ISCO INTERNATIONAL INC
SECURITIES PURCHASE AGREEMENT
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<TYPE>EX-10.1
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<FILENAME>dex101.htm
<DESCRIPTION>SECURITIES PURCHASE AGREEMENT
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<TITLE>Securities Purchase Agreement</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.1 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>SECURITIES PURCHASE AGREEMENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>SECURITIES PURCHASE AGREEMENT </B>(&#147;<U>Agreement</U>&#148;)
dated as of June&nbsp;22, 2006 by and among Manchester Securities Corp., a New York corporation (&#147;<U>Manchester</U>&#148;), Alexander Finance, L.P., an Illinois limited partnership (&#147;<U>Alexander</U>&#148; and together with Manchester and
Alexander, the &#147;<U>Purchasers</U>&#148;) and ISCO International, Inc., a corporation organized and existing under the laws of Delaware (the &#147;<U>Company</U>&#148;). </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>W</U> <U>I</U> <U>T</U> <U>N</U> <U>E</U> <U>S</U> <U>S</U> <U>E</U> <U>T</U> <U>H</U>: </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2"><B>WHEREAS, </B>the Company and Purchasers entered into a Third Amended and Restated Loan Agreement, dated as of November&nbsp;10, 2004, as amended (the &#147;<U>Loan Agreement</U>&#148;), pursuant to which the
Company issued to the Purchasers certain notes (collectively, the &#147;<U>Prior ISCO Notes</U>&#148;); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>WHEREAS,</B> the Company&#146;s
obligations to the Purchasers under the Prior ISCO Notes are secured by a perfected first lien on certain assets of the Company and its Subsidiaries (as defined below) under the Third Amended and Restated Security Agreement dated November&nbsp;10,
2004, as amended, between the Company, the Purchasers and the Subsidiaries (the &#147;<U>Security Agreement</U>&#148;); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>WHEREAS,</B>
Spectral Solutions, Inc., a Colorado corporation and Illinois Superconductor Canada Corporation (the &#147;<U>Subsidiaries</U>&#148;) guaranteed the obligations of the Company under the Loan Agreement and the Prior ISCO Notes under separate
Guaranties, as amended (the &#147;<U>Guaranties</U>&#148;); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>WHEREAS,</B> the Company now desires to sell and issue to the Purchasers,
and the Purchasers now wish to purchase from the Company, 5% Senior Secured Convertible Notes due 2010, each in the aggregate principal amount of $2,500,000 (the &#147;<U>Face Value</U>&#148;) in the form attached hereto as <U>Exhibit A</U> (the
&#147;<U>Convertible Notes</U>&#148;) convertible into shares (the &#147;<U>Conversion Shares</U>&#148;) of the Company&#146;s common stock, par value $0.001 per share (&#147;<U>Common Stock</U>&#148;); </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><B>WHEREAS,</B> the Company, the Purchasers and the Subsidiaries desire to amend the Security Agreement and the Guarantees to secure and guaranty the
obligations of the Company under the Convertible Notes by a perfected first lien on certain assets of the Company and its Subsidiaries; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2"><B>WHEREAS,</B> pursuant to the Registration Rights Agreement, dated as of the date hereof and in the form and such substance of <U>Exhibit B</U> hereto (the &#147;<U>Registration Rights Agreement</U>&#148;), the Company shall register for
resale under the Securities Act of 1933, as amended (the &#147;<U>Securities Act</U>&#148;), the Conversion Shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2"><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>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE I </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B><U>Purchase and Sale of Convertible Notes </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;1.1 <U>Issuance of Convertible
Notes</U>. Upon the following terms and conditions, the Company shall issue and sell to the Purchasers, and the Purchasers shall purchase from the Company, the Convertible Notes in the principal amount set forth below their name on the signature
pages hereto (up to an aggregate principal amount of $5,000,000). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;1.2 <U>Purchase Price</U>. The purchase price for the
Convertible Notes to be paid by each Purchaser (the &#147;<U>Purchase Price</U>&#148;) shall be the Face Value. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;1.3
<U>Amendment to Loan Documents</U>. On the Closing Date, (a)&nbsp;the Purchasers and the Company shall waive the Company&#146;s obligations to prepay the Prior ISCO Notes as a result of the Company&#146;s issuance of the Convertible Notes hereunder,
(b)&nbsp;the Purchasers, the Company and the Subsidiaries shall amend the terms of the Security Agreement to secure the Company&#146;s obligations under the Convertible Notes by a priority first lien on the assets of the Company and its
Subsidiaries, (c)&nbsp;the Subsidiaries shall amend the terms of their Guaranties to the Purchasers to include guaranteeing the obligations of the Company under this Purchase Agreement and the Convertible Notes, and (d)&nbsp;the UCC-1 Financing
Statements and the Patent and Trademark Financing Statements shall be amended to include the Company&#146;s obligations under the Convertible Notes, if required. Collectively, the Purchase Agreement, the Convertible Notes and the Registration Rights
Agreement shall be referred to as the &#147;<U>Transaction Documents</U>&#148;), and the Loan Agreement, the Security Agreement, the Guaranties, the UCC-1 Financing Statements and the Patent and Trademark Financing Statements, all as amended (as
applicable), shall be referred to as the &#147;<U>Loan Documents</U>&#148;. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;1.4 <U>The Closing</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) <I>Timing</I>. Subject to the fulfillment or waiver of the conditions set forth in Article IV hereof, the purchase and sale of the Convertible Notes
shall take place at a closing (the &#147;<U>Closing</U>&#148;), to be held on or about June <U>&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2006 (the &#147;<U>Closing Date</U>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT
