**Exhibit 10.42**

 

TWENTIETH AMENDMENT TO

GENERAL CREDIT AND SECURITY AGREEMENT

(A Fifteenth Amendment does not exist)

 

THISAGREEMENT, dated and effective as of September 21, 2007, 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.               The definition of “MaximumPrincipal Amount” under paragraph 2 of the Credit Agreement is hereby deletedand replaced with the following:

 

**Maximum Principal Amount** shall mean, at any date,Fourteen Million and No/100ths Dollars ($14,000,000), less Eighty percent (80%)of the amount of issued but unpaid financing authorizations issued by Lender infavor of Whirlpool Corporation, less Fifty percent (50%) of the amount ofissued but unpaid financing authorizations issued by Lender in favor of GeneralElectric Company, GE Appliances or any other company.

 

2.               As an origination fee forthis amendment, Borrower will pay to SPECTRUM the sum of $5,000.

 

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 TwentiethAmendment to the General Credit and Security Agreement between ApplianceRecycling Centers of America, Inc. and SPECTRUM Commercial ServicesCompany.

 

 
| Dated as of:  September                                , 2007 |   |               |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|
|                                                                                                                                                                                                                |   | Edward  R. Cameron |

 

1

----