COYOTE SPORTS, INC.
COHIG & ASSOCIATES, INC.
REPRESENTATIVE'S WARRANT AGREEMENT
Dated as of September __, 1997
TABLE OF CONTENTS
Section Title Page Number
1 Definitions 1
2 Warrants and Issuance of Warrant Certificates 3
3 Form of Warrant Certificate 3
4 Term of Warrants; Exercise of Warrants 3
5 Reservation of Warrant Securities 5
6 Payment of Taxes 5
7 Warrant Securities to be Fully Paid 6
8 Limitation on Transfer 6
9 Adjustment of Exercise Price and Number of Shares 6
10 Merger or Consolidation of Company 10
11 Modification of Agreement 10
12 Notice to Holders 10
13 Registration Rights 11
14 Restrictions on Transfer 14
15 No Rights as Stockholder 15
16 Notices 15
17 Arbitration 16
18 Miscellaneous Provisions 16
REPRESENTATIVE'S WARRANT AGREEMENT
THIS REPRESENTATIVE'S WARRANT AGREEMENT (the "Agreement"), dated as of
September __, 1997 is made and entered into by and between COYOTE SPORTS, INC.
(the "Company"), a Nevada corporation (the "Company"), and COHIG & ASSOCIATES,
INC. ("Cohig").
The Company agrees to issue and sell, and Cohig agrees to purchase, for the
price of $105, Warrants to purchase up to an aggregate 105,000 shares ("Shares")
of the Company's Common Stock, subject to the terms and conditions set forth
below.
In consideration of the foregoing and for the purpose of defining the terms
and provisions of the Warrants and the respective rights and obligations
thereunder, the Company and Cohig, for value received, hereby agree as follows:
SECTION 1. DEFINITIONS
The following terms used in this agreement shall have the following
meanings (unless otherwise expressly provided herein):
The "Act." The Securities Act of 1933, as amended.
The "Commission." The Securities and Exchange Commission.
The "Company." Coyote Sports, Inc., a Nevada corporation.
"Common Stock." The Common Stock, $.001 par value per share, of the
Company, whether now or hereafter authorized, holders of which have the right to
participate in the distribution of earnings and assets of the Company without
limit as to the amount or percentage.
"Current Market Price." The Current Market Price shall be determined as
follows:
(a) if the security at issue is listed on a national securities
exchange or admitted to unlisted trading privileges on such an exchange or
quoted on either the Nasdaq National Market or the Nasdaq Small Cap Market,
the Current Market Price shall be the last reported sale price of that
security on such exchange or system on the day for which the Current Market
Price is to be calculated; or, if no such sale is made on such day, the
average of the highest closing bid and lowest asked price for such day on
such exchange or system; or
(b) if the security at issue is not so listed or quoted or admitted
to unlisted trading privileges, the Current Market Price shall be the last
reported sale price of that security on the OTC Bulletin Board on the day
for which the Current Market Price is to be calculated; or if no such sale
is made on such day, the average of the last reported highest bid and
lowest asked prices quoted on the OTC Bulletin Board on the last business
day on such day; or
(c) if the security at issue is not so listed or quoted or admitted
to unlisted trading privileges and bid and asked prices are not reported,
the Current Market Price shall be determined in such reasonable manner as
may be prescribed from time to time by the Board of Directors of the
Company, subject to the objection and arbitration procedure as described in
Section 9.9 below.
"Effective Date." September __, 1997.
"Exercise Date." 9:00 a.m. Denver, Colorado, local time, on September __,
1998.
"Exercise Period." The period commencing on the Exercise Date and extending
to and through the Expiration Date.
"Exercise Price." $6.25 per Share, as modified in accordance with Section
4, below.
"Expiration Date." 5:00 p.m. Denver, Colorado, local time on September __,
2002; provided, however, if such date shall be a holiday or a day on which banks
are authorized to close in the State of Colorado, the Expiration Date shall mean
5:00 p.m. Denver, Colorado, local time on the next following day which in the
State of Colorado is not a holiday or a day on which banks are authorized to
close.
"Holder "or "Warrant Holder." The person to whom a Warrant Certificate
is issued, and any valid transferee thereof pursuant to Section 8 below.
"Majority Holder." Any Holder, any holder of Warrant Securities, or any
combination of Holders and such holders of Warrant Securities; and any Holder of
Warrant Warrants, any holder of Warrant Warrant Securities, or any combination
of such Holders and such holders of Warrant Warrant Securities, if they hold, in
the aggregate, unexercised Warrants plus issued and outstanding Warrant
Securities equal to more than 50% of the total of (i) all Warrant Securities
issued and outstanding as a result of the exercise of the Warrant, and (ii) all
Warrant Securities that may at that time be purchased by exercising the
unexercised portion of the Warrant. For purposes hereof, a Holder of a Warrant
which entitles the Holder to purchase more than one share or Warrant shall be
deemed to hold Warrants equal to the number of shares or Warrants which may be
acquired pursuant to any such Warrant.
"NASD." The National Association of Securities Dealers, Inc.
"NASDAQ." The Nasdaq Stock Market, Inc.
"Warrants." The Warrants issued in accordance with the terms of this
Agreement and any Warrants issued in substitution for or replacement of such
Warrants, or any Warrants into which such Warrants may be divided or exchanged.
"Warrant Securities." The Common Stock receivable upon exercise or
conversion of a Warrant, and the Common Stock underlying the unexercised portion
of a Warrant.
"OTC Bulletin Board." An electronic quotation medium operated by NASDAQ.
"Public Offering." The public offering by the Company of shares of Common
Stock pursuant to an underwriting agreement dated as of September __,
1997, between the Company and Cohig as Representative of the several
Underwriters named in the underwriting agreement.
"Underwriter." A broker-dealer identified as an Underwriter in the Final
Prospectus for the Public Offering.
SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES
2.1 Description of Warrants. Each Warrant shall initially entitle the
Warrant Holder to purchase one share of Common Stock on exercise thereof,
subject to modification and adjustment as hereinafter provided in Section 10.
Warrant Certificates representing up to 105,000 Warrants and evidencing the
right to purchase an aggregate of up to 105,000 shares of Common Stock of the
Company shall be executed by the proper officers of the Company. The Company
shall deliver Warrant Certificates in required whole number denominations to the
person entitled thereto in connection with the original issuance of Warrant
Certificates or any transfer or exchange permitted under this Agreement.
2.2 Warrant Securities. Certificates representing the Warrant Securities
shall be issued only on or after the Exercise Date upon exercise or conversion
of the Warrants or upon transfer or exchange of the Warrant Securities following
exercise of the Warrants.
SECTION 3. FORM OF WARRANT CERTIFICATE
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3.1 Form of Certificates. The Warrant Certificates shall be substantially
in the form attached hereto as Exhibit A and may have such letters, numbers or
other marks of identification and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement. The Warrant
Certificates shall be dated as of the date of issuance, whether on initial
issuance, transfer, exchange or in lieu of mutilated, lost, stolen or destroyed
Warrant Certificates.
3.2 Execution of Certificates. The Warrant Certificates shall be executed
on behalf of the Company by its President and Secretary, by manual signatures
thereon, and shall have imprinted thereon a facsimile of the Company's seal. Any
Warrant Certificate may be signed by any person who at the actual date of the
preparation of such Warrant Certificate shall be a proper officer of the
Company to sign such Warrant Certificate even though such person was not such an
officer upon the date of this Agreement.
