Other
Matters
At the date of this proxy statement the
Company’s management knows of no other matters which may come before the annual meeting. However, if any other matters properly
come before the meeting, it is the intention of the persons named in the accompanying proxy form to vote such proxies received
by the Company in accordance with their judgment on such matters.
The Notice you received in the mail
accompanying this Proxy Statement contains instructions on how to access this proxy statement and our 2017 Annual Report to Shareholders
on our website. The Annual Report includes, among other things, the consolidated balance sheets of the Company as of December 31,
2016 and January 2, 2016, and the related consolidated statements of comprehensive income (loss), shareholders’ equity and
cash flows for fiscal years ended December 31, 2016 and January 2, 2016. If you desire a copy of the Annual Report or a copy of
the Company’s Form 10-K, as amended, filed with the SEC, you may obtain one (excluding exhibits) without charge by addressing
a request to Investor Relations, Appliance Recycling Centers of America, Inc., 175 Jackson Avenue North, Suite 102, Minneapolis,
Minnesota 55343. You may also access a copy of the Company’s Form 10-K, as amended, on the SEC’s website at www.sec.gov.
|
By
Order of the Board of Directors
/s/
Michael J. Stein
Michael
J. Stein, Secretary
|
October 25, 2017
APPENDIX
A:
PLAN
OF CONVERSION
of
APPLIANCE RECYCLING CENTERS OF AMERICA,
INC.
a Minnesota corporation
to
APPLIANCE RECYCLING CENTERS OF AMERICA,
INC.
a Nevada corporation
This Plan of Conversion (“Plan of
Conversion”) is entered into by Appliance Recycling Centers of America, Inc., a Minnesota corporation, which desires to convert
to Appliance Recycling Centers of America, Inc., a Nevada corporation.
1.
Converting
Corporation
. The name of the Converting Corporation before the conversion is Appliance Recycling Centers of America, Inc.,
a Minnesota corporation.
2.
Converted
Corporation
. After conversion, the name of the Converting Corporation shall be Appliance Recycling Centers of America, Inc.,
a Nevada corporation.
3.
Organizational
Documents
. The Articles of Incorporation attached hereto as
Attachment A
shall be the Articles of Incorporation of the
Converted Corporation. The Bylaws of the Converting Corporation shall terminate on the Effective Date and shall be superseded and
replaced by the Bylaws of the Converted Corporation.
4.
Effective
Date
. The Conversion shall become effective upon filing the Articles of Conversion and the Articles of Incorporation with the
Nevada Secretary of State.
5.
Conversion
of Ownership Shares
.
As of the Effective Date, each share of the Converting Corporation that is outstanding immediately
prior thereto, shall be unchanged and shall continue to represent the shares of stock of the Converted Corporation and shall remain
in effect immediately after consummation of the conversion.
6.
Officers
and Directors
. The Board of Directors of the Converting Corporation holding office immediately before the Effective Date shall
constitute the Board of Directors of the Converted Corporation immediately upon the Effective Date. The Officers of the Converting
Corporation holding office immediately before the Effective Date shall constitute the Officers of the Converted Corporation immediately
upon the Effective Date.
7.
Continuation
.
As of the Effective Date, the Converted Corporation shall possess all rights, privileges, powers, franchises, assets, property
and immunities of the Converting Corporation. The title to any real property or any interest therein vested by deed or otherwise
in the Converting Corporation shall remain vested in the Converted Corporation. All rights of creditors, and all liens up on any
property of the Converting Corporation, shall be preserved unimpaired, limited in lien to the property affected by such liens at
the Effective Date, and all other debts, liabilities and duties of the Converting Corporation shall continue as debts, liabilities,
and duties of the Converted Corporation.
8.
Instruments
of Further Assurance
. If at any time after the Effective Date, the Converted Corporation shall determine or be advised that
any instrument of further assurance is needed in order to evidence the continued vesting in it of the title of the Converting Corporation
to any of the property rights of the Converting Corporation, the appropriate officers or managers of the Converted Corporation
and the Converting Corporation are hereby authorized to execute, acknowledge, and deliver all such instruments of further assurance
and to do all acts or things, in the name of the Converted Corporation and the Converting Corporation, as may be required or desirable
to carry out the provisions of this Plan of Conversion.
APPENDIX
B:
Proposed
Nevada Articles of Incorporation
This form must be accompanied by appropriate fees. ABOVE SPACE IS FOR OFFICE USE ONLY USE BLACK INK ONLY - DO NOT HIGHLIGHT Articles of Incorporation (PURSUANT TO NRS CHAPTER 78) Nevada Secretary of State NRS 78 Articles Revised: 1 - 5 - 15 BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701 - 4201 (775) 684 - 5708 Website: www.nvsos.gov *040105* *040105* 1. Name of Corporation: Appliance Recycling Centers of America, Inc. 2. Registered 俺 Commercial Registered Agent: National Registered Agents, Inc. of NV Name Noncommercial Registered Agent OR Office or Position with Entity (name and address below) (name and address below) Name of Noncommercial Registered Agent OR Name of Title of Office or Other Position with Entity Nevada Street Address City Zip Code Nevada Mailing Address (if different from street address) City Zip Code Agent for Service of Process: (check only one box) 3. Authorized Number of Number of shares shares with Par value without par value: 52,000,000 per share: $ 0.001 par value: 0 Stock: (number of shares corporation is authorized to issue) 4. Names and 1) Tony Isaac Name 175 Jackson Ave. N., Ste. 102 Minneapolis MN 55343 Street Address City State Zip Code 2) Richard Butler Name 175 Jackson Ave. N., Ste. 102 Minneapolis MN 55343 Street Address City State Zip Code Addresses of the Board of Directors/Trustees: (each Director/Trustee must be a natural person at least 18 years of age; attach additional page if more than two directors/trustees) 5. Purpose: (optional; The purpose of the corporation shall be: 6. Benefit Corporation: (see instructions) Yes required only if Benefit Corporation status selected) 7. Name, Address I declare, to the best of my knowledge under penalty of perjury, that the information contained herein is correct and acknowledge that pursuant to NRS 239.330, it is a category C felony to knowingly offer any false or forged instrument for filing in the Office of the Secretary of State. X Name Incorporator Signature 175 Jackson Ave. N., Ste. 102 Minneapolis MN 55343 Address City State Zip Code and Signature of Incorporator: (attach additional page if more than one incorporator) 8. Certificate of Acceptance of I hereby accept appointment as Registered Agent for the above named Entity. Appointment of X Reset
CONTINUATION OF
ARTICLES OF INCORPORATION OF APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
Article 3: Authorized Stock
Section 3.1. Designation of Classes and Series
.
The total number of shares of capital stock
that the Corporation shall have authority to issue is 52,000,000 shares, of which (i) 40,000,000 shares shall be Common Stock,
$0.001 par value per share (the “
Common Stock
”) and (ii) 2,000,000 shares shall be Preferred Stock, $0.001 par
value per share (the “
Preferred Stock
”), of which 288,588 shares are hereby designated “
Series A Convertible
Preferred Stock
”, with the voting powers, designations, preferences, limitations, restrictions, relative rights and distinguishing
designation set forth in Section 3.2.
The Preferred Stock may be issued from time
to time in one or more series. The Board of Directors is expressly authorized to establish from the undesignated shares of Preferred
Stock one or more series of Preferred Stock and to prescribe the series and the number of each such series of Preferred Stock and
the voting powers, designations, preferences, limitations, restrictions and relative rights of each such series of Preferred Stock,
including without limitation: the rate of dividends upon which and the times at which dividends on shares of such series shall
be payable and the preference, if any, which such dividends shall have relative to dividends on shares of any other class or classes
or any other series of stock of the corporation; whether such dividends shall be cumulative or noncumulative, and if cumulative,
the date or dates from which dividends on shares of such series shall be cumulative; the voting rights, if any, to be provided
for shares of such series; the rights, if any, which the holders of shares of such series shall have in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the corporation; the rights, if any, which the holders
of stock of the corporation, and the terms and conditions, including price and rate of exchange of such conversion or exchange;
and the redemption rights (including sinking fund provisions), if any, for shares of such series; and such other voting powers,
designations, preferences, limitations, restrictions, relative rights and distinguishing designation as the Board of Directors
may desire to so fix. The Board of Directors is also expressly authorized to fix the number of shares constituting such series
and to increase or decrease the number of shares of any series prior to the issuance of shares of that series and to increase or
decrease the number of shares of any series subsequent to the issuance of shares of that series, but not to decrease such number
below the number of shares outstanding. In case the number of shares of any series shall be so decreased, the shares constituting
such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares
of such series.
Section 3.2. Series
A Convertible Preferred Stock Section
3.2.1 Definitions.
For purposes of this Section 3.2, the following definitions
shall apply:
(a)
“
Business Day
” means a day in which a majority of the banks in the State of Nevada in the United States
of America are open for business.
(b)
“
Conversion Date
” shall mean the date on which a share or shares of the Series A Convertible Preferred
Stock is converted pursuant to the terms of this Section 3.2.
