WARRANT TO PURCHASE SHARES OF COMMON STOCK OF URON INC. EXERCISABLE ON OR BEFORE, AND VOID AFTER
NEITHER
THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE
SECURITIES LAWS. AS A RESULT, THIS WARRANT AND SUCH SECURITIES MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR EVIDENCE SATISFACTORY TO THE COMPANY OF AN APPLICABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT OR COMPLIANCE WITH RULE 144 UNDER
SUCH
ACT. THE TRANSFER OF THIS WARRANT IS FURTHER RESTRICTED AS PROVIDED
HEREIN.
WARRANT
TO PURCHASE SHARES
OF
COMMON STOCK
OF
URON INC.
EXERCISABLE
ON OR BEFORE, AND VOID AFTER
5:00
P.M.
MINNEAPOLIS TIME ON JULY 5, 2012
This
Certifies That ▇▇▇▇▇▇
▇▇▇▇▇▇ (the “Holder”),
or
registered assigns, is entitled to subscribe for and purchase from URON Inc.,
a
Minnesota corporation (the “Company”),
at
any time after July 5, 2007, through July 5, 2012, 100,000 shares of the
Company’s common stock at an exercise price of $0.15 per share, subject to
adjustment as provided herein (as adjusted, the “Purchase
Price”).
The
shares that may be acquired upon exercise of this Warrant are referred to herein
as the “Warrant
Shares.”
As
used herein, the term “Holder” means the Holder identified in the paragraph
above and any party who acquires all or a part of this Warrant as a registered
transferee of such
Holder.
The
term “Convertible
Securities”
means
any stock or other securities convertible into, or exchangeable for, Company
common stock. This
Warrant is subject to the following terms and conditions:
1. Exercise.
The
rights represented by this Warrant may be exercised by the Holder, in whole
or
in part (but not as to a fractional share of common stock), by written Notice
of
Exercise (in the form attached hereto) delivered to the Company at the principal
office of the Company prior to the expiration of this Warrant and accompanied
or
preceded by the surrender of this Warrant along with a check in payment of
the
Purchase Price multiplied
by the number of Warrant Shares being purchased hereunder, unless this Warrant
is being exercised pursuant to Section 9 below.
2. Exchange
and Replacement.
Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction, or mutilation of this Warrant, the Company will make and
deliver a new Warrant of like
tenor, in lieu of this Warrant. This Warrant shall be promptly canceled by
the
Company upon the surrender hereof in connection with any exchange or
replacement.
3. Issuance
of the Warrant Shares.
(a) Subject
to the provisions of paragraph (b) below, certificates for the Warrant Shares
purchased hereunder shall be delivered to the Holder within a reasonable time,
not exceeding ten days, after the rights represented by this Warrant shall
have
been so
exercised, and, unless this Warrant has expired,
a new Warrant representing the right to purchase the number of
Warrant Shares,
if any, with respect to which this Warrant shall not then have been exercised
shall also be delivered to the Holder within such time.
(b) Notwithstanding
the foregoing, the Company shall not
be
required to recognize any exercise or deliver any certificate for Warrant Shares
upon attempted exercise of this Warrant except in accordance with exemptions
from the applicable securities, registration requirements or registrations
under
applicable securities laws. The Company shall not be obligated to effect a
registration of the Warrant Shares under federal or state securities laws unless
specifically so provided herein. The Holder agrees to execute such documents
and
make such representations, warranties, and agreements as may be required solely
to comply with the exemptions relied upon by the Company, or the registrations
made, for the issuance of the Warrant Shares.
4. Covenants
of the Company.
The
Company covenants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will at all times
have
authorized for the purpose of issue or transfer upon exercise of the
subscription rights evidenced by this Warrant a sufficient number of shares
of
common stock to provide for the exercise of the rights represented by this
Warrant.
5. Purchase
Price Adjustments. The
provisions of this Warrant are subject to adjustment as provided in this Section
5.
