AGREEMENT AND PLAN OF MERGER AND REORGANIZATION AMONG URON INC., WFL ACQUISITION CORP. and WYOMING FINANCIAL LENDERS, INC.
Exhibit
2.1
AGREEMENT
AND PLAN OF MERGER AND REORGANIZATION
AMONG
URON
INC.,
WFL
ACQUISITION CORP.
and
WYOMING
FINANCIAL LENDERS, INC.
AGREEMENT
AND PLAN OF MERGER AND REORGANIZATION
This
Agreement and Plan of Merger and Reorganization (hereinafter the “Agreement”)
is
entered into effective as of this 13th day of December, 2007, by and among
URON
Inc., a Minnesota corporation (hereinafter “URON”);
WFL
Acquisition Corp., a newly formed Wyoming corporation and wholly owned
subsidiary of URON (hereinafter “Merger
Sub”);
and
Wyoming Financial Lenders, Inc., a Wyoming corporation (hereinafter
“WFL”).
RECITALS
URON
and
WFL have entered into a Letter of Intent (the “LOI”)
which,
subject to certain conditions, contemplates URON’s acquisition of WFL (the
“Merger”)
in a
reverse triangular merger transaction. This Agreement relates to the Merger.
A
condition to closing of the Merger is the completion of an “Equity
Financing” by
URON
in which URON will raise gross proceeds of at least $4,000,000 in a private
placement exempt from registration under the Securities Act of
1933.
URON
will
effect a one-for-ten reverse stock split (the “Reverse
Stock Split”)
prior
to the closing of the Merger, the effect of which will be to reduce the number
of outstanding shares of URON common stock to an aggregate of approximately
750,000.
The
boards of directors of each of URON, Merger Sub and WFL deem it advisable and
in
the best interests of such corporations and their respective stockholders that
Merger Sub merge with and into WFL pursuant to this Agreement and the Articles
of Merger (in the form attached hereto as Exhibit
A)
and
pursuant to applicable provisions of law of the State of Wyoming.
The
boards of directors of Merger Sub and WFL have determined to recommend,
respectively, that the sole stockholder of Merger Sub and the sole stockholder
of WFL adopt and approve this Agreement and approve the Merger and the
transactions contemplated by this Agreement.
NOW
THEREFORE,
for the
mutual consideration set out herein, and other good and valuable consideration,
the sufficiency of which is hereby acknowledged, the parties agree as
follows:
AGREEMENT
1. Plan
of Reorganization.
The
parties to this Agreement do hereby agree that Merger Sub shall be merged with
and into WFL upon the terms and conditions set forth herein and in accordance
with the provisions of the Wyoming Business Corporations Act (“WBCA”).
It is
the intention of the parties hereto that this transaction qualify as a tax-free
reorganization under Section 368(a)(2)(E) of the Internal Revenue Code of 1986,
as amended, and related sections thereunder.
2. Terms
of Merger and Other Agreements.
In
accordance with the provisions of this Agreement and the requirements of
applicable law, Merger Sub shall be merged with and into WFL as of the Effective
Time (the terms “Closing”
and
“Effective
Time”
are
defined in Section 7 hereof). WFL shall be the surviving corporation
(hereinafter the “Surviving
Corporation”)
and
the separate existence of Merger Sub shall cease at the Effective Time.
Consummation of the Merger shall be upon the following terms and subject to
the
conditions set forth herein:
(a) Corporate
Existence.
(i) Commencing
with the Effective Time, the Surviving Corporation shall continue its corporate
existence as a Wyoming corporation and (A) it shall thereupon and thereafter
possess all rights, privileges, powers, franchises and property (real, personal
and mixed) of each of Merger Sub and WFL (collectively, the “Constituent
Corporations”);
(B) all debts due to either of the Constituent Corporations, on whatever
account, all causes in action and all other things belonging to either of the
Constituent Corporations shall be taken and deemed to be transferred to and
shall be vested in the Surviving Corporation by virtue of the Merger without
further act or deed; and (C) all rights of creditors and all liens, if any,
upon
any property of any of the Constituent Corporations shall be preserved
unimpaired, limited in lien to the property affected by such liens immediately
prior to the Effective Time, and all debts, liabilities and duties of the
Constituent Corporations shall thenceforth attach to the Surviving
Corporation.
(ii) At
the
Effective Time, (A) the Articles of Incorporation of WFL, as amended, shall
be
the Articles of Incorporation of the Surviving Corporation, and the By-laws
of
WFL, as existing immediately prior to the Effective Time, shall be and remain
the By-laws of the Surviving Corporation; (B) the members of the board of
directors of WFL holding office immediately prior to the Effective Time shall
remain as the members of the board of directors of the Surviving Corporation
(if
on or after the Effective Time a vacancy exists on the board of directors of
the
Surviving Corporation, such vacancy may thereafter be filled in a manner
provided by applicable law and the By-laws of the Surviving Corporation); and
(C) until the board of directors of the Surviving Corporation shall otherwise
determine, all persons who hold offices of WFL at the Effective Time shall
continue to hold the same offices of the Surviving Corporation.
(b) Conversion
of Securities.
As
of the
Effective Time and without any action on the part of URON, Merger Sub, WFL
or
the holders of any of the securities of any such entities, each of the following
shall occur:
(i) Shares
of
WFL Common Stock (as defined hereinafter) issued and outstanding immediately
prior to the Effective Time shall be converted into fully paid and nonassessable
shares of URON Common Stock and URON Preferred Stock (as defined hereafter)
such
that URON shall issue to the holders of WFL Common Stock an aggregate number
of
shares of URON Common Stock and URON Preferred Stock satisfying the Conversion
Ratio; with each holder of WFL Common Stock receiving a number of such shares
in
proportion to the number of shares of WFL Common Stock held by such holder
immediately prior to the Effective Time. At the Effective Time, all such shares
of WFL Common Stock shall no longer be outstanding and shall automatically
be
canceled and shall cease to exist, and each certificate previously evidencing
any such shares shall thereafter represent the right to receive, upon the
surrender of such certificate in accordance with the provisions of
Section 4 hereof, certificates evidencing such number of shares of URON
Common Stock and URON Preferred Stock, respectively, into which such shares
of
WFL Common Stock were converted. The holders of such certificates previously
evidencing shares of WFL Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares of
WFL
Common Stock. The shares of URON Common Stock issued to the holders of WFL
Common Stock shall be restricted securities as that term is defined in Rule
144
promulgated under the Securities Act of 1933, as amended (the “Securities
Act”)
and
the certificates evidencing such shares shall bear standard restrictive
legends;
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(ii) Any
shares of capital stock of WFL held in the treasury of WFL immediately prior
to
the Effective Time shall automatically be canceled and extinguished without
any
conversion thereof and no payment shall be made or other consideration given
with respect thereto; and
(iii) Each
share of capital stock of Merger Sub issued and outstanding immediately prior
to
the Effective Time shall remain in existence as a share of common stock of
the
Surviving Corporation, which shall be owned by URON.
Notwithstanding
anything in this Agreement to the contrary, any shares of WFL capital stock
issued and outstanding immediately prior to the Effective Time and held by
a
holder (a “Dissenting
Stockholder”)
who
has not voted in favor of the Merger or consented thereto in writing and who
has
properly demanded appraisal for such shares in accordance with the WBCA
(“Dissenting
Shares”)
shall
not be converted into a right to receive URON Common Stock or URON Preferred
Stock at the Effective Time, but shall represent and become the right to receive
such consideration as may be determined to be due to such Dissenting Stockholder
pursuant to the laws of the State of Wyoming, unless and until such holder
fails
to perfect or withdraws or otherwise loses such holder’s right to appraisal and
payment under the WBCA. At the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof, all Dissenting Shares
shall be cancelled and shall cease to exist. If, after the Effective Time,
such
Dissenting Stockholder fails to perfect or withdraws or otherwise loses such
holder’s right to appraisal, such former Dissenting Shares held by such holder
shall be treated as if they had been converted as of the Effective Time into
a
right to receive, upon surrender as provided above, URON Common Stock and URON
Preferred Stock without any interest thereon. WFL shall give Merger Sub, or
after the Effective Time, the Surviving Corporation, prompt notice of any
demands received for appraisal of shares of WFL capital stock, any withdrawals
of any such demands and any other instruments served pursuant to the WBCA and
received by WFL.
(c) Post
Closing Management of URON.
At
the
Closing, the officers and directors of URON shall resign and the board of
directors shall appoint those persons set forth on Schedule A attached hereto,
as the officers and directors of URON.
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(d) Conversion
Ratio.
For
purposes of this Agreement, the term “Conversion Ratio” shall mean that number
of shares of URON Common Stock which shall be necessary to provide the
shareholders of WFL, as a group, with 1,125,000 shares of URON Common Stock,
approximately fifteen percent (15%) of the total shares of URON Common Stock
issued and outstanding and with 10,000,000 shares of URON Preferred Stock or
approximately one hundred percent (100%) of URON Preferred Stock immediately
following the Closing in accordance with Schedule B attached hereto, calculated
(i) after the Reverse Stock Split, (ii) in a manner that assumes the
simultaneous or prior closing of the Equity Financing, and (iii) giving effect
to the exercise of certain outstanding URON options and warrants listed on
Schedule B.
(e) Reverse
Stock Split; Authorization of Class of Preferred Stock.
Prior to
Closing, URON
shall effect a one-for-ten reverse stock split of the issued and outstanding
shares of URON Common Stock, and the authorized number of shares URON Common
Stock, in such ratio as to reduce the number of shares of URON Common Stock
outstanding immediately prior to Closing to approximately 750,000. Any URON
options and warrants not exercised prior to Closing shall remain unaffected
by
the Merger. Prior to Closing, URON shall also authorize a series of preferred
stock, entitled “Series A Convertible Preferred Stock,” consisting of 10,000,000
shares which shall be initially convertible into URON Common Stock on the basis
of one share of Series A Convertible Preferred Stock for one share of URON
Common Stock. The form of Certificate of Designations creating and authorizing
the issuance of the Series A Convertible Preferred Stock is attached hereto
as
Exhibit
B.
(f) Equity
Financing.
A
condition to the Closing is URON’s completion of the Equity Financing (as
defined in the Recitals of this Agreement) in
which
URON will raise gross proceeds of at least $4,000,000 in a private placement
exempt from registration under the Securities Act of 1933, and in consideration
therefor issue at least 3,375,000 shares of URON Common Stock (post Reverse
Stock Split).
(g) Additional
Definitions.
For
purposes of this Agreement and the Exhibits and Schedules attached hereto,
the
following terms shall have the meanings specified or referred to below, unless
the context otherwise requires:
“Affiliate”
means
with respect to a specified Person, any other Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by,
or
is under common control with, the specified Person; it being understood and
agreed that, for purposes of this definition, the term “control” means the
possession, direct or indirect, of the power to direct or cause the direction
of
the management and policies of such Person, whether through the ownership of
voting securities or other ownership interest, by contract or
otherwise.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Consent”
means
any approval, consent, ratification, waiver, or other authorization, release
or
similar action that is necessary (including any Governmental
Authorization).
4
“Liability”
means
any liability or obligation (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, whether incurred or consequential and
whether due or to become due), including any liability for Taxes.
“Material
Adverse Effect”
means
with respect to any Person, any event or events or any change in or effect
on
such Person’s financial condition, business, prospects, operations, customers,
suppliers, employee relationships, assets, properties, or results of operations
that, when taken as a whole, (i) is greater than $50,000, (ii) has
materially interfered or is reasonably likely to materially interfere with
the
ongoing operations of such Person’s business or (iii) singly or in the
aggregate has resulted in, or is reasonably likely to have, a material adverse
effect on the ongoing conduct of the business of such Person; provided, however,
that any adverse effect arising out of or resulting from (x) an event or series
of events or circumstances affecting the United States economy generally or
the
economy generally of any other country in which the Person operate, or (y)
the
entering into of this Agreement and the consummation of the transactions
contemplated thereby, shall be excluded in determining whether a Material
Adverse Effect has occurred.
3. Indemnification
Agreement.
On the
Effective Date, one or more principal stockholders of URON shall execute and
deliver an indemnification agreement in negotiated form, pursuant to which
such
principal stockholders will indemnify URON and the Surviving Corporation for
pre-Closing breaches of representations and warranties hereunder by URON and
Merger Sub.
4. Delivery
of Shares.
Promptly after the Effective Time, URON shall deliver to each record holder
of
certificates formerly representing all of such holder’s shares of WFL’s Common
Stock (the “Old
Certificates”),
at
the address set forth on books of WFL, (i) a notice of the effectiveness of
the
WFL Merger and (ii) a Letter of Transmittal in a form reasonably acceptable
to
WFL. Upon surrender of an Old Certificate, together with a Letter of Transmittal
duly executed and completed in accordance with the instructions thereto, the
holder of such Old Certificate (other than Old Certificates representing
Dissenting Shares) shall be entitled to receive, in exchange therefor,
certificates representing the shares of URON Common Stock and URON Preferred
Stock into which such holder’s shares of WFL Common Stock were converted
pursuant to the Merger (the “New
Certificates”),
that
such holder is entitled to receive, which shall be delivered by URON in
accordance with the instructions provided by such holder in the Letter of
Transmittal executed by such holder. Until surrendered and exchanged as herein
provided, each outstanding certificate which, prior to the Effective Time,
represented WFL Common Stock shall be deemed for all corporate purposes to
evidence ownership of the same number of shares of URON Common Stock and URON
Preferred Stock into which the shares of WFL Common Stock represented by such
certificate shall have been so converted.