(c)
“
Distribution
” shall mean the transfer of cash or other property without consideration, whether by way
of dividend or otherwise (other than dividends on Common Stock payable in Common Stock), or the purchase or redemption of shares
of the Corporation for cash or property other than: (i) repurchases of Common Stock issued to or held by employees, officers, directors
or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing
for the right of said repurchase, (ii) repurchases of Common Stock issued to or held by employees, officers, directors or consultants
of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii)
repurchases of capital stock of the Corporation in connection with the settlement of disputes with any shareholder, (iv) any other
repurchase or redemption of capital stock of the Corporation approved by the holders of (a) a majority of the Common Stock and
(b) a majority of the Preferred Stock of the Corporation voting as separate classes.
(d)
“
Holder
” shall mean the person or entity in which the Series A Convertible Preferred Stock is registered
on the books of the Corporation, which shall initially be the person or entity that subscribes for the Series A Convertible Preferred
Stock, and shall thereafter be the permitted and legal assigns of which the Corporation is notified by the Holder and in respect
of which the Holder has provided a valid legal opinion in connection therewith to the Corporation.
(e)
“
Holders
” shall mean all Holders of the Series A Convertible Preferred Stock.
(f)
“
Junior Stock”
shall mean the Common Stock and each other class of capital stock or series of preferred
stock of the Corporation established prior to or after the Original Issue Date, the terms of which do not expressly provide that
such class or series ranks senior to or on parity with the Series A Convertible Preferred Stock upon the liquidation, winding•up
or dissolution of the Corporation.
(g)
“
Original Issue Date
” shall mean the date upon which the shares of Series A Convertible Preferred Stock
are first issued.
(h)
“
Recapitalization
” shall mean any stock dividend, stock split, and combination of shares, reorganization,
recapitalization, reclassification, or other similar event.
Section 3.2.2 Dividends.
(a)
The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock
of the Corporation unless (in addition to the obtaining of any consents required elsewhere in these Articles of Incorporation or
under applicable law) the holders of the Series A Convertible Preferred Stock then outstanding shall first receive, or simultaneously
receive, a dividend on each outstanding share of Series A Convertible Preferred Stock pursuant to this Section 3.2. The holders
of the Series A Convertible Preferred Stock shall be entitled to receive, as declared by the Board of Directors and out of funds
legally available for the purpose, a dividend in the aggregate amount of one dollar, regardless of the number of then•issued
and outstanding shares of Series A Convertible Preferred Stock. The remaining dividends allocated by the Board of Directors shall
be distributed in an equal amount per share to the holders of outstanding Common Stock and Series A Convertible Preferred Stock
(on an as•if•converted to Common Stock basis pursuant to the Conversion Ratio as defined below).
(b)
To the fullest extent permitted by the General Corporation Law of the State of Nevada, the Corporation shall be expressly
permitted, but not required, to redeem, repurchase or make distributions on the shares of its capital stock in all circumstances
other than where doing so would cause the Corporation to be unable to pay its debts as they become due in the usual course of business.
Section 3.2.3 No Liquidation
Preference
. Immediately prior to the occurrence of any liquidation, dissolution or winding up of the Corporation, whether voluntary
of involuntary, all shares of Series A Convertible Preferred Stock shall automatically convert into shares of Common Stock based
upon the then•applicable Conversion Ratio and shall participate in the liquidation proceeds in the same manner as other shares
of Common Stock.
Section 3.2.4 Conversion
.
The Series A Convertible Preferred Stock shall not be convertible into Common Stock and have no other conversion rights except
as specifically set forth below:
(a)
Conversion
. The “
Conversion Ratio
” per share of the Series A Convertible Preferred Stock in connection
with any Conversion shall be at a ratio of 1:100, meaning every one share of Series A Convertible Preferred Stock, if and when
converted into Common Stock, shall convert into 100 shares of Common Stock (the “
Conversion
”). Each Holder
shall have the right, exercisable at any time and from time to time (unless otherwise prohibited by law, rule or regulation, or
as restricted below), to convert any or all of such Holder’s shares of Series A Convertible Preferred Stock into shares
of Common Stock at the Conversion Ratio. Notwithstanding anything to the contrary herein, the Holders may not effectuate any Conversion
and the Corporation may not issue any shares of Common Stock in connection therewith that would trigger any NASDAQ requirement
to obtain shareholder approval prior to a Conversion or any issuance of shares of Common Stock in connection therewith that would
be in excess of that number of shares of Common Stock equivalent to 19.9% of the number of shares of Common Stock as of the date
hereof;
provided, however,
that the Holders may effectuate any Conversion and the Corporation shall be obligated to issue
shares of Common Stock in connection therewith that would not trigger such a requirement. This restriction shall be of no further
force or effect upon the approval of the shareholders in compliance with NASDAQ’s shareholder voting requirements. Notwithstanding
anything to the contrary contained herein, the Holders may not effectuate any Conversion and the Corporation shall not issue any
shares of Common Stock in connection therewith until the later of (x) February 28, 2019, or (y) 61 days following the date on
which the shareholders of the Corporation shall have approved the voting, Conversion, and other potential rights of the holders
of Series A Convertible Preferred Stock otherwise set forth in this Section 3.2 in accordance with the relevant NASDAQ requirements.
(b)
Taxes
. The Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock upon conversion in a name other than that in which the shares of the Series
A Convertible Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Corporation the amount of any such tax, or has established, to the satisfaction
of the Corporation, that such tax has been paid. The Corporation shall withhold from any payment due whatsoever in connection with
the Series A Convertible Preferred Stock any and all required withholdings and/or taxes the Corporation, in its sole discretion
deems reasonable or necessary, absent an opinion from Holder’s accountant or legal counsel, acceptable to the Corporation
in its sole determination, that such withholdings and/or taxes are not required to be withheld by the Corporation.
(c)
Stock Dividends, Splits, and Reclassifications
. If the Corporation shall (i) declare a dividend or other distribution
payable in securities or (ii) split its outstanding shares of Common Stock into a larger number, including any such reclassification
in connection with a merger, consolidation or other business combination in which the Corporation is the continuing entity(any
such corporate event, an “
Event
”), then in each instance the Conversion Ratio shall be adjusted such that the
number of shares issued upon conversion of one share of Series A Convertible Preferred Stock will equal the number of shares of
Common Stock that would otherwise be issued but for such Event.
(d)
Fractional Shares
. If any Conversion of Series A Convertible Preferred Stock would result in the issuance of a fractional
share of Common Stock (aggregating all shares of Series A Convertible Preferred Stock being converted pursuant to each Conversion),
such fractional share shall be rounded up to the nearest whole share and the Holder shall be entitled to receive, in lieu of the
final fraction of a share, one additional whole share of Common Stock.
(e)
Reservation of Stock Issuable Upon Conversion
. The Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the
Series A Convertible Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all then•outstanding shares of the Series A Convertible Preferred Stock; and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then•outstanding
shares of the Series A Convertible Preferred Stock, the Corporation will within a reasonable time period make a good faith effort
to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares
of Common Stock to such number of shares as shall be sufficient for such purpose.
(f)
Effect of Conversion
. On any Conversion Date, all rights of any Holder with respect to the shares of the Series A
Convertible Preferred Stock so converted, including the rights, if any, to receive distributions of the Corporation’s assets
or notices from the Corporation, will terminate, except only for the rights of any such Holder to receive certificates (if applicable)
for the number of shares of Common Stock into which such shares of the Series A Convertible Preferred Stock have been converted.
Section 3.2.5 Voting
.
The Holder of each share of Series A Convertible Preferred Stock shall have such number of votes as is determined by multiplying
(a) the number of shares of Series A Convertible Preferred Stock held by such holder, and (b) 100. Such voting calculation is hereby
authorized by the Corporation and the Corporation acknowledges such calculation may result in the total number of possible votes
cast by the Series A Holders and all other classes of the Corporation’s common stock in any given voting matter exceeding
the total aggregate number of shares that this Corporation shall have authority to issue. With respect to any shareholder vote,
such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and
shall be entitled, notwithstanding any provision hereof, to notice of any shareholders’ meeting in accordance with the Bylaws
of this Corporation, and shall be entitled to vote, together with holders of Common Stock, with respect to any question upon which
holders of Common Stock have the right to vote. The holders of Series A Convertible Preferred Stock shall vote together with all
other classes and series of common and preferred stock of the Corporation as a single class on all actions to be taken by the Common
Stock shareholders of the Corporation, except to the extent that voting as a separate class or series is required by law. Notwithstanding
anything to the contrary herein, the Holders of shares of Series A Convertible Preferred Stock may not engage in any vote where
the voting power would trigger any NASDAQ requirement to obtain shareholder approval; provided, however, the Holders shall have
the right to vote that portion of their voting power that would not trigger such a requirement. This restriction shall lapse upon
the requisite approval of the shareholders in compliance with NASDAQ’s shareholder voting requirements in effect at the time
of such approval.
