**Exhibit 10.45**

 

TWENTY THIRD AMENDMENT TO

GENERAL CREDIT AND SECURITY AGREEMENT

(A Fifteenth Amendment does not exist)

 

THISAGREEMENT, dated and effective as of May 1, 2008, between SPECTRUMCommercial Services Company, a Minnesota Corporation, having its mailingaddress and principal place of business at Two Appletree Square, Suite 415,Bloomington, Minnesota 55425 (herein called “Lender” or “SCS”), and ApplianceRecycling Centers of America, Inc., a Minnesota corporation, having themailing address and principal place of business at 7400 Excelsior Boulevard,Minneapolis, MN 55426, (herein called “Borrower”), amends that certain GeneralCredit and Security Agreement dated August 30, 1996, (“Credit Agreement”)as amended.  Where the provisions of thisAgreement conflict with the Credit Agreement, the intent of this Agreementshall control.

 

1.               Paragraph 5entitled “Interest” is hereby deleted and replaced with the following:

 

**5**. **Interest.**  Borrower agrees to pay interest on theoutstanding principal amount of the Note, at the close of each day at afluctuating rate per annum (computed on the basis of actual number of dayselapsed and a year of 360 days) which is at all times equal to One and One HalfPercent (1.50%) in excess of the Prime Rate; each change in such fluctuatingrate caused by a change in the Prime Rate to occur simultaneously with thechange in the Prime Rate (the “Initial Rate”); provided, however, that (i) inno event shall the Initial Rate, the Adjusted Rate or the Re-adjusted rate ineffect hereunder at any time be less than 6.25% per annum; (ii) interestpayable hereunder with respect to each calendar month shall not be less than$58,000.00 regardless of the amount of loans, Advances or other creditextensions that actually may have been outstanding during the month, and (iii) interestshall continue to accrue hereunder until all Obligations have been paid infull..  Interest accrued through the lastday of each month will be due and payable to Lender on the next Monthly PaymentDate.  Interest shall also be payable onthe Maturity Date or on any earlier Termination Date.  Interest accrued after the Maturity Date orearlier Termination Date shall be payable on Demand.  Interest may be charged to Borrower’s loanaccount as an Advance at Lender’s option, whether or not Borrower then has theright to obtain an Advance pursuant to the terms of this Agreement.

 

Notwithstandingthe foregoing, after an Event of Default, the Note shall bear interest untilpaid at 5% per annum in excess of the rate otherwise then in effect, which rateshall continue to vary based on further changes in the Prime Rate; provided,however, that after an Event of Default, (i) in no event shall theinterest rate in effect under the Note at any time be less than 11.0% per annum;(ii) interest payable under the Note with respect to each calendar monthshall not be less than $86,000.00 regardless of the amount of loans, Advancesor other credit extensions that actually may have been outstanding during themonth, and (iii) interest shall continue to accrue hereunder until allObligations have been paid in full.. (The Initial Rate, the Adjusted Rate and the Re-adjusted Rate in effecteither before or after an Event of Default is referred to herein collectivelyas the “Interest Rate”).  The undersignedshall also pay a late fee equal to 10% of any payment under the Note that ismore than 10 days past due.

 

2.               Paragraph 23 is herebydeleted and replaced with the following:

 

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23. Termination.  Subject to the automatic termination ofBorrower’s ability to obtain additional Advances or credit extensions underthis Agreement upon the occurrence of certain Events of Default, and furthersubject to Lender’s right to terminate Borrower’s ability to obtain additionalcredit extensions and Advances under this Agreement upon the occurrence ofother Events of Default or upon demand, the term of this Agreement shall end onthe Termination Date provided, however, that Borrower may terminate this Agreementat any earlier time upon sixty days prior written notice.

 

In the event of thetermination of this Agreement and repayment of all of the Obligations at anytime prior to the then current Maturity Date, for any reason, including but notlimited to (a) termination by Lender after the occurrence of an Event ofDefault, (b) sale of Collateral by Lender, Borrower or any third party, (c) saleof Collateral in any Insolvency Proceeding, (iv) restructure,reorganization, compromise, or repayment of the Obligations by the confirmationof a plan of reorganization or any other plan of compromise, restructure,arrangement, or repayment in any Insolvency Proceeding, (d) the use of newor replacement financing or capital to repay the Obligations, or (e) thecontraction, winddown or cessation of business by Borrower, then, in view ofthe impracticability and extreme difficulty of ascertaining the actual amountof damages to Lender or profits lost by Lender as a result of such earlytermination, and by mutual agreement of the parties as to a reasonableestimation and calculation of the lost profits or damages of Lender, Borrowershall pay a “Prepayment Fee” to Lender equal to the following:

 

If termination and fullrepayment occurs on or prior to December 31, 2008 — Three percent of theMaximum Principal Amount.

If termination and fullrepayment occurs on or prior to December 31, 2009 — Two percent of theMaximum Principal Amount.

If termination and fullrepayment occurs after December 31, 2009 but before the then currentMaturity Date — One percent of the Maximum Principal Amount.

 

On the Termination Date, allobligations arising under this Agreement shall become immediately due andpayable without further notice or demand. Lender’s rights with respect to outstanding Obligations owing on orprior to the Termination Date will not be affected by termination and all ofsaid rights including (without limitation) Lender’s Security Interest in theCollateral existing on such Termination Date or acquired by Borrowerthereafter, and the requirements of this Agreement that Borrower furnishschedules and confirmatory assignments of Receivables and Inventory and turnover to Lender all full and partial payments thereof shall continue to beoperative until all such Obligations have been duly satisfied.

 

(continued on next page)

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of thedate first above written.

 
| SPECTRUM  COMMERCIAL SERVICES COMPANY |   | APPLIANCE  RECYCLING CENTERS OF AMERICA, INC. |
|---------------------------------------|--------|----------------------------------------------------|
|                                  |   |                                               |
|                                  |   |                                               |
| By                                    |   |                                               | By |   |
| Steven  I. Lowenthal, Co-CEO          |   | Edward  R. Cameron, CEO                            |
|                                       |        |                                                    |  |  |

 

REAFFIRMATION

Of Edward R. Cameron

 

Theundersigned, Edward R. “Jack” Cameron, hereby reaffirms all of the terms of theSupport Agreement issued by him in favor of SPECTRUM Commercial ServicesCompany (including its participants and assigns) and dated as of December 29,2004, and acknowledges that such agreement is in full force and effectaccording to its terms.  The undersignedunderstands and acknowledges that this Reaffirmation is required by SPECTRUMCommercial Services Company as a condition to the execution of the Twenty ThirdAmendment to the General Credit and Security Agreement between ApplianceRecycling Centers of America, Inc. and SPECTRUM Commercial ServicesCompany.

 

 
| Dated  as of:                                     , 2008 |   |               |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|
|                                                                                                                                                                                                                               |   | Edward  R. Cameron |

 

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