SEC Contract Filing

Filing Date: 2015-11-20

Document Content:
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>meec_ex101.htm
<DESCRIPTION>WAIVER AND AMENDMENT
<TEXT>
<html><head><title>meec_ex101.htm</title><!--Document Created by EDGARMaster--></head><BODY style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN; MARGIN: 0px 7%" scroll="yes"><p style="MARGIN: 0px" align="right"><strong>EXHIBIT 10.1</strong></p><p style="MARGIN: 0px" align="center"><b></b>&nbsp;</p><p style="MARGIN: 0px" align="center"><b>WAIVER AND AMENDMENT NO. 2 TO FINANCING AGREEMENT,</b></p><p style="MARGIN: 0px" align="center"><b>AND REAFFIRMATION OF GUARANTY</b></p><p style="MARGIN: 0px">&nbsp;</p><p style="MARGIN: 0px; TEXT-INDENT: 30px">This WAIVER AND AMENDMENT NO. 2 TO FINANCING AGREEMENT AND REAFFIRMATION OF GUARANTY dated as of November 16, 2015 (the "<b>Amendment</b>"), is executed among Midwest Energy Emissions Corp., a Delaware corporation, (the "<b>Borrower</b>"), MES, Inc., a North Dakota corporation ("<b>MES</b>" or "<b>Guarantor</b>"), and AC Midwest Energy LLC, a Delaware limited liability company (the "<b>Lender</b>").</p><p style="MARGIN: 0px">&nbsp;</p><p style="MARGIN: 0px" align="center">R E C I T A L S:</p><p style="MARGIN: 0px">&nbsp;</p><p style="MARGIN: 0px; TEXT-INDENT: 30px">A. Borrower, Guarantor and Lender entered into that certain Financing Agreement dated as of August 14, 2014 (the "<b>Original Financing Agreement</b>"), pursuant to which Original Financing Agreement the Lender has made certain financial accommodations to Borrower, as evidenced by that certain Senior Secured Convertible Note dated as of August 14, 2014 in the original principal amount of $10,000,000 (the "<b>Original Note</b>"), which financial accommodations were guaranteed by the Guarantor pursuant to the Original Financing Agreement. </p><p style="MARGIN: 0px; TEXT-INDENT: 30px">&nbsp;</p><p style="MARGIN: 0px; TEXT-INDENT: 30px">B. In connection with the Original Financing Agreement, Borrower and Guarantor granted the Lender a security interest in and to certain of the Borrower's and Guarantor's assets pursuant to that certain Security Agreement by and among the Borrower, Guarantor and Lender dated as of August 14, 2014 (the "<b>Security Agreement</b>"), that certain Securities Pledge Agreement between the Borrower and the Lender dated as of August 14, 2014 (the "<b>Securities Pledge Agreement</b>") and that certain Collateral Assignment of License Agreement by and among the Borrower, Guarantor and Lender dated as of August 14, 2014 (the "<b>Collateral Assignment of License Agreement</b>" and collectively with the Security Agreement and the Securities Pledge Agreement referred to herein as the "<b>Security Documents</b>"). </p><p style="MARGIN: 0px; TEXT-INDENT: 30px">&nbsp;</p><p style="MARGIN: 0px; TEXT-INDENT: 30px">C. In connection with the Original Financing Agreement, the Borrower issued to the Lender a warrant which entitles the Lender to purchase 12,500,000 shares of the Borrower's common stock as evidenced by that certain Warrant executed by the Borrower in favor of the Lender dated of August 14, 2014 (as amended, the "<b>Warrant</b>"). </p><p style="MARGIN: 0px; TEXT-INDENT: 30px">&nbsp;</p><p style="MARGIN: 0px; TEXT-INDENT: 30px">D. In connection with the Original Financing Agreement, Richard Galterio ("<b>Agent</b>") as agent for the Investors (as defined in that certain Noteholder Agency Appointment Agreement by and between the Investors and Agent, the "<b>Agency Agreement</b>") (each a "<b>Subordinated Creditor</b>" and collectively the "<b>Subordinated Creditors</b>"), Borrower and Guarantor executed and delivered to the Lender that certain Intercreditor Agreement dated as of August 14, 2014 (the "<b>Intercreditor Agreement</b>").</p><p style="MARGIN: 0px; TEXT-INDENT: 30px">&nbsp;</p><p style="MARGIN: 0px; TEXT-INDENT: 30px">E. On March 16, 2015 Borrower, Guarantor and Lender entered into that certain Waiver and Amendment to Financing Agreement and Reaffirmation of Guaranty (the "<b>First Amendment</b>") which waived certain provisions of the Original Financing Agreement, amended the Warrant and the Original Financing Agreement and resulted in the Borrower issuing a replacement promissory in replacement for the Note (the "<b>Replacement Note</b>"). </p><p style="MARGIN: 0px">&nbsp;</p><p style="MARGIN: 0px"><table id="pagebreaka6f6d10a-a103-4cf0-9ce2-15dea4f7541c" class="pagebreak" style="WIDTH: 100%; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" border="0"> <tr><td class="hpbhr">&nbsp;</td></tr><tr><td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">1</td></tr><tr></tr><tr><td><div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div></td></tr><tr><td>&nbsp;</td></tr></table></p><p style="MARGIN: 0px">&nbsp;&nbsp;</p><p style="MARGIN: 0px; TEXT-INDENT: 30px">F. At the present time the Borrower and the Guarantor request, and the Lender is agreeable to (i) a modification of various financial and other covenants and provisions as set forth in the Original Financing Agreement, as previously amended by the First Amendment (the "<b>Amended Financing Agreement</b>"), (ii) a waiver of a violation by the Borrower of the Minimum Units Contracted covenant set forth in Section 8.1(c) of the Amended Financing Agreement, and (iii) purchase an additional warrant to purchase 5,000,000 shares of Common Stock in the form of <u>Exhibit A</u> hereto (the "<b>Second Warrant</b>") and purchase from Borrower additional senior secured convertible promissory notes of Borrower pursuant to the terms and conditions hereinafter set forth in the form of <u>Exhibit B</u> hereto (the "<b>New Notes</b>"). (The Original Financing Agreement as amended by the First Amendment and this Amendment is referred to as the "<b>Financing Agreement</b>".) </p><p style="MARGIN: 0px; TEXT-INDENT: 30px">&nbsp;</p><p style="MARGIN: 0px; TEXT-INDENT: 30px">NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and adequacy