Exhibit 36
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ROYAL ASSOCIATES, INC.
AND
RA MERGER SUB, INC.
AND
ROYAL PRECISION, INC.
September 12, 2002
TABLE OF CONTENTS
(Not part of Agreement)
ARTICLE I - THE MERGER.........................................................3
ARTICLE II - CHARTER AND BYLAWS AND OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION................................................5
ARTICLE III - REPRESENTATIONS OF THE COMPANY...................................6
ARTICLE IV- REPRESENTATIONS AND WARRANTIES OF ACQUISITION
CORP. AND MERGER SUB........................................................8
ARTICLE V - COVENANTS..........................................................9
ARTICLE VI - CONDITIONS.......................................................12
ARTICLE VII - CLOSING.........................................................13
ARTICLE VIII - TERMINATION PRIOR TO CLOSING...................................13
ARTICLE IX - MISCELLANEOUS....................................................14
VOTING AGREEMENT..............................................................17
SCHEDULE A TO AGREEMENT AND PLAN OF MERGER - CONTINUING STOCKHOLDERS..........19
SCHEDULE B TO AGREEMENT AND PLAN OF MERGER....................................20
EXHIBIT 1.02 - FORM OF CERTIFICATE OF MERGER..................................21
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), is made and entered
into as of September 12, 2002, by and among ROYAL ASSOCIATES, INC., a Delaware
corporation ("ACQUISITION CORP."); RA MERGER SUB, INC., a Delaware corporation
("MERGER SUB"); and ROYAL PRECISION, INC., a Delaware corporation (the
"COMPANY").
W I T N E S S E T H:
WHEREAS, the Company has 12,718,877 shares of issued and outstanding common
stock, par value $.001 per share (individually, a "COMPANY SHARE," collectively,
the "COMPANY SHARES"); and
WHEREAS, Merger Sub is a wholly-owned subsidiary of Acquisition Corp.; and
WHEREAS, Acquisition Corp. has proposed to the Board of Directors of the
Company that Acquisition Corp. acquire each of the issued and outstanding
Company Shares other than 10,688,650 Company Shares held by the persons or
entities identified in Schedule A hereto (the "CONTINUING STOCKHOLDERS", the
shares to be acquired, the "PUBLIC SHARES", and the shares held by the
Continuing Stockholders, the "CONTINUING SHARES") through a merger (the
"MERGER") of Merger Sub with and into the Company pursuant to the terms of this
Agreement; and
WHEREAS, Acquisition Corp. as of the Effective Time will have not less than
20,000 shares of authorized common stock, without par value per share
(individually an "ACQUISITION CORP. SHARE" and collectively, the "ACQUISITION
CORP. Shares"); and
WHEREAS, the Board of Directors of Acquisition Corp. believes that it is in
the best interests of Acquisition Corp. and its stockholders, and the Board of
Directors of the Company believes that it is in the best interests of the
Company and its stockholders, to enter into this Agreement and to consummate the
merger of Merger Sub with and into the Company in accordance with the terms of
this Agreement; and
WHEREAS, an opinion of an independent financial advisor to the Company's
Board of Directors ("ADVISOR"), that the consideration to be received by the
holders of Public Shares in the Merger is fair to such holders from a financial
point of view, has been received by the Company; and
WHEREAS, the Boards of Directors of the Company, Acquisition Corp. and
Merger Sub have approved this Agreement and the Merger upon the terms set forth
in this Agreement.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements, and upon and subject to the terms and the conditions
hereinafter set forth, the parties do hereby agree as follows:
ARTICLE I.
THE MERGER
1.01 THE MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.02), Merger Sub shall be merged with
and into the Company in accordance with this Agreement and the separate
corporate existence of Merger Sub shall thereupon cease. The Company shall be
the surviving corporation in the Merger (sometimes hereinafter referred to as
the "SURVIVING CORPORATION").
1.02 EFFECTIVE TIME. If all the conditions to the Merger set forth in
Article VI shall have been fulfilled or waived in accordance herewith on the
Closing Date and this Agreement shall not have been terminated as provided in
Article VIII, the parties hereto shall cause a Certificate of Merger in the form
of EXHIBIT 1.02 hereto (the "CERTIFICATE OF MERGER") to be properly executed and
filed with the Secretary of State of the State of Delaware on the Closing Date
and Merger Sub shall be merged with and into the Company in accordance with this
Agreement. The Merger shall become effective at the time of filing of the
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Certificate of Merger or at such later time which the parties hereto shall have
agreed upon and designated in such filing as the effective time of the Merger
(the "EFFECTIVE TIME").
1.03 CONVERSION OF SHARES. At the Effective Time:
(a) Each Public Share outstanding immediately prior to the Effective Time
other than Dissenting Shares (as defined in Section 1.03(b)), automatically and
without any action on the part of the respective holders thereof (collectively,
the "SELLING STOCKHOLDERS"), shall be converted into the right to receive cash
in an amount per share equal to Ten Cents ($0.10), without interest (the "MERGER
CONSIDERATION"), payable to the holder thereof upon the surrender of the
certificate formerly representing such outstanding Public Share.
(b) Notwithstanding any provision to the contrary in this Agreement, Public
Shares held by a stockholder who has not approved the Merger and who has
demanded, and is entitled by law to exercise, appraisal rights for such Public
Shares in accordance with the Delaware General Corporation Law (the "DGCL")
(such shares, the "DISSENTING SHARES") shall not be converted into the right to
receive any portion of the Merger Consideration, unless such stockholder fails
to perfect or withdraws or otherwise loses his or her right to an appraisal in
accordance with the DGCL. If, after the Effective Time, such stockholder fails
to perfect or withdraws or loses his or her right to an appraisal, such
Dissenting Shares shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration, as provided
herein, without interest thereon.
(c) Every 5.784 Continuing Shares outstanding immediately prior to the
Effective Time shall remain outstanding but shall be converted into 1/10,000 of
an Acquisition Corp. Share.
(d) Each share of Merger Sub outstanding immediately prior to the Effective
Time shall remain outstanding as one share of capital stock of the Surviving
Corporation and shall constitute the only outstanding shares of capital stock of
the Surviving Corporation.