Section 3.2.6 Redemption
.
The Series A Convertible Preferred Stock shall have no redemption rights.
Section 3.2.7 Protective
Provisions
. In addition to any other rights provided by law, at any time any shares of Series A Convertible Preferred Stock
are outstanding, as a legal party in interest, the Corporation, through action directly initiated by the Corporation’s Board
of Directors or indirectly initiated by the Corporation’s Board of Directors through judicial action or process, including
any action by the shareholders of the Corporation’s Common Stock, shall not, either directly or indirectly by amendment,
merger, consolidation or otherwise, take any of the following actions without first obtaining the affirmative approval of a majority
of the Holders.
(a)
Increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series A Convertible
Preferred Stock;
(b)
Effect an exchange, reclassification, or cancellation of all or a part of the Series A Convertible Preferred Stock, but
excluding a stock split or reverse stock split or combination of the Common Stock or Preferred Stock;
(c)
Effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of
Series A Convertible Preferred Stock; or
(d)
Alter or change the rights, preferences or privileges of the shares of Series A Convertible Preferred Stock so as to affect
adversely the shares of such series, including the rights set forth in this Section 3.2;
provided, however
, that the Corporation
may, by any means authorized by law and without any vote of the Holders of shares of the Series A Convertible Preferred Stock,
make technical, corrective, administrative or similar changes in this Section 3.2 that do not, individually or in the aggregate,
materially adversely affect the rights or preferences of the Holders of shares of the Series A Convertible Preferred Stock.
Section 3.2.8 Preemptive
Rights
. Holders of Series A Convertible Preferred Stock and holders of Common Stock shall not be entitled to any preemptive,
subscription or similar rights in respect to any securities of the Corporation, except as specifically set forth herein or in any
other document agreed to by the Corporation.
Section 3.2.9 Reports
.
The Corporation shall mail to all holders of Series A Convertible Preferred Stock those reports, proxy statements and other materials
that it mails to all of its holders of Common Stock.
Section 3.2.10 Notices
.
In addition to any other means of notice provided by law or in the Corporation’s Bylaws, any notice required by the provisions
of this Section 3.2 to be given to the Holders shall be deemed given if deposited in the United States mail, postage prepaid, return
receipt requested and addressed to each Holder
of record at such Holder’s address appearing on the books of the Corporation.
Section 3.2.11 Miscellaneous
.
(a)
The headings of the various sections and subsections of this Section 3.2 are for convenience of reference only and shall
not affect the interpretation of any of the provisions of this Section 3.2.
(b)
Whenever possible, each provision of this Section 3.2 shall be interpreted in a manner as to be effective and valid under
applicable law and public policy. If any provision set forth herein is held to be invalid, unlawful, or incapable of being enforced
by reason of any rule of law or public policy, such provision shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating or otherwise adversely affecting the remaining provisions of this Section 3.2. No provision herein set forth
shall be deemed dependent upon any other provision unless so expressed herein. If a court of competent jurisdiction should determine
that a provision of this Section 3.2 would be valid or enforceable if a period of time were extended or shortened, then such court
may make such change as shall be necessary to render the provision in question effective and valid under applicable law.
(c)
The Corporation will provide to the Holders of the Series A Convertible Preferred Stock all communications sent by the Corporation
to the holders of the Common Stock.
(d)
Except as may otherwise be required by law, the shares of the Series A Convertible Preferred Stock shall not have any powers,
designations, preferences or other special rights, other than those specifically set forth in this Section 3.2.
(e)
Shares of the Series A Convertible Preferred Stock converted into Common Stock shall be retired and canceled and shall have
the status of authorized but unissued shares of preferred stock of the Corporation undesignated as to any specific series and may
with any and all other authorized but unissued shares of preferred stock of the Corporation be designated or re•designated
and issued or reissued, as the case may be, as part of any series of preferred stock of the Corporation.
(f)
Notwithstanding the above terms and conditions of this Section 3.2 and the dollar amounts and share numbers set forth herein
shall be subject to adjustment, as appropriate, whenever there shall occur a stock split, stock dividend, combination, reclassification
or other similar event involving shares of the Series A Convertible Preferred Stock. Such adjustments shall be made in such manner
and at such time as the Board of Directors in good faith determines to be equitable in the circumstances, any such determination
to be evidenced in a resolution duly adopted by the Board of Directors. Upon any such equitable adjustment, the Corporation shall
promptly deliver to each Holder a notice describing in reasonable detail the event requiring the adjustment and the method of
calculation thereof.
(g)
With respect to any notice to a Holder required to be provided hereunder, such notice shall be mailed to the registered
address of such Holder, and neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular
Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to
the other Holders or affect the legality or validity of any redemption, conversion, distribution, rights, warrant, reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation, winding•up or other action, or the vote upon any action
with respect to which the Holders are entitled to vote. All notice periods referred to herein shall commence on the date of the
mailing of the applicable notice. Any notice that was mailed in the manner herein provided shall be conclusively presumed to have
been duly given whether or not the Holder receives the notice.
Article 4: Names and Addresses of the Board of
Directors/Trustees
175 Jackson Ave. N., Ste. 102
Minneapolis, MN 55343
175 Jackson Ave. N., Ste. 102
Minneapolis, MN 55343
Article 9: Limitation of Liability
The personal liability of
the directors of the corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State
of Nevada, as the same may be amended and supplemented.
Article 10: Indemnification
The Corporation shall, to the maximum extent and
in the manner permitted by the General Corporation Law of the State of Nevada, as the same may be amended and supplemented, indemnify
and hold harmless any and all persons whom it shall have power to indemnify under said provisions from and against any and all
liabilities (including expenses) imposed upon or reasonably incurred by him or her in connection with any action, suit or other
proceeding in which he or she may be involved or with which he or she may be threatened, or other matters referred to in or covered
by said provisions both as to action in his or her official capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director or officer of the corporation.
In the matter of Nevada Secretary of State Form RA Acceptance Revised: 1 - 5 - 15 Registered Agent Acceptance (PURSUANT TO NRS 77.310) Name of Represented Business Entity Date the above named business entity. USE BLACK INK ONLY - DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY Certificate of Acceptance of Appointment by Registered Agent Nevada Nevada Street Address City Zip Code Zip Code City Mailing Address (if different from street address) noncommercial registered agent with the following address for service of process: am a: and hereby state that on X Authorized Signature of R.A. or On Behalf of R.A. Company Date b) I, BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701 - 4201 (775) 684 - 5708 Website: www.nvsos.gov Nevada Nevada Street Address City Zip Code City Zip Code I accepted the appointment as registered agent for Mailing Address (if different from street address) represented entity accepting own service of process at the following address: c) Title of Office or Position of Person in Represented Entity *If changing Registered Agent when reinstating, officer's signature required. X Signature of Officer Date This form may be submitted by : a Commercial Registered Agent, Noncommercial Registered Agent or Represented Entity . For more information please visit http : //www . nvsos . gov/index . aspx?page= 141 *180304* *180304* Appliance Recycling Centers of America, Inc. National Registered Agents, Inc. of NV Name of Appointed Registered Agent OR Represented Entity Serving as Own Agent* (complete only one) a) 俺 commercial registered agent listed with the Nevada Secretary of State, Reset
APPENDIX
C:
Proposed
Nevada Bylaws
BYLAWS
OF
APPLIANCE RECYCLING CENTERS OF AMERICA,
INC.
