8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 3, 2014

AMERICAN DG ENERGY INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

001-34493	04-3569304
(Commission file number)	(IRS Employer Identification No.)
45 First Avenue
Waltham, Massachusetts	02451
(Address of principal executive offices)	(Zip Code)

(781) 622-1120

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.          Entry Into a Material Definitive Agreement. 

On October 3, 2014, American DG Energy Inc., or the Company, entered into a convertible note amendment agreement, or the Note Amendment Agreement, with EuroSite Power Inc., the Company’s majority owned subsidiary, or EuroSite, John N. Hatsopoulos, the Company’s Chief Executive Officer, and certain European investors. In part, the Note Amendment Agreement provided that the holders, or the Holders, of the Company’s existing 6% Senior Unsecured Convertible Debentures Due 2018, originally issued in part on May 23, 2011 and in part on November 25, 2011, in an aggregate principal amount of $19,400,000, or the Old Debentures, exchange the Old Debentures for like principal amounts of 6% Senior Unsecured Convertible Debentures Due 2018, amended to reflect the prepayment to the Holders of all accrued and future interest under the Old Debentures in shares of common stock of EuroSite, which the Company then owned at a conversion price of $.50 per share, or the New Debentures.

Pursuant to the Note Amendment Agreement and in connection with the payment of the interest currently due on the Old Debentures, the Company issued to the Holders warrants to purchase up to 1,164,000 shares of common stock of EuroSite owned by the Company, or the Warrants, at an exercise price of $.60 per share and an expiration date of October 3, 2017.

Included among the Holders is (i) John N. Hatsopoulos, the Company’s Chief Executive Officer, who was issued a New Debenture in the principal amount of $2,400,000, Warrants to purchase up to 144,000 shares of common stock of EuroSite owned by the Company, and 1,164,000 shares of EuroSite common stock and (ii) a European investor, which was issued New Debentures in the principal amounts of $10,100,000 and $6,900,000, Warrants to purchase up to 1,020,000 shares of common stock of EuroSite owned by the Company and 8,245,000 shares of EuroSite common stock.

In addition, pursuant to the Note Amendment Agreement the Company converted its 4% Senior Convertible Note Due 2017, originally issued on February 20, 2014 in the aggregate principal amount of $1,100,000 by EuroSite into 2,200,000 shares of EuroSite common stock with any accrued but unpaid interest being paid out in cash.

The foregoing descriptions of the Note Amendment Agreement, the New Debentures and the Warrants, are qualified in their entirety by reference to the full text of the Note Amendment Agreement, the form of New Debenture and the form of Warrant, which are attached as Exhibit 10.1, Exhibit 4.1 and Exhibit 4.2, respectively, to this Current Report on Form 8-K and incorporated by reference into this Item 1.01. A copy of the Company’s press release is attached hereto as Exhibit 99.1.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in “Item 1.01 – Entry into a Material Definitive Agreement” concerning the New Debentures and the Note Amendment Agreement is incorporated by reference into this Item 2.03.

Item 3.02. Unregistered Sales of Equity Securities.

The information contained in “Item 1.01 – Entry into a Material Definitive Agreement” concerning the issuance of the Debentures, the Warrants and the EuroSite common stock is incorporated herein by reference. The issuance of the New Debentures, the Warrants and the underlying shares of common stock, and the shares of EuroSite common stock have not been registered under the Securities Act of 1933, as amended, or the Securities Act, in reliance on an exemption under Sections 3(a)(9) or (4)(a)(2) of the Securities Act.

Item 9.01. Financial Statements and Exhibits. 

See the attached Exhibit Index. 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	October 6, 2014	AMERICAN DG ENERGY INC.
		By:	/s/ Gabriel Parmese
		Gabriel Parmese, Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
4.1	Form of 6% Senior Unsecured Convertible Debenture Due 2018 issued by the Company.
4.2	Form of Warrant issued by the Company.
10.1	Convertible Note Amendment Agreement by and among the Company, EuroSite Power Inc., John N. Hatsopoulos and certain European investors, dated October 3, 2014.
99.1	Press Release dated October 6, 2014.

EX-4.1

Exhibit 4.1

THE 6% SENIOR UNSECURED CONVERTIBLE DEBENTURE DUE 2018 REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES INTO WHICH IT MAY BE CONVERTED HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”) OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED FOR SALE, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDERS OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS.

American DG Energy Inc.

6% Senior Unsecured Convertible Debenture Due 2018

No. [__]: $[__]

This Debenture (the “Debenture”) is one of a duly authorized issue of Debentures of American DG Energy Inc., a corporation duly incorporated under the laws of the State of Delaware, and having its principal address at 45 First Avenue, Waltham, Massachusetts 02451 (the “Company”), designated as its 6% Senior Unsecured Convertible Debentures due 2018 (the “Debentures”) in an aggregate principal amount of up to $[__]. This Debenture replaces the 6% Senior Unsecured Convertible Debenture due 2018, dated as of [__], 2011, as amended, originally issued in the aggregate principal amount of $[__] (the “Original Debenture”).

FOR VALUE RECEIVED, the Company promises to pay to the order of the [__], or its registered assigns (the “Holder”), the principal sum of [__] United States Dollars (U.S. $[__]) (the “Principal Amount”) on May 25, 2018, subject to earlier payment as otherwise provided herein (the “Maturity Date”). All interest previously accrued under this Debenture, together with all future interest payable through the scheduled Maturity Date, has been prepaid in shares of common stock of EuroSite Power Inc. (“EuroSite”) previously owned by the Company pursuant to the Convertible Note Amendment Agreement, dated October 3, 2014, by and among the Company, EuroSite and the Holder.

On the Maturity date, the Company will pay, in cash, the Principal Amount outstanding under this Debenture (the “Outstanding Principal Amount”).

This Debenture is subject to the following additional provisions:

1. Exchange. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different denominations as requested by the Holder surrendering the same. No fees will be charged for such exchange. Notwithstanding the foregoing, the Company shall have no obligation to issue new Debentures unless and until requested by the Holders thereof.

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2. Transfers. This Debenture has been issued subject to investment representations of the original purchaser hereof and may be transferred or exchanged only (a) in compliance with the Exchange Act, and applicable state securities laws, and (b) in accordance with applicable provisions hereof. Prior to due presentment for transfer of this Debenture, the Company may treat the person in whose name this Debenture is duly registered on the Company’s debenture register as the owner hereof for the purpose of receiving payment as herein provided and all other purposes, whether or not this Debenture is then overdue, and the Company shall not be affected by notice to the contrary.

