EXHIBIT 23
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of February
26, 2002 (the "Effective Date"), among Xxxxxxx X. Xxxxxxxx and Xxxxx X Xxxxxxxx,
Trustees of The Xxxxxxxx Family Living Trust u/a dtd. 4/11/94 ("JFLT"),
Xxxxxxxxxxx X. Xxxxxxxx, an individual residing at 0000 Xxxxx Xxxxx Xxxxx,
Xxxxxxx, Xxxxxxx 00000, Xxxx Xxxxxx Xxxxxxxx, Custodian f/b/o Xxxxxxx X. Xxxxxx
VIP Plus Profit-Sharing Account ("KJW"), Xxxx X. Xxxxxxxx, an individual having
an office in Torrington, Connecticut, and Xxxxxxx X. Xxxxxx, an individual
residing in Cincinnati, Ohio (JFLT, CAJ, KJW, Messrs. Xxxxxxxx and Xxxxxx are
individually referred to as a "Stockholder" and collectively as "Stockholders"),
and Royal Precision, Inc., a Delaware corporation (the "Company").
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. (a) The following terms, as used herein, have the
following meanings:
"Affiliate", as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person. For purposes of this definition, "control" (including, with correlative
meaning, the terms "controlling", "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
"Common Stock" means the shares of common stock, par value $.001 per share,
of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means each Person (other than the Company) who shall be a party to
this Agreement, whether in connection with the execution and delivery of the
Agreement as of the date hereof or otherwise, so long as such Person shall
"beneficially own" (as such term is defined in Rule 13D-3 under the Exchange
Act) any shares of Stockholder Securities.
"Option" means the right to convert all or any part of the unpaid principal
and interest thereon, the payment of which is in default, into Common Stock at
the rate of one share of Common Stock for each $.25 of unpaid principal and
interest thereon, pursuant to the terms of a Subordinated Note from the Company
to a Stockholder.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or other
department or agency thereof.
"Public Offering" means any primary or secondary public offering of equity
securities of the Company, or any successor thereto, pursuant to an effective
registration statement under the Securities Act other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor or similar form.
"Registrable Securities" means: (a) the shares of Common Stock owned of
record and beneficially by any Stockholder on the date of this Agreement; (b)
any Common Stock which may be acquired by any Stockholder upon (i) exercise of a
Warrant or (ii) conversion of debt owed to such Stockholder by the Company
pursuant to the terms of an Option; (c) any Common Stock issued as a result of
any reorganization, reclassification, merger, consolidation, stock split or
dividend with respect to such shares of Common Stock described in (a) and (b);
and (d) any capital stock for which such Common Stock described in (a), (b) or
(c) is exchanged or into which it is converted; provided that such securities
shall cease to be Registrable Securities when (y) a registration statement
relating to such securities shall have been declared effective by the SEC, and
such securities shall have been disposed of pursuant to such effective
registration statement, or (z) such securities are sold under circumstances in
which all of the applicable conditions of Rule 144 (or any similar provisions
then in effect) under the Securities Act are met or such shares of Common Stock
may be sold pursuant to Rule 144(k).
"Rights Holder" means any Stockholder or any transferee of a Stockholder to
whom such Stockholder shall have transferred any of its rights under Article 2.
"SEC" means the Securities and Exchange Commission and any successor having
similar powers.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Holder" means a Rights Holder who proposes to sell Common Stock
pursuant to Article II.
"Stockholder Action" mean the action taken, where required or permitted
pursuant to this Agreement, by the holders of a majority of Stockholder
Securities.
"Stockholder Representative" shall be a Stockholder selected by the
Stockholders owning a majority of the Stockholder Securities with each
Stockholder having a number of votes as equals the number of Stockholder
Securities owned by such Stockholder on the date that such vote is taken and
whose sole function shall be to report to the Company the written instructions
of each Stockholder and the results of tabulation of such instructions. Any
Stockholder Representative may be removed at the request of those Stockholders
owning a majority of the Stockholder Securities outstanding on the date such
request is made. The initial Stockholder Representative shall be Xxxxxxx X.
