exv4w8






EXHIBIT 4.8



THIS RENEWABLE UNSECURED SUBORDINATED NOTE (THE “NOTE”) OF ADVANCED ENVIRONMENTAL RECYCLING
TECHNOLOGIES, INC. (THE “COMPANY”) IS SUBJECT TO THE TERMS OF THE INDENTURE, WHICH AMONG OTHER
PROVISIONS, CONTAINS REQUIREMENTS FOR THE HOLDER TO TRANSFER THIS NOTE, INCLUDING THE PRIOR CONSENT
OF THE COMPANY TO ANY SUCH TRANSFER. THE INDENTURE HAS BEEN FILED AS EXHIBIT 4.7 TO THE COMPANY’S
REGISTRATION STATEMENT ON FORM S-1 DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE COMMISSION ON
OR ABOUT                   , 2009, PURSUANT TO WHICH THIS NOTE HAS BEEN ISSUED BY THE COMPANY.



THE COMPANY MAY REDEEM THIS NOTE, IN WHOLE OR IN PART, IN ACCORDANCE WITH THE TERMS OF THE
INDENTURE.




ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.




Incorporated Under the Laws of Delaware




RENEWABLE UNSECURED SUBORDINATED NOTE




	 	 	 	 	 	 	 	 	 
	Registered No.:

	 	 	 	 	 	Registered Principal Amount: $	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Issue Date:

	 	 	 	 	 	Interest Rate:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Term:

	 	 	 	 	 	Interest Payment Schedule:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Maturity Date:

	 	 	 	 	 	Payment Date (for interest):	 	 
	 

	 	 
	 	 	 	 	 	 





     Advanced Environmental Recycling Technologies, Inc., a corporation created under the laws of
the State of Delaware (the “Company,” which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay to
                  , or registered assigns, the principal sum of                    Dollars
($                  ) on the Maturity Date and to pay accrued and unpaid interest hereon from the Issue Date
set forth above, or from the most recent Payment Date to which interest has been paid or duly
provided for, beginning on the first Payment Date after the Issue Date (the “Initial Payment Date”)
and on each subsequent Payment Date thereafter at the Interest Rate set forth above, until the
principal hereof is paid or made available for payment; provided, however, that if the Payment Date
is within five (5) Business Days of the Issue Date, then the first payment will be made in the
following month and will include the interest earned since the Issue Date. Interest shall accrue
on the principal amount for the period from the later of the Issue Date of this Note or the last
Payment Date upon which an interest payment was made until and including the day before the
following Payment Date. Initially capitalized terms used but not defined herein shall have the
respective meanings given such terms in the Indenture. The principal hereof is subject to optional
redemption by the Company and optional repurchase at the request of the Holder, as provided in the
Indenture, and if not so redeemed or repurchased, shall be due and payable in full on the Maturity
Date, which also shall constitute a Payment Date.



     The principal and interest so payable and punctually paid or duly provided for on any Payment
Date, as provided in the Indenture, will be paid to the Person in whose name this Note is
registered (the “Holder”) at the close of business on the Regular Record Date for such Payment
Date. Payment of the principal of and interest on this Note will be made at the office of the
Paying Agent, or in such other office as may be selected in accordance with the Indenture, in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of the Company, payment
of interest may be made in United States dollars by wire or by check mailed to the address of the
Person entitled thereto as such address shall appear in the Securities Register.



     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.



 









 





     Unless the Certificate of Authentication hereon has been executed by or on behalf of the
Trustee referred to on the reverse hereof by manual or facsimile signature, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any purpose.



     No recourse shall be had for the payment of the principal or interest of this Note against any
Company incorporator, stockholder, Officer, director, employee, Affiliate or Agent by virtue of any
statute or by enforcement of any assessment or otherwise.



     IN WITNESS WHEREOF, the Company has caused this Renewable Unsecured Subordinated Note to be
signed in its name by the manual or facsimile signature of its President and attested to by the
manual or facsimile signature of its Secretary.



	 	 	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
	 

	 	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 





     Attest:



                                                            




                                        , Secretary




CERTIFICATE OF AUTHENTICATION




     This Note is one of the Renewable Unsecured Subordinated Notes, referred to in the
within-mentioned Indenture.



	 	 	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	U.S. Bank National Association, as Trustee	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Authorized Signature
	 	 






 









 






REVERSE SIDE OF NOTE




     This Note is one of a duly authorized issue of Renewable Unsecured Subordinated Notes of the
Company designated as its Renewable Unsecured Subordinated Notes (the “Notes”) in the maximum
aggregate principal amount of up to $50,000,000, issued and to be issued under an Indenture, dated
as of                   , 2008 (the “Indenture”), between the Company and U.S. Bank National
Association, as Trustee (the “Trustee,” which term includes any successor Trustee under the
Indenture). Reference is hereby made to the Indenture and all indentures supplemental thereto for
a statement of the respective rights, limitation of rights, duties and immunities thereunder of the
Company, the Trustee and the Holders, and for a statement of the terms upon which the Notes are,
and are to be, authenticated and delivered. Capitalized and certain other terms used herein and
not otherwise defined have the meanings set forth in the Indenture.



