Exhibit 10.1

 

SECOND AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT

 

this Second Amendment to Revolving Credit, Term Loan and Security Agreement (the
“Amendment”) is made this 22nd day of March, 2012 among appliance recycling
centers of america, inc., a Minnesota Corporation (“arca”), appliance recycling
centers of america-california, inc., a California Corporation (“arca-ca”), arca
canada inc., an Ontario, Canada Corporation (“arca canada”)
appliancesmart, inc., a Minnesota Corporation (“Appliance Smart”, together with
arca, arca-ca and arca Canada, collectively, the “Borrowers” and each
individually, a  “Borrower”), certain financial institutions party to the Credit
Agreement from time to time as lenders (the “Lenders”), and pnc bank, national
association, as agent and lender (“pnc”, in such capacity, “Agent”).

 

RECITALS

 

A.                                    The Borrowers, Lenders and PNC are parties
to that certain Revolving Credit, Term Loan and Security Agreement dated as of
January 24, 2011 (as the same may have been amended, supplemented or otherwise
modified from time to time prior to the date hereof, the “Credit Agreement”),
pursuant to which PNC has made certain loans to, and extensions of credit for
the account of, the Borrowers.  The Credit Agreement and all other documents
executed in connection therewith to the date hereof are collectively referred to
as the “Existing Financing Agreements.”  All capitalized terms used not
otherwise defined herein shall have the meaning ascribed thereto in the Loan
Agreement, as amended hereby

 

B.                                    The Borrowers have requested, and PNC has
agreed, to amend certain provisions of the Credit Agreement subject to the terms
and conditions of this Amendment.

 

NOW THEREFORE, with the foregoing background hereinafter deemed incorporated by
reference herein and made part hereof, the parties hereto, intending to be
legally bound, promise and agree as follows:

 

1.                                     Amendments to Credit Agreement.

 

(a)                            Leases.                   As of the Effective
Date, Section 7.11 of the Credit Agreement is amended and restated as follows:

 

7.11                        Leases.  Enter as lessee into any lease arrangement
for real or personal property (unless capitalized and permitted under
Section 7.6 hereof) if after giving effect thereto, aggregate annual rental
payments for all leased property would exceed $6,200,000 in any one fiscal year
in the aggregate for all Borrowers.

 

2.                                      Waiver.  To the extent that any Default
or Event of Default has occurred since the Closing Date due to Borrowers’
failure to comply with Section 7.11, upon the effectiveness of this Amendment,
Agent and Lenders hereby waive any such Default or Event of Default provided
however that such waiver shall in no way constitute a waiver of any other
Default or Event of Default which may have occurred, nor shall this waiver
obligate Agents or Lenders to provide any further waiver of any other Default or
Event of Default under the Loan Agreement

 

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(whether similar or dissimilar, including any further Default or Event of
Default resulting from a failure to comply with Section 7.11 of the Loan
Agreement).  This waiver shall not preclude the future exercise of any right,
power, or privilege available to Agents or Lenders whether under the Loan
Agreement, the Other Documents or otherwise upon the occurrence of any Event of
Default after the date hereof.

 

3.                                      Representations and Warranties.     Each
Borrower, hereby:

 

(a)                            represents and warrants that all representations
and warranties set forth in the Loan Agreement and all of the other Existing
Financing Agreements are true and correct in all material respects as of the
date hereof (except to the extent any such representations and warranties
specifically relate to a specific date, in which case such representations and
warranties were true and correct in all material respects on and as of such
other specific date);

 

(b)                            reaffirms all of the covenants contained in the
Credit Agreement as amended hereby and covenants to abide thereby until the
satisfaction in full of the Obligations and the termination of the commitments
of the Lenders under the Credit Agreement;

 

(c)                             represents and warrants that, after giving
effect to this Amendment, no Default or Event of Default has occurred and is
continuing under any of the Existing Financing Agreements;

 

(d)                            represents and warrants that it has the authority
and legal right to execute, deliver and carry out the terms of this Amendment,
that such actions were duly authorized by all necessary corporate or company
action, as applicable, and that the officers executing this Amendment on its
behalf were similarly authorized and empowered, and that this Amendment does not
contravene any provisions of its organizational documents or of any contract or
agreement to which it is a party or by which any of its properties are bound;
and

 

(e)                             represents and warrants that this Amendment is
valid, binding and enforceable against the Borrowers in accordance with its
terms except as such enforceability may be limited by any applicable bankruptcy,
insolvency, moratorium or similar laws affecting creditors’ rights generally and
by general principles of equity (whether enforcement is sought in equity or at
law).