(a) In
case
the Company shall hereafter: (i) pay any dividends on any class of stock of
the
Company payable in common stock or Convertible Securities; (ii) subdivide its
then-outstanding shares of common stock into a greater number of shares; or
(iii) combine outstanding shares of common stock, by reclassification or
otherwise; then,
in
any such event, the Purchase Price in effect immediately prior to such event
shall (until adjusted again pursuant hereto) be adjusted immediately after
such
event to a price (calculated to the nearest full cent) determined by dividing
(A) the number of shares of common stock
outstanding
immediately prior to such event, multiplied by the then-existing Purchase Price,
by (B) the total number of shares of common stock outstanding immediately after
such event (including in each case the maximum number of shares of common stock
issuable in respect of any Convertible Securities), and the resulting quotient
shall be the adjusted Purchase Price. An adjustment made pursuant to this
paragraph shall
become
effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date
in
the case of a subdivision, combination or reclassification. If, as a result
of
an adjustment made pursuant to this paragraph, the Holder of any Warrant
thereafter surrendered for exercise shall become entitled to receive shares
of
two or more classes of capital stock or share of common stock and other capital
stock of the Company, the Company’s board of directors (whose determination
shall be conclusive) shall determine the allocation of the adjusted Purchase
Price between or among shares of such classes of capital stock or shares of
common stock and other-capital
stock. All calculations under this paragraph shall be made to the nearest cent
or to the nearest 1/100 of a share, as
the
case
may be. In the event that at any time as a result of an adjustment made pursuant
to this paragraph, the holder of any Warrant thereafter surrendered for exercise
shall become entitled to receive any shares of the Company other than shares
of
common stock, thereafter the Purchase Price of such other shares so receivable
upon exercise of any Warrant shall be subject to adjustment from
time to
time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to common stock contained in this Section.
(b) In
case
of any consolidation or merger to which the Company is a party other than a
merger or consolidation in which the Company is the surviving corporation,
or in
case of any sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, or in the case of any
statutory exchange of securities with another corporation (including any
exchange effected in connection with a merger of a third corporation into the
Company), there shall be no adjustment under paragraph (a) above but the Holder
of this Warrant then outstanding shall have the right thereafter to convert
this
Warrant into the kind and amount of shares of stock and other
securities, and
any
other property, which he, she or it would have owned or have been entitled
to
receive immediately after such consolidation, merger, statutory exchange sale
or
conveyance had such Warrant been converted immediately prior to the effective
date of such consolidation, merger, statutory exchange, sale or conveyance.
The
provisions of this paragraph shall similarly apply to successive consolidations,
mergers, statutory exchanges, sales or conveyances.
2
6. No
Voting Rights.
This
Warrant by itself shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.
7. Notice
of Transfer of Warrant or Resale of the Warrant Shares.
(a) The
Holder,
by acceptance hereof, agrees to give written notice to the Company before
transferring this Warrant or transferring any Warrant Shares of such Holder’s
intention to do so, describing briefly the manner of any proposed transfer.
If
in the opinion of the Company counsel the proposed transfer may be effected
without registration or qualification (under any federal or state securities
laws), the Company, as promptly as practicable, shall notify the Holder of
such
opinion, whereupon the Holder shall be entitled to transfer this Warrant or
to
dispose of Warrant Shares received upon the previous exercise of this Warrant,
all in accordance with the
terms
of the notice delivered by the Holder to the Company; provided, however, that
an
appropriate legend may be endorsed on this Warrant or the certificates for
such
Warrant Shares respecting restrictions upon transfer thereof necessary or
advisable in the opinion of counsel and satisfactory to the Company to prevent
further transfers which would be in violation of Section 5 of the Securities
Act
of 1933 (the “Securities
Act”)
and
applicable state securities laws; and provided further that the prospective
transferee or purchaser shall execute such documents and make such
representations, warranties, and agreements as may be required solely
to.
comply
with the exemptions relied upon by the Company for the transfer of disposition
of the Warrant or Warrant Shares.