Xxxxxxxx.
"Stockholder Securities" means, as of the date on which any determination
is to be made, (a) any Common Stock which may be or has been acquired by any
Rights Holder upon (i) exercise of a Warrant or (ii) conversion of debt pursuant
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to the terms of an Option; (b) any Common Stock issued as a result of any
reorganization, reclassification, merger, consolidation, stock split or dividend
with respect to such shares of Common Stock described in (a); and (c) any
capital stock for which such Common Stock described in (a) or(b) is exchanged or
into which it is converted
"Subordinated Note" means any subordinated promissory notes issued by the
Company on or after the date of this Agreement, one or more of such notes being
issued to a Stockholder.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as a principal in connection with a distribution of such Registrable
Securities and not as part of such dealer's market-making activities.
"Warrant" means any of the warrants issued by the Company on or after the
date of this Agreement, one or more of such warrant being issued to a
Stockholder.
(b) Each of the following terms is defined in the Section opposite
such term:
Term Section
---- -------
Demand Notice 2.1.1
Initiating Holder 2.1.1
Maximum Offering Size 2.1.3
NASD 2.4.6
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1 DEMAND REGISTRATION.
2.1.1 At any one time commencing after the exercise of any Option
until the sixth anniversary of such date, any one or more of the Rights Holders
(an "Initiating Holder") may, by written notice (a "Demand Notice") sent to the
Company and to each other Rights Holder, demand that the Company register under
the Securities Act all or any portion of any of the Registrable Securities held
by such Rights Holders for sale in the manner specified in the Demand Notice;
PROVIDED, HOWEVER, that a Demand Notice shall require (a) either (i) the
registration of at least a majority of the number of Stockholder Securities
outstanding at the date of the Demand Notice (as adjusted for stock splits,
combinations and similar events), or (ii) that it be signed by the Holders of a
majority of the Stockholder Securities outstanding at the date of the Demand
Notice, and (b) the registration of at least 250,000 shares of Common Stock (as
adjusted for stock splits, combinations and similar events). If any of such
other Rights Holders wish to register Common Stock, such Rights Holder shall
notify the Company and each other Rights Holder within five Business Days of
receipt of the Demand Notice of the number of shares of Registrable Securities
such other Rights Holder wishes to have included in such registration.
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2.1.2 Following receipt of any Demand Notice under Section 2.1.1
above, the Company shall file a registration statement within 60 days thereafter
and shall use its best efforts to have such registration statement declared
effective at the earliest practicable time under the Securities Act, for public
sale in accordance with the method of disposition specified in the Demand
Notice, the number of shares of Common Stock specified in the Demand Notice. If
such method of disposition shall be an underwritten public offering, the
Stockholder Representative, as directed by a Stockholder Action, may designate
the managing underwriter of such offering, subject to the approval of the
Company, which approval shall not be unreasonably withheld or delayed.
2.1.3 If a Demand Registration involves an underwritten Public
Offering and the managing Underwriter shall advise the Company and the Selling
Holders that, in its view, the number of shares of Common Stock requested to be
included in such registration exceeds the largest number of shares of Common
Stock which can be sold without having an adverse effect on such offering,
including the price at which such shares of Common Stock can be sold (the
"Maximum Offering Size"), the Company will include in such registration, up to
the Maximum Offering Size, all shares of Common Stock requested to be registered
by the Selling Holders (allocated, if necessary for the offering not to exceed
the Maximum Offering Size, pro rata among such Holders on the basis of the
relative number of Stockholder Securities owned by such Selling Holders as of
the date of the first filing with the SEC). No shares excluded from the
underwriting by reason of the Underwriter's marketing limitation shall be
included in such registration. The Company shall be obligated to register shares
of Common Stock pursuant to a demand made in accordance with Section 2.1.1
hereof on one occasion only; PROVIDED, HOWEVER, that such obligation shall be
deemed satisfied only when (a) a registration statement covering all shares of
Common Stock specified in notices received as aforesaid, for sale in accordance
with the method of disposition specified in the Demand Notice, shall have become
effective and, if such method of disposition is a firm commitment underwritten
public offering, all such shares shall have been sold pursuant thereto or (b)
the Initiating Holder shall have determined not to proceed with the offering
covered by such registration statement after the Company shall have expended a
substantial amount of funds in connection therewith (other than as a result of
the Company's breach of its obligations hereunder).