3. Definitions. For purposes hereof the following definitions shall apply:

“2011 Private Placement” The Company’s private placement of up to $[__] of Debentures.

“Acquisition” shall have the meaning set forth in Paragraph 16(a).

“Callable Date” shall have the meaning set forth in Paragraph 6(a)(ii).

“Common Stock” shall mean the Common Stock, $.001 par value per share, of the Company.

“Company” shall have the meaning set forth in the first introductory paragraph.

“Conversion Notice” shall have the meaning set forth in Paragraph 5(c).

“Conversion Price” shall mean $2.11, subject to adjustment from time to time as set forth in Paragraph 7 hereof.

“Debenture” shall have the meaning set forth in the first introductory paragraph.

“Debentures” shall have the meaning set forth in the first introductory paragraph.

“EuroSite” shall have the meaning set forth in the second introductory paragraph.

“Events of Default” shall have the meaning set forth in Paragraph 15.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Holder” shall have the meaning set forth in the second introductory paragraph.

“Holder Conversion Date” shall have the meaning set forth in Paragraph 5(c).

“Maturity Date” shall have the meaning set forth in the second introductory paragraph.

“Original Debenture” shall have the meaning set forth in the first introductory paragraph.

“Outstanding Principal Amount” shall have the meaning set forth in the third introductory paragraph.

“Principal Amount” shall have the meaning set forth in the second introductory paragraph.

“Redemption Date” shall have the meaning set forth in Paragraph 6(a)(iii).

“Redemption Debentures” shall have the meaning set forth in Paragraph 6(c).

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“Redemption Price” shall have the meaning set forth in Paragraph 6(b).

“Redemption Notice” shall have the meaning set forth in Paragraph 6(a).

“Securities Act” means the Securities Act of 1933, as amended.

“Subscription Agreement” shall mean the agreement entered into by and between the Company and the Holder for the purchase of the Original Debenture.

“Underlying Shares” shall mean the shares of Common Stock into which this Debenture is convertible.

In addition, other terms defined in the Subscription Agreement and not otherwise defined herein shall have the same meanings herein as are set forth for such terms in the Subscription Agreement.

4. Maturity. On the Maturity Date, the Outstanding Principal Amount of this Debenture shall be payable in cash.

5. Conversion. This Debenture is subject to conversion as follows:

(a) Holder’s Right to Convert. The Outstanding Principal Amount of this Debenture shall be convertible at any time, in whole or in part, at the option of the Holder hereof, into fully paid validly issued and nonassessable shares of Common Stock.

(b) Conversion Price for Converted Shares. Subject to Paragraph 5(a), the Outstanding Principal Amount of this Debenture that is converted into shares of Common Stock shall be convertible into the number of shares of Common Stock calculated by dividing the Outstanding Principal Amount of this Debenture submitted for conversion by the Conversion Price.

(c) (i) Mechanics of Conversion. In order to convert this Debenture (in whole or in part) into shares of Common Stock, the Holder shall surrender this Debenture, by either overnight courier or two-day courier, to the Company, and shall give written notice in the form of Exhibit 1 hereto (the “Conversion Notice”) by facsimile (with the original of such notice forwarded with the foregoing courier) to the Company that the Holder elects to convert all or the portion of the Outstanding Principal Amount of this Debenture specified therein, which such notice and election shall be irrevocable by the Holder; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless this Debenture with evidence of the principal amount hereof to be converted is delivered to the Company as provided above, or the Holder notifies the Company that this Debenture has been lost, stolen or destroyed and promptly executes an agreement reasonably satisfactory to the Company to indemnify the Company from any loss which may be incurred by it in connection with this Debenture. The date on which a Conversion Notice is given (the “Holder Conversion Date”) shall be deemed to be the date the Company received by facsimile the Conversion Notice, as evidenced by a printed confirmation of receipt received by the Holder or confirmed by telephone conference between the Holder and the Company.

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(ii) Issuance of Certificates. In the case of any Conversion Notice given by the Holder to the Company, the Company shall issue and deliver as promptly as practicable and in no event later than five (5) business days after delivery to the Company of the Debenture, or after receipt of such agreement and indemnification, to such Holder or to its designee, a certificate or certificates for the number of shares of Common Stock to which the Holder shall be entitled, together with a Debenture for the Outstanding Principal Amount not submitted for conversion, if any. The person or persons entitled to receive the shares of Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Holder Conversion Date.

6. Redemption.

(a) Company Option to Redeem. All or any portion of this Debenture may be redeemed at the Company’s option expressed by a written notice (a “Redemption Notice”) to the Holder; provided that:

(i) the Underlying Shares are then registered on a U.S. national securities exchange, and the Underlying Shares received upon conversion will be freely tradeable without restriction;

(ii) the Redemption Notice cannot be delivered by the Company prior to May 25, 2016 (the “Callable Date”); and

(iii) the Redemption Notice shall be given by the Company to the Holder at least sixty (60) days prior to the proposed date of redemption (the “Redemption Date”).

(b) Redemption Price. The redemption price for the portion of this Debenture being redeemed shall equal one hundred and fifteen percent (115%) of the Outstanding Principal Amount of this Debenture being so redeemed (the “Redemption Price”), along with any accrued but unpaid interest. The Redemption Price shall be payable in cash in United States Dollars.

(c) Mechanics of Redemption. In the event the Company shall be required or elects to redeem any part or all of the Outstanding Principal Amount of this Debenture, the Company shall send by either overnight courier or two-day courier (with a copy sent by facsimile) confirmation of such determination or obligation to the record Holder of this Debenture (the Outstanding Principal Amount to be redeemed, “Redemption Debentures”), which confirmation shall be included in the Redemption Notice. Such confirmation shall specify the Outstanding Principal Amount of this Debenture to be redeemed and the Redemption Date, which shall be at least sixty (60) days after the giving of the Redemption Notice by the Company. On the Redemption Date, the Redemption Debentures shall be redeemed automatically without any further action by the Holders of such Debentures and whether or not the Debentures are surrendered to the Company; provided, that the Company shall be obligated to pay the cash consideration due to a Holder of such Debentures upon redemption only when such Debentures are either delivered to the principal office of the Company or the Holder notifies the Company that such Debentures have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Company to indemnify the Company from any loss which may be incurred by it in connection with such Debenture. Thereupon, there shall be promptly issued and delivered to such Holder, within seven (7) business days after the Redemption Date and delivery to the Company of such Debentures, or after receipt of such agreement and indemnification, at the address of such Holder on the books of the Company, payment in immediately available funds to the name as shown on the books of the Company in the amount of the Redemption Price as calculated as set forth in Paragraph 6(b).

