Document:

Exhibit 10.1
    

    

    

    
      FOURTH AMENDMENT TO AMENDED AND
      RESTATED CREDIT AGREEMENT
    

    

    

    
      THIS FOURTH AMENDMENT TO AMENDED AND
      RESTATED CREDIT AGREEMENT (this "Amendment")
      is entered into as of May 5, 2014, by and among WELLS FARGO CAPITAL
      FINANCE, LLC (formerly known as Wells Fargo Foothill, LLC), a Delaware
      limited liability company, as the arranger and administrative agent ("Agent")
      for the Lenders (as defined in the Credit Agreement referred to below),
      the Lenders party hereto and REALPAGE, INC., a Delaware corporation (the
      "Borrower").
    

    
      WHEREAS, Borrower, Agent, and Lenders are
      parties to that certain Amended and Restated Credit Agreement dated as
      of December 22, 2011 (as amended, restated, modified or supplemented
      from time to time, the "Credit
      Agreement");
    

    
      WHEREAS, Borrower, Agent and the Lenders
      desire to amend the Credit Agreement in certain respects as set forth
      herein and Agent and the Lenders have agreed to the foregoing, on the
      terms and conditions set forth herein.
    

    
      NOW THEREFORE, in consideration of the
      premises and mutual agreements herein contained, the parties hereto
      agree as follows:
    

    
      1.        Defined
      Terms.  Unless otherwise
      defined herein, capitalized terms used herein and not otherwise defined
      shall have the meanings ascribed to such terms in the Credit Agreement.
    

    
      2.        Amendment
      to Credit Agreement.  In
      reliance upon the representations and warranties of Borrower set forth
      in Section 6
      below, and subject to the satisfaction of the conditions to
      effectiveness set forth in Section
      5 below, the Credit Agreement
      is hereby amended as follows:
    

    
      (a)       Section 6.9 of the Credit
      Agreement is hereby amended and restated in its entirety as follows:
    

    
      6.9.      Restricted
      Junior Payments.
    

    
        Make any Restricted Junior Payment; provided,
      however,
      that so long as it is permitted by law, and so long as no Default or
      Event of Default shall have occurred and be continuing or would result
      therefrom, (i) Borrower's Subsidiaries may make distributions to any
      Loan Party, (ii) Borrower may make distributions to former employees,
      officers, consultants or directors (or any spouses, ex-spouses, or
      estates of any of the foregoing) on account of redemptions of Stock of
      Borrower held by such Persons, provided,
      however, that the aggregate
      amount of such redemptions made by Borrower during the term of this
      Agreement does not exceed $750,000 in the aggregate, (iii) Borrower may
      make distributions to its shareholders in accordance with Borrower's
      Governing Documents in lieu of issuing any fractional shares in the
      event of the conversion of the preferred stock of Borrower held by such
      Persons into common stock of Borrower, provided,
      however, that the aggregate
      amount of such distributions made by Borrower during any fiscal year of
      Borrower does not exceed $25,000 in the aggregate, and (iv) from time to
      time during the period commencing on the Fourth Amendment Effective Date
      and ending May 5, 2016, Borrower may repurchase Stock issued by
      Borrower, provided,
      however,
      that (x) both immediately before and immediately after giving effect to
      each such stock repurchase, Excess Availability plus Qualified Cash of
      Borrower shall be at least $20,000,000, and (y) the aggregate amount of
      all such stock repurchases does not exceed $75,000,000.
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      (b)      Section 7(a) of the Credit
      Agreement is hereby amended and restated in its entirety to read as
      follows:
    

    
        (a)       Minimum
      Interest Expense Coverage Ratio.  Have
      an Interest Expense Coverage Ratio, measured on a fiscal quarter-end
      basis, of not less than 1.75:1.00 for the 12 month period ending on the
      last day of each fiscal quarter of Borrower and its Subsidiaries
      beginning with the fiscal quarter ending June 30, 2014.
    

