COYOTE SPORTS, INC.
VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") is made and entered into as of
February 2, 1999, by and between Royal Precision, Inc., a Delaware corporation
("Royal"), and Xxx X. Xxxxxxxxxxx (the "Stockholder").
RECITALS
A. Concurrently with the execution of this Agreement, Coyote Sports,
Inc., a Nevada corporation ("Coyote"), RP Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Coyote ("Coyote Sub"), and Royal
are entering into an Agreement and Plan of Merger (the "Merger Agreement") which
provides for the merger (the "Merger") of Coyote Sub with and into Royal.
Pursuant to the Merger, each share of capital stock of Royal will be converted
into the right to receive one share of a new class of Coyote Convertible
Preferred Stock, authorized by Coyote, on the basis described in the Merger
Agreement.
B. The Stockholder is the record holder and beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of such number of shares of the outstanding capital stock of
Coyote as is indicated on the signature page of this Agreement (the "Shares").
C. As an inducement to Royal to enter into the Merger Agreement, the
Stockholder is willing to enter into and be bound by this Agreement pursuant to
which the Stockholder agrees not to transfer or otherwise dispose of any of the
Shares, or any other shares of capital stock of Coyote acquired hereafter and
prior to the Expiration Date (as defined in Section 1.1 below, except as
otherwise permitted hereby), to vote the Shares and any other such shares of
capital stock of Coyote so as to approve an increase in the number of authorized
shares of Coyote Preferred Stock and the issuance of Coyote Convertible
Preferred Stock and to facilitate consummation of the Merger and to grant Royal
a proxy with respect to the Shares upon the terms set forth herein.
D. All terms not otherwise defined herein shall have their respective
meanings set forth in the Merger Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereby agree as follows:
1. Agreement to Retain Shares.
1.1 Transfer and Encumbrance. The Stockholder agrees not to transfer
(except as may be specifically required by court order), sell, exchange,
pledge or otherwise dispose of or encumber any of the Shares or any New
Shares, as defined in Section 1.2 below, or to make any offer or agreement
relating to any such action, at any time prior to the Expiration Date. As
used herein, the term "Expiration Date" shall mean the earlier to occur of
(i) such date and time as the Merger shall become effective in accordance
with the terms and provisions of the Merger Agreement and (ii) such date
and time as the Merger Agreement shall be validly terminated pursuant to
the terms thereof.
1.2 Additional Purchases. The Stockholder agrees that any shares of
capital stock of Coyote (or securities convertible into, exchangeable for
or constituting the right to acquire, capital stock of Coyote) that the
Stockholder purchases or with respect to which the Stockholder otherwise
acquires beneficial ownership after the execution of this Agreement and
prior to the Expiration Date (including, without limitation, in the event
of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of Coyote
affecting the Shares, or pursuant to the exercise of any option) ("New
Shares") shall be subject to the terms and conditions of this Agreement to
the same extent as if they constituted Shares.
2. Agreement to Vote Shares. At every meeting of the stockholders of
Coyote called with respect to any of the following, and at every adjournment
thereof, and on every action or approval by written consent of the stockholders
of Coyote with respect to any of the following, the Stockholder shall vote
(including any class vote) the Shares: (i) in favor of approval of the Merger
Agreement and the Merger, the terms thereof and each of the transactions
contemplated thereby, and any matter necessary to facilitate the Merger; (ii)
against any action or agreement that would result in a breach of any covenant,
representation or warranty or any other agreement or obligation of Coyote under
the Merger Agreement; (iii) against (x) any extraordinary corporate transaction,
such as a merger, consolidation or any other business combination involving
Coyote or its subsidiaries, (y) a sale, lease or transfer of a material amount
of assets by Coyote or its subsidiaries (other than in the ordinary course of
business) or (z) any reorganization, recapitalization, dissolution or
liquidation of Coyote, in each case other than the Merger and the transactions
contemplated by the Merger Agreement); or (iv) any other action involving Coyote
or its subsidiaries which is intended or which reasonably could be expected to
impede, interfere with, delay, postpone or materially adversely affect the
Merger and the transactions contemplated by the Merger Agreement (each of the
matters referred to in clauses (i) through (iv), a "Subject Matter"). This
Agreement is intended to bind the Stockholder only with respect to the specific
matters set forth herein.
