Exhibit 1.1
SELLING AGREEMENT
This SELLING AGREEMENT is made as of this _______ day of
___________________, 1998, between COYOTE SPORTS, INC., a Nevada corporation
("Company"), with principal offices at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, and those persons whose names appear on the signature pages hereof
("Selling Shareholders").
RECITALS:
WHEREAS, the Company has issued to Selling Shareholders shares of the
Company's common stock (the shares of Common Stock being hereinafter referred to
as the "Shares");
WHEREAS, the Company intends to file a registration statement on Form
S-3 ("Registration Statement") with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"),
registering the Shares for sale;
WHEREAS, this Agreement is entered into between the Company and the
Selling Shareholders to facilitate a legal and orderly distribution of the
Shares pursuant to the Registration Statement.
NOW, THEREFORE, in consideration of the promises made herein and for
other good and valuable consideration, the parties agree as follows:
1. Covenants, Representations and Warranties of the Company.
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(a) The Company shall use its best efforts to keep the
Registration Statement effective so as to permit the public sale of the Shares
for a period of one (1) year after the effective date of the Registration
Statement.
(b) The Company will provide the Selling Shareholders with
sufficient copies of the Registration Statement (and the prospectus contained
therein) as shall be required to satisfy prospectus delivery requirements under
federal and state securities laws.
(c) The Company will pay all expenses of the public offering of
the Shares except for fees of attorneys, accountants and other advisors retained
by the Selling Shareholders and brokerage and other selling commissions
associated with the distribution of the Shares.
(d) In the case of the happening, at any time after the commencement
of the offering of the Shares, and prior to the termination thereof, of any
event which materially affects the Company or the Shares which should be set
forth in an amendment of or supplement to the Registration Statement in order to
make the statements therein not misleading, the Company agrees, upon receiving
knowledge of such event, to notify the Selling Shareholders as promptly as
possible of the happening of such an event. In such event, the Company agrees
to prepare and furnish to the Selling Shareholders copies of an amended
Registration Statement or a supplement to the Registration Statement (including
the prospectus contained therein) in such quantities as the Selling Shareholders
may reasonably request, in order that the Registration Statement as so amended
or supplemented will not contain any untrue statement of material fact, or omit
to state any material fact necessary in order to make the statements therein not
misleading in light of the circumstances under which they were made.
(e) The Company shall obtain the necessary state securities and blue
sky registrations or clearances in only those states in which it elects to do
so.
(f) No order preventing or suspending the use of any preliminary
prospectus contained in the Registration Statement has been issued by the
Commission, and such preliminary prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit 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; provided, however,
that this representation and warranty does not apply to any state ments or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by and with respect to the Selling Shareholders expressly
for use therein.
(g) The Company meets the requirements for the use of Form S-3 under
the Act and the rules and regulations of the Commission.
(h) The Registration Statement and the final prospectus contained
therein and any further amendments or supplements thereto (including any
document incorporated by reference therein filed after the effective date of the
Registration Statement) will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder.
All documents incorporated by reference into the Registration Statement will
conform in all material respects to the requirements of the Commission. No part
of the Registration Statement, the prospectus or any amendment or supplement
thereto (including documents incorporated by reference therein) will contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions in the Registration Statement or prospectus made in
reliance upon and in conformity with substantive information furnished in
writing to the Company by and with respect to the Selling Shareholders expressly
for use therein.
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2. Covenants, Representations and Warranties of the Selling Shareholders.
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(a) In the case of the happening, at any time after the commencement
of the offering of the Shares, and prior to the termination thereof, of any
event which materially affects the plan of distribution of the Shares, which
event should be set forth in an amendment of or supplement to the Registration
Statement in order to make the statements therein not misleading, each Selling
Shareholder who or which receives knowledge of such event, upon receiving such
knowledge, shall notify the Company, as promptly as possible, of the happening
of such an event, whereupon the provisions of Section l(d) above shall then
apply.
(b) Each Selling Shareholder agrees to deliver copies of the final
prospectus contained in the Registration Statement, as it may be amended and
supplemented from time to time, to purchasers of the Shares as required by
applicable federal and state securities laws. Each Selling Shareholder agrees
that it will offer and sell the Shares in only those states as to which counsel
for the Company has advised each Selling Shareholder in writing that the
necessary state securities or blue sky clearances have been obtained. Each
Selling Shareholder will notify the Company in writing at the time the
distribution of its Shares has been completed.