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Notwithstanding anything to the contrary contained herein, the Holder’s rights of conversion pursuant to Paragraph 5 hereof shall expire at the close of business on the 15th day prior to the Redemption Date.

7. Adjustments to the Conversion Price.

(a) Adjustment for Subdivisions, Combinations, etc. If the Company shall subdivide its outstanding Common Stock by split-up, spin-off, or otherwise, or combine its outstanding Common Stock, then the number of shares issuable upon conversion of this Debenture and the Conversion Price in effect as of the date of such subdivision, split-up, spin-off, or combination shall be proportionally adjusted to give effect thereto.

(b) Adjustment for Dividends and Distributions. In the event the Company at any time while this Debenture is outstanding makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in Common Stock (or rights to acquire Common Stock), then and in each such event, provision shall be made so that the Holders of Debentures shall receive upon conversion thereof pursuant to Paragraph 5 hereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of such other securities of the Company to which a Holder on the relevant record or payment date, as applicable, would have been entitled, subject to all other adjustments called for during such period under this Paragraph 7 with respect to the rights of the Holders of the Debentures.

(c) Adjustment for Merger, Reorganization, etc. In the event that at any time or from time to time, the Common Stock issuable upon conversion of this Debentures is changed into the same or a different number of shares of any class or classes of stock, whether in connection with a merger or consolidation, by recapitalization, reclassification, reorganization or otherwise (other than a subdivision, combination of shares or stock dividend provided for elsewhere in this Paragraph 7), then and in each such event, provision shall be made so that the Holders of Debentures shall receive upon conversion thereof pursuant to Paragraph 5 hereof, in lieu of the Underlying Shares, the amount of such other securities of the Company to which a Holder of the Underlying Shares on the relevant record or payment date, as applicable, would have been entitled to receive in respect thereof, subject to all other adjustments called for during such period under this Paragraph 7 with respect to the rights of the Holders of the Debentures.

(d) Certificate as to Adjustments. Upon each occurrence of an adjustment pursuant to this Paragraph 7, the Company at its expense shall furnish to each Holder a certificate setting forth (i) in reasonable detail the facts upon which such adjustment is based, and (ii) the number of shares of Common Stock and the amount of other property or securities that after giving effect thereto would be received by the Holder upon conversion of this Debenture.

(e) Minimum Adjustments. No adjustment of the Conversion Price shall be made unless such adjustment would require an increase or decrease of at least $0.10 in such price; provided that any adjustments which by reason of this Paragraph 7(e) are not required to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment(s) so carried forward, shall require an increase or decrease of at least $0.10 in the Conversion Price then in effect hereunder.

(f) Board Discretion. Any determination as to whether an adjustment in the Conversion Price in effect hereunder is required pursuant to Paragraph 7, or as to the amount of any such adjustment, if required, shall be binding upon the holders of this Debenture and the Company if made in good faith by the Board of Directors of the Company.

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8. Limitations on Conversion. The Holder shall not have the right to convert any portion of this Debenture to the extent that such conversion right would cause the Company to be in violation of any regulation of a national securities exchange limiting the number or amount of securities that an issuer subject to such regulation is able to issue without prior registration under the Securities Act or stockholder approval, including without limitation, Rule 312.03 set forth in the NYSE Listed Company Manual.

9. Fractional Shares. No fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall be issuable hereunder. The number of shares of Common Stock that are issuable upon any conversion shall be rounded up or down to the nearest whole share.

10. Reservation of Stock Issuable Upon Conversion. The Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, shares of Common Stock (or other securities issuable upon conversion hereof) for the purpose of enabling the Company to satisfy any obligation to issue shares of its Common Stock or such other securities upon conversion of the Debentures.

11. Other Covenants of the Company.

(a) The Company shall not intentionally take any action, which would be reasonably likely to impair the contractual rights and privileges of the Debentures set forth herein or of the Holders thereof.

(b) The Company shall not redeem (other than pursuant to Paragraph 6, 10 and 12), retire, purchase or otherwise acquire, directly or indirectly, Debentures held by any Holder unless the Company shall have offered to redeem, retire, purchase or otherwise acquire, as the case may be, the same proportion of the aggregate principal amount of Debentures held by each other Holder of Debentures at the time outstanding upon the same terms and conditions and such offer shall remain open for a period of at least thirty (30) business days.

(c) The Company shall not transfer any of its assets or property to any of its direct or indirect subsidiaries or affiliates unless such transfer is being made in good faith for a proper business purpose, as determined by the Company’s Board of Directors.

12. Obligations Absolute. No provision of this Debenture, other than conversion as provided herein, shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Debenture at the time, place and rate, and in the manner, herein prescribed.

13. Waivers of Demand, Etc. The Company hereby expressly waives demand and presentment for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, notice of intent to accelerate, prior notice of bringing of suit and diligence in taking any action to collect amounts called for hereunder and will be directly and primarily liable for the payments of all sums owing and to be owing hereon, regardless of and without any notice (except as required by law), diligence, act or omission as or with respect to the collection of any amount called for hereunder.

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14. Replacement Debentures. In the event that the Holder notifies the Company that its Debenture has been lost, stolen or destroyed, a replacement Debenture identical in all respects to the original Debenture (except for registration number and Outstanding Principal Amount, if different than that shown on the original Debenture) shall be issued to the Holder, provided that the Holder executes and delivers to the Company an agreement reasonably satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with the Debenture and provided that the Company is provided a form of Debenture for such replacement purposes.

