONT size="2">10
</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Directly or indirectly create, incur, assume or permit to exist any
lien, pledge, charge or encumbrance on or with respect to any of its property
or assets (including any document or instrument in respect of goods or accounts
receivable) whether now owned or held or hereafter acquired, or any income or
profits therefrom, except for Permitted Liens.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Directly or indirectly transfer any of its assets to any subsidiary of
the Company.
</FONT>
<P align="left"><FONT size="2">As used herein, <B>"</B>Permitted Liens<B>&#148; </B>means (i)&nbsp;liens granted under the Security
Agreement or the Security Agreement, dated as of October&nbsp;23, 2002 by and
between the Lenders and the Company (the &#147;Original Security Agreement&#148;); (ii)
liens imposed by mandatory provisions of law such as materialmen&#146;s, mechanic&#146;s
or warehousemen&#146;s; (iii)&nbsp;liens for taxes, assessments and governmental charges
or levies imposed upon the Company or any subsidiaries or their income, profits
or property, if the same are not yet due and payable or if the same are
contested in good faith and as to which adequate reserves have been provided;
(iv)&nbsp;pledges or deposits made to secure payment of worker&#146;s compensation
insurance, unemployment insurance, pensions or social security programs or to
secure the performance of letters of credits, bids, tenders, public or
statutory obligations, surety, performance bonds and other similar obligations;
(v)&nbsp;encumbrances consisting of zoning restrictions, easements, or other
restrictions on the use of real property, provided that such do not impair the
use of such property for the uses intended and none of which is violated by
existing or proposed structures or land use and (vi)&nbsp;the liens and encumbrances
disclosed on Schedule&nbsp;A of the Security Agreement.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;4.5 Warrants issued under Original Loan Agreement. With respect
to the Warrants, the provisions of the Registration Rights Agreement and of
Section&nbsp;4.5 of the Original Loan Agreement shall continue to apply.
</FONT>
<P align="center"><FONT size="2"><B>ARTICLE 5</B>
</FONT>
<P align="center"><FONT size="2"><b>MISCELLANEOUS</b>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.1 Fees and Expenses. The Company shall pay, concurrently with
the execution and delivery of this Agreement, the reasonable fees and expenses
of legal counsel for the Lenders incident to the negotiation, preparation,
execution, delivery and performance of the Loan Documents incurred to date and,
thereafter, upon request of a Lender, the Company, shall pay any additional
fees and expenses incurred by the Lenders and incident to the filing,
negotiation, preparation, performance or amendment of the Loan Documents.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.2 Entire Agreement. This Agreement, together with the Notes,
the Security Agreement, the Guaranties and the other Loan Documents, contains
the entire
</FONT>
<P align="center"><FONT size="2">11
</FONT>
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<P align="left"><FONT size="2">understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, with
respect to such matters.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.3 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been delivered (i)&nbsp;upon receipt, when delivered personally; (ii)&nbsp;when sent by
facsimile, upon receipt if received on a business day prior to 5:00 p.m.
(Central Time), or the first business day following such receipt if received on
a business day after 5:00 p.m. (Central Time); or (iii)&nbsp;upon receipt, when
deposited with a nationally recognized overnight express courier service, fully
prepaid, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
</FONT>
<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">

<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">If to the Company:&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
ISCO International, Inc.<BR>
451 Kingston Court<BR>
Mt. Prospect, Illinois 60056<BR>
Attn: Frank Cesario<BR>
Fax: (847)&nbsp;391-5015</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With copies to:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Pepper Hamilton LLP<BR>
400 Berwyn Park<BR>
899 Cassatt Road<BR>
Berwyn, Pennsylvania 19312<BR>
Attn: Michael P. Gallagher<BR>
Fax: (610)&nbsp;640-7835</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">If to Manchester Securities Corp.:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
712 Fifth Avenue, 36th Floor<BR>
New York, New York 10019<BR>
Attn: Dan Gropper<BR>
Fax: (212)&nbsp;974-2092</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With copies to:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Kleinberg, Kaplan, Wolff &#038; Cohen, P.C.<BR>
551 Fifth Avenue<BR>
New York, NY 10176<BR>
Attn: Lawrence D. Hui<BR>
Fax: (212)&nbsp;986-8866</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">If to Alexander:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Alexander Finance, LP<br>
1560 Sherman Avenue, Suite&nbsp;900<BR>
Evanston, Illinois 60201<BR>
Attn: Bradford T. Whitmore<BR>
Fax: (847)&nbsp;733-0339</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With copies to:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Sachnoff &#038; Weaver<BR>
30 S. Wacker Drive<BR>
Chicago, Illinois 60606<BR>
Attn: Evelyn C. Arkebauer, Esq.<BR>
Fax: (312)&nbsp;207-6400</FONT></TD>
</TR>
</TABLE>
</DIV>

