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EXHIBIT 10.15
ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
XX 0000
XX 00 - Xxx 000
Xxxxxxxx, Xxxxx 00000
April 12, 1999
TO: Holders of Series A Convertible Preferred Stock
Xxxxxxx Xxxxxxxx
Xxxxx XxXxxxxx
Re: Series A Preferred Stock
Gentlemen:
Advanced Environmental Recycling Technologies, Inc. (the "Company") and
each of the undersigned, for good and valuable consideration, intending to be
legally bound, hereby agree as follows:
1. The Filing date (as defined in Section 2(a) of the Registration
Rights Agreement, dated as of September 30, 1998, by and among
the Company and each of you (the "Registration Rights
Agreement")) shall not mean January 15, 1999, but shall instead
mean June 1, 1999.
2. The number of Registrable Securities (as defined in Section
1(a)(iii) of the Registration Rights Agreement) specified in the
first sentence of Section 2(a) of the Registration Rights
Agreement shall be increased from 5,970,000 Registrable
Securities to 6,196,656 Registrable Securities (which number
includes the Registrable Securities underlying the Series I
Warrants (as defined below)).
3. The Registration Deadline (as defined in Section 2(c) of the
Registration Rights Agreement) shall not mean March 17, 1999, but
shall instead mean August 1, 1999.
4. All accrued but unpaid amounts required to be paid by the Company
pursuant to Section 2(c) of the Registration Rights Agreement are
hereby waived.
5. The fourth sentence of Section 2(c) of the Registration Rights
Agreement is hereby amended and restated in its entirety to read
as follows:
In addition, the Company shall pay to each Investor an amount
equal to the product of (i) the Aggregate Share Price, multiplied
by (ii) two hundredths (.02), for the next thirty (30) day period
(or portion thereof) following the initial thirty (30) day period
referred to in the preceding sentence (A) after the Filing Date
and prior to the date on which the Registration Statement
required to be filed pursuant to Section 2(a) hereof is filed
with the SEC, (B) after the Registration Deadline and prior to
the date on which the Registration Statement required to be filed
pursuant to Section 2(a) hereof is declared effective by the SEC,
and (C) during which sales of any Registrable Securities cannot
be made pursuant to the Registration Statement after the
Registration Statement has been declared effective or the Common
Stock is not listed or included for quotation on the SmallCap,
NNM, NYSE or AMEX.
6. A new fifth sentence is hereby added to Section 2(c) of the
Registration Rights Agreement, which shall read as follows:
In addition, the Company shall pay to each Investor an amount
equal to the product of (i) the Aggregate Share Price, multiplied
by (ii) three hundredths (.03), for each additional thirty (30)
day period (or portion thereof) following the two initial thirty
(30) day periods referred to in the two preceding sentences (A)
after the Filing Date and prior to the date on which the
Registration
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Statement required to be filed pursuant to Section 2(a) hereof is
filed with the SEC, (B) after the Registration Deadline and prior
to the date on which the Registration Statement required to be
filed pursuant to Section 2(a) hereof is declared effective by
the SEC, and (C) during which sales of any Registrable Securities
cannot be made pursuant to the Registration Statement after the
Registration Statement has been declared effective or the Common
Stock is not listed or included for quotation on the SmallCap,
NNM, NYSE or AMEX; provided, however, that there shall be
excluded from each such period any delays which are solely
attributable to changes (other than corrections of Company
mistakes with respect to information previously provided by the
Investors) required by the Investors in the Registration
Statement with respect to information relating to the Investors,
including, without limitation, changes to the plan of
distribution.
7. The last three sentences of Section 2(c) of the Registration
Rights Agreement are hereby amended and restated in their
entirety to read as follows:
(For example, if the Registration Statement is not effective by
the Registration Deadline, the Company would pay $10,000 for the
first thirty (30) days, $20,000 for the second thirty (30) days
and $30,000 for each thirty (30) day period thereafter with
respect to each $1,000,000 of Aggregate Share Price until the
Registration Statement becomes effective). Such amounts shall be
paid in cash or shares of Common Stock at the Company's option.
The number of shares so payable shall equal the quotient obtained
by dividing (i) the dollar amount payable by (ii) the product of
(A) 0.90 multiplied by (B) the Variable Conversion Price (as
defined in the Certificate of Designation)). Payments of cash and
issuances of shares of Common Stock pursuant hereto shall be made
within five (5) days after the end of each period that gives rise
to such obligation, provided that, if any such period extends for
more than thirty (30) days, interim payments or issuances shall
be made for each such thirty (30) day period.
