Document:

Exhibit 10.62

                     ROYAL PRECISION EXECUTIVE BONUS PROGRAM
                                     FY 2003

PURPOSE OF THE PROGRAM

The  purpose  of  the  Royal  Precision  Executive  Bonus  Program  is to  use a
combination of  performance  elements to focus  management  attention on various
objectives to improve shareholder value and to reward participants for achieving
those objectives.

OPERATION OF THE PROGRAM

I.   Eligibility

     A.   Royal Precision managers and executives who are continuously  employed
          from the  beginning of each fiscal year through the date of payment of
          bonus are eligible to  participate  in the Royal  Precision  Executive
          Bonus Program.

     B.   Royal  Precision  managers and  executives  whose  employment  in that
          capacity  starts  after  the  beginning  of the  fiscal  year or whose
          employment in that capacity terminates prior to the date of payment of
          the bonus are eligible to participate  in the Executive  Bonus Program
          only if approved by the Chairman and CEO of Royal Precision.

II.  Basis of Distribution

     A.   Bonus Opportunity Levels

          Bonus  opportunity  levels are established for each participant at the
          beginning of the fiscal year,  or on a subsequent  date if  employment
          starts  after the  beginning  of the fiscal  year.  Bonus  opportunity
          levels are assigned to each participant  based on competitive rates of
          pay, internal equity and the ability to influence results.

     B.   Performance Elements

          Performance will be measured on the following elements:

<TABLE>
<CAPTION>
          PERFORMANCE                                                                         TARGET
          ELEMENT                       DEFINITION                              WEIGHT         LEVEL
          -------                       ----------                              ------         -----
<S>                                     <C>                                     <C>           <C>
          EBIT                          Earnings before interest, taxes,          80%            *
                                        and non-operating items
                                        approved in advance by the
                                        Chairman and CEO.

          Operating Working             A four-quarter average of the             20%            *
          Capital per Sales Dollar      following calculation: the sum
                                        of accounts receivable and net
                                        inventories, less accounts
                                        payables (net of customer
                                        deposits) as of quarter end,
                                        divided by the annualized quarter
                                        sales.
</TABLE>

     C.   Eligible Compensation

          Eligible  compensation reflects each participant's annual base salary,
          or base  salary paid during the period of  eligibility  if  employment
          started after the beginning of the fiscal year.

III. Determination of Bonus Award

     A.   The  Bonus  Award  for  each  participant  will be  determined  on the
          following guidelines:

* CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

          1.   Actual results for each Performance Element will be determined on
               year- end financial results as reflected in the audited financial
               statements.

          2.   Achievement of Bonus Targets will be based on percent of Targeted
               Performance  attained,  as summarized  below and  illustrated  in
               Exhibit 1.*

                    PERCENT OF PERCENT OF
                    TARGETED PERFORMANCE      BONUS TARGET EARNED
                    --------------------      -------------------
                    Below 80%                          0%
                    80%                               80%
                    100%                             100%
                    115%                             115%
                    125% and above                   Linear

          3.   The  calculation  of the Bonus  Award is an  annual  computation.
               Overperformance  or  underperformance  in any  year  will  not be
               carried  forward or carried  backward  for use in another  year's
               computation.

     B.   A hypothetical  example of the  calculation of a  participant's  Bonus
          Award is provided  in Exhibit 1.* The exhibit shows the level to which
          calculations will be rounded.

IV.  Individual Performance Adjustment

     The  Chairman  and  CEO of  Royal  Precision  may  adjust  a  participant's
     formula-derived  Bonus  Award  upward or  downward  by up to 25% to reflect
     individual performance. The final Bonus Award for any participant may range
     from 75% to 125% of the formula-derived bonus award calculated from Exhibit
     1.*

V.   Payment of Bonus Awards and Discretionary Bonuses

     Bonus Awards and any  Discretionary  Special Bonuses will be paid within 60
     days  following the end of the  Company's  fiscal year and after receipt of
     audited financial statements.

VI.  Unexpected Changes in Operations or Unusual Adjustments

     In  the  event  of  major  unexpected  changes  in  operations  or  unusual
     adjustments  during the  fiscal  year,  Company  management  may  recommend
     adjustments or changes to the approved bonus program.  The Chairman and CEO
     of Royal  Precision will have final approval on any  adjustments or changes
     to the approved program.

VII. General Provisions

     A.   The  Royal  Precision  Bonus  Program  is  implemented  solely  at the
          discretion  of the  Company,  subject to approval by the  Compensation
          Committee  who  reserves  the  right to  amend,  modify,  suspend,  or
          terminate the Bonus Program.

     B.   Bonus Awards are totally  separate  from all other  Company  benefits.
          They will not be used as a basis for  determining  levels of any other
          benefit such as vacation pay, life  insurance  coverage,  future bonus
          pay, etc.

     C.   Establishment  of the  Royal  Precision  Bonus  Program  shall  not be
          construed  as  conferring  any legal  rights upon any  employee or any
          person for continuation of employment, nor shall it interfere with the
          rights of the Company to discharge any employee  without regard to the
          effect such discharge  might have upon the  employee's  eligibility or
          receipt of benefits through the Corporate Bonus Program.

*    EXHIBIT 1 OMITTED AS HYPOTHETICAL AND CONFIDENTIAL TREATMENT REQUESTED.Exhibit 10.63

               AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

                           Dated as of AUGUST 9, 2002

     FM  PRECISION  GOLF  MANUFACTURING  CORP.,  a Delaware  corporation  and FM
PRECISION GOLF SALES CORP., a Delaware  corporation  (collectively,  jointly and
severally,  the "Borrower"),  and WELLS FARGO BUSINESS CREDIT, INC., a Minnesota
corporation (the "Lender"), hereby agree as follows:

     The  Borrower  and the  Lender  have  entered  into a Credit  and  Security
Agreement  dated as of October 9, 1998, as amended by that certain  Amendment to
Credit and Security  Agreement  and Waiver of Defaults  dated April 13, 1999, as
amended by that certain Second Amendment to Credit and Security  Agreement dated
November 10,  1999,  as amended by that  certain  Third  Amendment to Credit and
Security  Agreement  dated March 24,  2000,  as amended by that  certain  Fourth
Amendment to Credit and Security  Agreement  dated August 3, 2000, as amended by
that certain Fifth Amendment to Credit and Security  Agreement dated November 8,
2000,  as  amended  by that  certain  Sixth  Amendment  to Credit  and  Security
Agreement dated March 9, 2001, as amended by that certain  Seventh  Amendment to
Credit and  Security  Agreement  dated May 30,  2001 as amended by that  certain
Eighth  Amendment to Credit and Security  Agreement and Waiver of Defaults dated
November 15,  2001,  as amended by that  certain  Ninth  Amendment to Credit and
Security  Agreement and Waiver of Defaults  dated April 10, 2002  (collectively,
the "Original Credit Agreement").  Capitalized terms used in these recitals have
the meanings given to them in the Credit Agreement unless otherwise specified.

     The  Lender  has  agreed to make  certain  loan  advances  to the  Borrower
pursuant to the terms and conditions set forth in the Original Credit Agreement.

     The loan advances under the Original Credit  Agreement are evidenced by the
Borrower's Second  Replacement  Revolving Note dated as of March 9, 2001, in the
maximum principal amount of $6,500,000.00, Borrower's Term Note dated October 9,
1998 in the original  principal amount of $4,300,000.00  and Borrower's  Capital
Expenditures  Note dated  March 24,  2000 in the  original  principal  amount of
$400,000.00,  each of which is payable to the order of the Lender  (collectively
the "Notes").

     All  indebtedness of the Borrower to the Lender is secured  pursuant to the
terms of the  Original  Credit  Agreement  and all other  Security  Documents as
defined therein and shall be guaranteed  pursuant to the unconditional  guaranty
of the Guarantor.

     Borrower  and Lender wish to amend and  restate  the terms of the  Original
Credit Agreement in its entirety.

     Now,  therefore,  in consideration  of the premises and promises  contained
herein, and other good and valuable  consideration,  the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

                                       1
<PAGE>
                                   Article I.

                                   DEFINITIONS

     Section 1.1  DEFINITIONS.  For all  purposes of this  Agreement,  except as
otherwise expressly provided or unless the context otherwise requires:

          (a) the terms  defined in this Article  have the meanings  assigned to
them in this Article, and include the plural as well as the singular; and

          (b) all  accounting  terms  not  otherwise  defined  herein  have  the
meanings assigned to them in accordance with GAAP.

          "Accounts"  means  all of the  Borrower's  accounts,  as such  term is
     defined in the UCC,  including  without  limitation  the  aggregate  unpaid
     obligations  of  customers  and other  account  debtors to the  Borrower or
     either of them  arising out of the sale or lease of goods or  rendition  of
     services by the  Borrower or either of them on an open  account or deferred
     payment basis.

          "Advance" means a Revolving Advance or a Term Advance.

          "Affiliate" or "Affiliates"  means the Covenant Entities and any other
     Person  controlled  by,  controlling  or  under  common  control  with  the
     Borrower,  including  (without  limitation) any Subsidiary of the Borrower.
     For purposes of this  definition,  "control," when used with respect to any
     specified Person,  means the power to direct the management and policies of
     such  Person,  directly or  indirectly,  whether  through the  ownership of
     voting securities, by contract or otherwise.

