THIS WARRANT AND THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
SECURITIES ACT ”), OR ANY STATE SECURITIES LAWS AND
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF
SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS
OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.
SERIES A WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
TIMBERJACK SPORTING SUPPLIES, INC.
Expires September 29, 2015
No.: [______]
Number of Shares: [__________]
Date of Issuance: September 30,
2010
FOR VALUE RECEIVED, the undersigned, Timberjack
Sporting Supplies, Inc., a Nevada corporation (together with its
successors and assigns, the “ Issuer ” or
the “ Company ” ), hereby certifies that
[____________________] or its registered assigns is entitled to
subscribe for and purchase, during the Term (as hereinafter
defined), up to [__________________________] ([_______]) shares
(subject to adjustment as hereinafter provided) of the duly
authorized, validly issued, fully paid and non-assessable Common
Stock of the Issuer, at an exercise price per share equal to the
Warrant Price then in effect, subject, however, to the provisions
and upon the terms and conditions hereinafter set forth.
Capitalized terms used in this Warrant and not otherwise defined
herein shall have the respective meanings specified in
Section 8 hereof.
1.
Term . The term of this Warrant shall commence on September
30, 2010 and shall expire at 6:00 p.m., Eastern Time, on September
29, 2015 (such period being the “ Term ”
).
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Method of Exercise; Payment;
Issuance of New Warrant; Transfer and Exchange
.
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(a)
Time of Exercise . The purchase rights represented by this
Warrant may be exercised in whole or in part during the
Term.
(b)
Method of Exercise . The Holder hereof may exercise this
Warrant, in whole or in part, by delivery to the Company (or such
other office or agency of the Issuer as it may designate by notice
in writing to the Holder at the address of the Holder appearing on
the books of the Issuers) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto (“ Notice of
Exercise Form ”); and, within three (3) Trading Days
of the date said Notice of Exercise Form is delivered to the
Company, the Company shall have received payment of an amount of
consideration therefor equal to the Warrant Price in effect on the
date of such exercise multiplied by the number of shares of Warrant
Stock with respect to which this Warrant is then being exercised,
payable at such Holder’s election (i) by certified or
official bank check or by wire transfer to an account designated by
the Issuer, (ii) by “cashless exercise” in accordance
with the provisions of subsection (c) of this Section
2 , but only when a registration statement under the
Securities Act providing for the resale of the Warrant Stock and
the Common Stock underlying the preferred stock issued pursuant to
the Purchase Agreement is not then in effect as required under the
Registration Rights Agreement (as defined below), or (iii) by a
combination of the foregoing methods of payment selected by the
Holder of this Warrant. Notwithstanding anything herein to the
contrary, the Holder shall not be required to physically surrender
this Warrant to the Company until the Holder has purchased all of
the Warrant Shares available hereunder and the Warrant has been
exercised in full, in which case, the Holder shall surrender this
Warrant, or an indemnification reasonably acceptable to the Issuer
undertaking with respect to such Warrant in the case of its loss,
theft or destruction, to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise Form is
delivered to the Company. Partial exercises of this
Warrant resulting in purchases of a portion of the total number of
Warrant Shares available hereunder shall have the effect of
lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant
Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and
the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise Form within one (1)
Business Day of receipt of such notice. In the event of
any dispute or discrepancy, the records of the Company shall be
controlling and determinative in the absence of manifest
error.
(c)
Cashless Exercise . Notwithstanding any provision herein to
the contrary, but subject to Section 2(b)(ii) hereof,
and commencing six (6) months following the Original Issue Date, in
lieu of exercising this Warrant by payment of cash, the Holder may
exercise this Warrant by a cashless exercise (“
Cashless Exercise ” ) by surrender of this
Warrant at the principal office of the Issuer together with the
properly endorsed Notice of Exercise, in which event the Issuer
shall issue to the Holder a number of shares of Common Stock
computed using the following formula:
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the number of shares of Common Stock
to be issued to the Holder.
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the number of shares of Common Stock
purchasable upon exercise of all of the Warrant or, if only a
portion of the Warrant is being exercised, the portion of the
Warrant being exercised.
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B
= the
Per Share Market Value of one share of Common Stock.
If at any time after the effective date of the
registration statement, there is not an effective registration
statement covering the resale of the shares underlying the Warrant,
the Holder may exercise this Warrant by Cashless
Exercise.