FACE="Times New Roman" SIZE="2">(b) <I>Form of Payment and Closing</I>. On the Closing Date, the Company shall deliver to the Purchasers the Convertible Notes purchased and paid for by them hereunder, issued in the name of the applicable Purchaser.
Subject to the applicable conditions set forth in Section&nbsp;4.2 below, on the Closing Date the Purchasers shall pay the Purchase Price for their respective Convertible Notes by wire transfer of immediately available funds to an account designated
in writing by the Company. In addition, each party shall deliver all documents, instruments and writings required to be delivered by such party pursuant to this Agreement at or prior to the Closing, as specified in Article&nbsp;IV below. Subject to
the payments of the Purchase Price in accordance with this Agreement, the Convertible Notes will be fully paid for by the Purchasers as of the Closing Date. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE II </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B><U>Representations and Warranties </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;2.1 <U>Representations and Warranties of the
Company</U>. The Company hereby makes the following representations and warranties to each Purchaser as of the date hereof: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a)
<I>Organization and Qualification; Material Adverse Effect</I>. 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 Subsidiaries. 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 (x)&nbsp;adversely affect the
legality, validity or enforceability of any of the Transaction Documents or 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, taken as a whole
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 Transaction Documents and the Loan Documents (any of (x), (y)&nbsp;or (z)&nbsp;a &#147;<U>Material Adverse
Effect</U>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) <I>Authorization; Enforcement</I>. The Company has the requisite corporate power and authority to enter into and
to consummate the transactions contemplated by the Transaction Documents, and otherwise to carry out its obligations thereunder. The execution and delivery of amendments to each of the Loan Documents by the Company (and the Subsidiaries, if
applicable) 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 amendments to the Loan 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> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) <I>Capitalization.</I> The authorized, issued and outstanding capital stock of the Company is set forth in Schedule 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 Transaction Documents. Except
as disclosed in Schedule 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> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(d) <I>Issuance of Shares</I>. Upon issuance in accordance with this Agreement and the terms of the
Convertible Notes, the Conversion Shares into which the Convertible Notes are convertible will be duly authorized, validly issued, fully paid and nonassessable and free from all taxes (other than transfer taxes where the Convertible Notes have been
transferred and other than any taxes due because of actions by a Purchaser), liens and charges with respect to the issue thereof and the holders of such Conversion Shares shall be entitled to all rights and preferences accorded to a holder of Common
Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(e) <I>No Conflicts</I>. The execution, delivery and performance of the Transaction Documents and the amendments to the Loan
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)&nbsp;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> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(f) <I>Consents and
Approvals</I>. 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 Transaction Documents and the amendment of the Loan Documents other than: (i)&nbsp;the filing of the Amendments to the UCC and Patent and Trademark Financing Statements if any are
required by the Purchasers; (ii)&nbsp;approval by the American Stock Exchange; and (iii)&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 clauses (i)&nbsp;and (ii)&nbsp;are hereinafter referred to as the &#147;<U>Required Approvals</U>&#148;). The Company has no reason to believe that it will be unable to obtain the Required Approvals. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(g) <I>Private Offering</I>. Assuming (without any independent investigation or verification by or on behalf of the Company) the accuracy of the
representations and warranties of the Purchasers set forth herein, the offer and sale of the Convertible Notes are exempt from registration under Section&nbsp;5 of the Securities Act of 1933, as amended (the &#147;<U>Securities Act</U>&#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 Convertible Notes to the registration requirements of Section&nbsp;5 of the Securities Act.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(h) <I>SEC Documents</I>. The Company has filed all reports or other filings required to be filed by it
under Securities Act and the Securities Exchange Act of 1934, as amended (the &#147;<U>Exchange Act</U>&#148;), including pursuant to Section&nbsp;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;<U>SEC Documents</U>&#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, 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> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(i) <I>Brokers</I>. 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 Purchasers relating to the Transaction Documents or the transactions contemplated thereby. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(j)
<I>Compliance with Obligations to the Purchasers</I>. The Company is in compliance with all of its obligations to the Purchasers pursuant to the Loan Documents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Section&nbsp;2.2 <U>Representations and Warranties of the Purchaser</U>. Each Purchaser hereby makes the following representations and warranties to the Company as of the date hereof and the Closing Date: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) <I>Organization; Authority</I>. The Purchaser 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 Loan Agreement, Security Agreement, the Registration Rights Agreement and by the