          "Agreement"  means this  Amended  and  Restated  Credit  and  Security
     Agreement,  as amended,  supplemented  or restated  from time to time which
     replaces the Original Credit Agreement in its entirety.

          "Availability"  means  the  positive  difference,  if any,  of (i) the
     Borrowing Base and (ii) the sum of (A) the outstanding principal balance of
     the Revolving Note and (B) the L/C Amount.

          "Banking  Day" means a day other than a Saturday,  Sunday or other day
     on which banks are generally not open for business in Phoenix, Arizona.

          "Base Rate" means the rate of interest publicly announced from time to
     time by Wells Fargo Bank N.A. as its "base rate" or, if such bank ceases to
     announce a rate so designated, any similar successor rate designated by the
     Lender.

          "Book Net Worth"  means the  aggregate  of the  common  and  preferred
     stockholders' equity in the Borrower, determined in accordance with GAAP.

                                       2
<PAGE>
          "Borrowing Base" means, at any time the lesser of:

               (a)  the Maximum Line; or

               (b)  the sum of:

                    (A) the  lesser  of (x)  85% of  Eligible  Accounts,  or (y)
               $6,500,000.00, plus

                    (B) during the  Foreign  Accounts  Eligibility  Period,  the
               lesser  of  (A)  85%  of   Eligible   Foreign   Accounts  or  (B)
               $500,000.00, plus

                    (C) the lesser of (x) 60% of Eligible  Inventory  (exclusive
               of Eligible Raw Materials  Inventory)  plus the lesser of (i) 50%
               of the Eligible Raw Materials  Inventory or (ii) $250,000.00,  or
               (y) $2,000,000.00, plus

                    (D) the  lesser of (i) the  undisbursed  face  amount of the
               Johnston Letter of Credit or (ii)  $1,000,000.00  (the "Letter of
               Credit  Overadvance") which amount shall automatically be reduced
               to $0.00 in the event that the Johnston  Letter of Credit expires
               or the issuer refuses to allow a permitted draw thereunder, plus

                    (E) $1,000,000.00 (the "Seasonal Overadvance).  The Seasonal
               Overadvance shall automatically be reduced to $900,000.00 on each
               January 31, to $800,000.00 on each February 28, to $700,000.00 on
               each  March  31,  to   $600,000.00  on  each  April  30,  and  to
               $500,000.00 on each May 31;  provided that upon  compliance  with
               the  provisions  of  romanettes  (i) and  (ii)  contained  in the
               definition of Seasonal  Overadvance  Floating Rate, the Letter of
               Credit Overadvance shall become the lesser of (a) the undisbursed
               face amount of the sum of the  Johnston  Letter of Credit and the
               C. Johnston Letter of Credit or (b)  $2,000,000.00,  which amount
               automatically shall be reduced to $1,000,000.00 in the event that
               one of the Johnston Letter of Credit or the C. Johnston Letter of
               Credit  expires or the issuer  refuses to allow a permitted  draw
               thereunder and to $0.00 in the event that both of said letters of
               credit  expire or the issuer  refuses to allow a  permitted  draw
               under  either of said  letters  of  credit.  In such  event,  the
               Seasonal Overadvance shall be eliminated.

               Unless otherwise  designated by the Borrower,  Revolving Advances
               will be  allocated  first to component D of the  Borrowing  Base,
               second to components A, B and C and finally to component E.

          "Capital Expenditures" for a period means any expenditure of money for
     the purchase or  construction of assets,  or for  improvements or additions
     thereto, which are capitalized on the Borrower's balance sheet.

          "Capital  Expenditures  Advance" has the meaning  specified in Section
     2.6.2.

                                       3
<PAGE>
          "Capital  Expenditures Note" means the Borrower's Capital Expenditures
     Note dated March 24, 2000 in the original  principal  amount of $400,000.00
     and any note or notes  issued  in  substitution  therefor,  as the same may
     hereafter be amended, supplemented or restated from time to time.

          "Capital Expenditures Floating Rate" means an annual rate equal to the
     sum of the Base Rate plus three and one-quarter of one percent (3.25%). The
     Capital Expenditures  Floating Rate shall change when and as the Prime Rate
     changes.

          "Collateral"  means all of the  Borrower's  Accounts,  chattel  paper,
     deposit  accounts,   documents,   Equipment,  the  Real  Property,  General
     Intangibles,   goods,   instruments,    Inventory,   Investment   Property,
     letter-of-credit  rights,  letters  of  credit,  all sums on deposit in any
     Collateral  Account,  and any items in any Lockbox;  together  with (i) all
     substitutions  and  replacements  for and products of any of the foregoing;
     (ii) in the case of all  goods,  all  accessions;  (iii)  all  accessories,
     attachments,  parts,  equipment  and repairs now or  hereafter  attached or
     affixed  to or used in  connection  with  any  goods;  (iv)  all  warehouse
     receipts,  bills of lading and other  documents  of title now or  hereafter
     covering such goods; (v) all collateral subject to the Lien of any Security
     Document;  (vi) any  money,  or other  assets of the  Borrower  that now or
     hereafter  come into the  possession,  custody,  or control of the  Lender;
     (vii) all sums on deposit in the Special  Account;  and (viii)  proceeds of
     any and all of the foregoing;  provided that  Collateral  shall not include
     funds which are legally contained in employee trust accounts.

          "Collateral Accounts" have the meaning given in the Collateral Account
     Agreements.

          "Collateral   Account   Agreements"   means  the  Collateral   Account
     Agreements  dated October 9, 1998 by and among FMM,  FMS,  Wells Fargo Bank
     N.A. and the Lender.

          "Collateral  Assignment of Trademarks" means the Collateral Assignment
     of Trademarks by FMM in favor of the Lender dated October 9, 1998.

          "Commitment"  means the Lender's  commitment  to make  Advances and to
     cause the  Issuer  to issue  Letters  of  Credit  to or for the  Borrower's
     account pursuant to Article II.

          "Covenant  Entities"  means  Royal  Grip,  Inc.,  Royal Grip  Headwear
     Company and Royal Precision, Inc.

          "Credit  Facility"  means the credit  facility being made available to
     the Borrower by the Lender pursuant to Article II.

          "Debt" of any  Person  means all items of  indebtedness  or  liability
     which in  accordance  with GAAP  would be  included  in  determining  total
     liabilities  as shown on the  liabilities  side of a balance  sheet of that
     Person as at the date as of which Debt is to be determined. For purposes of
     determining  a  Person's  aggregate  Debt at any time,  "Debt"  shall  also

                                       4
<PAGE>
     include the  aggregate  payments  required to be made by such Person at any
     time under any lease that is considered a capitalized lease under GAAP.

          "Deeds  of  Trust"  means  the deed of  trust  in favor of the  Lender
     encumbering  Lot 9 of the Schofield  Patent Lots 1 & 9 Replat  Subdivision,
     according  to that plat  recorded on 6/1/1976 as Plat No. 281 in the Office
     of County Clerk in Teton County,  Wyoming and Lot 7 of the Meadows of Teton
     ________  Phase III  _________,  1-20  Subdivision,  according to that plat
     recorded  on  9/25/1996  as Plat No. 612 in the  Office of County  Clark in
     Teton County, Wyoming.

          "Default"  means an event  that,  with  giving of notice or passage of
     time or both, would constitute an Event of Default.

          "Default  Period" means any period of time  beginning on the first day
     of any month  during  which an Event of Default has  occurred and ending on
     the date the Lender  notifies the Borrower in writing that such Default has
     been cured or waived.

          "Default Rate" means an annual rate equal to two percent (2%) over the
     Revolving  Floating Rate, the Term Floating Rate, the Capital  Expenditures
     Floating  Rate,  the Seasonal  Overadvance  Floating Rate and the Letter of
     Credit  Overadvance  Floating Rate, which rate shall change when said Rates
     change.

          "ERISA" means the Employee  Retirement Income Security Act of 1974, as
     amended.

