<DOCUMENT>
<TYPE>EX-2
<SEQUENCE>4
<FILENAME>ex2.txt
<DESCRIPTION>PUT AGREEMENT
<TEXT>
Exhibit 2
PUT AGREEMENT
THIS PUT AGREEMENT (the "Agreement") dated as of August 31, 2001 ("Effective
Date") between JOHNSTON FAMILY CHARITABLE REMAINDER UNITRUST #3, dated October
15, 1998 (the "Trust") and CHRISTOPHER A. JOHNSTON, an individual residing in
Jackson, Wyoming ("CAJ").
WHEREAS, CAJ owns shares of common stock of Royal Precision, Inc. (the
"Company"); and
WHEREAS, the Trust wants to reserve the right to purchase a certain number of
shares of the Company from CAJ.
NOW THEREFORE, the parties hereto, intending to be legally bound and for good
and valuable consideration, including, without limitation, the mutual covenants
and promises set forth herein, do hereby agree as follows:
Section 1. PUT RIGHT. The Trust hereby grants CAJ the option to require the
Trust to purchase up to 200,000 shares of common stock of the Company (the
"Shares") in lots of 25,000 Shares owned by CAJ (the "Option") on the following
terms and conditions:
Section 2. WINDOW. CAJ may exercise this Option at any time or from time to time
during the period beginning on the Effective Date and ending on the second
anniversary of such date by sending a written notice (a "Notice") to the Trust
setting forth the number of Shares CAJ is requiring the Trust to purchase.
Section 3. CLOSING. On the first day on which banks in the State of Wyoming are
open for business (a "Business Day") following the third day of receipt of a
Notice, a closing will be held at the offices of Merbanco Incorporated in
Jackson Hole, Wyoming at 10:00 a.m. local time at which time CAJ shall deliver
to the Trust a certificate representing the number of Shares to be purchased by
the Trust and a stock power duly endorsed by CAJ for transfer to the Trust of
such Shares with all signatures guaranteed by a medallion signature guarantee,
and the Trust shall deliver to CAJ a bank or cashier's check drawn on a bank
having an office in Jackson Hole, Wyoming payable to the order of the Trust in
an amount equal to the 'Per Share Price' times the number of Shares to be
purchased (the "Purchase Price").
Section 4. ADJUSTMENTS. If the Company: (a) pays a dividend or makes a
distribution on its Shares in shares of its common stock; (b) subdivides its
outstanding shares of common stock into a greater number of shares; (c) combines
its outstanding shares of common stock into a smaller number of shares; (d)
makes a distribution on its common stock in shares of its capital stock other
than common stock; or (e) issues by recapitalization of its common stock any
shares of its capital stock, then the Option and the Purchase Price in effect
immediately prior to such action shall be adjusted so that the Trust may receive
the number of shares of capital stock of the Company which it would have owned
immediately following such action if it had purchased the Shares immediately
prior to such action. This adjustment shall become effective immediately after
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the record date in the case of a dividend or distribution and immediately after
the effective date in the case of a subdivision, combination or
reclassification.
Section 5. DEFINITIONS.
"Per Share Price" shall mean the greater of (a) $2.00 or (b) current Market
Price less $.50.
"Market Price" shall mean the per Share closing price on the principal
national securities exchange or the NASDAQ - National Market System on which the
Shares are listed or admitted to trading on the day prior to the date of the
Notice or, if no closing price can be determined for the date of determination,
the most recent date for which such price can reasonably be ascertained, or if
the Shares are not listed or admitted to trading on a national securities
exchange or the NASDAQ - National Market System, the mean between the
representative bid and asked per Share prices in the over-the-counter market at
the closing of the day prior to the date of the Notice or the most recent such
bid and asked prices then available, as reported by NASDAQ or if the Shares are
not then quoted by NASDAQ, as furnished by any market maker selected from time
to time by the Trust for that purpose.
Section 6. MISCELLANEOUS.
6.1. NOTICES. Any notice or other communication hereunder must be given in
writing and (a) delivered in person, (b) transmitted by telex, facsimile, e-mail
or telecommunications mechanism provided that any notice so given is also mailed
as provided in clause (c), or (c) mailed postage prepaid, return receipt
requested, as follows:
IF TO THE TRUST, ADDRESSED TO:
Richard P. Johnston, Trustee Phone No. (307) 739-3010
4350 Greens Place Fax No. (520) 575-0320
Wilson, WY 83014
IF TO CAJ, ADDRESSED TO:
Christopher A. Johnston Phone No. (307) 739-1188
Merbanco Incorporated Fax No. (307) 739-2288
P.O. Box 25182
3490 Club House Drive
Suite 102
Jackson, Wyoming 83001
6.2. GOVERNING LAW, ETC. This Agreement shall be governed by and construed
in accordance with the laws of the State of Wyoming and shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement may not be changed or amended in any
manner whatsoever except in writing signed by each of the parties hereto. This
Agreement may be executed in one or more counterparts, and all executed
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counterparts shall constitute one and the same Agreement, binding on both
parties, whether or not both parties have executed the original or same
counterparts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
JOHNSTON FAMILY CHARITABLE
REMAINDER UNITRUST #3
By: /s/ Richard P. Johnston
-------------------------------------
Richard P. Johnston, Trustee
/s/ Christopher A. Johnston
-------------------------------------
Christopher A. Johnston
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</DOCUMENT>