1
EXHIBIT 2.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of May
14, 1997 and effective as of the Effective Date (as defined herein), among Xxxxx
Xxxxxxx, an individual residing at 0000 Xxxxx Xxxxxxxxxx Xxxxx Xxxx, Xxxxxxxx
Xxxxxx, Xxxxxxx 00000, Xxxx X. Xxxxx, an individual whose address is 0000 Xxxxx
00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, DMB Property Ventures Limited
Partnership, a Delaware limited partnership having an office at 0000 Xxxxx 00xx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Xxxx X. Xxxxx, an individual whose
address is 0000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 and Xxxxxxx
Xxxxxxxx, Trustee of the Xxxxxxx Xxxxxxxx Trust dated April 21, 1989, as
amended, whose address is 0000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000 (Messrs. Edwards, Brown, Xxxxx and Xxxxxxxx and DMB Property Ventures
Limited Partnership collectively referred to as the "Xxxxxxx Group"),
Xxxxxxxxxxx X. Xxxxxxxx, an individual residing at 0000 Xxxxx Xxxxx Xxxxx,
Xxxxxxx, Xxxxxxx 00000, RPJ/JAJ Partners, Ltd., a Wyoming partnership having an
office at Teton Pines, 0000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, Xxxxx
X. Xxxxxxxx, an individual residing at 0000 X. Xxxxxxxx Xxxx, Xxx Xxxxxx,
Xxxxxxx 00000, Xxxxxxx X. Xxxxxx, an individual residing at 0000 Xxxxxxxxxx
Xxxx, Xxxxxx, Xxxx 00000 (Messrs. Xxxxxxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx and
Xxxxxx, and RPJ/JAJ Partners collectively referred to as the "Xxxxxxxx Group")
and Xxxxxxxx Xxxxxxx & Company, L.P., a New York limited partnership having an
office at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("B&M") (B&M and each
member of the Xxxxxxx Group and the Xxxxxxxx Group individually referred to as a
"Stockholder" and collectively as "Stockholders"), and FM Precision Golf Corp.,
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.
"Effective Date" means the date and time at which properly executed
Articles of Merger are duly filed with the Secretary of State of the State of
Nevada in accordance with the provisions of that certain Agreement and Plan of
Merger among Royal Grip, Inc., FM Precision Golf Corp. and FMPSub, Inc. of even
date herewith.
2
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Group" means any of the Xxxxxxx Group, the Xxxxxxxx Group or B&M.
"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 Common Stock.
"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 the shares of Common Stock held by any
Stockholder on the date of this Agreement, any Common Stock issued as a result
of the exercise of any option held by any Stockholder on the date of this
Agreement, 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, and any capital stock for which such Common Stock
is exchanged or into which it is converted; provided that such securities shall
cease to be Registrable Securities when (a) 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 (b) 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).
"Registration Expenses" means all (a) registration and filing fees, (b)
fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of a qualified independent underwriter, if
any, counsel in connection therewith and the reasonable fees and disbursements
of counsel in connection with blue sky qualifications of the Registrable
Securities), (c) printing expenses, (d) internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees performing legal or accounting duties), (e) fees and disbursements of
counsel for the Company, (f) fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters), (g) fees and expenses of
any special experts retained by the Company in connection with such
registration, (h) reasonable fees and expenses of (i) one counsel for the
Xxxxxxx Group and its permitted transferees, (ii) one counsel for the Xxxxxxxx
Group and its permitted transferees, and (iii) one counsel for B&M and its
permitted transferees, (i) fees and expenses of listing the Registrable
Securities on a securities exchange or on the NASDAQ National Market System, (j)
rating agency fees, (k) reasonable fees and expenses of counsel for the
Underwriter, (l) reasonable fees and expenses of the Underwriter (excluding
discounts or commissions relating to the distribution of the Registrable
Securities) and (m) out-of-pocket expenses of the Company.
- 2 -
3
"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 any Stockholder or any transferee of a
Stockholder who proposes to sell Registrable Securities pursuant to Article II.
"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.
(b) Each of the following terms is defined in the Section
opposite such term:
Term Section
---- -------
Demand Registrant 2.1(a)
Demand Registration 2.1(a)
Indemnified Party 2.8
Indemnifying Party 2.8
Maximum Offering Size 2.3(a)
Piggyback Holder 2.2(a)
Piggy-Back Registration 2.2
Registration Request 2.1(a)
ARTICLE II
REGISTRATION RIGHTS
Section 2.1. Demand Registration.