Convertible Notes and otherwise to carry out its obligations hereunder and thereunder. The purchase by the Purchaser of its Convertible Notes under this Agreement has been duly authorized by all necessary action on the part of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser 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> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) <I>Investment Intent</I>. Each Purchaser is acquiring its Convertible Notes for its own account and
without a present intention to distribute or resell it in violation of applicable securities laws. No Purchaser will offer, sell, transfer, assign, pledge or hypothecate any portion of the Convertible Notes in the absence of a registration under, or
pursuant to an applicable exemption from, federal and applicable state securities laws. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) <I>Experience</I>. The Purchaser 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 Convertible Notes and Conversion Shares and has so evaluated the merits and risks
of such investment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(d) <I>Accredited Investor Status; Sophisticated Purchaser</I>. The Purchaser is an &#147;accredited investor&#148;
as that term is defined in Rule 501(a) of Regulation D under the 1933 Act and is able to bear the risk of its investment in the Convertible Notes and Conversion Shares. The Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the purchase of the Convertible Notes and Conversion Shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(e)
<I>Information</I>. The Purchaser and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company which have been requested and materials relating to the offer and sale of the
Convertible Notes and Conversion Shares which have been requested by the Purchaser. The Purchaser and its advisors, if any, have 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 the Convertible Notes and the merits and risks of investing in the Convertible Notes and Conversion Shares; (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. Neither such inquiries nor any other due diligence investigations conducted by the Purchaser or
its advisors, if any, or its representatives shall modify, amend or affect the Purchaser&#146;s right to rely on the Company&#146;s representations and warranties contained in Section&nbsp;2.1 above. The Purchaser understands that its purchase of
the Convertible Notes and Conversion Shares involves a high degree of risk. The Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the
Convertible Notes and Conversion Shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(f) <I>No Public Trading</I>. The Purchaser understands that there is currently no public
trading market for the Convertible Notes, that none is expected to develop, and that the Convertible Notes must be held indefinitely unless and until such Convertible Notes are converted into shares that are registered for public resale under the
1933 Act or other applicable laws (or an exemption from registration is available). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(g) <I>Brokers</I>. The Purchaser 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 Purchaser relating to this Agreement or the transactions contemplated hereby. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(h) <I>Reliance by the Company</I>. The Purchaser understands that the Convertible Notes are being
offered and sold in reliance on a transactional exemption from the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to determine the applicability of such exemptions and the suitability of the Purchaser to acquire the Convertible Notes and the Conversion Shares issuable upon conversion
or exercise thereof. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE III </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B><U>Covenants </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;3.1 <U>Affirmative Covenants</U>. The Company covenants that from the
date hereof and for so long as any portion of the principal amount of the Convertible Notes, Prior ISCO Notes or other obligation under the Transaction Documents and Loan Documents shall remain outstanding, it will observe or perform each of the
following unless such observance or performance is expressly waived by the Purchasers in writing: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) <I>Corporate Existence</I>. 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> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) <I>Continuation of Business</I>. Except as set forth on Schedule 3.1(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> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Section&nbsp;3.2 <U>Dividends; Stock Repurchases</U>. So long as any Convertible 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> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;3.3 <U>Incurrence of Debt; Liens; Transfer of Assets to Subsidiaries</U>. For so long as any principal amount of the Convertible Notes
remain outstanding, neither the Company nor any Subsidiary of the Company shall: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) 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 Convertible Notes; (ii)&nbsp;other indebtedness to the Purchasers; or
(iii)&nbsp;indebtedness to trade creditors in the ordinary course of business consistent with past practice. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) 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> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) Directly or indirectly transfer any of its assets to any Subsidiary of the Company. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">As used herein, &#147;<U>Permitted Liens</U>&#148; means (i)&nbsp;liens granted under the Security Agreement; (ii)&nbsp;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 A of the Security Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;3.4 <U>AMEX Rule</U>. Notwithstanding any other provision of this
Agreement, the Convertible Notes and the Registration Rights Agreement, the total number of Conversion Shares issuable upon conversion of the Convertible Notes shall be no more than 19.9% of the Common Stock issued and outstanding on the date