3.3 Mutilated, Lost, Stolen, or Destroyed Certificate. In case the
certificate or certificates evidencing the Warrants shall be mutilated, lost,
stolen or destroyed, the Company shall, at the request of the Warrant Holder,
issue and deliver in exchange and substitution for and upon cancellation of the
mutilated certificate or certificates, or in lieu of and substitution for the
certificate or certificates lost, stolen or destroyed, a new Warrant Certificate
or Certificates of like tenor and representing an equivalent right or interest,
but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Warrant and a bond of indemnity, if requested, also
satisfactory in form and amount, at the applicant's cost. Applicants for such
substitute Warrant Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
3.4 Exchange of Certificate. Any Warrant Certificate may be exchanged for
another certificate or certificates entitling the Warrant Holder to purchase a
like aggregate number of Shares as the certificate or certificates surrendered
then entitled such Warrant Holder to purchase. Any Warrant Holder desiring to
exchange a Warrant Certificate shall make such request in writing delivered to
the Company, and shall surrender, properly endorsed, with signatures guaranteed,
the certificate evidencing the Warrant to be so exchanged. Thereupon, the
Company shall execute and deliver to the person entitled thereto a new Warrant
Certificate as so requested.
SECTION 4. TERM OF WARRANTS; EXERCISE OF WARRANT
4.1 Exercise of Warrant. Subject to the terms of this Agreement, the
Warrant Holder shall have the right, at any time during the four-year period
commencing at 9:00 a.m., Denver Time, on the Exercise Date and ending at 5:00
p.m., Denver Time, on the Expiration Date to purchase from the Company up to the
number of fully paid and nonassessable Shares to which the Warrant Holder may at
the time be entitled to purchase pursuant to this Agreement, upon surrender to
the Company, at its principal office, of the certificate evidencing the Warrants
to be exercised, together with the purchase form on the reverse thereof, duly
filled in and signed, and upon payment to the Company of the Exercise Price for
the number of Shares in respect of which such Warrants are then exercised, but
in no event for less than 100 Shares (unless fewer than an aggregate of 100
shares are then purchasable under all outstanding Warrants held by a Warrant
Holder).
4.2 Payment of Exercise Price. Payment of the aggregate Exercise Price
shall be made in cash or by check, or any combination thereof.
4.3. Issuance of Shares. Subject to the provisions of Section 9, upon
receipt of a Warrant Certificate with the exercise form thereon duly executed,
together with payment in full of the Exercise Price for the Warrant Securities
being purchased by such exercise, or upon exercise of the Conversion Right
described in Section 4.6, the Company shall requisition from the Company's
transfer agent certificates for Warrant Securities and upon receipt shall make
delivery of certificates evidencing the total number of whole Warrant Securities
for which Warrants are then being exercised or converted, together with cash as
provided in Section 4.8 hereof in respect of any fractional Warrant Securities
otherwise issuable upon such surrender. The certificates shall be in such names
and denominations as are required for delivery to, or in accordance with the
instructions of the Warrant Holder; provided that if fewer than all Warrant
Securities issuable
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on exercise of a Warrant Certificate are purchased, the Company (if so
requested) shall issue such balance Warrant Certificate for the balance of the
Warrant Securities. Such certificates for the Warrant Securities shall be deemed
to be issued, and the person to whom such Warrant Securities are issued of
record shall be deemed to have become a holder of record of such Warrant
Securities, as of the date of the surrender of such Warrant Certificate and
payment of the Exercise Price, whichever shall last occur; provided further that
if the books of the Company with respect to the Warrant Securities shall be
closed as of such date, the certificates for such Warrant Securities shall be
deemed to be issued, and the person to whom such Warrant Securities are issued
of record shall be deemed to have become a record holder of such Warrant
Securities, as of the date on which such books shall next be open (whether
before, on or after the applicable Expiration date) but at the Exercise Price
and upon the other conditions in effect upon the date of surrender of the
Warrant Certificate and payment of the Exercise Price, whichever shall have last
occurred, to the Company.
4.4 Cancellation of Certificates. All Certificates surrendered upon
exercise or conversion of Warrants shall be canceled.
4.5 Status as Shareholder. Upon receipt of the Warrant Certificate by the
Company as described in Sections 4.1 or 4.3 above, the Holder shall be deemed to
be the holder of record of the Warrant Securities issuable upon such exercise,
notwithstanding that the transfer books of the Company may then be closed or
that certificates representing such Warrant Securities may not have been
prepared or actually delivered to the Holder.
4.6 Conversion Right. In addition to and without limiting the rights of the
Holder under the terms of the Warrant Agreement, the Holder shall have the right
(the "Conversion Right") during the Exercise Period to convert the Warrant
evidenced by a certificate or any portion thereof into shares of Common Stock as
provided in this Section 4.6 at any time or from time to time prior to its
expiration.
a. Upon exercise of the Conversion Right with respect to a particular
number of shares of Common Stock (the "Converted Shares"), the Company
shall deliver to the Holder, without payment by the Holder of any Exercise
Price or any cash or other consideration, that number of Converted Shares
equal to the quotient obtained by dividing the Net Value (as hereinafter
defined in this paragraph 4.6(a)) of the Converted Shares by the Current
Market Price of a single Share, determined in each case as of the close of
business on the Conversion Date (as hereinafter defined). The "Net Value"
of the Converted Shares shall be determined by subtracting the aggregate
Exercise Price of the Converted Shares from the aggregate Current Market
Price of the Converted Shares on the Conversion Date. No factional
securities shall be issuable upon exercise of the Conversion Right, and if
the number of securities to be issued in accordance with the foregoing
formula is other than a whole number, the Company shall pay to the Holder
an amount in cash equal to the Current Market Price of the resulting
fractional share.
b. The Conversion Right may be exercised by the Holder by the
surrender of the Warrant Certificate at the principal office of the Company
or at the office of the Company's stock transfer agent, if any, together
with a written statement specifying that the Holder thereby intends to
exercise the Conversion Right and indicating the number of Shares subject
to the Warrants which are being surrendered (referred to in subparagraph
4.(a) above as the Converted Shares), on the reverse side of the Warrant
Certificate, in exercise of the Conversion Right. Such conversion shall be
effective upon receipt by the Company of the Warrant Certificate, or on
such later date as is specified therein (the "Conversion Date"), but not
later than the Expiration Date. Certificates for the Converted Shares
issuable upon exercise of the Conversion Right, together with a check in
payment of any fractional Converted Share and, in the case of a partial
exercise a new Warrant evidencing the Warrant Securities remaining subject
to the Warrant, shall be issued as of the Conversion Date and shall be
delivered to the Holder within seven (7) days following the Conversion
Date.
4.7 Fractional Shares. On exercise of the Warrants by the Warrant Holders,
the Company shall not be required to deliver fractions of shares of Common
Stock; provided, however, that the Company shall purchase such fraction for an
amount in cash equal to the Current Market Price of such fraction, computed on
the trading day immediately preceding the day upon which such Warrant
Certificate was surrendered for exercise. By accepting a
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Warrant Certificate, the holder thereof expressly waives any right to receive a
Warrant Certificate evidencing any fraction of a Share or to receive any
fractional share of securities upon exercise of a Warrant, except as expressly
provided in this Section 4.7.