A Nevada corporation
As adopted ____, 2017
TABLE OF CONTENTS
|
Page
|
ARTICLE 1. OFFICES
|
1
|
1.1)
|
Registered Office
|
1
|
1.2)
|
Offices
|
1
|
ARTICLE 2. SHAREHOLDERS
|
1
|
2.1)
|
Regular Meeting
|
1
|
2.2)
|
Frequency of Regular Meetings
|
1
|
2.3)
|
Special Meetings
|
1
|
2.4)
|
Quorum
|
1
|
2.5)
|
Voting
|
1
|
2.6)
|
Voting of Shares by Certain Holders
|
1
|
2.7)
|
Notice of Meeting
|
2
|
2.8)
|
Proxies
|
2
|
2.9)
|
Record Date
|
2
|
2.10)
|
Presiding Officer
|
2
|
2.11)
|
Conduct of Meetings of Shareholders
|
2
|
2.12)
|
Order of Business
|
3
|
2.13)
|
Inspectors of Election
|
3
|
ARTICLE 3. DIRECTORS
|
3
|
3.1)
|
General Powers
|
3
|
3.2)
|
Number
|
3
|
3.3)
|
Qualifications and Term of Office
|
3
|
3.4)
|
Quorum
|
3
|
3.5)
|
Regular Meetings
|
3
|
3.6)
|
Special Meetings
|
4
|
3.7)
|
Electronic Communications
|
4
|
3.8)
|
Absent Director
|
4
|
3.9)
|
Notice
|
4
|
3.10)
|
Manner of Action
|
4
|
3.11)
|
Compensation
|
4
|
3.12)
|
Salaries
|
4
|
3.13)
|
Executive Committee
|
4
|
3.14)
|
Vacancies
|
4
|
3.15)
|
Order of Business
|
5
|
3.16)
|
Informal Action by Directors
|
5
|
ARTICLE 4. OFFICERS
|
5
|
4.1)
|
Number
|
5
|
4.2)
|
Election, Term of Office and Qualifications
|
5
|
4.3)
|
The Chief Executive Officer
|
5
|
4.4)
|
Assistant Executive Officers
|
5
|
4.5)
|
Secretary
|
5
|
4.6)
|
Chief Financial Officer
|
5
|
4.7)
|
Assistant Officers
|
6
|
4.8)
|
Officers Shall not Lend Corporate Credit
|
6
|
Table
of Contents
(continued)
ARTICLE 5. INDEMNIFICATION
|
6
|
5.1)
|
Authority of the Board of Directors
|
6
|
5.2)
|
Standard for Indemnification
|
6
|
5.3)
|
No Presumptions Resulting From Termination of Actions
|
6
|
5.4)
|
Mandatory Indemnification
|
6
|
5.5)
|
Determination
|
6
|
5.6)
|
Advance Payment
|
6
|
5.7)
|
Continuance of Indemnification
|
7
|
5.8)
|
Not Exclusive Remedy
|
7
|
5.9)
|
Insurance
|
7
|
5.10)
|
Notice of Indemnification
|
7
|
ARTICLE 6. SHARES AND THEIR TRANSFER
|
7
|
6.1)
|
Establishment and Issuance of Shares
|
7
|
6.2)
|
Uncertificated Shares of Stock; Stock Certificates
|
7
|
6.3)
|
Transfer of Shares
|
7
|
6.4)
|
Stock Records; Transfer Agent and Registrar
|
8
|
6.5)
|
Facsimile Signature
|
8
|
6.6)
|
Lost Certificates
|
8
|
6.7)
|
Treasury Stock
|
8
|
6.8)
|
Inspection of Books by Shareholders
|
8
|
ARTICLE 7. DIVIDENDS, DISTRIBUTIONS, ETC
|
8
|
7.1)
|
Dividends
|
8
|
7.2)
|
Other Distributions, Reserves
|
8
|
ARTICLE 8. FINANCIAL AND PROPERTY MANAGEMENT
|
9
|
8.1)
|
Fiscal Year
|
9
|
8.2)
|
Audit of Books and Accounts
|
9
|
8.3)
|
Contracts
|
9
|
8.4)
|
Checks
|
9
|
8.5)
|
Deposits
|
9
|
8.6)
|
Voting Securities Held by Corporation
|
9
|
ARTICLE 9. WAIVER OF NOTICE
|
9
|
9.1)
|
Requirement of Waiver In Writing
|
9
|
ARTICLE 10. AMENDMENTS
|
9
|
10.1)
|
Action by Board of Directors
|
9
|
BYLAWS
OF
APPLIANCE RECYCLING CENTERS OF AMERICA,
INC.
ARTICLE
1. OFFICES
1.1)
Registered
Office
. The registered office of the corporation shall be 701 S. Carson Street, Suite #200, Carson, City, Nevada 89701. The
Board of Directors shall have authority to change the registered office of the corporation from time to time, and any such change
shall be registered by the Secretary with the Secretary of State of Nevada.
1.2)
Offices
.
The corporation may have such other offices, including its principal business office, either within or without the State of Minnesota,
as the Board of Directors may designate or as the business of the corporation may require from time to time.
ARTICLE
2. SHAREHOLDERS
2.1)
Regular
Meeting
. Regular meetings of the shareholders of the corporation shall be held at the principal business office of the corporation,
or at such place as is designated by the Board of Directors, at which time the shareholders, voting as provided in the Articles
of Incorporation, shall elect a Board of Directors for the ensuing year, and shall transact such other business as shall properly
come before them.
2.2)
Frequency
of Regular Meetings
. Regular meetings which may also be referred to as annual meetings of shareholders may be called at any
time by a majority of the Board of Directors. If a regular meeting of shareholders has not been held during the immediately preceding
thirteen (13) months, a shareholder or shareholders holding three percent (3%) or more of all voting shares may demand a regular
meeting of shareholders by written notice of demand given to the Chief Executive Officer or Secretary of the corporation. Within
thirty (30) days after receipt of the demand by one of those officers, the Board shall cause a regular meeting of shareholders
to be called and held on notice no later than ninety (90) days after receipt of the demand, all at the expense of the corporation.
2.3)
Special
Meetings
. Special meetings of the shareholders may be called by the Secretary at any time upon request of the Chief Executive
Officer, or two of the members of the Board of Directors, or upon a written request of shareholders holding ten percent (10%) or
more of the capital stock entitled to vote. The written request shall be given to the Chief Executive Officer and shall contain
the purpose of the meeting. Notice shall be given in accordance with the provisions of Section 2.7 hereof.
2.4)
Quorum
.
The holders of a majority of the shares outstanding and entitled to vote, represented either in person or by proxy, shall constitute
a quorum for the transaction of business. The shareholders present at a duly called or held meeting, at which a quorum of the shareholders
is present, may continue to transact business until adjournment notwithstanding the withdrawal of enough shareholders to leave
less than a quorum. In case a quorum is not present at any meeting, those present shall have the power to adjourn the meeting from
time to time, without notice or other announcement at the meeting, until the requisite number of voting shares shall be represented;
any business may be transacted at such reconvened meeting which might have been transacted at the meeting which was adjourned.
2.5)
Voting
.
At each meeting of the shareholders, every shareholder having the right to vote shall be entitled to vote in person or by proxy
duly appointed by an instrument in writing subscribed by such shareholder. Each shareholder shall have one (1) vote for each share
having voting power standing in his name on the books of the corporation. Upon the demand of any shareholder, the vote for director,
or the vote upon any question before the meeting shall be by ballot. All elections shall be had and all questions decided by a
majority vote of the number of shares entitled to vote and represented at any meeting at which there is a quorum, except in such
cases as shall otherwise be required or permitted by statute, the Articles of Incorporation, these Bylaws or by agreement approved
by a majority of all shareholders.
2.6)
Voting
of Shares by Certain Holders
. Shares standing in the name of another corporation may be voted by such officer, agent or proxy
as the articles or bylaws of such corporation may prescribe, or in the absence of such provision, as that corporation’s board
of directors may prescribe. Shares under control of a personal representative, administrator, guardian, conservator, attorney-in-fact,
or other similar person may be voted by that person, either in person or by proxy, without registration of those shares in the
name of that person. Shares under the control of a trustee in bankruptcy or a receiver may be voted by the trustee or receiver
if authority to do so is contained in an appropriate order of the court by which the trustee or receiver was appointed. A shareholder
whose shares are pledged may vote those shares until the shares are registered in the name of the pledgee. Shares held by a trust
shall be registered in the name of a trustee, as trustee for the trust, and may be voted by that named trustee in person or by
proxy.
2.7)
Notice
of Meeting
. There shall be mailed to each shareholder shown by the books of the corporation to be a holder of record of voting
shares, at his address as shown by the books of the corporation, a notice setting out the time and place of the regular meeting
or any special meeting, which notice shall be mailed at least ten (10) days prior thereto. Every notice of any special meeting
shall state the purpose or purposes of the proposed meeting, and the business transacted at all special meetings shall be confined
to purposes stated in the call. Notice thereof may be waived in writing either before, at, or after such meeting.
2.8)
Proxies
.
At all meetings of shareholders, a shareholder may vote by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxies shall be filed with the Secretary of the corporation before or at the time of the meeting. No proxy
shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy.
2.9)
Record
Date
. The Board of Directors may fix in advance a date, not exceeding sixty (60) days preceding the date of any of the aforesaid
events, as a record date for the determination of shareholders entitled to notice of and to vote at any such meeting and any adjournment
thereof, or to receive any such dividend or allotment of rights, or to exercise the rights in respect to any change, conversion
or exchange of capital stock or to give such consent, and in such case only such shareholders on the record date so fixed shall
be entitled to notice of and to vote at such meeting and any adjournment thereof, or to receive such dividend or allotment of rights,
or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books
of the corporation after any such record date so fixed. If the stock transfer books are not closed and no record date is fixed
for such determination of the shareholders of record, the date on which notice of the meeting is mailed, or the date of adoption
of a resolution of the Board of Directors declaring a dividend, allotment of rights, change, conversion or exchange of capital
stock or to give such consent, whichever is earlier, shall be the record date for such determination of shareholders. The determination
of shareholders entitled to vote at the meeting as called shall apply to any adjournment of such meeting except when the date of
determination or the closing of the stock transfer book is more than ninety (90) days prior to such adjourned meeting, in which
event a new meeting must be called.
2.10)
Presiding
Officer
. The appropriate officers of the corporation shall preside over all meetings of the shareholders; provided, however,
that in the absence of an appropriate corporate officer at any meeting of the shareholders, the meeting shall choose any person
present to act as presiding officer of the meeting.