    
      (c)       Section 7(c) of the Credit
      Agreement is hereby amended (and solely with respect to the amendment of
      the amount for Fiscal Year 2013, such amendment is effective as of
      December 31, 2013) by amending and restating the table therein to read
      as follows:
    

    
    	
           
        	
           
        	
           
        
	
          Fiscal Year 2013
        	
          Fiscal Year 2014
        	
          
            Fiscal Year 2015
and each Fiscal Year
thereafter
          

        
	
          $26,000,000
        	
          $30,000,000
        	
          $33,000,000
        

    

    
      (d)       Schedule 1.1 to the Credit
      Agreement is hereby amended by amending the last sentence of the defined
      term "EBITDA" to delete the reference to "Fixed Charge Coverage Ratio"
      therein and replace it in its entirety with "Interest Expense Coverage
      Ratio."
    

    
      (e)       Schedule 1.1 to the Credit
      Agreement is hereby amended to add the following defined terms in the
      appropriate alphabetical order:
    

    
      "Fourth Amendment Effective Date" means
      May 5, 2014.
    

    
      "Interest Expense Coverage Ratio" means,
      for any period, the ratio of (x) EBITDA for such period to (y) Interest
      Expense (other than Interest Expense that is not paid or payable in cash
      (including pay-in-kind or capitalized interest expense)) paid or payable
      for such period.
    

    
      (f)       Schedule 1.1 to the Credit
      Agreement is hereby amended to delete the following defined terms in
      their entirety: "Fixed Charge Coverage Ratio" and "Fixed Charges."
    

    
      (g)       Schedule 4 of Exhibit C-1 of the
      Credit Agreement is hereby amended and restated in its entirety as set
      forth on Exhibit C
      hereto.
    

    
      
        

        

      

      
        
          -2-
        

        
          

        

      

      
        

        

      

    

    

    

    
      3.        Continuing
      Effect.  Except as expressly
      set forth in Section 2
      of this Amendment, nothing in this Amendment shall constitute a
      modification or alteration of the terms, conditions or covenants of the
      Credit Agreement or any other Loan Document, or a waiver of any other
      terms or provisions thereof, and the Credit Agreement and the other Loan
      Documents shall remain unchanged and shall continue in full force and
      effect, in each case as amended hereby.
    

    
      4.        Reaffirmation
      and Confirmation.  Borrower
      hereby ratifies, affirms, acknowledges and agrees that the Credit
      Agreement and the other Loan Documents to which it is a party represent
      the valid, enforceable and collectible obligations of Borrower, and
      further acknowledges that there are no existing claims, defenses,
      personal or otherwise, or rights of setoff whatsoever with respect to
      the Credit Agreement or any other Loan Document.  Borrower hereby agrees
      that this Amendment in no way acts as a release or relinquishment of the
      Liens and rights securing payments of the Obligations.  The Liens and
      rights securing payment of the Obligations are hereby ratified and
      confirmed by Borrower in all respects.
    

    
      5.        Conditions
      to Effectiveness.  This
      Amendment shall become effective upon the satisfaction of the following
      conditions precedent:
    

    
      (a)       Agent shall have received a copy
      of this Amendment executed and delivered by Agent, the Required Lenders
      and the Loan Parties (with four (4) original copies of this Amendment to
      follow within two (2) Business Days after the date hereof); and
    

    
      (b)       After giving effect to this
      Amendment, no Default or Event of Default shall have occurred and be
      continuing on the date hereof or as of the date of the effectiveness of
      this Amendment.
    