          "Eligible  Accounts"  means all unpaid  Accounts,  net of any credits,
     except the following shall not in any event be deemed Eligible Accounts:

               (i) That  portion of  Accounts  which are 60 days past stated due
          date or which are unpaid 120 days or more after the invoice date;

               (ii) That  portion of  Accounts  that is disputed or subject to a
          claim of offset or a contra account;

               (iii)  That  portion  of  Accounts  not yet  earned  by the final
          delivery of goods or  rendition  of services,  as  applicable,  by the
          Borrower to the customer;

               (iv) Accounts owed by any unit of government,  whether foreign or
          domestic (provided,  however, that there shall be included in Eligible
          Accounts that portion of Accounts owed by such units of government for
          which the Borrower has provided  evidence  satisfactory  to the Lender
          that (A) the Lender has a first priority  perfected  security interest
          and (B) such Accounts may be enforced by the Lender  directly  against
          such unit of government under all applicable laws);

                                       5
<PAGE>
               (v) Accounts owed by an account debtor located outside the United
          States and Canada  which are not (A) backed by a bank letter of credit
          naming the Lender as  beneficiary  or assigned  to the Lender,  in the
          Lender's possession or in a Related Lender's possession and acceptable
          to the Lender in all respects, in its sole discretion,  or (B) covered
          by a foreign receivables  insurance policy acceptable to the Lender in
          its sole discretion;

               (vi)  Accounts owed by an account  debtor that is insolvent,  the
          subject of bankruptcy proceedings or has gone out of business;

               (vii)  Accounts  owed by a  stockholder,  Subsidiary,  Affiliate,
          officer or employee of the Borrower;

               (viii) Accounts not subject to a duly perfected security interest
          in  the  Lender's  favor  (except  those  meeting  the  provisions  of
          romanette  (v)(A)  or  (B)  above  shall  not be  deemed  not to be an
          Eligible  Account  due  to  the  lack  of a  duly  perfected  security
          interest) or which are subject to any lien, security interest or claim
          in  favor  of any  Person  other  than the  Lender  including  without
          limitation any payment or performance bond;

               (ix)  That  portion  of  Accounts  that  has  been  restructured,
          extended, amended or modified;

               (x)  That  portion  of  Accounts  that  constitutes  advertising,
          finance charges, service charges or sales or excise taxes;

               (xi)  Accounts owed by an account  debtor,  regardless of whether
          otherwise  eligible,  if 20% or more of the  total  amount  due  under
          Accounts  from such debtor is  ineligible  under  clauses (i), (ii) or
          (ix) above

               (xii) Accounts consisting of tooling charges; and

               (xiii)  Accounts  owed by an Account  debtor  (other  than Taylor
          Made,  Callaway and  Marubeni/Precision  Japan)  regardless of whether
          otherwise eligible, in excess of 15% of total Accounts.

               (xiv)  Accounts owed by Taylor Made and  Callaway,  regardless of
          whether otherwise eligible, in excess of 25% of total Accounts.

               (xv) Accounts  owed by  Marubeni/Precision  Japan,  regardless of
          whether otherwise eligible, which are not backed by a letter of credit
          assigned to the  Lender,  it being  agreed  that any  Account  owed by
          Marubeni/Precision  Japan which is backed by an  acceptable  letter of
          credit which is assigned to Lender shall be an Eligible Account and an

                                       6
<PAGE>
          Eligible  Foreign  Account  without  limitation  as to  amount  or the
          provisions of Foreign Account Eligibility Period.

               (xvi) Accounts not denominated in US Dollars.

               (xvii) Accounts, or portions thereof, otherwise deemed ineligible
          by the Lender in its sole discretion.

          "Eligible Foreign Accounts" means Accounts due and owing by an Account
     debtor  located  outside the United  States and Canada;  but  excluding any
     Accounts having any of the following characteristics:

               (i) (A) That  portion of  Accounts  which are 60 days past stated
          due date or which are unpaid 120 days or more after the invoice date,

               (ii) That  portion of  Accounts  that is disputed or subject to a
          claim of offset or a contra account;

               (iii)  That  portion  of  Accounts  not yet  earned  by the final
          delivery of goods or  rendition  of services,  as  applicable,  by the
          Borrower to the customer;

               (iv) That  portion of Accounts  for which an invoice has not been
          sent to the applicable account debtor;

               (v) Accounts owed by any unit of government;

               (vi)  Accounts owed by an account  debtor that is insolvent,  the
          subject of bankruptcy proceedings or has gone out of business;

               (vii)  Accounts  owed by a  stockholder,  Subsidiary,  Affiliate,
          officer or employee of the Borrower;

               (viii) Accounts not subject to a duly perfected security interest
          in the  Lender's  favor or which are  subject  to any  lien,  security
          interest  or  claim  in  favor of any  Person  other  than the  Lender
          including without limitation,  any payment or performance bond (except
          Accounts owed by Marubeni/Precision Japan which are backed by a letter
          of credit  assigned  to the  Lender  shall not be deemed  not to be an
          Eligible Foreign Account due to the lack of a duly perfected  security
          interest);

               (ix)  That  portion  of  Accounts  that  has  been  restructured,
          extended, amended or modified;

               (x)  That  portion  of  Accounts  that  constitutes  advertising,
          finance charges, service charges or sales or excise taxes;

                                       7
<PAGE>
               (xi) That portion of Accounts owed by any one Account debtor that
          would permit  Revolving  Advances  supported by such Account  debtor's
          Accounts to exceed $300,000 at any one time;

               (xii)  Accounts  denominated  in any  currency  other than United
          States dollars,  Canadian dollars, French francs, Swiss francs, German
          marks, Japanese yen, United Kingdom pounds sterling or Euros;

               (xiii)  Accounts  with  respect  to which  the  Borrower  has not
          instructed  the Account  debtor to pay the  Account to the  Collateral
          Account or Lockbox;

               (xiv)   Accounts  owed  by  debtors   located  in  countries  not
          acceptable to the Lender in its sole discretion;

               (xv)  Accounts owed by an account  debtor,  regardless of whether
          otherwise  eligible,  if 20% or more of the  total  amount  due  under
          Accounts  from such debtor is  ineligible  under  clauses (i), (ii) or
          (ix) above;

               (xvi) Accounts owed by an Account  debtor,  regardless of whether
          otherwise eligible, in excess of 15% of total Accounts; and

               (xvii) Accounts  otherwise  deemed  unacceptable to the Lender in
          its sole discretion.

          "Eligible  Raw  Materials  Inventory"  means that  portion of Eligible
     Inventory consisting of raw materials.

          "Eligible  Inventory"  means all  inventory of the Borrower  valued at
     weighted  average cost as  determined in  accordance  with GAAP;  provided,
     however,  that the  following  shall not in any  event be  deemed  Eligible
     Inventory:

               (i)  Inventory  that  is:  in-transit   (exclusive  of  inventory
          in-transit  between Premises  locations);  located at any warehouse or
          other premises not approved by the Lender in writing;  located outside
          of the states, or localities,  as applicable,  in which the Lender has
          not filed  financing  statements to perfect a first priority  security
          interest   in  such   inventory;   covered   by  any   negotiable   or
          non-negotiable  warehouse receipt, bill of lading or other document of
          title not in the  possession of the Lender;  on consignment to or from
          any other Person or subject to any bailment;

               (ii) Packaging inventory;

               (iii) Work-in-process inventory (other than frequency coefficient
          matched shafts that have been labeled ("FCM Shafts");

               (iv)  Inventory  that  is  damaged,  obsolete  or  not  currently
          saleable in the normal course of the Borrower's operations;

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<PAGE>
               (v) Inventory  that the Borrower has  returned,  has attempted to
          return,  is in the  process of  returning  or intends to return to the
          vendor thereof;

               (vi) Inventory that is subject to a security interest in favor of
          any Person other than the Lender;

               (vii)  Inventory that does not consist of finished  shafts (other
          than FCM Shafts);

               (viii) Slow-Moving Inventory;

               (ix)  Inventory that is subject to a licensing  agreement,  which
          licensing   agreement   would  preclude  or  hinder  the  Lender  from
          liquidating such Inventory in the ordinary course of business; and

               (x) Inventory  otherwise  deemed  ineligible by the Lender in its
          sole discretion.

          "Environmental Laws" has the meaning specified in Section 5.12.

          "Equipment"  means all of the  Borrower's  equipment,  as such term is
     defined in the UCC, whether now owned or hereafter acquired,  including but
     not  limited to all  present  and future  machinery,  vehicles,  furniture,
     fixtures, manufacturing equipment, shop equipment, office and recordkeeping
     equipment,  parts, tools,  supplies,  and including  specifically  (without
     limitation) the goods described in any equipment  schedule or list herewith
     or hereafter  furnished to the Lender by the Borrower,  and whether located
     on the Premises or otherwise.

          "Event of Default" has the meaning specified in Section 8.1.

          "FMM"  means  FM  Precision  Golf  Manufacturing   Corp.,  a  Delaware
     corporation.

          "FMS" means FM Precision Golf Sales Corp., a Delaware corporation.

          "Foreign Accounts  Eligibility  Period" means the period beginning May
     1, 2002 and ending April 30, 2003. Said period may be renewed in subsequent
     years by Lender in its sole discretion.

          "Funding  Date" has the  meaning  given in Section  2.1.  "Funds  From
     Operations"  for a given  period  means  the sum of (i)  Net  Income,  (ii)
     depreciation and amortization,  (iii) deferred income taxes, and (iv) other
     non-cash items, each as determined for such period in accordance with GAAP.

          "GAAP" means generally accepted  accounting  principles,  applied on a
     basis  consistent  with the accounting  practices  applied in the financial
     statements  described in Section 5.5,  except for any change in  accounting
     practices  to the  extent  that,  due to a  promulgation  of the  Financial
     Accounting  Standards  Board  changing or  implementing  any new accounting

                                       9
<PAGE>
     standard,  the Borrower either (i) is required to implement such change, or
     (ii) for future  periods will be required to and for the current period may
     in accordance with GAAP implement such change, for its financial statements
     to be in conformity  with GAAP (any such change is herein  referred to as a
     "Required  GAAP  Change"),  provided  that  (1) the  Borrower  shall  fully
     disclose in such financial statements any such Required GAAP Change and the
     effects of the  Required  GAAP Change on the  Borrower's  income,  retained
     earnings or other accounts, as applicable, and (2) the Borrower's financial
     covenants  set  forth in  Sections  6.12  through  6.15  and 7.10  shall be
     adjusted as necessary to reflect the effects of such Required GAAP Change.

