Exhibit 10.45


 


TWENTY THIRD AMENDMENT TO


GENERAL CREDIT AND SECURITY AGREEMENT


(A Fifteenth Amendment does not exist)


 


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


 


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


 


5. Interest.  Borrower agrees to pay interest on the
outstanding principal amount of the Note, at the close of each day at a
fluctuating rate per annum (computed on the basis of actual number of days
elapsed and a year of 360 days) which is at all times equal to One and One Half
Percent (1.50%) in excess of the Prime Rate; each change in such fluctuating
rate caused by a change in the Prime Rate to occur simultaneously with the
change in the Prime Rate (the “Initial Rate”); provided, however, that (i) in
no event shall the Initial Rate, the Adjusted Rate or the Re-adjusted rate in
effect hereunder at any time be less than 6.25% per annum; (ii) interest
payable hereunder with respect to each calendar month shall not be less than
$58,000.00 regardless of the amount of loans, Advances or other credit
extensions that actually may have been outstanding during the month, and (iii) interest
shall continue to accrue hereunder until all Obligations have been paid in
full..  Interest accrued through the last
day of each month will be due and payable to Lender on the next Monthly Payment
Date.  Interest shall also be payable on
the Maturity Date or on any earlier Termination Date.  Interest accrued after the Maturity Date or
earlier Termination Date shall be payable on Demand.  Interest may be charged to Borrower’s loan
account as an Advance at Lender’s option, whether or not Borrower then has the
right to obtain an Advance pursuant to the terms of this Agreement.


 


Notwithstanding
the foregoing, after an Event of Default, the Note shall bear interest until
paid at 5% per annum in excess of the rate otherwise then in effect, which rate
shall continue to vary based on further changes in the Prime Rate; provided,
however, that after an Event of Default, (i) in no event shall the
interest 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 month
shall not be less than $86,000.00 regardless of the amount of loans, Advances
or other credit extensions that actually may have been outstanding during the
month, and (iii) interest shall continue to accrue hereunder until all
Obligations have been paid in full.. 
(The Initial Rate, the Adjusted Rate and the Re-adjusted Rate in effect
either before or after an Event of Default is referred to herein collectively
as the “Interest Rate”).  The undersigned
shall also pay a late fee equal to 10% of any payment under the Note that is
more than 10 days past due.


 


2.               Paragraph 23 is hereby
deleted and replaced with the following:


 


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


 


In the event of the
termination of this Agreement and repayment of all of the Obligations at any
time prior to the then current Maturity Date, for any reason, including but not
limited to (a) termination by Lender after the occurrence of an Event of
Default, (b) sale of Collateral by Lender, Borrower or any third party, (c) sale
of Collateral in any Insolvency Proceeding, (iv) restructure,
reorganization, compromise, or repayment of the Obligations by the confirmation
of a plan of reorganization or any other plan of compromise, restructure,
arrangement, or repayment in any Insolvency Proceeding, (d) the use of new
or replacement financing or capital to repay the Obligations, or (e) the
contraction, winddown or cessation of business by Borrower, then, in view of
the impracticability and extreme difficulty of ascertaining the actual amount
of damages to Lender or profits lost by Lender as a result of such early
termination, and by mutual agreement of the parties as to a reasonable
estimation and calculation of the lost profits or damages of Lender, Borrower
shall pay a “Prepayment Fee” to Lender equal to the following:


 


If termination and full
repayment occurs on or prior to December 31, 2008 — Three percent of the
Maximum Principal Amount.


If termination and full
repayment occurs on or prior to December 31, 2009 — Two percent of the
Maximum Principal Amount.


If termination and full
repayment occurs after December 31, 2009 but before the then current
Maturity Date — One percent of the Maximum Principal Amount.


 


On the Termination Date, all
obligations arising under this Agreement shall become immediately due and
payable without further notice or demand. 
Lender’s rights with respect to outstanding Obligations owing on or
prior to the Termination Date will not be affected by termination and all of
said rights including (without limitation) Lender’s Security Interest in the
Collateral existing on such Termination Date or acquired by Borrower
thereafter, and the requirements of this Agreement that Borrower furnish
schedules and confirmatory assignments of Receivables and Inventory and turn
over to Lender all full and partial payments thereof shall continue to be
operative 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 the
date 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


 


The
undersigned, Edward R. “Jack” Cameron, hereby reaffirms all of the terms of the
Support Agreement issued by him in favor of SPECTRUM Commercial Services
Company (including its participants and assigns) and dated as of December 29,
2004, and acknowledges that such agreement is in full force and effect
according to its terms.  The undersigned
understands and acknowledges that this Reaffirmation is required by SPECTRUM
Commercial Services Company as a condition to the execution of the Twenty Third
Amendment to the General Credit and Security Agreement between Appliance
Recycling Centers of America, Inc. and SPECTRUM Commercial Services
Company.


 


 


	
  Dated
  as of:                                   
  , 2008

  	
   

  	
   

  
	
   

  	
   

  	
  Edward
  R. Cameron

  



 


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