3. Representations, Warranties and Covenants of the Stockholder. The
Stockholder hereby represents, warrants and covenants to Royal as follows:
3.1 Ownership of Shares. The Stockholder (i) is the record holder
and beneficial owner of the Shares, which at the date hereof and at all
times up until the Expiration Date will be free and clear of any liens,
claims, options, charges, voting trusts
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or agreements, proxies or other encumbrances; (ii) does not beneficially
own any shares of capital stock of Coyote (or securities convertible into,
exchangeable for or constituting the right to acquire, capital stock of
Coyote), other than the Shares (and other than options to purchase the
number of shares of the common stock of Coyote, if any, indicated on the
signature page of this Agreement); and (iii) has full power and authority
to make, enter into and carry out the terms of this Agreement.
3.2 Stockholder Authority; No Conflict. This Agreement has been duly
authorized (to the extent that the Stockholder is not a natural person),
executed and delivered by the Stockholder and constitutes the legal, valid
and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms, except as limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting enforcement of creditors' rights
generally and (ii) general principles of equity, regardless of whether
asserted in a proceeding in equity or at law. Neither the execution and
delivery of this Agreement nor the consummation by the Stockholder of the
transactions contemplated hereby will result in a violation of, or a
default under, or conflict with, any contract, trust, commitment,
agreement, understanding, arrangement or restriction of any kind to which
the Stockholder is a party or bound or to which the Stockholder's Shares
are subject. Consummation by the Stockholder of the transactions
contemplated hereby will not violate, or require any consent, approval, or
notice under (except for any notice which may be required pursuant to the
Exchange Act), any provision of any judgment, order, decree, statute, law,
rule or regulation applicable to the Stockholder or the Stockholder's
Shares.
3.3 No Proxy Solicitations. The Stockholder will not, and will not
permit any entity under the Stockholder's control to: (i) solicit proxies
or become participants in a solicitation with respect to a CSI Acquisition
Proposal or CSI Alternative Transaction or otherwise encourage or assist
any party in taking or planning any action that would compete with,
restrain or otherwise serve to interfere with or inhibit the timely
consummation of the Merger in accordance with the terms of the Merger
Agreement; (ii) initiate a stockholders' vote or action by consent of
Coyote stockholders with respect to an Acquisition Proposal or Alternative
Transaction; or (iii) become members of a "group" (as such term is used in
Section 13(d) of the Exchange Act) with respect to any voting securities of
Coyote with respect to an Acquisition Proposal or Alternative Transaction.
Notwithstanding the above, the Stockholder may take any actions in the
Stockholder's role as a director of Coyote permitted under the Merger
Agreement.
3.4 Royal Reliance. The Stockholder understands and acknowledges
that Royal is entering into the Merger Agreement in reliance upon the
Stockholder's execution and delivery of this Agreement. The Stockholder
acknowledges that the irrevocable proxy set forth in Section 4 is granted
in consideration for the execution and delivery of the Merger Agreement by
Royal.
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3.5 No Solicitation. Upon execution of this Agreement, the
Stockholder shall not have, or shall immediately terminate any
discussions with, any third party concerning an Alternative Transaction.
From and after the date of this Agreement until the earlier of the
Effective Time (as defined in the Merger Agreement) or the termination of
this Agreement in accordance with its terms, the Stockholder shall not, and
shall not permit any officer, director, employee, controlled Affiliate,
investment banker or other agent (in such agency capacity) of the
Stockholder to, directly or indirectly, (i) solicit, engage in discussions
or negotiate with any Person (whether such discussions or negotiations are
initiated by the Stockholder or otherwise) or take any other action
intended or designed to facilitate the efforts of any Person, other than
Royal, relating to an Alternative Transaction, (ii) provide information
with respect to Coyote or any of its Subsidiaries to any Person, other than
Royal, relating to a possible Alternative Transaction by any Person, other
than Royal, (iii) enter into an agreement with any person, other than
Royal, providing for a possible Alternative Transaction, or (iv) make or
authorize any statement, recommendation or solicitation in support of any
possible Alternative Transaction by any Person, other than by Royal.
Notwithstanding the above, the Stockholder may take any actions in the
Stockholder's role as a director of Coyote permitted under the Merger
Agreement.