SECTION 2.2 PIGGY-BACK REGISTRATION.
2.2.1 If at any time commencing after the exercise of an Option until
the sixth anniversary of such date, the Company proposes to register any of its
equity securities under the Securities Act (other than pursuant to Form X-0, X-0
or comparable registration statement), it will give written notice, at least 30
days prior to the filing of each such registration statement, to the Rights
Holders of its intention to do so. If any one or more of such Rights Holders
notifies the Company within 20 days after receipt of any such notice of its
desire to include any Registrable Securities owned by it in such proposed
registration statement, the Company shall, subject to the provisions set forth
below, afford each such Rights Holder the opportunity to have any such shares
registered under such registration statement. If such registration is an
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underwritten registration, and the managing Underwriter(s) advise the Company in
writing that in its opinion the number of securities requested to be included in
such registration exceeds the number which can be sold in such offering without
adversely affecting such Underwriters' ability to effect an orderly distribution
of such securities, the Company will give the Rights Holders notice of such fact
and include in such registration FIRST, the securities proposed to be sold by
the Company for its own account and for the account of any stockholder of the
Company entitled to demand registration, and SECOND, any other securities of the
Company having registration rights, including the Registrable Securities owned
by the Rights Holders, on the following pro rata basis: all shares of Common
Stock requested to be registered by the Holders (allocated, if necessary for the
offering not to exceed the Maximum Offering Size, pro rata among such Rights
Holders on the basis of the relative number of Stockholder Securities owned by
such Rights Holders as of the date of the first filing with the SEC).
2.2.2 Notwithstanding the provisions of this Section 2.2, the Company
shall have the right at any time after it shall have given written notice
pursuant to this Section 2.2 (irrespective of whether a written request for
inclusion of any such securities shall have been made) to elect not to file any
such proposed registration statement, or to withdraw the same after filing but
prior to the effective date thereof.
SECTION 2.3 REGISTRATION ON FORM S-3. At any time commencing after the date
of exercise of the Option, and in addition to the rights under Sections 2.1 and
2.2 hereof, if at any time a Stockholder makes a written request or requests
that the Company to effect a registration on Form S-3 and any related
qualification or compliance with respect to all or a part of the Registrable
Securities owned by such Stockholder, the Company will:
2.3.1. as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested as would permit or
facilitate the sale and distribution of all or such portion of the Registrable
Securities as are specified in such request, PROVIDED, HOWEVER, that the Company
shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section 2.3.1: (a) if Form S-3 is not available for
such offering by the Selling Holders; (b) if the Selling Holders, together with
the holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell shares of Common Stock and such other securities
(if any) at an aggregate price to the public (net of any underwriters' discounts
or commissions) of less than $500,000; (c) if the Company shall furnish to the
Stockholder Representative a certificate signed by the President of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such Form S-3 registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than 120 days after receipt of the request of
the Stockholder Representative, after a Stockholder Action, under this Section
2.3.1 (PROVIDED, HOWEVER, that the Company shall not utilize this right more
than once in any 12 month period); (d) if the Company has, within the 12 month
period preceding the date of such request, already effected two registrations on
Form S-3 for the Rights Holders pursuant to this Section 2.3.1; or (v) if the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
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2.3.2 Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities so requested to be registered as
soon as practicable after receipt of the request or requests of the Selling
Holders. Registrations effected pursuant to Section 2.3.1 hereof shall not be
counted as demands for registration or registrations effected pursuant to
Sections 2.1 or 2.2 hereof.
