Exhibit 28.2
CW No. 2
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE DISTRIBUTED FOR VALUE
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH
LAWS COVERING SUCH SECURITIES OR UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT,
PLEDGE OR DISTRIBUTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
EXERCISABLE ON OR BEFORE, AND VOID AFTER 5:00 P.M.
MINNEAPOLIS TIME, MARCH 1, 2009
WARRANT TO PURCHASE
5,000 SHARES OF COMMON STOCK
OF
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
THIS CERTIFIES THAT, in consideration of certain good
and valuable consideration, Marvin Goldstein, or permitted
assigns (the "Holder"), is entitled to subscribe for and
purchase from Appliance Recycling Centers of America, Inc., a
Minnesota corporation (the "Company"), at any time, or from
time to time, from September 1, 1999 and on or before 5:00
p.m. Minneapolis time, March 1, 2009, Five Thousand (5,000)
fully paid and nonassessable shares (the "Warrant Shares") of
the Company's common stock, no par value per share (the
"Common Stock"), at an exercise price per share of $0.625 (the
"Warrant Exercise Price"), subject to adjustment as
hereinafter indicated.
This Warrant is subject to the following provisions, terms, and
conditions:
1. Exercise and Transferability.
(a) Subject to subsection 1(c), the rights represented by this
Warrant may be exercised by the holder hereof, in whole or in
part (but not as to fewer than 100 shares of Common Stock),
by written notice of exercise delivered to the Company and by
the surrender of this Warrant (properly endorsed) at the
principal office of the Company and upon payment to it by
cash or certified or cashier's check of the Warrant Exercise
Price for the number of Warrant Shares being purchased.
(b) This Warrant may not be transferred, except by will, pursuant
to the operation of law, or in compliance with the provisions
of Section 10 hereof.
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(c) The shares of Common Stock to be issued upon exercise of the
Warrant may not be issued absent registration under the 1933
Act, and applicable state securities laws, or the availability
of an exemption from registration. There can be no assurance
that any such exemption will be available to the Company at
the time of exercise.
2. Additional Right to Convert Warrant.
(a) The Holder of this Warrant shall have the right to require
the Company to convert this Warrant (the "Conversion Right") at any
time after it is exercisable, but prior to its expiration, into shares
of Common Stock as provided for in this Section 2. Upon exercise of the
Conversion Right, the Company shall deliver to the Holder (without
payment by the Holder of any Warrant Exercise Price) shares of the
Company's Common Stock in a number equal to the quotient obtained by
dividing (x) the value of the Warrant at the time the Conversion Right
is exercised (determined by subtracting the aggregate Warrant Exercise
Price at the time the Conversion Right is exercised from the aggregate
Market Price (defined below) of the shares of Common Stock issuable
upon exercise of the Warrant on the day immediately prior to the
exercise of the Conversion Right by (y) the Market Price of one share
of Common Stock on the day immediately prior to the exercise of the
Conversion Right.
(b) The Conversion Right may be exercised by the Holder, at
any time or from time to time, prior to its expiration, on any business
day by specifying in the notice of exercise (i) the total number of
shares of Common Stock the Holder will purchase, and (ii) the number of
shares of Common Stock that are to be acquired pursuant to the
Conversion Right and not for cash.
(c) Upon receipt of the notice of exercise, the Company will
promptly deliver to the Holder a certificate or certificates for the
number of shares of Common Stock issuable upon such conversion,
together with cash in lieu of any fraction of a share, and the Company
will deliver to the Holder a new warrant representing the number of
shares, if any, with respect to which the Warrant shall not have been
exercised.
(d) Market Price of a share of Common Stock as of a particular
date (the "Determination Date") shall mean the last reported sale price
or, if none, the average of the last reported closing bid and asked
prices on any national securities exchange or quoted in the National
Association of Securities Dealers Automated Quotations Systems
(NASDAQ), or if not listed on a national securities exchange or quoted
in NASDAQ, the average of the last reported closing bid and asked
prices as reported by the National Quotations Bureau from quotations by
market makers in such Common Stock on the OTC Bulletin Board or the
local over-the-counter market or, if not listed on a national
securities exchange or quoted on NASDAQ or quoted on the OTC Bulletin
Board or by local market makers, the fair market value as determined in
good faith by the Company's Board of Directors.