(c) Statements contained in the Registration Statement, the
prospectus or any amendments or supplements thereto (including any document
incorporated by reference therein) made in reliance upon and in conformity with
substantive information furnished in writing to the Company by and with respect
to the Selling Shareholders expressly for use therein do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make such statements therein not misleading.
(d) If during the effectiveness of the Registration Statement, the
Company notifies the Selling Shareholders of the occurrence of any intervening
event that, in the opinion of the Company's legal counsel, causes the prospectus
included in the Registration Statement not to comply with the Act, each Selling
Shareholder, promptly after receipt of the Company's notice, shall cease making
any offers, sales or other dispositions of the Shares included in the
Registration Statement until the Selling Shareholders receive from the Company
copies of a new, amended or supplemented prospectus complying with the Act.
Notwithstanding the above, the Selling Shareholders may offer and sell the
Shares in compliance with the Act during such time without the use or reliance
upon registration or the Registration Statement.
3. Suspension of Offering. It is understood that the Company and the
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Selling Shareholders will advise each other immediately, in writing, of the
receipt of any threat or the initiation of any steps or procedures by any
federal or state instrumentality or any individual which reasonably would be
expected to impair or prevent the offer of the Shares or the issuance of any
suspension orders or other prohibitions preventing or impairing the proposed
offering. In the case of the happening of any such event, the Company agrees
actively to defend against any such steps, procedures, orders or prohibitions
unless all parties agree in writing to the acquiescence in such actions or
orders.
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4. Indemnification.
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(a) Company's Indemnification. The Company hereby agrees to indemnify
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and hold harmless each Selling Shareholder, its officers and directors, and each
other person, if any, who controls the Selling Shareholders within the meaning
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Selling Shareholder or any such person controlling such
Selling Shareholder may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or proceedings in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained, on the effective date thereof, in the
Registration Statement, or in any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, and will
reimburse such Selling Shareholder or such person controlling such Selling
Shareholder for any legal or other expenses reasonably incurred in connection
with investigating or defending any such loss, claim, damage, liability or
proceeding; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Selling Shareholder.
(b) Selling Shareholder's Indemnification. Each Selling Shareholder
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hereby agrees to indemnify and hold harmless the Company, its officers and
directors, and each other person, if any, who controls the Company within the
meaning of the Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or such other person controlling the Company may
become subject under the Act or otherwise, but only to the extent that such
losses, claims, damages or liabilities (or proceedings in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in the Registration
Statement or in any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein not misleading, which, in each such
case, has been made in or omitted from the Registration Statement, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Selling Shareholder and will reimburse the Company or
such person controlling the Company for any legal or other expenses reasonably
incurred in connection with investigating or defending any such loss, claim,
damage, liability or proceeding.
5. Miscellaneous:
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(a) This Agreement is made pursuant to and governed by the laws of the
State of Colorado, without regard to its choice of law principles.
(b) Any notices by the Company to Selling Shareholders shall be deemed
delivered if in writing and delivered personally, or sent by certified mail, or
by a nationally-recognized overnight delivery service, to the Selling
Shareholders addressed to them at their
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addresses as set forth in the Company's books and records. Any notice by Selling
Shareholders to the Company shall be deemed delivered if in writing and
delivered personally, or sent by certified mail or by a nationally-recognized
overnight delivery service, addressed to the Company at its address as set forth
at the beginning hereof.
(c) All covenants, representations and warranties of the Selling
Shareholders set forth herein are made severally and not jointly.
(d) In the event that (i) any obligation of the Company pursuant to
that certain Registration Rights Agreement dated as of March 19, 1998 between
the Company and Paragon Coyote Texas Ltd., a Texas limited partnership (each a
"Preexisting Company Obligation"), conflicts or is inconsistent with this
Agreement and (ii) such Preexisting Company Obligation is in any respect more
stringent than the conflicting or inconsistent obligation of the Company set
forth in this Agreement, then in each such event the Preexisting Company
Obligation shall control.
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IN WITNESS WHEREOF, the parties have executed this Selling Agreement as of
the date first above written.
COMPANY:
COYOTE SPORTS, INC.
By:_____________________________
Xxx Xxxxxxxxxxx
Its: Chairman and Secretary
SELLING SHAREHOLDERS:
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