1.04 EXCHANGE OF CERTIFICATES.
(a) From and after the Effective Time, a bank or trust company to be
designated by Acquisition Corp. and reasonably acceptable to the Company (the
"PAYING AGENT") shall act as paying agent in effecting the exchange for the
Merger Consideration of certificates that, prior to the Effective Time,
represented Public Shares entitled to payment pursuant to Section 1.03. Upon the
surrender of each such certificate and the delivery by the Paying Agent of the
Merger Consideration in exchange therefore, the certificates that, prior to the
Effective Time, represented outstanding Public Shares shall forthwith be
canceled. Until so surrendered and exchanged, each such certificate shall
represent solely the right to receive the Merger Consideration multiplied by the
number of Public Shares represented by such certificate. Upon the surrender and
exchange of such outstanding certificate, the holder shall receive the Merger
Consideration, without any interest thereon. If any cash is to be paid to a
person other than a person in whose name such surrendered certificate is
registered, it shall be a condition to such payment or exchange that the person
requesting such payment or exchange shall pay to the Paying Agent any transfer
or other taxes required by reason of the payment of such cash to a name other
than that of the registered holder of such surrendered certificate, or such
person shall establish to the satisfaction of the Paying Agent that such tax has
been paid or is not applicable. Notwithstanding the foregoing, neither the
Paying Agent nor any party to any such exchange shall be liable to a holder of
Public Shares for any Merger Consideration delivered to a public official
pursuant to applicable abandoned property laws.
(b) At or prior to the Effective Time, Acquisition Corp. shall provide the
Paying Agent with sufficient cash to pay the Merger Consideration to each holder
of Public Shares entitled thereto.
(c) Promptly following the date which is six months after the Effective
Time, the Paying Agent shall return to the Surviving Corporation all cash
(together with all interest earned thereon) and other instruments in its
possession relating to the transactions described in this Agreement, and the
Paying Agent's duties shall terminate. Thereafter, each holder of a certificate
that immediately prior to the Effective Time represented Public Shares may
surrender such certificate to the Surviving Corporation and (subject to
applicable abandoned property, escheat and similar laws) receive in exchange
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therefore the Merger Consideration, without interest, but shall have no greater
rights against the Surviving Corporation than may be accorded to general
creditors of the Surviving Corporation under Delaware law.
(d) Promptly after the Effective Time, the Paying Agent shall mail to each
record holder of certificates that immediately prior to the Effective Time
represented (a) Public Shares a form of letter of transmittal and instructions
for use in surrendering such certificates and receiving the Merger Consideration
therefore, and (b) Continuing Shares a form of letter of transmittal and
instructions for use in surrendering such certificates and receiving new
certificates for Acquisition Corp. Shares.
(e) After the Effective Time, there shall be no transfers on the stock
transfer books of the Company or the Surviving Corporation of any Public Shares.
If, after the Effective Time, certificates that immediately prior to the
Effective Time represented Public Shares are presented to the Surviving
Corporation or the Paying Agent, they shall be canceled and exchanged for the
Merger Consideration, as provided in Section 1.03 hereof, subject to applicable
law in the case of Dissenting Shares.
1.05 STOCK OPTIONS.
(a) As of the Effective Time, (i) each outstanding option to purchase
Company Shares (an "OPTION") issued pursuant to grants under the 1997 Stock
Option Plan and other stock option plans of the Company (together, the "STOCK
OPTION PLANS"), and each outstanding warrant or conversion right to purchase
Company Shares (the "WARRANTS") (whether vested or unvested prior to the Merger)
held by the persons or entities identified in Schedule B hereto shall be
converted into a warrant, option or conversion right to receive 5.784/10,000 of
the number of Acquisition Corp. Shares on the same terms and conditions as apply
to such warrant, option or conversion right for Company Shares, provided, that
the respective exercise or conversion price thereof shall be adjusted by
multiplying such price by 10,000 and dividing by 5.784 such that the aggregate
exercise price in effect immediately following the Merger shall match the
aggregate exercise price thereof in effect immediately prior to the Merger, and
(ii) each Option and Warrant held by anyone else shall terminate as of the
Effective Time.
(b) No further options shall be granted pursuant to the Stock Option Plans
and no additional warrants of the Company shall be issued prior to the Effective
Time.
1.06 EFFECT OF THE MERGER. From and after the Effective Time, the Merger
shall have the effect set forth in the DGCL. Without limiting the generality of
the foregoing, upon the Effective Time of the Merger, the Surviving Corporation
shall possess all assets, rights, privileges, immunities, powers and purposes of
each of Merger Sub and the Company and all the debts, liabilities, obligations
and commitments of the Merger Sub and the Company shall become the debts,
liabilities, obligations and commitments of the Surviving Corporation.
ARTICLE II
CHARTER AND BYLAWS AND OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
2.01 CHARTER. The Certificate of Incorporation of Merger Sub as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until duly amended in accordance with
applicable law.
2.02 BYLAWS. The bylaws of Merger Sub in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation, until duly
amended in accordance with applicable law.
2.03 DIRECTORS. The directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation as of the
Effective Time.
2.04 OFFICERS. The officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation as of the
Effective Time.
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ARTICLE III
REPRESENTATIONS OF THE COMPANY
Subject to the limitations stated in Section 3.08, the Company hereby
represents and warrants to Acquisition Corp. and Merger Sub as of the date
hereof and as of the Effective Time as follows:
3.01 ORGANIZATION AND AUTHORIZATION.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
power and authority, corporate or otherwise, to carry on and conduct its
business as it is now being conducted and to own or lease its properties and
assets, and is duly qualified and in good standing in the states in which
failure to do so would have a "Material Adverse Effect" (as defined below) on
the Company. "MATERIAL ADVERSE EFFECT" shall mean, with respect to any party
hereto, any change, event or effect that, when taken together with all other
adverse changes, events or effects, is or is reasonably likely to be materially
adverse to the business, operations, properties or financial condition of such
party and its subsidiaries and affiliates, taken as a whole.