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3. Issuance of the Warrant Shares. The Company agrees that the Warrant
Shares purchased hereby shall be and are deemed to be issued to the record
holder hereof as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for the Warrant Shares as
aforesaid. Subject to the provisions of the next succeeding Section,
certificates for the Warrant Shares so purchased shall be delivered to the
Holder hereof by the transfer agent within a reasonable time after the rights
represented by this Warrant shall have been so exercised, and, unless this
Warrant has expired, a new Warrant representing the right to purchase the number
of Warrant Shares, if any, with respect to which this Warrant shall not then
have been exercised shall also be delivered to the Holder hereof within such
time. Notwithstanding the foregoing, however, the Company shall not be required
to deliver any certificate for shares of Common Stock upon exercise of this
Warrant, except in accordance with the provisions, and subject to the
limitations, of Section 10 hereof, to the extent that such provisions and
limitations are applicable.
4. Covenants of the Company. The Company covenants and agrees that the
Warrant Shares issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be duly authorized and issued, fully paid,
nonassessable, and free from all taxes, liens, and charges with respect to the
issuance thereof, and without limiting the generality of the foregoing, the
Company covenants and agrees that it will from time to time take all such action
as may be required to assure that the par value per share of the Common Stock,
if any, is at all times equal to, or less than, the then effective Warrant
Exercise Price. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved for issuance upon
exercise of the rights evidenced by this Warrant a sufficient number of shares
of its Common Stock to provide for the exercise of such rights.
5. Antidilution Adjustments. The provisions in this Warrant relating to
the number of Warrant Shares and the Warrant Exercise Price are subject to
adjustment as hereinafter provided.
(a) If, at any time prior to exercise of this
Warrant, the Company shall declare a dividend or make any
other distribution upon the Common Stock of the Company
payable in shares of Common Stock or other securities, upon
exercise of this Warrant, the Holder shall be entitled to
receive, for each share of Common Stock purchased pursuant to
such Warrant (and in addition to such shares purchased), the
number of shares of Common Stock or other securities, as the
case may be, issued per share of Common Stock in payment of
such dividend or distribution.
(b) In case at any time the Company shall subdivide
its outstanding shares of Common Stock into a greater number
of shares, the Warrant Exercise Price in effect immediately
prior to such subdivision shall be proportionately reduced and
the number of Warrant Shares purchasable pursuant to this
Warrant immediately prior to such subdivision shall be
proportionately increased, and conversely, in case at any time
the Company shall combine its outstanding shares of Common
Stock into a smaller number of shares, the Warrant Exercise
Price in effect immediately prior to such combination shall be
proportionately increased and the number of Warrant Shares
purchasable upon the exercise of this Warrant
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immediately prior to such combination shall be proportionately
reduced. Except as provided in this Subsection 5(b), no
adjustment in the Warrant Shares so purchasable shall be made
pursuant to this Section 5 as a result of, or by reason of,
any such subdivision or combination.
(c) Except as hereinafter provided, no adjustment of
the Warrant Exercise Price hereunder shall be made if such
adjustment results in a change in the Warrant Exercise Price
then in effect of less than five cents ($.05). Any adjustment
of less than five cents ($.05) of any Warrant Exercise Price
shall be carried forward and shall be made at the time of and
together with any subsequent adjustment which, together with
any adjustment or adjustments so carried forward, amounts to
five cents ($.05) or more. However, upon the exercise of this
Warrant, the Company shall make all necessary adjustments (to
the nearest cent) not theretofore made to the Warrant Exercise
Price up to and including any date upon which this Warrant is
exercised.