(b) If,
in
the opinion of counsel referred to in this Section 7, the proposed transfer
or
disposition of this Warrant or such Warrant Shares described in the written
notice given pursuant to this Section 7 may
not
be
effected without registration or qualification of this Warrant or such Warrant
Shares the Company shall promptly give written notice thereof to the Holder,
and
the Holder will limit its activities in
respect
to such transfer or disposition as, in the opinion of both such counsel, are
permitted by law.
8. No
Fractional Shares.
No
fractional shares will be issued upon the exercise hereof.
9. Net
Issue Exercise.
In lieu
of exercising this Warrant pursuant to Section 1 hereof, the Holder may elect
to
receive, without the payment of any additional consideration, a number of
Warrant Shares equal to the value (as determined below) of this Warrant (or
the
portion thereof being exercised) by surrender of this Warrant to the Company
together with a duly executed Notice of Exercise (in the form attached hereto)
in which the appropriate alternative is initialed by the Holder. In such event,
the Company shall issue to the Holder the number of Warrant Shares computed
by
applying the following formula:
X
= Y
(A-B)
A
3
Where:
|
X
|
=
|
the number of Warrant Shares to be issued to the Holder; | |||
|
Y
|
=
|
the
number of Warrant Shares subject to this
warrant (or, if only a portion
of this Warrant is being exercised, the number of Warrant Shares
subject
to the portion of this Warrant being exercised);
|
|||
|
A
|
=
|
the Fair Market Value of one Warrant Share (at the date of such exercise); and | |||
|
B
|
=
|
the Purchase Price, as adjusted to the date of such calculation. |
For
purposes of the above, the “Fair
Market Value”
of
one
share shall equal the average of the closing sale prices of the common stock
quoted on the Nasdaq Stock Market or listed in the Over-The-Counter Bulletin
Board (or the Pink Sheets) or the closing price quoted on any national
securities exchange on which such securities are listed, whichever is
applicable, for the ten consecutive trading days immediately prior to the date
of determination of Fair Market Value (or, if no sales take place on any such
trading day, the average of the closing bid and asked prices on such trading
day). If, however, the common stock is not traded on the Nasdaq Stock Market
or
Over-The-Counter or on a national securities exchange, the Fair Market Value
of
a Warrant Share shall be determined in good faith by the Company’s board of
directors.
10. Registration
Rights.
(a) Subject
to paragraph (d) of this Section, each time the Company shall determine to
proceed with the actual preparation and filing of a registration statement
under
the Securities Act, in connection with the proposed offer and sale for money
of
any of its securities by it (other than a registration on Form ▇-▇, ▇-▇ or
any
successor forms), the Company will give written notice of its determination
to
Holder. Upon the written request of Holder given within 30 days after receipt
of
any such notice from the Company, the Company will, except as herein provided,
cause all Warrant Shares with respect to which Holder has requested registration
to be included in such registration statement, all to the extent requisite
to
permit the sale or other disposition by Holder of the shares to be so
registered; provided, however, that nothing herein shall prevent the Company
from, at any time, abandoning or delaying any such registration initiated by
it.
If any such registration pertains to an underwritten offering in whole or in
part, the Company may require that the shares requested for inclusion by Holder
pursuant to this section be included in the underwritten offering on the same
terms and conditions as the securities otherwise being sold through the
underwriters. In the event that if in the good faith judgment of the managing
underwriter of such underwritten offering the inclusion of all of the Warrant
Shares originally covered by a request for registration made by Holder would
reduce the amount of securities to be offered by the Company or interfere with
the successful marketing of the securities to be offered by the Company, the
number of Warrant Shares owned by or issuable to Holder and otherwise to be
included in the underwritten offering may be reduced. Any Warrant Shares which
are thus excluded from the underwritten offering shall be withheld from the
market by Holder for a period, not to exceed 180 days, that the managing
underwriter reasonably determines is necessary in order to effect the
underwritten offering.