hereof, which number shall be subject to readjustment for any stock split, stock dividend or reclassification of the Common Stock. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>ARTICLE IV </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>Conditions to Closing </U></B></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;4.1 <U>Conditions Precedent to the Obligation of the Company to Sell</U>. The obligation hereunder of the Company to issue and/or sell the
Convertible Notes at the Closing is subject to the satisfaction of each of the applicable conditions set forth below. These conditions are for the Company&#146;s sole benefit and may be waived by the Company at any time in its sole discretion.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) <I>Accuracy of the Purchaser&#146;s Representations and Warranties</I>. The representations and warranties of the Purchaser will be
true and correct in all material respects as of the date when made and as of the Closing Date, as though made at that time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b)
<I>Performance by the Purchaser</I>. The Purchaser shall have performed all agreements and satisfied all conditions required to be performed or satisfied by the Purchaser at or prior to the Closing Date including payment of the Purchase Price to the
Company as provided herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) <I>No Injunction.</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 Transaction Documents. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">8 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;4.2 <U>Conditions Precedent to the Obligation of the Purchasers to Purchase</U>. The
obligation hereunder of the Purchasers to acquire and pay for the Convertible Notes at the Closing is subject to the satisfaction of each of the applicable conditions set forth below. These conditions are for the Purchasers benefit and may be waived
by the Purchasers at any time in their sole discretion. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(a) <I>Accuracy of the Company&#146;s Representations and Warranties</I>. The
representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date 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). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(b) <I>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 Closing, including, without limitation, delivery of the Convertible Notes to the Purchaser on the Closing Date, as
applicable. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(c) <I>No Material Adverse Change, Injunction or Litigation</I>. There shall have been no material adverse change in the
financial or business condition of the Company or its Subsidiaries, taken as a whole, that would have a Material Adverse Effect. 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 Transaction Documents. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(d) <I>Opinion of Counsel; Compliance Certificate</I>. On the Closing Date, the Purchasers shall have received an opinion(s) of counsel to the Company
substantially in the form attached hereto as <U>Exhibit C</U> and such other opinions, certificates and documents as the Purchasers or their counsel shall reasonably require incident to the Closing. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(e) <I>Security Agreement</I>. At the Closing Date, the Company and the Subsidiaries and the Purchasers shall have executed and delivered the Security
Agreement, as amended, in the form and substance of <U>Exhibit&nbsp;D</U> attached hereto, providing for the security of the Convertible Notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman"
SIZE="2">(f) <I>Financing Statements</I>. The Company and the applicable Subsidiaries shall have executed and delivered UCC-1 and Patent and Trademark Financing Statements pertaining to the Security Agreement, as amended, if required by the
Purchasers. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:13%"><FONT FACE="Times New Roman" SIZE="2">(g) <I>Officer&#146;s Certificates</I>. On the Closing Date, the Company shall have delivered to the Purchasers a certificate
in form and substance satisfactory to the Purchasers and the Purchasers&#146; counsel, executed by a senior officer of the Company, certifying as to satisfaction of the Closing Date conditions, the incumbency of signing officers, and the true,
correct and complete nature of the Certificate of Incorporation, By-Laws, good standing and authorizing resolutions of the Company. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">9 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE V </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B><U>Legend and Stock</U> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;5.1 <U>Stock Legends</U>. Each Purchaser agrees to the
imprinting, so long as is required by this Section&nbsp;5.1, of the following legend on its Convertible Notes and Conversion Shares: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
&#147;<U>SECURITIES ACT</U>&#148;), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The Conversion Shares shall not contain the
legend set forth above if the issuance thereof occurs at any time while the registration statement (&#147;<U>Registration Statement</U>&#148;) filed pursuant to the Registration Rights Agreement is effective under the Securities Act or in the event
that the Conversion Shares may be sold pursuant to Rule 144(k) under the Securities Act. The Company agrees that it will provide each Purchaser, upon request, with a certificate or certificates representing Conversion Shares free from such legend at
such time as such legend is no longer required hereunder. Each Purchaser agrees that, in connection with any transfer of Conversion Shares by it pursuant to an effective registration statement under the Securities Act, it will comply with the
prospectus delivery requirements of the Securities Act provided copies of a current prospectus relating to such effective registration statement are or have been supplied to such Purchaser. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ARTICLE VI </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>Governing Law; Miscellaneous </U></B></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.1 <U>Fees and Expenses</U>. The Company shall pay, concurrently with the execution and delivery of this Agreement, the reasonable fees and