5
No
dividends or other distributions declared or made with respect to URON Common
Stock or URON Preferred Stock after the Effective Time will be paid to the
holder of any certificate that prior to the Effective Time evidenced shares
of
WFL Common Stock until the holder of such certificate surrenders or exchanges
such certificate as herein provided. Subject to the effect of any applicable
abandoned property, escheat or similar laws, following surrender of any such
certificate, there will be paid to the holder of the certificates evidencing
shares of URON Common Stock and URON Preferred Stock issued in exchange
therefor, without interest, (i) the amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with respect to
such shares of URON Common Stock and URON Preferred Stock and (ii) at the
appropriate payment date, the amount of dividends or other distributions, with
a
record date after the Effective Time but prior to the surrender and a payment
date occurring after surrender, payable with respect to such shares of URON
Common Stock and URON Preferred Stock less any withholding taxes which are
required thereon. No party hereto will be liable to any former holder of WFL
Common Stock for any URON Common Stock or URON Preferred Stock or dividends
or
distributions thereon in each case delivered to a public official pursuant
to
any applicable abandoned property, escheat or similar law. In the event any
certificate representing WFL Common Stock shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the holder of WFL
Common Stock claiming such certificate to be lost, stolen or destroyed and
an
agreement by such holder to indemnify and hold harmless URON and the Surviving
Corporation against any claim that may be made against them with respect to
such
certificate, URON will issue in exchange for such lost, stolen or destroyed
certificate URON Common Stock and URON Preferred Stock to which such holder
is
entitled pursuant to this Agreement.
5. Representations
of WFL.
WFL
represents and warrants as follows, which warranties and representations shall
also be true as of the Closing except as set forth in the disclosure schedule
attached to this Agreement (hereinafter the “WFL
Disclosure Schedule”).
The
WFL Disclosure Schedule is arranged in paragraphs corresponding to the numbered
paragraphs contained in this Article 5:
(a) WFL
has
the corporate power to enter into this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement and the consummation
of
the transactions contemplated hereby have been duly authorized by the board
of
directors of WFL. This Agreement has been duly executed and delivered by WFL
and
constitutes a legal, valid and binding obligation of WFL, enforceable against
WFL in accordance with its terms, except as enforcement may be limited by
applicable bankruptcy, insolvency or other laws affecting creditor’s rights
generally or by legal principles of general applicability governing the
availability of equitable remedies. Notwithstanding anything else contained
herein to the contrary, WFL cannot consummate the Merger unless and until it
receives the affirmative votes of the holders of a majority of the shares of
WFL
Common Stock in favor of this Agreement and the Merger.
(b)
Attached
hereto as Schedule 5(b) of the WFL Disclosure Schedule are the following
financial statements of WFL (collectively the “WFL
Financial
Statements”):
(i)
audited consolidated balance sheets and statements of income, changes in
stockholders’ equity, and cash flow as of and for the fiscal years ended
September 30, 2006 and September 30, 2007 (the “Most
Recent Fiscal Year End”);
and
(ii) any interim unaudited consolidated balance sheets and statements of income,
changes in stockholders’ equity, and cash flow (the “Most
Recent Financial Statements”)
required by Securities and Exchange Commission Regulation S-X. The WFL Financial
Statements (including the notes thereto) have been prepared in accordance with
GAAP throughout the periods covered thereby and present fairly the financial
condition of WFL as of such dates and the results of operations of WFL for
such
periods; provided,
however,
that the
Most Recent Financial Statements are subject to normal year-end adjustments
(which will not be material individually or in the aggregate), lack footnotes
and other presentation items, and the other exceptions from GAAP noted in
Section 5(b) of the Disclosure Schedule.
6
(c) Since
September 30, 2007, there has not been any material adverse change in the
condition of WFL (financial or otherwise).
(d) WFL
is
not a party to, or the subject of, any pending litigation, claims, or
governmental investigation or proceeding not reflected in WFL Financial
Statements, and to the actual knowledge of its executive officers and directors
(herein “Knowledge”),
there
are no lawsuits, claims, assessments, investigations, or similar matters,
threatened or contemplated against or affecting WFL or the management or
properties of WFL.
(e) WFL
has
been duly organized and is validly existing and in good standing under the
laws
of the State of Wyoming, and has the corporate power to own, lease and operate
its property and to carry on its business as now being conducted and is duly
qualified to do business and in good standing to do business in any jurisdiction
where so required except where the failure to so qualify would have no material
adverse effect on WFL.
(f) WFL
has
filed all material federal, state, county and local income, excise, property
and
other tax, governmental and/or other returns, forms, filings, or reports, which
are due or required to be filed by it prior to the date hereof and have paid
or
made adequate provision in WFL Financial Statements for the payment of all
taxes, fees, or assessments which have or may become due pursuant to such
returns, filings or reports or pursuant to any assessments received. WFL is
not
delinquent or obligated for any tax, penalty, interest, delinquency or charge
and there are no tax liens or encumbrances applicable to it.
(g) As
of the
date of this Agreement, WFL’s authorized capital stock consists of 50,000 shares
of common stock, no par value (the “WFL
Common Stock”),
of
which 1,000 shares of WFL Common Stock are issued and outstanding. All
outstanding shares of common stock of WFL are, and shall be at Closing, validly
issued, fully paid and nonassessable. There are no existing options, convertible
or exchangeable securities, calls, claims, warrants, preemptive rights,
registration rights or commitments of any character relating to the issued
or
unissued common stock or other securities of WFL. There are no voting trusts,
proxies or other agreements, commitments or understandings of any character
to
which WFL is a party or by which WFL is bound with respect to the voting of
any
common stock of WFL. There are no outstanding stock-appreciation, phantom-stock
or similar rights with respect to any common stock of WFL. There are no
outstanding obligations to repurchase, redeem or otherwise acquire any shares
of
common stock of WFL.
(h) WFL
is
the owner of, or has a valid leasehold interest in, the properties and assets
used by it located on its premises, or shown on the Most Recent Balance Sheet
or
acquired after the date thereof, free and clear of all Encumbrances other than
Permitted Encumbrances, except for properties and assets disposed of in the
Ordinary Course of Business since the date of the Most Recent Balance Sheet.
For
purposes of this Agreement, the term “Ordinary
Course of Business”
means
the ordinary course of business consistent with past custom and practice
(including with respect to quantity and frequency).
7
(i)
WFL has
no material liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due, including any liability
for
taxes), except for (i) liabilities set forth in the WFL Financial Statements,
(ii) liabilities set forth in Section 5(i) of the WFL Disclosure Schedule,
and
(iii) of liabilities that have arisen after the Most Recent Fiscal Month End
in
the Ordinary Course of Business and Liabilities incurred in connection with
the
transactions contemplated by this Agreement.
(j) Intentionally
omitted.
(k) WFL
owns
no real property. Section 5(k) of the WFL Disclosure Schedule sets forth the
address of each parcel of real property leased by WFL (“Leased
Real Property”),
and a
true and complete list of all leases (“Leases”)
for
each such Leased Real Property (including the date and name of the parties
to
such Lease). WFL has delivered to URON a true and complete copy of each such
Lease, and in the case of any oral Lease, a written summary of the material
terms of such Lease. Except as set forth in Section 5(k) of the WFL Disclosure
Schedule, with respect to each of the Leases:
(i) to
the
Knowledge of WFL, such Lease is legal, valid, binding, enforceable and in full
force and effect;
(ii) the
transactions contemplated by this Agreement do not require the consent of any
other party to such Lease (except for those Leases for which lease consents
are
obtained or shall be obtained promptly after the closing), will not result
in a
breach of or default under such Lease, and will not otherwise cause such Lease
to cease to be legal, valid, binding, enforceable and in full force and effect
on substantially the same terms following the Closing;
(iii) WFL’s
possession and quiet enjoyment of the Leased Real Property under such Lease
has
not been disturbed and, to the Knowledge of WFL, there are no disputes with
respect to such Lease;
(iv) to
the
Knowledge of WFL, neither WFL nor any other party to the Lease is in breach
of
or default under such Lease;
(v) no
security deposit or portion thereof deposited with respect to such Lease has
been applied in respect of a breach of or default under such Lease that has
not
been redeposited in full;
(vi) the
other
party to such Lease is not an affiliate of, and otherwise does not have any
economic interest in, WFL;
(vii) WFL
has
not subleased, licensed or otherwise granted any person the right to use or
occupy the Leased Real Property or any portion thereof; and
8
(l)
Section
5(l) of the WFL Disclosure Schedule lists the following contracts and other
agreements presently in effect to which WFL is a party:
(i) any
agreement (or group of related agreements) for the lease of personal property
to
or from any person or entity (“Person”)
providing for lease payments in excess of Fifty Thousand Dollars ($50,000)
per
annum:
(ii) any
agreement (or group of related agreements) for the purchase or sale of raw
materials, commodities, supplies, products, or other personal property, or
for
the furnishing or receipt of services, the performance of which will extend
over
a period of more than one (1) year or involve consideration in excess of Fifty
Thousand Dollars ($50,000);
(iii) any
agreement concerning a partnership or joint venture;
(iv) any
agreement (or group of related agreements) under which it has created, incurred,
assumed, or guarantied any indebtedness for borrowed money, or any capitalized
lease obligation, in excess of Fifty Thousand Dollars ($50,000) or under which
it has imposed an encumbrance on any of its assets, tangible or
intangible;
(v) any
material agreement concerning confidentiality or non-competition;
(vi) any
profit sharing, stock option, stock purchase, stock appreciation, deferred
compensation, severance, or other material plan or arrangement for the benefit
of its current or former directors, officers, and employees;
(vii) any
collective bargaining agreement;
(viii) any
agreement for the employment of any individual on a full-time, part-time,
consulting, or other basis providing annual compensation or severance benefits
in excess of Fifty Thousand Dollars ($50,000);
(ix) any
agreement under which it has advanced or loaned any amount to any of its
directors, officers, and employees outside the Ordinary Course of
Business;
(x) any
agreement under which WFL has advanced or loaned any other Person amounts in
the
aggregate exceeding Fifty Thousand Dollars ($50,000); or
(xi) any
other
agreement (or group of related agreements) the performance of which involves
consideration in excess of Fifty Thousand Dollars ($50,000).
WFL
has
delivered to Uron a correct and complete copy of each written agreement (as
amended to date) listed in Section 5(l) of the WFL Disclosure Schedule and
a
written summary setting forth the material terms and conditions of each oral
agreement referred to in such Schedule. With respect to each such agreement:
(A)
the agreement is legal, valid, binding, enforceable, and in full force and
effect in all material respects; (B) to the Knowledge of WFL, no party is in
material breach or default, and no event has occurred that with notice or lapse
of time would constitute a material breach or default, or permit termination,
modification, or acceleration, under the agreement; and (C) to the Knowledge
of
WFL, no party has repudiated any material provision of the agreement.
9
(m)
Section
5(m) of the WFL Disclosure Schedule contains a list of each note and accounts
receivable of WFL in an amount in excess of Ten Thousand Dollars ($10,000).
All
such notes and accounts receivable were generated by WFL in the Ordinary Course
of Business and are
valid
receivables subject to no setoffs or counterclaims, are current and collectible.
WFL has no Knowledge of any fact or circumstance that would cause it to believe
that the collection percentage with respect to the notes and receivables will
substantially vary from the average collection experience of WFL over the prior
three (3) years.
(n) Section
5(n) of the WFL Disclosure Schedule sets forth the following information with
respect to each material insurance policy (including policies providing
property, casualty, liability, and workers’ compensation coverage and bond and
surety arrangements) with respect to which WFL is a party, a named insured,
or
otherwise the beneficiary of coverage:
(i) the
name,
address, and telephone number of the agent;
(ii) the
name
of the insurer, the name of the policyholder, and the name of each covered
insured;
(iii) the
policy number and the period of coverage;
(iv) the
scope
(including an indication of whether the coverage is on a claims made,
occurrence, or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage;
and
(v) a
description of any retroactive premium adjustments or other material
loss-sharing arrangements.
With
respect to each such insurance policy: (A) the policy is legal, valid, binding,
enforceable, and in full force and effect in all material respects; (B) to
the
Knowledge of WFL, none of WFL or any other party to the policy is in material
breach or default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred that, with notice or the lapse
of
time, would constitute such a material breach or default, or permit termination,
modification, or acceleration, under the policy; and (C) no party to the policy
has repudiated any material provision thereof. Section 5(m) of the Disclosure
Schedule describes any material self-insurance arrangements affecting
WFL.
(o) Section
5(o) of the WFL Disclosure Schedule sets forth each instance in which WFL (i)
is
subject to any outstanding Order, or (ii) to the Knowledge of WFL, is a party
or
is threatened to be made a party to any action, suit, proceeding, hearing,
or
investigation of, in, or before (or that could come before) any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before (or that could come before) any arbitrator, which in
the
case of clause (i) or clause (ii) has or would have a Material Adverse
Effect.