(a) At any time after the date hereof, any Group or any other
Holder to which rights under this Section 2.1 have been transferred or assigned
(a "Demand Registrant") may make a written request (the "Registration Request")
for registration (a "Demand Registration") under the Securities Act of
Registrable Securities having a value (determined in the good faith judgment of
the Board of Directors) of not less than five million dollars. The Registration
Request will specify the number of shares of Registrable Securities proposed to
be sold and will also specify the intended method of disposition thereof;
provided that the Company shall not be obligated to effect (i) more than one
Demand Registration for the Xxxxxxx Group and its transferees, (ii) more than
two Demand Registrations for the Xxxxxxxx Group and its transferees, (iii) more
than one Demand Registration for B&M and its transferees, or (iv) a Demand
Registration if counsel to the Company delivers to the Demand Registrant a
written opinion in form and substance reasonably satisfactory to the Demand
Registrant to the effect that registration under the Securities Act is not
necessary in order for the Demand Registrant to sell the Registrable Securities
in the manner contemplated by the Demand Registrant and, following such sale,
the transferee (assuming such transferee is not the Company or an
- 3 -
4
Affiliate of the Company within the meaning of the Securities Act) will be free
to resell such Registrable Securities without restriction and without
registration under the Securities Act.
(b) For purposes of Section 2.1(a), a registration of
Registrable Securities will not count as a Demand Registration until it has
become effective under the Securities Act.
(c) If the Demand Registrant so elects, the offering of
Registrable Securities pursuant to a Demand Registration shall be in the form of
an underwritten offering. The Board of Directors shall select the book-running
managing Underwriter in connection with such offering, and the Demand Registrant
may select one additional investment banking firm to serve as co-managing
underwriter in connection with the offering.
(d) The Company will use its best efforts to effect the
registration and the sale of Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable in connection
with any Registration Request.
(e) Notwithstanding anything to the contrary herein contained,
the Company will not be obligated to effect (i) any Demand Registration until
after the first anniversary of the date of this Agreement, (ii) not more than
one Demand Registration between the first and second anniversaries of the date
of this Agreement, and (iii) any Demand Registration after the fifth anniversary
of the date of this Agreement.
Section 2.2. Piggy-Back Registration.
(a) If the Company proposes to file a registration statement
under the Securities Act with respect to an offering of its Registrable
Securities (i) for its own account (other than a registration statement on Form
S-4 or S-8 (or any substitute form that may be adopted by the SEC)), or (ii) for
the account of any holders of its capital stock, then the Company shall give
written notice of such proposed filing to each Holder and all transferees of any
Stockholder to which a Stockholder shall have transferred any of its rights
under this Section 2.2 (a "Piggyback Holder") as soon as practicable (but in any
event not less than 20 days before the anticipated filing date), and such notice
shall offer such Piggyback Holders the opportunity to register any and all
shares of Registrable Securities owned by such Piggyback Holders. If such
Piggyback Holders wish to register securities of the same class or series as the
Company or such holders, such registration shall be on the same terms and
conditions as the registration of the Company's or such holders' securities (a
"Piggy-Back Registration"). No registration effected under this Section 2.2
shall relieve the Company of its obligations to effect a Demand Registration to
the extent required by Section 2.1 hereof; provided that no Piggyback Holder may
participate in any Piggy-Back Registration or Demand Registration at a time when
such Piggyback Holder owns Registrable Securities which are already registered
under a then effective registration statement.
Section 2.3. Reduction of Offering.
(a) 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, (i) the number of shares of Common Stock requested to
be included in such registration (including Common Stock which the Company
proposes to be included) or (ii) the inclusion of some or all of the shares of
- 4 -
5
Common Stock owned by the Holders, in either case, 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, in the priority listed below, up to the Maximum Offering Size:
(I) with respect to the Demand Registration which takes place
between the first and second anniversaries of the date of this
Agreement, all shares of Common Stock requested to be registered by the
Stockholders (allocated, if necessary for the offering not to exceed
the Maximum Offering Size, pro rata among such Stockholders on the
basis of the relative number of shares of Registrable Securities owned
by the Group to which such Stockholder belongs as of the date of the
first filing with the SEC);
(II) with respect to any other Demand Registration, first, 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 entities on the basis of the
relative number of shares of Registrable Securities requested to be
registered);
(III) second, all Registrable Securities requested to be
included in such registration by any other Holder (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro
rata among such other Holders on the basis of the relative number of
shares of Registrable Securities requested to be included in such
registration); and
(IV) third, any Common Stock proposed to be registered by the
Company.