          "General Intangibles" means all of the Borrower's general intangibles,
     as such  term is  defined  in the  UCC,  whether  now  owned  or  hereafter
     acquired,  including  (without  limitation) all present and future patents,
     patent applications,  copyrights,  trademarks,  trade names, trade secrets,
     customer or supplier lists and contracts,  manuals, operating instructions,
     permits, franchises, the right to use the Borrower's name, and the goodwill
     of the Borrower's business.

          "Guarantors"  means Royal  Precision,  Inc.,  a Delaware  corporation,
     Christopher Johnston and Lisa Johnston.

          "Hazardous Substance" has the meaning given in Section 5.12.

          "Interest  Expense"  means,  for a  fiscal  year-to-date  period,  the
     Borrower's  total gross  interest  expense  during  such period  (excluding
     interest  income),  and shall in any event include,  without  limitation or
     duplication,  (i) interest expensed (whether or not paid) on all Debt, (ii)
     the  amortization  of debt  discounts,  (iii) the  amortization of all fees
     payable in connection with the incurrence of Debt to the extent included in
     interest expense,  and (iv) the portion of any capitalized lease obligation
     allocable to interest expense.

          "Inventory"  means all of the  Borrower's  inventory,  as such term is
     defined  in the UCC,  whether  now  owned or  hereafter  acquired,  whether
     consisting  of  whole  goods,  spare  parts  or  components,   supplies  or
     materials, whether acquired, held or furnished for sale, for lease or under
     service contracts or for manufacture or processing, and wherever located.

          "Issuer" means the issuer of any Letter of Credit.

          "Johnston  Letter of Credit" has the meaning  specified in Section 4.1
     below.

          "L/C  Amount"  means the sum of (i) the  aggregate  face amount of any
     issued and outstanding  Letters of Credit and (ii) the unpaid amount of the
     Obligation of Reimbursement.

          "L/C  Application"  means an application  and agreement for letters of
     credit in a form acceptable to the Issuer and the Lender.

                                       10
<PAGE>
          "Letter of Credit" has the meaning specified in Section 2.2.

          "Letter of Credit  Overadvance  Floating  Rate"  means an annual  rate
     equal to the Base Rate.  The  Letter of Credit  Overadvance  Floating  Rate
     shall change when and as the Base Rate changes.

          "Loan  Documents"  means this  Agreement,  the Notes and the  Security
     Documents.

          "Maturity Date" means July 31, 2003,  provided however, if but only if
     (i) there is not a then existing Event of Default or Default  Period,  (ii)
     the expiry date of the Johnston Letter of Credit and the C. Johnston Letter
     of Credit, if issued,  are extended through August 12, 2004, (iii) FMM, FMS
     and the Covenant  Entities in the aggregate have not achieved a Net Loss in
     excess  of  $100,000.00  during  the  month of June,  2004,  and,  (iv) the
     Borrower and the Lender have mutually agreed (through an executed amendment
     to this  Agreement),  on or before July 31, 2003, upon new covenants levels
     (including a debt service coverage ratio covenant) for Section 6.12 through
     6.15 below applicable to the period of time from July 31, 2003 through July
     31, 2004, which covenants shall be no less stringent than the covenants set
     forth below in said  Sections,  the Borrower shall have the right to extend
     the Maturity Date until July 31, 2004.  This is a one time right only,  and
     not further  extensions  of the  Maturity  Date shall be  permitted  unless
     consented  to by  Lender  in  writing  in the  Lender's  sole and  absolute
     discretion.

          "Maximum  Line"  means  $6,500,000.00,  unless  said amount is reduced
     pursuant to Section  2.12, in which event it means the amount to which said
     amount is reduced.

          "Minimum Interest Charge" has the meaning given in Section 2.8(c).

          "Mortgage Deed" means the Mortgage Deed and Security  Agreement by FMM
     in favor of Lender dated October 9, 1998.

          "Net Income" means for the  applicable  period,  before-tax net income
     from continuing operations as determined in accordance with GAAP.

          "Net Loss" means for the applicable  period,  before-tax net loss from
     continuing operations as determined in accordance with GAAP.

          "Note"  means  the  Revolving  Note,  the  Term  Note  or the  Capital
     Expenditures  Note, and "Notes" means the Revolving Note, the Term Note and
     the Capital Expenditures Note.

          "Obligations" means the Notes and each and every other 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 direct  or  indirect,  due or to become  due,  absolute  or  contingent,
     primary or secondary,  liquidated or unliquidated,  or sole, joint, several
     or joint and several, and including  specifically,  but not limited to, the
     Obligation of  Reimbursement  and all  indebtedness of the Borrower arising
     under this  Agreement,  the Notes,  any L/C  Application  completed  by the

                                       11
<PAGE>
     Borrower,  or any other loan or credit  agreement  or guaranty  between the
     Borrower and the Lender, whether now in effect or hereafter entered into.

          "Obligation of Reimbursement" has the meaning given in Section 2.3(a).

          "Patent Security Agreement" means the Patent Mortgage,  Assignment and
     Security Agreement by FMM in favor of the Lender dated October 9, 1998.

          "Permitted Lien" has the meaning given in Section 7.1.

          "Person"  means  any  individual,   corporation,   partnership,  joint
     venture,  limited  liability  company,  association,  joint-stock  company,
     trust, unincorporated organization or government or any agency or political
     subdivision thereof.

          "Plan" means an employee benefit plan or other plan maintained for the
     Borrower's employees and covered by Title IV of ERISA.

          "Premises" means all premises where the Borrower conducts its business
     and has any  rights  of  possession,  including  (without  limitation)  the
     premises legally described in Exhibit D attached hereto.

          "Real  Property"  means the real  property  subject to the lien of the
     Mortgage Deed.

          "Receivables"  means  each  and  every  right of the  Borrower  to the
     payment of money,  whether  such right to payment  now exists or  hereafter
     arises,  whether such right to payment arises out of a sale, lease or other
     disposition of goods or other property, out of a rendering of services, out
     of a loan,  out of the  overpayment  of  taxes  or  other  liabilities,  or
     otherwise  arises  under any contract or  agreement,  whether such right to
     payment is created,  generated  or earned by the  Borrower or by some other
     person who subsequently  transfers such Person's  interest to the Borrower,
     whether such right to payment is or is not already  earned by  performance,
     and  howsoever  such right to payment may be  evidenced,  together with all
     other rights and  interests  (including  all liens and security  interests)
     which the  Borrower  may at any time have by law or  agreement  against any
     account  debtor or other  obligor  obligated  to make any such  payment  or
     against any property of such account debtor or other obligor; all including
     but not limited to all present and future Accounts,  contract rights, loans
     and obligations  receivable,  chattel papers,  bonds,  notes and other debt
     instruments,  tax  refunds  and  rights to payment in the nature of general
     intangibles.

          "Reportable  Event"  shall have the  meaning  assigned to that term in
     Title IV of ERISA.

          "Revolving Advance" has the meaning given in Section 2.1.

          "Revolving Floating Rate" means an annual rate equal to the sum of the
     Base Rate plus three  percent  (3.0%).  The  Revolving  Floating Rate shall
     change when and as the Base Rate changes.

                                       12
<PAGE>
          "Revolving  Note" means the Borrower's  Second  Replacement  Revolving
     Note, dated March 9, 2001 in the original principal amount of $6,500,000.00
     and any note or notes  issued in  substitution  therefore,  as the same may
     hereafter be amended, supplemented or restated from time to time.

          "Seasonal Overadvance Floating Rate" means an annual rate equal to the
     sum of the Base Rate plus three percent  (3.0%).  The Seasonal  Overadvance
     Floating Rate shall automatically be reduced to an annual rate equal to the
     Base Rate, if but only if, (i) Christopher  Johnston provides to the Lender
     the C. Johnston  Letter of Credit  complying with the terms of Section 9.17
     below and (ii)  there is not a then  existing  Event of  Default or Default
     Period.  Said reduction shall be effective,  if at all, on the date of this
     Agreement if the  provisions of romanette (i) are complied with on the date
     of this  Agreement,  or the  first day of the first  full  month  following
     Lender's  receipt of the C. Johnston  Letter of Credit  complying  with the
     provisions of Section 9.17 below.  The Seasonal  Overadvance  Floating Rate
     shall change when and as the Base Rate changes.

          "Security  Documents"  means this  Agreement,  the Mortgage  Deed, the
     Collateral Account Agreements,  the Patent Security Agreement and any other
     document  delivered to the Lender from time to time in connection  with the
     Original Credit Agreement, this Agreement or to secure the Obligations,  as
     the same may  hereafter be amended,  supplemented  or restated from time to
     time.

          "Security Interest" has the meaning given in Section 3.1.

          "Slow-Moving  Inventory"  means any  inventory  in excess of the total
     amount of like  kind  inventory  sold by the  Borrower  in the  immediately
     preceding 12 month period.

          "Special Account" means a specified cash collateral account maintained
     by a financial  institution  acceptable  to the Lender in  connection  with
     Letters of Credit, as contemplated by Section 2.4.

