Exhibit 10.2


 





WAIVER


 


July 29, 2015


 


 


Advanced Environmental Recycling Technologies, Inc.


914 N. Jefferson


Springdale, Arkansas 72764


Attention: Chief Executive Officer



 


 


Ladies and Gentlemen:


 


Reference hereby is made
to that certain Credit Agreement, dated as of March 18, 2011, as amended by that certain First Amendment to Credit Agreement, dated
as of May 23, 2011, and as further amended by that certain Second Amendment to Credit Agreement, dated as of October 20, 2011 (as
further amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by
and among Advanced Environmental Recycling Technologies, Inc., a Delaware corporation (“Borrower”), the lenders
from time to time parties hereto (the “Lenders”), H.I.G. AERT, LLC, as the administrative agent for the Lenders
(in such capacity, together with its successors and assigns in such capacity, “Agent”; and together with the
Lenders, collectively, the “Lender Group”). Capitalized terms used herein and not otherwise defined or limited
herein shall have the meanings ascribed to such terms in the Credit Agreement.


 


As you are aware, Borrower
has failed to perform obligations owed to the Lender Group under the terms and conditions of the Credit Agreement as a result of
Borrower’s failure to comply with Sections 2.12(a), 2.12(b) and 7.01(b) which requires Borrower to begin paying cash
interest on the Series A Term Loan beginning March 17, 2013, and cash interest on the Series B Term Loan respectively (collectively,
the “Specified Events of Default”).


 


As a result of the Specified
Events of Default, Events of Default have occurred and are currently continuing under the Credit Agreement. You have requested
that the Lender Group waive the Specified Events of Default until August 12, 2015, at which time all interest on the Series A Term
Loan will bear cash interest at 8.0% per annum (collectively, the “Series A Interest Rate”) and the Series B Term Loan
will bear cash interest at 4.0% per annum (collectively, the “Series B Interest Rate”). This letter (this “Waiver”)
is to advise you that the Lender Group hereby waives the Specified Events of Default and their rights and remedies under the Credit
Agreement arising as a result of the Specified Events of Default.


 



    	 



    	 



    




Notwithstanding the foregoing,
such waiver shall not waive any other requirement or hinder, restrict or otherwise modify the rights and remedies of the Lender
Group following the occurrence of any other Event of Default under the Credit Agreement. Except as otherwise expressed herein,
the text of the Credit Agreement and the other Credit Documents shall remain in full force and effect, and the Lender Group hereby
reserves its rights to require strict compliance in the future with all terms and conditions of the Credit Agreement and the other
Credit Documents. Borrower hereby reaffirms its obligations under each Credit Document to which it is a party. Borrower hereby
further ratifies and reaffirms the validity and enforceability of all of the Liens heretofore granted, pursuant to and in connection
with the Security Agreement or any other Credit Document, to Agent, on behalf and for the benefit of each member of the Lender
Group, as collateral security for the Obligations under the Credit Documents in accordance with their respective terms, and acknowledges
that all of the Liens, and all Collateral heretofore pledged as security for the Obligations, continues to be and remain Collateral
for the Obligations from and after the date hereof. Borrower hereby restates, ratifies and reaffirms each and every term and condition
set forth in the Credit Agreement and the Credit Documents effective as of the date hereof.


 


This Waiver may be executed
in multiple counterparts, each of which (including any counterpart delivered by facsimile or other electronic method of transmission)
shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement, and this Waiver
shall be deemed to be made under, and for all purposes shall be construed in accordance with, the laws of the State of New York.
This Waiver shall be effective as of the date set forth above when and only when, Agent shall have received a counterpart of this
Waiver duly executed by Borrower and the Lenders.


 


This Waiver shall constitute
a Credit Document for all purposes.


 


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IN WITNESS WHEREOF,
the parties hereto have caused this Waiver to be executed and delivered as of the date first above written.


 


 


	 	H.I.G. AERT, LLC,
	 	as Administrative Agent and Lender
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Bobby J. Sheth
	 	 	Name: 	Bobby J. Sheth
	 	 	Title:	Authorized Signatory



 


 





Acknowledged and agreed to


as of the date first written above:


  


 



	ADVANCED ENVIRONMENTAL	 
	RECYCLING TECHNOLOGIES, INC.,	 
	a Delaware corporation	 
	 	 	 
	 	 	 
	By:	/s/ J. R. Brian Hanna	 
	Name:	J. R. Brian Hanna	 
	Title:	Chief Financial Officer 




 


 


 


 


 




 





Waiver (H.I.G. LOAN Agreement)