(b) If a registration pursuant to Section 2.2 involves an
underwritten Public Offering (other than in the case of an underwritten Public
Offering requested by any Demand Registrant in a Demand Registration, in which
case the provisions with respect to priority of inclusion in such offering set
forth in Section 2.3(a) shall apply) and the managing Underwriter advises the
Company that, in its view, the number of shares of Common Stock which the
Company and the Selling Holders intend to include in such registration exceeds
the Maximum Offering Size, the Company will include in such registration, in the
following priority, up to the Maximum Offering Size:
(i) first, so much of the Common Stock proposed to be
registered by the Company as would not cause the offering to exceed the
Maximum Offering Size; and
(ii) second, all Registrable Securities requested to be
included in such registration statement by any Holder pursuant to
Section 2.2 or otherwise (allocated, if necessary for the offering not
to exceed the Maximum Offering Size, pro rata among such entities on
the basis of the relative number of shares of Registrable Securities
requested to be so included).
Section 2.4. Registration Procedures. Whenever the Company is required
to effect the registration of Registrable Securities pursuant to Section 2.1 or
2.2 hereof, the Company will use reasonable efforts in good faith to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable, and in
connection with any such Registration Request:
- 5 -
6
(a) The Company will as expeditiously as possible prepare and
file with the SEC a registration statement on any form for which the Company
then qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of the Registrable Securities to be
registered thereunder in accordance with the intended method of distribution
thereof, and use reasonable efforts in good faith to cause such filed
registration statement to become and remain effective for a period of not less
than 120 days; provided that in the case of a Demand Registration, if the
Company shall furnish to any Selling Holder a certificate signed by either its
Chairman, Chief Executive Officer or President stating that in his good faith
judgment it would materially adversely affect the Company or its stockholders
for such a registration statement to be filed as expeditiously as possible, the
Company shall have a period of not more than 120 days within which to file such
registration statement measured from the date of receipt of the Registration
Request in accordance with Section 2.1.
(b) The Company will, if requested, prior to filing a
registration statement or prospectus or any amendment or supplement thereto,
furnish to any Selling Holder and each Underwriter, if any, drafts of such
documents proposed to be filed, and thereafter furnish to the Selling Holders
and such Underwriter, if any, such number of copies of such registration
statement, each amendment and supplement thereto (in each case including all
exhibits thereto and documents incorporated by reference therein), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as any Selling Holders or such Underwriter
may reasonably request in order to facilitate the sale of the Registrable
Securities.
(c) After the filing of the registration statement, the
Company will promptly notify any Selling Holders of any stop order issued or
threatened by the SEC and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.
(d) The Company will use reasonable efforts in good faith to
(i) register or qualify the Registrable Securities under such other securities
or blue sky laws of such jurisdictions in the United States as any Selling
Holders reasonably (in light of their intended plan of distribution) requests
and (ii) cause such Registrable Securities to be registered with or approved by
such other governmental agencies or authorities as may be necessary by virtue of
the business and operations of the Company and do any and all other acts and
things that may be reasonably necessary or advisable to enable the Selling
Holders to consummate the disposition of their Registrable Securities; provided,
that the Company will not be required to (A) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this paragraph (d), (B) subject itself to taxation in any such jurisdiction
other than taxation arising with respect to the registration of securities or
(C) consent to general service of process in any such jurisdiction.
(e) At any time when a prospectus relating to the sale of
Registrable Securities is required to be delivered under the Securities Act, the
Company will immediately notify the Selling Holders of the occurrence of an
event requiring the preparation of a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and promptly make
available to the Selling Holders and the Underwriters any such supplement or
amendment. The Selling Holders agree that, upon receipt of any notice from the
Company of the happening of any
- 6 -
7
event of the kind described in the preceding sentence, the Selling Holders will
forthwith discontinue the offer and sale of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until receipt of
the copies of such supplemented or amended prospectus and, if so directed by the
Company, the Selling Holders will deliver to the Company all copies, other than
permanent file copies then in the possession of the Selling Holders, of the most
recent prospectus covering such Registrable Securities at the time of receipt of
such notice. In the event the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective as provided in Section 2.4(a) hereof by the number of days during the
period from and including the date of the giving of such notice to the date when
the Company shall make available to the Selling Holders such supplemented or
amended prospectus.
(f) The Company will enter into customary agreements
(including an underwriting agreement in customary form) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities.
(g) The Company will make available for inspection by any
Selling Holder and any Underwriter participating in any disposition pursuant to
a registration statement being filed by the Company pursuant to this Article II,
any attorney, accountant or other professional retained by any Selling Holder or
Underwriter (collectively, the "Inspectors"), all financial and other records,
pertinent corporate documents and properties of the Company (collectively, the
"Records") as shall be reasonably requested by any Inspector, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any Inspectors in connection with such registration statement.