          "Subsidiary"  means  any  corporation  of which  more  than 50% of the
     outstanding  shares of capital  stock  having  general  voting  power under
     ordinary  circumstances  to elect a majority of the board of  directors  of
     such  corporation,  irrespective of whether or not at the time stock of any
     other class or classes  shall have or might have voting  power by reason of
     the  happening of any  contingency,  is at the time  directly or indirectly
     owned  by  either  Borrower,  by  either  Borrower  and one or  more  other
     Subsidiaries, or by one or more other Subsidiaries.

          "Term Advance" has the meaning specified in Section 2.6.1.

          "Term Floating Rate" means an annual rate equal to the sum of the Base
     Rate  plus  three  and  three-quarters  of one  percent  (3.75%).  The Term
     Floating Rate shall change when and as the Prime Rate changes.

          "Term Note" means the Borrower's  Term Note,  dated October 9, 1998 in
     the original principal amount of $4,300,000.00 and any note or notes issued
     in   substitution   therefor,   as  the  same  may  hereafter  be  amended,
     supplemented or restated from time to time.

                                       13
<PAGE>
          "Termination  Date" means the earliest of (i) the Maturity Date,  (ii)
     the date the Borrower terminates the Credit Facility, or (iii) the date the
     Lender  demands  payment  of the  Obligations  after an  Event  of  Default
     pursuant to Section 8.2.

          "UCC" means the Uniform Commercial Code as in effect from time to time
     in the state  designated  in  Section  9.13 as the state  whose  laws shall
     govern this Agreement,  or in any other state whose laws are held to govern
     this Agreement or any portion hereof.

          "Wells Fargo Bank N.A." means Wells Fargo Bank, National Association.

     Section 1.2 OTHER DEFINITIONAL  TERMS;  RULES OF INTERPRETATION.  The words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement  shall refer to this  Agreement  as a whole and not to any  particular
provision of this Agreement.  All accounting terms not otherwise  defined herein
have the meanings assigned to them in accordance with GAAP. All terms defined in
the UCC and not otherwise  defined herein have the meanings  assigned to them in
the UCC. References to Articles, Sections, subsections,  Exhibits, Schedules and
the like, are to Articles, Sections and subsections of, or Exhibits or Schedules
attached to, this  Agreement  unless  otherwise  expressly  provided.  The words
"include",  "includes"  and  "including"  shall be deemed to be  followed by the
phrase "without  limitation".  Unless the context in which used herein otherwise
clearly  requires,  "or" has the  inclusive  meaning  represented  by the phrase
"and/or".  Defined  terms  include in the singular  number the plural and in the
plural  number the  singular.  Reference to any  agreement  (including  the Loan
Documents),  document or instrument means such agreement, document or instrument
as amended or modified  and in effect from time to time in  accordance  with the
terms thereof (and, if applicable,  in accordance  with the terms hereof and the
other Loan Documents), except where otherwise explicitly provided, and reference
to any  promissory  note includes any  promissory  note which is an extension or
renewal thereof or a substitute or replacement  therefor.  Reference to any law,
rule, regulation,  order, decree, requirement,  policy, guideline,  directive or
interpretation means as amended, modified,  codified,  replaced or reenacted, in
whole or in part, and in effect on the determination  date,  including rules and
regulations promulgated thereunder.

                                  Article II.

                     AMOUNT AND TERMS OF THE CREDIT FACILITY

     Section 2.1 REVOLVING ADVANCES. The Lender agrees, on the terms and subject
to the conditions  herein set forth,  to make advances to the Borrower from time
to time  from the date  all of the  conditions  set  forth  in  Section  4.1 are
satisfied (the "Funding Date") to the Termination Date, on the terms and subject
to the conditions herein set forth (the "Revolving Advances").  The Lender shall
have no obligation  to make a Revolving  Advance if, after giving effect to such
requested  Revolving  Advance,  the sum of the outstanding and unpaid  Revolving
Advances  under this Section 2.1 or otherwise  would exceed the  Borrowing  Base
less the L/C Amount.  The  Borrower's  obligation to pay the Revolving  Advances
shall be evidenced by the Revolving  Note and shall be secured by the Collateral
as provided in Article III. Within the limits set forth in this Section 2.1, the

                                       14
<PAGE>
Borrower may borrow, prepay pursuant to Section 2.12 and reborrow.  The Borrower
agrees to comply with the following  procedures in requesting Revolving Advances
under this Section 2.1:

          (a) The Borrower  shall make each  request for a Revolving  Advance to
the  Lender  before  11:00  a.m.  (Phoenix  time)  of the  day of the  requested
Revolving Advance.  Requests may be made in writing or by telephone,  specifying
the date of the requested Revolving Advance and the amount thereof. Each request
shall be by (i) any officer of either Borrower; or (ii) any person designated as
either Borrower's agent by any officer of either Borrower in a writing delivered
to the Lender; or (iii) any person whom the Lender reasonably  believes to be an
officer of either Borrower or such a designated agent.

          (b) Upon fulfillment of the applicable conditions set forth in Article
IV, the Lender shall disburse the proceeds of the requested Revolving Advance by
crediting the same to the Borrower's  demand  deposit  account  maintained  with
Wells Fargo Bank N.A.  unless the Lender and the Borrower shall agree in writing
to another manner of disbursement. Upon the Lender's request, the Borrower shall
promptly  confirm  each  telephonic  request  for an  Advance by  executing  and
delivering an appropriate  confirmation  certificate to the Lender. The Borrower
shall repay all Advances  even if the Lender does not receive such  confirmation
and even if the person  requesting  an Advance was not in fact  authorized to do
so. Any request for an Advance,  whether written or telephonic,  shall be deemed
to be a representation  by the Borrower that the conditions set forth in Section
4.2 have been satisfied as of the time of the request.

     Section 2.2 LETTERS OF CREDIT.

          (a) Upon the request of either  Borrower,  the Lender may, in its sole
discretion,  on the terms and subject to the conditions herein set forth,  cause
an Issuer to issue,  from the Funding Date to the Termination  Date, one or more
irrevocable  standby  or  documentary  letters  of credit  (each,  a "Letter  of
Credit") for the Borrower's account. In the event the Lender elects to issue one
or more Letters of Credit,  the aggregate  amount at any time outstanding of all
such Letters of Credit shall not exceed the lesser of:

               (i) $500,000.00 less the L/C Amount, or

               (ii) the Borrowing Base less the sum of (A) all  outstanding  and
unpaid Revolving Advances, and (B) the L/C Amount.

Each  Letter of Credit,  if any,  shall be issued  pursuant  to a  separate  L/C
Application  entered  into by the Borrower and the Lender for the benefit of the
Issuer,  completed in a manner  satisfactory  to the Lender and the Issuer.  The
terms and conditions set forth in each such L/C Application shall supplement the
terms and conditions  hereof,  but if the terms of any such L/C  Application and
the terms of this Agreement are inconsistent, the terms hereof shall control.

          (b) No Letter of Credit shall be issued with an expiry date later than
the Termination Date in effect as of the date of issuance.

                                       15
<PAGE>
          (c) Any  request to cause an Issuer to issue a Letter of Credit  under
this Section 2.2 shall be deemed to be a representation by the Borrower that the
conditions  set forth in Section 4.2 have been  satisfied  as of the date of the
request.

     Section 2.3 PAYMENT OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT; OBLIGATION OF
REIMBURSEMENT.

     The Borrower acknowledges that the Lender, as co-applicant,  will be liable
to the Issuer for reimbursement of any and all draws under Letters of Credit and
for all other amounts  required to be paid under the applicable L/C Application.
Accordingly,  the  Borrower  agrees  to pay to the  Lender  any and all  amounts
required to be paid under the applicable L/C  Application,  when and as required
to be paid thereby, and the amounts designated below, when and as designated:

          (a) The Borrower hereby agrees to pay the Lender on the day a draft is
honored  under any Letter of Credit a sum equal to all amounts  drawn under such
Letter of Credit  plus any and all  reasonable  charges  and  expenses  that the
Issuer or the Lender may pay or incur  relative to such draw and the  applicable
L/C Application,  plus interest on all such amounts, charges and expenses as set
forth  below  (the  Borrower's  obligation  to pay all such  amounts  is  herein
referred to as the "Obligation of Reimbursement").

          (b) Whenever a draft is submitted under a Letter of Credit, the Lender
shall make a Revolving  Advance in the amount of the Obligation of Reimbursement
and shall apply the proceeds of such Revolving  Advance thereto.  Such Revolving
Advance  shall be  repayable  in  accordance  with and be  treated  in all other
respects as a Revolving Advance hereunder.

          (c) If a draft is submitted under a Letter of Credit when the Borrower
is unable,  because a Default  Period  then exists or for any other  reason,  to
obtain a Revolving Advance to pay the Obligation of Reimbursement,  the Borrower
shall pay to the Lender on demand and in immediately available funds, the amount
of the Obligation of Reimbursement together with interest, accrued from the date
of the draft until  payment in full at the  Default  Rate.  Notwithstanding  the
Borrower's inability to obtain a Revolving Advance for any reason, the Lender is
irrevocably authorized,  in its sole discretion,  to make a Revolving Advance in
an amount  sufficient  to discharge  the  Obligation  of  Reimbursement  and all
accrued but unpaid interest thereon.

