**Exhibit 10.48**

 

TWENTY SIXTH AMENDMENT TO

GENERAL CREDIT AND SECURITY AGREEMENT

AND WAIVER

(A Fifteenth Amendment does not exist)

 

THISAGREEMENT, dated and effective as of March 10, 2010, 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:

 

**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 Three and OneHalf Percent (3.5%) in excess of the Prime Rate; each change in suchfluctuating rate caused by a change in the Prime Rate to occur simultaneouslywith the change in the Prime Rate (the “Initial Rate”); provided, however, that(i) in no event shall the Initial Rate, the Adjusted Rate or theRe-adjusted rate in effect hereunder at any time be less than 6.75% 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.

 

Notwithstanding theforegoing, after an Event of Default, the Note shall bear interest until paidat 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 11.75% perannum; (ii) interest payable under the Note with respect to each calendarmonth shall not be less than $86,000.00 regardless of the amount of loans,Advances or other credit extensions that actually may have been outstandingduring the month, and (iii) interest shall continue to accrue hereunderuntil all Obligations 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.

 

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2.                                       Paragraph 17(l) ishereby deleted and replaced with the following:

 

17(l).  As of the end of eachfiscal year hereafter, beginning with the year ending December 31, 2010,Borrower’s Periodic Financial Report for the 2010 fiscal year and for eachsubsequent fiscal year ending, shall reflect a Tangible Net Worth of at leastThree Million Dollars ($3.0 million).

 

3.                                       As of the datehereof, Borrower will pay to SPECTRUM the sum of $25,000.00.

 

4.                                       Waiver  As of December 31, 2009, the Borrower isin default of Paragraph 17 (l) and 17(m). SPECTRUM hereby waives the default of 17 (l) and 17 (m) as of December 31,2009.  By providing this waiver, SPECTRUMdoes not in any way waive or alter the profitability or Tangible Net Worthcovenant for other time periods other than fiscal quarter and fiscal yearending December 31, 2009, unless altered in writing.

 

5.                                       Representationsand Warranties.  The personsigning below on behalf of Borrower represents that he or she is authorized tomake the agreements set forth herein and to legally bind Borrower to thisAgreement.  Borrower hereby representsand warrants to SPECTRUM as follows:

 

The Credit Agreement, this Amendment, and each LoanDocument (as amended or modified hereby) is the legal, valid and bindingobligation of Borrower, enforceable against it in accordance with its terms,and is in full force and effect.  Noevent has occurred and is continuing that constitutes an Event of Default underthe Loan Documents.  The representationsand warranties contained in each Loan Document (other than any suchrepresentations or warranties that, by their terms, are specifically made as ofa date other than the date hereof) are correct on and as of the date hereof asthough made on and as of the date hereof and are hereby reaffirmed.

 

6.                                       Counterparts;Telefacsimile Execution.  ThisAmendment may be executed in any number of counterparts and by differentparties and separate counterparts, each of which when so executed anddelivered, shall be deemed an original, and all of which, when taken together,shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to thisAmendment by telefacsimile shall be effective as delivery of a manuallyexecuted counterpart of this Amendment.

 

7.                                       Effect on LoanDocuments.

 

a.               The Credit Agreement shallbe amended as set forth herein effective as of the date hereof.  The Credit Agreement, as amended hereby, andthe other Loan Documents shall be and remain in full force and effect inaccordance with its respective terms and each are hereby ratified and confirmedin all respects.  The execution,delivery, and performance of this Amendment shall not operate as a waiver or anamendment of any right, power, or remedy of SPECTRUM under the CreditAgreement, as in effect prior to the date hereof unless expressly statedherein.  The waivers, consents andmodifications herein are limited to the specifics hereof, shall not apply withrespect to any facts or occurrences other than those on which the same arebased, shall not excuse future non-compliance with the Credit Agreement, andshall not operate as a consent to any further or other matter under the LoanDocuments.

 

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b.              To the extent that any termsand conditions in any of the Loan Documents shall contradict or be in conflictwith any terms or conditions of the Credit Agreement, after giving effect tothis Amendment, such terms and conditions are hereby deemed modified or amendedaccordingly to reflect the terms and conditions of the Credit Agreement asmodified or amended hereby.  To the extentthat any terms or conditions of the Credit Agreement conflict with the terms orconditions of this Amendment, the terms and conditions of this Amendment, aswell as the intent of this Amendment, shall control.

 

8.                                       EntireAgreement.  ThisAmendment, together with all other instruments, agreements, and certificatesexecuted by the parties in connection herewith, embody the entire understandingand agreement between the parties hereto with respect to the subject matterhereof and supersede all prior agreements, understandings and inducements,whether express or implied, oral or written.

 

9.                                       Estoppel.  To induce SPECTRUM to enter into thisAmendment, Borrower hereby acknowledges and agrees that, after giving effect tothis Amendment, as of the date hereof, there exists no default or Event ofDefault and no right of offset, defense, counterclaim or objection in favor ofBorrower as against SPECTRUM with respect to the Credit Agreement, any of theLoan Documents, or any of the Obligations.

 

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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.

 

Datedas of: March 10, 2010

 
|              |   |
|-------------------|--------|
|              |   |
| Edward R. Cameron |   |

 

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