(h) The Company will furnish to the Selling Holders and to
each Underwriter, if any, a signed counterpart, addressed to the Selling Holders
or such Underwriter, of (i) an opinion or opinions of counsel to the Company and
(ii) a comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters as are customarily
covered by opinions and comfort letters, as the Selling Holders or the managing
Underwriter therefor reasonably request.
(i) The Company will otherwise use reasonable efforts in good
faith to comply with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering a period of 12 months, beginning within three months
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
(j) The Company will use reasonable efforts in good faith to
cause all such Registrable Securities to be listed on each securities exchange
on which similar securities issued by the Company are then listed.
(k) The Company may require any Selling Holder, and each
Selling Holder agrees, to furnish promptly in writing to the Company such
information regarding such Selling Holder, the plan of distribution of the
Registrable Securities and other information as the Company may from time to
time reasonably request or as may be legally required in connection with such
registration.
- 7 -
8
Section 2.5. Registration Expenses. Registration Expenses incurred in
connection with any registration made or requested to be made pursuant to this
Article II will be borne by the Company, whether or not any such registration
statement becomes effective.
Section 2.6. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Selling Holder and its officers, directors and
agents, and each Person, if any, who controls each such Selling Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages, liabilities and
expenses caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information furnished in writing to the Company
by or on behalf of such Selling Holder expressly for use therein; provided that
with respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, or in any prospectus, as the case
may be, the indemnity agreement contained in this paragraph shall not apply to
the extent that any such loss, claim, damage, liability or expense results from
the fact that a current copy of the preliminary prospectus (or, in the case of a
prospectus, the prospectus as amended or supplemented) was not sent or given to
the Person asserting any such loss, claim, damage, liability or expense at or
prior to the written confirmation of the sale of the Registrable Securities to
such Person if it is determined that the Company has provided such prospectus
and it was the responsibility of such Selling Holder to provide such Person with
a current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The Company also agrees
to indemnify any Underwriters of the Registrable Securities, their officers and
directors and each Person who controls such underwriters on substantially the
same basis as that of the indemnification of the Selling Holder provided in this
Section 2.6.
Section 2.7. Indemnification by the Selling Holders. Each Selling
Holder agrees to indemnify and hold harmless the Company, its officers,
directors and agents and each Person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Selling Holder, but only with reference to information related to such
Selling Holder furnished in writing by or on behalf of such Selling Holder
expressly for use in any registration statement or prospectus relating to the
Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus. Each Selling Holder also agrees to indemnify and hold
harmless Underwriters of the Registrable Securities, their officers and
directors and each Person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 2.7.
Section 2.8. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 2.6 or 2.7, such Person (the "Indemnified Party") shall promptly notify
the Person against whom such indemnity may be sought (the "Indemnifying Party")
- 8 -
9
in writing and the Indemnifying Party upon request of the Indemnified Party
shall retain counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to the proceeding; provided that the failure of any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent that the Indemnifying
Party is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (a) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (b) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its consent, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Party shall have requested an Indemnifying Party to reimburse the Indemnified
Party for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 Business Days after receipt by such
Indemnifying Party of the aforesaid request and (ii) such Indemnifying Party
shall not have reimbursed the Indemnified Party in accordance with such request
prior to the date of such settlement, unless the Indemnifying Party has
contested such reimbursement obligation and provides reasonable assurances that
such payment can be made upon resolution of such dispute. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement (A) includes
an unconditional release of such Indemnified Party from all liability arising
out of such proceeding and (B) provides that such Indemnified Party does not
admit any fault or guilt with respect to the subject matter of such proceeding.
Section 2.9. Contribution. (a) If the indemnification provided for
herein is for any reason unavailable to the Indemnified Parties in respect of
any losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) as between the Company and
the Selling Holders on the one hand and the Underwriters on the other, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and such Selling Holders on the one hand and the Underwriters on the
other from the offering of the securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits but also the relative fault of the Company and the
Selling Holders on the one hand and of the Underwriters on the other in
connection with the
- 9 -
10
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and (ii) as
between the Company on the one hand and any Selling Holder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
such Selling Holder in connection with such statements or omissions, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Selling Holders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and such Selling Holders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the prospectus. The relative
fault of the Company and the Selling Holders on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and any Selling Holder or by the Underwriters. The
relative fault of the Company on the one hand and any Selling Holder on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(b) The Company and each Selling Holder agree that it would
not be just and equitable if contribution pursuant to this Section 2.9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Party as a
result of the losses, claims, damages or liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 2.9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission, and
no Selling Holder shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities of such
Selling Holder were offered to the public (less underwriters' discounts and
commissions) exceeds the amount of any damages which such Selling Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
Section 2.10. Participation in Underwritten Registrations. No Person
may participate in any underwritten registration hereunder unless such Person
(a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights.
