Exhibit 10.5


                             SUBORDINATION AGREEMENT

     This  Agreement,  dated as of October  26,  2001,  is made by The  Johnston
Family Charitable Foundation (the "Subordinated  Creditor"),  for the benefit of
Wells Fargo Business Credit, Inc., a Minnesota corporation (the "Lender").

     Royal Grip, Inc., a Nevada  corporation ("RG") Royal Grip Headwear Company,
a Nevada corporation ("RGHC"), FM Precision Golf Manufacturing Corp., a Delaware
corporation  ("FMM") and FM Precision Golf Sales Corp.,  a Delaware  corporation
("FMS") are now or  hereafter  may be indebted to the Lender on account of loans
or the other extensions of credit or financial accommodations from the Lender to
them, or to any other person under the guaranty or endorsement of them.

     Royal Precision,  Inc., a Delaware  corporation  ("RP") is the guarantor of
all indebtedness owed to RG, RGHC, FMM and FMS to Lender.  RP, RG, RGHC, FMS and
FMM are collectively referred to as the "Borrower".

     The  Subordinated  Creditor  has  made or may make  loans  or  grant  other
financial accommodations to the Borrower.

     As a condition to making any loan or  extension of credit to the  Borrower,
the Lender has required that the Subordinated  Creditor  subordinate the payment
of the Subordinated  Creditor's loans and other financial  accommodations to the
payment of any and all indebtedness of the Borrower to the Lender. Assisting the
Borrower in obtaining credit  accommodations  from the Lender and  subordinating
its interests  pursuant to the terms of this  Agreement are in the  Subordinated
Creditor's best interest.

     ACCORDINGLY,   in   consideration   of  the  loans   and  other   financial
accommodations  that have been made and may  hereafter be made by the Lender for
the benefit of the Borrower, and for other good and valuable consideration,  the
receipt  and  sufficiency  of which are hereby  acknowledged,  the  Subordinated
Creditor hereby agrees as follows:

     1. DEFINITIONS.  As used herein,  the following terms have the meanings set
forth below:

          "Borrower  Default"  means a Default or Event of Default as defined in
     any agreement or instrument evidencing,  governing, or issued in connection
     with Lender  Indebtedness,  including,  but not limited to, (i) the Amended
     and Restated Credit and Security  Agreement dated as of October 9, 1998, as
     amended  from time to time by and  between  RG,  RGHC and the Lender as the
     same may hereafter be amended,  supplemented or restated from time to time,
     (ii) the  Credit and  Security  Agreement  dated as of October 9, 1998,  as
     amended  from time to time,  by and between  FMS, FMM and the Lender as the
     same may hereafter be amended,  supplemented or restated from time to time,
     (iii) the Guaranty dated as of October 9, 1998 by RP in favor of Lender, as
     the same may  hereafter be amended,  supplemented  or restated from time to
     time, and (iv) the  Replacement  Guaranty dated as of October 9, 1998 by RP
     in favor of Lender,  as the same may hereafter be amended,  supplemented or
     restated  from  time to time,  or any  default  under or breach of any such
     agreement or instrument.

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          "Lender  Indebtedness"  means  each  and  every  debt,  liability  and
     obligation of every type and  description  which the Borrower may now or at
     any time  hereafter  owe to the Lender,  whether  such debt,  liability  or
     obligation now exists or is hereafter  created or incurred,  and whether it
     is or may  be  direct  or  indirect,  due or to  become  due,  absolute  or
     contingent,  primary or secondary,  liquidated or  unliquidated,  or joint,
     several  or  joint  and  several,   all  interest  thereon,  all  renewals,
     extensions  and  modifications  thereof  and any  notes  issued in whole or
     partial substitution therefor.

          "Subordinated  Indebtedness"  means  all  obligations  to repay  funds
     borrowed  as  evidenced  by the  Subordinated  Note  as  amended,  renewed,
     substituted or restated from time to time.

          "Subordinated Note" means RP's Revolving  Promissory Note, dated as of
     October 26, 2001, payable to the order of the Subordinated  Creditor in the
     original  principal  amount of  $1,250,000.00,  together with all renewals,
     extensions  and  modifications  thereof  and any  note or notes  issued  in
     substitution therefor.

