EX-10.1 E






PACIFIC MERCANTILE BANK



IRREVOCABLE STANDBY LETTER OF CREDIT 



DATE: 5/15/2007



LETTER OF CREDIT NO. 600704242



AMOUNT U.S. $1,825,000.00



ISSUING AND ADVISING BANK 



PACIFIC MERCANTILE BANK



949 South Coast Dr., Ste. 300



Costa Mesa, CA 92626



APPLICANT NAME AND ADDRESS:



HIGH CAPITAL FUNDING LLC



333 Sandy Springs Circle, Suite 230



Atlanta, GA 30328



IN FAVOR OF 



CONVERTED ORGANICS INC.



7A Commercial Wharf West



Boston, MA 02110



EXPIRATION DATE: 



April 7, 2008 6:00 PM PST 



(Drafts to be drawn and presented to the Issuing Bank on or before this date. See additional
provisions below regarding expiration and renewal conditions.)



Gentlemen:



We hereby establish our Irrevocable Letter of Credit in favor of Converted Organics Inc. (the
Beneficiary), at the request of High Capital Funding, LLC. We authorize you to draw on Pacific
Mercantile Bank located at 949 South Coast Dr., Ste. 300, Costa Mesa, CA 92626 up to an aggregate
amount of $1,825,000.00 US Dollars (available by your drafts at sight).



Available by drafts drawn at sight, on Issuing Bank, when accompanied by the following documents:



1. Beneficiary’s signed statement as follows:




This Standby Letter of Credit (No. 600704242) may be drawn down one time in any amount up to
$1,825,000 upon presentation to Pacific Mercantile Bank by Converted Organics Inc. (COIN)
between February 16, 2008 and 6:00 PM PST March 17, 2008 of a Certificate of Drawdown signed
by its Chief Executive Officer and Chief Financial Officer attesting to:




1.1 The amount of net proceeds1 if any, received by COIN from the issuance of equity
subsequent to the closing of its IPO on February 16 2007.




1.2 The amount of net proceeds, if any, received by COIN from the Issuance of debt (which is
subordinated to the $17,500,000 principal amount of NJ EDA Solid Waste Revenue Bonds sold to
Oppenheimer Funds, Inc. on February 16, 2007).




The amount of the drawdown and the information in 1.1 and 1.2 above shall be in the form of
“The Certificate of Drawdown” attached hereto.



2. All drafts drawn hereunder must be marked: Drawn under Pacific Mercantile Bank’s Letter of
Credit number



600704242, and signed by an authorized officer of Beneficiary (or one purporting to be an
authorized



officer).



3. The original Standby Letter of Credit.



ADDITIONAL.PROVISIONS:



1. Pacific Mercantile Bank shall pay the drawdown amount to the Beneficiary on the fifteenth
business day following presentation of the documents specified in items 1, 2 and 3 in the above
section to Pacific Mercantile Bank.



2. Any one Beneficiary or all Beneficiaries, acting Individually or jointly, may draw on this
Letter of Credit in whole or in part, and any action taken by any Beneficiary hereunder shall bind
all of them.



3. Notwithstanding any related matters governing maturity dates as stated above, this LETTER OF
CREDIT shall expire IN FULL AND FINALLY on 4/7/2008 6:00 PM PST. Advising Bank will consider
reissuance of this Letter of Credit upon request by Applicant.



We engage with you that all drafts drawn under and in compliance with the terms of this credit will
be duly honored if presented at this office on or before the original expiration date or any
automatically extended date, as hereinbefore set forth, we confirm credit and hereby undertake that
all drafts drawn and presented will be duly honored by us. PACIFIC MERCANTILE BANK is authorized
to debit the Applicant’s account for any unpaid fees and charges hereon.



This Letter of Credit is to be subject to and governed International Standby Practices 98 (1SP96),
International Chamber of Commerce Publication No. 590.



PACIFIC MERCANTILE BANK



949 South Coast Drive



Costa Mesa, CA 92626



By     



Richard G. Bushman



Vice-President, Credit Administration



By:     



Bradford G. Hoover



Executive Vice President



Chief Credit Officer



1



EXHIBIT A



FORM OF CERTIFICATE OF DRAWDOWN



PACIFIC MERCANTILE BANK



STANDBY LETTER OF CREDIT No. 600704242



This Standby Letter of Credit No. 600704242 may be drawn down one time in any amount up to $
1,825,000 upon presentation to Pacific Mercantile Bank by Converted Organics, Inc. (COIN) between
February 16, 2008 and 6:00 PM PST March 17,2008 a Certificate of Drawdown signed by its Chief
Executive Officer and Chief Financial Officer attesting to:



1. The amount of net proceeds, if any, received by COIN from the issuance of equity subsequent to
the closing of its IPO on February 16, 2007 is $ 



2. The amount of net proceeds, if any, received by COIN from the issuance of debt (which is
subordinated to the $17,500,000 principal amount of NJ EDA Solid Waste Revenue Bonds sold to
Oppenheimer Funds, Inc. on February 16,2007) is $ 



Converted Organics Inc.



By:     



Chief Executive Officer



By:      



Chief Financial Officer



2



EXHIBIT A-1



CERTIFICATE OF DRAWDOWN



FORM OF SIGHT DRAFT



DRAWN UNDER PACIFIC MERCANTILE BANK



IRREVOCABLE STANDBY LETTER OF CREDIT



NO. 600704242



DATE     



AT SIGHT



Pay to the order of Converted Organics Inc



U.S. DOLLARS     



[Amount in words]     U.S. Dollars



TO: Pacific Mercantile Bank



949 South Coast Drive, Ste 300,



Costa Mesa, California 92626



Converted Organics Inc.



By:      




3