4. Grant of Irrevocable Proxy; Appointment of Proxy.
4.1 The Stockholder hereby irrevocably grants to, and appoints, each
of Xxxxxxx X. Xxxxxxx and Xxx Xxxxxxxxx or either of them, the
Stockholder's proxy and attorney-in-fact (with full power of substitution),
for and in the name, place and stead of the Stockholder, to vote such
Stockholder's Shares, or grant or not grant a consent or approval in
respect of such Shares, at any meeting of shareholders of Coyote or at any
adjournment thereof or in any other circumstances, including, without
limitation, a solicitation of stockholder consents to action without a
meeting, upon which the Stockholder's vote, consent or other approval is
sought, in respect of any Subject Matter.
4.2 Revocation of Any Other Proxies. The Stockholder represents that
any proxies heretofore given in respect of the Stockholder's Shares are not
irrevocable, and that any such proxies are hereby revoked.
4.3 Proxy Granted to Royal Irrevocable. The Stockholder hereby
affirms that the irrevocable proxy set forth in this Section 4.1 is given
in connection with the execution of the Merger Agreement, and that such
irrevocable proxy is given to secure the performance of the duties of the
Stockholder under this Agreement. The Stockholder hereby further affirms
that the irrevocable proxy is coupled with an interest and may under no
circumstances be revoked, except, that this proxy shall expire on the
Expiration Date. The Stockholder hereby ratifies and confirms all that
such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy (expiring on the Expiration Date) is
executed and intended to be irrevocable in accordance with the provisions
of the Nevada General Corporation Law (the "NGCL").
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5. Certain Events. The Stockholder agrees that this Agreement and the
obligations hereunder shall attach to the Stockholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise, including without
limitation the Stockholder's constituent partners or its successors.
6. Additional Documents. The Stockholder hereby covenants and agrees to
execute and deliver any additional documents necessary or desirable, in the
reasonable opinion of Royal, to carry out the intent of this Agreement.
7. Consent and Waiver. The Stockholder hereby gives any consents or
waivers that are reasonably required for the consummation of the Merger under
the terms of any agreements to which the Stockholder is a party or pursuant to
any rights the Stockholder may have.
8. Termination. This Agreement shall terminate and shall have no further
force or effect as of the Expiration Date.
9. Miscellaneous.
9.1 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, then the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
9.2 Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement
nor any of the rights, interests or obligations of the Stockholder may be
assigned by the Stockholder without the prior written consent of Royal.
9.3 Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of
a written agreement executed by the party against whom enforcement is
sought.
9.4 Specific Performance; Injunctive Relief. The parties hereto
acknowledge that Royal will be irreparably harmed and that there will be no
adequate remedy at law for a violation of any of the covenants or
agreements of the Stockholder set forth herein. Therefore, it is agreed
that, in addition to any other remedy or remedies that may be available to
Royal upon any such violation, Royal shall have the right to enforce such
covenants and agreements by specific performance, injunctive relief or by
any other means available to Royal at law or in equity without posting any
bond and without proving that monetary damages would be inadequate.
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9.5 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and sufficient if delivered in
person, by cable, telegram or telex, or sent by mail (registered or
certified mail, postage prepaid, return receipt requested) or overnight
courier (prepaid) to the respective parties as follows:
If to Royal: Royal Precision, Inc.
00000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attn: Chairman of the Board
With a copy to: White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attn: Xxxx Xxxxxxxxx, Esq.
If to the
Stockholder: Xxx X. Xxxxxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Telecopier No.:
Telephone No.:
Attn:
or to such other address or person's attention as any party may have
furnished to the other in writing in accordance herewith, except that
notices of change of address shall only be effective upon receipt.
9.6 Governing Law. The laws of the State of New York (irrespective
of its choice of laws, rules or principles) will govern the validity of
this Agreement, the construction of its terms and the interpretation and
enforcement of the rights and duties of the parties hereto.
9.7 Entire Agreement. This Agreement and the Merger Agreement
contain the entire understanding of the parties with respect to the subject
matter hereof, and supersede all prior negotiations and understandings
between the parties with respect to such subject matter.
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9.8 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but which together shall constitute one
and the same agreement.
9.9 Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction or interpretation of
this Agreement.
9.10 Waiver of Jury Trial. ROYAL AND THE STOCKHOLDER EACH HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT,
TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties have caused this Voting Agreement to
be duly executed on the day and year first above written.
ROYAL PRECISION, INC.
By: ____________________________
Title: _________________________
XXX X. XXXXXXXXXXXX
_______________________________
______ shares of Common Stock
______ shares of Common Stock
subject to options