(b) The Company has the right, power and capacity to execute, deliver and,
subject to approval of this Agreement and the Merger by the holders of the
Company Shares in accordance with the DGCL (the "COMPANY STOCKHOLDER APPROVAL"),
perform this Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, have been duly and validly authorized
by all necessary corporate action on the part of the Board of Directors of the
Company. Upon the Company Stockholder Approval, the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby will have been duly authorized by the holders
of the Company Shares. This Agreement has been duly and validly executed and
delivered by the Company and, subject to the Company Stockholder Approval,
constitutes the Company's legal, valid and binding obligation, enforceable in
accordance with its terms.
3.02 AUTHORIZED AND OUTSTANDING STOCK. The authorized capital stock of the
Company consists of 1,000,000 shares of preferred stock, par value $0.001 per
share, and 15,000,000 shares of common stock, par value $0.001 per share. There
are no other shares of capital stock authorized or issued. As of the date
hereof, (i) no shares of preferred stock of the Company are issued and
outstanding, (ii) 12,718,877 shares of common stock of the Company are issued
and outstanding, and (iii) 3,091,778 shares of common stock of the Company are
issuable upon exercise of outstanding stock options under the Stock Option Plans
and outstanding Warrants, including conversion rights. All of the issued and
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable. There are no shares of capital stock of any other
company held by the Company other than the capital stock of FM Precision Golf
Manufacturing Corp., FM Precision Golf Sales Corp., Royal Grip, Inc. and Royal
Grip Headwear Company.
3.03 NO CONFLICT. The execution and delivery of this Agreement by the
Company, the consummation of the transactions contemplated herein by the
Company, and the performance of the covenants and agreements of the Company
herein will not, with or without the giving of notice or the lapse of time, or
both, (i) violate or conflict with any of the provisions of the charter or
bylaws of the Company; or (ii) violate, conflict with or result in a breach or
default under or cause termination of any term or condition of any mortgage,
indenture, contract, license, permit, instrument, trust document, will, or other
agreement, document or instrument to which the Company is a party or by which
the Company or any of its properties may be bound, which individually or in the
aggregate, would have a Material Adverse Effect on the Company (except the
agreements with the Company's lending bank described in the Company's Report on
Form 10-Q for the quarter ended February 28, 2002, as to which the Company shall
obtain a waiver at or prior to Closing waiving all provisions under such
agreements necessary to permit the Merger); or (iii) violate any provision of
law, statute, rule, regulation, court order, judgment or decree, or ruling of
any governmental authority, to which the Company or any of its properties may be
subject, which individually or in the aggregate, would have a Material Adverse
Effect on the Company; or (iv) result in the creation or imposition of any lien,
claim, charge, restriction, security interest or encumbrance of any kind
whatsoever upon any asset of the Company, which, individually or in the
aggregate, would have a Material Adverse Effect on the Company.
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3.04 REQUIRED FILINGS, CONSENTS AND APPROVALS. The execution and delivery
of this Agreement by the Company does not, and the performance of this Agreement
by the Company will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), state
securities laws ("BLUE SKY LAWS") and filing and recordation of appropriate
merger documents as required by the DGCL and (ii) where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not, individually or in the aggregate, have a Material
Adverse Effect on the Company and its affiliates taken as a whole, or prevent or
materially delay the performance by the Company of any of its obligations under
this Agreement or the consummation of the Merger.
3.05 DISCLOSURE DOCUMENTS.
(a) Each document required to be filed by the Company with the Securities
and Exchange Commission (the "COMMISSION") in connection with the transactions
contemplated by this Agreement (the "COMPANY DISCLOSURE DOCUMENTS"), including,
without limitation, the Information Statement to be filed with the Commission in
connection with the Merger, and any amendments or supplements thereto will, when
filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act.
(b) At the time the Information Statement or any amendment or supplement
thereto is first mailed to stockholders of the Company and at the time of the
consent action of the Company's stockholders for the purpose of considering and
taking action on this Agreement and the Merger (the "STOCKHOLDER ACTION TIME"),
the Information Statement, as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. At the time of the
filing of any Company Disclosure Document, if any, other than the Information
Statement and at the time of any distribution thereof, such Company Disclosure
Document will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
The foregoing notwithstanding, the Company makes no representation or warranty
with respect to any information supplied by Acquisition Corp. or Merger Sub or
any of their representatives which is contained in any of the Company Disclosure
Documents.
3.06 BROKERAGE. No broker, agent, or finder has rendered services to the
Company in connection with the transaction contemplated under this Agreement.
3.07 OPINION OF FINANCIAL ADVISOR. Advisor has rendered to the Board of
Directors of the Company a written opinion dated as of September 12, 2002, a
copy of which has been provided to Acquisition Corp., to the effect that the
Merger Consideration is fair to the Company's stockholders from a financial
point of view. Such opinion was delivered orally to the Board of Directors of
the Company not later than the time that consummation of the transactions
contemplated hereby was approved by the Company's Board of Directors, and was
delivered in writing to the Board of Directors of the Company prior to the
execution and delivery of this Agreement. Such opinion has not been withdrawn or
modified in any manner adverse to Acquisition Corp.
3.08 LIMITATION ON REPRESENTATIONS AND WARRANTIES. Anything elsewhere in
this Agreement to the contrary notwithstanding, Acquisition Corp. and Merger Sub
shall not be entitled to any remedy (other than to terminate this Agreement) in
respect of any inaccuracy or breach by the Company of any representation and
warranty set forth in this Article III to the extent that, at or before Closing,
any of the members of the Board of Directors of Acquisition Corp. had actual
knowledge of the fact or facts which caused such breach or inaccuracy.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUISITION CORP. AND MERGER SUB
Each of Acquisition Corp. and Merger Sub hereby represents and warrants to
the Company as of the date hereof and as of the Effective Time as follows:
4.01 ORGANIZATION. Acquisition Corp. is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority, corporate or otherwise, to carry on
and conduct its business as it is now being conducted and to own or lease its
properties and assets. Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority, corporate or otherwise, to carry on and
conduct its business as it is now being conducted and to own or lease its
properties and assets.
4.02 AUTHORIZATION. Each of Acquisition Corp. and Merger Sub has the right,
power and capacity to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly and validly authorized by all necessary
corporate action on the part of Acquisition Corp. and Merger Sub. This Agreement
has been duly and validly executed and delivered by Acquisition Corp. and Merger
Sub and constitutes Acquisition Corp.'s and Merger Sub's respective legal, valid
and binding obligation, enforceable in accordance with its terms.