    
      6.        Representations
      and Warranties.  In order to
      induce Agent and Lenders to enter into this Amendment, each Loan Party
      hereby represents and warrants to Agent and Lenders that:
    

    
      (a)       After giving effect to this
      Amendment, all representations and warranties contained in the Loan
      Documents to which such Loan Party is a party are true and correct in
      all material respects (except that such materiality qualifier shall not
      be applicable to any representations and warranties that already are
      qualified or modified by materiality of dollar thresholds in the text
      thereof) on and as of the date of this Amendment (except to the extent
      any representation or warranty expressly related to an earlier date in
      which case such representations and warranties shall be true and correct
      in all material respects (except that such materiality qualifier shall
      not be applicable to any representations and warranties that already are
      qualified or modified by materiality or dollar thresholds in the text
      thereof) on and as of such earlier date);
    

    
      (b)       No Default or Event of Default
      has occurred and is continuing; and
    

    
      (c)       This Amendment and the Loan
      Documents, as amended hereby, constitute legal, valid and binding
      obligations of such Loan Party and are enforceable against such Loan
      Party in accordance with their respective terms, except as enforcement
      may be limited by equitable principles or by bankruptcy, insolvency,
      reorganization, moratorium or similar laws relating to or limiting
      creditors' rights generally.

    

    
      
        

        

      

      
        
          -3-
        

        
          

        

      

      
        

        

      

    

    
      

    

    
      7.        Miscellaneous.
    

    
      (a)       Expenses.  Borrower
      agrees to pay on demand all reasonable costs and expenses of Agent and
      the Lenders (including reasonable attorneys' fees) incurred in
      connection with the preparation, negotiation, execution, delivery and
      administration of this Amendment and all other instruments or documents
      provided for herein or delivered or to be delivered hereunder or in
      connection herewith.  All obligations provided herein shall survive any
      termination of this Amendment and the Credit Agreement as amended hereby.
    

    
      (b)       Choice
      of Law and Venue; Jury Trial Waiver; Reference Provision.  Without
      limiting the applicability of any other provision of the Credit
      Agreement or any other Loan Document, the terms and provisions set forth
      in Section 12 of the Credit Agreement are expressly incorporated herein
      by reference.
    

    
      (c)       Counterparts.  This
      Amendment may be executed in any number of counterparts, and by the
      parties hereto on the same or separate counterparts, and each such
      counterpart, when executed and delivered, shall be deemed to be an
      original, but all such counterparts shall together constitute but one
      and the same Amendment.
    

    
      8.        Release.
    

    
      (a)       In consideration of the
      agreements of Agent and Lenders contained herein and for other good and
      valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, each Loan Party, on behalf of itself and its successors,
      assigns, and other legal representatives, hereby absolutely,
      unconditionally and irrevocably releases, remises and forever discharges
      Agent and Lenders, and their successors and assigns, and their present
      and former shareholders, affiliates, subsidiaries, divisions,
      predecessors, directors, officers, attorneys, employees, agents and
      other representatives (Agent, each Lender and all such other Persons
      being hereinafter referred to collectively as the "Releasees"
      and individually as a "Releasee"),
      of and from all demands, actions, causes of action, suits,
      controversies, damages and any and all other claims, counterclaims,
      defenses, rights of set-off, demands and liabilities whatsoever
      (individually, a "Claim"
      and collectively, "Claims")
      of every name and nature, known or unknown, suspected or unsuspected,
      both at law and in equity, which such Loan Party or any of its
      successors, assigns, or other legal representatives may now or hereafter
      own, hold, have or claim to have against the Releasees or any of them
      for, upon, or by reason of any circumstance, action, cause or thing
      whatsoever which arises at any time on or prior to the day and date of
      this Amendment for or on account of, or in relation to, or in any way in
      connection with any of the Credit Agreement, or any of the other Loan
      Documents or transactions thereunder or related thereto.
    

    
      (b)       Each Loan Party understands,
      acknowledges and agrees that the release set forth above may be pleaded
      as a full and complete defense and may be used as a basis for an
      injunction against any action, suit or other proceeding which may be
      instituted, prosecuted or attempted in breach of the provisions of such
      release.

    

    
      
        

        

      

      
        
          -4-
        

        
          

        

      

      
        

        

      

    

    
      

    

    
      (c)       Each Loan Party agrees that no
      fact, event, circumstance, evidence or transaction which could now be
      asserted or which may hereafter be discovered shall affect in any manner
      the final, absolute and unconditional nature of the release set forth
      above.
    