15. Defaults. If one or more of the following described “Events of Default” shall occur:

(a) Any of the representations or warranties made by the Company in this Debenture or the Subscription Agreement shall be false or (when taken together with other information furnished by or on behalf of the Company) misleading in any material respect at the time made; or

(b) The Company shall fail to perform or observe any material covenant or agreement in this Debenture or the Subscription Agreement, or any other covenant, term, provision, condition, agreement or obligation of the Company under this Debenture, and such failure shall continue uncured for a period of fifteen (15) business days after notice from the Holder of such failure; or

(c) The Company shall fail to make payments of principal or interest when due, or the Company shall fail to issue shares of Common Stock upon conversion of this Debenture when due, and any such failure shall continue uncured for a period of fifteen (15) days after notice from the Holder of such failure, provided that the Company shall have no right to cure any payment deficiency relating to principal or any payment deficiency relating to interest if there have been two prior deficiencies in the payment of interest; or

(d) The Company shall (1) admit in writing its inability to pay its debts generally as they mature; (2) make a general assignment for the benefit of creditors or commence proceedings for its dissolution; or (3) apply for or consent to the appointment of a trustee, liquidator or receiver for it or for a substantial part of its property or business; or

(e) A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or

(f) Any governmental agency or any court of competent jurisdiction shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60) days thereafter; or

(g) Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings, or relief under any bankruptcy law or any law for the relief of debt, shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed within sixty (60) days after such institution, or the Company shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit to any material allegations of, or default in answering a petition filed in, any such proceeding;

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then, or at any time thereafter prior to the date on which all continuing Events of Default have been cured, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default), at the option of the Holder and in the Holder’s sole discretion, the Holder may, by notice to the Company declare this Debenture immediately due and payable, and the Holder may immediately, and without expiration of any period of grace, enforce any and all of the Holder’s rights and remedies provided herein or any other rights or remedies afforded by law. In such event, the Debenture shall be redeemed at a redemption price per Debenture equal to the Redemption Price provided in Paragraph 6(b).

16. Special Treatment on an Acquisition.

(a) Definition. For purposes of this Debenture, the term “Acquisition” shall have the following meaning: (i) the sale of the Company by merger in which the shareholders of the Company in their capacity as such no longer own a majority of the outstanding equity securities of the Company (or its successor); or (ii) any sale of all or substantially all of the assets or outstanding equity securities of the Company (other than in a spin-off or similar transaction).

(b) Treatment of this Debenture on an Acquisition. The Company shall give the Holder ten business days (10) notice of the proposed occurrence of an Acquisition (but failure to give such notice shall not affect the validity of the Acquisition). At the close of business on the closing date of the Acquisition, the Holder of this Debenture shall receive (and the Company shall be required to pay), in cancellation of this Debenture, one hundred and fifteen percent (115%) of the Outstanding Principal Amount of this Debenture plus all accrued interest thereon; provided that the Holder shall retain the right to convert this Debenture in accordance with Section 5 at any time prior to the close of business on the business day immediately preceding the closing of the Acquisition, which conversion considered contingent on the closing of the Acquisition.

17. Extension. At the election of the Holder, if the Outstanding Principal Amount of this Debenture remains unpaid after the Maturity Date, this Debenture and the aggregate Outstanding Principal Amount shall remain an outstanding obligation of the Company, payable on the demand of the Holder, and the Company promises to pay to the Holder interest on the Outstanding Principal Amount, at the rate of 6% per annum, due and payable on demand. Interest shall be calculated based on a 360-day year. Interest shall accrue from the Maturity Date.

18. Savings Clause. In case any provision of this Debenture is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Debenture will not in any way be affected or impaired thereby.

19. Entire Agreement. This Debenture and the agreements referred to in this Debenture constitute the full and entire understanding and agreement between the Company and the Holder with respect to the subject hereof. Neither this Debenture nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and a majority of the Outstanding Principal Amount of the Debentures. By countersigning this Debenture below, the Holder consents to the amending and restating of the Original Debenture, in a manner similar to as provided for herein.

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20. Assignment, Etc. Subject to any applicable law and the requirements set forth in the legend set forth hereon, any Holder may, without notice, transfer or assign this Debenture. The Company agrees that, subject to compliance with the applicable law, after receipt by the Company of written notice of assignment from the Holder or from the Holder’s assignee, all principal, interest, and other amounts which are then due and thereafter become due under this Debenture shall be paid to such assignee at the place of payment designated in such notice. This Debenture shall be binding upon the Company and its successors and shall inure to the benefit of the Holder and its successors and assigns.

21. No Waiver. No failure on the part of the Holder to exercise, and no delay in exercising any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Holder of any right, remedy or power hereunder preclude any other or future exercise of any other right, remedy or power. Each and every right, remedy or power hereby granted to the Holder or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Holder from time to time.

22. Miscellaneous. Unless otherwise provided herein, any notice or other communication to a party hereunder shall be deemed to have been duly given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid with a copy in each case sent on the same day to the party by facsimile, FedEx or other overnight delivery service to said party at its address set forth herein or such other address as either may designate for itself in such notice to the other and communications shall be deemed to have been received when delivered personally or, if sent by mail, when actually received by the party to whom it is addressed.

Copies of all notices to the Company shall be sent to: American DG Energy Inc., 45 First Avenue, Waltham, Massachusetts 02451, attention Chief Financial Officer. Whenever the sense of this Debenture requires, words in the singular shall be deemed to include the plural and words in the plural shall be deemed to include the singular. Paragraph headings are for convenience only and shall not affect the meaning of this document.

23. Choice of Law and Consent to Jurisdiction. This Debenture shall be governed by, and construed in accordance with, the internal laws of the State of New York and, to the extent it involves any United States federal statute or regulations, in accordance therewith. The parties hereby consent and submit to the exclusive jurisdiction of the state and federal courts in New York City with respect to all disputes arising in connection with this Debenture.

[Remainder of this page intentionally left blank; signature page follows.]

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer thereunto duly authorized.

Dated: October [__], 2014

AMERICAN DG ENERGY INC.

By: 

Name: Gabriel J. Parmese

Title: Chief Financial Officer

ACKNOWLEDGEMENT

[Holder]

By:__________________________

Name:

Title: 

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EXHIBIT 1

Conversion Notice

6% Senior Unsecured Convertible Debenture Due 2018

The undersigned, as Holder of the 6% Senior Unsecured Convertible Debenture due 2018 of American DG Energy Inc. (“Company”), No. [__], in the Outstanding Principal Amount of U.S.$[__] (the “Debenture”), hereby irrevocably elects to convert U.S.$_______________ of the Outstanding Principal Amount of the Debenture and U.S.$______________ of interest accrued but unpaid under the Debenture, into shares of Common Stock, par value $.001 per share (the “Common Stock”), of Company according to the conditions of the Debenture, as of the date written below. The undersigned hereby requests that share certificates for the Common Stock to be issued to the undersigned pursuant to this Conversion Notice be issued in the name of, and delivered to, the undersigned or its designee as indicated below. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Conversion Information: NAME OF HOLDER: 

By:

Name: 

Title:

Print Address of Holder:

Issue Common Stock to: 

at: 

Date of Conversion:

11

EX-4.2

Exhibit 4.2

Form of Warrant

THIS WARRANT AND THE EUSP COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY STATE SECURITIES LAWS WHICH MAY BE APPLICABLE. ADGE MAY REQUIRE AN OPINION OF COUNSEL BEFORE IT EFFECTS ANY TRANSFER ON ITS BOOKS AND RECORDS OF THIS WARRANT OR THE EUSP COMMON STOCK ISSUABLE UPON EXERCISE HEREOF.