2.11)
Conduct
of Meetings of Shareholders
. Subject to the following, meetings of shareholders generally shall follow accepted rules of parliamentary
procedure:
1. The
chairman of the meeting shall have absolute authority over matters of procedure and there shall be no appeal from the ruling of
the chairman. If the chairman, in his absolute discretion, deems it advisable to dispense with the rules of parliamentary procedure
as to any one meeting of shareholders or part thereof, the chairman shall so state and shall clearly state the rules under which
the meeting or appropriate part thereof shall be conducted.
2. If
disorder should arise which prevents continuation of the legitimate business of the meeting, the chairman may quit the chair and
announce the adjournment of the meeting; and upon his so doing, the meeting is immediately adjourned.
3. The
chairman may ask or require that anyone not a bona fide shareholder or proxy leave the meeting.
2.12)
Order
of Business
. The suggested order of business at the annual meeting of shareholders, and so far as possible at all other meetings
of the shareholders, shall be:
|
1.
|
Reading and disposal of any unapproved minutes.
|
|
2.
|
Annual reports of all officers and committees.
|
|
3.
|
Election of directors.
|
2.13)
Inspectors
of Election
. The Board of Directors in advance of any meeting of shareholders may appoint Inspectors to act at such meeting
or any adjournment thereof. If inspectors of election are not so appointed, the officer or person acting as chairman of any such
meeting may, and on the request of any shareholder or his proxy, shall make such appointment. In case any person appointed as inspector
shall fail to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting,
or at the meeting by the officer or person acting as chairman. The inspectors of election shall determine the number of shares
outstanding, the voting power of each, the shares represented at the meeting, the existence of a quorum, the authenticity, validity
and effect of proxies, receive votes, ballots, assents or consents, hear and determine all challenges and questions in any way
arising and announce the result, and do such acts as may be proper to conduct the election or vote with fairness to all shareholders.
No inspector whether appointed by
the Board of Directors or by the officer or person acting as chairman need be a shareholder.
ARTICLE
3. DIRECTORS
3.1)
General
Powers
. The property, affairs, and business of the corporation shall be managed by the Board of Directors.
3.2)
Number
.
The number of directors shall be two (2) but the number of directors may be increased or diminished by a majority vote of the board
of directors.
3.3)
Qualifications
and Term of Office
. Directors need not be shareholders or residents of the State of Nevada. Directors shall be elected by the
shareholders at a regular meeting for an indefinite term until the next regular meeting of shareholders and until a successor shall
have been elected and qualified. Each of the directors of the corporation shall hold office until the regular meeting next following
or closely coinciding with the expiration of his term of office and until his successor shall have been elected and shall qualify,
or until he shall resign, or shall have been removed as provided by statute.
3.4)
Quorum
.
A majority of the Board of Directors shall constitute a quorum for the transaction of business; provided, however, that if any
vacancies exist by reason of death, resignation or otherwise, a majority of the remaining directors shall constitute a quorum for
the conduct of business. If less than a quorum is present at any meeting, a majority of the directors present may adjourn the meeting
from time to time without further notice.
3.5)
Regular
Meetings
. As soon as practical after each regular meeting of shareholders, the Board of Directors shall meet for the purposes
of organization, choosing the officers of the corporation and for the transaction of other business at the place where the shareholders
meeting is held or at the place where regular meetings of the Board of Directors are held. No notice of such meeting need be given.
Such first meeting may be held at any other time and place which shall be specified in a notice given as hereinafter provided for
special meetings or in a consent and waiver of notice signed by all the directors.
Other regular meetings of the Board of
Directors shall be held from time to time at such time and place as may from time to time be fixed by resolution adopted by a majority
of the whole Board of Directors. Unless notice shall be waived by all directors entitled to notice, notice shall be given in the
same manner as prescribed for notice of special meetings.
3.6)
Special
Meetings
. Special meetings of the Board of Directors may be held at such time and place as may from time to time be designated
in the notice or waiver of notice of the meeting. Special meetings of the Board of Directors may be called by the Chief Executive
Officer, or by any director. Unless notice shall be waived by all directors entitled to notice, notice of the special meeting shall
be given by the Secretary, who shall give at least twenty-four (24) hours’ notice thereof to each director by mail, telegraph,
telephone, or in person.
3.7)
Electronic
Communications
. A Board of Directors meeting may be had entirely or partially by any means of communication through which the
directors may simultaneously hear each other, provided notice is given of the meeting pursuant to Section 3.9 and there is a sufficient
number of participants to constitute a quorum.
3.8)
Absent
Director
. A director may give advance written consent or opposition to a proposal to be acted on at a board of directors meeting.
Such written consent or opposition does not constitute presence for purposes of determining the existence of a quorum. Written
consent or opposition shall be counted as a vote on the proposal if the proposal acted on is substantially the same or has substantially
the same effect as the proposal to which the director has consented or objected.
3.9)
Notice
.
Unless notice is waived by all directors entitled to notice, a regular meeting of the Board of Directors may be called by giving
ten (10) days’ notice to all directors. A special meeting of the Board of Directors may be called by giving at least twenty-four
(24) hours’ notice to all directors. Notice may be given by mail, telegraph, telephone, or in person. If given by mail such
notice shall be deemed given when deposited in the United States mails. Notice by mail may not be used if the meeting is called
less than four (4) days from the date of notice. The notice must specify the date, time and place of the meeting, and if a special
meeting, the purpose of the meeting.
3.10)
Manner
of Action
. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the
Board of Directors.
3.11)
Compensation
.
Directors and any members of any committee of the Corporation contemplated by these Bylaws or otherwise provided for by resolution
of the Board of Directors, shall receive such compensation therefor as may be determined from time to time by resolution of the
Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other
capacity and receiving proper compensation therefor.
3.12)
Salaries
.
Salaries and other compensation of all officers of the corporation shall be fixed by the Board of Directors, which action may be
taken informally without the benefit of written resolutions. Nothing herein contained shall be construed to preclude any officer
from serving the corporation as a director, consultant or in any other capacity and receiving proper compensation therefor.
3.13)
Executive
Committee
. A two-thirds (2/3) majority vote of the Board of Directors present at a meeting may pass a resolution establishing
committees having the authority of the Board to the extent provided in the resolution. A committee shall consist of three or more
persons who need not be members of the Board. A majority of the committee present at a meeting shall constitute a quorum for the
purpose of transacting business. In all other respects committees shall conduct meetings in the same manner prescribed for the
Board of Directors. Committees shall be subject at all times to the control and direction of the Board.
3.14)
Vacancies
.
A director may resign at any time by giving written notice of same to the Board of Directors, or to the President. Such resignation
shall be effective upon receipt unless a later date is specified in the notice. If at any time and for any reason, including the
creation of a new directorship, a vacancy occurs in the Board of Directors, the remaining directors of the Board, though less than
a quorum, may elect a successor to fill such vacancy, or the Board may leave the vacancy unfilled until the next regular meeting
of the shareholders, or until an intervening special meeting of the shareholders is called and held for the purpose of electing
a successor. A director elected to fill the vacancy shall hold his office for the unexpired term of his predecessor, or until his
successor is duly elected and qualified.
3.15)
Order
of Business
. The following order of business shall be observed at all meetings of the Board of Directors so far as is practicable:
|
2.
|
Proof of due notice of meeting, or unanimous consent, or unanimous presence and declaration by president.
|
|
3.
|
Reading and disposal of any unapproved minutes.
|
|
4.
|
Reports of officers and committees.
|
3.16)
Informal
Action by Directors
. Any action required to be taken at a meeting of the directors, or any other action which may be taken
at a meeting of the directors, may be taken without a meeting and notice thereof if a consent in writing, setting forth the action
so taken, shall be signed by all of the directors entitled to vote with respect to the subject matter set forth.
ARTICLE
4. OFFICERS
4.1)
Number
.
The officers of the corporation may include a Chief Executive Officer, a Chief Financial Officer, and such other officers as may
from time to time be chosen by the Board of Directors. Any number of offices may be held by one person.
4.2)
Election,
Term of Office and Qualifications
. At any regular meeting of the Board of Directors, the board may elect a Chief Executive
Officer, a Chief Financial Officer, and such other officers and assistant officers as may be deemed advisable. Such officers shall
hold office until their successors are elected and qualify; provided, however, that any officer may be removed with or without
cause by the affirmative vote of a majority of the whole Board of Directors.
4.3)
The
Chief Executive Officer
. The Chief Executive Officer, who may also be referred to as the President shall: (a) have general
active management of the business of the corporation; (b) when present, preside at all meetings of the Board and of the shareholders;
(c) see that all orders and resolutions of the Board are carried into effect; (d) sign and deliver in the name of the corporation
any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the corporation, except in cases in which
the authority to sign and deliver is required by law to be exercised by another person or is expressly delegated by the articles
or bylaws or by the Board to some other officer or agent of the corporation; (e) maintain records of and, whenever necessary, certify
all proceedings of the Board and the shareholders; and (f) perform other duties prescribed by the Board. The Chief Executive Officer
may also be referred to as the President.