          (d) The Borrower's  obligation to pay any Revolving Advance made under
this Section 2.3,  shall be evidenced by Revolving  Note and shall bear interest
as provided in Section 2.8.

     Section 2.4 SPECIAL  ACCOUNT.  If the Credit Facility is terminated for any
reason whatsoever while any Letter of Credit is outstanding,  the Borrower shall
thereupon  pay the  Lender in  immediately  available  funds for  deposit in the
Special Account an amount equal to the L/C Amount.  The Special Account shall be
an  interest  bearing  account  maintained  for  the  Lender  by  any  financial
institution  acceptable to the Lender.  Any interest earned on amounts deposited
in the Special  Account  shall be credited  to the Special  Account.  Amounts on
deposit in the Special  Account may be applied by the Lender at any time or from

                                       16
<PAGE>
time to time to the Obligations in the Lender's sole  discretion,  and shall not
be subject to  withdrawal  by the  Borrower  so long as the Lender  maintains  a
security  interest  therein.  The Lender  agrees to transfer  any balance in the
Special  Account  to the  Borrower  at such time as the  Lender is  required  to
release its security interest in the Special Account under applicable law.

     Section 2.5 OBLIGATIONS ABSOLUTE.  The Borrower's obligations arising under
Section 2.3 shall be absolute,  unconditional and irrevocable, and shall be paid
strictly in accordance  with the terms of Section 2.3,  under all  circumstances
whatsoever, including (without limitation) the following circumstances:

          (a) any lack of validity or  enforceability of any Letter of Credit or
any other agreement or instrument relating to any Letter of Credit (collectively
the "Related Documents");

          (b) any amendment or waiver of or any consent to departure from all or
any of the Related Documents;

          (c) the existence of any claim,  setoff,  defense or other right which
the Borrower may have at any time,  against any beneficiary or any transferee of
any Letter of Credit (or any Persons for whom any such  beneficiary  or any such
transferee  may be acting),  or other Person,  whether in  connection  with this
Agreement,  the transactions  contemplated herein or in the Related Documents or
any unrelated transactions;

          (d) any statement or any other document  presented under any Letter of
Credit proving to be forged, fraudulent,  invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;

          (e)  payment  by or on behalf of the  Issuer or the  Lender  under any
Letter of Credit against  presentation of a draft or certificate  which does not
strictly comply with the terms of such Letter of Credit; or

          (f) any other  circumstance  or happening  whatsoever,  whether or not
similar to any of the foregoing.

     Section 2.6.1 TERM ADVANCE.

          (a) The Lender  agrees,  on the terms and  subject  to the  conditions
herein set forth,  to make a one time  non-revolving  advance to the Borrower in
the  amount  of  $4,300,000.00   (the  "Term  Advance").   The  Borrower  hereby
acknowledges that as of the date hereof, the Term Advance is fully disbursed and
as  of  the  date  hereof  has  a  current  outstanding   principal  balance  of
$2,014,550.00.

          (b)  The  Borrower's  obligation  to pay the  Term  Advance  shall  be
evidenced by the Term Note and shall be secured by the Collateral as provided in
Article III.

                                       17
<PAGE>
     Section 2.6.2 CAPITAL EXPENDITURES ADVANCE.

          (a) The Lender  agrees,  on the terms and  subject  to the  conditions
herein set forth (including  without  limitation  Section 4.2 and 4.3 below), to
make a non-revolving  advance to the Borrower in the amount of $400,000.00  (the
"Capital Expenditures Advance"). The Borrower hereby acknowledges that as of the
date hereof, the Capital  Expenditures  Advance is fully disbursed and as of the
date hereof has a current outstanding principal balance of $300,010.00.

          (b) The Borrower's  obligation to pay the Capital Expenditures Advance
is evidenced by the Capital  Expenditures  Note and is secured by the Collateral
as provided in Article III.

     Section 2.7.1 PAYMENT OF TERM NOTE. The  outstanding  principal  balance of
the Term Note shall be due and payable as follows:

          (a)  Beginning  on April 1, 2001 and on the  first  day of each  month
thereafter, in equal monthly installments of $46,850.00;

          (b) On the Termination  Date, the entire unpaid  principal  balance of
the Term Note, and all unpaid interest  accrued  thereon,  shall in any event be
due and payable.

     Section  2.7.2  PAYMENT  OF  CAPITAL  EXPENDITURES  NOTE.  The  outstanding
principal  balance of the Capital  Expenditures Note shall be due and payable as
follows:

          (a)  Beginning  on May 31,  2001 and on the  first  day of each  month
thereafter in equal monthly installments of $6,666.00; and

          (b) On the Termination  Date, the entire unpaid  principal  balance of
the Capital Expenditures Note, and all unpaid interest accrued thereon, shall in
any event be due and payable.

     Section  2.8  INTEREST;   MINIMUM   INTEREST  CHARGE;   DEFAULT   INTEREST;
PARTICIPATIONS;  USURY.  Interest accruing on the Notes shall be due and payable
in arrears on the first day of each month.

          (a) REVOLVING NOTE. Except as set forth in Sections 2.8(d), 2.8(f) and
2.8(g),  the  outstanding  principal  balance  (exclusive of that portion of the
Revolving Advances which constitutes the Seasonal  Overadvance and the Letter of
Credit  Overadvance)  of the Revolving Note shall bear interest at the Revolving
Floating Rate.  Except as set forth in Sections 2.8(d),  2.8(f) and 2.8(g),  the
outstanding  principal  balance of that portion of the Revolving  Advances which
constitutes  the  Seasonal  Overadvance  shall  bear  interest  at the  Seasonal
Overadvance  Floating Rate.  Except as set forth in Section  2.8(d),  2.8(f) and
2.8(g),  the  outstanding  principal  balance of that  portion of the  Revolving
Advances which constitutes the Letter of Credit  Overadvance shall bear interest
at the Letter of Credit Overadvance Floating Rate.

                                       18
<PAGE>
          (b) TERM  NOTE.  Except as set forth in  Sections  2.8(d),  2.8(f) and
2.8(g),  the outstanding  principal balance of the Term Note shall bear interest
at the Term Floating Rate.

          (c) MINIMUM  INTEREST  CHARGE.  Notwithstanding  the interest  payable
pursuant to Section  2.8(a),  2.8(b) and 2.8(h),  the Borrower  shall pay to the
Lender  interest of not less than  $15,000.00  per calendar  month (the "Minimum
Interest Charge") during the term of this Agreement,  and the Borrower shall pay
any deficiency  between the Minimum  Interest  Charge and the amount of interest
otherwise  calculated  under  Sections  2.8(a) and 2.8(e) on the date and in the
manner provided in Section 2.10.

          (d) DEFAULT  INTEREST RATE. At any time during any Default Period,  in
the Lender's  sole  discretion  and without  waiving any of its other rights and
remedies, the principal of the Advances outstanding from time to time shall bear
interest at the Default Rate, effective for any periods designated by the Lender
from time to time during that Default Period.

          (e) PARTICIPATIONS. If any Person shall acquire a participation in the
Advances under this Agreement,  the Borrower shall be obligated to the Lender to
pay the full amount of all interest calculated under, along with all other fees,
charges and other  amounts due under this  Agreement,  regardless if such Person
elects to accept interest with respect to its participation at a lower rate than
the Revolving  Floating Rate or the Term Floating  Rate, or otherwise  elects to
accept less than its pro rata share of such fees,  charges and other amounts due
under this Agreement.

          (f) USURY.  In any event no rate change shall be put into effect which
would  result  in a rate  greater  than  the  highest  rate  permitted  by  law.
Notwithstanding  anything to the contrary  contained in any Loan  Document,  all
agreements  which  either now are or which shall become  agreements  between the
Borrower and the Lender are hereby  limited so that in no  contingency  or event
whatsoever  shall the total  liability  for  payments in the nature of interest,
additional  interest and other charges exceed the  applicable  limits imposed by
any applicable usury laws. If any payments in the nature of interest, additional
interest and other charges made under any Loan Document are held to be in excess
of the limits imposed by any  applicable  usury laws, it is agreed that any such
amount held to be in excess shall be considered payment of principal  hereunder,
and the  indebtedness  evidenced  hereby shall be reduced by such amount so that
the total liability for payments in the nature of interest,  additional interest
and  other  charges  shall not  exceed  the  applicable  limits  imposed  by any
applicable  usury laws, in  compliance  with the desires of the Borrower and the
Lender.  This  provision  shall never be  superseded or waived and shall control
every other  provision  of the Loan  Documents  and all  agreements  between the
Borrower and the Lender, or their successors and assigns.

          (g)  SAVINGS  CLAUSE.  The  Borrower  agrees  that the  interest  rate
contracted  for  includes  the  interest  rate set forth  herein  plus any other
charges  or fees set  forth  herein  and  costs and  expenses  incident  to this
transaction  paid by the  Borrower to the extent  that some are deemed  interest
under applicable law.