WARRANT ISSUED BY AMERICAN DG ENERGY INC.

TO PURCHASE SHARES OF COMMON STOCK OF

EUROSITE POWER INC. OWNED BY IT

Key Terms/Definitions:

ADGE:	American DG Energy Inc., a Delaware corporation
EUSP:	EuroSite Power Inc., a Delaware corporation and a majority owned subsidiary of ADGE
Holder:
“EUSP Common Stock”:	Common Stock of EUSP owned by ADGE
Number of shares of EUSP Common Stock issuable on full exercise of Warrant (subject to adjustment):	___________ shares
Exercise Price per share of EUSP Common Stock (subject to adjustment):	$0.60
Expiration Date:	Three (3) years from the effective date of this agreement

THIS IS TO CERTIFY that, for value received and subject to the provisions hereinafter set forth, that the Holder, or permitted assigns, is entitled to purchase from ADGE at any time on or after the date hereof and on or before the Expiration Date the number of shares of EUSP Common Stock set forth in the table above, subject to the terms, provisions and conditions hereinafter set forth, at the Exercise Price per share.

ADGE shall give the Holder written notice of the pendency of the Expiration Date at least 10 days, but not more than 60 days, prior to the Expiration Date. If ADGE fails to serve the Expiration Notice upon the Holder within the required time period, the Expiration Date shall be deemed to have been extended and this Warrant shall continue to be exercisable by the Holder until 10 days after ADGE delivers a delinquent Expiration Notice to the Holder referencing the new, extended Expiration Date.

Tender of the price paid to purchase this Warrant shall be made by delivery of a bank check payable to ADGE or by wire transfer to ADGE’s designated bank account, together with one executed copy of this Warrant.

SECTION 1. EXERCISE OF WARRANT.

This Warrant may be exercised in whole or in part at any time by the surrender of this Warrant (with the subscription form at the end hereof duly completed and executed) at the principal office of ADGE and upon payment to ADGE of the aggregate Exercise Price for the shares being purchased. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a sale of EUSP, the exercise of any portion of this Warrant may, at the election of the Holder, be conditioned upon the consummation of such sale, in which case such exercise shall not be deemed to be effective immediately prior to the consummation of such transaction.

If this Warrant is exercised in respect of less than all of the shares of EUSP Common Stock at the time purchasable hereunder, the Holder shall be entitled to receive a new Warrant of like tenor to this Warrant covering the number of shares in respect of which this Warrant shall not have been exercised.

The EUSP Common Stock issuable upon the exercise of this Warrant shall be deemed to have been issued to the Holder at the time of such exercise, and the Holder shall be deemed for all purposes to have become the record holder of the EUSP Common Stock at such time. Certificates for shares of the EUSP Common Stock purchased upon exercise or partial exercise of this Warrant shall be delivered by ADGE to Holder within five business days after the date of exercise.

This Warrant and all rights and options hereunder shall expire on the Expiration Date (as the same may be modified as provided herein), and shall be wholly null and void to the extent this Warrant is not exercised before it expires.

SECTION 2. RESERVATION.

ADGE will at all times prior to the Expiration Date keep available such number of the shares of the EUSP Common Stock owned by it solely for the purpose of issuance upon the exercise of the rights represented by this Warrant as herein provided for, as may at any time be issuable upon the exercise of this Warrant.

SECTION 3. STOCK DIVIDENDS, ETC.

The per share Exercise Price and the number of shares deliverable hereunder shall be adjusted as hereinafter set forth:

Section 3.1. Stock Dividends, Subdivisions and Combinations. In case after the date hereof EUSP shall:

(a) take a record of the holders of EUSP Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, EUSP Common Stock, or

(b) subdivide its outstanding shares of EUSP Common Stock into a larger number of shares of EUSP Common Stock, or

(c) combine its outstanding shares of EUSP Common Stock into a smaller number of shares of EUSP Common Stock,

then the per share Exercise Price shall be adjusted, for the purpose of preserving the economic value of this Warrant, to the price determined by multiplying the per share Exercise Price in effect immediately prior to such subdivision or combination or the taking of a record of holders in respect of such payment or distribution, as the case may be (each, a “Triggering Event”) by a fraction (i) the numerator of which shall be the total number of outstanding shares of EUSP Common Stock immediately prior to such Triggering Event, and (ii) the denominator of which shall be the total number of outstanding shares of EUSP Common Stock immediately after such Triggering Event.

Section 3.2. Adjustment of Number of Shares Purchasable. Upon each adjustment of the per share Exercise Price, the number of shares of EUSP Common Stock subsequently purchasable hereunder shall be an amount equal to the(i) the number of shares of EUSP Common Stock purchasable hereunder immediately prior to such adjustment multiplied by (ii) a quotient derived by dividing the aggregate Exercise Price in effect immediately before such adjustment by the per share Exercise Price in effect immediately following such adjustment or readjustment.

Section 3.3. Notice of Adjustments. Whenever the per share Exercise Price or number of shares deliverable upon exercise of this Warrant shall be adjusted pursuant to this Section 3, ADGE shall promptly prepare a certificate signed by the President or a Vice President and by the Treasurer or an Assistant Treasurer of ADGE setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board of Directors of ADGE made any determination hereunder), and shall promptly cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.

SECTION 4. MERGERS, CONSOLIDATIONS, SALES.

