Exhibit 10.1

INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of
___________, 2015 by and between Appliance Recycling Centers of America, Inc., a
Minnesota corporation (the “Company”), and _________________ (“Indemnitee”).
WHEREAS, highly competent persons have become more reluctant to serve
publicly-held corporations as directors, officers, or in other capacities unless
they are provided with adequate protection through insurance or adequate
indemnification against risks of claims and actions against them arising out of
their service to and activities on behalf of the corporation;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers, and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the Company or business enterprise itself. The Bylaws of
the Company, as they may be amended from time to time (the “Bylaws”), provide
that the Company shall indemnify and advance expenses to all directors and
officers of the Company in the manner set forth therein and to the fullest
extent permitted by applicable law. The Restated Articles of Incorporation of
the Company, as they may be amended from time to time (the “Articles”), provide
for the limitation of liability for directors. In addition, Indemnitee may also
be entitled to indemnification pursuant to the Minnesota Business Corporation
Act (“MBCA”). The Articles and the MBCA expressly provide that the liability
limitation and indemnification provisions set forth therein are not exclusive,
and thereby contemplate that contracts may be entered into between the Company
and members of the Board, officers and other persons with respect to
indemnification;
WHEREAS, the uncertainties relating to such insurance and to indemnification
have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting
and retaining such persons is detrimental to the best interests of the Company’s
shareholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent, and necessary for the Company contractually
to obligate itself to indemnify, and to advance expenses on behalf of, such
persons to the fullest extent permitted by applicable law so that they will
serve or continue to serve the Company free from undue concern that they will
not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the Articles
and Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed
a substitute therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder;
WHEREAS, Indemnitee does not regard the protection available under the Company’s
Articles, Bylaws and insurance as adequate in the present circumstances, and may
not be willing to serve as an officer,

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director, or in other capacities without adequate protection, and the Company
desires Indemnitee to serve in such capacity. Indemnitee is willing to serve,
continue to serve, and to take on additional service for or on behalf of the
Company on the condition that he or she be so indemnified; and
NOW, THEREFORE, in consideration of the premises and covenants contained herein,
the Company and Indemnitee covenant and agree as follows:
1.Service by Indemnitee. Indemnitee shall serve or continue to serve as a
director or officer of the Company faithfully and to the best of Indemnitee’s
ability so long as Indemnitee is duly elected or appointed or until Indemnitee
tenders his or her resignation or is removed or terminated.

2.Indemnity of Indemnitee. The Company hereby agrees to hold harmless and
indemnify Indemnitee to the fullest extent permitted by law, as such may be
amended from time to time. In furtherance of the foregoing indemnification, and
without limiting the generality thereof:

a.Indemnification by the Company. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 2(a) if, by reason of his or her
Corporate Status (as hereinafter defined), Indemnitee is, or is threatened to be
made, a party to or participant in any Proceeding (as hereinafter defined).
Pursuant to this Section 2(a), Indemnitee shall be indemnified against all
Expenses (as hereinafter defined) and Liabilities (as hereinafter defined)
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith; did not receive improper personal benefits or
engage in transactions in conflict with the Company’s interest that are void or
voidable under Section 302A.255 of the MBCA; acted in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company; and with respect to any criminal Proceeding, had no reasonable cause to
believe Indemnitee’s conduct was unlawful.

b.Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee is, by reason of his or her Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he or she shall be
indemnified to the maximum extent permitted by law, as such may be amended from
time to time, against all Expenses actually and reasonably incurred by him or
her or on his or her behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in connection with
each successfully resolved claim, issue, or matter. For purposes of this Section
2(b) and without limitation, the termination of any claim, issue or matter in
such a Proceeding by dismissal, with or without prejudice, shall be deemed to be
a successful result as to such claim, issue, or matter.

