Exhibit 10.1

EXCHANGE AGREEMENT

                                          (including any other persons or
entities exchanging Existing Notes hereunder for whom the undersigned Holder
holds contractual and investment authority, the “Holder”) enters into this
Exchange Agreement (this “Agreement”) with Verenium Corporation (the “Company”)
on August 28, 2009, whereby on the date hereof the Holder will exchange (the
“Exchange”) the Company’s 5.50% Convertible Senior Notes due 2027 (the “Existing
Notes”) for the Company’s new 9.00% Convertible Senior Secured Notes due 2027
(the “New Notes”) that will be issued pursuant to the provisions of an Indenture
(the “Indenture”) to be entered into by and between the Company and Wells Fargo
Bank, National Association, as trustee (the “Trustee”).

On and subject to the terms hereof, the parties hereto agree as follows:

Article I: Exchange of the Existing Notes for New Notes

At the Closing (as defined herein), the Holder hereby agrees to exchange and
deliver to the Company the following Existing Notes, and in exchange therefor
the Company hereby agrees to issue to the Holder the principal amount of New
Notes described below and to pay in cash the following accrued but unpaid
interest on such Existing Notes:

 

Principal Amount of Existing Notes to be Exchanged:

   $                                                     (the “Exchanged Notes”)

Principal Amount of New Notes to be Issued in Exchange:

   $                                                    
(the “Holder’s New Notes”)

Cash Payment of Accrued but Unpaid Interest on Exchanged Notes:

   $                                                     (the “Cash Payment”)

The closing of the Exchange (the “Closing”) shall occur no later than three
business days after the date of this Agreement (assuming the timely delivery of
the Exchanged Notes). At the Closing, (a) the Holder shall deliver or cause to
be delivered to the Company all right, title and interest in and to the
Exchanged Notes free and clear of any mortgage, lien, pledge, charge, security
interest, encumbrance, title retention agreement, option, equity or other
adverse claim thereto (collectively, “Liens”), and all documentation related
thereto, and whatever documents of conveyance or transfer may be necessary or
desirable to transfer to and confirm in the Company all right, title and
interest in and to the Exchanged Notes free and clear of any Liens, (b) the
Company shall issue to the Holder the Holder’s New Notes and (c) the Company
shall deliver to the Holder the Cash Payment; provided, however, that the
parties acknowledge that the issuance of the Holder’s New Notes to the Holder
may be delayed due to procedures and mechanics within the system of The
Depository Trust Company and that such delay will not be a default under this
Agreement so long as (i) the Company is using commercially reasonable efforts to
effect the issuance of one or more global notes representing the New Notes,
(ii) such delay is no longer than three business days and (iii) interest shall
accrue on such New Notes from the date of the Indenture. Simultaneously with or
after the Closing, the Company may issue New Notes to one or more other holders
of outstanding Existing Notes, subject to the terms of the Indenture.

--------------------------------------------------------------------------------

Article II: Covenants, Representations and Warranties of the Holder

The Holder hereby covenants as follows, and makes the following representations
and warranties, each of which is and shall be true and correct on the date
hereof and at the Closing, to the Company, Lazard Frères & Co. LLC and Lazard
Capital Markets LLC, and all such covenants, representations and warranties
shall survive the Exchange.

Section 2.1 Power and Authorization. The Holder is duly organized, validly
existing and in good standing, and has the power, authority and capacity to
execute and deliver this Agreement, to perform its obligations hereunder, and to
consummate the Exchange contemplated hereby. If the Holder that is signatory
hereto is executing this Agreement to effect the exchange of Exchanged Notes
beneficially owned by one or more other persons or entities (who are thus
included in the definition of “Holder” hereunder), (a) such signatory Holder has
all requisite discretionary authority to enter into this Agreement on behalf of,
and bind, each such other person or entity that is a beneficial owner of
Exchanged Notes, and (b) Exhibit A hereto is a true, correct and complete list
of (i) the name of each party delivering (as beneficial owner) Exchanged Notes
hereunder, (ii) the principal amount of such Holder’s Exchanged Notes, (iii) the
principal amount of Holder’s New Notes to be issued to such Holder in respect of
its Exchanged Notes, and (iv) the amount of the cash payment to be made to such
Holder in respect of the accrued interest on its Exchanged Notes.

Section 2.2 Valid and Enforceable Agreement; No Violations. This Agreement has
been duly executed and delivered by the Holder and constitutes a legal, valid
and binding obligation of the Holder, enforceable against the Holder in
accordance with its terms, except that such enforcement may be subject to
(a) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors’ rights generally, and
(b) general principles of equity (the “Enforceability Exceptions”). This
Agreement and consummation of the Exchange will not violate, conflict with or
result in a breach of or default under (i) the Holder’s organizational
documents, (ii) any agreement or instrument to which the Holder is a party or by
which the Holder or any of its assets are bound, or (iii) any laws, regulations
or governmental or judicial decrees, injunctions or orders applicable to the
Holder.