<P align="center"><FONT size="2">12
</FONT>
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<P align="left"><FONT size="2">or such other address or facsimile number as may be designated in writing
hereafter, in the same manner, by such person.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.4 Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and by Lenders holding at least 75% of the
Commitments; or, in the case of a waiver, by the party against whom enforcement
of any such waiver is sought. No waiver 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.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.5 Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.6 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. Neither the Company nor any Lender may assign this Agreement or any
rights or obligations hereunder (other than an assignment from a Lender to an
affiliate of such Lender) without the prior written consent of the other. Any
transfer made in violation of this provision shall be null and void. The
assignment by a party of this Agreement or any rights hereunder shall not
affect the obligations of such party under this Agreement.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.7 No Third-Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.8 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without regard to the principles of conflicts of law thereof.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.9 Survival. The agreements, representations and warranties and
covenants contained in this Agreement shall survive the delivery of the Notes
pursuant to this Agreement and any Advances made thereunder.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.10 Counterpart and Facsimile Signatures. This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid and binding obligation of the executing party with the same force and effect as if
such facsimile signature page were an original thereof.
</FONT>
<P align="center"><FONT size="2">13
</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.11 Publicity. The Company and the Lenders shall consult with
each other in issuing any press releases or otherwise making public statements
with respect to the transactions contemplated hereby and neither the Company
nor any Lender shall issue any such press release or otherwise make any such
public statement without the prior consent of the other, which consent shall
not be unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law, in which such case the
disclosing party shall provide the other party with prior notice of such public
statement.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.12 Severability. In case any one or more of the provisions of
this Agreement shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement
shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.13 Payment of Expenses. The Company agrees to pay all costs and
expenses, including reasonable attorneys&#146; fees and expenses, which may be
incurred by any Lender in successfully enforcing any Financing Document,
including without limitation in enforcing Section&nbsp;5.14 below.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.14 Indemnification. The Company hereby agrees to indemnify,
defend and hold harmless each Lender and its respective partners, shareholders,
officers, affiliates, employees or agents (&#147;<B>Indemnified Parties</B>&#148;), from and
against any and all losses, claims, damages, liabilities and costs, including
reasonable legal fees (collectively &#147;<B>Losses</B>&#148;) (i)&nbsp;incurred as a result of the
breach by the Company or any subsidiary of any representation, covenant or
other provision in any Loan Document; (ii)&nbsp;incurred as a result of entering
into this Agreement; (iii)&nbsp;incurred in enforcing this Section&nbsp;5.14 or (iv)
incurred involving a third-party claim and arising out of the acquisition,
holding and/or enforcement by such Lender of any of the Loan Documents.
</FONT>
<P align="center"><FONT size="2">14
</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;5.15 Like Treatment of Lenders. Neither the Company nor any of its affiliates
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee, payment for the redemptions or exchange of the
Notes, or any Advance thereunder or otherwise, to any holder of Notes, for or
as an inducement to, or in connection with the solicitation of, any consent,
waiver or amendment of any terms or provisions of the Loan Documents, unless
such consideration is required to be paid to all holders of Notes bound by such
consent, waiver or amendment whether or not such holders so consent, waive or
agree to amend and whether or not such holders tender their Notes for
redemption or exchange. The Company shall not, directly or indirectly, redeem
to prepay any Advances unless such offer of redemption is made pro rata to all
holders on identical terms.
</FONT>
<P align="center"><FONT size="2">15
</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF</B>, the parties hereto have caused this Agreement to be
duly executed by their respective authorized persons as of the date first
indicated above.
</FONT>
<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">

<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" valign="top" align="left"><FONT size="2">ISCO INTERNATIONAL, INC</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/ Amr Abdelmonem, Ph.D.</FONT></TD>
</TR>
<TR>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Name: Amr Abdelmonem, Ph.D.<BR>
Title: Chief Executive Officer</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" valign="top" align="left"><FONT size="2">MANCHESTER SECURITIES CORPORATION</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/ Elliot Greenberg</FONT></TD>
</TR>
<TR>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Name: Elliot Greenberg<BR>
Title: Vice President</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" valign="top" align="left"><FONT size="2">ALEXANDER FINANCE, L.P.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/&nbsp;Bradford T. Whitmore</FONT></TD>
</TR>
<TR>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Name:&nbsp;Bradford T. Whitmore<BR>
Title:&nbsp;President, Ben Partners, Inc., its General Partner</FONT></TD>
</TR>
</TABLE>
</DIV>

<P align="center"><FONT size="2">16
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P align="center"><FONT size="2"><B>SCHEDULES</B>
</FONT>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="70%">

<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Schedule&nbsp;A
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Schedule of Lenders</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Company Schedules</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</DIV>

<P align="center"><FONT size="2"><B>EXHIBITS</B>
</FONT>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="70%">

<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Exhibit&nbsp;A
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Secured Grid Note</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Exhibit&nbsp;B
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Amended and Restated Security Agreement</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Exhibit&nbsp;C
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Guaranties</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Exhibit&nbsp;D
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Amendments to UCC Financing Statements</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Exhibit&nbsp;E
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Amendments to Patent and Trademark
Financing Filings</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Exhibit&nbsp;F
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Legal opinion of counsel to the Company</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Exhibit&nbsp;G
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Form of Notice of Borrowing</FONT></TD>
</TR>
</TABLE>
</DIV>

<P align="center"><FONT size="2">&nbsp;
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P align="center"><FONT size="2"><B>SCHEDULE A</B>
</FONT>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="60%">

<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR  valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Lender</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Commitment</B></FONT></TD>
</TR>
<TR  valign="bottom">
    <TD nowrap align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Manchester Securities Corporation</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2"><br>
</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
$3,371,400<br>
</FONT></TD>
    <TD nowrap valign="top"><FONT size="2"><br>
</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Alexander Finance, L.P.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2"><br>
</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
$2,628,600<br>
</FONT></TD>
    <TD nowrap valign="top"><FONT size="2"><br>
</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Total</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2"><br>
</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
$6,000,000<br>
</FONT></TD>
    <TD nowrap valign="top"><FONT size="2"><br>
</FONT></TD>
</TR>
</TABLE>
</DIV>



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