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EXHIBIT 10.16
December 17, 1999
TO: Holders of Series A, B and C Convertible Preferred Stock
RE: LETTER AGREEMENT SERIES A, B AND C PREFERRED STOCK
Ladies and Gentlemen:
Advanced Environmental Recycling Technologies, Inc., a Delaware
corporation (the "Company"), believes that certain rights which the holders (the
"Purchasers") of the outstanding shares of Series A, B and C Preferred Stock of
the Company (the "Series A, B and C Preferred Stock") possess may require that
the Series A, B and C Preferred Stock be treated as debt and not as equity. As a
result, the Company has requested that the Purchasers enter into this letter
agreement (this "Agreement") relating to such rights. The Purchasers have agreed
to enter into this Agreement on the terms and conditions set forth below. The
Company and each of the Purchasers, for good and valuable consideration,
intending to be legally bound, hereby agree as follows:
1. Article VIII.A(v)(b) of the Certificates of Designation in respect of
the Series A, B and C Preferred Stock dated November 10, 1998, as
amended April 12, 1999 (the "Certificates of Designation"), is hereby
amended and restated in its entirety as follows:
(b) merge, consolidate or engage in any other business combination
with any other entity (other than pursuant to a migratory merger
effected solely for the purpose of changing the jurisdiction of
incorporation of the Corporation and other than pursuant to a merger
in which the Corporation is the surviving or continuing entity and the
voting capital stock of the Corporation immediately prior to such
merger represents at least 50% of the voting power of the capital
stock of the Corporation after the merger) (provided, however, that no
transaction described in this subparagraph shall constitute a
Redemption Event unless the Board of Directors of the Corporation
shall have approved such transaction (including, in the case of a
tender offer to, or proxy solicitation of, the shareholders of the
Corporation which results in the consummation of any such transaction,
the approval of the commencement of such tender offer or proxy
solicitation)); or
2. Article VIII.A(v)(c) of the Certificates of Designation in respect of
the Series A, B and C Preferred Stock dated November 10, 1998, as
amended April 12, 1999 (the "Certificates of Designation"), is hereby
amended and restated in its entirety as follows:
(c) [Intentionally Deleted]; or
3. All remaining terms and provisions of the Certificates of Designation
shall continue and survive this Agreement and remain in full force and
effect.
4. This agreement shall become effective when (i) counterparts of this
Agreement have been signed by each party hereto and delivered to each
other party hereto and (ii) the Company shall have delivered to each
Purchaser of Series A Preferred stock only a Lock-Up Agreement in
substantially the form of Exhibit A attached hereto duly executed by
each of the parties thereto.
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 Agreement in
the space indicated below. This Agreement may
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be executed in two or more counterparts, all of which shall be considered one
and the same Agreement. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
Very truly yours,
ADVANCED ENVIRONMENTAL RECYCLING
TECHNOLOGIES, INC.
By: /S/ Xxx X. Xxxxxx, Chairman
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Agreed to and accepted as of the date first written above:
ZANETT LOMBARDIER, LTD. HARLOW ENTERPRISES, INC.
By: /S/ G. A. Cicogna By:
------------------------------ Name:
Name: Xxxxxxxx Xxxxxxx --------------------------
Title: Director to Advisor Title:
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PARKLAND LIMITED
By:
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Name:
-----------------------------
Title:
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XXXXXXX SACHS PERFORMANCE XXXXXXX XXXXX 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
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Agreed to and accepted as of the date first written above:
RAZORBACK FARMS, INC. XXXXXX INVESTMENTS, INC.
By: /S/ Xxxxx Xxxxxx By: /S/ Xxxxxxxx X. Xxxxxx
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Name: RAZORBACK FARMS, INC. Name: XXXXXX INVESTMENT CO.
Title: CEO Title: Chairman
/S/ Xxx Xxxx /S/ Xxxxxxx Xxxx
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XXX XXXX XXXXXXX XXXX
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Agreed to and accepted as of the date first written above:
XXXXX & CO. MILLENCO
By: /S/ Xxxxx Xxxxxx By: /S/ Xxxxxxx XxXxxxx
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Name: XXXXX XXXXXX Name: XXXXXXX XXXXXXXX
Title: CHIEF ADMINISTRATIVE OFFICER Title: C.O.O.
/S/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