In the case of any consolidation or merger of EUSP with another entity (regardless of whether EUSP is the surviving entity), or the sale of all or substantially all of its assets to another entity, or any reorganization or reclassification of the EUSP Common Stock or other equity securities of EUSP, then, lawful and adequate provision shall be made by ADGE, to the extent possible, whereby the Holder shall thereafter have the right to receive upon the basis and upon the terms and conditions specified herein and in lieu of the shares of EUSP Common Stock immediately theretofore purchasable hereunder, such shares of stock, securities or assets (including, without limitation, cash), if any, as may (by virtue of such consolidation, merger, sale, reorganization or reclassification) be issued or payable with respect to or in exchange for a number of outstanding shares of EUSP Common Stock equal to the number of shares of EUSP Common Stock immediately theretofore so purchasable hereunder had such consolidation, merger, sale, reorganization or reclassification not taken place, and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon exercise of this Warrant. ADGE shall not consent to any such consolidation, merger or sale of EUSP unless (a) ADGE or EUSP provides the holder hereof with not less than 10 days prior written notice of such consolidate.0on, merger or sale (provided that the failure to give such notice shall not affect the validity of such corporate event), and (b) prior to the consummation thereof, ADGE confirms its obligation to deliver to each such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire.

SECTION 5. DISSOLUTION OR LIQUIDATION.

If EUSP declares or pays a dividend upon the EUSP Common Stock payable otherwise than in cash out of earnings or earned surplus (determined in accordance with generally accepted accounting principles, consistently applied) except for a stock dividend payable in shares of EUSP Common Stock (a “Liquidating Dividend”), then ADGE shall pay to the Holder at the time of payment thereof the Liquidating Dividend which would have been paid to such holder on the EUSP Common Stock had this Warrant been fully exercised immediately prior to the date on which a record is taken for such Liquidating Dividend, or, if no record is taken, the date as of which the record holders of EUSP Common Stock entitled to such dividends are to be determined.

SECTION 6. NOTICE OF DIVIDENDS; PAYMENTS.

If the Board of Directors of EUSP shall declare any dividend or other distribution on any class of its EUSP Common Stock except by way of a stock dividend payable in EUSP Common Stock on its EUSP Common Stock, ADGE shall mail notice thereof to the Holder not less than 10 days prior to the record date fixed for determining shareholders entitled to participate in such dividend or other distribution, and the Holder shall be entitled to receive, on the exercise of this Warrant, cash or other property from ADGE in an amount and of the same type (cash or property) equal to that which the holder would have been entitled to receive if the unexercised portion hereof had been exercised as of the record date of such dividend or distribution.

SECTION 7. NO FRACTIONAL SHARES.

No fractional shares shall be issued upon the exercise of this Warrant under any circumstances.

SECTION 8. RESTRICTIONS ON TRANSFERABILITY OF WARRANTS AND SHARES; COMPLIANCE WITH LAWS.

Notwithstanding anything contained in this Warrant to the contrary, the terms and provisions of this Section 8 of this Warrant remain in full force and effect at all times and shall survive the Expiration Date.

Section 8.1. In General. This Warrant and the shares of EUSP Common Stock issued upon the exercise hereof shall not be transferable except upon the conditions hereinafter referred to, which conditions are intended to ensure compliance with the provisions of the Securities Act of 1933, as amended (or any similar federal statute at the time in effect) (the “Securities Act”), and any applicable state securities laws in respect of the transfer of this Warrant or any such shares. Any attempt to transfer such Warrant or such shares except in accordance with the terms hereof shall, to the extent legally enforceable, be void.

Section 8.2. Restrictive Legends. Each Warrant and each certificate for shares of EUSP Common Stock issued upon the exercise of any Warrant shall bear a customary restrictive legend relating to securities laws compliance until counsel for ADGE determines that such legend is no longer legally required. This Warrant and any shares of EUSP Common Stock issuable upon exercise hereof may be transferred only in accordance with the provisions of such legend, including the legend set forth on the first page hereof.

Section 8.3. Accredited Investor. The initial Holder of this Warrant represents that it is an “accredited investor” as defined in the rules and regulations under the Securities Act.

SECTION 9. EXERCISE IN FULL AND ASSIGNMENT ONLY IN FULL.

This Warrant may only be exercised or assigned for the number of shares of EUSP Common Stock subject hereto. If this Warrant is assigned in full, this Warrant shall be surrendered at the principal office of ADGE (with the assignment form at the end hereof duly executed), and thereupon a new Warrant of like tenor to this Warrant shall be issued to the assignee covering the number of shares of EUSP Common Stock then issuable upon exercise of this Warrant.

SECTION 10. LOST, STOLEN WARRANTS, ETC.

In case this Warrant shall be mutilated, lost, stolen or destroyed, ADGE may issue a new Warrant of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of the mutilated Warrant, or in lieu of the Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to ADGE of the loss, theft or destruction of such Warrant, and upon receipt of indemnity satisfactory to ADGE. All warrants hereafter issued in exchange or substitution for this Warrant shall be substantially in the form hereof.

SECTION 11. WARRANT HOLDER RIGHTS.

This Warrant does not confer upon the holder hereof any right to vote or to consent or to receive notice as a shareholder of EUSP, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder, prior to the exercise hereof as hereinbefore provided.

SECTION 12. GOVERNING LAW.

This Warrant shall be governed by the laws of the State of Delaware.

(Signature page immediately follows.)

IN WITNESS WHEREOF, ADGE has caused this Warrant to be signed by a duly authorized officer.

Dated: October 3, 2014

AMERICAN DG ENERGY INC.
By:
	John H. Hatsopoulos, Chief Executive Officer

The initial Warrant Holder hereby confirms

the representations and covenants contained

in Section 8:

___________________________________

SUBSCRIPTION FORM

The undersigned,____________________________, pursuant to the provisions of the within Warrant, hereby elects to exercise said Warrant to purchase from American DG Energy Inc. the full number of shares of EUSP Common Stock covered by the within Warrant.

Signature

Address:

Dated: _____________________________

FULL ASSIGNMENT

FOR VALUE RECEIVED, ____________________________ hereby sells, assigns and transfers unto_________________________ with an address of ____________________the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint ___________________________, attorney, to transfer the said Warrant on the books of American DG Energy Inc.

Assignor

Dated: ______________________________

EX-10.1

Exhibit 10.1

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUERS OF THE SECURITIES THAT ARE REFERRED TO HEREIN, INCLUDING THE MERITS AND RISKS INVOLVED. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY OFFERING MATERIALS OR THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE SECURITIES REFERRED TO HEREIN ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

American dg energy inc.

EUROSITE POWER INC.

Convertible Note Amendment Agreement

October 3, 2014

American DG Energy Inc.

EuroSite Power Inc.