          (h) CAPITAL EXPENDITURES NOTE. Except as set forth in Sections 2.8(d),
2.8(f) and 2.8(g), the outstanding principal balance of the Capital Expenditures
Note shall  bear  interest  at the  Capital  Expenditures  Floating  Rate.  Said

                                       19
<PAGE>
interest  shall  begin to accrue  upon the  disbursement  of any  portion of the
Capital Expenditures Advance.

     Section 2.9 FEES.

          (a) UNUSED LINE FEE. For the  purposes of this Section  2.9(a),"Unused
Amount" means the Maximum Line reduced by (1) outstanding Revolving Advances and
(2) the L/C Amount.  The Borrower agrees to pay to the Lender an unused line fee
at the rate of  one-half of one  percent  (0.5%) per annum on the average  daily
Unused Amount from the date of this  Agreement to and including the  Termination
Date,  due and  payable  monthly in arrears on the first day of the month and on
the Termination Date.

          (b) LETTER OF CREDIT FEES. The Borrower agrees to pay the Lender a fee
with  respect to each  Letter of Credit,  if any,  accruing on a daily basis and
computed at the annual rate of three percent (3%) of the  aggregate  amount that
may then be drawn on all  issued  and  outstanding  Letters  of Credit  assuming
compliance  with all  conditions for drawing  thereunder  (the  "Aggregate  Face
Amount"), from and including the date of issuance of such Letter of Credit until
such date as such Letter of Credit  shall  terminate by its terms or be returned
to the Lender, due and payable monthly in arrears on the first day of each month
and on the Termination Date.

          (c) LETTER OF CREDIT  ADMINISTRATIVE  FEES. The Borrower agrees to pay
the Lender, on written demand, the administrative  fees charged by the Issuer in
connection  with the honoring of drafts  under any Letter of Credit,  amendments
thereto, transfers thereof and all other activity with respect to the Letters of
Credit at the  then-current  rates  published  by the Issuer  for such  services
rendered on behalf of customers of the Issuer generally.

          (d) AUDIT FEES.  The  Borrower  hereby  agrees to pay the  Lender,  on
demand,  audit fees of $87.50 per hour (or Lender's  then  applicable  rate) per
auditor  in  connection  with any  audits or  inspections  by the  Lender of any
collateral  or the  operations  or business of the  Borrower,  together with all
actual out-of-pocket costs and expenses incurred in conducting any such audit or
inspection  (collectively,  "Out-of-Pockets").  So long as there is not any then
existing  Event of Default or Default  Period,  such audit fees shall not exceed
$5,000.00  per audit plus all  applicable  Out-of-Pockets  and  audits  shall be
performed not more frequently  than four times per annum.  The Lender shall send
to the Borrower an invoice  applicable to such audit fees,  out-of-pocket  costs
and expenses, provided, however, any failure of the Lender to send such invoices
shall not relieve the Borrower of its obligations under this Section 2.9(d).

          (e) OVERADVANCE  FEE. As of the date hereof,  the Borrower owes to the
Lender  $4,200.00 in  overadvance  fees pursuant to Section 2.14 of the Original
Credit Agreement. Said amount shall be due and payable on April 1, 2003.

          (f) WIRE FEES. The Borrower agrees to pay the Lender a wire fee in the
amount of $15.00 for each funding wire initiated by the Lender at the Borrower's
request.

                                       20
<PAGE>
          (g) FOREIGN CREDIT INSURANCE. The Borrower agrees to pay to the Lender
a Foreign Credit Insurance fee in the amount of $1,250.00 per quarter.  Said fee
shall be due and payable in arrears on the last day of each fiscal quarter.

          (h) AMENDMENT FEE. Pursuant to the terms of the Ninth Amendment to the
Credit and Security Agreement and Waiver of Defaults  applicable to the Original
Credit Agreement, the Borrower owes the Lender an amendment fee in the amount of
$15,000.00 (the "Amendment  Fee"). The Amendment Fee shall be due and payable on
April 1, 2003.

          (i) AMENDED AND RESTATED  FEE. The Borrower  shall pay to the Lender a
fully earned  non-refundable fee in the amount of $50,000.00 in consideration of
the Lender's execution and delivery of this Agreement. Said fee shall be due and
payable  as  follows:  $10,000.00  upon  the  execution  and  delivery  of  this
Agreement, $20,000.00 on February 1, 2003 and $20,000.00 on March 1, 2003.

          (j) SUCCESS FEE.  The Borrower  shall pay to the Lender a fully earned
non-refundable fee in the amount of $100,000.00 in the event of a stock (whether
the stock is that of Royal  Precision,  Inc. or the stock of either Borrower) or
asset sale outside of the ordinary  course of business or a liquidation of Royal
Precision,  Inc.'s or either Borrower's  business or a sale of substantially all
of the  assets  of any of them.  Said  fee  shall  be due and  payable  upon the
consummation of any of the above transactions.  Notwithstanding  anything to the
contrary,  no such fee shall be due in the event that  substantially  all of the
issued and  outstanding  stock of Royal  Precision,  Inc.  is  acquired by Royal
Associates,  Inc., or Royal  Precision,  Inc.  merges with a subsidiary of Royal
Associates, Inc.

     Section  2.10  COMPUTATION  OF INTEREST  AND FEES;  WHEN  INTEREST  DUE AND
PAYABLE.  Interest accruing on the outstanding principal balance of the Advances
and fees hereunder  outstanding from time to time shall be computed on the basis
of  actual  number of days  elapsed  in a year of 360  days.  Interest  shall be
payable in arrears on the first day of each month and on the Termination Date.

     Section 2.11 [INTENTIONALLY DELETED]

     Section  2.12  VOLUNTARY   PREPAYMENT;   REDUCTION  OF  THE  MAXIMUM  LINE;
TERMINATION OF THE CREDIT FACILITY BY THE BORROWER. Except as otherwise provided
herein,  the Borrower may prepay the Revolving  Advances in whole at any time or
from time to time in part.  The  Borrower  may prepay the Term  Advance  and the
Capital Expenditures Advance (other than in accordance with Section 2.7.1(a) and
2.7.2(a)),  and terminate the Credit  Facility or reduce the Maximum Line at any
time if it  gives  the  Lender  at  least 30 days'  prior  written  notice.  Any
prepayment of the Term Advance and the Capital  Expenditure  Advance (other than
in  accordance  with Section  2.7.1(a) and 2.7.2(a)) or reduction in the Maximum
Line must be in an amount  not less than  $250,000.00  or an  integral  multiple
thereof.  No  reduction  of the Maximum Line shall in any way affect the Minimum
Interest  Charges.  If the  Borrower  reduces  the  Maximum  Line to  zero,  all
Obligations shall be immediately due and payable. Any partial prepayments of the
Term Note and the  Capital  Expenditures  Note (other  than in  accordance  with
Section  2.7.1(a) and 2.7.2(a))  shall be applied to principal  payments due and
owing in  inverse  order of their  maturities.  Upon  termination  of the Credit

                                       21
<PAGE>
Facility  and payment  and  performance  of all  Obligations,  the Lender  shall
release or terminate the Security  Interest and the Security  Documents to which
the Borrower is entitled by law.

     Section 2.13 [INTENTIONALLY DELETED]

     Section 2.14 MANDATORY PREPAYMENT.  Without notice or demand, if the sum of
the outstanding  principal balance of the Revolving Advances plus the L/C Amount
shall at any time  exceed the  Borrowing  Base,  the  Borrower  shall (i) first,
immediately  prepay the Revolving  Advances to the extent necessary to eliminate
such  excess;  and  (ii) if  prepayment  in full of the  Revolving  Advances  is
insufficient  to  eliminate  such  excess,  pay to  the  Lender  in  immediately
available  funds for  deposit  in the  Special  Account  an amount  equal to the
remaining excess. Any payment received by the Lender under this Section 2.14 may
be applied to the Obligations,  in such order and in such amounts as the Lender,
in its  discretion,  may from time to time determine;  and any prepayment  under
Section  2.12  shall be  applied  as  indicated  and if to the Term  Note or the
Capital  Expenditures  Note in the inverse  order of  maturity.  For each day or
portion thereof that the Revolving Advances shall exceed the Borrowing Base, the
Borrower shall pay to the Lender an overadvance charge (which charge shall be in
addition to and not in lieu of any other  interest,  fees or charges  payable by
Borrower hereunder) in the amount of $500.00; provided however, that if such day
occurs during a Default  Period,  the  overadvance  charge for such day shall be
$1,000.00.

     Section  2.15  PAYMENT.  All  payments  to the  Lender  shall  be  made  in
immediately  available funds and shall be applied to the Obligations one Banking
Day  after  receipt  by the  Lender.  The  Lender  may  hold  all  payments  not
constituting  immediately  available  funds for two (2)  additional  days before
applying them to the Obligations.  Notwithstanding  anything in Section 2.1, the
Borrower  hereby  authorizes  the Lender,  in its discretion at any time or from
time to time without the Borrower's request and even if the conditions set forth
in Section 4.2 would not be satisfied,  to make a Revolving Advance in an amount
equal to the portion of the Obligations from time to time due and payable.

     Section 2.16 PAYMENT ON NON-BANKING  DAYS.  Whenever any payment to be made
hereunder  shall be stated to be due on a day which is not a Banking  Day,  such
payment may be made on the next  succeeding  Banking Day, and such  extension of
time  shall in such case be  included  in the  computation  of  interest  on the
Advances or the fees hereunder, as the case may be.

