Exhibit 10.1
[American Pallet Letterhead]
December 23, 2005
VIA FACSIMILE
Xx. Xxxxxxxx Xxxxxxx
Southridge Capital Management, LLC
00 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Re: American Pallet
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Dear Xxxxx:
Reference is made to our various discussions, wherein we mutually agreed
(the "Agreement" or the "Extension") to modify the Secured Convertible
Promissory Note Due September 27, 2005 (the "Note"), the Stock Pledge Agreement
dated as of April 27, 2005 (the "Pledge"), and the Limited Recourse Guarantee,
dated as of April 27, 2005 (the "Guarantee") (both as extended on October 20,
2005, together the "Lending Documents"). In this letter "we" or the "Company"
shall refer to American Pallet Leasing, Inc., a Delaware corporation and "you"
or "your" shall refer to Brittany Capital Management Limited, a Bahamian
corporation. Initially capitalized terms used herein which are not otherwise
defined shall have the meanings assigned thereto in the Lending Documents.
1. You have agreed to extend the Note from December 31, 2005 until
March 31, 2006. All other terms in the note remain in effect and
unaltered except as they may relate to the Note's Maturity Date.
2. We have agreed that in addition to the 1,300,000 currently
pledged on your behalf, that additional insider shareholders
pledge their individual holdings, representing no less than an
additional 1,000,000 shares of the stock. We have agreed to
provide you with the holding periods for all pledged shares at
the time of the pledge. We have agreed that once it becomes
feasible to file a registration statement or a post effective
amendment to the registration statement currently in review,
consistent with the rules of the Securities and Exchange
Commission, that we will use our best efforts to register such
shares in the event that the Note is still outstanding. Nothing
in this section will prevent your being able to sell such shares
pursuant to Rule 144.
3. As previously agreed in the October 20, 2005, letter, we will
make an additional tranche of shares available to you, at your
request, given than 3 months have passed since your initial
Form144 filing.
4. As per the original extension, any recovery you may have against
sales made pursuant to Item 3 above will be credited against the
outstanding balance under the Note.
5. In addition, the discount on the Note will be reset from 15% to
20%.
6. We have agreed to reset all warrants associated with the issuance
of the Note to a strike price of $0.07 per warrant in
consideration for the extended holding period.
XX. XXXXXXXX XXXXXXX
DECEMBER 23, 2005
PAGE 2 OF 2
7. We have agreed that pursuant to this Agreement that the Company
shall not be considered in default pursuant to the Note (nor any
of the Lending Documents) by virtue of this Extension.
8. We have also agreed that by agreeing to this Extension you have
not waived any of your rights under the Lending Documents, except
your right to have originally considered the Note in default
pursuant to the original Maturity Date; moreover, we have agreed
that you will not be required to forebear against any portion of
the note that may be recovered through 144 sales.
9. We have agreed that you shall have a subordinate lien on the
assets of L&L Lumber, which the Company is in the process of
acquiring, behind the secured lender. As noted in your discussion
with our attorney today, there may be two lenders who will have
the senior secured portion.
If the foregoing correctly states our understanding, kindly have an
authorized representative of Brittany Capital Management Limited execute where
provided below, wherein this letter Agreement shall properly amend the
aforementioned documents as herein provided. Kindly note that this letter may be
executed in counterparts and via facsimile, each of which shall be deemed an
original but all of which shall constitute one and the same agreement.
Very truly yours,
AMERICAN PALLET LEASING, INC.
By:
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Xxxxx X. Xxxxxxx
Its: President & CEO
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Acknowledged & Xxxxxx: Acknowledged & Xxxxxx:
By:
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FOR BRITTANY CAPITAL MANAGEMENT AS GUARANTOR
LIMITED
Acknowledged & Agreed:
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AS GUARANTOR (IF MORE THAN ONE)