    
      

      [Signature
      Page Follows]

    

    
      
        

        

      

      
        
          -5-
        

        
          

        

      

      
        

        

      

    

    
      

    

    
      IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
      executed by their respective officers thereunto duly authorized and
      delivered as of the date first above written.
    

    
      

    

    	
           
        	
          
            REALPAGE, INC.,
a Delaware corporation

By: /s/
            Timothy J. Barker                   
            
Name: Timothy J. Barker                   
            
Title: Chief Financial Officer             
          

        

    

    
      

      

      

      Signature Page to Fourth Amendment to Amended and Restated Credit
      Agreement
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      

    

    	
           
        	
          
            WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited
            liability company, as Agent and as a Lender

By: /s/
            Daniel Morihiro                     
Name:
            Daniel Morihiro                      
Title:
            Director                                      
          

        

    

    

    

    
      

      Signature Page to Fourth Amendment to Amended and Restated Credit
      Agreement
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    	
           
        	
          
            BANK OF AMERICA, N.A.,
a national banking association,
            as a Lender

By: /s/ Jennifer
            Yan                          
            
Name: Jennifer Yan                          
Title:
            Senior Vice President               
          

        

    

    

    

    
      

      Signature Page to Fourth Amendment to Amended and Restated Credit
      Agreement
    

    
      

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    	
           
        	
          
            JPMORGAN CHASE BANK, N.A.,
a national banking
            association, as a Lender

By: /s/ Scott R. Maggard
                             
Name:
            Scott R. Maggard                  
            
Title: Underwriter III                         
          

        

    

    

    

    

    

    
      Signature Page to Fourth Amendment to Amended and Restated Credit
      Agreement
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    

    

    	
           
        	
          
            Comerica Bank,
A Texas Banking Association, as a Lender

By:
            /s/ Charles Fell                            
            
Name: Charles Fell                            
            
Title: Vice President                          
          

        

    

    

    

    

    

    
      Signature Page to Fourth Amendment to Amended and Restated Credit
      Agreement
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      CONSENT AND REAFFIRMATION
    

    
      Each Guarantor hereby (i) acknowledges
      receipt of a copy of the foregoing Fourth Amendment to Amended and
      Restated Credit Agreement (the "Amendment";
      capitalized terms used but not otherwise defined herein shall have the
      meanings ascribed to such terms in the Amendment), (ii) consents to
      Borrower's execution and delivery of the Consent; (iii) agrees to be
      bound by the Amendment (including Section
      8 thereof); (iv) affirms that
      nothing contained in the Amendment shall modify in any respect
      whatsoever any Loan Document to which it is a party except as expressly
      set forth therein; and (v) ratifies, affirms, acknowledges and agrees
      that each of the Loan Documents to which such Guarantor is a party
      represents the valid, enforceable and collectible obligations of such
      Guarantor, and further acknowledges that there are no existing claims,
      defenses, personal or otherwise, or rights of setoff whatsoever with
      respect to the Credit Agreement or any other such Loan Document.  Each
      Guarantor hereby agrees that the Amendment in no way acts as a release
      or relinquishment of the Liens and rights securing payments of the
      Obligations.  The Liens and rights securing payment of the Obligations
      are hereby ratified and confirmed by such Guarantor in all
      respects.  Although each Guarantor has been informed of the matters set
      forth herein and has acknowledged and agreed to same, each Guarantor
      understands that neither Agent nor any Lender has any obligation to
      inform any Guarantor of such matters in the future or to seek any
      Guarantor's acknowledgment or agreement to future amendments, waivers or
      consents, and nothing herein shall create such a duty.
    

