This excerpt taken from the ARCI 8-K filed Oct 26, 2009.
Appliance Sales and Recycling Agreement
On October 21, 2009, Appliance Recycling Centers of America, Inc. (the Company) entered into an Appliance Sales and Recycling Agreement (the Agreement) with General Electric Company (GE) acting through its GE Consumer & Industrial business. Under the Agreement, GE will sell all of its recyclable appliances generated in the northeastern United States to the Company, and the Company will collect, process and recycle such recyclable appliances. The Agreement requires that the Company will only recycle, and will not sell for re-use or resale the recyclable appliances purchased from GE. The Company will establish a regional processing center (RPC) located in the northeastern United States at which the recyclable appliances will be processed.
The term of the Agreement is for a period of six years from the first date of collection of recyclable appliances from GEs northeast delivery area (the Initial Term). The Company expects that the first date of collection will be in late January, 2010. The Agreement may be renewed for up to three additional one year terms (the Renewal Terms), each at GEs sole option.
In conjunction with the Agreement, on October 21, 2009, the Company has issued to GE a warrant to purchase from the Company 248,189 shares of common stock at a price of $0.75 per share. The warrant is exercisable in full at any time during a term of ten years. The exercise price may be reduced and the number of shares of common stock that may be purchased under the warrant may be increased if the Company issues or sells additional shares of common stock at a price lower than the then-current warrant exercise price or the then-current market price of the common stock. The warrant was issued pursuant to exemption from registration under Section 4(2) of the Securities Act.