     2.  SUBORDINATION.  The payment of all of the Subordinated  Indebtedness is
hereby  expressly  subordinated to the extent and in the manner  hereinafter set
forth to the payment in full of the Lender  Indebtedness;  and regardless of any
priority  otherwise  available  to  the  Subordinated  Creditor  by  law  or  by
agreement,  the Lender shall hold a first  security  interest in all  collateral
securing payment of the Lender Indebtedness (the "Collateral"), and any security
interest  claimed  therein  (including  any proceeds  thereof but  excluding the
Option (as defined in the Subordinated  Note) and the proceeds from the exercise
of  the  Option)  by  the  Subordinated  Creditor  shall  be  and  remain  fully
subordinate for all purposes to the security  interest of the Lender therein for
all purposes whatsoever.

     3. PRINCIPAL  PAYMENTS.  Until all of the Lender Indebtedness has been paid
in full, the Subordinated Creditor shall not, without the Lender's prior written
consent,  demand,  receive or accept any principal  payment from the Borrower in
respect of the  Subordinated  Indebtedness,  or exercise any right of, or permit
any,  setoff  in  respect  of the  Subordinated  Indebtedness,  except  that the
Subordinated Creditor may accept scheduled payments (but not prepayments and the
Lender  acknowledges  that October 26, 2002 is the maturity of the  Subordinated
Note) of principal  required to be paid under the Subordinated  Note, so long as
(i) no Borrower Default has occurred and is continuing or will occur as a result
of or  immediately  following  any  such  payment,  (ii)  the  aggregate  excess
Availability, as defined in the Credit Agreements (exclusive of any Availability
existing as a result of any overadvance  component of either Borrowing Base) for
the 60 days immediately  preceding any such payment is not less than $500,000.00
and (iii) after giving  effect to each such payment the  aggregate  Availability
(exclusive  of  any  Availability  existing  as  a  result  of  any  overadvance
components of either Borrowing Base) under both Credit Agreements minus accounts
payable more than 30 days past respective due date is not less than $500,000.00.

     4.  INTEREST  PAYMENTS.  Without the Lender's  prior written  consent,  the
Subordinated  Creditor shall not demand,  receive or accept any interest payment
from the  Borrower in respect of the  Subordinated  Indebtedness  so long as any
Borrower  Default  exists or if a Borrower  Default will occur as a result of or
immediately following such interest payment.

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<PAGE>
     5. RECEIPT OF PROHIBITED  PAYMENTS.  If the Subordinated  Creditor receives
any payment on the Subordinated  Indebtedness that the Subordinated  Creditor is
not entitled to receive under the provisions of this Agreement, the Subordinated
Creditor  will hold the  amount so  received  in trust for the  Lender  and will
forthwith turn over such payment to the Lender in the form received  (except for
the endorsement of the Subordinated Creditor where necessary) for application to
then-existing  Lender  Indebtedness  (whether  or not  due),  in such  manner of
application as the Lender may deem  appropriate.  If the  Subordinated  Creditor
exercises any right of setoff which the  Subordinated  Creditor is not permitted
to exercise under the provisions of this Agreement,  the  Subordinated  Creditor
will promptly pay over to the Lender, in immediately  available funds, an amount
equal to the amount of the claims or  obligations  offset.  If the  Subordinated
Creditor  fails to make any  endorsement  required  under  this  Agreement,  the
Lender,  or any of its  officers or employees or agents on behalf of the Lender,
is hereby irrevocably  appointed as the  attorney-in-fact  (which appointment is
coupled with an interest) for the Subordinated Creditor to make such endorsement
in the Subordinated Creditor's name.

     6. ACTION ON SUBORDINATED DEBT. The Subordinated Creditor will not commence
any action or proceeding  against the Borrower to recover all or any part of the
Subordinated Indebtedness, or join with any creditor (unless the Lender shall so
join) in bringing  any  proceeding  against the Borrower  under any  bankruptcy,
reorganization,   readjustment  of  debt,   arrangement  of  debt  receivership,
liquidation or insolvency law or statute of the federal or any state government,
or take  possession  of,  sell,  or dispose of any  Collateral,  or  exercise or
enforce any right or remedy available to the Subordinated  Creditor with respect
to any such Collateral,  unless and until the Lender  Indebtedness has been paid
in full.