45 First Avenue

Waltham, MA 02451

Ladies and Gentlemen:

1. Background. The undersigned investor (the “Investor”) is the owner of convertible notes of American DG Energy Inc. (“ADGE”) in the aggregate principal amount set forth on the signature page. Investors executing an agreement similar to this one are referred to as the “Investors.” The aforesaid convertible notes of ADGE are referred to herein as the “ADGE Notes.” Interest accrued and unpaid on the ADGE Notes, together with the balance of interest payable through the next interest payment date of the ADGE Notes (“Current Interest”), is set forth on the signature page. Interest payable on the ADGE Notes from and after the next interest payment date thereon through the maturity date thereof (“Future Interest”) is set forth on the signature page. ADGE is the owner of shares of the common stock of EuroSite Power Inc. (“EUSP” and such shares, the “EUSP Shares”).

ADGE has agreed to convert the Current Interest and the Future Interest on the ADGE Notes owned by the Investors into EUSP Shares owned by ADGE at a conversion price of $0.50 per EUSP Share.

ADGE has agreed to issue to the Investors warrants to purchase EUSP Shares owned by ADGE in connection with the conversion of Current Interest, with the number of EUSP Shares subject to such warrants being set forth on the signature page at an exercise price of $0.60 per EUSP Share

Further, the Investors have agreed to convert the entire amount due in respect of the principal and interest on the convertible notes of EUSP (“EUSP Notes”) owned by them into newly issued EUSP Shares, with the aggregate amount of principal and interest being converted at a conversion price of $0.50 per EUSP Share, as set forth on the signature page. The portion of such aggregate amount being converted that is interest consists of interest accrued through the date hereof (“Accrued Interest”) and the balance of interest payable thereafter on the next interest payment date of the EUSP Notes (“Future Interest”).

2. Conversion of Current and Future Interest on the ADGE Notes and Issuance of ADGE Warrants.

a. Conversion of ADGE Notes. Each Investor hereby converts the Current Interest and the Future Interest on the ADGE Notes owned by it into EUSP Shares owned by ADGE at a conversion price of $0.50 per EUSP Share.

b. Issuance of ADGE Warrants to Purchase EUSP Shares owned by ADGE. ADGE agrees to issue warrants to purchase EUSP Shares owned by each Investor, such warrants to be in the form of Exhibit A hereto and the number of EUSP Shares subject to such warrants being set forth on the signature page.

c. Deliveries. As soon as practical after the execution of this agreement by all parties, the Investor agrees to deliver to ADGE the ADGE Notes owned by it, and in replacement thereof ADGE will issue a new convertible note for the same principal amount as the Investor’s ADGE Notes in substantially the same form but reflecting the interest conversion. Further, upon delivery of the ADGE Notes held by the Investor, ADGE agrees to transfer to the Investor the EUSP Shares being issued on conversion of the interest on the ADGE Notes and the aforesaid warrants.

3. Conversion of EUSP Notes.

a. Conversion. Each Investor hereby converts the entire principal, Accrued Interest and Future Interest on the EUSP Notes owned by it into newly issued EUSP Shares at a purchase price per share of $0.50.

b. Deliveries. As soon as practical after the execution of this agreement by all parties, each Investor agrees to deliver to EUSP for cancellation all of the EUSP Notes owned by it. Upon delivery of the EUSP Notes held by the Investor, EUSP agrees to issue to the Investor the EUSP Shares to be issued on the conversion of the EUSP Notes.

4. Representations and Warranties.

a. ADGE and EUSP. ADGE and EUSP hereby confirm that their respective representations, warranties and agreements in the subscription agreement and other documents pursuant to which the original ADGE Notes and the EUSP Notes were issued continue to be true and correct as if made on the date hereof and as if made with respect to the securities being issued pursuant hereto, except that with respect to such representations and warranties that speak as of a particular date, no material adverse change has occurred making such representations and warranties untrue or incorrect in any material respect as of the date hereof.

b. The Investor. The Investor hereby confirms that its representations, warranties and agreements in the subscription agreement and other documents pursuant to which the Investor purchased its ADGE Notes and EUSP Notes are true and correct as of the date hereof. Without limiting the foregoing, the Investor represents and warrants that he/it is an accredited investor, as such term is defined in the regulations under the Securities Act of 1933, as amended.

5. Expenses. Each party hereto shall each bear its own expenses incurred in connection with this transaction.

6. Miscellaneous.

a. Notices. When any notice is required or authorized hereunder, such notice shall be given in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail if sent during normal business hours of the recipient, and if not sent during normal business hours, then on the next business day so long as receipt is confirmed, (iii) five days after having been sent by registered or certified mail (or regular mail if registered or certified mail is unavailable in the country of the recipient), (iv) if sent within the U.S., one business day after deposit with a recognized overnight courier, specifying next business day delivery, with written verification of receipt or (v) if sent from the U.S. to an address outside the U.S. or if sent from outside the U.S. to an address within the U.S., five business days after deposit with an internationally recognized courier service specifying that delivery be made within five business days with written verification of receipt. All notices and other communications shall be sent if sent to the Investor, to the business address or email address of the Investor set forth on the signature page to this Agreement, as it may subsequently change by notice from the Investor; and

2

If to ADGE, to:	American DG Energy Inc.
	45 First Avenue
	Waltham, MA 02451
	Attention:  Chief Financial Officer
	Email:   gabriel.parmese@americandg.com
If to EuroSite, to:	EuroSite Power Inc.
	45 First Avenue
	Waltham, MA 02451
	Attention:  Chief Financial Officer
	Email:  gabriel.parmese@americandg.com
With a copy to:	Sullivan & Worcester LLP
	One Post Office Square
	Boston, MA 02109
	Attention:  Edwin L. Miller, Jr.
	Email:  emiller@sandw.com

Such notices or communications shall be effective when received. If a notice or communication to Investor is sent in the manner provided above, it is duly given, whether or not the addressee receives it. EuroSite by notice to the Investor may designate additional or different addresses for subsequent notices or communications.

b. Successors and Assigns. This Agreement shall be binding upon the heirs, executors, administrators, successors and assignees of the Investor.

c. Choice of Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York and, to the extent it involves any United States federal statute or regulations, in accordance therewith.

d. Consent to Jurisdiction. The parties hereby consent and submit to the exclusive jurisdiction of the state and federal courts in New York City with respect to all disputes arising in connection with this transaction.

e. Survival of Representations. The parties agree that all of the warranties, representations, acknowledgments, confirmations, covenants and promises made in this Agreement shall survive its execution and delivery.

f. Counterparts. This Agreement may be executed in any number of counterparts each of which shall be deemed an original and which, taken together, shall form one and the same agreement. Execution and delivery of this Agreement may be evidenced by a scan/.pdf of the executed document sent by email.

g. Integration. This Agreement is the complete and exclusive agreement between the parties with regard to the subject matter hereof and supersedes any and all prior discussions, negotiations and memoranda related hereto.

h. Exercise of Warrant. ADGE and EUSP agree to take any actions necessary to permit the exercise of the Warrant upon satisfaction of the conditions of exercise set forth therein.