SECTION 2.4 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In
connection with any registration of Registrable Securities under Section 2
hereof, the Company covenants and agrees as follows:
2.4.1 The Company shall pay all costs (including the costs of a single
firm of counsel designated by the Selling Holders to review the registration
statement and all amendments and supplements thereto up to a maximum of $25,000
in respect of each registration under Section 2 hereof, but excluding any
underwriting or selling commissions or other charges of any Underwriter or
broker-dealer acting on behalf of the Selling Holders), fees and expenses in
connection with all registration statements filed pursuant to Section 2 hereof,
including, without limitation, the Company's legal and accounting fees, printing
expenses, blue sky fees and expenses. The Company will take all necessary action
which may be required in qualifying or registering the Registrable Securities
included in a registration statement for offering and sale under the securities
or blue sky laws of such states as reasonably are requested by the Selling
Holders; provided, that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify as a foreign corporation
to do business under the laws of any such jurisdiction. If the Selling Holders
have sent a Demand Notice and have determined not to sell any Registrable
Securities pursuant to a registered offering, the Selling Holders may elect to
reimburse the Company for any costs incurred solely with respect to such
registration statement or lose the demand registration rights.
2.4.2 The Company shall indemnify each Selling Holder, its trustees
and officers, and each person, if any, who controls such Selling Holder within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, from and against, and pay or reimburse them for, all losses, claims,
damages, expenses and liabilities (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Securities Act, the Exchange Act or
otherwise, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any supplement to or amendments thereof, or arising out of or based upon any
omission or alleged omission of a material fact required to be stated therein or
necessary to make a statement therein not misleading, except insofar as such
losses, claims, damages, expenses or liabilities arise out of or are based upon
any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by or on behalf of a Selling
Holder expressly for use therein. Each Selling Holder shall indemnify the
Company, its officers and directors and each person, if any, who controls the
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Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, from and against, and pay or reimburse them for, all
losses, claims, damages, expenses and liabilities (including all expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which any of them may become subject under the Securities Act,
the Exchange Act or otherwise, directly arising from written information
furnished by or on behalf of such Selling Holder for specific inclusion in such
registration statement.
2.4.3 The Company shall not permit any other registration statement to
be filed during the first 60 days of effectiveness of a registration statement
filed pursuant to Section 2 hereof (other than a registration statement in
connection with a merger or consolidation or pursuant to Form X-0, X-0 or
comparable registration statement or a registration filed pursuant to any rights
granted to the Xxxxxxxx Family Foundation pursuant to the terms of that certain
Subordinated Promissory Note dated October 26, 2001 issued by the Company),
without the prior written consent of the Stockholder Representative, which
consent shall not be unreasonably withheld, and shall be provided only after a
Stockholder Action. The Company shall not permit the inclusion of any securities
other than the Registrable Securities held by any Rights Holder to be included
in any registration statement filed pursuant to Sections 2.1 and 2.3 hereof;
provided, however, that the Company may include securities being offered by it
for its own account and for the account of stockholders of the Company permitted
by the Company to include their securities in such registration statement, to
the extent that such inclusion does not in any way reduce the number of
securities proposed to be included by Selling Holder.
2.4.4 The Company shall use reasonable efforts in good faith to cause
to be furnished to each Selling Holder and to each Underwriter, if any, a signed
counterpart, addressed to each Selling Holder or such Underwriter, of (a) an
opinion of counsel to the Company, dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under the underwriting agreement), and
(b) a "cold comfort" letter dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering, a
letter dated the date of the closing under the underwriting agreement) signed by
the independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities.
2.4.5 The Company shall as soon as practicable after the effective
date of the registration statement, and in any event within 15 months
thereafter, make "generally available to its security holders" (within the
meaning of Rule 158 under the Securities Act) an earnings statement (which may
be unaudited) complying with Section 11(a) of the Securities Act and covering a
period of at least 12 consecutive months beginning after the effective date of
the registration statement.