3.Contribution.

a.Whether or not the indemnification provided in Section 2 hereof is available,
in respect of any threatened, pending or completed action, suit, or proceeding
in which the Company is jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding), the Company shall pay, in the first instance,
the entire amount of any judgment or settlement of such action, suit or
proceeding without requiring Indemnitee to contribute to such payment and the
Company hereby waives and relinquishes any right of contribution it may have
against Indemnitee. The Company shall not enter into any settlement of any
action, suit or proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding) unless
such settlement provides for a full and final release of all claims asserted
against Indemnitee.

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b.Without diminishing or impairing the obligations of the Company set forth in
Section 3(a), if, for any reason, Indemnitee shall elect or be required to pay
all or any portion of any judgment or settlement in any threatened, pending or
completed action, suit or proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), the
Company shall contribute to the amount of Expenses and Liabilities actually and
reasonably incurred and paid or payable by Indemnitee in proportion to the
relative benefits received by the Company and all officers, directors, or
employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, from the transaction or events from
which such action, suit or proceeding arose; provided, however, that the
proportion determined on the basis of relative benefit may, to the extent
necessary to conform to law, be further adjusted by reference to the relative
fault of the Company and all officers, directors or employees of the Company
other than Indemnitee who are jointly liable with Indemnitee (or would be if
joined in such action, suit or proceeding), on the one hand, and Indemnitee, on
the other hand, in connection with the transaction or events that resulted in
such expenses, judgments, fines, or settlement amounts, as well as any other
equitable considerations which applicable law may require to be considered. The
relative fault of the Company and all officers, directors, or employees of the
Company, other than Indemnitee, who are jointly liable with Indemnitee (or would
be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, shall be determined by reference to, among other
things, the degree to which their actions were motivated by intent to gain
personal profit or advantage, the degree to which their liability is primary or
secondary and the degree to which their conduct is active or passive.

c.The Company hereby agrees to fully indemnify and hold Indemnitee harmless from
any claims of contribution which may be brought by officers, directors or
employees of the Company, other than Indemnitee, who may be jointly liable with
Indemnitee.

d.To the fullest extent permissible under applicable law, if the indemnification
provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to
the amount incurred by Indemnitee, whether for Liabilities and/or for Expenses,
in connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances of such Proceeding in order to reflect (i) the relative
benefits received by the Company and Indemnitee as a result of the event(s)
and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative
fault of the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).

4.Indemnification for Expenses of a Witness. Notwithstanding any other provision
of this Agreement, to the extent that Indemnitee is, by reason of his or her
Corporate Status, a witness, or is made (or asked) to respond to discovery
requests, in any Proceeding to which Indemnitee is not a party, he or she shall
be indemnified against all Expenses actually and reasonably incurred by him or
her or on his or her behalf in connection therewith.

5.Notification and Defense of Claim. To obtain indemnification under this
Agreement, Indemnitee must notify the Company in writing as soon as practicable
of any Proceeding involving such Indemnitee for which indemnity will or could be
sought. With respect to any Proceeding of which the Company is so notified, the
Company will be entitled to participate therein at its own expense and/or to
assume the defense thereof at its own expense, with legal counsel reasonably
acceptable to Indemnitee. After notice from the Company to Indemnitee of its
election so to assume such defense, the Company shall not be liable to
Indemnitee for any legal or other expense subsequently incurred by Indemnitee in
connection with

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such action, suit, proceeding, or investigation, other than as provided below in
this Section 5. Indemnitee shall have the right to employ his or her own counsel
in connection with such action, suit, proceeding, or investigation, but the fees
the expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of Indemnitee unless
(i) the employment of counsel by Indemnitee has been authorized by the Company,
(ii) counsel to Indemnitee shall have reasonably concluded that there may be a
conflict of interest or position on any significant issue between the Company
and Indemnitee in the conduct of the defense of such Proceeding or (iii) the
Company shall not in fact have employed counsel to assume the defense of such
Proceeding, in each of which cases the fees and expenses of counsel for
Indemnitee, shall be at the expense of the Company, except as otherwise
expressly provided by this Agreement. The Company shall not be entitled, without
the consent of Indemnitee, to assume the defense of any claim brought by or in
the right of the Company or as to which counsel for Indemnitee shall have
reasonably made the conclusion provided for in Section 5(ii) above. The Company
shall not be required to indemnify Indemnitee under this Agreement for any
amounts paid in settlement of any Proceeding effected without its written
consent. The Company shall not settle any Proceeding in any manner which would
impose any penalty or limitation on Indemnitee without Indemnitee’s written
consent. Neither the Company nor Indemnitee will unreasonably withhold or delay
its consent to any proposed settlement.