     7. ACTION CONCERNING COLLATERAL.

          (a)  Notwithstanding  any  security  interest  now  held or  hereafter
acquired by the Subordinated  Creditor, the Lender may take possession of, sell,
dispose of, and  otherwise  deal with all or any part of the  Collateral  (other
than the  Option and the  proceeds  from the  exercise  of the  Option)  and may
enforce any right or remedy available to it with respect to the Collateral,  all
without notice to or consent of the Subordinated Creditor except as specifically
required by applicable law.

          (b) In addition, and without limiting the generality of the foregoing,
if a Borrower Default has occurred and is continuing and the Borrower intends to
sell any Collateral to an unrelated  third party outside the ordinary  course of
business,  the Subordinated  Creditor shall, upon the Lender's request,  execute
and deliver to such purchaser such instruments as may reasonably be necessary to
terminate and release any security  interest or lien the  Subordinated  Creditor
has in the Collateral to be sold.

          (c) The Lender  shall  have no duty to  preserve,  protect,  care for,
insure,  take possession of, collect,  dispose of, or otherwise realize upon any
of the Collateral,  and in no event shall the Lender be deemed the  Subordinated
Creditor's  agent with respect to the Collateral.  All proceeds  received by the
Lender with respect to any Collateral may be applied, first, to pay or reimburse
the Lender for all costs and expenses  (including  reasonable  attorneys'  fees)
incurred by the Lender in connection with the collection of such proceeds,  and,
second,  to any indebtedness  secured by the Lender's  security interest in that
Collateral in any order that it may choose.

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     8. BANKRUPTCY AND INSOLVENCY. In the event of any receivership, insolvency,
bankruptcy,   assignment  for  the  benefit  of  creditors,   reorganization  or
arrangement with creditors,  whether or not pursuant to bankruptcy law, the sale
of  all  or  substantially  all of the  assets  of  the  Borrower,  dissolution,
liquidation  or any  other  marshalling  of the  assets  or  liabilities  of the
Borrower,  the  Subordinated  Creditor will file all claims,  proofs of claim or
other instruments of similar  character  necessary to enforce the obligations of
the Borrower in respect of the Subordinated  Indebtedness and will hold in trust
for the Lender and promptly pay over to the Lender in the form received  (except
for  the  endorsement  of  the   Subordinated   Creditor  where  necessary)  for
application  to the  then-existing  Lender  Indebtedness,  any and  all  moneys,
dividends or other  assets  received in any such  proceedings  on account of the
Subordinated  Indebtedness,  unless and until the Lender  Indebtedness  has been
paid in full. If the  Subordinated  Creditor shall fail to take any such action,
the Lender, as  attorney-in-fact  for the Subordinated  Creditor,  may take such
action on the Subordinated  Creditor's behalf. The Subordinated  Creditor hereby
irrevocably  appoints the Lender,  or any of its officers or employees on behalf
of the Lender,  as the  attorney-in-fact  for the  Subordinated  Creditor (which
appointment  is  coupled  with an  interest)  with the power but not the duty to
demand, sue for, collect and receive any and all such moneys, dividends or other
assets and give  acquittance  therefor and to file any claim,  proof of claim or
other instrument of similar  character,  to vote claims comprising  Subordinated
Indebtedness  to accept or reject any plan of partial or  complete  liquidation,
reorganization,  arrangement,  composition  or extension  and to take such other
action in the Lender's own name or in the name of the  Subordinated  Creditor as
the Lender may deem necessary or advisable for the enforcement of the agreements
contained herein; and the Subordinated  Creditor will execute and deliver to the
Lender such other and further  powers-of-attorney  or  instruments as the Lender
may request in order to accomplish the foregoing.