4.03 NO CONFLICT. The execution and delivery of this Agreement by
Acquisition Corp. and Merger Sub, the consummation of the transactions
contemplated herein by Acquisition Corp. and Merger Sub, and the performance of
the covenants and agreements of Acquisition Corp. and Merger Sub herein will
not, with or without the giving of notice or the lapse of time, or both, (i)
violate or conflict with any of the provisions of the Certificate of
Incorporation or bylaws of Acquisition Corp. or the Certificate of Incorporation
or bylaws of Merger Sub; or (ii) violate, conflict with or result in breach or
default under or cause termination of any term or condition of any mortgage,
indenture, contract, license, permit, instrument, trust document, will, or other
agreement, document or instrument to which Acquisition Corp. or Merger Sub is a
party or by which Acquisition Corp. or Merger Sub or either such party's
respective properties may be bound; or (iii) violate any provision of law,
statute, rule, regulation, court order, judgment or decree, or ruling of any
governmental authority, to which Acquisition Corp. or Merger Sub is a party or
by which Acquisition Corp. or Merger Sub or the respective properties of either
such party may be bound; or (iv) result in the creation or imposition of any
lien, claim, charge, restriction, security interest or encumbrance of any kind
whatsoever upon any asset of Acquisition Corp. or Merger Sub.
4.04 DISCLOSURE. No representations, warranties, assurances or statements
by Acquisition Corp. or Merger Sub in this Agreement and no statement contained
in any document, certificates or other writings furnished or to be furnished by
Acquisition Corp. or Merger Sub (or caused to be furnished by Acquisition Corp.
or Merger Sub) to the Company or any of its representatives pursuant to the
provisions hereof contains or will contain any untrue statement of material
fact, or omits or will omit to state any fact necessary, in light of the
circumstances under which it was made, in order to make the statements herein or
therein not misleading.
4.05 BROKERAGE. No broker, agent, or finder has rendered services to
Acquisition Corp. or Merger Sub in connection with the transaction contemplated
under this Agreement.
4.06 REQUIRED FILINGS AND CONSENTS. The execution and delivery of this
Agreement by Acquisition Corp. and Merger Sub does not, and the performance of
this Agreement by Acquisition Corp. and Merger Sub will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except (i)
for applicable requirements, if any, of the Exchange Act, Blue Sky Laws and
filing and recordation of appropriate merger documents as required by the DGCL
and (ii) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not, individually or in
the aggregate, have a Material Adverse Effect on Acquisition Corp. or Merger Sub
or prevent or delay the performance by Acquisition Corp. or Merger Sub of any of
their respective obligations under this Agreement or the consummation of the
Merger.
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4.07 INFORMATION FOR COMPANY DISCLOSURE DOCUMENTS. The information supplied
by Acquisition Corp. and Merger Sub for inclusion in the Company Disclosure
Documents shall not contain any untrue statement of material fact, or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they are made, not misleading (i) in the case of the Information Statement at
the time the Information Statement or any amendment or supplement thereto is
first mailed to stockholders of the Company and at the Stockholder Action Time
and (ii) in the case of any Company Disclosure Document other than the
Information Statement, at the time of the filing thereof and at the time of any
distribution thereof and the Stockholder Action Time. The foregoing
notwithstanding, neither Acquisition Corp. nor Merger Sub makes any
representation or warranty with respect to any information supplied by the
Company or any of its representatives which is contained in any of the foregoing
documents.
4.08 FINANCING. Acquisition Corp. has sufficient funds to enable it to make
timely payment of the Merger Consideration in accordance with the terms hereof.
ARTICLE V
COVENANTS
5.01 CONDUCT OF THE BUSINESS PENDING THE MERGER.
(a) The Company covenants and agrees that between the date of this
Agreement and the Effective Time, unless Acquisition Corp. shall otherwise agree
in writing, the business of the Company shall be conducted only in, and the
Company shall not take any action except in the ordinary course of business and
in a manner consistent with prior business practices.
(b) The Company agrees and covenants that between the date of this
Agreement and the Effective Time, the Company shall not:
(i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock;
(ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock;
(iii) purchase or otherwise acquire, any shares of its capital stock;
or
(iv) issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any shares of its capital stock or any securities
convertible into any such shares of its capital stock, or any rights,
warrants or options to acquire any such shares or convertible securities,
other than issuance of shares of common stock of the Company upon the
exercise of Warrants or of Options outstanding as of the date of this
Agreement.
5.02 ACCESS. From the date of this Agreement through the Closing Date, the
Company shall (i) provide Acquisition Corp. and its designees (including
officers, counsel, accountants, actuaries, and other authorized representatives)
with such information as Acquisition Corp. may from time to time reasonably
request with respect to the Company, including assistance to Acquisition Corp.
in connection with the transactions contemplated by this Agreement; (ii) provide
Acquisition Corp. and its designees access during regular business hours to the
books, records, offices, personnel, counsel, accountants and actuaries of the
Company, as Acquisition Corp. or its designees may from time to time reasonably
request; and (iii) permit Acquisition Corp. and its designees to make such
inspections thereof, including without limitation conducting customary
environmental tests (with the Company having prior notice and the right to be
present), assessments and audits, as Acquisition Corp. may reasonably request.
Any investigation shall be conducted in such a manner so as not to interfere
unreasonably with the operation of the business of the Company. No such
investigation shall limit or modify in any way the Company's obligations with
respect to any breach of its representations, warranties, covenants or
agreements contained herein. Information afforded or furnished to Acquisition
Corp. by the Company pursuant to this Section 5.02 shall be kept confidential by
and shall not be disclosed to third parties by them except: (a) with the prior
written consent of the Company; (b) as may be required by law, regulation or by
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legal process (including by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or similar process); or (c) as may be
necessary in connection with the consummation of the Merger.