6.Advancement of Expenses. Notwithstanding any other provision of this
Agreement, the Company shall advance all Expenses actually and reasonably
incurred by or on behalf of Indemnitee in connection with any Proceeding by
reason of Indemnitee’s Corporate Status upon (a) receipt by the Company of a
statement or statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding and
(b) a determination that the facts then known to the person making the
determination, as provided in Section 7, would not preclude indemnification
under this Agreement. Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded or accompanied
by a written undertaking by or on behalf of Indemnitee to repay any Expenses
advanced if it shall ultimately be determined that Indemnitee is not entitled to
be indemnified against such Expenses. Advances shall be made without regard to
Indemnitee’s ability to repay such amounts and without regard to Indemnitee’s
ultimate entitlement to indemnification under other provisions of this
Agreement. Any advances and undertakings to repay pursuant to this Section 6
shall be unsecured and interest free.

7.Procedures and Presumptions for Determination of Entitlement to
Indemnification. It is the intent of this Agreement to secure for Indemnitee
rights of indemnity that are as favorable as may be permitted under the MBCA and
public policy of the State of Minnesota. Accordingly, the parties agree that the
following procedures and presumptions shall apply in the event of any question
as to whether Indemnitee is entitled to indemnification under this Agreement:

a.To obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request, including therein or therewith such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification. The Chief Financial Officer of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board in writing that
Indemnitee has requested indemnification. Notwithstanding the foregoing, any
failure of Indemnitee to provide such a request to the Company, or to provide
such a request in a timely fashion, shall not relieve the Company of any
liability that it may have to Indemnitee unless, and to the extent that, such
failure actually and materially prejudices the interests of the Company.

b.Upon written request by Indemnitee for indemnification pursuant to the first
sentence of Section 7(a) hereof, as soon as practicable (but in any event not
later than sixty (60) days) after final

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disposition of the relevant Proceeding, a determination with respect to
Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a
Change of Control shall not have occurred, (A) by a majority vote of the
Disinterested Directors, even though less than a quorum of the Board, (B) by a
committee of Disinterested Directors designated by majority vote of the
Disinterested Directors, even though less than a quorum of the Board, (C) if
there are no such Disinterested Directors or, if such Disinterested Directors so
direct, by Independent Counsel (as hereinafter defined) in a written opinion to
the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change
of Control shall have occurred, by Independent Counsel in a written opinion to
the Board, a copy of which shall be delivered to Indemnitee.

c.If the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 7(b)(ii) hereof, such Independent
Counsel shall be selected by Indemnitee, and Indemnitee shall give written
notice to the Company advising it of the identity of the Independent Counsel so
selected. If the determination of entitlement to indemnification is to be made
by Independent Counsel pursuant to Section 7(b)(i)(C) (or if Indemnitee requests
that such selection be made by the Board), such Independent Counsel shall be
selected by the Company in which case the Company shall give written notice to
Indemnitee advising him or her of the identity of the Independent Counsel so
selected. In any event, Indemnitee or the Company, as the case may be, may,
within ten (10) days after such written notice of selection shall have been
received, deliver to the Company or Indemnitee, as the case may be, a written
objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in Section 13 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the person so
selected shall act as Independent Counsel. If a written objection is made and
substantiated, the Independent Counsel selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within twenty (20) days after the
later of submission by Indemnitee of a written request for indemnification
pursuant to Section 7(a) hereof and final disposition of the Proceeding, no
Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition a federal or state court in the State of
Minnesota or other court of competent jurisdiction for resolution of any
objection which shall have been made by Company or Indemnitee to the other’s
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under
Section 7(b) hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 7(b) hereof, and the Company shall
pay all reasonable fees and expenses incident to the procedures of this Section
7(c), regardless of the manner in which such Independent Counsel was selected or
appointed. If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days of
such determination.