4
(b) If
and
whenever the Company is required by the provisions of Section 10(a) to effect
the registration of any Warrant Shares under the Securities Act, the Company
will:
(i) prepare
and file with the SEC a registration statement with respect to such shares,
and
use reasonable commercial efforts to cause such registration statement to become
and remain effective for such period as may be reasonably necessary to effect
the sale of such shares, not to exceed two years from the date of issuance
of
the covered Warrant Shares;
(ii) prepare
and file with the SEC such amendments to such registration statement and
supplements to the prospectus contained therein as may be necessary to keep
such
registration statement effective for such period as may be reasonably necessary
to effect the sale of such securities, not to exceed two years from the date
of
issuance of the covered Warrant Shares;
(iii) furnish
to Holder and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as Holder and underwriters
may reasonably request in order to facilitate the public offering of such
securities;
(iv) use
reasonable commercial efforts to register or qualify the securities covered
by
such registration statement under such state securities or blue sky laws of
such
jurisdictions as the underwriters may reasonably request within 20 days
following the original filing of such registration statement, except that the
Company shall not for any purpose be required to execute a general consent
to
service of process or to qualify to do business as a foreign corporation in
any
jurisdiction wherein it is not so qualified; and
(v) prepare
and promptly file with the SEC any amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then
in
effect would include an untrue statement of a material fact or omit to state
any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading.
(c) With
respect to any registration of shares pursuant to Section 10(a), the Company
shall bear the following fees, costs and expenses: all registration, filing
and
NASD fees, printing expenses, fees and disbursements of counsel and accountants
for the Company, fees and disbursements of counsel for the underwriter or
underwriters of such securities (if the Company and/or selling security holders
are required to bear such fees and disbursements), all internal Company
expenses, the premiums and other costs of policies of insurance against
liability arising out of the public offering, and all legal fees and
disbursements and other expenses of complying with state securities or blue
sky
laws of any jurisdictions in which the securities to be offered are to be
registered or qualified. Fees and disbursements of counsel and accountants
for
Holder, underwriting discounts and commissions and transfer taxes for Holder
and
any other expenses incurred by Holder not expressly included above shall be
borne by Holder.
(d) Notwithstanding
anything to the contrary herein, the Company shall not be obligated to register
the resale of (i) any Warrant Shares purchased for cash which have been
outstanding for more than two years or (ii) any Warrant Shares, purchased
pursuant to Section 9, after July 8, 2009.
5
IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.
| URON INC.: | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
|
▇▇▇▇▇▇ ▇▇▇▇▇▇ |
||
|
Chief
Executive Officer
|
||
6
NOTICE
OF EXERCISE
(To
be
signed upon exercise of Warrant)
THE
UNDERSIGNED, the holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, of the shares of common stock of URON Inc. to which such Warrant
relates and herewith makes payment of $______________________ therefor in cash
or by certified check (unless the Warrant is being exercised pursuant to Section
9, in which case the box below indicating such fact is checked), and requests
that the certificate for such shares be issued in the name of, and be delivered
to, ______________________ the address for which is set forth below the
signature of the undersigned.
|
o
|
The
undersigned is exercising the Warrant pursuant to the Net Issue Exercise
provisions of Section 9.
|
Dated:
_______________________, 20____
|
Signature |
|
Name |
|
Address |
|
City, State, Zip Code |
|
Social Security or Tax Identification No. |
7
ASSIGNMENT
FORM
(To
be
signed only upon authorized transfer of Warrant)
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns, and transfers unto
_______________________________ the right to purchase the securities of URON
Inc., a Minnesota corporation, to which the within Warrant relates and appoints
______________________, attorney, to transfer said right on the books of URON
Inc. with full power of substitution in the premises.
Dated:
_______________________, 20____
|
Signature
|
|
Name |
|
Address |
|
Social
Security or Tax Identification No.
|
8