- 10 -
11
Section 2.11. Current and Periodic Reports. The Company covenants that
it will timely file all reports required to be filed by it under the Securities
Act and the Exchange Act. Upon the request of the Xxxxxxx Group, B&M or the
Xxxxxxxx Group, the Company will deliver to the Xxxxxxx Group, B&M or the
Xxxxxxxx Group a written statement as to whether it has complied with such
requirements.
Section 2.12. Holdback Agreements. If and to the extent requested by
the Company, in the case of a non-underwritten Public Offering, and if and to
the extent requested by the managing Underwriter or Underwriters, in the case of
an underwritten Public Offering, the Holders agree not to effect, except as part
of such registration, any public sale or distribution of the shares of Common
Stock being registered or a similar security of the Company, or any securities
convertible into or exchangeable or exercisable for such securities, including a
sale pursuant to Rule 144, during the 14 days prior to, and during the 120-day
period beginning on, the effective date of such registration statement.
Section 2.13. Minimum Ownership. No Stockholder, nor any transferee of
any Stockholder, shall have any rights under this Agreement to participate in
any registration statement, either as a Demand Registrant, or as a Piggyback
Holder, after the date when all Registrable Securities owned by the applicable
Group or transferees is less than 5% of the then outstanding shares of Common
Stock of the Company.
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. The Company is not a party to
and will not hereafter enter into any agreement with respect to its securities
which is inconsistent with, or otherwise grant rights superior to, the rights
granted to the Xxxxxxxx and Xxxxxxx Groups or B&M under this Agreement.
Section 3.3. Entire Agreement; Amendments; No Waivers.
(a) 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 agreements with
respect thereto. This Agreement may be amended but only in a writing signed by
the Xxxxxxx Group, the Xxxxxxxx Group, B&M 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.
(b) 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.
- 11 -
12
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. EACH OF THE PARTIES AGREES
THAT ANY LEGAL ACTION BETWEEN THE PARTIES RELATING TO THE ENTRY INTO OR
PERFORMANCE OF THIS AGREEMENT, OR THE INTERPRETATION OR ENFORCEMENT OF TERMS
HEREOF, SHALL BE BROUGHT IN A FEDERAL OR STATE COURT LOCATED IN NEW CASTLE
COUNTY, DELAWARE, HAVING JURISDICTION OF THE SUBJECT MATTER THEREOF, AND EACH
PARTY IRREVOCABLY CONSENTS TO PERSONAL JURISDICTION IN ANY SUCH FEDERAL OR STATE
COURT, WAIVES ANY RIGHT TO OBJECT TO SUCH VENUE OR TO ASSERT THE DEFENSE OF
FORUM NON-CONVENIENS, AND AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL ADDRESSED TO SUCH PARTY AT ITS ADDRESS SET FORTH
IN,OR DETERMINED IN ACCORDANCE WITH, SECTION 3.11 HEREOF.
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.
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.
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.
- 12 -
13
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, except
as otherwise specifically provided herein, be borne by the party incurring such
fees or expenses.
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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
FM PRECISION GOLF CORP.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxxxxxxx X. Xxxxxxxx, President
P.O. Box 25182
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
STOCKHOLDERS:
Signature of Stockholder: /s/ Xxxxx Xxxxxxx
-----------------------------------------
Xxxxx Xxxxxxx
0000 Xxxxx Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
Telecopier:
Signature of Stockholder /s/ Xxxx X. Xxxxx
-----------------------------------------
Xxxx X. Xxxxx
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
- 13 -
14
Signature of Stockholder DMB PROPERTY VENTURES
LIMITED PARTNERSHIP
By: DMB GP, Inc., General Partner
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Its President
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
Signature of Stockholder /s/ Xxxx X. Xxxxx
-----------------------------------------
Xxxx X. Xxxxx
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
Signature of Stockholder /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxxx, Trustee of the Xxxxxxx
Xxxxxxxx
Trust dated April 21, 1989, as amended
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 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
Signature of Stockholder: RPJ/JAJ PARTNERS, LTD.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, General Partner
Teton Pines
0000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
- 14 -
15
Signature of Stockholder: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx
0000 X. Xxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
Signature of Stockholder: XXXXXXXX XXXXXXX &
COMPANY, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, Managing
General Partner
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Signature of Stockholder: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxx 00000
Telecopier: (000) 000-0000
- 15 -