d.In making a determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement.
Anyone seeking to overcome this presumption shall have the burden of proof and
the burden of persuasion by clear and convincing evidence. Neither the failure
of the Company (including by its directors or independent legal counsel) to have
made a determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because Indemnitee
has met the applicable standard of conduct, nor an actual determination by the
Company (including by its directors or independent legal counsel) that
Indemnitee has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.

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e.Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action
is based on the records or books of account of the Enterprise (as hereinafter
defined), including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Enterprise. In addition, the knowledge and/or actions, or failure to act, of
any director, officer, agent or employee of the Enterprise shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement. Whether or not the foregoing provisions of this Section 7(e) are
satisfied, it shall in any event be presumed that Indemnitee has at all times
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Company. Anyone seeking to overcome
this presumption shall have the burden of proof and the burden of persuasion by
clear and convincing evidence.

f.If the person, persons or entity empowered or selected under Section 7 to
determine whether Indemnitee is entitled to indemnification shall not have made
a determination within the sixty (60) day period referred to in Section 7(b),
the requisite determination of entitlement to indemnification shall be deemed to
have been made and Indemnitee shall be entitled to such indemnification absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law; provided, however,
that such sixty (60) day period may be extended for a reasonable time, not to
exceed an additional thirty (30) days, if the person, persons or entity making
such determination with respect to entitlement to indemnification in good faith
requires such additional time to obtain or evaluate documentation and/or
information relating thereto.

g.Indemnitee shall cooperate with the person, persons or entity making such
determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any Independent Counsel or member of
the Board shall act reasonably and in good faith in making a determination
regarding Indemnitee’s entitlement to indemnification under this Agreement. Any
costs or expenses (including attorneys’ fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons, or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee’s entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.

h.The Company acknowledges that a settlement or other disposition short of final
judgment may be successful if it permits a party to avoid expense, delay,
distraction, disruption and uncertainty. In the event that any Proceeding to
which Indemnitee is a party is resolved in any manner other than by adverse
judgment against Indemnitee (including, without limitation, settlement of such
action, claim or proceeding with or without payment of money or other
consideration) it shall be presumed that Indemnitee has been successful on the
merits or otherwise in such Proceeding. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion by clear
and convincing evidence.

i.The termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which he or she reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

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8.Remedies of Indemnitee.

a.In the event that (i) a determination is made pursuant to Section 7 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement, (iii) no determination of entitlement to indemnification is
made pursuant to Section 7(b) of this Agreement within the sixty (60) day period
referred to in Section 7(b), or (v) payment of indemnification is not made
within ten (10) days after a determination has been made that Indemnitee is
entitled to indemnification or such determination is deemed to have been made
pursuant to Section 7 of this Agreement, Indemnitee shall be entitled to an
adjudication in any federal or state court in the State of Minnesota of
Indemnitee’s entitlement to such indemnification. Indemnitee shall commence such
proceeding seeking an adjudication within one hundred and eighty (180) days
following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 8(a).     The Company shall not oppose
Indemnitee’s right to seek any such adjudication.

b.In the event that a determination shall have been made pursuant to Section
7(b) of this Agreement that Indemnitee is not entitled to indemnification, any
judicial proceeding commenced pursuant to this Section 8 shall be conducted in
all respects as a de novo trial on the merits, and Indemnitee shall not be
prejudiced by reason of the adverse determination under Section 7(b).