(d)
Issuance of Stock Certificates . In the event of any
exercise of this Warrant in accordance with and subject to the
terms and conditions hereof, certificates for the shares of Warrant
Stock so purchased shall be dated the date of such exercise and
delivered to the Holder’s Prime Broker as specified in the
Holder’s exercise form within a reasonable time, not
exceeding three (3) Trading Days after such exercise (the “
Delivery Date ”) or, at the request of the
Holder (provided that a registration statement under the Securities
Act providing for the resale of the Warrant Stock is then in effect
or that the shares of Warrant Stock are otherwise exempt from
registration), issued and delivered to the Depository Trust Company
(“ DTC ”) account on the Holder’s
behalf via the Deposit Withdrawal Agent Commission System (“
DWAC ”) within a reasonable time, not exceeding
three (3) Trading Days after such exercise, and the Holder hereof
shall be deemed for all purposes to be the holder of the shares of
Warrant Stock so purchased as of the date of such exercise.
Notwithstanding the foregoing to the contrary, the Issuer or its
transfer agent shall only be obligated to issue and deliver the
shares to the DTC on a holder’s behalf via DWAC if such
exercise is in connection with sale in reliance upon an effective
Registration Statement or other exemption from registration by
which the shares may be issued without a restrictive legend and the
Issuer and its transfer agent are participating in DTC through the
DWAC system.
(e)
Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Exercise . In addition to any other rights
available to the Holder, if the Issuer fails to cause its transfer
agent to transmit to the Holder a certificate or certificates
representing the Warrant Stock pursuant to an exercise on or before
the Delivery Date, and if after such date the Holder is required by
its broker to purchase (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Stock which the Holder anticipated receiving
upon such exercise (a “ Buy-In ”), then
the Issuer shall (1) pay in cash to the Holder the amount by which
(x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased
exceeds (y) the amount obtained by multiplying (A) the number of
shares of Warrant Stock that the Issuer was required to deliver to
the Holder in connection with the exercise at issue times (B) the
price at which the sell order giving rise to such purchase
obligation was executed, and (2) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of shares of Warrant Stock for which such exercise was not honored
or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Issuer timely complied with its
exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted exercise of
shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the
immediately preceding sentence the Issuer shall be required to pay
the Holder $1,000. The Holder shall provide the Issuer written
notice indicating the amounts payable to the Holder in respect of
the Buy-In, together with applicable confirmations and other
evidence reasonably requested by the Issuer. Nothing herein shall
limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with
respect to the Issuer’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of
this Warrant as required pursuant to the terms hereof.
(f)
Transferability of Warrant . Subject to Section
2(h) hereof, this Warrant may be transferred by a Holder,
in whole or in part, without the consent of the Issuer. If
transferred pursuant to this paragraph, this Warrant may be
transferred on the books of the Issuer by the Holder upon surrender
of this Warrant at the principal office of the Issuer or its
designated agent, properly endorsed (by the Holder executing an
assignment in the form attached hereto) and upon payment of any
necessary transfer tax or other governmental charge imposed upon
such transfer. This Warrant is exchangeable for Warrants to
purchase the same aggregate number of shares of Warrant Stock, each
new Warrant to represent the right to purchase such number of
shares of Warrant Stock as the Holder hereof shall designate at the
time of such exchange. All Warrants issued on transfers or
exchanges shall be dated the Original Issue Date and shall be
identical with this Warrant except as to the number of shares of
Warrant Stock issuable pursuant thereto.
(g)
Continuing Rights of Holder . The Issuer shall, at the time
of or at any time after each exercise of this Warrant, upon the
request of the Holder hereof, acknowledge in writing the extent, if
any, of its continuing obligation to afford to such Holder all
rights to which such Holder shall continue to be entitled after
such exercise in accordance with the terms of this Warrant,
provided that if any such Holder shall fail to make
any such request, the failure shall not affect the continuing
obligation of the Issuer to afford such rights to such
Holder.
(h)
Compliance with Securities Laws.
(i) The
Holder of this Warrant, by acceptance hereof, acknowledges that
this Warrant and the shares of Warrant Stock to be issued upon
exercise hereof are being acquired solely for the Holder’s
own account and not as a nominee for any other party, and for
investment, and that the Holder will not offer, sell or otherwise
dispose of this Warrant or any shares of Warrant Stock to be issued
upon exercise hereof except pursuant to an effective registration
statement, or an exemption from registration, under the Securities
Act and any applicable state securities laws.
