EX-10.1






Converted Organics Inc.

137A Lewis Wharf

Boston, MA 02110




January 12, 2012



Iroquois Master Fund Ltd.


Iroquois Capital Opportunity Fund LP


c/o Iroquois Capital Management, L.L.C.


641 Lexington Avenue, 26th Floor


New York, New York 10022




	 	 	 	Re: Securities Purchase Agreement, dated as of April 1, 2011 (the “Purchase
Agreement”), by and among Converted Organics Inc. (the “Company”) and Iroquois Master
Fund Ltd. (“Holder”) and Iroquois Capital Opportunity Fund LP





Dear Mr. Silverman:



Pursuant to the Purchase Agreement, the Company issued a certain secured convertible note in
the original principal amount of $3,850,000 (the “Original Note”) to the Holder. All capitalized
terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms
in the Purchase Agreement. Also, pursuant to that certain letter agreement, dated November 2, 2011
(the “Letter Agreement”), by and among the parties hereto, the Company and the Holder exchanged the
Original Note for the Exchange Note (as defined in the Letter Agreement) pursuant to Section
3(a)(9) of the 1933 Act.



A. The Company and the Holder shall exchange, pursuant to Section 3(a)(9) of the 1933 Act,
the Exchange Note for (i) the senior secured convertible note, in the form attached hereto as
Exhibit A (the “2012 Exchange Note”), (ii) 9,564,546 shares of unlegended and freely
tradable shares of Common Stock (such 9,564,546 shares are referred to herein as the “Shares”) (as
adjusted for stock splits, combination and other similar transactions occurring after date hereof)
and (iii) a number of unlegended and freely tradable shares of Common Stock (which number of shares
shall be determined on February 13, 2012) equal to the positive difference (if any) between (1) the
quotient of (x) $17,072.71 divided by (y) the Conversion Price in effect on February 13, 2012,
minus (2) the number of Shares issued to the Holder (such number of shares is referred to herein as
the “Additional Shares”). Simultaneously with the execution and delivery of this letter agreement,
the Company shall deliver the 2012 Exchange Note and the Shares to the Holder, and the Shares shall
be delivered via DTC. The Additional Shares shall be delivered via DTC by the Company to the Holder
on February 13, 2012. If the number of Shares delivered to the Holder exceeds the number of shares
of Common Stock determined pursuant to clause (1) above in this paragraph, then the number of
shares of Common Stock equal to such excess shall constitute a credit against the number of shares
of Common Stock to be issued to the Holder pursuant to Section 3 of the 2012 Exchange Note from and
after February 13, 2012, and shall reduce the number of shares of Common Stock required to be
actually issued by the Company to the Holder under Section 3 of the 2012 Exchange Note from and
after February 13, 2012, on a share-for-share basis until such time as the number of shares that
would have been issued by the Company to the Holder (not taking account of such credit) from and
after February 13, 2012, equals the amount of such excess.



B. The Company expressly acknowledges and agrees that the 2012 Exchange Note does not extinguish
the indebtedness evidenced by the Exchange Note and is not a novation, repayment or re-borrowing
thereof but rather is given in exchange for, and in replacement and substitution of, the Exchange
Note.



C. Except as expressly set forth herein, (i) each of the Transaction Documents and each of the
obligations of the Company thereunder, and each of the rights of and benefits to the Holder
thereunder, is, and shall continue to be, in full force and effect and each is hereby ratified and
confirmed in all respects, except that from and after the date hereof, without implication that the
contrary would otherwise be true, all references in the Transaction Documents to “the Transaction
Documents,” “thereto,” “thereof,” “thereunder” or words of like import referring to the Transaction
Documents shall mean the Transaction Documents as amended by this letter agreement and (ii) the
execution, delivery and effectiveness of this letter agreement shall not operate as an amendment or
waiver of any right, power or remedy of the Holder under any of the other Transaction Documents,
nor constitute an amendment or waiver of any provision of any of the Transaction Documents and each
of the Transaction Documents shall continue in full force and effect, as amended or modified by
this letter agreement. The parties hereto agree that this letter agreement constitutes a
Transaction Document and that the 2012 Exchange Note is a Note (as defined in the Transaction
Documents) for all purposes of all Transaction Documents because it was issued in exchange for the
Exchange Note which was issued in exchange for the Original Note.



D. The Company shall, on or before 8:30 a.m., New York time, on January 13, 2012, file a Current
Report on Form 8-K describing all the material terms of the transactions contemplated by this
letter agreement in the form required by the 1934 Act.



E. This letter agreement may be executed in two or more counterparts, all of which 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. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as
if such signature page were an original thereof.



[signature page follows]





Sincerely,



/s/ Edward J. Gildea




	 	 	Edward J. Gildea,






CEO



Agreed to and accepted:



Iroquois Master Fund Ltd.



By: Iroquois Capital Management, L.L.C.


Its: Investment Manager



	 	 	 
	By:

	 	/s/ Joshua Silverman
	 

	 	 
	Name:

	 	Joshua Silverman
	
 
	 	 
	Title:

	 	Authorized Signatory
	 

	 	 






Accepted by (in its capacity as a party to the Purchase Agreement):



Iroquois Capital Opportunity Fund LP



	 	 	 
	By:

	 	/s/ Joshua Silverman
	 

	 	 
	Name:

	 	Joshua Silverman
	
 
	 	 
	Title:

	 	Authorized Signatory