_________________

(Signature page immediately follows.)

3

The undersigned Investor, ADGE and EUSP hereby execute this Convertible Note Amendment Agreement as of the date first set forth above.

$510,000 interest due, 1,020,000 common shares and 1,020,000 3-year warrants exercisable at $0.60.
é Amount of Current Interest due, common shares to be exchanged and warrants to be issued, respectively, to A European Investor. ADGE Notes being converted into EUSP Shares owned by ADGE at $0.50 per share and warrants to purchase EUSP shares, exercisable at $0.60 per share	/s/ A European Investor é A European Investor
$72,000 interest due, 144,000 common shares and 144,000 3-year warrants exercisable at $0.60.
é Amount of Current Interest due, common shares to be exchanged and warrants to be issued, respectively, to John Hatsopoulos. ADGE Notes being converted into EUSP Shares owned by ADGE at $0.50 per share and warrants to purchase EUSP shares, exercisable at $0.60 per share	/s/_John Hatsopoulos é John Hatsopoulos
$3,612,500 future interest due, 7,225,000 common shares
é Amount of Future Interest due to A European Investor on ADGE Notes being converted into EUSP Shares owned by ADGE at $0.50 per share and number of common shares of EUSP to be exchanged for this future interest	/s/ A European Investor é A European Investor
$510,000 future interest due, 1,020,000 common shares
é Amount of Future Interest due to John Hatsopoulos on ADGE Notes being converted into EUSP Shares owned by ADGE at $0.50 per share and number of common shares of EUSP to be exchanged for this future interest	/s/ John Hatsopoulos é John Hatsopoulos
$1,100,000 Convertible Note, 2,200,000 common shares
é Value of EUSP convertible note owned by ADGE to be converted to common shares at a price of $0.50 and number of EUSP common shares to be issued by EUSP to ADGE for the conversion of convertible notes held by ADGE.	/s/ John Hatsopoulos é John Hatsopoulos CEO American DG Energy
$300,000 Convertible Note, 600,000 common shares
é Value of EUSP convertible note owned by John Hatsopoulos to be converted to common shares at a price of $0.50 and number of EUSP common shares to be issued by EUSP to John Hatsopoulos for the conversion of convertible notes held by John Hatsopoulos.	/s/ John Hatsopoulos é John Hatsopoulos
$300,000 Convertible Note, 600,000 common shares
é Value of EUSP convertible note owned by A European Investor to be converted to common shares at a price of $0.50 and number of EUSP common shares to be issued by EUSP to A European Investor for the conversion of convertible notes held by A European Investor.	/s/ A European Investor é A European Investor
AGREED:	AGREED:
AMERICAN DG ENERGY INC. By: /s/ John Hatsopoulos	EUROSITE POWER INC. By: /s/ Gabriel J. Parmese

4

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Investor Contact: John Hatsopoulos American DG Energy Inc. 781.622.1120 john.hatsopoulos@americandg.com Media Contact: Christine Cobuzzi American DG Energy Inc. 781.522.6014 christine.cobuzzi@americandg.com

American DG Energy and EuroSite Power Restructure Balance Sheet

Reduces Current and Future Interest Expense by $5.1 Million and Reduces Debt by $3.1 Million

WALTHAM, Mass. – October 06, 2014 – American DG Energy Inc. (NYSE MKT: ADGE) and EuroSite Power Inc. (OTCQB: EUSP), leading On-Site Utilities, offering clean electricity, heat, hot water and cooling solutions to hospitality, healthcare, housing and athletic facilities, in America and Europe announced the favorable restructuring of their balance sheets to enable future growth. John Hatsopoulos, CEO of American DG Energy and Chairman of the Board of EuroSite Power, stated: “I am excited to announce that we executing in creative ways to finance our companies. We have reduced the future interest expense on our convertible debt, as well as our convertible debt levels, in a way which allows us to use our cash to fuel our future growth.”

Under the terms of the agreement, the combined companies eliminated approximately $5.1 million in current and future interest expense on their convertible debt and reduced principal by approximately $3.1 million. This transaction significantly increases the equity of EuroSite Power and the combined companies.

More specifically:

· American DG Energy eliminated $4.7 million in current and future interest on its convertible debt in exchange for approximately 9.4 million outstanding shares of EuroSite Power’s common stock owned by it plus warrants, exercisable at $0.60 per share, to purchase from American DG Energy additional outstanding shares of Eurosite Power owned by American DG Energy. As a result of this exchange, all of American DG Energy’s convertible debt is now zero coupon.

· Convertible debt holders of EuroSite Power have converted approximately $3.1 million of convertible debt for 6.1 million new EuroSite Power common shares. This will save approximately $350,000 of future interest expense and reduce EuroSite Power’s debt level by 56% from $5.5 million to $2.4 million.

About American DG Energy

American DG Energy supplies low-cost energy to its customers through distributed power generating systems. The Company is committed to providing institutional, commercial and small industrial facilities with clean, reliable power, cooling, heat and hot water at lower costs than charged by local utilities – without any capital or start-up costs to the energy user – through its On-Site Utility energy solutions. American DG Energy is headquartered in Waltham, Massachusetts. Learn more about how American DG Energy (NYSE MKT: ADGE) reduces energy costs at www.americandg.com or follow us on Facebook and Twitter.

About EuroSite Power

EuroSite Power provides institutional, commercial and small industrial properties with clean, reliable power, cooling, heat and hot water at lower costs than charged by local utilities – without any capital or start-up costs to the energy user. EuroSite Power, formed to introduce the On-Site Utility solution into the European market, is a subsidiary of American DG Energy Inc. More information can be found at http://www.eurositepower.co.uk/.

####

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. All statements, other than statements of historical facts, are forward-looking statements. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond American DG Energy’s and EuroSite Power’s control. Factors that could materially affect actual results can be found in American DG Energy’s and EuroSite Power’s filings with the U.S. Securities and Exchange Commission. American DG Energy and EuroSite Power undertake no obligation to update publicly (except to the extent required by law) any forward-looking statements for any reason after the date hereof.