(ii) Except
as provided in paragraph (iii) below, this Warrant and all
certificates representing shares of Warrant Stock issued upon
exercise hereof shall be stamped or imprinted with a legend in
substantially the following form:
THIS WARRANT AND THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
SECURITIES ACT ”), OR ANY STATE SECURITIES LAWS
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF
SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS
OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
(iii) The
Issuer agrees to reissue this Warrant or certificates representing
any of the Warrant Stock, without the legend set forth above, if at
such time, prior to making any transfer of any such securities, the
Holder shall give written notice to the Issuer describing the
manner and terms of such transfer and demonstrating that the
following conditions are satisfied. Such proposed transfer will not
be effected until: (a) either (i) the Issuer has received an
opinion of counsel reasonably satisfactory to the Issuer, to the
effect that the registration of such securities under the
Securities Act is not required in connection with such proposed
transfer, or (ii) a registration statement under the Securities Act
covering such proposed disposition has been filed by the Issuer
with the Securities and Exchange Commission and has become and
remains effective under the Securities Act, or (b) either (i) the
Issuer has received an opinion of counsel reasonably satisfactory
to the Issuer, to the effect that registration or qualification
under the securities or “blue sky” laws of any state is
not required in connection with such proposed disposition, or (ii)
compliance with applicable state securities or “blue
sky” laws has been effected or a valid exemption exists with
respect thereto. The Issuer shall respond to any such notice from a
holder within three (3) Trading Days. In the case of any proposed
transfer under this Section 2(h) , the Issuer shall
use reasonable efforts to comply with any such applicable state
securities or “blue sky” laws, but shall in no event be
required, (x) to qualify to do business in any state where it is
not then qualified, (y) to take any action that would subject it to
tax or to the general service of process in any state where it is
not then subject, or (z) to comply with state securities or
“blue sky” laws of any state for which registration by
coordination is unavailable to the Issuer. Whenever a certificate
representing the Warrant Stock is required to be issued to the
Holder without a legend, in lieu of delivering physical
certificates representing the Warrant Stock, the Issuer shall cause
its transfer agent to electronically transmit the Warrant Stock to
the Holder by crediting the account of the Holder or Holder’s
Prime Broker with DTC through its DWAC system (to the extent not
inconsistent with any provisions of this Warrant or the Purchase
Agreement).
(i)
Accredited Investor Status . At the time of the exercise of
this Warrant, the Holder (1) shall be an “accredited
investor” as defined in Regulation D under the Securities
Act, or (2) shall exercise this Warrant by means of a Cashless
Exercise as provided for in Section 2(c) , subject to
any applicable restrictions.
3.
Adjustment of Warrant Price . The Warrant Price shall be
subject to adjustment from time to time as set forth in this
Section 3 . The Issuer shall give the Holder written
notice of any event described below which requires an adjustment
pursuant to this Section 3 in accordance with the
notice provisions set forth in Section 12
.
(a)
Adjustments for Stock Splits, Combinations, Certain Dividends
and Distributions . Except with respect to the
Reverse Split (as defined in the Securities Purchase Agreement)
which shall not result in an adjustment of the Conversion Price, if
the Issuer shall, at any time or from time to time after the
Original Issue Date, effect a split of the outstanding Common Stock
(or any other subdivision of its shares of Common Stock into a
larger number of shares of Common Stock), combine the outstanding
shares of Common Stock into a smaller number of shares of Common
Stock, or make or issue or set a record date for the determination
of holders of Common Stock entitled to receive a dividend or other
distribution payable in shares of Common Stock, then, in each event
(i) the number of shares of Common Stock for which this Warrant
shall be exercisable immediately after the occurrence of any such
event shall be adjusted to equal the number of shares of Common
Stock that a record holder of the same number of shares of Common
Stock for which this Warrant is exercisable immediately prior to
the occurrence of such event would own or be entitled to receive
after the happening of such event, and (ii) the Warrant Price then
in effect shall be adjusted to equal (A) the Warrant Price then in
effect multiplied by the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares of Common Stock for which this
Warrant is exercisable immediately after such
adjustment.