    
      [Signature
      Page Follows]
    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    

    

    	
           
        	
          
            MULTIFAMILY INTERNET VENTURES, LLC,
a California limited
            liability company

By: /s/ Timothy J.
            Barker                 
            
Name: Timothy J. Barker                  
            
Title: VP, CFO and Treasurer          
          

        

    

    

    

    	
           
        	
          
            STARFIRE MEDIA, INC.,
a Delaware corporation

By:
            /s/ Timothy J. Barker                   
            
Name: Timothy J. Barker                   
            
Title: VP, CFO and Treasurer            
          

        

    

    

    

    	
           
        	
          
            REALPAGE INDIA HOLDINGS, INC.,
a Delaware corporation

By:
            /s/ Timothy J. Barker                    
            
Name: Timothy J. Barker                    
            
Title: VP, CFO and Treasurer             
          

        

    

    

    

    	
           
        	
          
            A.L. WIZARD, INC.,
a Delaware corporation

By: /s/
            Timothy J. Barker                    
Name:
            Timothy J. Barker                    
Title:
            VP, CFO and Treasurer             
          

        

    

    

    

    	
           
        	
          
            PROPERTYWARE LLC
a California limited liability company

By:
            RealPage, Inc., as Sole Member

By: /s/ Timothy J.
            Barker                     
            
Name: Timothy J. Barker                     
Title:
            Chief Financial Officer               
          

        

    

    

    

    

    

    
      Consent and Reaffirmation to Fourth Amendment to Amended and Restated
      Credit Agreement
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    

    

    	
           
        	
          
            43642 YUKON INC.,
a Yukon company 

By: /s/
            Timothy J. Barker                 
            
Name: Timothy J. Barker                 
            
Title: VP, CFO and Treasurer          
          

        

    

    

    

    	
           
        	
          
            eREAL ESTATE INTEGRATION, INC.,
a California corporation

By:
            /s/ Timothy J. Barker                 
            
Name: Timothy J. Barker                 
            
Title: VP, CFO and Treasurer          
          

        

    

    

    

    	
           
        	
          
            RP NEWCO LLC,
a Delaware limited liability company

By:
            RealPage, Inc., as Sole Member

By: /s/ Timothy J.
            Barker                 
            
Name: Timothy J. Barker                 
            
Title: Chief Financial Officer           
          

        

    

    

    

    	
           
        	
          
            RP NEWCO II LLC,
a Delaware limited liability company

By:
            RealPage, Inc., as Sole Member

By: /s/ Timothy J.
            Barker               
            
Name: Timothy J. Barker               
            
Title: Chief Financial Officer         
          

        

    

    

    

    	
           
        	
          
            RENT MINE ONLINE INC.,
a Delaware corporation

By:
            /s/ Timothy J. Barker               
            
Name: Timothy J. Barker               
            
Title: VP, CFO and Treasurer        
          

        

    

    

    

    

    

    
      Consent and Reaffirmation to Fourth Amendment to Amended and Restated
      Credit Agreement
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    	
           
        	
          
            REALPAGE PHILIPPINES HOLDINGS LLC,
a Delaware limited
            liability company

By: RealPage, Inc., as Sole Member

By:
            /s/ Timothy J. Barker                 
Name:
            Timothy J. Barker                 
            
Title: Chief Financial Officer            
          

        

    

    

    

    	
           
        	
          
            REALPAGE FORMS LLC,
a Delaware limited liability company

By:
            /s/ Timothy J. Barker                   
            
Name: Timothy J. Barker                   
            
Title: VP, CFO and Treasurer            
          

        

    

    

    

    	
           
        	
          
            SENIOR-LIVING.COM, INC.,
a Delaware corporation

By:
            /s/ Timothy J. Barker                  
Name:
            Timothy J. Barker                   
Title:
            VP, CFO and Treasurer            
          

        

    

    

    

    	
           
        	
          
            MULTIFAMILY TECHNOLOGY SOLUTIONS, INC., a Delaware
            corporation

By: /s/ Timothy J. Barker
                             
Name:
            Timothy J. Barker                   
Title:
            VP, CFO and Treasurer            
          

        

    

    

    

    	
           
        	
          
            MTS NEW JERSEY, INC., a Delaware corporation

By: /s/
            Timothy J. Barker                  
            
Name: Timothy J. Barker                   
            
Title: VP, CFO and Treasurer           
          

        