     9.  RESTRICTIVE  LEGEND;   TRANSFER  OF  SUBORDINATED   INDEBTEDNESS.   The
Subordinated  Creditor will cause the  Subordinated  Note or any part thereof to
contain a specific statement thereon to the effect that the indebtedness thereby
evidenced is subject to the provisions of this Agreement,  and the  Subordinated
Creditor  will  mark its  books  conspicuously  to  evidence  the  subordination
effected hereby.  Attached hereto is a true and correct copy of the Subordinated
Note  bearing such  legend.  At the request of the Lender,  after and during the
continuance of a Borrower Default, the Subordinated  Creditor shall deposit with
the Lender the Subordinated Note and all of the other notes,  bonds,  debentures
or other  instruments  evidencing the  Subordinated  Indebtedness,  which notes,
bonds,  debentures or other instruments may be held by the Lender so long as any
Lender Indebtedness remains outstanding. The Subordinated Creditor is the lawful
holder of the Subordinated  Note and has not transferred any interest therein to
any other person.

     10.  CONTINUING  EFFECT.  This  Agreement  shall  constitute  a  continuing
agreement of subordination,  and the Lender may, without notice to or consent by
the  Subordinated  Creditor,  modify  any  term of the  Lender  Indebtedness  in
reliance upon this Agreement.  Without limiting the generality of the foregoing,
the  Lender  may,  at any time and from  time to time,  either  before  or after
receipt of any such  notice of  revocation,  without the consent of or notice to
the  Subordinated   Creditor  and  without   incurring   responsibility  to  the
Subordinated  Creditor or impairing or releasing  any of the Lender's  rights or
any of the Subordinated Creditor's obligations hereunder:

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          (a) change the interest rate or change the amount of payment or extend
the time  for  payment  or renew or  otherwise  alter  the  terms of any  Lender
Indebtedness or any instrument evidencing the same in any manner;

          (b) sell, exchange, release or otherwise deal with any property at any
time securing payment of the Lender Indebtedness or any part thereof;

          (c) release  anyone liable in any manner for the payment or collection
of the Lender Indebtedness or any part thereof;

          (d) exercise or refrain from exercising any right against the Borrower
or any other person (including the Subordinated Creditor); and

          (e) apply any sums  received by the  Lender,  by  whomsoever  paid and
however realized,  to the Lender Indebtedness in such manner as the Lender shall
deem appropriate.

     11. NO COMMITMENT. None of the provisions of this Agreement shall be deemed
or construed to constitute or imply any  commitment or obligation on the part of
the Lender to make any future loans or other  extensions  of credit or financial
accommodations to the Borrower.

     12.  NOTICE.  All notices and other  communications  hereunder  shall be in
writing and shall be (i) personally  delivered,  (ii)  transmitted by registered
mail, postage prepaid, or (iii) transmitted by telecopy,  in each case addressed
to the party to whom notice is being given at its address as set forth below:

     If to the Lender:

     Wells Fargo Business Credit, Inc
     100 West Washington Street, 7th Floor
     MAC S4101-076
     Phoenix, Arizona 85003
     Telecopier: 602-378-6215
     Attention: Mr. Cliff Moschnik

     If to the Subordinated Creditor:

     c/o Richard P. Johnston
     4350 Greens Place
     Wilson, Wyoming 83014
     Telecopier: 307-739-1070

or at such  other  address as may  hereafter  be  designated  in writing by that
party.  All such  notices or other  communications  shall be deemed to have been
given on (i) the date received if delivered personally, (ii) the date of posting
if  delivered  by  mail,  or (iii)  the date of  transmission  if  delivered  by
telecopy.

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     13.  CONFLICT  IN  AGREEMENTS.  If  the  subordination  provisions  of  any
instrument evidencing Subordinated  Indebtedness conflict with the terms of this
Agreement, the terms of this Agreement shall govern the relationship between the
Lender and the Subordinated Creditor.

     14. NO  WAIVER.  No waiver  shall be deemed to be made by the Lender or the
Subordinated Creditor of any of its rights hereunder unless the same shall be in
writing signed on behalf of the Lender or the Subordinated Creditor, as the case
may be, and each such waiver, if any, shall be a waiver only with respect to the
specific  matter or  matters  to which the  waiver  relates  and shall in no way
impair the rights of the Lender or the Subordinated  Creditor or the obligations
of the  Subordinated  Creditor to the Lender or the obligations of the Lender to
the Subordinated Creditor in any other respect at any time.