(b)
Adjustment for Other Dividends and Distributions . If the
Issuer shall, at any time or from time to time after the Original
Issue Date, make or issue or set a record date for the
determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in (i) cash, (ii) any
evidences of indebtedness, or any other securities of the Company
or any property of any nature whatsoever, other than, in each case,
shares of Common Stock; or (iii) any warrants or other rights to
subscribe for or purchase any evidences of indebtedness, or any
other securities of the Company or any property of any nature
whatsoever, other than, in each case, shares of Common Stock, then,
and in each event, (A) the number of shares of Common Stock for
which this Warrant shall be exercisable shall be adjusted to equal
the product of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such adjustment
multiplied by a fraction (1) the numerator of which shall be the
Per Share Market Value of Common Stock at the date of taking such
record and (2) the denominator of which shall be such Per Share
Market Value minus the amount allocable to one share of Common
Stock of any such cash so distributable and of the fair value (as
determined in good faith by the Board and supported by an opinion
from an investment banking firm mutually agreed upon by the Issuer
and the Holder) of any and all such evidences of indebtedness,
shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (B) the
Warrant Price then in effect shall be adjusted to equal (1) the
Warrant Price then in effect multiplied by the number of shares of
Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (2) the number of shares of
Common Stock for which this Warrant is exercisable immediately
after such adjustment. A reclassification of the Common Stock
(other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common
Stock and shares of any other class of stock shall be deemed a
distribution by the Issuer to the holders of its Common Stock of
such shares of such other class of stock within the meaning of this
Section 3(b) and, if the outstanding shares of Common
Stock shall be changed into a larger or smaller number of shares of
Common Stock as a part of such reclassification, such change shall
be deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of
Section 3(a) .
(c)
Adjustments for Reclassification, Exchange or Substitution .
If the Common Stock for which this Warrant is exercisable at any
time or from time to time after the Original Issue Date shall be
changed to the same or different number of shares of any class or
classes of stock, whether by reclassification, exchange,
substitution or otherwise (other than by way of a stock split or
combination of shares or stock dividends provided for in
Section 3(a) , Section 3(b) , or a
reorganization, merger, consolidation, or sale of assets provided
for in Section 3(d) ), then, and in each event, an
appropriate revision to the Warrant Price shall be made and
provisions shall be made (by adjustments of the Warrant Price or
otherwise) so that, upon any subsequent exercise of this Warrant,
the Holder shall have the right to receive, in lieu of Warrant
Stock, the kind and amount of shares of stock and other securities
receivable upon reclassification, exchange, substitution or other
change, by holders of the number of shares of Common Stock for
which this Warrant was exercisable immediately prior to such
reclassification, exchange, substitution or other change, all
subject to further adjustment as provided herein.
(d)
Adjustments for Reorganization, Merger, Consolidation or Sales
of Assets . If at any time or from time to time after the
Original Issue Date there shall be (i) a capital reorganization of
the Issuer (other than by way of a stock split or combination of
shares or stock dividends or distributions provided for in
Section 3(a) , and Section 3(b) , or a
reclassification, exchange or substitution of shares provided for
in Section 3(c) ), or (ii) a merger or consolidation
of the Issuer with or into another corporation, where the holders
of the Issuer’s outstanding voting securities prior to such
merger or consolidation do not own over 50% of the outstanding
voting securities of the merged or consolidated entity, immediately
after such merger or consolidation, or (iii) the sale of all or
substantially all of the Issuer’s properties or assets to any
other person (an “ Organic Change ”),
then, as a part of such Organic Change an appropriate revision to
the Warrant Price shall be made if necessary and provision shall be
made if necessary (by adjustments of the Warrant Price or
otherwise) so that, upon any subsequent exercise of this Warrant,
the Holder shall have the right to receive, in lieu of Warrant
Stock, the kind and amount of shares of stock and other securities
or property of the Issuer or any successor corporation resulting
from the Organic Change. In any such case, appropriate adjustment
shall be made in the application of the provisions of this
Section 3(d) with respect to the rights of the Holder
after the Organic Change to the end that the provisions of this
Section 3(d) (including any adjustment in the Warrant
Price then in effect and the number of shares of stock or other
securities deliverable upon exercise of this Warrant) shall be
applied after that event in as nearly an equivalent manner as may
be practicable. In any such case, the resulting or
surviving corporation (if not the Issuer) shall expressly assume
the obligations to deliver, upon the exercise of this Warrant, such
securities or property as the Holder shall be entitled to receive
pursuant to the provisions hereof, and to make provisions for the
protection of the rights of the Holder as provided
above.
(e)
Adjustments for Issuance of Additional Shares of Common
Stock. For a period of twenty-four (24) months following the
issuance of the Warrant (the “ Anti-Dilution
Period ”), in t
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