5.03 FURTHER ACTION; REASONABLE EFFORTS. Upon the terms and subject to the
conditions hereof, each of the parties hereto shall use its reasonable efforts
to take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the Merger, including, without
limitation, using its reasonable efforts to obtain all licenses, permits,
consents, approvals, authorizations, qualifications and orders of governmental
authorities and parties to contracts with the Company as are necessary for the
consummation of the Merger and to fulfill the conditions to the Merger. In case
at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the officers and
directors of the Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of the Company or Acquisition Corp., any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Acquisition Corp., any other actions and things
they may reasonably deem desirable to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest in,
to and under any of the rights, properties or assets of the Company acquired or
to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger.
5.04 COMPETING TRANSACTION. The Company shall not, and shall not permit its
officers, directors, employees, and other representatives and agents to, (i)
solicit, initiate or encourage any inquiries or the making of any proposal
concerning any merger, sale of assets, sale of shares of capital stock or
similar transaction involving the Company or division of the Company (any such
transaction being referred to herein as a "COMPETING TRANSACTION"), (ii)
participate in any discussions or negotiations regarding any Competing
Transactions, or (iii) enter into any agreement with respect to any Competing
Transaction; provided, however, that the Company may review such proposals and
participate in such discussions and negotiate with any person if the Board of
Directors of the Company, after consultation with counsel, determines that such
action is necessary in light of the fiduciary obligations of the Board of
Directors to the Company or the stockholders of the Company.
5.05 INFORMATION STATEMENT. As soon as practicable, the Company shall file
with the Commission under the Exchange Act, and shall use its best efforts to
have cleared by the Commission, an information statement with respect to the
stockholder consent action referred to herein (the "INFORMATION STATEMENT") and,
together with Acquisition Corp., a Schedule 13E-3 as required by the rules and
regulations of the Commission. Acquisition Corp. and the Company shall also take
any action required to be taken under Blue Sky Laws in connection with the
Merger. Acquisition Corp. and the Company shall cooperate with each other in
taking such action and in the preparation of the Information Statement and
Schedule 13E-3. Each of the Company, Acquisition Corp. and Merger Sub agrees to
use its reasonable efforts, after consultation with the other parties hereto, to
respond promptly to all such comments of or requests by the Commission and to
cause the Information Statement and all required amendments and supplements
thereto to be mailed to the holders of Company Shares who would be entitled to
vote at a stockholder meeting at the earliest practicable time. The Information
Statement shall include (i) the recommendation of the Board of Directors of the
Company that the stockholders of the Company approve and adopt this Agreement,
unless the Board of Directors, after consultation with counsel, determines to
withdraw such recommendation in light of their respective applicable fiduciary
duties, and (ii) the opinion of Advisor that the Merger Consideration to be
received by the holders of Public Shares in the Merger is fair to such holders
from a financial point of view. The Company shall not be required to solicit
from holders of Public Shares entitled to vote at a stockholders meeting proxies
in favor of such approval. In the stockholder consent action, Acquisition Corp.
shall cause any shares of common stock of the Company then owned by Acquisition
Corp. to be voted in favor of the approval and adoption of this Agreement and
the Merger.
5.06 INDEMNIFICATION.
(a) Acquisition Corp. will cause the charter and bylaws of the Surviving
Corporation as in effect at the Effective Time to contain the indemnification
provisions that the Company's charter and bylaws contain on the date hereof and
will not permit those provisions to be amended, repealed or otherwise modified
for a period of six years after the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at or prior to the
Effective Time were directors, officers, employees or agents of the Company.
10
(b) After the Effective Time, the Surviving Corporation will, to the
fullest extent permitted under applicable law, indemnify and hold harmless each
director, officer, employee and agent of the Company on the date hereof (each,
together with such person's heirs, executors or administrators, an "INDEMNIFIED
PERSON" and collectively, the "INDEMNIFIED PERSONS") against any costs or
expenses (including without limitation attorneys fees), judgments, fines,
losses, claims, damages, liabilities and amounts paid in settlement in
connection with any actual or threatened claim, action, suit, proceeding or
investigation (each, whether civil, criminal, administrative or investigative, a
"CLAIM"), arising out of, relating to or in connection with any action or
omission occurring prior to the Effective Time (including, without limitation,
acts or omissions, in connection with such persons serving as an officer,
director or fiduciary of any entity if such service was at the request or for
the benefit of the Company) or arising out of or pertaining to the transactions
contemplated by this Agreement. In the event of any such actual or threatened
Claim (whether arising before or after the Effective Time), (i) the Company and
the Surviving Corporation, as the case may be, will pay the reasonable fees and
expenses of counsel selected by the Indemnified Persons, promptly after
statements therefore are received and will pay all other reasonable expenses in
advance of the final disposition of that Claim, and (ii) the Surviving
Corporation will cooperate and use all reasonable efforts to assist in the
vigorous defense of any such Claim.
(c) In the event the Surviving Corporation or Acquisition Corp. or any of
their successors or assigns (i) consolidates with or merges into any other
person and is not the continuing or surviving corporation or entity of that
consolidation or merger or (ii) transfers all or substantially all its
properties and assets to any person, then and in each such case Acquisition
Corp. and the Surviving Corporation will cause proper provisions to be made so
that the successors and assigns of the Surviving Corporation or Acquisition
Corp. assume the obligations set forth in this Section.
(d) For a period of six years after the Effective Time, the Surviving
Corporation will cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by the Company and its
subsidiaries (provided that Acquisition Corp. may substitute therefore policies
of at least the same coverage and amounts containing terms and conditions that
are no less advantageous in any material respect to the Indemnified Persons and
which coverages and amounts must be no less than the coverages and amounts
provided at that time for Acquisition Corp.'s directors and officers) with
respect to matters arising at or before the Effective Time; provided, however,
that Acquisition Corp. will not be required to pay an annual premium for such
insurance coverage in excess of two times the annual premium amount paid by the
Company for such coverage as of the date hereof.
(e) The rights of each Indemnified Person hereunder will be in addition to
any other rights such Indemnified Person may have under employment or
indemnification agreements with the Company, the charter or bylaws of the
Company, under the DGCL or otherwise. The provisions of this Section will
survive the consummation of the Merger and expressly are intended to benefit
each of the Indemnified Persons. Acquisition Corp. will pay all reasonable
expenses, including reasonable attorneys' fees, that may be incurred by any
Indemnified Person in enforcing the indemnity and other obligations provided in
this Section.