(p) To
the
Knowledge of WFL, no executive, key employee, or significant group of employees
presently plans to terminate employment with WFL. WFL is not a party to or
bound
by any collective bargaining agreement, nor has it experienced any strike or
material grievance, claim of unfair labor practices, or other collective
bargaining dispute within the past three (3) years. WFL has not committed any
material unfair labor practice.
10
(q) Section
5(q) of the WFL Disclosure Schedule lists each Employee Benefit Plan that WFL
maintains or to which WFL contributes or has any obligation to contribute.
For
purposes of this Agreement, the term “Employee Benefit Plan” means any pension,
stock purchase, stock option, restricted stock, profit sharing, 401(k),
severance pay, or life, health, disability, accident or medical insurance,
that
is maintained by WFL or to which WFL contributes.
(i) Each
such
Employee Benefit Plan (and each related trust, insurance contract, or fund)
in
all material respects has been maintained, funded and administered in accordance
with the terms of such Employee Benefit Plan and complies in form and in
operation in all material respects with the applicable requirements of ERISA,
the Code, and other applicable laws.
(ii) All
required reports and descriptions (including Form 5500 annual reports, summary
annual reports, and summary plan descriptions) have been timely filed and/or
distributed in accordance with the applicable requirements of ERISA and the
Code
with respect to each such Employee Benefit Plan. The requirements of COBRA
have
been met in all material respects with respect to each such Employee Benefit
Plan and each Employee Benefit Plan maintained by an ERISA Affiliate that is
an
Employee Benefit Plan subject to COBRA.
(iii) All
contributions (including all employer contributions and employee salary
reduction contributions) that are due have been made within the time periods
prescribed by ERISA and the Code to each such Employee Benefit Plan that is
a
pension benefit plan and all contributions for any period ending on or before
the Closing Date that are not yet due have been made to each such Employee
Benefit Plan or accrued in accordance with the past custom and practice of
WFL.
All premiums or other payments for all periods ending on or before the Closing
Date have been paid with respect to each such Employee Benefit Plan that is
an
employee welfare benefit plan.
(iv) Each
such
Employee Benefit Plan that is intended to meet the requirements of a “qualified
plan” under Code §401(a) has received a determination from the Internal Revenue
Service that such Employee Benefit Plan is so qualified, and such Seller has
no
knowledge of any facts or circumstances that could adversely affect the
qualified status of any such Employee Benefit Plan.
(v) There
have been no “Prohibited Transactions” as such term is defined under regulations
promulgated pursuant to ERISA with respect to any such Employee Benefit Plan
or
any Employee Benefit Plan maintained by an ERISA Affiliate. No fiduciary has
any
liability for material breach of fiduciary duty or any other material failure
to
act or comply in connection with the administration or investment of the assets
of any such Employee Benefit Plan. No action, suit, proceeding, hearing, or
investigation with respect to the administration or the investment of the assets
of any such Employee Benefit Plan (other than routine claims for benefits)
to
the Knowledge of WFL, is pending or threatened.
11
(vi) WFL
has
delivered to URON correct and complete copies of the plan documents and summary
plan descriptions, the most recent determination letter received from the
Internal Revenue Service, the most recent annual report (Form 5500, with all
applicable attachments), and all related trust agreements, insurance contracts,
and other funding arrangements which implement each such Employee Benefit
Plan.
(r)
Except
as disclosed in the Financial Statements or as set forth in Section 5(r) of
the
Disclosure Schedule, no Affiliate of WFL, nor any member of the family of an
Affiliate of WFL, has been involved in any material business arrangement or
relationship with WFL within the past twelve (12) months, and neither such
Affiliate nor any member of such Affiliate’s family owns any material asset,
tangible or intangible, that is used in the business of WFL or any of its
Subsidiaries.
(s) The
minute books, and other documents and records of WFL have been or will be made
available to URON prior to the Closing.
(t) The
execution of this Agreement does not materially violate or breach any material
agreement or contract to which WFL is a party, and WFL, to the extent required,
has (or will have by Closing) obtained all necessary approvals or consents
required by any agreement to which WFL is a party. The execution and performance
of this Agreement will not violate or conflict with any provision of the
Articles of Incorporation or Bylaws of WFL.
(u) WFL
has
complied with all of the provisions relating to the issuance of securities,
and
for the registration thereof, under the Securities Act, other applicable
securities laws, and all applicable blue sky laws in connection with any and
all
of its stock issuances. There are no outstanding, pending or threatened stop
orders or other actions or investigations relating thereto involving federal
and
state securities laws. All issued and outstanding shares of WFL’s capital stock
were offered and sold in compliance with federal and state securities laws
and
were not offered, sold or issued in violation of any preemptive right, right
of
first refusal or right of first offer and are not subject to any right of
recission.
(v) WFL
is
and has been in compliance with, and WFL has conducted any business previously
owned or operated by it in compliance with, all applicable laws, orders, rules
and regulations of all governmental bodies and agencies, including applicable
securities laws and regulations and environmental laws and regulations, except
where such noncompliance has and will have, in the aggregate, no Material
Adverse Effect. WFL has not received notice of any noncompliance with the
foregoing, nor does it have Knowledge of any claims or threatened claims in
connection therewith.
(w) Without
limiting the foregoing, (i) WFL and any other person or entity for whose conduct
WFL is legally held responsible are and have been in compliance with all
applicable federal, state, regional, and local laws, statutes, ordinances,
judgments, rulings and regulations relating to any matters of pollution,
protection of the environment, health or safety, or environmental regulation
or
control, and (ii) neither WFL nor any other person for whose conduct WFL is
legally held responsible has manufactured, generated, treated, stored, handled,
processed, released, transported or disposed of any hazardous substance on,
under, from or at any of WFL’s properties or in connection with WFL’s
operations. There is no pending or, to WFL’s Knowledge, threatened civil or
criminal litigation, written notice of violation, formal administrative
proceeding or investigation, inquiry or information request by any federal,
state or foreign court, administrative agency or commission or other
governmental authority or instrumentality (a “Governmental
Authority”)
or
other entity relating to any environmental law involving WFL.
12
(x) Assuming
the consent of the stockholders of WFL is obtained, and assuming the appropriate
filings are made with the Secretary of State of the State of Wyoming, the
execution and delivery by WFL of this Agreement and the closing documents and
the consummation by WFL of the transactions contemplated hereby do not and
will
not (i) require the consent, approval or action of, or any filing or notice
to,
any corporation, firm, person or other entity or any public, governmental or
judicial authority (except for such consents, approvals, actions, filing or
notices the failure of which to make or obtain will not in the aggregate have
a
material adverse effect), other than the consent of the stockholders of WFL;
(ii) violate any order, writ, injunction, decree, judgment, ruling, law, rule
or
regulation of any Governmental Authority applicable to WFL, or its business
or
assets; or (iii) constitute a material breach of any agreement, indenture,
mortgage, license or other instrument or document to which WFL is a party or
to
which it is otherwise subject.
(y) There
are
no disagreements of any kind presently existing, or reasonably anticipated
by
WFL to arise, between the accountants and lawyers formerly or presently employed
by WFL.
(z) Neither
WFL nor any of its past or present officers or directors is, or ever has been,
the subject of any formal or informal inquiry or investigation by the Securities
and Exchange Commission (“SEC”)
or The
National Association of Securities Dealers, Inc. (“NASD”).
(aa) No
representation or warranty by WFL contained in this Agreement and no statement
contained in any certificate, schedule or other communication furnished pursuant
to or in connection with the provisions hereof contains or shall contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. There is no current or prior event or
condition of any kind or character pertaining to WFL that may reasonably be
expected to have a material adverse effect on WFL. Except as specifically
indicated elsewhere in this Agreement, all documents delivered by WFL in
connection herewith have been and will be complete originals, or exact copies
thereof.
6. Representations
of URON and Merger Sub.
URON
and Merger Sub hereby jointly and severally represent and warrant as follows,
each of which representations and warranties shall also be true as of the
Closing except as set forth in the disclosure schedule attached to this
Agreement (hereinafter the “URON
Disclosure Schedule”).
The
URON Disclosure Schedule is arranged in paragraphs corresponding to the numbered
paragraphs contained in this Article 6:
(a) As
of the
Closing, the shares of URON Common Stock and URON Preferred Stock to be issued
and delivered to the stockholders of WFL (the “WFL
Stockholders”)
hereunder and in connection herewith will, when so issued and delivered,
constitute duly authorized, validly and legally issued, fully-paid,
nonassessable shares of URON capital stock, will not be issued in violation
of
any preemptive or similar rights and will be issued free and clear of all liens
and encumbrances.
13
(b) Each
of
URON and Merger Sub has the corporate power to enter into this Agreement and
to
perform its obligations hereunder. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the respective Boards of Directors of URON and Merger Sub and
by
URON as the sole stockholder of Merger Sub. This Agreement has been duly
executed and delivered by each of URON and Merger Sub and constitutes a legal,
valid and binding obligation of URON and Merger Sub, enforceable against URON
and Merger Sub in accordance with its terms except as enforcement may be limited
by applicable bankruptcy, insolvency or other laws affecting creditor’s rights
generally or by legal principles of general applicability governing the
availability of equitable remedies.
(c) URON
has
made available to WFL a true and complete copy of its audited financial
statements as of and for the fiscal years ended December 31, 2005, and 2006, and
its unaudited financial statements for the nine months ended September 30,
2007
(the “URON
Financial Statements”).
The
URON Financial Statements fairly present, in all material respects, the
financial condition of URON as of the date thereof and the results of its
operations for the periods then ended. The URON Financial Statements have been
prepared in accordance with generally accepted accounting principles applied
on
a consistent basis (except as may be indicated therein or in the notes thereto
and except for the absence of footnotes, in the case of unaudited financial
statements). Merger Sub has no financial statements because it was recently
formed solely for the purpose of effectuating the WFL Merger and it has been,
is
and will remain inactive except for purposes of the Merger, and it has no
assets, liabilities, contracts or obligations of any kind other than as incurred
in the Ordinary Course of Business in connection with its incorporation in
Wyoming. URON has no subsidiaries (other than Merger Sub and the subsidiary
contemplated to hold URON’s current business) or affiliates and does not have
any direct or indirect equity participation or similar interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business. Merger Sub has no subsidiaries or affiliates (other than URON)
and does not have any direct or indirect equity participation or similar
interest in any corporation, partnership, limited liability company, joint
venture, trust or other business.
(d) Since
June 30, 2007, there has not been any material adverse change in the condition
of the URON or Merger Sub (financial or otherwise).
(e) Neither
URON nor Merger Sub is a party to, or the subject of, any pending litigation,
claims, or governmental investigation or proceeding not reflected in the URON
Financial Statements, and to the Knowledge of URON and Merger Sub, there are
no
lawsuits, claims, assessments, investigations, or similar matters, threatened
or
contemplated against or affecting Merger Sub, URON, or the management or
properties of URON or Merger Sub. URON is not subject to any order, judgment,
injunction or decree of any Governmental Authority or arbitrator.
14
(f) URON
and
Merger Sub are each duly organized, validly existing and in good standing under
the laws of the jurisdiction of their incorporation; each has the corporate
power to own, lease and operate its property and to carry on its business as
now
being conducted and is duly qualified to do business and in good standing to
do
business in any jurisdiction where so required except where the failure to
so
qualify would have no material adverse effect on URON and Merger Sub. Neither
corporation is required to be qualified to do business in any state other than
in their respective states of incorporation.
(g) URON
and
Merger Sub have each filed all federal, state, county and local income, excise,
property and other tax, governmental and/or other returns, forms, filings,
or
reports, which are due or required to be filed by it prior to the date hereof
and have paid or made adequate provision in the URON Financial Statements for
the payment of all taxes, fees, or assessments which have or may become due
pursuant to such returns, filings or reports or pursuant to any assessments
received. Neither URON nor Merger Sub is delinquent or obligated for any tax,
penalty, interest, delinquency or charge and there are no tax liens or
encumbrances applicable to either corporation.
(h) As
of the
date of this Agreement, URON’s authorized capital stock consists of 200,000,000
shares of Common Stock, no par value per share (the “URON
Common Stock”),
of
which 7,710,255 shares of URON Common Stock are issued and outstanding. Merger
Sub’s capitalization consists solely of 1,000 authorized shares of common stock
(the “Merger
Sub Stock”),
of
which 1,000 shares are outstanding, all of which are owned by URON, free and
clear of all liens, claims and encumbrances. All outstanding shares of capital
stock of URON and Merger Sub are, and shall be at Closing, validly issued,
fully
paid and nonassessable. Except as set forth on Schedule 6(h), there are no
existing options, convertible or exchangeable securities, calls, claims,
warrants, preemptive rights, registration rights or commitments of any character
relating to the issued or unissued capital stock or other securities of either
URON or Merger Sub. All outstanding options and warrants of URON not exercised
prior to Closing shall remain unaffected by the Merger. There are no voting
trusts, proxies or other agreements, commitments or understandings of any
character to which URON or Merger Sub is a party or by which URON or Merger
Sub
is bound with respect to the voting of any capital stock of URON or Merger
Sub.