c.If a determination shall have been made pursuant to Section 7(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding commenced pursuant to
this Section 8, absent (i) a misstatement by Indemnitee of a material fact, or
an omission of a material fact necessary to make Indemnitee’s misstatement not
materially misleading in connection with the application for indemnification, or
(ii) a prohibition of such indemnification under applicable law, as such may be
amended from time to time.
d.In the event that Indemnitee, pursuant to this Section 8, seeks a judicial
adjudication of his or her rights under, or to recover damages for breach of,
this Agreement, or to recover under any directors’ and officers’ liability
insurance policies maintained by the Company, the Company shall pay on his or
her behalf, in advance, any and all expenses of the types described in the
definition of Expenses in Section 13 of this Agreement actually and reasonably
incurred by him or her in such judicial adjudication, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advancement of expenses or insurance recovery.

e.The Company shall be precluded from asserting in any judicial proceeding
commenced pursuant to this Section 8 that the procedures and presumptions of
this Agreement are not valid, binding and enforceable and shall stipulate in any
such court that the Company is bound by all the provisions of this Agreement.
The Company shall indemnify Indemnitee against any and all expenses of the types
described in the definition of Expenses in Section 13 of this Agreement and, if
requested by Indemnitee, shall (within ten (10) days after receipt by the
Company of a written request therefore) advance, to the extent not prohibited by
law, such expenses to Indemnitee, which are incurred by Indemnitee in connection
with any action brought by Indemnitee for indemnification or advance of Expenses
from the Company under this Agreement or under any directors’ and officers’
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advancement of Expenses or insurance recovery, as the case may be.

f.Notwithstanding anything in this Agreement to the contrary, no determination
as to entitlement to indemnification under this Agreement shall be required to
be made prior to the final disposition of the Proceeding.

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9.Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification;
Subrogation.

a.The rights of indemnification as provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Articles, the Bylaws, any agreement, a vote
of shareholders, a resolution of directors of the Company, or otherwise. No
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his or her Corporate Status
prior to such amendment, alteration or repeal. To the extent that a change in
the MBCA, whether by statute or judicial decision, permits greater
indemnification than would be afforded currently under the Articles, Bylaws and
this Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change. No
right or remedy herein conferred is intended to be exclusive of any other right
or remedy, and every other right and remedy shall be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.

b.The Company hereby acknowledges that Indemnitee has or may from time to time
obtain certain rights to indemnification, advancement of expenses and/or
insurance provided by one or more third parties (collectively, the “Third-Party
Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of first
resort (i.e., its obligations to Indemnitee are primary and any obligation of
the Third-Party Indemnitors to advance expenses or to provide indemnification
for the same expenses or liabilities incurred by Indemnitee are secondary), (ii)
that it shall be required to advance the full amount of Expenses incurred by
Indemnitee and shall be liable for the full amount of all Expenses and
Liabilities to the extent legally permitted and as required by the terms of this
Agreement and the Articles or Bylaws (or any other agreement between the Company
and Indemnitee), without regard to any rights Indemnitee may have against the
Third-Party Indemnitors, and (iii) that it irrevocably waives, relinquishes and
releases the Third-Party Indemnitors from any and all claims against the
Third-Party Indemnitors for contribution, subrogation or any other recovery of
any kind in respect thereof. The Company further agrees that no advancement or
payment by the Third-Party Indemnitors on behalf of Indemnitee with respect to
any claim for which Indemnitee has sought indemnification from the Company shall
affect the foregoing and the Third-Party Indemnitors shall have a right of
contribution and/or be subrogated to the extent of such advancement or payment
to all of the rights of recovery of Indemnitee against the Company.

c.Except as provided in Section 9(b) above, in the event of any payment under
this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee (other than against the Third-Party
Indemnitors), who shall execute all papers required and take all action
necessary to secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such rights.

d.Except as provided in Section 9(b) above, the Company shall not be liable
under this Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement, or otherwise.

e.Except as provided in Section    9(b) above, the Company’s obligation to
indemnify or advance Expenses hereunder to Indemnitee who is or was serving at
the request of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, board of directors’ committee member, employee, or
agent of any other corporation, partnership, joint venture, trust, employee
benefit plan or other

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Enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of expenses from such other corporation,
partnership, joint venture, trust, employee benefit plan or other Enterprise.