expenses of legal counsel for the Purchasers incident to the negotiation, preparation, execution, delivery and performance of the amended Transaction Documents incurred to date and, thereafter, upon request of a Purchaser, the Company, shall pay any
additional fees and expenses incurred by the Purchasers and incident to the filing, negotiation, preparation, performance or amendment of the Transaction Documents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Section&nbsp;6.2 <U>Entire Agreement</U>. This Agreement, together with the Convertible Notes, the Security Agreement, the Guaranties and the other Transaction Documents, contain the entire 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> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">10 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.3 <U>Notices</U>. 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 or electronic transmission, 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></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="37%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="62%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">If to the Company:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">ISCO International, Inc.</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">1001 Cambridge Drive</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Elk Grove Village, Illinois 60007</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attn: Frank Cesario</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Fax: (847) 391-5015</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">E-mail: frank.cesario@iscointl.com</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT FACE="Times New Roman" SIZE="2">With copies to:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Pepper Hamilton LLP</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">400 Berwyn Park</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">899 Cassatt Road</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Berwyn, Pennsylvania 19312</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attn: Michael P. Gallagher</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Fax: (610) 640-7835</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">E-mail: GALLAGMP@pepperlaw.com</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">11 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="37%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="62%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">If to Manchester:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">712 Fifth Avenue, 36</FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><SUP>th</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"> Floor</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">New York, New York 10019</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attn: Dave Miller</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Fax: (212) 974-2092</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">E-Mail: dmiller@elliottmgmt.com</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT FACE="Times New Roman" SIZE="2">With copies to:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Kleinberg, Kaplan, Wolff &amp; Cohen, P.C.</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">551 Fifth Avenue</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">New York, NY 10176</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attn: Lawrence D. Hui</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Fax: (212) 986-8866</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">E-Mail: lhui@kkwc.com</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">If to Alexander:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Alexander Finance, LP</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">1560 Sherman Avenue, Suite 900</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Evanston, Illinois 60201</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attn: Bradford T. Whitmore</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Fax: (847) 733-0339</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">E-Mail: bwhitmore@gbros.com</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="text-indent:4.00em"><FONT FACE="Times New Roman" SIZE="2">With copies to:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Sachnoff &amp; Weaver</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">30 S. Wacker Drive</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Chicago, Illinois 60606</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attn: Evelyn C. Arkebauer, Esq.</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Fax: (312) 207-6400</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">E-Mail: earkeba@sachnoff.com</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" 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> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.4 <U>Amendments; Waivers</U>. Except as provided in Article 4 hereof, 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 each of the Purchasers; 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> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.5
<U>Headings</U>. 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> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.6 <U>Successors and Assigns</U>. 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 Purchaser may assign this Agreement or any rights or obligations hereunder (other than an assignment from a Purchaser to an affiliate of such Purchaser) 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> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">12 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.7 <U>No Third-Party Beneficiaries</U>. 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> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Section&nbsp;6.8 <U>Governing Law</U>. 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> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.9 <U>Survival</U>. The agreements, representations and warranties and covenants contained in this Agreement shall
survive the delivery of the Convertible Notes pursuant to this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.10 <U>Counterpart and Facsimile Signatures</U>.
