SALE AND PURCHASE AGREEMENT
This SALE AND PURCHASE AGREEMENT (this “Agreement”), dated as of September 26, 2006,
is by and between XXXXX, RUGER & COMPANY, INC., a Delaware corporation, (the “Purchaser”)
and RUGER BUSINESS HOLDINGS, L.P., a Delaware limited partnership (the “Seller”).
W I T N E S S E T H :
WHEREAS, the Seller desires to sell and deliver to the Purchaser 4,272,000 shares of the
common stock, $1.00 par value, of the Purchaser (the “Common Stock”) and the Purchaser
desires to purchase the same from the Seller, subject to the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and mutual covenants and agreements set forth
herein, the parties hereto hereby agree as follows:
ARTICLE I
SALE AND PURCHASE
1.1 Sale and Purchase of Common Stock. Subject to the terms and conditions hereof on
the Closing Date (as defined below), the Seller will sell the Common Stock to the Purchaser and the
Purchaser will purchase the Common Stock from the Seller for the aggregate purchase price of Twenty
Five Million Two Hundred Four Thousand Eight Hundred Dollars ($25,204,800) (the “Purchase
Price”).
1.2 The Closing. The closing (the “Closing”) of the transactions contemplated
by this Agreement shall take place on the date hereof at the offices of the Purchaser, or at such
time or place as may be agreed upon in writing by the parties hereto. The date of the Closing is
herein referred to as the “Closing Date”.
1.3 Closing Deliveries. At the Closing (i) the Seller shall deliver to the Purchaser
one or more certificate(s) representing the Common Stock registered in the name of the Seller,
having all requisite stock transfer stamps attached, duly endorsed for immediate transfer to the
Purchaser, or with stock powers attached duly endorsed for immediate transfer to Purchaser,
together with such other instruments and documents as may be reasonably necessary to transfer the
Common Stock to the Purchaser on the Closing Date and (ii) the Purchaser shall deliver to the
Seller the Purchase Price by wire transfer of immediately available funds to an account of the
Seller designated in writing by the Seller to the Purchaser. Upon payment of the Purchase Price by
the Seller, the Common Stock shall be free and clear of all liens, charges, security interests,
claims or other encumbrances.
ARTICLE II
SELLER’S REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants to the Purchaser as follows:
2.1 Existence of Seller. The Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has full power and
authority under such laws to enter into and perform its obligations hereunder. The execution,
delivery and performance of this Agreement by the Seller and the consummation by the Seller of the
transactions contemplated hereby have been duly authorized by all necessary limited partnership
action on the part of the Seller.
2.2 Execution and Enforceability. This Agreement has been duly organized and validly
executed and delivered by the Seller and constitutes a valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws of general application relating to or
affecting enforcement of creditors’ rights generally and general principles of equity.
2.3 Consents. No consent, approval or authorization of, or exemption by, or
registration or filing with, any governmental or regulatory authority or other third party which
has not been obtained or made by the Seller on or before the date hereof is required in connection
with the execution and delivery by the Seller of this Agreement or the consummation by the Seller
of the transactions contemplated hereby.
2.4 Ownership of Common Stock. The Seller is the legal and beneficial owner of the
Common Stock and has good and marketable title thereto, free and clear of any liens, charges,
security interest, claims or other encumbrances.
2.5 Transfer. The Seller has legal right and power to transfer and deliver the Common
Stock to the Purchaser in the manner provided in this Agreement, and upon delivery of such Common
Stock pursuant to the terms of this Agreement, Purchaser will receive good and valid legal title
thereto and full beneficial ownership thereof, free and clear of all liens, charges, security
interest, claims or other encumbrances.
2.6 Broker. Except for Xxxxxxxx Inc., no broker, finder or other person is entitled
to any brokerage fees, commissions or finder’s fees from the Seller in connection with the
transactions contemplated hereby.