SECTION 5. RESERVATION OF WARRANT SECURITIES
There has been reserved, and the Company shall at all times keep reserved
so long as the Warrants remain outstanding, out of its authorized and unissued
Common Stock, such number of shares of Common Stock as shall be subject to
purchase under the Warrants. Every transfer agent for the Common Stock and other
securities of the Company issuable upon the exercise of the Warrants will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares and other securities as shall be requisite for such purpose.
The Company will keep a copy of this Agreement on file with every transfer agent
for the Common Stock and other securities of the Company issuable upon the
exercise of the Warrants. The Company will supply every such transfer agent with
duly executed stock and other certificates, as appropriate, for such purpose and
will provide or otherwise make available any cash which may be payable as
provided in Section 4.7 hereof.
SECTION 6. PAYMENT OF TAXES
The Company will pay all documentary stamp taxes, if any, attributable to
the initial issuance of the Warrants or the Warrant Securities and any tax
(except federal or state income tax) which may be payable in respect of any
transfer of the Warrants or the Warrant Securities.
SECTION 7. WARRANT SECURITIES TO BE FULLY PAID
The Company covenants that all Warrant Securities that may be issued and
delivered to a Holder of this Warrant upon the exercise of a Warrant and payment
of the Exercise Price, and all Converted Shares that may be issued and delivered
to a Holder upon a conversion of a Warrant, will be, upon such delivery, validly
and duly issued, fully paid and nonassessable.
SECTION 8. LIMITATION ON TRANSFER
This Warrant may not be sold, transferred, assigned, pledged or
hypothecated until the Exercise Date, except for (a) the sale, transfer, or
assignment, in whole or in part, to or among the officers of Cohig and employees
who are also shareholders of Cohig or (b) the transfer by will, pursuant to the
laws of descent and distribution or operation of law as a result of the death of
any transferee to whom all or a portion of this Warrant may be transferred. All
sales, transfers, assignments or hypothecations of this Warrant must be in
compliance with this Section 8. Any assignment or transfer of this Warrant shall
be made by the presentation and surrender of this Warrant to the Company at its
principal office or the office of its transfer agent, if any, accompanied by a
duly executed Assignment Form, in the form attached to and by this reference
incorporated in this Warrant as Exhibit B. Upon the presentation and surrender
of these items to the Company, the Company, at its sole expense, shall execute
and deliver to the new Holder or Holders a new Warrant or Warrants, containing
the same terms and conditions as this Warrant, in the name of the new Holder or
Holders as named in the Assignment Form, and this Warrant shall at that time be
canceled.
SECTION 9. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES
9.1. Adjustments. The number and kind of securities purchasable upon the
exercise of the Warrants and the Exercise Price shall be subject to adjustment
from time to time upon the happening of certain events, as follows:
(a) In case the Company shall (i) pay a dividend in Common Stock or
make a distribution to its stockholders in Common Stock, (ii) subdivide its
outstanding Common Stock, (iii) combine its outstanding Common Stock into a
smaller number of shares of Common Stock or (iv) issue by classification of
its Common Stock other securities of the Company, the number of Shares
purchasable upon exercise of the Warrants
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immediately prior thereto shall be adjusted so that the Warrant Holder
shall be entitled to receive the kind and number of Shares or other
securities of the Company which it would have owned or would have been
entitled to receive immediately after the happening of any of the events
described above, had the Warrants been exercised immediately prior to the
happening of such event or any record date with respect thereto. Any
adjustment made pursuant to this subsection 9.1(a) shall become effective
immediately after the effective date of such event retroactive to the
record date, if any, for such event.
(b) If, prior to the expiration of the Warrants by exercise, by their
terms, or by redemption, the Company shall be recapitalized by
reclassifying its outstanding shares of Common Stock into shares with a
different par value, or by changing its outstanding shares of Common Stock
into shares without par value or in the event of any other material change
of the capital structure of the Company or of any successor corporation by
reason of any reclassification, recapitalization or conveyance, prompt,
proportionate, equitable, lawful and adequate provision shall be made
whereby any Warrant Holder shall thereafter have the right to purchase, on
the basis and the terms and conditions specified in this Agreement, in lieu
of the Warrant Securities theretofore purchasable on the exercise of any
Warrant, such securities or assets as may be issued or payable with respect
to or in exchange for the number of Warrant Securities theretofore
purchasable on exercise of the Warrant had such reclassification,
recapitalization or conveyance not taken place; and in any such event, the
rights of any Warrant Holder to any adjustment in the number of Warrant
Securities purchasable on exercise of such Warrant, as set forth above,
shall continue to be preserved in respect of any stock, securities or
assets which the Warrant Holder becomes entitled to purchase.
(c) In case the Company shall issue rights, options, warrants, or
convertible securities to all or substantially all holders of its Common
Stock, without any charge to such holders, entitling them to subscribe for
or purchase Common Stock at a price per share which is lower at the record
date mentioned below than the then Current Market Price, the number of
Shares thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Shares theretofore purchasable upon
exercise of the Warrants by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding immediately prior to the
issuance of such rights, options, warrants or convertible securities plus
the number of additional shares of Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such rights,
options, warrants, or convertible securities plus the number of shares
which the aggregate offering price of the total number of shares offered
would purchase at such Current Market Price. Such adjustment shall be made
whenever such rights, options, warrants, or convertible securities are
issued, and shall become effective immediately and retroactively to the
record date for the determination of stockholders entitled to receive such
rights, options, warrants, or convertible securities.
(d) In case the Company shall distribute to all or substantially all
holders of its Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions out of earnings) or rights,
options, warrants, or convertible securities containing the right to
subscribe for or purchase Common Stock (excluding those referred to in
subsection 9.1(b) above), then in each case the number of Shares thereafter
purchasable upon the exercise of the Warrants shall be determined by
multiplying the number of Shares theretofor purchasable upon exercise of
the Warrants by a fraction, of which the numerator shall be the then
Current Market Price on the date of such distribution, and of which the
denominator shall be such Current Market Price on such date minus the then
fair value (determined as provided in subsection 9.1(g) below) of the
portion of the assets or evidences of indebtedness so distributed or of
such subscription rights, options, warrants, or convertible securities
applicable to one share. Such adjustment shall be made whenever any such
distribution is made and shall become effective on the date of distribution
retroactive to the record date for the determination of stockholders
entitled to receive such distribution.
(e) No adjustment in the number of Shares purchasable pursuant to the
Warrants shall be required unless such adjustment would require an increase
or decrease of at least one percent in the number of Shares then
purchasable upon the exercise of the Warrants or, if the Warrants are not
then exercisable, the
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number of Shares purchasable upon the exercise of the Warrants on the first
date thereafter that the Warrants become exercisable; provided, however,
that any adjustments which by reason of this subsection 9.1(d) are not
required to be made immediately shall be carried forward and taken into
account in any subsequent adjustment.
(f) Whenever the number of Shares purchasable upon the exercise of
the Warrant is adjusted, as herein provided, the Exercise Price payable
upon exercise of the Warrant shall be adjusted by multiplying such Exercise
Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Warrant Shares purchasable upon the
exercise of the Warrant immediately prior to such adjustment, and of which
the denominator shall be the number of Warrant Shares so purchasable
immediately thereafter.