(d) Upon the occurrence of each adjustment of the
Warrant Exercise Price pursuant to this Section 5, the Company
shall promptly compute such adjustment in accordance with the
terms hereof and furnish to the registered holder a notice (at
the address of the holder or the transfer books of the
Company) setting forth such adjustment and showing in detail
the facts upon which such adjustment is based. The Company
shall, upon the written request at any time of the registered
holder, furnish or cause to be furnished to the registered
holder a certificate setting forth (a) all such adjustments
theretofore made, and (b) the Warrant Exercise Price at the
time in effect.
6. Consolidation, Merger, or Sale of Assets. In the case of any
consolidation or merger of the Company with another corporation, the sale of all
or substantially all of its assets to another person, or any reorganization or
reclassification of the capital stock of the Company (except a stock split or
combination, provision for which is made in Section 5 hereof), as a condition of
such consolidation, merger, sale, reorganization, or reclassification, lawful
and adequate provision shall be made whereby the Holder hereof shall thereafter
have the right to purchase upon the basis and upon the terms and conditions
specified herein and in lieu of the Warrant Shares immediately theretofore
purchasable hereunder, such shares of stock, securities, or assets as may (by
virtue of such consolidation, merger, sale, reorganization, or reclassification)
be issued or payable with respect to, or in exchange for, a number of
outstanding shares of the Company's Common Stock equal to the number of Warrant
Shares immediately theretofore so purchasable hereunder had such consolidation,
merger, sale, reorganization, or reclassification not taken place, and in any
such case appropriate provisions shall be made with respect to the rights and
interest of the holder to the end that the provisions hereof (including, without
limitation, provisions for adjustments of the Warrant Exercise Price) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities, or assets thereafter deliverable upon the exercise of this
Warrant. The Company shall not effect any such consolidation, merger, or sale
unless, prior to, or simultaneously with, the consummation thereof, any
successor person or persons purchasing such assets or succeeding or resulting
from such consolidation, merger, reorganization, or reclassification shall
assume by written instrument, executed and mailed or delivered to the Holder,
the obligation to deliver to
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such Holder such shares of stock, securities, or assets as, in accordance with
the foregoing provisions, the Holder may be entitled to receive.
7. Fractional Shares. Fractional shares shall not be issued upon the
exercise of this Warrant, but in any case where the holder would, except for the
provisions of this Section, be entitled under the terms hereof to receive a
fractional share, the Company shall, upon the exercise of this Warrant for the
largest number of whole shares then called for, pay a sum in cash equal to the
sum of (a) the Market Price (as defined in Section 2 hereof) of such fractional
share, less (b) the proportional part of the Warrant Exercise Price represented
by such fractional share.
8. Common Stock. As used herein, the term "Common Stock" shall mean and
include the Company's currently authorized shares of Common Stock and shall also
include any capital stock of any class of the Company hereafter authorized which
shall not be limited to a fixed sum or percentage in respect of the rights of
the holders thereof to participate in dividends or in the distribution of assets
upon the voluntary or involuntary liquidation, dissolution, or winding-up of the
Company into which such shares shall be converted.
9. No Voting Rights. This Warrant shall not entitle the Holder hereof
to any voting rights or other rights as a shareholder of the Company.
10. Restrictions on Transfer of the Warrant and the Warrant Shares.
(a) The Holder of this Warrant, by
acceptance hereof, agrees to give written notice to
the Company before transferring this Warrant or any
Warrant Shares of the Holder's intention to do so,
describing briefly the manner of any proposed
transfer. Upon receiving such written notice, the
Company shall present copies thereof to the Company's
counsel, and if in the reasonable opinion of such
counsel the proposed transfer does not comply with
federal and state securities laws and may not be
effected without registration or qualification (under
any federal or state law), the Company shall notify
the Holder of such opinion.
If, in the opinion of Company's counsel referred to in this
Section 10, the proposed transfer of the Warrant or any Warrant Shares
described in the written notice given pursuant to this Section 10 may
not be effected without registration or qualification under federal or
state securities laws, the Company shall give notice thereof to the
Holder hereof, and the Holder will limit his activities in respect to
such as, in the opinion of such counsel, are permitted by law.
