GREENSTONE
HOLDINGS GROUP, LLC
48 Wall Street, Suite 1100
New York, NY 10005
Tel: 212-918-4570 Fax: 212-918-4801
Mr. Joe
Brooks
Chairman and CEO
AERT
914 North Jefferson
PO Box 1237
Springdale. Arkansas 72765-1237
This
letter (“Agreement”) confirms the understanding between
Advanced Environmental Recycling Technologies, Inc., its
subsidiaries and related companies (collectively, the
“Company”) and Greenstone Holdings Group, LLC,
(“GSH”) pursuant to which the Company has engaged GSH
to act as the Company’s exclusive consultant in connection
with respect to, but not limited to, corporate structure, public
market strategies and fundraising activities for a period of
18 months. The Company will submit a Schedule B, within
seven days, to GSH identifying any potential funders they are
currently in negotiations with that they request GSH does not
contact.
Pursuant
to this engagement and as requested by the Company, GSH will
provide, among others, the following services in connection with
the Transaction:
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1.
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Review the Company’s plan of finance, corporate structure,
financial condition, and to advise the Company on future capital
structure and opportunities.
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2.
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Introduce the Company to strategic parties using commercially
reasonable efforts. Such introductions will consist of those
activities usual and customary with a transaction of this scope,
including but not limited to, the review of written offering
materials and the introduction of suitable parties to the
Company.
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3.
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Coordinate the due diligence effort of investors, represent the
Company in the negotiation of the final terms and assist where
appropriate the preparation of documentation and
closing.
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4.
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Introduce to the Company potential business contacts on a
non-exclusive basis.
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5.
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Identify and assist the Company with all efforts as a public
company.
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The
Company agrees to pay GSH a monthly consulting fee of $15,000.00
per month for the eighteen month period of this agreement which
will begin accruing on the signing of this agreement and be deemed
payable from the closing of any funding or joint venture completed
by the Company. In addition to the consulting fee, the Company
agrees to pay
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certain
additional fees to GSH (“Success Fees”) as follows:
(A) 10% of the first $10 million raised in equity; plus
(B) 8% of the next $10 million raised in equity; plus
(C) 6% of each million raised in equity thereafter and
(D) 3% of each million dollars raised in debt funding. In
regards to any short term notes with a maturity of 6 months or
less that roll-over - the debt fee shall not be paid again on the
amount of principal. In the event that a success fee is paid
directly to a fundraising entity, with GSH approval, then GSH shall
receive a reduced success fee of no less than 3% of the gross
proceeds raised.
During
the course of this engagement, that as a result of introductions or
other equally substantive efforts on the part of GSH, one or more
individuals or entities purchases, invests or otherwise acquires
equity, debt or similar capital forming transactions (including
merger, joint venture or acquisition) then the Company agrees to
pay GSH a fee equal to the schedule of Success Fees. GSH will
receive a “breakup” fee of $200,000 in the event that
the Company agrees in writing to a transaction introduced by GSH
and refuses to close or complete within 120 days of such
acceptance.
During
the course of this engagement, GSH will introduce the Company to
various institutional investors through a series of individual
meetings, small group presentations or conference calls. The
Company agrees that if it completes a transaction with one or more
of these investors during the term of this engagement and for a
period of eighteen months after the expiration of this Agreement,
it will pay GSH a fee identical to those outlined above
(“Success Fees”). The Company agrees and acknowledges
the exclusivity of all investors introduced to the Company by GSH
during the term of this Agreement.
During
the course of this engagement the Company agrees to pay GSH equity
of any foreign or domestic joint venture created for the Company
caused by the introduction of GSH directly or indirectly to such
strategic partners. The Company will insure that GSH will receive
20% equity of the transaction and 20% of any and all gross revenues
associated with GSH’s equity position in the venture paid to
the Company by any business source or client the Company obtains
through the business development related by the introduction of
GSH.
In
addition, the Company agrees to reimburse GSH for its reasonable
out-of-pocket expenses and those expenses will be billed
separately. Typically, those out-of-pocket expenses include travel,
document procurement and computer services. Additionally, the
Company agrees to pay attorney’s fees and other professional
advisors engaged by GSH and such engagement will require Company
prior written consent. The Company also agrees to pay the
reasonable legal fees and expenses incurred by the investors as is
customary in these transactions.
Since
GSH will be acting on the Company’s behalf, it is the
practice of GSH to receive indemnification, and the Company agrees
to GSH standard indemnification and reimbursement provisions that
are attached hereto as “Exhibit A” and
incorporated herein.
In
connection with this engagement, the Company agrees to provide such
information regarding the Company’s business as may be
reasonably requested by GSH, including but not limited to: (i)
Balance sheet; (ii) disclosure statement relative to
bankruptcies, judgments or similar events; (iii) tax returns
and status for prior three (3) years; and (iv) any other
event that may impact unfavorably on the Transaction. The Company
represents and warrants that
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