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2.4.6 The Company shall deliver promptly to each Selling Holder and to
the managing Underwriter, if any, copies of all correspondence between the SEC
and the Company, its counsel or auditors and permit each Selling Holder and
Underwriter at its own cost and expense to do such investigation, upon
reasonable advance notice, and upon entering into a confidentiality agreement,
in form and substance reasonably acceptable to the Company, with each Selling
Holder and such Underwriter, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. (the "NASD") or other national exchange. Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as the Lender shall
reasonably request as it deems necessary to comply with applicable securities
laws or rules of the NASD or other national exchange.
2.4.7 Nothing contained in this Agreement shall be construed as
requiring any Stockholder to exercise its Option prior to the effectiveness of
any registration statement.
SECTION 2.5 UNDERWRITING AGREEMENT. The Company shall enter into an
underwriting agreement with the managing Underwriter selected for such
underwriting by the Stockholder Representative and reasonably satisfactory to
the Company. Such agreement shall be reasonably satisfactory in form and
substance to the Company, the Stockholder Representative and such managing
Underwriter, and shall contain such representations, warranties and covenants by
the Company and such other terms as are customarily contained in agreements of
that type used by the managing Underwriter. Each Selling Holder shall be a party
to any underwriting agreement relating to an underwritten sale of its
Registrable Securities and may, at its option, require that any or all the
representations, warranties and covenants of the Company to or for the benefit
of such Underwriter shall also be made to and for the benefit of such Selling
Holder. No Selling Holder shall be required to make any representations or
warranties to or agreements with the Company or the Underwriter except as they
may specifically relate to such Selling Holder and its intended method(s) of
distribution.
ARTICLE III
MISCELLANEOUS
SECTION 3.1 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
any provisions hereof.
SECTION 3.2 NO INCONSISTENT AGREEMENTS. Except for the Subordinated
Promissory Note between the Company and THE XXXXXXXX FAMILY CHARITABLE
FOUNDATION, dated October 26, 2001, the Company is not a party to any agreement
with respect to its securities which is inconsistent with, or otherwise grant
rights superior to, the rights granted to the Stockholders under this Agreement.
The Company will not hereafter enter into any agreement with respect to its
securities which is inconsistent with, or otherwise grant rights superior to,
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the rights granted to the Stockholders under this Agreement, provided that such
requirement shall terminate at any time the number of Stockholder Securities
outstanding, or which may be outstanding after the passage of time or the
occurrence of any event, is less than 25,000.
SECTION 3.3 ENTIRE AGREEMENT; AMENDMENTS; NO WAIVERS.
3.3.1 This Agreement and the other instruments and agreements referred
to herein embody the entire agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior or contemporaneous agreements with
respect thereto. This Agreement may be amended but only in a writing signed by
the Stockholders who hold a majority of Stockholder Securities and the Company.
Any provision hereof may be waived but only in a writing signed by the party
against which such waiver is sought to be enforced.
3.3.2 No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 3.4 NOTICES. Any notices or other communications required or
permitted by this Agreement shall be in writing and shall be delivered either by
personal delivery, by nationally recognized overnight courier service, by
facsimile, by first class mail or by registered or certified mail, return
receipt requested, addressed to a party at the address set forth below such
party's signature, or to such other address as any party shall have previously
designated to the others by written notice given in the manner hereinabove set
forth. Notices shall be deemed given one day after being sent, if sent by
overnight courier; when delivered and receipted for, if hand delivered; when
received, if sent by facsimile or other electronic means or by first class mail;
or when receipted for (or upon the date of attempted delivery where delivery is
refused or unclaimed), if sent by certified or registered mail, return receipt
requested.
SECTION 3.5 APPLICABLE LAW. The parties, being concerned that either party
may obtain some advantage by having the law of the jurisdiction of its principal
place of business apply, and agreeing in concept to have this Agreement subject
to the laws of a neutral jurisdiction, whose laws are perceived as being fair in
general to the business community at large, have determined and agreed as
follows: THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
SECTION 3.6 SEVERABILITY. The invalidity or unenforceability of any
provisions of this Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
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SECTION 3.7 SUCCESSORS, ASSIGNS, TRANSFEREES. The provisions of this
Agreement shall be binding upon and accrue to the benefit of the parties hereto
and their respective heirs, successors and assigns. Neither this Agreement nor
any provisions hereof shall be construed so as to confer any right or benefit
upon any Person other than the parties to this Agreement and their respective
heirs, successors and assigns. Each party to this Agreement agrees to provide to
each other party to this Agreement the name and address of any person to whom is
made any assignment of any rights hereunder.