(g) Whenever the number of Shares purchasable upon exercise of the
Warrants is adjusted as herein provided, the Company shall cause to be
promptly mailed to the Warrant Holder by first class mail, postage prepaid,
notice of such adjustment and a certificate of the chief financial officer
of the Company setting forth the number of Shares purchasable upon the
exercise of the Warrants after such adjustment, a brief statement of the
facts requiring such adjustment and the computation by which such
adjustment was made.
(h) For the purpose of this subsection 9.1, the term "Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the
Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at any time, as
a result of an adjustment made pursuant to this Section 9, the Warrant
Holder shall become entitled to purchase any securities of the Company
other than Common Stock, (y) if the Warrant Holder's right to purchase is
on any other basis than that available to all holders of the Company's
Common Stock, the Company shall obtain an opinion of an independent
investment banking firm valuing such other securities; and (z) thereafter
the number of such other securities so purchasable upon exercise of the
Warrants 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 the Shares contained in this Section 9.
(i) Upon the expiration of any rights, options, warrants, or
conversion privileges, if such shall have not been exercised, the number of
Shares purchasable upon exercise of the Warrants, to the extent the
Warrants have not then been exercised, shall, upon such expiration, be
readjusted and shall thereafter be such as they would have been had they
been originally adjusted (or had the original adjustment not been required,
as the case may be) on the basis of (i) the fact that the only shares of
Common Stock so issued were the shares of Common Stock, if any, actually
issued or sold upon the exercise of such rights, options, warrants, or
conversion privileges, and (ii) the fact that such shares of Common Stock,
if any, were issued or sold for the consideration actually received by the
Company upon such exercise plus the consideration, if any, actually
received by the Company for the issuance, sale or grant of all such rights,
options, warrants, or conversion privileges whether or not exercised;
provided, however, that no such readjustment shall have the effect of
decreasing the number of Shares purchasable upon exercise of the Warrants
by an amount in excess of the amount of the adjustment initially made in
respect of the issuance, sale, or grant of such rights, options, warrants,
or conversion rights.
9.2. No Adjustment for Dividends. Except as provided in subsection 9.1, no
adjustment in respect of any dividends or distributions out of earnings shall be
made during the term of the Warrants or upon the exercise or conversion of the
Warrants.
9.3. No Adjustment in Certain Cases. No adjustments shall be made pursuant
to Section 9 hereof in connection with the issuance of the Common Stock sold as
part of the public sale pursuant to the Underwriting Agreement or the issuance
of Shares upon exercise of the Warrants. No adjustments shall be made pursuant
to Section 9 hereof in connection with the grant or exercise of presently
authorized or outstanding options to purchase, or the issuance of shares of
Common Stock under the Company's director or employee benefit plans disclosed in
the Registration Statement relating to the Public Offering.
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9.4. Preservation of Purchase Rights upon Reclassification, Consolidation,
etc. In case of any consolidation of the Company with or merger of the Company
into another corporation, or in case of any sale or conveyance to another
corporation of the property, assets, or business of the Company as an entirety
or substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute with the Warrant Holder an
agreement that the Warrant Holder shall have the right thereafter upon payment
of the Exercise Price in effect immediately prior to such action to purchase,
upon exercise of the Warrants, the kind and amount of shares and other
securities and property which it would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale, or conveyance
had the Warrants been exercised immediately prior to such action. In the event
of a merger described in Section 368(a)(2)(E) of the Internal Revenue Code of
1986, in which the Company is the surviving corporation, the right to purchase
Shares under the Warrants shall terminate on the date of such merger and
thereupon the Warrants shall become null and void, but only if the controlling
corporation shall agree to substitute for the Warrants, its Warrants which
entitle the holder thereof to purchase upon their exercise the kind and amount
of shares and other securities and property which it would have owned or been
entitled to receive had the Warrants been exercised immediately prior to such
merger. Any such agreements referred to in this subsection 9.4 shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 9 hereof. The provisions of this subsection
9.4 shall similarly apply to successive consolidations, mergers, sales, or
conveyances.
9.5. Par Value of Shares of Common Stock. Before taking any action which
would cause an adjustment effectively reducing the portion of the Exercise Price
allocable to each Share below the par value per share of the Common Stock
issuable upon exercise of the Warrants, the Company will take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Common Stock
upon exercise of the Warrants.
9.6. Independent Public Accountants. The Company may retain a firm of
independent public accountants of recognized national standing (which may be any
such firm regularly employed by the Company) to make any computation required
under this Section 9, and a certificate signed by such firm shall be conclusive
evidence of the correctness of any computation made under this Section 9.
9.7. Statement on Warrant Certificates. Irrespective of any adjustments in
the number of securities issuable upon exercise of the Warrants, Warrant
certificates theretofore or thereafter issued may continue to express the same
number of securities as are stated in the similar Warrant certificates initially
issuable pursuant to this Agreement. However, the Company may, at any time in
its sole discretion (which shall be conclusive), make any change in the form of
Warrant certificate that it may deem appropriate and that does not affect the
substance thereof; and any Warrant certificate thereafter issued, whether upon
registration of transfer of, or in exchange or substitution for, an outstanding
Warrant certificate, may be in the form so changed.
9.8. Treasury Stock. For purposes of this Section 9, shares of Common Stock
owned or held at any relevant time by, or for the account of, the Company, in
its treasury or otherwise, shall not be deemed to be outstanding for purposes of
the calculations and adjustments described.
9.9. Officers' Certificate. Whenever the Exercise Price or the aggregate
number of Warrant Securities purchasable pursuant to this Warrant shall be
adjusted as required by the provisions of this Section 9, the Company shall
promptly file with its Secretary or an Assistant Secretary at its principal
office, and with its transfer agent, if any, an officers' certificate executed
by the Company's President and Secretary or Assistant Secretary, describing the
adjustment and setting forth, in reasonable detail, the facts requiring such
adjustment and the basis for and calculation of such adjustment in accordance
with the provisions of this Warrant. Each such officers'' certificate shall be
made available to the Holder or Holders of this Warrant for inspection at all
reasonable times, and the Company, after each such adjustment, shall promptly
deliver a copy of the officers' certificate relating to that adjustment to the
Holder or Holders of this Warrant. If the officers' certificate is not
accompanied by the certificate described in Section 8.6, the officers'
certificate described in this Section 6 shall be deemed to be conclusive as to
the correctness of the adjustment reflected
8
therein if, and only if, no Holder of this Warrant delivers written notice to
the Company of an objection to the adjustment within 30 days after the officers'
certificate is delivered to the Holder or Holders of this Warrant. The Company
will make its books and records available for inspection and copying during
normal business hours by the Holder so as to permit a determination as to the
correctness of the adjustment. If written notice of an objection is delivered by
a Holder to the Company and the parties cannot reconcile the dispute, the Holder
and the Company shall submit the dispute to arbitration pursuant to the
provisions of Section 17 below. Failure to prepare or provide the officers'
certificate shall not modify the parties" rights hereunder.