4.4)
Assistant
Executive Officers
. Each assistant executive officer shall have such powers and shall perform such duties as may be prescribed
by the Board of Directors. In the event of absence or disability of the Chief Executive Officer, an assistant executive officer
shall succeed to his powers and duties in the order in which they are elected or as otherwise prescribed by the Board of Directors.
The Assistant Executive Officers may also be referred to as Vice Presidents.
4.5)
Secretary
.
The Secretary shall be secretary of and shall attend all meetings of the shareholders and Board of Directors. The Secretary shall
act as clerk thereof and shall record all the proceedings of such meetings in the minute book of the corporation. The Secretary
shall give proper notice of meetings of shareholders and directors. The Secretary shall keep the seal of the corporation, if any,
and shall affix the same to any instrument requiring it and shall attest the seal by his signature. The Secretary shall, with the
Chief Executive Officer or Chief Financial Officer, acknowledge all certificates for shares of the corporation and shall perform
such other duties as may be prescribed from time to time by the Board of Directors.
4.6)
Chief
Financial Officer
. The Chief Financial Officer, who may also be referred to as the Treasurer, shall: (a) keep accurate financial
records for the corporation; (b) deposit all money, drafts, and checks in the name of and to the credit of the corporation in the
banks and depositories designated by the Board; (c) endorse for deposit all notes, checks, and drafts received by the corporation
as ordered by the Board, making proper vouchers therefor; (d) disburse corporate funds and issue checks and drafts in the name
of the corporation, as ordered by the Board; (e) render to the Chief Executive Officer and the Board, whenever requested, an account
of all transactions by the Chief Financial Officer and of the financial condition of the corporation; and (f) perform other duties
prescribed by the Board or by the Chief Executive Officer. The Chief Financial Officer may also be referred to as the Treasurer.
4.7)
Assistant
Officers
. In the event of absence or disability of any officer, assistants to such officers shall succeed to the powers and
duties of the absent officer in the order in which they are elected or as otherwise prescribed by the Board of Directors until
such principal officer shall resume his duties or a replacement is elected by the Board of Directors. Such assistant officers shall
exercise such other powers and duties as may be delegated to them from time to time by the Board of Directors, but they shall be
subordinate to the principal officer they are designated to assist.
4.8)
Officers
Shall not Lend Corporate Credit
. Except for the proper use of the corporation, no officer of this corporation shall sign or
endorse in the name or on behalf of this corporation, or in his official capacity, any obligations for the accommodation of any
other party or parties, nor shall any check, note, bond, stock certificate or other security or thing of value belonging to this
company be signed by any officer or director as collateral for any obligation other than valid obligations of this corporation.
ARTICLE
5. INDEMNIFICATION
5.1)
Authority
of the Board of Directors
. The corporation acting through its Board of Directors or as otherwise provided in this bylaw, shall
exercise as fully as may be permitted from time to time by the statutes and decisional law of the State of Nevada or by any other
applicable rules or principles of law its power to indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit, or proceeding, wherever brought, whether civil, criminal, administrative,
or investigative, by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or
was serving at the request of the corporation, as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding.
5.2)
Standard
for Indemnification
. Any person described in Section 5.1 may be indemnified by the corporation if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceedings, had no reasonable cause to believe his conduct was unlawful.
5.3)
No
Presumptions Resulting From Termination of Actions
. The determination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, have reasonable cause to believe that his conduct was
unlawful.
5.4)
Mandatory
Indemnification
. To the extent that any such person has been successful on the merits or otherwise in defense of any action,
suit, or proceeding referred to in this bylaw, or in defense of any claim, issue, or matter within this bylaw, he shall be indemnified
against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection therewith.
5.5)
Determination
.
Any indemnification under Section 5.1, unless ordered by a court, shall be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in Section 5.2. Such determination shall be made (1) by the Board of Directors
by a majority vote of a quorum consisting of directors who are not parties to such action, suit, or proceeding or (2) if such a
quorum is not obtainable, or, even if obtainable if a quorum of disinterested directors so directs, by independent legal counsel
in a written opinion, or (3) by a majority vote of disinterested shareholders.
5.6)
Advance
Payment
. The expenses incurred in defending a civil or criminal action, suit, or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit, or proceeding as authorized by the Board of Directors in the manner provided
in Section 5.5 upon receipt of an undertaking by or on behalf of the director, officer, employee, or agent to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this bylaw.
5.7)
Continuance
of Indemnification
. The indemnification provided by this bylaw shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
5.8)
Not
Exclusive Remedy
. The indemnification provided by this bylaw shall not exclude any other right to which an officer may be entitled
under any agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall not imply that the corporation may not provide lawful
indemnification not expressly provided for in this bylaw. Nothing contained in this bylaw shall affect any rights to indemnification
to which corporate personnel other than directors and officers may be entitled by contract or otherwise under law.
5.9)
Insurance
.
The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent
of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him
in any such capacity, provided, that no indemnification shall be made under any policy of insurance for any act which could not
be indemnified by the corporation under this bylaw.
5.10)
Notice
of Indemnification
. If, under this bylaw, any expenses or other amounts are paid by way of indemnification, otherwise than
by Court order or action by the shareholders, the corporation shall, not later than the next annual meeting of shareholders unless
such meeting is held within three (3) months from the date of such payment, and in any event, within fifteen (15) months from the
date of such payment, mail to its shareholders of record at the time entitled to vote for the election of directors a statement
specifying the persons paid, the amounts paid, and the nature and status of the litigation or threatened litigation at the time
of such payment.
ARTICLE
6. SHARES AND THEIR TRANSFER
6.1)
Establishment
and Issuance of Shares
. Subject to the provisions of the Articles of Incorporation and as provided by law, the Board of Directors
is authorized to designate and cause to be issued, classes and series of shares of the corporation, with designated voting rights,
preferences, and other characteristics, at such times and for such consideration as the Board of Directors may determine.
6.2)
Uncertificated
Shares of Stock; Stock Certificates
. The corporation may provide, to the extent and in the manner permitted by applicable law,
that some or all of any or all classes and series of shares of capital stock in the corporation shall be issued in uncertificated
form. Except as otherwise expressly provided by statute, the rights and obligations of the holders of certificated and uncertificated
shares of the same class and series are identical. Any action providing for uncertificated shares shall not apply to shares then
represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the foregoing, upon written
request delivered to the Secretary of the Corporation, an owner of stock of the corporation shall be entitled to a certificate,
to be in such form as the Board of Directors prescribes, certifying the number of shares of stock of the corporation owned by him.
In the case of shares represented by certificates, the certificates for such stock shall be numbered in the order in which they
shall be issued and shall be signed in the name of the corporation by the Chief Executive Officer, and by the Secretary or any
other proper officer of the corporation authorized by the Board of Directors. Within a reasonable time after the issuance or transfer
of uncertificated shares, the corporation shall send to the registered owner of the shares a written notice containing the information
required to be set forth or stated on certificates pursuant to applicable law, unless such notice is not required by law.
6.3)
Transfer
of Shares
. Transfer of certificated and uncertificated shares of the corporation shall be made only on the books of the corporation.
The shareholder in whose name shares of stock stand on the books of the corporation shall be deemed the owner thereof for all purposes
as regards the corporation; provided, that when any transfer of shares shall be made as collateral security, and not absolutely,
such facts, if known to the Secretary of the corporation, or to the transfer agent, shall be so expressed in the entry of transfer.
Transfers of uncertificated shares shall be made only by the holder thereof (or his legal representative or duly authorized attorney-in-fact)
upon presentment of proper evidence of authority to transfer. Transfers of certificated shares shall be made only by the stockholder
named in the certificate (or his legal representative or duly authorized attorney-in-fact) and upon surrender for cancellation
of the certificate or certificates for such shares, with duly executed assignment and power of transfer endorsed thereon or attached
thereto, and with such proof of the authenticity of the signatures as the corporation or its transfer agent may reasonably require.
Every certificate surrendered to the corporation for exchange or transfer shall be cancelled and no other certificate or certificates
or evidence of uncertificated shares shall be issued in exchange for any existing certificates until such existing certificate
shall have been so cancelled except in cases provided for in Section 6.6 of this Article 6.
6.4)
Stock
Records; Transfer Agent and Registrar
. The corporation shall keep, at its principal executive office or at another place or
places within the United States determined by the Board, a share register not more than one year old containing the names and addresses
of the shareholders and the number and classes of shares held by each shareholder. The corporation shall also keep at its principal
executive office or at another place or places within the United States determined by the Board, a record of the dates on which
certificates representing shares were issued, or on which uncertificated shares were issued, and in the case of cancellation, the
respective dates of cancellation. The Board of Directors may appoint one or more transfer agents or transfer clerks, and may require
all certificates for shares to bear the signature or signatures of any of them.