     The Notes are general unsecured obligations of the Company. The payment of the principal of
and interest on this Note is expressly subordinated, as provided in the Indenture, to the payment
of all Senior Debt and, by the acceptance of this Note, the Holder hereof agrees, expressly for the
benefit of the present and future holders of Senior Debt, to be bound by the provisions of the
Indenture relating to such subordination and authorizes and appoints as such Holder’s
attorney-in-fact, the Trustee, to take such action on such Holder’s behalf as may be necessary or
appropriate to effectuate such subordination. The Company may, at its option, at any time redeem
this Note either in whole or from time to time in part prior to the Maturity Date by providing at
least thirty (30) days written notice to the Holder.



     If this Note shall be redeemed by a call for redemption and payment be duly provided hereof as
specified in the Indenture, interest shall cease to accrue on this Note.



     This Note may be transferred and exchanged only as provided in the Indenture. This Note may
not be assigned, transferred or otherwise alienated without the prior written consent of the
Company and shall be subject to the Company’s right to demand and receive an opinion of Holder’s
legal counsel (which counsel shall be reasonably acceptable to the Company) that the transfer does
not violate any applicable securities laws. The Company may also require a signature guarantee.



     Approximately fifteen (15) but not less than ten (10) days prior to the Maturity Date, the
Company will send the Holder a Notice of Maturity to notify the Holder of the Maturity Date.
Except as otherwise provided in the Indenture, if in the Notice of Maturity the Company does not
notify the Holder of its intention to repay this Note, and unless within fifteen (15) days after
the Maturity Date, the Holder has not demanded repayment of this Note, this Note shall be
automatically renewed for an additional term equal to the term of the maturing Note and shall be
deemed to have been renewed by the Holder and the Company as of the Maturity Date, such that a new
Note shall be deemed to have been issued as of such Maturity Date. This Note will continue to
renew as described herein absent some action permitted under the Indenture and this Note by either
the Holder or the Company. Interest on the renewed Note shall accrue from the Issue Date thereof,
which is the first day of such renewed term. This renewed Note will be deemed to have identical
terms and provisions as the maturing Note, including provisions relating to payment, except that
the interest rate payable during the term of the renewed Note shall be the interest rate which is
being offered by the Company on other Notes with the same term as of the Issue Date of such
renewal. If other Notes with the same term are not then being offered on the Issue Date of such
renewal, the interest rate upon renewal will be the rate specified by the Company on or before the
Maturity Date, or the Note’s existing rate if no such rate is specified. If the Company gives
notice to the Holder of the Company’s intention to repay the Note at maturity, the Company shall
pay the Holder the principal amount and accrued and unpaid interest thereon on the Maturity Date,
and, provided such payment is timely made, no interest will accrue after the Maturity Date.
Otherwise, if the Holder requests repayment within fifteen (15) days after the Maturity Date, no
interest will accrue after the Maturity Date and the Holder will be sent payment upon the later of
the Maturity Date or five (5) days following the date the Company receives such notice from Holder;
provided that any interest paid to the Holder accruing after the Maturity Date shall be deducted
from such payment.



     If an Event of Default shall occur and be continuing, the outstanding principal of this Note
may be declared due and payable in the manner and with the effect provided in the Indenture. The
Company shall pay all costs of collection, whether or not judicial proceedings are instituted, in
the manner provided in the Indenture. The



 









 







Indenture provides that such declaration and its consequences may, in certain events, be
waived by the Holders of a majority in principal amount of the Notes outstanding.



     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Notes at the time outstanding. The Indenture also
contains provisions permitting the Holders of specified percentages of aggregate principal amount
of the Notes at the time outstanding, on behalf of the Holders of all of the Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or
not notation of such consent or waiver is made upon this Note.



     No reference herein to the Indenture and no provision of this Note or of the Indenture or
amendment or modification hereof or thereof shall alter or impair the obligation of the Company to
pay the principal of and interest on this Note at the times, place and rate and in the coin or
currency herein prescribed.



     In the event of a consolidation or merger of the Company into, or of the transfer of its
assets substantially as an entirety to, a successor entity in accordance with the Indenture, such
successor entity shall assume payment of the Notes and the performance of every covenant of the
Indenture on the part of the Company, and in the event of any such transfer, the Company (or the
successor entity in the event of a subsequent consolidation, merger or transfer) shall be
discharged from all obligations and covenants in respect of the Notes and the Indenture and may be
dissolved and liquidated, all as more fully set forth in the Indenture.



     The Notes are originally issuable in such denominations as may be designated from time to time
by the Company, but in no event in an original denomination less than $1,000. Subject to the
provisions of the Indenture (including without limitation Section 2.6 thereof), the transfer of
this Note is registerable in the Securities Register, upon surrender of this Note for registration
of transfer at the office or agency of the Registrar duly endorsed by or accompanied by a written
instrument of transfer in the form printed on this Note or in another form satisfactory to the
Company and the Registrar duly executed by the Holder hereof or such Holder’s attorney, duly
authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or transferees. The
Registrar may assess service charges for any such registration or transfer or exchange, and the
Registrar may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.



     Prior to due presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the contrary.



     This Note shall be governed by and construed in accordance with the laws of the State of New
York, without giving effect to the conflict of law provisions thereof.



 









 





FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer this Note)




FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto




 





 





 




(Please print name and address of transferee)



this Note, together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint                   , as Attorney-in-Fact, to transfer the within Note on the
books kept for registration thereof, with full power of substitution.




Dated:                                         




	 	 	 	 	 
	Signature:
	 	 	 	 
	 

	 	 

(Signature must conform in all
respects to name of holder as
specified on the face of the Note)
	 	 






	 	 	 	 	 
	Social Security 

or Other Identifying 

Number of Transferee:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Signature Guaranteed: