Exhibit 10.1
ThermoEnergy
Corporation
Bridge Loan and Warrant
Amendment Agreement;
Consent, Waiver and
Notice of Exercise
This Agreement is made by and among
ThermoEnergy Corporation, a Delaware corporation (the
“Corporation”) and the undersigned holders of the
shares of the Corporation’s Series B Convertible Preferred
Stock (the “Series B Stock”) and/or the Common Stock
Purchase Warrants issued by the Corporation (the
“Warrants”) as set forth on Schedule I hereto (each, an
“Investor”), and the Consent, Waiver and Notice made
herein are given by the Investors, this 17 th day of
June 2011.
Whereas, to induce the Investors to
exercise the Warrants, the Corporation desires to amend each of the
Warrants to provide that such Warrant shall be exercisable for the
purchase of shares of Series B Stock rather than shares of the
Corporation’s Common Stock (the “Common Stock”)
and to adjust the exercise price of such Warrant as hereinafter
provided (the “Warrant Amendment”); and
Whereas, the Board of Directors of
the Corporation has recommended that the Corporation’s
Certificate of Incorporation, as previously amended (the
“Certificate of Incorporation”), be amended to modify
the description of the Series B Stock as hereinafter provided to
permit the holders of the Series B Stock to waive the application
of the anti-dilution adjustment to the conversion price of the
Series B Stock (the “Charter Amendment”);
and
Whereas, the Investors are willing
to consent to the Charter Amendment and, upon the effectiveness
thereof, to waive the application of the anti-dilution adjustment
to the deemed issuance of Common Stock upon the effectiveness of
the Warrant Amendment or upon the issuance of shares of Series B
Stock upon exercise of the Warrants in accordance with their terms,
as amended by the Warrant Amendment (the “Anti-Dilution
Waiver”); and
Whereas, the Investor desires to
exercise the Warrants upon the effectiveness of the Warrant
Amendment; and
Whereas, in anticipation of the
exercise of the Warrants and subject to the effectiveness of the
Charter Amendment and the making of the Anti-Dilution Waiver by the
holders of a sufficient number of the outstanding shares of Series
B Stock, each of the Investors is willing to make a loan to the
Corporation in the principal amount equal to the exercise price of
the Warrants held by such Investor;
Now, therefore, in consideration of
the foregoing and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the
Corporation and the Investors hereby agree as follows:
1.
Consent to Charter Amendment . Pursuant to Section 228
of the Delaware General Corporation Law and Section 1.10 of the
By-Laws of the Corporation, the Investors hereby consent to the
adoption of the following resolution by written consent in lieu of
a meeting of the stockholders of the Corporation:
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That the Certificate of
Incorporation of this Corporation, as heretofore amended, be
further amended by (i) deleting the word “and” from the
end of Section 6(g)(ii)(F) of the Description of Series B
Convertible Preferred Stock attached as Exhibit A to the
Certificate of Designation, Preferences and Rights filed in the
Office of the Secretary of State of the State of Delaware on
November 18, 2009 (the “Description”), (ii) by deleting
the period from the end of Section 6(g)(ii)(G) of the Description
and substituting in place there of a semi-colon and the word
“and” and (iii) by adding at the end of Section
6(g)(ii) of the Description the following new
provision: “(H) shares of Common Stock issued or
deemed issued upon the issuance or exercise of options, warrants or
other rights to acquire shares of Common Stock or other securities
convertible into or exchangeable for shares of Common Stock or upon
the issuance or conversion of securities convertible into shares of
Common Stock in a transaction or series of related transactions
approved by the holders of a majority of the then-outstanding
shares of Series B Convertible Preferred Stock.”
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Promptly following receipt of the written
consent to the foregoing Charter Amendment from the requisite
holders of the Corporation’s voting securities, the
Corporation shall prepare and distribute to all of the
Corporation’s stockholders a Notice in compliance with
Section 228(e) of the Delaware General Corporation Law and an
Information Statement in compliance with Regulation 14C promulgated
by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 (the “Exchange Act”)
(“Regulation 14C”) and thereafter shall file in the
Office of the Secretary of State of the State of Delaware a
Certificate of Amendment effecting the Charter Amendment (the
“Certificate of Amendment”). The Corporation
shall, upon filing of the Certificate of Amendment in the Office of
the Secretary of State of the State of Delaware, promptly give
notice of such filing to all Investors.
2.
Approval of Warrant Amendment; Waiver of Anti-Dilution
Adjustment . Effective upon the
filing in the Office of the Secretary of State of the State of
Delaware of the Certificate of Amendment, the Investors hereby
approve the Warrant Amendment contemplated by this Agreement, it
being the intention of the Investors that the shares of Common
Stock deemed issued upon the Warrant Amendment or upon the exercise
of the Warrants following the Warrant Amendment shall not be deemed
to be “Additional Stock” (as such term is defined in
the Description) and that no anti-dilution adjustment to the
conversion price of the Series B Stock shall be made pursuant to
Section 6(g)(i) of the Description upon the effectiveness of the
Warrant Amendment or upon exercise of the Warrants as
amended.
3.
Warrant Amendment . Upon the
effectiveness of the Charter Amendment, and provided that the
holders of at least a majority of the outstanding shares of Series
B Stock (including the Investors) approve, each of the Warrants
shall automatically be, and hereby are, amended (i) to provide that
such Warrant is exercisable for the purchase of shares of Series B
Stock (and no longer for the purchase of shares of Common Stock),
(ii) to provide that the number of shares of Series B Stock for
which such Warrant is exercisable shall be equal to (x) the number
of shares of Common Stock for which such Warrant had theretofore
been exercisable divided by (y) 10, and (iii) to change the
exercise price thereof to $1.30 per share of Series B
Stock. In all other respects the Warrants shall remain
in full force and effect without amendment or
alteration. For purposes of clarification, the parties
agree that the term “Warrants”) refers only those
Common Stock Purchase Warrants listed on Schedule I hereto and does
not include any other warrants, options or similar rights held by
the Investors or by any other person or entity (the
“Non-Participating Warrants”). The Warrant
Amendment effected by this Section 3 shall in no way alter or amend
any of the Non-Participating Warrants.
4.
Warrant Exercise . The
Investors hereby give notice of exercise of all of the Warrants,
immediately upon the effectiveness of the Warrant Amendment, and
hereby authorize the Corporation to cancel the Bridge Loans (as
such term is hereinafter defined) in full satisfaction of the
Investors’ obligation to pay the exercise price for the
Warrants.
5.
Bridge Loans . Pending the
effectiveness of the Warrant Amendment, and until the Warrants, as
amended, are exercised, each of the Investors hereby agrees to make
an interest free loan to the Corporation in the principal amount
equal to the exercise price of such Investor’s Warrants (as
amended by the Warrant Amendment) as shown on Schedule I hereto
(each, a “Bridge Loan”). The Bridge Loans
shall be evidenced by Promissory Notes in substantially the form
attached hereto as Exhibit A (the “Bridge Notes”) and,
if not cancelled in payment of the exercise price for the Warrants
on or before February 29, 2012, shall become immediately due and
payable upon demand by the Investors given at any time on or after
March 1, 2012.
6.
Representations and Warranties of the Corporation
. The Corporation hereby represents
and warrants to the Investors as follows:
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Organization and
Qualification . The Corporation is duly
incorporated, validly existing and in good standing under the laws
of the State of Delaware, with the requisite power and authority to
own and use its properties and assets and to carry on its business
as currently conducted. The Corporation is not in
violation of any of the provisions of its Certificate of
Incorpo
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