6.5)
Facsimile
Signature
. Where any certificate is manually signed by a transfer agent, a transfer clerk or by a registrar appointed by the
Board of Directors to perform such duties, a facsimile or engraved signature of the Chief Executive Officer and Secretary or other
proper officer of the corporation authorized by the Board of Directors may be inscribed on the certificate in lieu of the actual
signature of such officer. The fact that a certificate bears the facsimile signature of an officer who has ceased to hold office
shall not affect the validity of such certificate if otherwise validly issued.
6.6)
Lost
Certificates
. Any shareholder claiming a certificate of stock to be lost or destroyed shall make an affidavit or affirmation
of that fact in such form as the Board of Directors may require, and shall, if the directors so require, give the corporation a
bond of indemnity in form and with one or more sureties satisfactory to the Board, in an amount determined by the Board of Directors
not exceeding double the value of the stock represented by such certificate to indemnify the corporation, against any claim that
may be made of such certificate; whereupon a new certificate may be issued in the same tenor and for the same number of shares
as the one alleged to have been destroyed or lost.
6.7)
Treasury
Stock
. Treasury stock shall be held by the corporation subject to disposal by the Board of Directors, in accordance with the
Articles of Incorporation and these Bylaws, and shall not have voting rights nor participate in dividends.
6.8)
Inspection
of Books by Shareholders
. Upon written demand shareholders shall for any purpose, as provided by statute, be permitted to examine
and copy the share register; records of shareholder and Board proceedings; the articles of incorporation and amendments; the bylaws
and amendments; reports made to shareholders within the last three (3) years; voting trust agreements; a statement of names and
addresses of its Directors and principal officers; and financial statements prepared for distribution to the shareholders or to
a government agency as a matter of public record. Shareholders shall for any proper purpose and upon written demand be permitted
to examine and copy other corporate records.
ARTICLE
7. DIVIDENDS, DISTRIBUTIONS, ETC.
7.1)
Dividends
.
Subject to the provisions of the Articles of Incorporation, these bylaws, and, the applicable laws, the Board of Directors may
declare a distribution in the form of a dividend whenever, and in such amounts as, in its opinion, the condition and the affairs
of the corporation shall render it advisable.
7.2)
Other
Distributions, Reserves
. Subject to the provisions of the Articles of Incorporation and of these bylaws, the Board of Directors
in its discretion may purchase or acquire any of the shares of the capital stock of this corporation in accordance with law, or
any of its bonds, debentures, notes, scrip or other securities or evidences of indebtedness, or from time to time may set aside
from its net assets or net profits such sum or sums as it, in its absolute discretion, may think proper as a reserve fund to meet
contingencies, or for the purpose of maintaining or increasing the property or business of the corporation or for any other purpose
it may think conducive to the best interests of the corporation.
ARTICLE
8. FINANCIAL AND PROPERTY MANAGEMENT
8.1)
Fiscal
Year
. The fiscal year of the corporation shall be set by the Board of Directors.
8.2)
Audit
of Books and Accounts
. The books and accounts of the corporation shall be audited at such times as may be ordered by the Board
of Directors.
8.3)
Contracts
.
The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.
8.4)
Checks
.
All checks, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the
corporation shall be signed by the treasurer or such other officer or officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the Board of Directors.
8.5)
Deposits
.
All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such
banks, trust companies, or other depositories as the Board of Directors may select.
8.6)
Voting
Securities Held by Corporation
. The Chief Executive Officer or other agent designated by the Board of Directors, shall have
full power and authority on behalf of the corporation to attend, act and vote at any meeting of security holders of other corporations
in which this corporation may hold securities. At such meeting the Chief Executive Officer, or such other agent, shall possess
and exercise any and all rights and powers incident to the ownership of such securities which the corporation might possess and
exercise.
ARTICLE
9. WAIVER OF NOTICE
9.1)
Requirement
of Waiver in Writing
. Whenever any notice whatever is required to be given by these bylaws or the Articles of Incorporation
of the corporation or any of the corporate laws of the State of Nevada, a waiver thereof in writing, signed by the person or persons
entitled to said notice, either before, at, or after the time stated therein, shall be deemed equivalent thereto. Attendance by
a director at a meeting of the Board of Directors or attendance by a shareholder at a meeting of the shareholders shall constitute
a waiver of the notice of said meeting.
ARTICLE
10. AMENDMENTS
10.1)
Action
by Board of Directors
. The Board of Directors of the corporation is expressly authorized to make bylaws of the corporation
and from time to time to alter or repeal bylaws so made. In so acting, the Board of Directors may do so only upon vote of a majority
of the entire Board of Directors then in office and present at any meeting called for that purpose, provided that notice of such
proposed amendment shall have been given to the directors in the notice of such meeting. Such authority in the Board of Directors
is subject to the powers of the voting shareholders to enact, change or repeal such bylaws by majority vote of the shareholders
to enact, change or repeal such bylaws by majority vote of the shareholders present and represented at any annual meeting or at
any special meeting called for that purpose, and the Board of Directors shall not make or alter any bylaws fixing the number, qualifications
or term of office of members of the Board.
CERTIFICATION OF BYLAWS
The above Bylaws of the Corporation are
certified to have been adopted by the Board of Directors of the Corporation as of ______________, 2017.
_____________________________
Secretary
APPENDIX
D:
Description of Dissenters’ Rights
302A.471 Rights Of Dissenting Shareholders.
Subdivision 1.
Actions creating
rights.
A
shareholder of a corporation may dissent from, and obtain payment
for the fair value of the shareholder’s shares in the event of, any of the following corporate actions:
(a)
unless otherwise provided in the articles, an amendment of the articles that materially and adversely
affects the rights or preferences of the shares of the dissenting shareholder in that it:
(1) alters
or abolishes a preferential right of the shares;
(2) creates,
alters, or abolishes a right in respect of the redemption of the shares, including a provision respecting a sinking fund for the
redemption or repurchase of the shares;
(3)
alters or abolishes a preemptive right of the holder of the shares to acquire shares, securities other than shares, or rights to
purchase shares or securities other than shares;
(4)
excludes or limits the right of a shareholder to vote on a matter, or to cumulate votes, except as the right may be excluded or
limited through the authorization or issuance of securities of an existing or new class or series with similar or different voting
rights; except that an amendment to the articles of an issuing public corporation that provides that section 302A.671 does
not apply to a control share acquisition does not give rise to the right to obtain payment under this section; or
(5)
eliminates the right to obtain payment under this subdivision;
(b) a
sale, lease, transfer, or other disposition of property and assets of the corporation that
requires shareholder approval under section 302A.661, subdivision 2, but not including a disposition in dissolution described
in section 302A.725, subdivision 2, or a disposition pursuant to an order of a court, or a disposition for cash on terms requiring
that all or substantially all of the net proceeds of disposition be distributed to the shareholders in accordance with their respective
interests within one year after the date of disposition;
(c) a
plan of merger, whether under this chapter or under chapter 322B or 322C, to which the corporation is
a constituent organization, except as provided in subdivision 3, and except for a plan of merger adopted under section 302A.626;
(d) a
plan of exchange, whether under this chapter or under chapter 322B or 322C, to which the corporation is
a party as the corporation whose shares will be acquired by the acquiring organization, except
as provided in subdivision 3;
(e) a
plan of conversion is adopted by the corporation and becomes effective;
(f) an
amendment of the articles in connection with a combination of a class or series under section 302A.402 that reduces the number
of shares of the class or series owned by the shareholder to a fraction of a share if the corporation exercises
its right to repurchase the fractional share so created under section 302A.423; or
(g) any
other corporate action taken pursuant to a shareholder vote with respect to which the articles, the bylaws, or a resolution approved
by the board directs that dissenting shareholders may obtain payment for their shares.
Subd. 2.
Beneficial owners.
(a)
A shareholder shall not assert dissenters’ rights as to less than all of the shares registered
in the name of the shareholder, unless the shareholder dissents with respect to all the shares that are beneficially owned by another
person but registered in the name of the shareholder and discloses the name and address of each beneficial owner on whose behalf
the shareholder dissents. In that event, the rights of the dissenter shall be determined as if the shares as to which the shareholder
has dissented and the other shares were registered in the names of different shareholders.
(b)
A beneficial owner of shares who is not the shareholder may assert dissenters’ rights with respect
to shares held on behalf of the beneficial owner, and shall be treated as a dissenting shareholder under the terms of this section
and section 302A.473, if the beneficial owner submits to the corporation at
the time of or before the assertion of the rights a written consent of the shareholder.
Subd. 3.
Rights not to apply.
(a)
Unless the articles, the bylaws, or a resolution approved by the board otherwise provide, the right to obtain payment under this
section does not apply to a shareholder of (1) the surviving corporation in a merger with respect to shares of the shareholder
that are not entitled to be voted on the merger and are not canceled or exchanged in the merger or (2) the corporation whose shares
will be acquired by the acquiring organization in a plan of exchange with respect to shares of the shareholder that are not entitled
to be voted on the plan of exchange and are not exchanged in the plan of exchange.