(b) The following legend respecting
restrictions upon the transfer of the Warrant Shares
shall be endorsed on all certificates for the Warrant
Shares:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"), NOR ANY APPLICABLE
STATE SECURITIES LAWS. THEY HAVE BEEN ACQUIRED
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FOR INVESTMENT AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF
WITHIN THE MEANING OF THE 1933 ACT AND THE RULES AND
REGULATIONS THEREUNDER. THE HOLDER OF SUCH SECURITIES HAS
AGREED NOT TO EFFECT A DISPOSITION OF SUCH SECURITIES UNLESS
OR UNTIL: (1) A REGISTRATION STATEMENT UNDER THE 1933 ACT
COVERING SUCH SECURITIES HAS BECOME EFFECTIVE UNDER THE 1933
ACT, (2) THE COMPANY HAS RECEIVED EVIDENCE SATISFACTORY TO IT
THAT THE SALE OF SUCH SECURITIES WILL BE MADE IN COMPLIANCE
WITH RULE 144 AND THE APPLICABLE STATE SECURITIES LAWS, OR (3)
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT REGISTRATION UNDER THE 1933 ACT AND
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
In addition, the Company's transfer agent shall place
a stop order on the Company's transfer books with regard to
the Warrant and the Warrant Shares, as provided in this
Section 10.
11. Replacement of Warrant. The Company agrees with the Holder hereof
that, upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and, in the case of any
such loss, theft or destruction, upon receipt of any unsecured indemnity
agreement from the Holder reasonably satisfactory to the Company, or in the case
of any such mutilation, upon surrender and cancellation of such mutilated
Warrant, the Company will make and deliver a new Warrant of like tenure, in lieu
of the lost, stolen, destroyed or mutilated Warrant.
12. Termination of Warrant. If the initial Holder, Marvin Goldstein,
ceases to be a director of the Company or one of its subsidiaries or affiliates
for any reason prior to September 1, 1999, the date on which this Warrant
becomes exercisable, this Warrant shall terminate and expire as of the date such
directorship ceases.
IN WITNESS WHEREOF, Appliance Recycling Centers of America, Inc. has
caused this Warrant to be signed by its duly authorized officer and this Warrant
to be dated as of March 5, 1999.
APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
By/s/ Edward R. Cameron
--------------------------------------------
Edward R. Cameron
Chief Executive Officer
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EXERCISE FORM
(To be signed by registered holder to exercise Warrants)
The undersigned elects to exercise the attached Warrant [SELECT ONE]:
________ for cash
________ pursuant to the cashless Conversion Right contained in Section 2.
The undersigned hereby irrevocably elects to exercise the rights
represented by the attached Warrant to purchase _____________________________ of
the shares of Common Stock of APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
issuable upon the exercise of the Warrants represented thereby, and requests
that certificates for such shares (together with a new Warrant representing the
number of Warrants, if any, that are not exercised) shall be issued in the name
of:
Name (please print):
_________________________________________________________
Address:
_________________________________________________________
_________________________________________________________
Social security or
other identifying number:
_____________________________________
Dated: _________________, _____
_________________________________________________________
Signature*
* The signature on the Exercise Form must correspond to the name as
written upon the face of the Warrant in every particular without
alteration or enlargement or any change whatsoever. When signing on
behalf of a corporation, partnership, trust or other entity, PLEASE
indicate your position(s) and title(s) with such entity.
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ASSIGNMENT FORM
(To be signed only upon authorized transfer of Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
________________________________________________ the right to purchase the
securities of APPLIANCE RECYCLING CENTERS OF AMERICA, INC. to which the within
Warrant relates and appoints ________________________________, attorney-in-fact,
to transfer said right on the books of APPLIANCE RECYCLING CENTERS OF AMERICA,
INC. with full power of substitution in the premises.
Dated:_________________, ______
________________________________________
Signature
Address:
________________________________________
________________________________________
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