10.Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Company shall not be obligated under this Agreement to make any
indemnity in connection with any claim made against Indemnitee:

a.for which payment has actually been made to or on behalf of Indemnitee under
any insurance policy or other indemnity provision, except with respect to any
excess beyond the amount paid under any insurance policy or other indemnity
provision, provided, that the foregoing shall not affect the rights of
Indemnitee or the Third-Party Indemnitors set forth in Section 9(b); or

b.for an accounting of profits made from the purchase and sale (or sale and
purchase) by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act (as hereinafter defined) or similar provisions
of state statutory law or common law; or

c.in connection with any Proceeding (or any part of any Proceeding) initiated by
Indemnitee, including any Proceeding (or any part of any Proceeding) initiated
by Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Board authorized the Proceeding (or any part of any
Proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law.

11.Duration of Agreement. All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is an officer or
director of the Company (or is or was serving at the request of the Company as a
director, officer, trustee, general partner, managing member, fiduciary, board
of directors’ committee member, employee, or agent of another corporation,
partnership, joint venture, trust or other Enterprise) and shall continue
thereafter so long as Indemnitee shall be subject to any Proceeding (or any
proceeding commenced under Section 8 hereof) by reason of his or her Corporate
Status, whether or not he or she is acting or serving in any such capacity at
the time any liability or expense is incurred for which indemnification can be
provided under this Agreement. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets
of the Company), assigns, spouses, heirs, executors and personal and legal
representatives.

12.Entire Agreement. This Agreement and the documents referred to herein
constitute the entire agreement between the parties hereto with respect to the
subject matters covered hereby, and any other prior or contemporaneous oral or
written understandings or agreements with respect to the matters covered hereby
are superseded by this Agreement, provided that this Agreement is a supplement
to and in furtherance of the Articles and Bylaws and applicable law, and shall
not be deemed a substitute therefore, nor to diminish or abrogate any rights of
Indemnitee thereunder.

13.Definitions. For purposes of this Agreement:

a.“Change of Control” means any one of the follow circumstances occurring after
the date hereof: (i) there shall have occurred an event required to be reported
with respect to the Company in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item or any similar schedule or
form) under the Exchange Act, regardless of whether the Company is then subject
to such reporting requirement; (ii) any “person” or “group” (as such terms are
used in Section 13(d) and 14(d) of the Exchange

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Act) shall have become, without prior approval of the Company’s Board by
approval of at least two-thirds of the Continuing Directors, the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company’s then outstanding securities
(provided that, for the purpose of this Section 13(a)(ii), the term “person”
shall exclude (x) the Company, (y) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, and (z) any
corporation owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company);
(iii) there occurs a merger or consolidation of the Company with any other
entity, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than
fifty-one percent (51%) if the combined voting power of the voting securities of
the surviving entity outstanding immediately after such merger or consolidation
and with the power to elect at least a majority of the board of directors or
other governing body of such surviving entity; (iv) all or substantially all of
the assets of the Company are sold or disposed of in a transaction or series of
related transactions; (v) the approval of the shareholders of the Company of a
complete liquidation of the Company; or (vi) the Continuing Directors cease for
any reason to constitute at least a majority of the members of the Board.

b.“Continuing Director” means (i) each director on the Board on the date hereof
or (ii) any new director whose election or nomination for election by the
Company’s shareholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors on the date hereof or whose
election or nomination was approved.

c.“Corporate Status” means the status of a person who is or was a director,
officer, trustee, general partner, managing member, fiduciary, board of
directors’ committee member, employee, or agent of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
Enterprise that such person is or was serving at the express written request of
the Company.