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> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.11 <U>Publicity</U>. The Company and the Purchasrs
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 Purchaser 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> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.12 <U>Severability</U>. 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> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.13 <U>Payment of Expenses</U>. The Company agrees to pay all costs and expenses, including reasonable attorneys&#146; fees and expenses,
which may be incurred by any Purchaser in successfully enforcing any Transaction Document including without limitation in enforcing Section&nbsp;6.14 below. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Section&nbsp;6.14 <U>Indemnification</U>. The Company hereby agrees to indemnify, defend and hold harmless each Purchaser and its respective partners, shareholders, officers, affiliates, employees or agents
(&#147;<U>Indemnified Parties</U>&#148;), from and against any and all losses, claims, damages, liabilities and costs, including reasonable legal fees (collectively &#147;<U>Losses</U>&#148;) (i)&nbsp;incurred as a result of the breach by the
Company or any subsidiary of any representation, covenant or </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">13 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">other provision in any Financing Document; (ii)&nbsp;incurred as a result of entering into this Agreement;
(iii)&nbsp;incurred in enforcing this Section&nbsp;6.14 or (iv)&nbsp;incurred involving a third-party claim and arising out of the acquisition, holding and/or enforcement by such Purchaser of any of the Transaction Documents </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Section&nbsp;6.15 <U>Like Treatment of Purchasers</U>. 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 Convertible Notes to any holder of Convertible 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 Transaction Documents, unless such consideration is required to be paid to all holders of Convertible 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 Convertible Notes for redemption or exchange. The Company shall not, directly or indirectly, redeem to prepay any Convertible Note unless such offer of redemption is made pro rata to all
holders on identical terms. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">* * * * * </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><I>[Signature Page Follows] </I></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">14 </FONT></P>


<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated above. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>ISCO INTERNATIONAL, INC.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">/s/ John Thode</FONT></P> <P STYLE="font-size:1px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">John Thode</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President and CEO</FONT></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>SIGNATURE PAGE FOR PURCHASERS FOLLOWS] </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">15 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>[PURCHASERS SIGNATURE PAGE &#150; ISCO] </B></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="43%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>MANCHESTER SECURITIES CORP.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">/s/ Elliot Greenberg</FONT></P> <P STYLE="font-size:1px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Elliot Greenberg</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Vice President</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Principal Amount: $2,500,000 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Percentage of Original Principal Amount Issued: 50% </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2"><U>Address for Notice</U>: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">712 Fifth
Avenue, 36</FONT><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><SUP>th</SUP></FONT><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"> Floor </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2">New York, New York 10019 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Tel: (212)&nbsp;506-2999 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">Fax: (212)&nbsp;974-2092 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">E-Mail: dmiller@elliottmgmt.com </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Attn: Dave Miller </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">With a copy to:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Kleinberg, Kaplan, Wolff&nbsp;&amp; Cohen, P.C. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">551 Fifth
Avenue </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">New York, New York 10176 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Tel: (212)&nbsp;986-6000
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Fax: (212)&nbsp;986-8866 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">E-Mail: lhui@kkwc.com </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Attn: Lawrence D. Hui, Esq. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">16 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>[PURCHASERS SIGNATURE PAGE &#150; ISCO] </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="43%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>ALEXANDER FINANCE, L.P.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Bradford Whitmore</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Bradford Whitmore</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President, Bun Partners</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">General Partner</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Subscription Amount: $2,500,000 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Percentage of Original Principal Amount Issued: 50% </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2"><U>Address for Notice</U>: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2">1560 Sherman Avenue, Suite 900 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Evanston, Illinois 60201 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Tel: (847)&nbsp;733-1230 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Fax: (847)&nbsp;733-0339 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">E-Mail: bwhitmore@gbros.com </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2">Attn: Bradford T. Whitmore </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">With a copy to: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Sachnoff&nbsp;&amp; Weaver </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT
FACE="Times New Roman" SIZE="2">30 S. Wacker Drive </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">Chicago, Illinois 60606 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Tel: (312)&nbsp;207-3879 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Fax: (312)&nbsp;207-6400 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2">E-Mail: earkeba@sachnoff.com </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Attn: Evelyn
C. Arkebauer, Esq. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">17 </FONT></P>

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