There is no outstanding stock appreciation, phantom stock or similar rights
with
respect to any capital stock of URON or Merger Sub. There are no outstanding
obligations to repurchase, redeem or otherwise acquire any shares of capital
stock of URON or Merger Sub.
(i) The
financial records, minute books, and other documents and records of URON and
Merger Sub have been or will be made available to WFL prior to the Closing.
The
records and documents of URON and Merger Sub that have been delivered to WFL
constitute all of the material records and documents of URON and Merger Sub
in
the possession of URON or Merger Sub or any of their affiliates and
representatives.
(j) Neither
URON nor Merger Sub has breached, nor is there any pending, or to the Knowledge
of URON or Merger Sub, any existing or threatened claim that URON or Merger
Sub
has breached, any of the terms or conditions of any agreements, contracts,
commitments or other documents to which it is a party or by which it is, or
its
properties are bound. The execution and performance of this Agreement will
not
violate any provisions of applicable law or any agreement to which URON or
Merger Sub is subject. Each of URON and Merger Sub hereby represent and warrant
that it is not a party to any material contract or commitment, and that it
has
disclosed to WFL in writing all previous or existing relationships or dealings
with related or controlling parties or affiliates of URON or Merger Sub. Other
than as disclosed in URON’s public filings with the SEC, there are no currently
existing agreements with any affiliates, related or controlling persons or
entities of URON, Merger Sub or any stockholder of URON.
15
(k) URON
has
complied with all of the provisions relating to the issuance of securities,
and
for the registration thereof, under the Securities Act, other applicable
securities laws, and all applicable blue sky laws in connection with any and
all
of its stock issuances. There are no outstanding, pending or threatened stop
orders or other actions or investigations relating thereto involving federal
and
state securities laws. All issued and outstanding shares of URON’s capital stock
were offered and sold in compliance with federal and state securities laws
and
were not offered, sold or issued in violation of any preemptive right, right
of
first refusal or right of first offer and are not subject to any right of
recission.
(l) All
information regarding URON which has been provided to WFL by URON or set forth
in any document or other communication, disseminated to any former, existing
or
potential shareholders of URON or to the public or filed with the NASD, the
SEC
or any state securities regulators or authorities is true, complete, accurate
in
all material respects, not misleading, and was and is in full compliance with
all securities laws and regulations.
(m) URON
is
and has been in compliance with, and URON has conducted any business previously
owned or operated by it in compliance with, all applicable laws, orders, rules
and regulations of all governmental bodies and agencies, including applicable
securities laws and regulations (including, without limitation, the Sarbanes
Oxley Act of 2002) and environmental laws and regulations, except where such
noncompliance has and will have, in the aggregate, no material adverse effect.
URON has not received notice of any noncompliance with the foregoing, nor does
it have Knowledge of any claims or threatened claims in connection therewith.
URON has never conducted any operations or engaged in any business transactions
whatsoever other than as set forth in the reports URON has previously filed
with
the SEC.
(n) Without
limiting the foregoing, (i) URON and any other person or entity for whose
conduct URON is legally held responsible are and have been in compliance with
all applicable federal, state, regional, and local laws, statutes, ordinances,
judgments, rulings and regulations relating to any matters of pollution,
protection of the environment, health or safety, or environmental regulation
or
control, and (ii) neither URON nor any other person for whose conduct URON
is
legally held responsible has manufactured, generated, treated, stored, handled,
processed, released, transported or disposed of any hazardous substance on,
under, from or at any of URON’s properties or in connection with URON’s
operations.
There is
no pending or, to URON’s Knowledge, threatened civil or criminal litigation,
written notice of violation, formal administrative proceeding or investigation,
inquiry or information request by any Governmental Authority or other entity
relating to any environmental law involving URON.
16
(o) URON
has
filed all required documents, reports and schedules with the SEC, the NASD
and
any applicable state or regional securities regulators or authorities
(collectively, the “URON
SEC Documents”).
As of
their respective dates, the URON SEC Documents complied in all material respects
with the requirements of the Securities Act, the Securities Exchange Act of
1934, as amended (the “Exchange
Act”),
the
NASD rules and regulations and state and regional securities laws and
regulations, as the case may be, and, at the respective times they were filed,
none of the URON SEC Documents contained any untrue statement of a material
fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements (including, in each case,
any notes thereto) of URON included in the URON SEC Documents complied as to
form and substance in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto,
were
prepared in accordance with generally accepted accounting principles (except
as
may be indicated therein or in the notes thereto) applied on a consistent basis
during the periods involved (except as may be indicated therein or in the notes
thereto) and fairly presented in all material respects the financial position
of
URON as of the respective dates thereof and the results of its operations and
its cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein).
(p) Other
than as disclosed on Schedule 6(p), neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
(a)
result in any payment (whether severance pay, unemployment compensation or
otherwise) becoming due from URON to any person or entity, including without
limitation any employee, director, officer or affiliate or former employee,
director, officer or affiliate of URON, (b) increase any benefits otherwise
payable to any person or entity, including without limitation any employee,
director, officer or affiliate or former employee, director, officer or
affiliate of URON, or (c) result in the acceleration of the time of payment
or
vesting of any such benefits.
(q) Other
than as disclosed on Schedule 6(q), URON has no material contracts, commitments,
arrangements, or understandings relating to its business, operations, financial
condition, prospects or otherwise. For purposes of this Section 6(q), “material”
means payment or performance of a contract, commitment, arrangement or
understanding which is expected to involve payments in excess of
$5,000.
(r) Assuming
appropriate filings and mailings are made by URON under the Securities Act,
the
Exchange Act, with the NASD, and with the Secretary of State of Wyoming, the
execution and delivery by URON of this Agreement and the closing documents
and
the consummation by URON of the transactions contemplated hereby do not and
will
not (i) require the consent, approval or action of, or any filing or notice
to,
any corporation, firm, person or other entity or any public, governmental or
judicial authority (except for such consents, approvals, actions, filing or
notices the failure of which to make or obtain will not in the aggregate have
a
material adverse effect); (ii) violate any order, writ, injunction, decree,
judgment, ruling, law, rule or regulation of any Governmental Authority
applicable to URON, or its business or assets; (iii) constitute a material
breach of any agreement, indenture, mortgage, license or other instrument or
document to which URON or Merger Sub is a party or to which any of them is
otherwise subject; and (iv) violate or conflict with any provision of the
respective Articles of Incorporation or Articles of Incorporation or Bylaws
of
either URON or Merger Sub. To the Knowledge of officers of URON, URON is not
subject to, or a party to, any mortgage, lien, lease, agreement, contract,
instrument, order, judgment or decree or any other material restriction of
any
kind or character which would prevent, hinder, restrict or impair the continued
operation of the business of WFL after the Closing.
17
(s) URON
has
provided to WFL an accurate and complete list of all of its current employees,
consultants or independent contractors. URON is not a party to or bound by
any
employment agreement or any union contract, collective bargaining agreement
or
similar contract or agreement, or any other contract or agreement to provide
severance payments or benefits to any employee upon termination of employment.
As of the Closing, URON will not have any employees, consultants or independent
contractors, other than its attorneys and accountants. There are no labor
disputes, grievances or requests for arbitration. URON has no pension,
retirement, savings, profit sharing, stock-based, incentive compensation or
other similar employee benefit plan.
(t) Except
as
filed as exhibits to the URON SEC Documents, URON has no “material contracts”
(as defined in Item 601(b)(10) of Regulation S-B of the SEC) to which it is
a
party. URON is not a party to or bound by any contract which would prohibit
or
materially delay the consummation of the transactions contemplated by this
Agreement. All of the URON’s “material contracts” are in good standing, valid
and effective in accordance with their respective terms, and neither URON nor
any other party to a “material contract” of URON has violated any provision of,
or committed or failed to perform any act which, with or without notice, lapse
of time or both, would constitute a default under the provisions of, any such
“material contract.”
(u) Except
as
set forth in the URON SEC Documents or as set forth on Schedule 6(u), there
are
no liabilities (including, but not limited to, tax liabilities), obligations
or
claims (whether such liabilities or claims are contingent or absolute, direct
or
indirect, and matured or unmatured) (collectively, “Liabilities”)
of
URON, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in a Liability.
(v) URON
is
in compliance with the requirements of the Xxxxxxxx-Xxxxx Act of 2002 applicable
to it as of the date of this Agreement. URON maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
URON
has established disclosure controls and procedures (as defined in Exchange
Act
Rules 13a-15(e) and 15d-15(e)) for URON and designed such disclosures controls
and procedures to ensure that material information relating to URON, is made
known to the certifying officers by others within URON, particularly during
the
period in which URON’s Form 10-KSB or 10-QSB, as the case may be, is being
prepared. URON’s certifying officers have evaluated the effectiveness of URON’s
controls and procedures as of the date of its most recently filed periodic
report (such date, the “Evaluation
Date”).
URON
presented in its most recently filed periodic report the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in URON’s internal
control over financial reporting (as such term is defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) or in other factors that could significantly affect
URON’s internal control over financial reporting. URON’s auditors, at all
relevant times, have been duly registered in good standing with the Public
Company Accounting Oversight Board.
18
(w) There
are
no legal, administrative, arbitral or other proceedings, claims, suits, actions
or governmental investigations of any nature pending, or to URON’s Knowledge
threatened, directly or indirectly involving URON’s and/or officers, directors
or affiliates, including, but not limited to any stockholder claims or
derivative actions, or challenging the validity or propriety of the transactions
contemplated by this Agreement.
(x) URON:
(i)
is not in default under or in violation of (and no event has occurred that
has
not been waived that, with notice or lapse of time or both, would result in
a
default by URON under), nor has URON received notice of a claim that it is
in
default under or that it is in violation of, any indenture, mortgage, deed
of
trust or other agreement, instrument or contract to which URON is a party or
by
which it or any of its assets or properties are bound (whether or not such
default or violation has been waived), (ii) is not in violation of any order
of
any court, arbitrator or governmental body, (iii) is not and has not been in
violation of any law, order, rule, regulation, writ, injunction, judgment or
decree of any Governmental Authority having jurisdiction over URON or any of
its
business or properties, including federal and state securities laws and
regulations and (iv) is not in violation of any governmental
authorization.
(y) There
are
no disagreements of any kind presently existing, or reasonably anticipated
by
URON to arise, between the accountants and lawyers formerly or presently
employed by URON and URON.
(z) Neither
URON nor any of its past or present officers or directors is, or ever has been,
the subject of any formal or, to URON’s Knowledge, informal inquiry or
investigation by the SEC or the NASD.
(aa) URON
confirms that neither it nor any other Person acting on its behalf has provided
WFL or its agents or counsel with any information that constitutes or might
constitute material, nonpublic information concerning URON. URON understands
and
confirms that WFL will rely on the foregoing representations in effecting
transactions in securities of URON. All disclosure provided to WFL regarding
URON, its business and the transactions contemplated hereby furnished by or
on
behalf of URON with respect to the representations and warranties made herein
are true and correct with respect to such representations and warranties and
do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein not
misleading. URON acknowledges and agrees that WFL has not made, nor is WFL
making, any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth herein.
(bb) No
representation or warranty by URON or Merger Sub contained in this Agreement
and
no statement contained in any certificate, schedule or other communication
furnished pursuant to or in connection with the provisions hereof contains
or
shall contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of
the
circumstances under which they were made, not misleading. There is no current
or
prior event or condition of any kind or character pertaining to URON that may
reasonably be expected to have a material adverse effect on URON or its
subsidiaries. Except as specifically indicated elsewhere in this Agreement,
all
documents delivered by URON in connection herewith have been and will be
complete originals,
or
exact copies thereof.
19
7. Closing.
The
closing of the transactions contemplated herein (the “Closing”)
shall
take place upon the mutual release of Closing documents by and among the
parties, on such date (the “Closing
Date”)
as
mutually determined by the parties hereto when all conditions precedent have
been met and all required documents have been delivered. The “Effective
Time”
of
the
Merger shall be that date and time the Articles of Merger has been accepted
for
filing by the Wyoming Secretary of State, or at such later time as is provided
in the Certificate of Merger, and the “Effective
Date”
shall
be the date of the Effective Time.
8. Actions
Prior to Closing.
(a) Prior
to
the Closing, WFL on the one hand, and URON and Merger Sub on the other hand,
shall be entitled to make such investigations of the assets, properties,
business and operations of the other party, and to examine the books, records,
tax returns, financial statements and other materials of the other party as
such
investigating party deems necessary in connection with this Agreement and the
transactions contemplated hereby. Any such investigation and examination shall
be conducted at reasonable times and under reasonable circumstances, and the
parties hereto shall cooperate fully therein. Until the Closing, and if the
Closing shall not occur, thereafter, each party shall keep confidential and
shall not use in any manner inconsistent with the transactions contemplated
by
this Agreement, and shall not disclose, nor use for their own benefit, any
information or documents obtained from the other party concerning the assets,
properties, business and operations of such party, unless such information
(i)
is readily ascertainable from public or published information, (ii) is received
from a third party not under any obligation to keep such information
confidential, or (iii) is required to be disclosed by any law or order (in
which
case the disclosing party shall promptly provide notice thereof to the other
party in order to enable the other party to seek a protective order or to
otherwise prevent such disclosure). If this transaction is not consummated
for
any reason, each party shall return to the other all such confidential
information, including notes and compilations thereof, promptly after the date
of such termination. The representations and warranties contained in this
Agreement shall not be affected or deemed waived by reason of the fact that
either party hereto discovered or should have discovered any representation
or
warranty is or might be inaccurate in any respect.