SECTION 10. MERGER OR CONSOLIDATION OF THE COMPANY
The Company will not merge or consolidate with or into any other
corporation or sell all or substantially all of its property to another
corporation, unless the provisions of Section 9.3 are complied with.
SECTION 11. MODIFICATION OF AGREEMENT.
The Company may by supplemental agreement make any changes or corrections
in this Agreement it shall deem appropriate to cure any ambiguity or to correct
any defective or inconsistent provision or mistake or error herein contained.
Additionally, the Company may make any changes or corrections deemed necessary
which shall not adversely affect the interests of the Holders, including
lowering the exercise price or extending the Exercise Period of the Warrants;
provided, however, this Agreement shall not otherwise be modified, supplemented
or altered in any respect except with the consent in writing of the Holders who
hold not less than a majority of the Warrants then outstanding and provided
further that no such amendment shall accelerate the Warrant Expiration Date or
increase the Exercise Price without the approval of all the holders of all
outstanding Warrants.
SECTION 12. NOTICE TO HOLDERS
If, prior to the expiration of this Warrant either by its terms or by its
exercise in full, any of the following shall occur:
(i) the Company shall declare a dividend or authorize any other
distribution on its Common Stock; or
(ii) the Company shall authorize the granting to the shareholders
of its Common Stock of rights to subscribe for or purchase
any securities or any other similar rights; or
(iii) any reclassification, reorganization or similar change of
the Common Stock, or any consolidation or merger to which
the Company is a party, or the sale, lease, or exchange of
any significant portion of the assets of the Company; or
(iv) the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(v) any purchase, retirement or redemption by the Company of its
Common Stock;
then, and in any such case, the Company shall deliver to the Holder or Holders
written notice thereof at least 30 days prior to the earliest applicable date
specified below with respect to which notice is to be given, which notice shall
state the following:
(a) the purpose for which a record of stockholders is to be
taken;
9
(b) the number, amount, price and nature of the shares of Common
Stock or other stock, securities, or assets which will be
deliverable on Warrant Securities following exercise of the
Warrants if such exercise occurs prior to the record date
for such action;
(c) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights, or, if a record is
not to be taken, the date as of which the shareholders of
Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined;
(d) the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or purchase, retirement or
redemption is expected to become effective, and the date, if
any, as of which the Company's shareholders of Common Stock
of record shall be entitled to exchange their Common Stock
for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger,
sale, transfer, dissolution, liquidation, winding up,
purchase, retirement or redemption; and
(e) if any matters referred to in the foregoing clauses are to
be voted upon by shareholders of Common Stock, the date as
of which those shareholders to be entitled to vote are to be
determined.
SECTION 13. Registration Rights
13.1. Demand Registration Right. Upon the written request of a Majority
Holder, made at any time after the Exercise Date, but before the Expiration
Date, the Company shall file within 90 days of such written request, no more
than once, a registration statement or Regulation A offering statement pursuant
to the Act, and all necessary amendments thereto, to register or qualify the
Warrant, Warrant Securities and the Warrant Securities underlying the
unexercised portion of this Warrant. The Company may use the Regulation A
exemption if available, but the Company must file a registration statement if
the securities that are to be covered cannot be sold pursuant to Regulation A
because of the limitations applicable to the use of the Regulation A exemption.
The Company agrees to use its best efforts to cause this registration or
qualification to become effective as promptly as practicable and to keep such
registration effective for a period of the lesser of 180 days or the date of
completion of the distribution described in the Registration Statement; and its
officers, directors, consultants, auditors and counsel shall cooperate in all
matters necessary or advisable to pursue this objective. All of the expenses of
this registration or qualification shall be borne by the Company, including, but
not limited to, legal, accounting, consulting, printing, filing and NASD fees,
out-of-pocket expenses incurred by counsel, accountants, and consultants
retained by the Company and miscellaneous expenses directly related to the
registration statement or offering statement and the offering, and the
underwriter's accountable and nonaccountable expense allowances and fees; but
the Company shall not pay any expense allowance, brokerage fees, commissions or
underwriting discounts except to the extent they are attributable to other
securities that the Company has registered or qualified in conjunction with the
registration and qualification of the Warrant, Warrant Securities or the Warrant
Securities underlying the unexercised portion of this Warrant. Notwithstanding
the foregoing, if, as a qualification of any offering in any state or
jurisdiction in which the Company (by vote of its Board of Directors) or any
underwriter determines in good faith that it wishes to offer securities
registered in the offering, it is required that offering expenses be allocated
in a manner different from that provided above, then the offering expenses shall
be allocated in whatever manner is most nearly in compliance with the provisions
set out above. The Majority Holder shall be entitled to exercise the rights
described in this subsection 13.1 one time only.
Within 10 days after the delivery by the Majority Holder to the Company of
the notice described above, the Company shall deliver written notice to all
other Holders of this Warrant and holders of the Warrant Securities, if any,
advising them that the Company is proceeding with a registration statement or
offering statement and offering them the right to include the Warrant and
Warrant Securities of those Holders or holders therein. If any Holder of a
Warrant and Warrant Securities delivers written acceptance of that offer to the
Company within 30 days after the delivery of the
10
Company's notice, the Company shall be obligated to include that holder's
Warrant and that holder's Warrant Securities in the contemplated registration
statement or offering statement.
13.2. Piggy-Back Registration Right. If at any time prior to the Expiration
Date the Company files a registration statement with the Commission pursuant to
the Act, or pursuant to any other act passed after the date of this Agreement,
which filing provides for the sale of securities by the Company to the public,
or files a Regulation A offering statement under the Act, the Company shall
offer to the Holder or Holders of this Warrant and the holders of any Warrant
Securities the opportunity to register or qualify the Warrant Securities and any
Warrant Securities underlying the unexercised portion of this Warrant, if any,
at the Company's sole expense, regardless of whether the Holder or Holders of
this Warrant or the holders of Warrant Securities or both may have previously
availed themselves of any of the registration rights described in this Section
13; provided, however, that in the case of a Regulation A offering, the
opportunity to qualify shall be limited to the amount of the available exemption
after taking into account the securities that the Company wishes to qualify.
Notwithstanding anything to the contrary, this subsection 13.2 shall not be
applicable to a registration statement registering securities issued pursuant to
an employee benefit plan or as to a transaction subject to Rule 145 promulgated
under the Act or which a form S-4 registration statement could be used.
The Company shall deliver written notice to the Holder or Holders of this
Warrant and to any holders of the Warrant Securities of its intention to file a
registration statement or Regulation A offering statement under the Act at least
60 days prior to the filing of such registration statement or offering
statement, and the Holder or Holders and holders of Warrant Securities shall
have 30 days thereafter to request in writing that the Company register or
qualify the Warrant Securities or the Warrant Securities underlying the
unexercised portion of this Warrant in accordance with this subsection 13.2.
Upon the delivery of such a written request within the specified time, the
Company shall be obligated to include in its contemplated registration statement
or offering statement all information necessary or advisable to register or
qualify the Warrant Securities or Warrant Securities underlying the unexercised
portion of this Warrant for a public offering, if the Company does file the
contemplated registration statement or offering statement; provided, however,
that neither the delivery of the notice by the Company nor the delivery of a
request by a Holder or by a holder of Warrant Securities shall in any way
obligate the Company to file a registration statement or offering statement.