5.07 PUBLIC ANNOUNCEMENTS. Acquisition Corp., Merger Sub and the Company
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or the Merger and
shall not issue any such press release or make any such public statement without
the other party's prior consent, except as may be required by law, in which case
Acquisition Corp. or the Company, as applicable, shall use its reasonable
efforts to consult with the other party before issuing such release or making
any such public statement.
5.08 NOTICE OF CERTAIN MATTERS. The Company shall give prompt written
notice to Acquisition Corp. specifying in reasonable detail:
(a) Any notice of, or other communication relating to, a default or event
which, with notice or lapse of time or both, would become a material default
under any agreement, indenture or instrument material to the business, assets,
property, condition (financial or otherwise) or the results of operations of the
Company, taken as a whole, to which the Company is a party or is subject;
(b) Any material notice or other communication from any third party
alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement;
11
(c) Any material notice or other communication from any regulatory
authority (including the Commission) in connection with the transactions
contemplated by this Agreement;
(d) Any event which has or would result in a Material Adverse Effect on the
Company;
(e) Any claims, actions, proceedings or investigations commenced or, to the
Company's knowledge, threatened, involving or materially affecting the Company
or any of its properties or assets or, to the Company's knowledge, any employee,
consultant, director or officer, in his or her capacity as such which, if
pending on the date hereof, would have been required to have been disclosed
pursuant to this Agreement or which relates to the consummation of the Merger;
and
(f) Any event or action which, if known on the date hereof, would have
caused a representation or warranty set forth in Article III hereof to be untrue
or incomplete or incorrect in any material respect or would have required it to
have been disclosed pursuant to this Agreement.
5.09 DISSENTING STOCKHOLDERS. The Company shall give Acquisition Corp.
prompt notice of any demands received by the Company for appraisal of shares
pursuant to the DGCL, and Acquisition Corp. shall have the right to direct all
negotiations and proceedings with respect to such demands.
ARTICLE VI
CONDITIONS
6.01 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The respective
obligations of Acquisition Corp. and Merger Sub on the one hand and the Company
on the other hand to effect the Merger are subject to the satisfaction of the
following conditions, unless waived in writing by all parties:
(a) Stockholder Approval. This Agreement and the Merger shall have been
approved and adopted by the requisite affirmative written consent or vote of the
stockholders of the Company to the extent required by the DGCL and the Company
charter and bylaws.
(b) No Order. No United States or state governmental authority or other
agency or commission or United States or state court of competent law shall have
issued any rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of: (i) making the acquisition of Shares by Acquisition Corp. illegal
or otherwise restricting, preventing or prohibiting consummation of the Merger;
(ii) seeking to prohibit or limit materially the ownership or operation by the
Company or Acquisition Corp. of all or any material portion of the business or
assets of the Company or Acquisition Corp. as a result of the Merger; or (iii)
compelling the Company or Acquisition Corp. or any of their respective
subsidiaries or affiliates to dispose of or hold separate all or any material
portion of the business or assets of the Company, Acquisition Corp. or Merger
Sub as a result of the Merger; provided, however, that each of the parties shall
have used its reasonable efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as practicable any injunction or other
order that may be entered.
6.02 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF ACQUISITION CORP. AND
MERGER SUB. The obligations of Acquisition Corp. and Merger Sub to effect the
Merger are subject to the satisfaction of the following further conditions, any
or all of which may be waived by Acquisition Corp.
(a) Performance of Covenants, etc. The Company shall have performed in
all material respects all of its obligations hereunder required to be performed
by it at or prior to the Effective Time, and the representations and warranties
of the Company contained in this Agreement shall be true and correct in all
respects at and as of the Effective Time (as if made at and as of such time,
except that those representations and warranties which address matters only as
12
of a particular date shall remain true and correct as of such date) except where
the breach or inaccuracy thereof would not, individually or in the aggregate,
have a Material Adverse Effect on the Company.
(b) Consents and Approvals. Acquisition Corp. shall have received or be
reasonably satisfied that it will receive all consents and approvals
contemplated by this Agreement and any other consents of third parties necessary
in connection with the consummation of the Merger if the failure to obtain any
such consent would have a Material Adverse Effect on the Company.
6.03 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to effect the Merger are subject to the satisfaction
of the following further conditions, any or all of which may be waived by the
Company through its Board of Directors:
(a) Performance of Covenants, etc. Acquisition Corp. and Merger Sub shall
have performed in all material respects all of their obligations hereunder
required to be performed by them at or prior to the Effective Time, and the
representations and warranties of Acquisition Corp. and Merger Sub contained in
this Agreement shall be true and correct in all respects, at and as of the
Effective Time as if made at and as of such time (except that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date), except where the breach or
inaccuracy thereof would not, individually or in the aggregate, have a Material
Adverse Effect on Acquisition Corp. or the Company.
(b) Consents and Approvals. The Company shall have received or be satisfied
that it will receive all consents and approvals contemplated by this Agreement
and any other consents of third parties necessary in connection with the
consummation of the Merger if the failure to obtain any such consent would have
a Material Adverse Effect on Acquisition Corp. or the Company.
ARTICLE VII
CLOSING
7.01 CLOSING DATE. Subject to the satisfaction or waiver of the conditions
set forth herein, the consummation of the Merger (the "CLOSING") shall take
place at 11:00 a.m. Eastern Time on November 1, 2002 in the offices of ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ or on such other date at such
other time and place as to which the parties shall agree (the "CLOSING DATE").
ARTICLE VIII.
