Exhibit 10.3
THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT BY
XXXXXXXX FAMILY CHARITABLE REMAINDER UNITRUST #3 IN FAVOR OF XXXXX
FARGO BUSINESS CREDIT, INC. DATED AS OF December 7, 2000.
AMENDMENT NO. 1
THIS AMENDMENT NO. 1 (the "Amendment") is made and entered into as of March 16,
2001, by and between XXXXXXXX FAMILY CHARITABLE REMAINDER UNITRUST #3, a trust
created under a trust agreement dated October 15, 1998 (the "Lender"), and ROYAL
PRECISION, INC. (the "Borrower") to that certain REVOLVING SUBORDINATED
PROMISSORY NOTE, dated December 7, 2000 (the "Note").
RECITALS
WHEREAS, the parties have determined to modify the Note in the manner
hereinafter set forth.
NOW THEREFORE, the parties hereby agree as follows:
Section 1. AMENDMENTS.
1.1. Section 1.2 is hereby amended in its entirety to read as follows:
1.2. INTEREST. The Borrower shall pay interest on the unpaid principal
balance of all Loans at a rate per annum equal to 13%. All interest payable
under this Note or otherwise payable hereunder shall be computed on the basis of
the actual number of days elapsed over a year of 365 days. Interest on the
unpaid principal balance of each Loan shall be payable on January 30, 2001,
monthly thereafter at the end of each calendar month and at the repayment of the
unpaid principal balance of such Loan. Notwithstanding the provisions of the
first sentence, if the unpaid principal balance has not been repaid in full by
May 31, 2001, all unpaid principal shall bear interest at a rate per annum equal
to 17% from February 1, 2001 until paid in full.
1.2. Section 6.1 is hereby amended to read as follows:
6.1. ACCELERATION. If an Event of Default exists, the
outstanding unpaid principal balance of this Note, together
with all interest accrued thereon and any unpaid fees,
expenses or other amounts due to the Lender under this Note,
is immediately due and payable at the Lender's election,
without presentment, demand, protest or notice of any kind,
all of which are hereby waived. Until the Lender makes such
election, interest shall continue to accrue until the
earlier of (a) the Lender's demand for payment, in which
event the principal and interest shall be due and payable,
or (b) three days after approval of this Agreement by the
stockholders of the Borrower as outlined in Section 10.10
hereof ("Stockholder Approval"), in which event the Lender
has to either elect to convert or demand payment.
1.3. Section 6.3 is hereby amended to read as follows:
6.3. OPTION. If all Loans are not paid in full, including
all interest due thereon, by the End of the Credit, or
earlier if there is an Event of Default, then the Lender
shall have the option (the "Option") to convert all or any
part of the unpaid Loans and interest thereon into shares of
Common Stock of the Borrower (the "Shares") at the rate of
one Share for each $1.00 of unpaid principal and interest
thereon as of the End of the Credit (the "Exercise Price").
Until Stockholder Approval, the Lender shall only be able to
exercise the Option for an amount not to exceed $25,000.
After Stockholder Approval, there shall be no restrictions
on the exercise of the Option. Exercise of the Option shall
be considered payment by the Borrower and thus reduce any
outstanding balance owed by the Borrower by the amount of
Shares received by the Lender.
1.4. Section 10.10 is hereby inserted to read as follows:
10.10. STOCKHOLDER APPROVAL. Unless this Note has been fully
paid pursuant to its terms prior thereto, the Borrower
agrees to solicit stockholder approval for this Note at the
Borrower's annual meeting, or at such earlier time as the
Lender may request, but in all events a meeting of
stockholders of the Borrower must occur on or prior to
September 30, 2001 for the purpose of voting on approving
this Note. In the event the Lender requests a stockholder
meeting prior to the Borrower's annual meeting, the Lender
shall provide notice of such request to the Borrower and the
Borrower shall, at its sole cost and expense, take such
action as may be necessary to cause a special meeting of the
stockholders of the Borrower to be held within 45 days of
receipt of such request, or as soon as practical thereafter,
to vote on approving this Note.
Section 2. CONTINUING VALIDITY. Except as amended herein, the provisions of the
Note shall remain unchanged and in full force and effect. All references to the
Note hereafter shall be deemed to mean and refer to the Note, as amended by this
Amendment.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
ROYAL PRECISION, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
XXXXXXXX FAMILY CHARITABLE
REMAINDER UNITRUST #3
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Trustee
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