Section 2.3 Title to the Exchanged Notes. The Holder is the sole legal and
beneficial owner of the Exchanged Notes, and the Holder has good, valid and
marketable title to the Exchanged Notes, free and clear of any Liens (other than
pledges or security interests that the Holder may have created in favor of a
prime broker under and in accordance with its prime brokerage agreement with
such broker). The Holder has not, in whole or in part, except as described in
the preceding sentence, (a) assigned, transferred, hypothecated, pledged,
exchanged or otherwise disposed of any of the Exchanged Notes or its rights in
the Exchanged Notes, or (b) given any person or entity any transfer order, power
of attorney or other authority of any nature whatsoever with respect to the
Exchanged Notes. Upon the Holder’s delivery of the Exchanged Notes to the
Company pursuant to the Exchange, the Exchanged Notes shall be free and clear of
all Liens created by the Holder.

Section 2.4 Holder Status. The Holder is (i) an “accredited investor” within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act of
1933, as amended (the “Securities Act”), and (ii) a “qualified institutional
buyer” within the meaning of Rule 144A promulgated under the Securities Act.

Section 2.5 No Affiliate, Related Party or 5% Stockholder Status. The Holder is
not, and has not been during the consecutive three month period preceding the
date hereof, a director, officer or “affiliate,” within the meaning of Rule 144
promulgated under the Securities Act (an “Affiliate”), of the

 

2

--------------------------------------------------------------------------------

Company. To the best of the Holder’s knowledge, the Holder did not acquire any
of the Exchanged Notes, directly or indirectly, from an Affiliate of the
Company. The Holder and its Affiliates collectively beneficially own and will
beneficially own as of the date of the closing of the Exchange (but without
giving effect to the Exchange) less than 5% of the outstanding common stock, par
value $0.001 per share, of the Company (the “Common Stock”). The Holder is not a
subsidiary, affiliate or, to its knowledge, otherwise closely-related to any
director or officer of the Company or beneficial owner of 5% or more of the
outstanding Common Stock (each such director, officer or beneficial owner, a
“Related Party”). To its knowledge, no Related Party beneficially owns 5% or
more of the outstanding voting equity of the Holder.

Section 2.6 No Illegal Transactions. The Holder has not, directly or indirectly,
and no person acting on behalf of or pursuant to any understanding with the
Holder has, engaged in any transactions in the securities of the Company
(including, without limitation, any Short Sales (as defined below) involving any
of the Company’s securities) since the time that such Holder was first contacted
by either the Company, Lazard Frères & Co. LLC or Lazard Capital Markets LLC or
any other person regarding an investment in the New Notes or the Company. Such
Holder covenants that neither it nor any person acting on its behalf or pursuant
to any understanding with such Holder will engage, directly or indirectly, in
any transactions in the securities of the Company (including Short Sales) prior
to the time the transactions contemplated by this Agreement are publicly
disclosed. “Short Sales” include, without limitation, all “short sales” as
defined in Rule 200 of Regulation SHO promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and all types of direct and
indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps, derivatives and similar arrangements (including on a total return
basis), and sales and other transactions through non-U.S. broker-dealers or
foreign regulated brokers. Solely for purposes of this Section 2.6, subject to
the Holder’s compliance with its obligations under the U.S. federal securities
laws and the Holder’s internal policies, “Holder” shall not be deemed to include
any subsidiaries or affiliates of the Holder that are effectively walled off by
appropriate “Chinese Wall” information barriers approved by the Holder’s legal
or compliance department (and thus have not been privy to any information
concerning the Exchange).

Section 2.7 Adequate Information; No Reliance. The Holder acknowledges and
agrees that (a) the Holder has been furnished with all materials it considers
relevant to making an investment decision to enter into the Exchange and has had
the opportunity to review the Company’s filings with the Securities and Exchange
Commission (the “SEC”), including, without limitation, all filings made pursuant
to the Exchange Act, (b) the Holder has had a full opportunity to ask questions
of the Company and its representatives and to obtain from representatives of the
Company such information as is necessary to permit it to evaluate the merits and
risks of its investment in the Company, including in relation to its business,
operations, financial performance, financial condition and prospects, and the
terms and conditions of the Exchange, (c) the Holder has had the opportunity to
consult with its accounting, tax, financial and legal advisors to be able to
evaluate the risks involved in the exchange of the Existing Notes pursuant
hereto and to make an informed investment decision with respect to such Exchange
and (d) the Holder is not relying, and has not relied, upon any statement,
advice (whether legal, tax, financial, accounting or other), representation or
warranty made by the Company or any of its affiliates or representatives
including, without limitation, Lazard Frères & Co. LLC and Lazard Capital
Markets LLC, except for (i) the publicly available filings made by the Company
with the SEC under the Exchange Act and (ii) the representations and warranties
made by the Company in this Agreement.

Section 2.8 No Public Market. The Holder understands that no public market
exists for the New Notes, and that there is no assurance that a public market
will ever develop for the New Notes.