Furthermore, notwithstanding the filing of a registration statement or offering
statement, the Company may, at any time prior to the effective date thereof,
determine not to offer the securities to which the registration statement or
offering statement relates, other than the Warrant, Warrant Securities and
Warrant Securities underlying the unexercised portion of this Warrant.
Notwithstanding the foregoing, if, as a qualification of any offering in any
state or jurisdiction in which the Company (by vote of its Board of Directors)
or any underwriter determines in good faith that it wishes to offer securities
registered in the offering, it is required that offering expenses be allocated
in a manner different from that provided above, then the offering expenses shall
be allocated in whatever manner is most nearly in compliance with the provisions
set out above.
The Company shall comply with the requirements of this subsection 13.2 and
the related requirements of subsection 13.7 at its own expense. That expense
shall include, but not be limited to, legal, accounting, consulting, printing,
federal and state filing fees, NASD fees, out-of-pocket expenses incurred by
counsel, accountants and consultants retained by the Company, and miscellaneous
expenses directly related to the registration statement or offering statement
and the offering. However, this expense shall not include the portion of any
underwriting commissions, transfer taxes and the underwriter's accountable and
nonaccountable expense allowances attributable to the offer and sale of the
Warrant, Warrant Securities and the Warrant Securities underlying the
unexercised portion of this Warrant, all of which expenses shall be borne by the
Holder or Holders of this Warrant and the holders of the Warrant Securities
registered or qualified.
11
13.3. Inclusion of Information. In the event that the Company registers or
qualifies the Warrant, Warrant Securities or the Warrant Securities underlying
the unexercised portion of this Warrant pursuant to subsections 13.1 or 13.2
above, the Company shall include in the registration statement or qualification,
and the prospectus included therein, all information and materials necessary or
advisable to comply with the applicable statutes and regulations so as to permit
the public sale of the Warrant Securities or the Warrant Securities underlying
the unexercised portion of this Warrant. As used in subsections 13.1 and 13.2,
reference to the Company's securities shall include, but not be limited to, any
class or type of the Company's securities or the securities of any of the
Company's subsidiaries or affiliates.
13.4. Registration Statement Filed by Holder. In addition to the
registration rights described in subsections 13.1 and 13.2 above, upon the
written request of any Majority Holder, the Company, as promptly as possible
after delivery of such request, shall cooperate with the requesting Majority
Holder or holder in preparing and signing any registration statement or offering
statement that the Holder or holder may desire to file in order to sell or
transfer the Warrant and Warrant Securities. Within 10 days after the delivery
of the written request described above, the Company shall deliver written notice
to all other Holders of this Warrant and holders of Warrant Securities, if any,
advising them that the Company is proceeding with a registration statement or
offering statement and that their Warrant and Warrant Securities will be
included therein if they so desire and agree to pay their pro rata share of the
cost of registration or qualification and provided that the Holder or holder
delivers written notice to the Company of their desire to be included and their
agreement to pay their pro rata share of the cost within 30 days after the
delivery of the Company's notice to them. The Company will supply all
information necessary or advisable for any such registration statements or
offering statements; provided, however, that all the costs and expenses of such
registration statements or offering statements shall be borne, in a manner
proportionate to the number of securities for which they indicate a desire to
register, by the Holders of this Warrant and the holders of Warrant Securities
who seek the registration or qualification of their Warrant, Warrant Securities
or Warrant Securities underlying the unexercised portion of their Warrant. In
determining the amount of costs and expenses to be borne by those Holders or
holders, the only costs and expenses of the Company to be included are the
additional costs and expenses that would not have otherwise been incurred by the
Company if those Holders or holders had not desired to file a registration
statement or offering statement. As an example, and without limitation, audit
fees would not be charged to those Holders or holders if or to the extent that
the Company would have incurred the same audit fees for its year-end or other
use in the absence of the registration statement or offering statement. The
Holders or holders responsible for the costs and expenses shall reimburse the
Company for those reimbursable costs and expenses reasonably incurred by the
Company within 30 days after the initial effective date of the registration
statement or qualification at issue.
13.5. Payment of Exercise Price from Proceeds. In the event that any such
Registration Statement is utilized for a public offering of any of the Shares to
be received upon exercise of the Warrants pursuant to this Section 13, the
Warrant Holder may elect to pay the exercise price of the Warrants to the
Company out of the proceeds of the sale of the Shares pursuant to the
Registration Statement concurrently with the closing of such sale of the Shares;
provided that if such sale is not closed within 90 days of the effective date of
such Registration Statement, then the Warrant Holder shall be obligated to pay
the exercise price of the Warrants to the Company on such 90th day.
13.6. Condition of Company's Obligations. As to each registration statement
or offering statement, the Company's obligations contained in this Section 13
shall be conditioned upon a timely receipt by the Company in writing of the
following:
(a) Information as to the terms of the contemplated public
offering furnished by and on behalf of each Holder or holder intending to
make a public distribution of the Warrant Securities or Warrant Securities
underlying the unexercised portion of the Warrant; and
(b) Such other information as the Company may reasonably require
from such Holders or holders, or any underwriter for any of them, for
inclusion in the registration statement or offering statement.
12
13.7. Additional Requirements. In each instance in which the Company
shall take any action to register or qualify the Warrant Securities or the
Warrant Securities underlying the unexercised portion of this Warrant, if any,
pursuant to this Section 13, the Company shall do the following:
(a) supply to Cohig, as the representative of the Holders of the
Warrant and the holders of Warrant Securities whose Warrant Securities are
being registered or qualified, two (2) manually signed copies of each
registration statement or offering statement, and all amendments thereto,
and a reasonable number of copies of the preliminary, final or other
prospectus or offering circular, all prepared in conformity with the
requirements of the Act and the rules and regulations promulgated
thereunder, and such other documents as Cohig shall reasonably request;
(b) cooperate with respect to (i) all necessary or advisable
actions relating to the preparation and the filing of any registration
statements or offering statements, and all amendments thereto, arising from
the provisions of this Section 13, (ii) all reasonable efforts to establish
an exemption from the provisions of the Act or any other federal or state
securities statutes, (iii) all necessary or advisable actions to register
or qualify the public offering at issue pursuant to federal securities
statutes and the state "blue sky" securities statutes of each jurisdiction
that the Holders of the Warrant or holders of Warrant Securities shall
reasonably request, and (iv) all other necessary or advisable actions to
enable the Holders of the Warrant Securities to complete the contemplated
disposition of their securities in each reasonably requested jurisdiction;
and
(c) keep all registration statements or offering statements to
which this Section 13 applies, and all amendments thereto, effective under
the Act for a period of at least 180 days after their initial effective
date and cooperate with respect to all necessary or advisable actions to
permit the completion of the public sale or other disposition of the
securities subject to a registration statement or offering statement.
13.8. Reciprocal Indemnification. In each instance in which pursuant to
this Section 13 the Company shall take any action to register or qualify the
Securities or the Warrant Securities underlying the unexercised portion of this
Warrant, prior to the effective date of any registration statement or offering
statement, the Company and each Holder or holder of Warrants or Warrant
Securities being registered or qualified shall enter into reciprocal
indemnification and contribution agreements, in the form customarily used by
reputable investment bankers with respect to public offerings of securities.