(b)
If a date is fixed according to section 302A.445, subdivision 1, for the determination of shareholders entitled to receive
notice of and to vote on an action described in subdivision 1, only shareholders as of the date fixed, and beneficial owners as
of the date fixed who hold through shareholders, as provided in subdivision 2, may exercise dissenters’ rights.
(c)
Notwithstanding subdivision 1, the right to obtain payment under this section, other than in connection with a plan of merger
adopted under section 302A.621, is limited in accordance with the following provisions:
(1) The right
to obtain payment under this section is not available for the holders of shares of any class or series of shares that is listed
on the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market, or the NASDAQ Global Select Market.
(2) The applicability
of clause (1) is determined as of:
(i) the record
date fixed to determine the shareholders entitled to receive notice of, and to vote at, the meeting of shareholders to act upon
the corporate action described in subdivision 1; or
(ii) the day
before the effective date of corporate action described in subdivision 1 if there is no meeting of shareholders.
(3) Clause
(1) is not applicable, and the right to obtain payment under this section is available pursuant to subdivision 1, for the holders
of any class or series of shares who are required by the terms of the corporate action described in subdivision 1 to accept for
such shares anything other than shares, or cash in lieu of fractional shares, of any class or any series of shares of a domestic
or foreign corporation, or any other ownership interest of any other organization, that satisfies the standards set forth in clause
(1) at the time the corporate action becomes effective.
Subd. 4.
Other rights.
The
shareholders of a corporation who have a right under this section to obtain payment for their shares, or who would have the right
to obtain payment for their shares absent the exception set forth in paragraph (c) of subdivision 3, do not have a right at law
or in equity to have a corporate action described in subdivision 1 set aside or rescinded, except when the corporate action is
fraudulent with regard to the complaining shareholder or the corporation.
302A.473 Procedures For Asserting
Dissenters’ Rights.
Subdivision 1.
Definitions.
(a) For purposes of this section,
the terms defined in this subdivision have the meanings given them.
(b) “Corporation” means
the issuer of the shares held by a dissenter before the corporate action referred to in section 302A.471, subdivision 1 or
the successor by merger of that issuer.
(c) “Fair value of the shares”
means the value of the shares of a corporation immediately before the effective date of the corporate action referred to in section 302A.471,
subdivision 1.
(d) “Interest” means interest
commencing five days after the effective date of the corporate action referred to in section 302A.471, subdivision 1, up
to and including the date of payment, calculated at the rate provided in section 549.09, subdivision 1, paragraph (c), clause
(1).
Subd. 2.
Notice of action.
If a corporation calls a shareholder
meeting at which any action described in section 302A.471, subdivision 1 is to be voted upon, the notice of the meeting
shall inform each shareholder of the right to dissent and shall include a copy of section 302A.471 and this section
and a brief description of the procedure to be followed under these sections.
Subd. 3.
Notice of dissent.
If the proposed action must be approved
by the shareholders and the corporation holds a shareholder meeting, a shareholder who is entitled to dissent under section 302A.471 and
who wishes to exercise dissenters’ rights must file with the corporation before the vote on the proposed action a written
notice of intent to demand the fair value of the shares owned by the shareholder and must not vote the shares in favor of the
proposed action.
Subd. 4.
Notice of procedure; deposit
of shares.
(a) After the proposed action has
been approved by the board and, if necessary, the shareholders, the corporation shall send to (i) all shareholders who have complied
with subdivision 3, (ii) all shareholders who did not sign or consent to a written action that gave effect to the action creating
the right to obtain payment under section 302A.471, and (iii) all shareholders entitled to dissent if no shareholder vote
was required, a notice that contains:
(1) the address to which a demand
for payment and certificates of certificated shares must be sent in order to obtain payment and the date by which they must be
received;
(2) any restrictions on transfer
of uncertificated shares that will apply after the demand for payment is received;
(3) a form to be used to certify
the date on which the shareholder, or the beneficial owner on whose behalf the shareholder dissents, acquired the shares or an
interest in them and to demand payment; and
(4) a copy of section 302A.471 and
this section and a brief description of the procedures to be followed under these sections.
(b) In order to receive the fair value of the shares, a dissenting
shareholder must demand payment and deposit certificated shares or comply with any restrictions on transfer of uncertificated
shares within 30 days after the notice required by paragraph (a) was given, but the dissenter retains all other rights of a shareholder
until the proposed action takes effect.
Subd. 5.
Payment; return of shares.
(a) After the corporate action takes
effect, or after the corporation receives a valid demand for payment, whichever is later, the corporation shall remit to each
dissenting shareholder who has complied with subdivisions 3 and 4 the amount the corporation estimates to be the fair value of
the shares, plus interest, accompanied by:
(1) the corporation’s closing balance sheet
and statement of income for a fiscal year ending not more than 16 months before the effective date of the corporate action, together
with the latest available interim financial statements;
(2) an estimate by the corporation of the fair value
of the shares and a brief description of the method used to reach the estimate; and
(3) a copy of section 302A.471 and this
section, and a brief description of the procedure to be followed in demanding supplemental payment.
(b) The corporation may withhold the remittance described in
paragraph (a) from a person who was not a shareholder on the date the action dissented from was first announced to the public
or who is dissenting on behalf of a person who was not a beneficial owner on that date. If the dissenter has complied with subdivisions
3 and 4, the corporation shall forward to the dissenter the materials described in paragraph (a), a statement of the reason for
withholding the remittance, and an offer to pay to the dissenter the amount listed in the materials if the dissenter agrees to
accept that amount in full satisfaction. The dissenter may decline the offer and demand payment under subdivision 6. Failure to
do so entitles the dissenter only to the amount offered. If the dissenter makes demand, subdivisions 7 and 8 apply.
(c) If the corporation fails to remit payment within 60 days
of the deposit of certificates or the imposition of transfer restrictions on uncertificated shares, it shall return all deposited
certificates and cancel all transfer restrictions. However, the corporation may again give notice under subdivision 4 and require
deposit or restrict transfer at a later time.
Subd. 6.
Supplemental payment;
demand.
If a dissenter believes that the amount
remitted under subdivision 5 is less than the fair value of the shares plus interest, the dissenter may give written notice to
the corporation of the dissenter’s own estimate of the fair value of the shares, plus interest, within 30 days after the
corporation mails the remittance under subdivision 5, and demand payment of the difference. Otherwise, a dissenter is entitled
only to the amount remitted by the corporation.
Subd. 7.
Petition; determination.
If the corporation receives a demand
under subdivision 6, it shall, within 60 days after receiving the demand, either pay to the dissenter the amount demanded or agreed
to by the dissenter after discussion with the corporation or file in court a petition requesting that the court determine the
fair value of the shares, plus interest. The petition shall be filed in the county in which the registered office of the corporation
is located, except that a surviving foreign corporation that receives a demand relating to the shares of a constituent domestic
corporation shall file the petition in the county in this state in which the last registered office of the constituent corporation
was located. The petition shall name as parties all dissenters who have demanded payment under subdivision 6 and who have not
reached agreement with the corporation. The corporation shall, after filing the petition, serve all parties with a summons and
copy of the petition under the Rules of Civil Procedure. Nonresidents of this state may be served by registered or certified mail
or by publication as provided by law. Except as otherwise provided, the Rules of Civil Procedure apply to this proceeding. The
jurisdiction of the court is plenary and exclusive. The court may appoint appraisers, with powers and authorities the court deems
proper, to receive evidence on and recommend the amount of the fair value of the shares. The court shall determine whether the
shareholder or shareholders in question have fully complied with the requirements of this section, and shall determine the fair
value of the shares, taking into account any and all factors the court finds relevant, computed by any method or combination of
methods that the court, in its discretion, sees fit to use, whether or not used by the corporation or by a dissenter. The fair
value of the shares as determined by the court is binding on all shareholders, wherever located. A dissenter is entitled to judgment
in cash for the amount by which the fair value of the shares as determined by the court, plus interest, exceeds the amount, if
any, remitted under subdivision 5, but shall not be liable to the corporation for the amount, if any, by which the amount, if
any, remitted to the dissenter under subdivision 5 exceeds the fair value of the shares as determined by the court, plus interest.
Subd. 8.
Costs; fees; expenses.
(a) The court shall determine the
costs and expenses of a proceeding under subdivision 7, including the reasonable expenses and compensation of any appraisers appointed
by the court, and shall assess those costs and expenses against the corporation, except that the court may assess part or all
of those costs and expenses against a dissenter whose action in demanding payment under subdivision 6 is found to be arbitrary,
vexatious, or not in good faith.
(b) If the court finds that the corporation
has failed to comply substantially with this section, the court may assess all fees and expenses of any experts or attorneys as
the court deems equitable. These fees and expenses may also be assessed against a person who has acted arbitrarily, vexatiously,
or not in good faith in bringing the proceeding, and may be awarded to a party injured by those actions.
(c) The court may award, in its discretion,
fees and expenses to an attorney for the dissenters out of the amount awarded to the dissenters, if any.