SECTION 3.8 COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
any number of counterparts, each of which shall be an original with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 3.9 FEES AND EXPENSES. All fees and expenses incurred by any party
hereto in connection with the preparation of this Agreement and the transactions
contemplated hereby and all matters related thereto shall be borne by the
Company. Lastly, all costs, including attorney fees, incurred by any Stockholder
in revising, protecting, exercising or enforcing any of its rights hereunder and
under the other documents delivered hereunder, or otherwise incurred by any
Stockholder in connection with the enforcement hereof, including by way of
description and not limitation, such charges in any court or bankruptcy
proceedings or arising out of any claim or action by any person, firm or
corporation against any Stockholder which would not have been asserted were it
not for the Stockholder's relationship with the Company, shall also be paid by
the Company
SECTION 3.10 REMEDIES. The parties hereby acknowledge that money damages
would not be adequate compensation for the damages that a party would suffer by
reason of a failure of any other party to perform any of the obligations of this
Agreement. Therefore, each party hereto agrees that specific performance is the
only appropriate remedy under this Agreement and hereby waives the claim or
defense that any other party has an adequate remedy at law.
SECTION 3.11 RELATIONSHIPS. Nothing contained in this Agreement shall be
deemed or construed by the parties hereto or by any third person to create the
relationship of partnership, joint venturer or any other form of relationship.
No "group" within the meaning of the Exchange Act is being formed among the
Stockholders, or among any one or more of the Stockholders and the Company, as a
result of this Agreement.
SECTION 3.12 ARBITRATION. ANY CONTROVERSY, CLAIM OR DISPUTE ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY BREACH, TERMINATION OR VALIDITY THEREOF
(INCLUDING WITHOUT LIMITATION THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF
THIS AGREEMENT) BUT EXCLUDING ANY CONTROVERSY, CLAIM OR DISPUTE RELATING TO
INDEMNITY, SHALL BE SETTLED BY SUBMITTING THE MATTER TO ONE ARBITRATOR PURSUANT
TO THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION IN
THE CITY OF TORRINGTON, CONNECTICUT. JUDGMENT UPON THE AWARD RENDERED MAY BE
ENTERED IN ANY COURT HAVING COMPETENT JURISDICTION. THE PREVAILING PARTY IN ANY
SUCH ARBITRATION SHALL BE ENTITLED TO REIMBURSEMENT OF ALL COSTS AND EXPENSES
(INCLUDING ATTORNEYS' FEES, ADMINISTRATIVE FEES, ARBITRATOR'S FEES AND COURT
COSTS) ASSOCIATED WITH ANY SUCH ARBITRATION PROCEEDING. THE ARBITRATOR SHALL
HAVE NO POWER TO MODIFY ANY TERMS OF THIS AGREEMENT, OR ISSUE ANY AWARD WHICH BY
ITS TERMS MODIFIES ANY TERM OF THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ROYAL PRECISION, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxx, President
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
STOCKHOLDERS:
Signature of Stockholder: The Xxxxxxxx Family Living Trust
u/a dtd. 4/11/94
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx, Trustee
and
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X Xxxxxxxx, Trustee
c/o Xxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopier: (000) 000-0000
Signature of Stockholder: /s/ Xxxxxxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxxxxxx X. Xxxxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
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Signature of Stockholder: Xxxx Xxxxxx Xxxxxxxx, Custodian f/b/o
Xxxxxxx X. Xxxxxx
VIP Plus Profit-Sharing Account
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx, Individually
and as Plan Administrator
0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxx 00000
Telecopier: (000) 000-0000
Signature of Stockholder: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Signature of Stockholder: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------------
Xxxxxxx X. Xxxxxx
1800 Firstar Tower
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
-12-