 

4.                                     Conditions Precedent/Effectiveness
Conditions.  This Amendment shall be effective upon Agent’s receipt of this
Amendment (in form and substance satisfactory to Agent in its reasonable
discretion) fully executed by Borrowers and the Lenders;

 

5.                                     Further Assurances.  Each Borrower hereby
agrees to take all such actions and to execute and/or deliver to Agent and
Lenders all such documents, assignments, financing statements and other
documents, as Agent and Lenders may reasonably require from time to time, to
effectuate and implement the purposes of this Amendment.

 

6.                                     Payment of Expenses.  Borrowers shall pay
or reimburse Agent for its reasonable attorneys’ fees and expenses in connection
with the preparation, negotiation and execution of this Amendment and the
documents provided for herein or related hereto.

 

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7.                                     Reaffirmation of Credit Agreement. 
Except as modified by the terms hereof, all of the terms and conditions of the
Credit Agreement, as amended by this Amendment, and all other of the Other
Documents are hereby reaffirmed and shall continue in full force and effect as
therein written.

 

8.                                     Miscellaneous.

 

(a)                            Third Party Rights.  No rights are intended to be
created hereunder for the benefit of any third party donee, creditor, or
incidental beneficiary.

 

(b)                            Loan Document. This Amendment is an “Other
Document” as defined and described in the Credit Agreement and all of the terms
and provisions of the Credit Agreement relating to Other Documents shall apply
hereto.

 

(c)                             Headings.  The headings of any paragraph of this
Amendment are for convenience only and shall not be used to interpret any
provision hereof.

 

(d)                            Governing Law.  This Amendment shall be governed
by and construed in accordance with the laws of the State of Illinois.

 

(e)                             Severability. Any provision of this Amendment
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction

 

(f)                              Counterparts.  This Amendment may be executed
in any number of counterparts and by facsimile, PDF or other electronic
transmissions, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

 

(g)                             Successors and Assigns.  This Amendment shall be
binding upon and inure to the benefit of the parties hereto and its respective
successors and assigns.

 

[SIGNATURES TO APPEAR ON FOLLOWING PAGE]

 

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

 

BORROWERS:

 

APPLIANCE RECYCLING CENTERS OF AMERICA, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Edward R, Cameron

 

 

Name:

Edward R. Cameron

 

 

Title:

President & CEO

 

 

 

 

 

 

 

 

 

 

APPLIANCE RECYCLING CENTERS OF AMERICA-CALIFORNIA, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Edward R, Cameron

 

 

Name:

Edward R. Cameron

 

 

Title:

President & CEO

 

 

 

 

 

 

 

 

 

 

ARCA CANADA, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Edward R, Cameron

 

 

Name:

Edward R. Cameron

 

 

Title:

President & CEO

 

 

 

 

 

 

 

 

 

 

APPLIANCESMART, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Edward R, Cameron

 

 

Name:

Edward R. Cameron

 

 

Title:

President & CEO

 

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AGENT AND LENDER:

 

PNC BANK, NATIONAL ASSOCIATION,

 

 

as Lender and as Agent

 

 

 

 

 

 

 

 

 

 

By:

/s/ Timothy Canon

 

 

 

Timothy Canon, Vice President

 

 

 

 

 

 

 

200 S. Wacker Drive, Suite 600

 

 

 

Chicago, IL 60606

 

 

 

 

 

 

 

Commitment Percentage: 100%

 

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