d.“Disinterested Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification is sought by
Indemnitee.

e.“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

f.“Enterprise” means the Company and any other corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan or other
enterprise that Indemnitee is or was serving at the express written request of
the Company as a director, officer, trustee, general partner, managing member,
fiduciary, board of directors’ committee member, employee, or agent.

g.“Exchange Act” means the Securities Exchange Act of 1934, as amended.

h.“Expenses” means all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, participating, or being or preparing to be a witness in a
Proceeding, or responding to, or objecting to, a request to provide discovery in
any Proceeding. Expenses also shall include Expenses incurred in connection with
any appeal resulting from any Proceeding and any federal, state, local or
foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt
of any payments under this Agreement, including without limitation the

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premium, security for, and other costs relating to any cost bond, supersede as
bond, or other appeal bond or its equivalent. Expenses, however, shall not
include any Liabilities.

i.“Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the
past five years has been, retained to represent: (i) the Company or Indemnitee
in any matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement. The Company
agrees to pay the reasonable fees of the Independent Counsel referred to above
and to fully indemnify such counsel against any and all Expenses, claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.

j.“Liabilities” means any losses or liabilities, including any judgments, fines,
ERISA excise taxes and penalties, penalties and amounts paid in settlement,
arising out of or in connection with any Proceeding (including all interest,
assessments, and other charges paid or payable in connection with or in respect
of any judgments, fines, ERISA excise taxes and penalties, penalties or amounts
paid in settlement).

k.“Proceeding” includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought by or in the right of the Company or otherwise and whether
civil, criminal, administrative or investigative, in which Indemnitee was, is or
will be involved as a party or otherwise, by reason of his or her Corporate
Status, by reason of any action taken by him or her or of any inaction on his or
her part while acting in his or her Corporate Status; in each case whether or
not he or she is acting or serving in any such capacity at the time any
liability or expense is incurred for which indemnification can be provided under
this Agreement; including one pending on or before the date of this Agreement,
but excluding one initiated by an Indemnitee pursuant to Section 8 of this
Agreement to enforce his or her rights under this Agreement.

14.Severability. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
Without limiting the generality of the foregoing, this Agreement is intended to
confer upon Indemnitee indemnification rights to the fullest extent permitted by
applicable laws. In the event any provision hereof conflicts with any applicable
law, such provision shall be deemed modified, consistent with the aforementioned
intent, to the extent necessary to resolve such conflict.

15.Modification and Waiver. No supplement, modification, termination or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

16.Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with or otherwise receiving any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification covered hereunder.
The failure to so notify the Company shall not relieve the Company of any
obligation which it may have to Indemnitee under this Agreement or otherwise
unless and only to the extent that such failure or delay materially prejudices
the Company.

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17.Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient, and if not so confirmed, then on the next business day, (c) five (5)
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent:

a.To Indemnitee at the address set forth below Indemnitee signature hereto.

b.To the Company at:
7400 Excelsior Boulevard
Minneapolis, Minnesota 55426
Attention: Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

18.Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same Agreement. This Agreement may also be executed and
delivered by facsimile signature and in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

19.Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

20.Governing Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in
accordance with, the laws of the State of Minnesota, without regard to its
conflict of laws rules. The Company and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement shall be brought only in the federal or state
courts in the State of Minnesota (the “Minnesota Court”), and not in any other
state or federal court in the United States of America or any court in any other
country, (ii) consent to submit to the exclusive jurisdiction of the Minnesota
Court for purposes of any action or proceeding arising out of or in connection
with this Agreement, (iii) waive any objection to the laying of venue of any
such action or proceeding in the Minnesota Court, and (iv) waive, and agree not
to plead or to make, any claim that any such action or proceeding brought in the
Minnesota Court has been brought in an improper or inconvenient forum.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement on and as of the day and year first above written.
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.

By:     
Name:    
Its:    

INDEMNITEE

Name:

Address:

    
    

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