(b) Prior
to
the Closing, WFL, URON and Merger Sub agree not to issue any statement or
communications to the public or the press regarding the transactions
contemplated by this Agreement without the prior written consent of the other
parties. In the event that URON is required under federal securities law to
either (i) file any document with the SEC that discloses this Agreement or
the
transactions contemplated hereby, or (ii) to make a public announcement
regarding this Agreement or the transactions contemplated hereby, URON shall
provide WFL with a copy of the proposed disclosure no less than 48 hours before
such disclosure is made and shall incorporate into such disclosure any
reasonable comments or changes that WFL may request.
20
(c) Prior
to
the Closing, except as contemplated by this Agreement, there shall be no stock
dividend, stock split, recapitalization, or exchange of shares with respect
to
or rights, options or warrants issued in respect of URON Common Stock after
the
date hereof and there shall be no dividends or other distributions paid on
URON
Common Stock or URON Preferred Stock after the date hereof, in each case through
and including the Closing. URON and Merger Sub shall conduct no business, prior
to the Closing, other than in the ordinary course of business or as may be
necessary in order to consummate the transactions contemplated hereby. Prior
to
the Closing (except as otherwise contemplated by this Agreement), neither URON
nor Merger Sub shall take any action or enter into any agreement to issue or
sell any shares of capital stock of URON or Merger Sub or any securities
convertible into or exchangeable or exercisable for any shares of capital stock
of URON or Merger Sub or to repurchase, redeem or otherwise acquire any of
the
issued and outstanding capital stock of URON or Merger Sub, without the prior
written consent of WFL.
(d) Prior
to
the Closing, URON will timely file all required URON SEC Documents and comply
in
all material respects with the requirements of the Securities Act, the Exchange
Act, the NASD rules and regulations and state and regional securities laws
and
regulations.
(e) URON
agrees that, from the date
of
this Agreement until
the
first to occur of (i) the termination of this Agreement pursuant to Section
11
or (ii) the Closing, URON will not, and will not authorize or permit any officer
or director of URON or any other person on its behalf to, directly or
indirectly, solicit, facilitate, encourage, entertain, discuss, negotiate or
accept or enter into any offer, inquiry or proposal from or any agreement with
any party other than WFL concerning a possible investment in, or an acquisition,
merger or consolidation of URON with or into any other entity, a disposition
of
all or any substantial portion of the business, assets or securities of URON,
or
provide any confidential information to any party other than WFL concerning
any
such investment, acquisition, merger, consolidation or disposition (a
“URON
Third Party Transaction”).
URON
will promptly notify WFL in writing of any such offer, the principal terms
of
the same and the identity of the party making the same, unless URON’s sole
response to such offer is to refuse to discuss the offer with such party. In
the
event that URON breaches any of its undertakings provided for in this
Section 8(e) and URON enters into a definitive agreement or agreement in
principle with any third party in respect of which it breached such undertaking
within six months after the termination by WFL of this Agreement, then URON
shall cause WFL to be paid, by URON or another party or parties to the URON
Third Party Transaction, a breakup fee of $100,000 in cash upon the closing
of
such URON Third Party Transaction.
Such
breakup fee shall be agreed upon liquidated damages relating to such URON Third
Party Transaction and is not a penalty.
The
parties agree that it would be difficult, if not impossible, to calculate the
damages that would be suffered by WFL as a result of such URON
Third
Party Transaction and that such breakup fee is reasonable.
21
(h) WFL
agrees that, from the date of third Agreement until the first to occur of the
termination of this Agreement pursuant to Section 11 and (ii) the Closing,
except in connection with the Equity Financing, WFL will not, and will not
authorize or permit any officer or director of WFL or any other person on its
behalf to, directly or indirectly, solicit, facilitate, encourage, entertain,
discuss, negotiate or accept or enter into any offer, inquiry or proposal from
or any agreement with any party other than URON concerning an acquisition,
merger or consolidation of WFL with or into any other entity, a disposition
of
all or any substantial portion of the business, assets or securities of WFL,
or
provide any confidential information to any party other than URON concerning
any
such acquisition, merger, consolidation or disposition (a “WFL
Third Party Transaction”).
WFL
will promptly notify URON in writing of any such offer, the principal terms
of
the same and the identity of the party making the same, unless WFL’s sole
response to such offer is to refuse to discuss the offer with such party. In
the
event that WFL breaches any of its undertakings provided for in this
Section 8(h) and WFL enters into a definitive agreement or agreement in
principle with any third party in respect of which it breached such undertaking
within six months after the termination by URON of this Agreement, then WFL
shall cause URON to be paid, by WFL or another party or parties to WFL Third
Party Transaction, the amount of $100,000 in cash upon the closing of such
WFL
Third Party Transaction. Such breakup fee shall be agreed upon liquidated
damages relating to such WFL Third Party Transaction and is not a
penalty.
The
parties agree that it would be difficult, if not impossible, to calculate the
damages that would be suffered by URON as a result of such WFL
Third
Party Transaction and that such breakup fee is reasonable.
(i) Prior
to
the Closing, URON will cause its current business to be transferred in its
entirety to a newly formed operating subsidiary, which will be incorporated
and
organized under Minnesota law; provided, however, that URON will permit counsel
for WFL to review all documentation relating to the incorporation and
organization of such subsidiary.
9. Conditions
Precedent to the Obligations of WFL.
All
obligations of WFL under this Agreement are subject to the fulfillment, prior
to
or as of the Closing, of each of the following conditions:
(a) The
representations and warranties by or on behalf of URON and Merger Sub contained
in this Agreement or in any certificate or document delivered pursuant to the
provisions hereof or in connection herewith shall be true and correct in all
respects at and as of the Closing as though such representations and warranties
were made at and as of such time.
(b) URON
and
Merger Sub shall have performed and complied with all covenants, agreements,
and
conditions set forth or otherwise contemplated in, and shall have executed
and
delivered all documents required by, this Agreement to be performed or complied
with or executed and delivered by them prior to or at the Closing.
(c) The
directors of URON and the directors and sole stockholder of Merger Sub shall
have approved in accordance with applicable state corporation law the execution
and delivery of this Agreement and the consummation of the transactions
contemplated herein.
(d) On
or
before the Closing Date, URON and Merger Sub shall have delivered to WFL
certified copies of resolutions of the stockholders and the directors of Merger
Sub and URON approving and authorizing the execution, delivery and performance
of this Agreement and authorizing all of the necessary and proper action to
enable URON and Merger Sub to comply with the terms of this
Agreement.
22
(e) The
Merger shall be permitted by applicable state law and otherwise and URON shall
have sufficient shares of its capital stock authorized to complete the WFL
Merger and the transactions contemplated hereby.
(f) No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in
effect.
(g) At
Closing, all of the officers and directors of URON shall have resigned in
writing from their positions as directors and officers of URON, and the
directors of URON shall have taken such action as may be necessary or desirable
regarding the appointment of successor directors.
(h) At
the
Closing, all instruments and documents delivered by URON or Merger Sub pursuant
to the provisions hereof shall be reasonably satisfactory to legal counsel
for
WFL.
(i) WFL
shall
have received all necessary and required approvals and consents from required
parties and from its stockholders.
(j) At
the
Effective Time, URON and Merger Sub shall have liabilities aggregating $50,000
or less (excluding fees payable to legal counsel).
(k) URON
shall complete or shall have completed the following actions prior to or
simultaneous with the Closing of the WFL Merger:
(i) The
Equity Financing; and
(ii) The
Reverse Stock Split.
(l) At
the
Closing, URON and Merger Sub shall have delivered to WFL an opinion of URON’s
legal counsel dated as of the Closing to the effect that:
(i) Each
of
URON and Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation;
(ii) This
Agreement has been duly authorized, executed and delivered by URON and Merger
Sub and is a valid and binding obligation of URON and Merger Sub enforceable
in
accordance with its terms;
(iii) URON
and
Merger Sub each through its board of directors and stockholders have taken
all
corporate action necessary for performance under this Agreement;
(iv) The
documents executed and delivered to WFL and WFL Stockholders hereunder are
valid
and binding in accordance with their terms and vest in WFL Stockholders all
right, title and interest in and to the shares of URON’s capital stock to be
issued pursuant to Section 2(b) hereof, and the shares of URON capital stock
when issued will be duly and validly issued, fully paid and nonassessable;
and
23
(v) The
authorized capital stock of URON shall consist of 20,000,000
shares.
10. Conditions
Precedent to the Obligations of URON and Merger Sub.
All
obligations of URON and Merger Sub under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following
conditions:
(a) The
representations and warranties by WFL contained in this Agreement or in any
certificate or document delivered pursuant to the provisions hereof shall be
true and correct in all material respects at and as of the Closing as though
such representations and warranties were made at and as of such
times.
(b) WFL
shall
have performed and complied with, in all material respects, all covenants,
agreements, and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
(c) No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in
effect.
(d) No
stockholders of WFL shall have exercised their dissenters rights under the
WBCA
such that they possess (or have the right to possess in the future) Dissenting
Shares with respect to the Merger.
(e) The
following actions shall have been completed prior to or simultaneous with the
Closing of the Merger:
(i) The
Equity Financing; and
(ii) The
Reverse Stock Split.
(f) WFL
shall
deliver to URON financial statements meeting the requirements of 3-05 of
Regulation S-X promulgated under the Securities Act and the Exchange
Act.
(f) WFL
shall
deliver an opinion of its legal counsel to the effect that:
(i) WFL
is a
corporation duly organized, validly existing and in good standing under the
laws
of the state of its incorporation;
(ii) This
Agreement has been duly authorized, executed and delivered by WFL and is a
valid
and binding obligation of WFL enforceable in accordance with its
terms;
24
(iii) The
board
of directors and stockholders of WFL have taken all corporate action necessary
for performance under this Agreement; and
(iv) WFL
has
the corporate power to execute, deliver and perform under this
Agreement.
11. Events
of Termination.
This
Agreement may, by notice given in the manner hereinafter provided, be terminated
and abandoned at any time prior to completion of the Closing, as
follows:
(a) by
WFL if
(1) there has been a material breach by URON and, in the case of such a breach
relating to a covenant or agreement, such breach shall not have been cured
within ten (10) days after receipt by URON of notice specifying particularly
such breach, (2) if WFL identifies hereafter any fact, circumstance or event
that could be reasonably determined to have a material averse effect on URON
and
such fact, circumstance or event is not cured by URON within ten (10) days
after
receipt by URON of notice specifying particularly such fact, event or
circumstance, or (3) if the closing conditions hereunder in favor of WFL have
not been satisfied by the close of business on December 31, 2007;
(b) by
URON
(1) if there has been a material breach by WFL and, in the case of such a breach
relating to a covenant or agreement, such breach shall not have been cured
within ten (10) days after receipt by WFL of notice specifying particularly
such
breach, or (2) if URON identifies hereafter any fact, circumstance or event
that
could be reasonably determined to have a Material Adverse Effect on WFL, or
URON
following the Merger, and such fact, circumstance or event is not cured by
WFL
within ten (10) days after receipt by WFL of notice specifying particularly
such
fact, event or circumstance, or (3) if the closing conditions hereunder in
favor
of URON have not been satisfied by the close of business on December 31, 2007;
or
(c) or
at any
time by mutual written agreement of WFL and URON.
This
Agreement may not be terminated other than as set forth above. In the event
a
party terminates this Agreement other than as permitted above, such party shall
become liable to pay the other parties hereto a termination fee of $50,000.
Such
termination fee shall be agreed upon liquidated damages relating to such
termination and is not a penalty.
The
parties agree that it would be difficult, if not impossible, to calculate the
damages that would be suffered by the non-terminating party
and that
such termination fee is reasonable.
12. Survival
and Indemnification.
All
representations, warranties, covenants and agreements contained in this
Agreement, or in any schedule, certificate, document or statement delivered
pursuant hereto, shall survive (and not be affected in any respect by) the
Closing, any investigation conducted by any party hereto and any information
which any party may receive. Notwithstanding the foregoing, the representations
and warranties contained in or made pursuant to this Agreement shall terminate
on, and no claim or action with respect thereto may be brought after, the date
that URON’s annual report on Form 10-KSB for the fiscal year ended December 31,
2007 is filed with the SEC, except that breaches of representations, warranties
and covenants arising out of or related to the fraud or willful misconduct
of
any of the parties shall survive indefinitely. For purposes of determining
damages hereunder, damages shall mean
any
actual and out-of-pocket liabilities, obligations, losses, damages, judgments,
penalties, costs, and expenses (including, without limitation, reasonable
attorneys’ fees); provided that,
in no
event shall damages include any special, incidental, punitive, exemplary or
consequential damages or any damages for diminution in value.