    

    

    

    

    

    
      Consent and Reaffirmation to Fourth Amendment to Amended and Restated
      Credit Agreement
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    	
           
        	
          
            MTS CONNECTICUT, INC.,
a Delaware corporation

By:
            /s/ Timothy J. Barker                   
Name:
            Timothy J. Barker                   
Title:
            VP, CFO and Treasurer            
          

        

    

    

    

    	
           
        	
          
            MTS MINNESOTA, INC.,
a Delaware corporation

By:
            /s/ Timothy J. Barker                 
Name:
            Timothy J. Barker                  
Title:
            VP, CFO and Treasurer           
          

        

    

    

    

    	
           
        	
          
            LEASESTAR LLC, a Delaware limited liability company

By:
            RealPage, Inc., as Sole Member

          

          
            By: /s/ Timothy J. Barker                 
Name:
            Timothy J. Barker                 
Title:
            Chief Financial Officer           
          

        

    

    

    

    	
           
        	
          
            RP NEWCO V LLC, a Delaware limited liability company

By:
            RealPage, Inc., as Sole Member

          

          
            By: /s/ Timothy J. Barker                   
Name:
            Timothy J. Barker                   
Title:
            Chief Financial Officer             
          

        

    

    

    

    	
           
        	
          
            VELOCITY UTILITY SOLUTIONS LLC, a Texas limited liability
            company

By: RealPage, Inc., as Sole Member

          

          
            By: /s/ Timothy J. Barker                    
Name:
            Timothy J. Barker                     
Title:
            Chief Financial Officer               
          

        

    

    

    

    

    

    
      Consent and Reaffirmation to Fourth Amendment to Amended and Restated
      Credit Agreement
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      EXHIBIT C-1
    

    

    

    
      SCHEDULE 4
    

    

    

    
      Financial Covenants
    

    
      1.        Interest Expense Coverage
      Ratio.  
    

    
      Borrower's and its Subsidiaries' Interest
      Expense Coverage Ratio, measured on a quarter-end basis, for the quarter
      period ending _________, ________ is ___:1.0, which [is/is
      not] greater than or equal to
      the amount set forth in Section 7(a) of the Credit Agreement for the
      corresponding period.
    

    
      2.        Senior Leverage Ratio.
    

    
      Borrower's and its Subsidiaries' Senior
      Leverage Ratio, measured on a quarter-end basis, for the quarter period
      ending __________, ________ is ____: 1.0, which [is/is
      not] less than or equal to the
      amount set forth in Section 7(b) of the Credit Agreement for the
      corresponding period.  
    

    
      3.        Capital Expenditures.  
    

    
      Borrower's and its Subsidiaries Capital
      Expenditures from the beginning of Borrower's most recent fiscal year to
      the date hereof is ____________, which [is/is
      not] less than or equal to the
      amount set forth in Section 7(c) of the Credit Agreement for the
      corresponding period (including carry forward of $________ from prior
      fiscal year).
    

    
      

      

      

      

      

      

      Schedule 4 to Exhibit C-1 - Form of
      Compliance Certificateexh_101.htm

Exhibit 10.1

 

 

WAIVER

April 15, 2014

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 6.10(a) of the Credit Agreement, which require Borrower to have (i) a Leverage Ratio of below 3.10 to 1.00 and (ii) a Minimum EBITDA of $8.5 million, respectively (collectively, the “Specified Events of Default”) for four Fiscal Quarters (as defined in the Credit Agreement) ending March 31, 2014.  The Specified Events of Default represent Events of Default under the Notes (as defined in the Company’s Certificate of Designations, Preferences and Rights of the Series E Convertible Preferred Stock of Advanced Environmental Recycling Technologies, Inc. dated March 17, 2011 (the “Certificate of Designation”)) resulting in the occurrence of a Triggering Event (as defined in the Certificate of Designation) under Section 5(a)(ii) of the Certificate of Designation.

 

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.  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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2

  

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

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