13.9. Cohig as Representative. For purposes of subsection 13.6 (a)
above, by the receipt of this Warrant or any Warrant Securities, all Holders and
all holders of Warrant Securities acknowledge and agree that Cohig is and shall
be their representative.
13.10. Survival. The Company's obligations described in this Section 13
shall continue in full force and effect regardless of the exercise, surrender,
cancellation or expiration of this Warrant.
SECTION 14. RESTRICTIONS ON TRANSFER
14.1. Restrictions on Transfer. This Warrant, the Warrant Securities, and
all other securities issued or issuable upon exercise of this Warrant, may not
be offered, sold or transferred, in whole or in part, except in compliance with
the Act, and except in compliance with all applicable state securities laws. The
Warrant Holder agrees that prior to making any disposition of the Warrants to
the persons as provided in Section 8, the Warrant Holder shall give written
notice to the Company describing briefly the manner in which any such proposed
disposition is to be made; and no such disposition shall be made if the Company
has notified the Warrant Holder that in the opinion of counsel reasonably
satisfactory to the Warrant Holder a registration statement or other
notification or post-effective amendment thereto (hereinafter collectively a
"Registration Statement") under the Act is required with respect to such
disposition and no such Registration Statement has been filed by the Company
with, and declared effective, if necessary, by, the Commission.
13
14.2. Restrictive Legend. The Company may cause substantially the following
legends, or their equivalents, to be set forth on each certificate representing
the Warrants, the Warrant Securities, or any other security issued or issuable
upon exercise or conversion of a Warrant, not theretofore distributed to the
public or sold to underwriters, as defined by the Act:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY
MANNER EXCEPT IN COMPLIANCE WITH THE AGREEMENT PURSUANT TO WHICH THEY WERE
ISSUED."
(b) Any legend required by applicable state securities laws.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legends (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Act, or the securities represented thereby) shall also bear the above
legends unless, in the opinion of the Company's counsel, the securities
represented thereby need no longer be subject to such restrictions.
SECTION 15. NO RIGHTS AS STOCKHOLDER
Nothing contained in this Agreement or in the Warrants shall be construed
as conferring upon the Warrant Holder or its transferees any rights as a
stockholder of the Company, including the right to vote, receive dividends,
consent or receive notices as a stockholder in respect to any meeting of
stockholders for the election of directors of the Company or any other matter.
The Company covenants, however, that for so long as this Warrant is at least
partially unexercised, it will furnish any Holder of this Warrant with copies of
all reports and communications furnished to the shareholders of the Company.
SECTION 16. NOTICES
16.1. The Company. All notices, demands, claims, elections, opinions,
requests or other communications hereunder (however characterized or described)
shall be in writing and shall be deemed duly given or made if (and then two
business days after) sent by registered or certified mail, return receipt
requested, postage prepaid and addressed to, in the case of the Company as
follows:
Coyote Sports, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxxxxxx
16.2. The Warrant Holders. Any distribution, notice or demand required or
authorized by this Agreement to be given or made by the Company to or on the
Warrant Holders shall be sufficiently given or made if sent by mail, first
class, certified or registered, postage prepaid, addressed to the Warrant
Holders at their last known addresses as they shall appear on the registration
books for the Warrant Certificates maintained by the Company.
16.3. Effectiveness of Notice. The Company may send any notice, demand,
claim, election, opinion, request or communication hereunder to the intended
recipient at the address set forth above using any other means (including
personal delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail or electronic mail), but no such notice, demand, claim, election,
opinion, request or other communication shall be deemed to have been duly given
or made unless and until it actually is received by the intended recipient. The
Company may change the address to which
14
notices, demands, claims, elections, opinions, requests and other communications
hereunder are to be delivered by giving the Warrant Holders notice in the manner
herein set forth.
SECTION 17. ARBITRATION
The Company and the Holder, and by receipt of a Certificate or any Warrant
Securities, all subsequent Holders or holders of Warrant Securities, agree to
submit all controversies, claims, disputes and matters of difference with
respect to this Agreement and the Certificates, including, without limitation,
the application of this Section 17, to arbitration in Denver, Colorado,
according to the rules and practices of the American Arbitration Association
from time to time in force; provided, however, that if such rules and practices
conflict with the applicable procedures of Colorado courts of general
jurisdiction or any other provisions of Colorado law then in force, those
Colorado rules and provisions shall govern. This agreement to arbitrate shall be
specifically enforceable. Arbitration may proceed in the absence of any party if
notice of the proceeding has been given to that party. The parties agree to
abide by all awards rendered in any such proceeding. These awards shall be final
and binding on all parties to the extent and in the manner provided by the rules
of civil procedure enacted in Colorado. All awards may be filed, as a basis of
judgment and of the issuance of execution for its collection, with the clerk of
one or more courts, state or federal, having jurisdiction over either the party
against whom that award is rendered or its property. No party shall be
considered in default hereunder during the pendency of arbitration proceedings
relating to that default.
SECTION 18. MISCELLANEOUS PROVISIONS
18.1. Persons Benefiting. This Agreement shall be binding upon and inure to
the benefit of the Company; the Holders, and their respective successors and
assigns. By his acceptance of a Warrant Certificate, the Holder accepts and
agrees to comply with all of the terms and provisions hereof. Nothing in this
Agreement is intended or shall be construed to confer on any other person any
right, remedy or claim or to impose on any other person any duty, liability or
obligation.
18.2. Severability. If any term contained herein shall be held, declared or
pronounced void, voidable, invalid, unenforceable or inoperative for any reason
by any court of competent jurisdiction, government authority or otherwise, such
holding, declaration or pronouncement shall not affect adversely any other term,
which shall otherwise remain in full force and effect, and the effect of such
holding, declaration or pronouncement shall be limited to the territory or
jurisdiction in which made.
18.3. Termination. This Agreement shall terminate as of the close of
business on the Expiration Date, or such earlier date upon which all Warrants
shall have been exercised or redeemed; except that the exercise of a Warrant in
full or the Expiration Date shall not terminate the provisions of this Agreement
as it relates to holders of Warrant Securities.
18.4. Governing Law. These terms and each Certificate issued hereunder
shall be deemed to be a contract under the laws of the State of Nevada and for
all purposes shall be construed in accordance with the laws of said state
without giving effect to conflicts of laws provisions of such state.
18.5. Agreement Available to Holders. A copy of these terms shall be
available at all reasonable times at the office of the Company for inspection by
any Holder. As a condition of such inspection, the Company may require any
Holder to submit a Certificate held of record for inspection.
18.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be deemed to be
an original and all such counterparts shall together constitute but one and the
same instrument.
15
18.7. Failure to Perform. If the Company fails to perform any of its
obligations hereunder, it shall be liable to the Holder for all damages, costs
and expenses resulting from the failure, including, but not limited to, all
reasonable attorney's fees and disbursements.
18.8. Paragraph Headings. Paragraph headings used in this Warrant Agreement
are for convenience only and shall not be taken or construed to define or limit
any of the terms or provisions of this Agreement. Unless otherwise provided, or
unless the context shall otherwise require, the use of the singular shall
include the plural and the use of any gender shall include all genders.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
COYOTE SPORTS, INC.
By:
-----------------------------
Xxx X. Xxxxxxxxxxx, President
COHIG & ASSOCIATES, INC.