25
13. Nature
of Representations.
All of
the parties hereto are executing and carrying out the provisions of this
Agreement in reliance solely on the representations, warranties and covenants
and agreements contained in this Agreement and the other documents delivered
at
the Closing and not upon any representation warranty, agreement, promise or
information, written or oral, made by the other party or any other person other
than as specifically set forth herein.
14. Documents
at Closing.
At the
Closing, the following documents shall be delivered:
(a) WFL
will
deliver, or will cause to be delivered, to URON the following:
(i) a
certificate executed by the President of WFL to the effect that all
representations and warranties made by WFL under this Agreement are true and
correct as of the Closing, the same as though originally given to URON or Merger
Sub on said date;
(ii) a
certificate from the State of Wyoming dated within ten business days of the
Closing to the effect that WFL is in good standing under the laws of Wyoming;
(iii) such
other instruments, documents and certificates, if any, as are required to be
delivered pursuant to the provisions of this Agreement;
(iv) executed
copy of the Articles of Merger for filing in Wyoming;
(v) certified
copies of resolutions adopted by the stockholders and directors of WFL
authorizing the Merger;
(vi) all
other
items, the delivery of which is a condition precedent to the obligations of
URON
and Merger Sub, as set forth herein; and
(vii) the
legal
opinion required by Section 10 hereof.
(b) URON
and
Merger Sub will deliver or cause to be delivered to WFL:
(i) a
certificate of the President of URON and Merger Sub, respectively, to the effect
that all representations and warranties of URON and Merger Sub made under this
Agreement are true and correct as of the Closing, the same as though originally
given to WFL on said date;
(ii) certified
copies of resolutions adopted by the stockholders and the board of directors
of
Merger Sub and the board of directors of URON authorizing the WFL Merger and
all
related matters;
26
(iii) certificates
from the jurisdiction of incorporation of URON and Merger Sub dated within
ten
business days of the Closing Date that each of said corporations is in good
standing under the laws of said state;
(iv) executed
copy of the Articles of Merger for filing in Wyoming;
(v) opinion
of URON’s counsel as described in Section 9 above;
(vi) such
other instruments and documents as are required to be delivered pursuant to
the
provisions of this Agreement;
(vii) written
resignation of all of the officers and directors of URON and Merger Sub and
the
written appointment of new directors and officers of URON as contemplated under
Section 2(c) hereof; and
(viii) all
other
items, the delivery of which is a condition precedent to the obligations of
WFL,
as set forth in Section 9 hereof.
15. Finder’s
Fees.
URON
and
Merger Sub jointly and severally represent and warrant to WFL and WFL and
represents and warrants to URON and Merger Sub, that none of them, or any party
acting on their behalf, has incurred any liabilities, either express or implied,
to any “broker” or “finder” or similar person in connection with this Agreement
or any of the transactions contemplated hereby; except as set forth in this
Section 15. If the Merger closes, URON shall pay Xxxxxxx, Inc. a cash consulting
fee of $525,000 and shall grant Lantern Advisers, LLC, a warrant to purchase
400,000 shares of Uron’s common stock, calculated after the Reverse Stock Split,
at a price of $0.01 per share (alternatively, URON may grant Lantern Advisers,
LLC such a warrant, the vesting and exercisability of which is contingent upon
the Closing) (the “Lantern
Warrant”).
The
exact terms and conditions of such warrant shall be acceptable to
WFL.
16. Miscellaneous.
(a) Severability.
If any
provision of this Agreement is declared by any court or other Governmental
Body
to be null, void, or unenforceable, this Agreement shall be construed so that
the provision at issue shall survive to the extent it is not so declared null,
void, or unenforceable and all of the other provisions of this Agreement shall
remain in full force and effect.
(b)
Entire
Agreement.
This
Agreement, together with all exhibits and schedules hereto attached, constitutes
the entire agreement among the parties pertaining to the subject matter hereof
and completely supersedes all prior or contemporaneous agreements,
understandings, arrangements, commitments, negotiations, and discussions of
the
parties, whether oral or written, all of which shall have no substantive
significance or evidentiary effect. Each party acknowledges, represents, and
warrants that it has not relied on any representation, agreement, understanding,
arrangement, or commitment that has not been expressly set forth in this
Agreement. Each party acknowledges, represents and warrants that this Agreement
is fully integrated and parol evidence is not needed to reflect the intentions
of the parties. The parties specifically intend that the literal words of this
Agreement shall, alone, conclusively determine all questions concerning the
parties’ intent.
27
(c) Corporate
Affairs.
Each
party will make every reasonable effort to keep confidential any information
obtained by them concerning the other party, including its internal
organization, finances, procedures, and customers. Neither party will make
any
public announcement, or release any publicity regarding the other party, other
than routine oral communications with analysts, shareholders, and prospective
investors without the prior written consent (which shall not be unreasonably
withheld or delayed) of the party being named, unless, in the good faith opinion
of counsel to the party contemplating such disclosure, such disclosure is
required by law and time does not permit the party to obtain such consent,
or
such disclosure may otherwise be necessary in connection with the filing of
Tax
Returns, or claims for refunds, or in conducting a Tax audit or other
proceedings. This Section shall survive the termination of this
Agreement.
Notwithstanding anything herein to the contrary, any party (and any employee,
representative, or other agent of such party) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure
of
the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to it relating
to
such tax treatment and tax structure. For this purpose, tax treatment and tax
structure shall not include the identity of any existing or future party (or
any
affiliate of such party) to this Agreement.
(d) Notices.
Unless
otherwise expressly provided herein, all notices, requests, demands,
instructions, documents, and other communications to be given hereunder by
either party to the other shall be in writing, shall be sent to the address/fax
number set forth below (provided that any party may at any time change its
address for notice or other such information by giving written notice thereof
in
accordance with this Section), and shall be deemed to be duly given upon the
earliest of (a) hand delivery, or (b) the first business day after
sending by reputable overnight delivery service for next-day delivery (with
confirmation of delivery).
If
to
URON:
Attention:
Xxxxxx Xxxxxx
0000
Xxxxxxx Xxxxxx Xxxxx
Xxx
Xxxx,
XX 00000
Fax:
(000) 000-0000
with
a
copy to:
Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP
Attention:
Xxxx Xxxxxxxxxx
3300
Xxxxx Fargo Center
00
Xxxxx
Xxxxxxx Xxxxxx
Xxxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
28
If
to
WFL:
Wyoming
Financial Lenders, Inc.
Attention:
Xxxx Xxxxxxxx
0000
Xxxx
Xxxxxxxx
Xxxxxxx
Xxxxxx, XX 00000
Fax:
(000) 000-0000
with
a
copy to:
WERCS
Attention:
Xxxxxx Xxxxxxx
000
Xxxx
Xxxxx Xxxxxx
Xxxxxx,
XX 00000
Fax
No.
(000) 000-0000
Xxxxxxx,
XxXxx & Crank
Attention:
Xxxxxx X. XxXxx
0000
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Fax
No.
(000) 000-0000
Cohne
Xxxxxxxxx & Xxxxx
000
Xxxx
000 Xxxxx, Xxxxx 000
Xxxx
Xxxx
Xxxx, XX 00000
Attn:
X.
X. Xxxxxxx, Xx.
Fax
No:
(000) 000-0000
(e) Amendments;
Waivers.
This
Agreement may not be amended or modified unless such amendment or modification
is in writing and signed by all of the parties to this Agreement. The terms,
covenants, representations, warranties, or conditions of this Agreement may
only
be waived in writing. Any waiver of any condition, or of the breach of any
provision, term, covenant, representation, or warranty contained in this
Agreement, in any one or more instances, shall not be deemed to be or construed
as a further or continuing waiver of any condition, or of the breach of any
other provision, term, covenant, representation, or warranty of this
Agreement.
(f) Successors
and Assigns.
The
rights and obligations under this Agreement may not be assigned or delegated
unless in writing executed by the parties hereto, and any attempted assignment
or delegation without such prior written consent shall be void and of no force
or effect. This Agreement shall inure to the benefit of, and shall be binding
upon, the successors and permitted assigns of the parties to this
Agreement.
29
(g) Governing
Law; Submission to Jurisdiction.
This
Agreement and all transactions contemplated hereby shall be governed by, and
construed and enforced in accordance with, the laws of the State of Wyoming,
and
shall be treated in all respects as a State of Wyoming contract, without regard
to any state’s laws related to choice or conflict of laws.
The
parties irrevocably agree and consent to the jurisdiction of the courts of
the
State of Wyoming and the federal courts of the United States sitting in such
state for the adjudication of any matters arising under, or in connection with,
this Agreement.
(h) WAIVER
OF JURY TRIAL.
THE
PARTIES HEREBY IRREVOCABILITY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY,
ARISING OUT OF, OR RELATING TO, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
(i) Subsequent
Documentation.
At any
time, and from time to time after the Closing Date, each of the parties to
this
Agreement shall use its best efforts to take such action as may be necessary,
or
as may be reasonably requested by another party to this Agreement, to carry
out
and consummate the transactions contemplated by this Agreement.
(j) Counterparts.
This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall
be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed counterpart
of this Agreement by facsimile shall be equally as effective as delivery of
an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by facsimile also shall deliver an
original executed counterpart of this Agreement, but the failure to deliver
an
original executed counterpart shall not affect the validity, enforceability,
and
binding effect of this Agreement.
(k) Interpretation.
In this
Agreement, unless a clear contrary intention appears:
(i) the
singular number includes the plural number and vice versa;
(ii) reference
to any Person includes such Person’s successors and assigns, but, if applicable,
only if such successors and assigns are not prohibited by this Agreement, and
reference to a Person in a particular capacity excludes such Person in any
other
capacity or individually;
(iii) reference
to gender does not exclude the other gender;
(iv) reference
to any agreement, document, or instrument means such agreement, document, or
instrument as amended or modified and in effect from time to time in accordance
with the terms thereof;
(v) reference
to any legal requirement means such legal requirement as amended, modified,
codified, replaced, or reenacted, in whole or in part, and in effect from time
to time, including rules and regulations promulgated thereunder, and reference
to any section or other provision of any legal requirement means that provision
of such legal requirement from time to time in effect and constituting the
substantive amendment, modification, codification, replacement, or reenactment
of such section or other provision;
30
(vi) “hereunder,”
“hereof,” “hereto,” and words of similar import shall be deemed references to
this Agreement as a whole and not to any particular Article, Section, or other
provision hereof;
(vii) “including”
(and with correlative meaning “include”) means including without limiting the
generality of any description preceding such term;
(viii) “or”
is
used in the inclusive sense of “and/or”;
(ix) with
respect to the determination of any period of time, “from” means “from and
including” and “to” means “to but excluding”; and
(x) references
to documents, instruments, or agreements shall be deemed to refer as well to
all
addenda, exhibits, schedules, or amendments thereto.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement the day and year first above
written.
By:
|
/s/
Xxxxxxxxxxx Xxxxxx
|
Name:
|
Xxxxxxxxxxx
Xxxxxx
|
Title:
|
Chief
Executive Officer
|
WFL
ACQUISITION CORP.
|
|
By:
|
/s/
Xxxxxxxxxxx Xxxxxx
|
Name:
|
Xxxxxxxxxxx
Xxxxxx
|
Title:
|
Chief
Executive Officer
|
WYOMING
FINANCIAL LENDERS, INC.
|
|
By:
|
/s/
Xxxx Xxxxxxxx
|
Name:
|
Xxxx
Xxxxxxxx
|
Title:
|
President
|
31
Schedule
A
Post
Closing Management
New
directors:
Xxxxxxxxxxx
Xxxxxx
Xxxxx
Xxxxxx
Xxxx
Xxxxxxx
Xxxx
X.
Xxxxxxx XX
Xxxxxx
X.
Xxxxxxx
No
change
in the executive officers of URON
32
Schedule
B
Post
Closing Capitalization
Holders
|
Shares
|
Fully
Diluted
Percentage
|
|||||
Current
holders of URON Common Stock (post
Reverse Stock Split)
|
771,025
|
4.40
|
%
|
||||
Outstanding
options and warrants to purchase URON Common Stock (post Reverse
Stock
Split and excluding the Lantern Warrant) issuable upon
Merger
|
1,600,000
|
9.13
|
%
|
||||
Remaining
post-Closing outstanding options and warrants to purchase URON Common
Stock (post Reverse Stock Split)
|
10,000
|
0.05
|
%
|
||||
New
investors (through Equity Financing)
|
2,953,125
|
16.85
|
%
|
||||
Subscription
Agreement with Xxxxxxxxxxx Xxxxxx (post Reverse Stock
Split)
|
1,071,875
|
6.11
|
%
|
||||
Current
WFL stockholders (to be issued in Merger)
|
11,125,000(1
|
)
|
63.46
|
%
|
|||
Totals
|
17,531,025
|
100
|
%
|
(1)
|
10,000,000
of such shares will be issued as Series A Convertible Preferred Stock
at
the Closing, initially convertible into shares of URON Common Stock
on a
one-for-one basis.
|
33
Exhibit
A
ARTICLES
OF MERGER
Merging
WFL
Acquisition Corp.