 

3

--------------------------------------------------------------------------------

Article III: Covenants, Representations and Warranties of the Company

The Company hereby covenants as follows, and makes the following representations
and warranties, each of which is and shall be true and correct on the date
hereof and at the Closing, to the Holder, Lazard Frères & Co. LLC and Lazard
Capital Markets LLC, and all such covenants, representations and warranties
shall survive the Exchange.

Section 3.1 Power and Authorization. The Company is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, and has
the power, authority and capacity to execute and deliver this Agreement and the
Indenture, to perform its obligations hereunder and thereunder, and to
consummate the Exchange contemplated hereby.

Section 3.2 Valid and Enforceable Agreements. This Agreement has been duly
executed and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except that such enforcement may be subject to the Enforceability
Exceptions. At the Closing, the Indenture, substantially in the form of
Exhibit B hereto, will have been duly executed and delivered by the Company and
will govern the terms of the New Notes, and the Indenture will constitute a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except that such enforcement may be
subject to the Enforceability Exceptions.

Section 3.3 Validity of the Holder’s New Notes. The Holder’s New Notes have been
duly authorized by the Company and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to the Holder
pursuant to the Exchange against delivery of the Exchanged Notes in accordance
with the terms of this Agreement, the Holder’s New Notes will be valid and
binding obligations of the Company, enforceable in accordance with their terms,
except that such enforcement may be subject to the Enforceability Exceptions,
and the Holder’s New Notes will not be subject to any preemptive, participation,
rights of first refusal and other similar rights. Assuming the accuracy of the
Holder’s representations and warranties hereunder, the Holder’s New Notes
(a) will be issued in the Exchange exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) of the Securities Act, and (b) will
be free of any restrictions on resale by the Holder pursuant to Rule 144
promulgated under the Securities Act, and (c) will be issued in compliance with
all applicable state and federal laws concerning the issuance of the Holder’s
New Notes.

Section 3.4 Validity of Underlying Common Stock. The Holder’s New Notes are
convertible into shares of Common Stock (the “Conversion Shares”) in accordance
with the terms of the Indenture. The Conversion Shares have been duly authorized
and reserved by the Company for issuance upon conversion of the Holder’s New
Notes and, when issued upon conversion of the Holder’s New Notes in accordance
with the terms of the Holder’s New Notes and the Indenture, will be validly
issued, fully paid and non-assessable, and the issuance of the Conversion Shares
will not be subject to any preemptive, participation, rights of first refusal
and other similar rights.

Section 3.5 Listing Approval. The Conversion Shares have been listed on The
NASDAQ Global Market.

Section 3.6 Disclosure. On or before the first business day following the date
of this Agreement, the Company shall issue a publicly available press release or
file with the SEC a Current Report on Form 8-K disclosing all material terms of
the Exchange (to the extent not previously publicly disclosed).

 

4

--------------------------------------------------------------------------------

Article IV: Miscellaneous

Section 4.1 Entire Agreement. This Agreement and any documents and agreements
executed in connection with the Exchange embody the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous oral or written agreements,
representations, warranties, contracts, correspondence, conversations, memoranda
and understandings between or among the parties or any of their agents,
representatives or affiliates relative to such subject matter, including,
without limitation, any term sheets, emails or draft documents.

Section 4.2 Construction. References in the singular shall include the plural,
and vice versa, unless the context otherwise requires. References in the
masculine shall include the feminine and neuter, and vice versa, unless the
context otherwise requires. Headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meanings of the
provisions hereof. Neither party, nor its respective counsel, shall be deemed
the drafter of this Agreement for purposes of construing the provisions of this
Agreement, and all language in all parts of this Agreement shall be construed in
accordance with its fair meaning, and not strictly for or against either party.

Section 4.3 Costs and Expenses. The Holder and the Company shall each pay their
own respective costs and expenses incurred in connection with the negotiation,
preparation, execution and performance of this Agreement, including, but not
limited to, attorneys’ fees.

Section 4.4 Governing Law. This Agreement shall in all respects be construed in
accordance with and governed by the substantive laws of the State of New York,
without reference to its choice of law rules.

Section 4.5 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument. Any counterpart or other signature
hereon delivered by facsimile shall be deemed for all purposes as constituting
good and valid execution and delivery of this Agreement by such party.

[Remainder of Page Intentionally Left Blank]

 

5

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.

 

HOLDER:      COMPANY:        VERENIUM CORPORATION By:  

 

     By:  

 

Name:  

 

     Name:  

 

Title:  

 

     Title:  

 

[Signature Page to Exchange Agreement]

--------------------------------------------------------------------------------

EXHIBIT A

Exchanging Beneficial Owners

 

Name of Beneficial Owner

   Principal Amount of
Exchanged Notes    Principal Amount of
Holder’s New Notes    Cash Interest
Payment                                                                        
        

 

A-1

--------------------------------------------------------------------------------

EXHIBIT B

Indenture

 

B-1