TERMINATION PRIOR TO CLOSING
8.01 TERMINATION OF AGREEMENT. This Agreement may be terminated at any time
prior to the Closing:
(a) By the mutual written consent of the Company and Acquisition Corp.;
(b) By Acquisition Corp. in writing, without liability to Acquisition
Corp., if the Company shall materially breach any of its representations,
warranties or covenants contained herein, which failure or breach is not cured
within ten (10) days after Acquisition Corp. shall have notified the Company of
its intent to terminate this Agreement pursuant to this subparagraph (b);
(c) By either of the Company or Acquisition Corp. in writing, without
liability, if there shall be any order, writ, injunction or decree of any court
or governmental or regulatory agency binding on the Company, Acquisition Corp.
or Merger Sub, which prohibits or restrains the Company, Acquisition Corp. or
Merger Sub from consummating the Merger, provided, that the Company or
13
Acquisition Corp. shall have used their reasonable, good faith efforts to have
any such order, writ, injunction or decree lifted and the same shall not have
been lifted within one hundred eighty (180) days after entry, by any such court
or governmental or regulatory agency;
(d) By either the Company or Acquisition Corp. in writing, without
liability, if for any reason the Closing has not occurred by April 30, 2003,
other than as a result of the breach of this Agreement by the party seeking to
so terminate;
(e) By Acquisition Corp. in writing, without liability to Acquisition
Corp., or by the Company if the Company shall have acted in compliance with
Section 5.04 hereof, if the Company's Board of Directors (i) shall have
withdrawn or modified or amended in any respect its recommendation of the
Merger, or (ii) the Company's Board of Directors has entered into any
discussions or negotiations regarding any Competing Transaction;
(f) By the Company or Acquisition Corp., without liability, if the approval
of the stockholders of the Company necessary to consummate the Merger shall not
have been obtained on or before April 30, 2003; or
(g) By Acquisition Corp. in writing, without liability to Acquisition
Corp., if there shall have been any Material Adverse Effect on the Company's
business, assets, properties, prospects or condition (financial or otherwise).
8.02 TERMINATION OF OBLIGATIONS. Termination of this Agreement pursuant to
this Article VIII shall terminate all obligations of the parties hereunder,
except for the confidentiality obligations under Sections 5.02 and the payment
obligations under Section 9.07 hereof; provided, however, that termination
pursuant to subparagraphs (b) or (d) of Section 8.01 hereof shall not relieve a
defaulting or breaching party from any liability to the other party hereto.
ARTICLE IX
MISCELLANEOUS
9.01 ENTIRE AGREEMENT. This Agreement constitutes the sole understanding of
the parties with respect to the subject matter hereof and supersedes all prior
and contemporaneous agreements among the parties with respect to such subject
matter; provided, however, that this provision is not intended to abrogate any
other written agreement between the parties executed with or after this
Agreement.
9.02 AMENDMENT. No amendment, modification or alteration of the terms or
provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto.
9.03 PARTIES BOUND BY AGREEMENT; SUCCESSORS AND ASSIGNS. The terms,
conditions and obligations of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and the respective successors and assigns
thereof. Without the prior written consent of Acquisition Corp., the Company may
not assign its rights, duties or obligations hereunder or any part thereof to
any other person or entity. Each of Acquisition Corp. and Merger Sub may, upon
written notice to the Company and without relieving itself of any liability
hereunder, assign its rights and duties hereunder in whole or in part (before or
after the Closing) to one or more entities controlling, controlled by or under
common control with Acquisition Corp.
9.04 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall for all purposes be deemed to be an original and all of
which shall constitute the same instrument.
9.05 HEADINGS. The headings of the Sections and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
9.06 MODIFICATION AND WAIVER. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
14
the benefits thereof. No waiver of any of the provisions of this Agreement shall
be deemed to or shall constitute a waiver of any other provision hereof (whether
or not similar).
9.07 EXPENSES. If the Merger is not consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses, subject to
the rights of such party with respect to a willful breach, violation or default
by another party hereto; provided, however, that if the Merger is not
consummated due to the termination of this Agreement pursuant to Section 8.01(f)
hereof, the Company shall pay Acquisition Corp. an amount equal to Acquisition
Corp.'s actual and reasonably documented out-of-pocket fees and expenses
incurred by Acquisition Corp. in connection with this Agreement and the proposed
consummation of the transactions contemplated hereby. Regardless of whether or
not the Merger is consummated, unless a Competing Transaction is consummated,
Acquisition Corp. shall reimburse the Company for all of the fees and expenses
of the Advisor, incurred by the Company in connection with this Agreement.
9.08 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party hereto shall be in
writing and delivered personally or sent by registered or certified mail
(including by overnight courier or express mail service), postage or fees
prepaid, or sent by facsimile with original confirmed by mail,
If to the Company or its Board of Directors to:
Royal Precision, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Acquisition Corp or Merger Sub:
Royal Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman/CEO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address for a party as shall be specified by like notice. Any
notice which is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or the office of such party. Any notice which is addressed
and mailed in the manner herein provided shall be conclusively presumed to have
been duly given to the party to which it is addressed at the close of business,
local time of the recipient, on the third business day after the day it is so
placed in the mail or, if earlier, the time of actual receipt and if sent by
facsimile, as of the time of receipt if promptly confirmed by mail.
9.09 GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware without giving effect to the
principles of conflicts of law thereof.
9.10 NO THIRD-PARTY BENEFICIARIES. With the exception of the parties to
this Agreement, there shall exist no right of any person to claim a beneficial
interest in this Agreement or any rights occurring by virtue of this Agreement.
9.11 GENDER AND NUMBER. Where the context requires, the use of a pronoun of
one gender or the neuter is to be deemed to include a pronoun of the appropriate
gender, singular words are to be deemed to include the plural, and vice versa.
9.12 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or any instrument delivered
pursuant to this Agreement shall survive the Merger.
15
9.13 REFERENCES. Whenever reference is made in this Agreement to any
Article or Section, such reference shall be deemed to apply to the specified
Article or Section of this Agreement to this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
and Plan of Merger to be duly executed on its behalf as of the date indicated on
the first page hereof.
THE COMPANY:
ROYAL PRECISION, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
ACQUISITION CORP.:
ROYAL ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman of the
Board and CEO
MERGER SUB:
RA MERGER SUB, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman of the
Board
16
VOTING AGREEMENT
Each of the undersigned hereby agrees, until immediately following the Effective
Time (as defined in the foregoing Agreement and Plan of Merger ("MERGER
AGREEMENT")) or the termination of the Merger Agreement, whichever occurs
earlier: (a) to vote all shares of Common Stock (as defined in the Merger
Agreement) in the Company (as defined in the Merger Agreement) beneficially
owned by such of the undersigned in favor of the adoption of the Merger
Agreement; (b) not to dissent with respect to the Merger (as defined in the
Merger Agreement); and (c) not to grant any proxy on the undersigned's Common
Stock in the Company with respect to the Merger to, or transfer any of the
undersigned's Common Stock in the Company to, any person or entity other than
Acquisition Corp. (as defined in the Merger Agreement), any stockholder in
Acquisition Corp. or any other signatory to this Voting Agreement.