(a
Wyoming corporation)
with
and
into
Wyoming
Financial Lenders, Inc.
(a
Wyoming corporation)
Pursuant
to the provisions of the Wyoming Business Corporation Act (the “Wyoming Act”),
Wyoming Financial Lenders, Inc., a Wyoming corporation (“Wyoming Financial”),
hereby certifies the following information relating to the merger of WFL
Acquisition Corp., a Wyoming corporation, with and into Wyoming
Financial:
FIRST:
The plan of merger, titled as the “Agreement and Plan of Merger and
Reorganization,” is attached hereto as Exhibit
A
and
incorporated herein by this reference.
SECOND:
The approval of the shareholders of each of Wyoming Financial and WFL
Acquisition Corp. was required and obtained, with all 1,000 shares of common
stock of WFL Acquisition Corp. outstanding having been voted in favor of the
merger, and with all _______ shares of common stock of Wyoming Financial
outstanding having been voted in favor of the merger. Except as set forth above,
no other class or series of capital stock of either WFL Acquisition Corp. or
Wyoming Financial was or is outstanding or was or is entitled to vote on or
approve the plan of merger.
THIRD:
That the name of the surviving corporation is Wyoming Financial Lenders,
Inc.
FOURTH:
That the Articles of Incorporation of Wyoming Financial Lenders, Inc., as
presently existing, shall not be affected by the merger.
Wyoming
Financial Lenders, Inc.
|
|
By:
|
|
Name:
|
|
Title:
|
|
Dated:
|
34
Exhibit
B
Certificate
of Designation of Series A Convertible Preferred Stock
35
CERTIFICATE
OF DESIGNATIONS
FOR
SERIES A CONVERTIBLE PREFERRED STOCK
OF
URON INC.
(PURSUANT
TO MINNESOTA STATUTES, SECTION 302A.401,
SUBD.
3(b))
The
undersigned, being the President of URON Inc. (the “Corporation”),
a
corporation organized and existing under the Minnesota Business Corporation
Act,
in accordance with the provisions of Minnesota Statutes, Section 302A.401,
Subd. 3(b), does hereby certify that:
Pursuant
to the authority vested in the Board of Directors of the Corporation by the
Amended and Restated Articles of Incorporation of the Corporation, as amended,
the Board of Directors on _____, 2007, in accordance with Minnesota Statutes,
Section 302A.401, Subd. 3, duly adopted the following resolution
establishing a series of 10,000,000 shares of the Corporation’s preferred stock,
to be designated as its Series A Convertible Preferred Stock:
RESOLVED,
that pursuant to the authority vested in the Board of Directors of the
Corporation (the “Board
of Directors”)
by the
Amended and Restated Articles of Incorporation of the Corporation, as amended,
the Board of Directors hereby establishes a series of preferred stock of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights and preferences, of such series of shares as
follows:
SERIES
A CONVERTIBLE PREFERRED STOCK
Section 1.
Designation; Number of Shares.
The
shares of such series shall be designated as “Series A Convertible
Preferred Stock” (the “Series A
Preferred Stock”),
and
the number of shares constituting the Series A Preferred Stock shall be
10,000,000. The Series A Preferred Stock shall have a par value of $0.01
per share. The “Stated
Amount”
of
each
share of Series A Preferred Stock hereunder shall be $2.10.
Section 2.
Voting.
Each
outstanding share of Series A Preferred Stock shall be entitled to a number
of votes equal to the number of shares of the Corporation’s common stock (the
“Common
Stock”)
into
which such share of Series A Preferred Stock is then convertible pursuant
to Section 7 hereof as of the applicable record date for the vote or
written consent of shareholders, as applicable. Each holder of outstanding
shares of Series A Preferred Stock shall be entitled to notice of any
shareholders’ meeting in accordance with the bylaws of the Corporation and shall
vote with holders of the Common Stock, voting together as single class, upon
all
matters submitted to a vote of shareholders, excluding those matters required
to
be submitted to a class or series vote pursuant to the terms hereof (including,
without limitation, Section 9) or by law. Provided that holders of no other
class or series of shares are entitled to cumulate their votes in any election
of directors in which they are entitled to vote, the holders of shares of
Series A Preferred Stock shall not be entitled to cumulate their votes in
any election of directors in which they are entitled to vote. If the holders
of
any other class or series of shares shall be entitled to cumulative voting
then
the holders of Series A Preferred Stock shall be entitled to cumulative
voting.
Section 3.
Rank.
The
Series A Preferred Stock shall, with respect to dividend rights and rights
on liquidation, winding up or dissolution, whether voluntary or involuntary,
whether now or hereafter issued, rank: (a) senior (except as indicated in clause
(c) below) to any other series of Preferred Stock established hereafter by
the
Board of Directors, the terms of which shall specifically provide that such
series shall rank junior to the Series A Preferred Stock with respect to
dividend rights and rights on liquidation, winding up or dissolution; (b) senior
to the Common Stock of the Corporation (the “Common
Stock”)
and
any other equity securities of the Corporation (all of such equity securities
of
the Corporation to which the Series A Preferred Stock ranks senior,
including without limitation any Preferred Stock and the Common Stock, being
collectively referred to herein as “Junior
Securities”);
and
(c) pari passu in all respect to any class of preferred stock hereafter created,
in an aggregate amount of up to 10,000,000 shares, and designated as “Series A-1
Convertible Preferred Stock,” which shall have rights and preferences identical
to those set forth herein for Series A Preferred Stock and which upon its
designation and issuance shall be treated for all purposes hereunder and under
applicable state law as one single class of preferred stock (including, without
limitation, with respect to voting rights, dividend rights and rights on
liquidation, winding up or dissolution).
36
Section 4.
Dividends; Payment Priorities.
(a) Quarterly
Dividends. The
holders of shares of the Series A Preferred Stock shall be entitled to receive,
out of funds legally available therefor, dividends at an annual rate equal
to
10% of the Stated Amount, calculated on the basis of a 360-day year, consisting
of twelve 30-day months, and shall accrue on a daily basis from the date of
issuance thereof, whether or not declared. Accrued and unpaid
dividends shall compound on a quarterly basis, and shall be, except as set
forth
in Section 4(b) below, payable in cash. The Board of Directors may
fix a record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of such dividends, which record
date
shall not be more than sixty (60) days prior to the applicable dividend payment
date. The first such dividend payment shall be due and payable on
January 15, 2008, with subsequent payments due and payable on April 15, July
15
and October 15 of each year. Subject to applicable law, all
accrued and unpaid dividends, if any, shall be mandatorily paid immediately
prior to the earlier to occur of (i) a liquidation, dissolution or winding
up of
the Corporation or (ii) an optional Conversion pursuant to Section 7
hereof.
(b) Payment
of Dividends. At
the option of the Preferred Stockholder, the Corporation shall pay dividends
on
the Series A Preferred Stock in shares of Common Stock, with each share of
Common Stock being valued for this purpose at the Conversion Price (as defined
below) in effect on the date of payment. For purposes hereof, the
“Conversion
Price”
shall
be equal to Stated Amount per share divided by the Conversion Rate (as adjusted
from time to time pursuant hereto).
(c) Junior
Securities Dividends. The
Corporation shall not declare or pay any cash dividends on, make any other
distributions with respect to, or redeem, purchase or otherwise acquire for
consideration, any shares of Junior Securities unless and until all accrued
and
unpaid dividends on the Series A Preferred Stock shall have been paid in
full.
Section 5.
Liquidation Preference.
In the
event of any voluntary or involuntary liquidation, dissolution or winding up
of
the affairs of the Corporation, the holders of shares of Series A Preferred
Stock then outstanding shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its shareholders, an amount in cash
equal to the Stated Amount for each share of Series A Preferred Stock
outstanding to and including the date of liquidation, plus an amount in cash
equal to all accrued but unpaid dividends (whether or not declared)
(collectively, such amount is referred to as the “Liquidation
Preference”),
before any payment shall be made or any assets distributed to the holders of
any
Junior Securities. If the assets of the Corporation are not sufficient to pay
in
full the applicable Liquidation Preference, then the holders of all
then-outstanding Series A Preferred Stock shares shall share in such
distribution of assets in proportion to the full respective preferential amounts
that would be payable on such shares of Series A Preferred Stock if all
amounts payable thereon were paid in full.
37
Section 6.
Optional Redemption by Corporation.
(a) In
General.
To the
extent permitted by law and the terms or provisions of other agreements or
instruments for or with respect to capital stock or indebtedness of the
Corporation to which the Corporation is, or may become, a party or subject
(including without limitation any notes, debentures or indentures), all or
less
than all of the outstanding shares of Series A Preferred Stock shall be
redeemable, at the option of the Corporation, in whole, at any time. If the
Corporation elects to redeem all or some of the Series A Preferred Stock, it
shall establish a “Redemption
Date”,
the
date on which the Redemption shall close and the Redemption Price paid. Not
more
than 60 nor less than 30 days prior to the Redemption Date, written notice
by first-class mail, postage prepaid, shall be given to the holders of record
of
the Series A Preferred Stock to be redeemed, addressed to such shareholders
at their last addresses as shown on the stock books of the Corporation (the
“Optional
Redemption Notice”).
(b) Redemption
Price; Time and Place of Redemption.
Optional
redemptions under paragraph (a) above shall be made at a per-share redemption
price (the “Redemption
Price”)
equal
to,
as
applicable: (i) on or prior to the 15-month anniversary of the first issuance
of
Series A Preferred Stock, $3.00 per share plus accrued but unpaid dividends,
or
(ii) thereafter, $3.50 per share plus
accrued
but unpaid
dividends.
(c) Contents
of Redemption Notice.
Each
Optional Redemption Notice shall specify (i) the Redemption Date, (ii) the
Redemption Price, (iii) the numbers of shares of Series A Preferred Stock to
be
redeemed from each holder, (iv) the place or places of payment, (v) that payment
of the aggregate Redemption Price will be made upon presentation and surrender
of certificates representing the shares of Series A Preferred Stock, and
(vi) that on and after the redemption date, dividends will cease to accumulate
on such shares.
(d) Redemption
Procedure.
On or
after the date fixed for redemption as stated in the Optional Redemption Notice,
each holder of the shares of Series A Preferred Stock called for redemption
shall surrender the certificate or certificates evidencing such shares of
Series A Preferred Stock to the Corporation at the place designated in such
notice, and shall thereupon be entitled to receive payment of the aggregate
Redemption Price. If fewer than all the shares of Series A Preferred Stock
represented by any such surrendered certificate or certificates are redeemed,
a
new certificate shall be issued representing the unredeemed shares of
Series A Preferred Stock. If, on the date fixed for redemption, funds
necessary for the redemption shall be available therefor and shall have been
irrevocably deposited or set aside, then, notwithstanding that the certificates
evidencing any shares called for redemption shall not have been surrendered,
the
dividends with respect to the shares so called shall cease to accumulate on
and
after the date fixed for redemption, such shares of Series A Preferred
Stock shall no longer be deemed outstanding, the holders thereof shall cease
to
be shareholders with respect to such shares, and all rights whatsoever with
respect to such shares (except the right of the holders thereof to receive
the
aggregate Redemption Price, without interest, upon surrender of their
certificates) shall terminate. If any holder of shares of Series A Preferred
Stock to be redeemed has lost, misplaced or is otherwise unable to deliver
the
certificates representing such shares, such holder shall execute and deliver
an
affidavit of loss in customary form containing an indemnification of the
Corporation with respect to any undelivered certificates, and upon such
execution and delivery the former holder of such shares shall become entitled
to
receive the aggregate Redemption Price.
(e) No
Right of Holder to Require Redemption.
Holders
of Series A Preferred Stock have no right to require the Corporation to
redeem their Series A Preferred Stock.
(f) No
Conversion Prior to Redemption Date.
From
and after the date the Option Redemption Notice is deposited in the US mail
until the Redemption Date (the “No
Conversion Period”),
the
holders of the Series A Preferred Stock may not convert any of their shares
of
Series A Preferred Stock into Common Stock. If the Redemption Price is not
paid
by 5:00 p.m. Central Time on the Redemption Date, the holders of the Series
A
Preferred Stock may convert their shares under Section 7
hereof.
38
Section 7.
Optional Conversion by Shareholders.
(a) Subject
to Section 6(f) hereof, holders of Series A Preferred Stock may, at their
option upon surrender of the certificates therefor, convert any or all of their
shares of Series A Preferred Stock into fully paid and nonassessable shares
of Common Stock (and such other securities and property as they may be entitled
to, as hereinafter provided) at any time after issuance thereof. Notwithstanding
anything else contained hereinto the contrary, the holders of Series A Preferred
Stock may not convert any shares of Series A Preferred Stock into Common Stock
during the No Conversion Period.
(b) Each
share of Series A Preferred Stock shall be convertible at the office of any
transfer agent for the Series A Preferred Stock, and at such other office
or offices, if any, as the Board of Directors may designate, into that number
of
fully paid and nonassessable shares of Common Stock (calculated as to each
conversion to the nearest 1/100th of a share) as shall be equal to the
Conversion Rate, determined as hereinafter provided, in effect at the time
of
conversion. Shares of Series A Preferred Stock may initially be converted
into full shares of Common Stock at the rate of one share of Common Stock for
each share of Series A Preferred Stock, subject to adjustment from time to
time as provided in Section 8 (such conversion rate, as so adjusted from
time to time, being referred to herein as the “Conversion
Rate”).