By:
-----------------------------
16
EXHIBIT A
---------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED,
HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN COMPLIANCE WITH THE
AGREEMENT PURSUANT TO WHICH THEY WERE ISSUED.
Warrant Certificate No. ____
REPRESENTATIVE'S OPTIONS TO PURCHASE
____ SHARES OF COMMON STOCK
COYOTE SPORTS, INC.
INCORPORATED UNDER THE LAWS
OF THE STATE OF NEVADA
This Warrant Certificate certifies that ____ or registered assigns (the
"Holder") is the registered owner of the above-indicated number of Warrants
("Warrants") expiring at 5:00 p.m. Denver, Colorado local time, on September __,
2002 (the "Expiration Date"). Each Warrant entitles the Holder to purchase from
Coyote Sports, Inc. (the "Company") a Nevada corporation, at any time during the
period commencing at 9:00 a.m., Denver, Colorado local time, on September __,
1998, and expiring on the Expiration Date, one fully paid and non-assessable
share of Common Stock of the Company at a purchase price per Share of $6.25 (the
"Exercise Price"), upon surrender of this Certificate, with the exercise form
hereon duly completed and executed, with payment of the Exercise Price, at the
principal office of the Company, but only subject to the conditions set forth
herein and in the Representative's Warrant Agreement between the Company and
Cohig & Associates, Inc., dated September __, 1997 (the "Warrant Agreement"). In
addition, the Holder has the right to convert Warrants evidenced by this
Certificate into shares of Common Stock as provided in Section 4.6 of the
Warrant Agreement. The Exercise Price, the Expiration Date, and the number of
shares of Common Stock of the Company purchasable upon exercise of the Warrants
evidenced hereby shall be subject to adjustment from time to time as set forth
in the Warrant Agreement. Reference is hereby made to the other provisions of
the Warrant Agreement, all of which are hereby incorporated by reference herein
and made a part of this Certificate and which shall for all purposes have the
same effect as though fully set forth at this place.
Upon due presentment for registration of transfer of this Certificate at
the office of the Company a new Certificate or Certificates of like tenor and
evidencing in the aggregate a like number of Warrants, subject to any
adjustments made in accordance with the Warrant Agreement, shall be issued to
the transferee in exchange for this Certificate, subject to the limitations
provided in the Warrant Agreement.
The Holder of the Warrants evidenced by this Certificate may exercise or
convert all or any whole number of such Warrants in the manner stated hereon and
in the Warrant Agreement. The Exercise Price shall be payable in lawful money of
the United States of America in cash or by certified or cashier's check or bank
draft payable to the order of the Company. Upon any partial exercise or
conversion of the Warrants evidenced hereby, there shall be signed and issued to
the Warrant Holder a new Warrant Certificate in respect of the Shares as to
which the Warrants evidenced hereby shall not have been exercised or converted.
These Warrants may be exchanged at the office of the Company by surrender of
this Warrant Certificate properly endorsed for one or more new Warrants of the
same aggregate number of Shares as here evidenced by the Warrant or Warrants
exchanged. No fractional shares of Common Stock will be issued upon the exercise
of rights to purchase hereunder, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. These Warrants are
transferable at the office of the Company in the manner and subject to the
limitations set forth in the Warrant Agreement.
1
This Warrant Certificate does not entitle any Warrant Holder to any of the
rights of a stockholder of the Company.
COYOTE SPORTS, INC.
By:
-----------------------------
Dated:
[Seal]
Attest:
___________________________________
Secretary
2
NOTICE OF EXERCISE
------------------
(To be executed by a Holder desiring to exercise the right to purchase Shares
pursuant to a Warrant.)
The undersigned Holder of a Warrant hereby
(a) irrevocably elects to exercise the Warrant to the extent of purchasing
__________ Shares;
(b) makes payment in full of the aggregate Exercise Price for those Shares
in the amount of $ ___________ by the delivery of certified funds or a bank
cashier's check in the amount of $ ____________;
(c) requests that certificates evidencing the securities underlying such
Shares be issued in the name of the undersigned, or, if the name and address of
some other person is specified below, in the name of such other person:
_______________________________________________________
_______________________________________________________
_______________________________________________________
(Name and address of person other than the
-----
undersigned in whose name Shares are to be registered)
(d) requests, if the number of Shares purchased are not all the Shares
purchasable pursuant to the unexercised portion of the Warrant, that a new
Warrant of like tenor for the remaining Shares purchasable pursuant to the
Warrant be issued and delivered to the undersigned at the address stated below.
Dated: _______________ ____________________________________________
Signature Signature
(This signature must conform in all respects
to the name of the Holder as specified on
the face of the Warrant.)
______________________ ____________________________________________
Social Security Number Printed Name
or Employer ID Number
Address: ________________________________________
____________________________________________
3
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, the undersigned, ______________________ , hereby sells,
assigns and transfers unto:
Name: ___________________________________________________
(Please type or print in block letters)
Address: ________________________________________________
_____________________________________________
the right to purchase _____________ Shares of Coyote Sports, Inc. (the
"Company") pursuant to the terms and conditions of the Warrant held by the
undersigned. The undersigned hereby authorizes and directs the Company (i) to
issue and deliver to the above-named assignee at the above address a new Warrant
pursuant to which the rights to purchase being assigned may be exercised, and
(ii) if there are rights to purchase Shares remaining pursuant to the
undersigned's Warrant after the assignment contemplated herein, to issue and
deliver to the undersigned at the address stated below a new Warrant evidencing
the right to purchase the number of Shares remaining after issuance and delivery
of the Warrant to the above-named assignee. Except for the number of Shares
purchasable, the new Warrants to be issued and delivered by the Company are to
contain the same terms and conditions as the undersigned's Warrant. To complete
the assignment contemplated by this Assignment Form, the undersigned hereby
irrevocably constitutes and appoints ___________________________ as the
undersigned's attorney-in-fact to transfer the Warrants and the rights
thereunder on the books of the Company with full power of substitution for these
purposes.
Dated: ___________________ __________________________________________________
Signature
(This signature must conform in all respects to
the name of the Holder as specified on the face of
the Warrant.)
__________________________________________________
Printed Name
Address: _______________________________________________
________________________________________________
4
OPTION CONVERSION EXERCISE FORM
TO: Coyote Sports, Inc.
Pursuant to Section 4.7 of the Warrant Agreement, the Holder hereby
irrevocably elects to convert Warrants into _______________ Shares of the
Company. A conversion calculation is attached hereto as Exhibit B-1.
The undersigned requests that certificates for such Shares be issued as
follows:
Name: ___________________________________________________
Address: _________________________________________________
Deliver to: ______________________________________________
and that a new Certificate for the balance remaining of the Warrants, if any, be
registered in the name of, and delivered to, the undersigned at the address
stated above.
Signature ____________________ Dated _______________________
5
Exhibit B-1
CALCULATION OF OPTION CONVERSION
--------------------------------
Converted Securities = Net Value
---------
FMV
FMV = $ _______________
Net Value = Aggregate FMV - Aggregate Exercise Price
= $ _______________ - _______________
= $ _______________
Converted Shares = _______________
Fractional Converted Shares = _______________(1)
_______________
(1) _______________ to pay for fractional Shares in cash @ $ ______ per Share.
6