Dated: September 12, 2002
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
17
SCHEDULE A TO AGREEMENT AND PLAN OF MERGER
Continuing Stockholders
NUMBER OF SHARES OF COMMON STOCK OF
ROYAL PRECISION, INC. TO BE CONVERTED
INTO THE SAME NUMBER OF SHARES OF
NAME ROYAL ASSOCIATES, INC.
---- ----------------------
▇▇▇▇▇▇▇▇ Family Charitable Remainder 1,384,135
Unitrust #3
▇▇▇▇▇▇▇▇ Family Living Trust 775,935
▇▇▇▇▇▇▇▇ Family Charitable Foundation 5,261,780
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 344,479
DWR, Custodian for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Attorney at Law, fbo ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
VIP Plus Profit Sharing Plan 207,862
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1,159,803
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 198,769
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. 213,062
Self-Directed ▇▇▇ for ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇. 8,200
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 107,281
▇▇▇ ▇▇▇▇▇▇▇▇▇ 2,000
L. ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Family 1,000
Trust DTD U/A 01/07/97
▇▇▇▇▇▇ ▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Co-Trustees by ▇▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇▇▇▇
Trust U/A DTD 01/01/92 1,000
▇▇▇▇ ▇ ▇▇▇▇ 1,000
Davidson ▇. ▇▇▇▇ 1,000
▇▇▇▇ ▇. ▇▇▇▇ 1,000
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇ Trustees ▇▇▇▇▇ ▇▇▇
Hall Trust U/A DTD 10/06/1995 1,000
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Custodian for ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AZ Uniform Transfers to
Minors Acct 1,000
▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Jt Ten 25,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 41,753
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 62,630
▇▇▇▇▇ ▇. ▇▇▇▇ 131,513
RIFL Holdings, LLC 622,687
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 125,261
▇▇▇▇▇▇ ▇▇▇▇▇▇ 1,000
▇▇▇▇▇▇▇ ▇▇▇▇ 8,500
TOTAL 10,688,650
18
SCHEDULE B TO AGREEMENT AND PLAN OF MERGER
DESCRIPTION OF SECURITY CONVERTIBLE INTO SUBSTANTIALLY THE
SAME SECURITY OF ROYAL ASSOCIATES, INC., TO BE ADJUSTED AS
NAME PROVIDED IN SECTION 1.03(C)
---- ---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (a) Option for 25,052 shares at $.24 expiring on 3/13/07;
(b) option for 5,000 shares at $3.125 expiring on 5/25/10;
(c) option for 20,000 shares at $2.25 expiring on 7/24/11;
and (d) option for 5,000 shares at $2.40 expiring on
9/25/11.
▇▇▇▇▇▇▇▇ Family Living Trust (a) Warrant for 36,000 shares at $.25 expiring on 2/28/12;
(b) warrant for 145,200 shares at $.25 expiring on 4/10/12,
and (c) Amended Guaranty Agreement for 820,000 shares at
$.25.
▇▇▇▇▇▇▇▇ Family Charitable Foundation Warrant for 152,192 shares at $.25 expiring on 10/26/11
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (a) Option for 15,323 shares at $.24 expiring on 3/13/07,
(b) option for 5,000 shares at $1.875 expiring on 8/16/04,
and (c) option for 20,000 shares at $2.25 expiring on
7/24/11
DWR, Custodian for ▇▇▇▇▇▇▇ Warrant for 12,000 shares at $.25 expiring on 2/28/12
▇▇▇▇▇▇, Attorney at Law, fbo
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, VIP Plus Profit
Sharing Plan
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (a) Option for 20,000 shares at $.25 expiring on 7/24/11,
and (b) warrant for 36,000 shares at $.25 expiring on 3/8/12
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (a) Option for 11,106 shares at $.24 expiring on 3/13/07,
(b) option for 20,000 shares at $2.25 expiring on 7/24/11,
and (c) option for 5,000 shares at $2.40 expiring on 9/25/11
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. (a) Option for 20,000 shares at $3.00 expiring on 3/28/10,
(b) option for 5,000 shares at $2.40 expiring on 9/25/11 and
(c) warrant for 12,000 shares at $.25 expiring on 2/28/12
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (a) Option for 250,000 shares at $1.90 expiring on 9/24/11
and (b) warrant for 6,000 shares at $.25 expiring on
2/28/12.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Option for 20,000 shares at $2.625 expiring on May 1, 2005
19
Exhibit 1.02
Form of Certificate of Merger
CERTIFICATE OF MERGER
OF
RA MERGER SUB, INC.
INTO
ROYAL PRECISION, INC.
The undersigned corporation organized and existing under and by virtue of
the Delaware General Corporation Law, DOES HEREBY CERTIFY AS FOLLOWS:
FIRST. The names and states of incorporation of each of the constituent
corporations of the merger are as follows:
Name State of Incorporation
---- ----------------------
RA Merger Sub, Inc. Delaware
Royal Precision, Inc. Delaware
SECOND. An agreement of merger has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance
with the requirements of Section 251 of the Delaware General Corporation Law and
written consent of the stockholders of Royal Precision, Inc. has been given in
accordance with Section 228 of the Delaware General Corporation Law.
THIRD. The name of the surviving corporation is Royal Precision, Inc.
FOURTH. The Certificate of Incorporation of RA Merger Sub, Inc., a Delaware
corporation, shall be the Certificate of Incorporation of the surviving
corporation.
FIFTH. The executed agreement of merger is on file at the office of the
surviving corporation, the address of which is ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SIXTH. A copy of the agreement of merger will be furnished by the surviving
corporation, on request and without cost, to any stockholder of either
constituent corporation.
Dated: __________, 2002
ROYAL PRECISION, INC.
By
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and Chief Executive Officer of Royal Precision,
Inc., a corporation organized and existing under the laws of the State of
Delaware, hereby affirms that the Certificate of Merger is the act and deed of
Royal Precision, Inc. and that the facts stated therein are true.
-----------------------------------
20