     15. BINDING  EFFECT;  ACCEPTANCE.  This Agreement shall be binding upon the
parties hereto and their legal representatives, successors and assigns and shall
inure to the benefit of each party hereto and its  participants,  successors and
assigns irrespective of whether this or any similar agreement is executed by any
other Subordinated Creditor of the Borrower.

     16.   MISCELLANEOUS.   The  paragraph  headings  herein  are  included  for
convenience  of reference only and shall not constitute a part of this Agreement
for  any  other  purpose.  This  Agreement  may be  executed  in any  number  of
counterparts,  each of which  shall be an  original,  but all of which  together
shall constitute one instrument.

     17. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE; WAIVER OF JURY TRIAL.
This  Agreement  shall be  governed  by and  construed  in  accordance  with the
substantive laws (other than conflict laws) of the State of Arizona.  Each party
consents to the personal jurisdiction of the state and federal courts located in
the  State of  Arizona  in  connection  with  any  controversy  related  to this
Agreement,  waives any argument that venue in any such forum is not  convenient,
and agrees that any litigation  initiated by any of them in connection with this
Agreement  shall be venued in either  the  Superior  Court of  Maricopa  County,
Arizona or the United States  District Court,  District of Arizona.  THE PARTIES
WAIVE  ANY  RIGHT TO  TRIAL  BY JURY IN ANY  ACTION  OR  PROCEEDING  BASED ON OR
PERTAINING TO THIS ACKNOWLEDGMENT.

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     IN WITNESS  WHEREOF,  each party has executed this  Agreement as of the day
and year first above-written.

                                       THE JOHNSTON FAMILY CHARITABLE FOUNDATION


Witness: /s/ Mary J. Johnston          By: /s/ David E. Johnston
                                           -------------------------------------
                                           David E. Johnston
                                           Its: President


                                       WELLS FARGO BUSINESS CREDIT, INC.


                                       By: /s/ Clifton Moschnik
                                           -------------------------------------
                                           Its: Vice President

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                           ACKNOWLEDGMENT BY BORROWER

     The undersigned, being the Borrower referred to in the foregoing Agreement,
hereby (i)  acknowledges  receipt of a copy  thereof,  (ii) agrees to all of the
terms and provisions thereof,  (iii) agrees to and with the Lender that it shall
make no payment on the Subordinated  Indebtedness that the Subordinated Creditor
would not be entitled to receive  under the  provisions of the  Agreement,  (iv)
agrees  that any such  payment  will  constitute  a  default  under  the  Lender
Indebtedness,  and (v) agrees to mark its books  conspicuously  to evidence  the
subordination of the Subordinated Indebtedness effected hereby.


                                        ROYAL PRECISION, INC.,
                                        a Delaware corporation


                                        By: /s/ John C. Lauchnor
                                            ------------------------------------
                                            Its: President


                                        ROYAL GRIP, INC., a Nevada corporation


                                        By: /s/ John C. Lauchnor
                                            ------------------------------------
                                            Its: President


                                        ROYAL GRIP HEADWEAR COMPANY,
                                        a Nevada corporation


                                        By: /s/ John C. Lauchnor
                                            ------------------------------------
                                            Its: President

                                        FM PRECISION GOLF MANUFACTURING CORP.,
                                        a Delaware corporation

                                        By: /s/ John C. Lauchnor
                                            ------------------------------------
                                            Its: President


                                        FM PRECISION GOLF SALES CORP.,
                                        a Delaware corporation


                                        By: /s/ John C. Lauchnor
                                            ------------------------------------
                                            Its: President

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                                    EXHIBIT A

             attach copy of Subordinated Note with following legend

THIS  INSTRUMENT  IS SUBJECT TO THE TERMS OF A  SUBORDINATION  AGREEMENT  BY THE
JOHNSTON FAMILY  CHARITABLE  FOUNDATION IN FAVOR OF WELLS FARGO BUSINESS CREDIT,
INC. DATED AS OF OCTOBER 26, 2001.

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