8. Article VIII.A(iii) of the Certificate of Designation in respect
of the Series A Preferred Stock (the "Certificate of
Designation") is hereby amended and restated in its entirety as
follows:
(iii) The Corporation shall fail to make any payment of cash or
issuance of stock required by Section 2(c) of the Registration
Rights Agreement by and among the Corporation and the other
signatories thereto entered into in connection with the
Securities Purchase Agreement (the "Registration Rights
Agreement") on or before the (10th) day after the due date of
such payment or issuance.
9. Article VIII.A of the Certificate of Designation is hereby
amended by the addition of a new paragraph at the end of such
article, which paragraph shall read as follows:
Notwithstanding anything in this Article VIII.A to the
contrary, the holders of Series A Preferred Stock shall have
no right to deliver a Redemption Notice following the
occurrence of a Redemption Event specified in clause (i)
above if the Corporation pays to each holder within five (5)
business days after the occurrence of such Redemption Event,
as liquidated damages for the decrease in the value of the
Series A Preferred Stock (and the shares of the
Corporation's Common Stock issuable upon conversion thereof)
which will result from the occurrence of such Redemption
Event, an amount (the "Damages Amount") equal to ten percent
(10%) of the aggregate Stated Value of the shares of Series
A Preferred Stock then held by each such holder. The Damages
Amount shall be payable, at the Corporation's option, in
cash or shares of Common Stock (based upon a price per share
of Common Stock equal to ninety percent (90%) of the
Variable Conversion Price in effect (or which would have
been in effect if a Milestone Failure had previously
occurred) as of the date of such Redemption Event).
10. The expiration date of the warrants to purchase an aggregate of
226,656 shares of common stock of the Company, which warrants are
designated XX-00, XX-00, XX-00, XX-00, XX-00 and IW-19
(collectively, the "Series I Warrants") is hereby extended until
December 31, 1999. The shares of
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Common Stock of the Company underlying the Series I Warrants
shall, for all purposes, be deemed to be Registrable Securities
under the Registration Rights Agreement.
11. Each of the undersigned who is a holder of Series A Convertible
Preferred Stock of the Company, together constituting the holders
of all of the issued and outstanding shares of Series A
Convertible Preferred Stock of the Company, hereby consent to the
amendments to the Certificate of Designation set forth in
Paragraphs 8 and 9 of this Letter Agreement.
12. All remaining terms and provisions of the Registration Rights
Agreement, the Certificate of Designation, the Series X Warrants,
the Series Y Warrants and the Series I Warrants shall continue
and survive this Letter Agreement and remain in full force and
effect.
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If the foregoing accurately states the terms of the agreement that each
of you have reached with the Company, please so indicate by signing this Letter
in the space indicated below. 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.
Very truly yours,
ADVANCED ENVIRONMENTAL RECYCLING
TECHNOLOGIES, INC.
By: /S/ Xxx X. Xxxxxx, Chairman
---------------------------
Agreed to and accepted as of the date
first written above:
ZANETT LOMBARDIER, LTD. HARLOW ENTERPRISES, INC.
By: /S/ G. A. Cicogna By: /S/ HARLOW
--------------------------- -----------------------------
Name: Xxxxxxxx Xxxxxxx Name:
Title: Director to Advisor ----------------------------
Title:
---------------------------
PARKLAND LIMITED THE ZANETT SECURITIES CORPORATION
By: /S/ PARKLAND By: /S/ Xxxxxx X. Xxxxxxx
--------------------------- -----------------------------
Name: Name: XXXXXX X. XXXXXXX
-------------------------- Title: MANAGING DIRECTOR
Title:
-------------------------
[Signatures Continued on Next Page.]
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[Signatures continued from Preceding Page.]
XXXXXXX XXXXX PERFORMANCE XXXXXXX SACHS PERFORMANCE
PARTNERS (OFFSHORE), L.P. PARTNERS, L.P.
By: Commodities Corporation LLC, By: Commodities Corporation LLC,
its general partner its general partner
By: /S/ Xxxxxxx Xxxxxxxxxxx By: /S/ Xxxxxxx Xxxxxxxxxxx
--------------------------- -----------------------------
Name: Xxxxxxx Xxxxxxxxxxx Name: Xxxxxxx Xxxxxxxxxxx
Title: Vice President Title: Vice President
/S/ Xxxxxx X. Xxxxxxx /S/ Xxxxx Xxxxxxxx
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XXXXXX X. XXXXXXX XXXXX XXXXXXXX
/S/ Xxxxx XxXxxxxx /S/ Xxxxxxx Xxxxxxxx
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XXXXX XxXXXXXX XXXXXXX XXXXXXXX