ARTICLE III
PURCHASER’S REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants to the Seller, as follows:
3.1 Existence of Purchaser. The Purchaser is a corporation duly, validly existing and
in good standing under the laws of the State of Delaware and has full corporate power and authority
under such laws to enter into and perform its obligations hereunder. The
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execution, delivery and performance of this Agreement by the Purchaser and the consummation by
the Purchaser of the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Purchaser.
3.2 Execution and Enforceability. This Agreement has been duly and validly executed
and delivered by the Purchaser and constitutes a valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws of general application relating to or
affecting enforcement of creditors’ rights generally and general principles of equity.
3.3 Consents. No consent, approval or authorization of, or exemption by, or
registration or filing with, any governmental or regulatory authority or other third party which
has not been obtained or made by the Purchaser on or before the date hereof is required in
connection with the execution by the Purchaser of this Agreement or the consummation by the
Purchaser of the transactions contemplated hereby.
ARTICLE IV
MISCELLANEOUS
MISCELLANEOUS
4.1 Indemnification. The Seller agrees to indemnify and hold the Purchaser harmless
from and against all damages, losses or expenses (including, without limitation, reasonable
attorneys’ fees) suffered or paid, directly or indirectly, by the Purchaser arising out of the
failure of any representation or warranty made by the Seller in this Agreement to be true and
correct in all material respects as of the date of this Agreement or the material breach of any
covenant made by the Seller contained herein. The Purchaser agrees to indemnify and hold the
Seller harmless from and against all damages, losses or expenses (including, without limitation,
reasonable attorneys’ fees) suffered or paid, directly or indirectly, by the Seller arising out of
the failure of any representation or warranty made by the Purchaser in this Agreement to be true
and correct in all material respects on and as of the date of this Agreement or the material breach
of any covenant made by the Purchaser contained herein.
4.2 Publicity. Each of the parties hereto agrees that they will not issue any press
release or make any statement to the general public with respect to this Agreement or the
transactions contemplated hereby without prior approval of the other party, except as required by
law or the requirements of the New York Stock Exchange.
4.3 Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto with respect to the subject matter hereof and supersedes all prior agreements between them,
whether written or oral, with respect to the subject matter hereof.
4.4 Survival of Representations and Warranties. The respective representations and
warranties of the Seller and the Purchaser contained in this Agreement shall survive the purchase
and sale of the Common Stock contemplated hereby.
4.5 Amendment and Waiver. This Agreement may not be amended nor may any of the
provisions hereof be waived orally. To be effective, any amendment to this Agreement shall be in
writing and signed by all of the parties hereto. To be effective, any waiver of any of the provisions of this Agreement
shall be in writing and signed by the party to be
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charged and then such waiver shall be effective only to the extent
specifically set forth in such
writing.
4.6 Further Assurances. Each of the parties hereto shall take any and all such
further action and to execute, acknowledge and deliver such instruments, documents and agreements
as the other party may reasonably request to effectuate, consummate or confirm the transactions
contemplated hereby.
4.7 Governing Law. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, construed and enforced in accordance with the laws of the State of
New York without reference to the choice of law provisions thereof.
4.8 Expenses. Each of the parties hereto shall bear its own costs and expenses
incurred in connection with the transactions contemplated hereby. The Seller shall be solely
responsible for all amounts payable to Xxxxxxxx Inc. in connection with the transactions
contemplated hereby.
4.9 No Assignment; Binding Effect. This Agreement and the rights and obligations of
the parties hereto may not be assigned without the prior written consent of the other party and any
assignment made without such consent shall be null and void. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective successors.
4.10 Severability. If any provision of this Agreement is held to be prohibited by or
invalid under applicable law in any jurisdiction, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating any other provisions of this
Agreement.
4.11 Counterparts. This Agreement may be executed in one or more counterparts, each
of which when so executed and delivered shall be an original, but all of which together shall
constitute one and the same instrument.
4.12 Headings. The headings in this Agreement are inserted for convenience of
reference only and shall not affect the interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the day and
year first above written.
| XXXXX, RUGER & COMPANY, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| RUGER BUSINESS HOLDINGS, L.P. By Ruger Management, Inc., its General Partner |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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