Upon
conversion, Holders of Series A Preferred Stock shall receive in respect of
any accumulated and unpaid dividends on the Series A Preferred Stock
surrendered for conversion a number of shares of Common Stock equal to the
number of shares of Common Stock that would have been issued if the accumulated
and unpaid dividends in the form of Series A Preferred Stock would have
been converted at the same time.
(c) In
order
to effect a conversion, a holder shall: (i) fax (or otherwise deliver) a
copy of the fully executed Notice of Conversion, in the form attached hereto,
to
the Corporation (Attention: Secretary) and (ii) surrender or cause to be
surrendered the original certificates representing the Series A Preferred
Stock (the “Preferred
Stock Certificates”)
being
converted, duly endorsed, along with a copy of the Notice of Conversion as
soon
as practicable thereafter to the Corporation. Upon receipt by the Corporation
of
a facsimile copy of a Notice of Conversion from a holder, the Corporation shall
promptly send, via facsimile, a confirmation to such holder stating that the
Notice of Conversion has been received.
(d) The
date
of actual conversion (the “Conversion
Date”)
shall
be the date on which the Corporation has received both (a) the Notice of
Conversion (by facsimile), and (b) either the Preferred Stock Certificates
as
provided above, or an indemnification or bond, in each case in a form reasonably
satisfactory to the Corporation, in the event that the holder notifies the
Corporation that such Preferred Stock Certificates have been lost, stolen or
destroyed. The Corporation (itself, or through its transfer agent) shall, no
later than the later of the second business day following the Conversion Date,
(x) issue that number of shares of Common Stock issuable upon conversion of
such
shares of Series A Preferred Stock being converted (through book-entry or
other recordation on its books and records), (y) deliver (i.e., deposit with
a
nationally recognized overnight courier service postage prepaid or deliver
as
otherwise directed by the holder or its nominee on the Notice of Conversion)
to
the holder or its nominee one or more certificates representing such Common
Stock, and (z) deliver to the holder or its nominee one or more certificates
representing the number of shares of Series A Preferred Stock not being
converted, if any.
(e) A
number
of shares of the authorized but unissued Common Stock sufficient to provide
for
the conversion of the Series A Preferred Stock outstanding upon the basis
hereinbefore provided shall at all times be reserved by the Corporation, free
from preemptive rights, for such conversion. If the Corporation shall issue
any
securities or make any change in its capital structure which would change the
number of shares of Common Stock into which each share of the Series A
Preferred Stock shall be convertible as herein provided, the Corporation shall
at the same time also make proper provision so that thereafter there shall
be a
sufficient number of shares of Common Stock authorized and reserved, free from
preemptive rights, for conversion of the outstanding Series A Preferred
Stock on the new basis.
39
(f) Upon
the
surrender of Preferred Stock Certificates to be converted, duly endorsed or
accompanied by proper instruments of transfer as provided above, the person
converting such shares shall be deemed to be the Holder of record of the Common
Stock issuable upon such conversion, and all rights with respect to the shares
surrendered shall forthwith terminate except the right to receive the Common
Stock or other securities, cash or other assets as herein provided.
Section 8.
Adjustments
to Conversion Rate.
Notwithstanding anything in this Section 8 to the contrary, no change in
the Conversion Rate shall be made until the cumulative effect of the adjustments
called for by this Section 8 since the date of the last change in the
Conversion Rate would change the Conversion Rate by more than 1%. However,
once
the cumulative effect would result in such a change, then the Conversion Rate
shall be changed to reflect all adjustments called for by this Section 9
and not previously made. Subject to the foregoing, the Conversion Rate shall
be
adjusted from time to time as set forth in this Section 8. If the
occurrence of an event would cause the Conversion Rate to be adjusted by more
than one subsection of this Section 9, then the Conversion Rate shall be
adjusted only once pursuant to the subsection that would provide the greatest
share increase in the Conversion Rate.
(a) Adjustments
to Conversion Rate for Consolidation, Merger, etc.
In case
of any consolidation or merger of the Corporation with any other entity (other
than a wholly owned subsidiary of the Corporation), or in case of any sale
or
transfer of all or substantially all of the assets of the Corporation, or in
case of any share exchange pursuant to which all of the outstanding shares
of
Common Stock are converted into other securities or property, the Corporation
shall, prior to or at the time of such transaction, make appropriate provision
or cause appropriate provision to be made so that holders of each share of
Series A Preferred Stock then outstanding shall have the right thereafter
to convert such share of Series A Preferred Stock into the kind and amount
of shares of stock and other securities and property receivable upon such
consolidation, merger, sale, transfer or share exchange by a holder of the
number of shares of Common Stock into which such share of Series A
Preferred Stock could have been converted immediately prior to the effective
date of such consolidation, merger, sale, transfer or share exchange. If in
connection with any such consolidation, merger, sale, transfer or share
exchange, each holder of shares of Common Stock is entitled to elect to receive
either securities, cash or other assets upon completion of such transaction,
the
Corporation shall provide or cause to be provided to each holder of
Series A Preferred Stock the right to elect the securities, cash or other
assets into which the Series A Preferred Stock held by such holder shall be
convertible after completion of any such transaction on the same terms and
subject to the same conditions applicable to holders of the Common Stock
(including, without limitation, notice of the right to elect, limitations on
the
period in which such election shall be made and the effect of failing to
exercise the election).
(b) Adjustments
to Conversion Rate for Stock Splits, Reclassifications, and Certain
Distributions.
In case
the Corporation shall:
(i)
pay a
dividend or make a distribution on its Common Stock in shares of its capital
stock;
(ii)
subdivide its outstanding Common Stock into a greater number of shares;
(iii)
combine the shares of its outstanding Common Stock into a smaller number of
shares; or
40
(iv)
issue by reclassification of its Common Stock any shares of its capital
stock;
then
in
each such case the Conversion Rate in effect immediately prior thereto shall
be
proportionately adjusted so that the holder of any Series A Preferred Stock
thereafter surrendered for conversion shall be entitled to receive, to the
extent permitted by applicable law, the number and kind of shares of capital
stock of the Corporation which such holder would have owned or have been
entitled to receive after the happening of such event had such Series A
Preferred Stock been converted immediately prior to the record date for such
event (or if no record date is established in connection with such event, the
effective date for such action).
An
adjustment pursuant to this subparagraph (b) shall become effective
immediately after the record date in the case of a stock dividend or
distribution and shall become effective immediately after the effective date
in
the case of a subdivision, combination or reclassification.
Section 9.
Negative Covenants.
So long
as any shares of Series A Preferred Stock are outstanding, the Corporation
shall not take any of the following corporate actions (whether by merger,
consolidation or otherwise), without first obtaining the approval (whether
at a
meeting called for such purpose or through written consent) of the holders
of a
majority of the voting power of the Series A Preferred Stock: (i) alter or
change the rights, preferences or privileges of the Series A Preferred
Stock, or increase the authorized number of shares of Series A Preferred
Stock; or (ii) alter or change the rights, preferences or privileges of any
capital stock of the Corporation in any manner that adversely affects the
Series A Preferred Stock. Notwithstanding the foregoing, the rights of the
Series A Preferred Stock and its holders shall be subject to any
later-designated and issued class of preferred stock denominated “Series A-1
Convertible Preferred Stock,” as contemplated in Section 3 above.
Section 10.
Outstanding Shares.
For
purposes of this Certificate of Designations, all shares of Series A
Preferred Stock shall be deemed outstanding except for (a) shares of
Series A Preferred Stock held of record or beneficially by the Corporation
or any subsidiary of the Corporation, and (b) from the date fixed for
redemption pursuant to Section 6, all shares of Series A Preferred Stock
which have been called for redemption, provided that funds necessary for such
redemption are available therefor and have been irrevocably deposited or set
aside for such purpose.
Section
11. No Preemptive Rights. Shares
of Series A Preferred Stock shall not entitle their holders to preemptive rights
under the Minnesota Business Corporation Act, or any other rights to subscribe
for, purchase or receive any part of any new or additional shares of any class,
whether now or hereinafter authorized, or of bonds or debentures, or other
evidences of indebtedness convertible into or exchangeable for shares of any
class..
Section
12. Lost or Stolen Certificates. Upon
receipt by the Corporation of evidence satisfactory to the Corporation of the
loss, theft, destruction or mutilation of any Preferred Stock Certificates
representing the shares of Series A Preferred Stock (including, in the case
of
mutilation, the surrender and cancellation of the mutilated certificate), and,
in the case of loss, theft or destruction of such certificates, of an
indemnification undertaking by the holder to the Corporation in customary form,
the Corporation shall execute and deliver one or more new Preferred Stock
Certificate(s) of like tenor and date.
41
Section
13. Remedies, Characterizations, Other Obligations, Breaches and Injunctive
Relief. The
remedies provided in this Certificate
of
Designations
shall be cumulative and in addition to all other remedies available under this
Certificate
of
Designations,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), no remedy contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing herein
shall limit a holder’s right to pursue actual damages for any failure by the
Corporation to comply with the terms of this Certificate
of
Designations. Amounts
set forth or provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be received by the
holder thereof and shall not, except as expressly provided herein, be subject
to
any other obligation of the Corporation (or the performance
thereof).
Section 14.
Status of Series A Preferred Stock Upon
Retirement.
Shares
of Series A Preferred Stock which are acquired or redeemed by the
Corporation shall return to the status of authorized and unissued shares of
preferred stock of the Corporation without designation as to series. Upon the
acquisition or redemption by the Corporation of all outstanding shares of Series
A Preferred Stock, all provisions of this Certificate of Designations shall
cease to be of further effect. Upon the occurrence of such event, the Board
of
Directors shall have the power, without shareholder action, to cause restated
articles of incorporation of the Corporation or other appropriate documents
to
be prepared and filed with the Secretary of State of the State of Minnesota
which reflect such removal of all provisions relating to the Series A
Preferred Stock and/or the cancellation of this Certificate of
Designations.
Section
15. Restrictions on Transfer and Assignment.
Shares
of Series A Preferred Stock may be transferred on the Corporation’s books and
records only (i) pursuant to a written assignment (or stock power, or other
suitable instrument of conveyance) in form and substance satisfactory to the
Corporation in its reasonable discretion, and (ii) after the Corporation’s
receipt of a legal opinion, in form and substance satisfactory to the
Corporation in its reasonable discretion, that such transfer will be conducted
either pursuant to an effective registration thereof under the Securities Act
or
pursuant to an applicable exemption from the such registration requirements
(including the registration or qualification requirements of any applicable
state securities laws). Absent compliance with the provisions of this Section
16, the Corporation shall not be obligated to recognize any transfer of Series
A
Preferred Stock.
IN
WITNESS WHEREOF,
the
Corporation has caused this Certificate of Designations to be signed by Xxxxxx
Xxxxxx, its President, this ____ day of ____ 2007.
Xxxxxx
Xxxxxx, President
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42
NOTICE
OF CONVERSION
(To
be
Executed by the Registered Holder
in
order
to Convert the Series A Preferred Stock)
The
undersigned hereby irrevocably elects to convert __________ shares of
Series A Convertible Preferred Stock (the “Series
A Preferred
Stock ”),
represented by the stock certificate no(s). referenced below (the “Preferred
Stock Certificates”),
into
shares of common stock (“Common
Stock”)
of
URON Inc. (the “Corporation”)
according to the conditions of the Certificate
of
Designation
of Series A Convertible Preferred Stock (the “Certificate
of
Designation”),
as of
the date written below. If securities are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto. No fee will be charged to the holder for any conversion,
except for transfer taxes, if any. Each Preferred Stock Certificate is attached
hereto (or evidence of loss, theft or destruction thereof), or else will be
furnished to the Corporation in accordance with the requirements for conversion
set forth in the Certificate of Designation. In the event of partial exercise,
please reissue a new stock certificate for the number of shares of Series A
Preferred Stock which shall not have been converted.
Date: _________________
Number
of
shares of Series A Preferred Stock to be
converted: _______________________
Preferred
Stock Certificate no(s). being: _______________________
Please
Confirm The Following Information:
Conversion
Price: _________________
Number
of
shares of Common Stock to be issued: _________________
Number
of
shares of Common Stock beneficially owned or deemed beneficially owned by the
holder on the date hereof, determined in accordance with Section 16 of the
Securities Exchange Act of 1934, as amended: _________________
Please
issue the Common Stock, into which the shares of Series A Preferred Stock are
being converted, in the following name(s) and to the following address(es):
___________________________________________________________
_____________________________________________________________________________________________________________________
The
undersigned acknowledges and agrees that the Corporation’s issuance of the
Common Stock issuable upon conversion of the Series A Preferred Stock will
not be made pursuant to an effective registration statement under the Securities
Act of 1933, as amended, but will instead be made pursuant to an exemption
from
registration thereunder.
Print
Name of Holder
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Signature
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Address
of Holder
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