     Section  2.17 USE OF  PROCEEDS.  The  Borrower  shall use the  proceeds  of
Revolving  Advances,  each Letter of Credit,  and the Term  Advances if any, for
ordinary working capital purposes.

     Section 2.18 LIABILITY RECORDS.  The Lender may maintain from time to time,
at its discretion,  liability records as to the Obligations. All entries made on
any such record shall be presumed  correct  until the Borrower  establishes  the
contrary.  Upon the  Lender's  demand,  the  Borrower  will admit and certify in
writing the exact principal  balance of the  Obligations  that the Borrower then
asserts to be outstanding.  Any billing statement or accounting  rendered by the
Lender shall be  conclusive  and fully binding on the Borrower  absent  manifest
error which must be proven on or before any applicable due date.

                                       22
<PAGE>
                                  Article III.

                      SECURITY INTEREST; OCCUPANCY; SETOFF

     Section  3.1 GRANT OF  SECURITY  INTEREST.  The  Borrower  hereby  pledges,
assigns and grants to the Lender a security interest  (collectively  referred to
as the "Security  Interest") in the Collateral,  as security for the payment and
performance of the Obligations.

     Section 3.2 NOTIFICATION OF ACCOUNT DEBTORS AND OTHER OBLIGORS.  The Lender
may at any time (upon the  occurrence of an Event of Default or during a Default
Period)  notify any account  debtor or other Person  obligated to pay the amount
due that such right to payment has been  assigned or  transferred  to the Lender
for security and shall be paid directly to the Lender. The Borrower will join in
giving such notice if the Lender so requests.  At any time after the Borrower or
the Lender gives such notice to an account debtor or other  obligor,  the Lender
may, but need not, in the Lender's name or in the  Borrower's  name, (a) demand,
sue for,  collect  or  receive  any money or  property  at any time  payable  or
receivable on account of, or securing,  any such right to payment,  or grant any
extension to, make any  reasonable  compromise  or settlement  with or otherwise
agree to waive,  modify, amend or change the obligations  (including  collateral
obligations)  of any  such  account  debtor  or  other  obligor;  and (b) as the
Borrower's agent and  attorney-in-fact,  notify the United States Postal Service
to change  the  address  for  delivery  of the  Borrower's  mail to any  address
designated by the Lender,  otherwise intercept the Borrower's mail, and receive,
open and  otherwise  handle the  Borrower's  mail,  applying all  Collateral  as
permitted  under this  Agreement  and holding all other mail for the  Borrower's
account or forwarding such mail to the Borrower's last known address.

     Section 3.3 ASSIGNMENT OF INSURANCE. As additional security for the payment
and  performance of the  Obligations,  the Borrower hereby assigns to the Lender
any and all monies  (including,  without  limitation,  proceeds of insurance and
refunds of unearned  premiums) due or to become due under,  and all other rights
of the Borrower with respect to, any and all policies of insurance now or at any
time hereafter  covering the Collateral or any evidence  thereof or any business
records or valuable papers pertaining  thereto,  and the Borrower hereby directs
the issuer of any such policy to pay all such monies directly to the Lender.  At
any time,  whether or not a Default Period then exists, the Lender may (but need
not), in the Lender's name or in the Borrower's name,  execute and deliver proof
of  claim,  receive  all such  monies,  endorse  checks  and  other  instruments
representing  payment of such  monies,  and,  during the  existence of a Default
Period, adjust, litigate,  compromise or release any claim against the issuer of
any such policy.

     Section 3.4 OCCUPANCY.

          (a) The Borrower hereby  irrevocably grants to the Lender the right to
take possession of the Premises at any time during a Default Period.

          (b)  The  Lender  may  use  the  Premises   only  to  hold,   process,
manufacture,  sell, use, store, liquidate,  realize upon or otherwise dispose of
goods that are  Collateral  and for other  purposes  that the Lender may in good
faith deem to be related or incidental purposes.

                                       23
<PAGE>
          (c) The Lender's  right to hold the Premises shall cease and terminate
upon the earlier of (i) payment in full and  discharge  of all  Obligations  and
termination of the  Commitment,  and (ii) final sale or disposition of all goods
constituting Collateral and delivery of all such goods to purchasers.

          (d) The Lender  shall not be  obligated to pay or account for any rent
or  other  compensation  for  the  possession,  occupancy  or  use of any of the
Premises; provided, however, that if the Lender does pay or account for any rent
or  other  compensation  for  the  possession,  occupancy  or  use of any of the
Premises,  the Borrower shall  reimburse the Lender promptly for the full amount
thereof.  In addition,  the Borrower  will pay, or reimburse the Lender for, all
taxes (other than income taxes), fees, duties, imposts,  charges and expenses at
any time  incurred  by or imposed  upon the  Lender by reason of the  execution,
delivery, existence,  recordation,  performance or enforcement of this Agreement
or the provisions of this Section 3.4.

     Section 3.5 LICENSE. Without limiting the generality of any of the Security
Documents,  the Borrower hereby grants to the Lender a non-exclusive,  worldwide
and royalty-free license to use or otherwise exploit all trademarks, franchises,
trade names,  copyrights and patents of the Borrower for the purpose of selling,
leasing or  otherwise  disposing  of any or all  Collateral  during any  Default
Period.

     Section 3.6 FINANCING STATEMENT. The Borrower authorizes the Lender to file
from time to time where  permitted by law,  such  financing  statements  against
collateral described as "all personal property" as the Lender deems necessary or
useful  to  perfect  the  Security  Interest.  A carbon,  photographic  or other
reproduction  of this  Agreement or of any  financing  statements  signed by the
Borrower is sufficient as a financing  statement and may be filed as a financing
statement in any state to perfect the security  interests  granted  hereby.  For
this purpose, the following information is set forth:

     Name and address of Debtors:

     FM Precision Golf Manufacturing Corp.
     535 Migeon Avenue
     Torrington, Connecticut  06790
     Federal Tax Identification No. 06 1453898

     FM Precision Golf Sales Corp.
     535 Migeon Avenue
     Torrington, Connecticut  06790
     Federal Tax Identification No. 06 1453897

                                       24
<PAGE>
     Name and address of Secured Party:

     Wells Fargo Business Credit, Inc.
     100 West Washington Street
     7th Floor, MAC S4101-076
     Phoenix, AZ  85003

     Section 3.7 SETOFF.  The Borrower agrees that the Lender may at any time or
from time to time, at its sole  discretion and without demand and without notice
to anyone,  setoff any liability owed to the Borrower by the Lender,  whether or
not due,  against any  Obligation,  whether or not due. In addition,  each other
Person holding a participating  interest in any Obligations shall have the right
to appropriate or setoff any deposit or other liability then owed by such Person
to the  Borrower,  whether or not due, and apply the same to the payment of said
participating  interest,  as fully as if such  Person had lent  directly  to the
Borrower the amount of such participating interest.

                                  Article IV.

                              CONDITIONS OF LENDING

     Section 4.1 CONDITIONS PRECEDENT TO THE INITIAL REVOLVING AND TERM ADVANCES
AND THE INITIAL  LETTER OF Credit.  The Lender's  obligation to make the initial
Revolving Advance, cause to be issued any Letter of Credit, or make the one time
disbursement  of the Term Advance  hereunder  shall be subject to the  condition
precedent that the Lender shall have received all of the following, each in form
and substance satisfactory to the Lender:

          (a) This Agreement, properly executed by the Borrower.

          (b) The  Revolving  Note,  the Term Note and the Capital  Expenditures
Note, properly executed by the Borrower.

          (c) A true and  correct  copy of any and all leases  pursuant to which
the Borrower is leasing the Premises,  together with a landlord's disclaimer and
consent (and Memorandum thereof) with respect to each such lease.

          (d) Current searches of appropriate filing offices showing that (i) no
state or federal  tax liens have been  filed and  remain in effect  against  the
Borrower, (ii) no financing statements or assignments of patents,  trademarks or
copyrights  have been filed and remain in effect  against  the  Borrower  except
those financing statements and assignments of patents,  trademarks or copyrights
relating  to  Permitted  Liens or to liens  held by Persons  who have  agreed in
writing  that upon  receipt of proceeds of the  Advances,  they will deliver UCC
releases  and/or  terminations  and  releases  of such  assignments  of patents,
trademarks or copyrights  satisfactory  to the Lender,  and (iii) the Lender has
duly filed all financing  statements necessary to perfect the Security Interest,
to the extent the Security Interest is capable of being perfected by filing.

                                       25
<PAGE>
          (e) A certificate  of the Secretary or Assistant  Secretary of each of
FMM and FMS certifying as to (i) the  resolutions  of the  Borrower's  directors
and,  if  required,  shareholders,   authorizing  the  execution,  delivery  and
performance of the Loan Documents, (ii) the articles of incorporation and bylaws
of each of FMM and FMS,  and  (iii) the  signatures  of the  officers  or agents
authorized  to execute  and deliver the Loan  Documents  and other  instruments,
agreements and certificates,  including  Advance requests,  on behalf of each of
FMM and FMS.

          (f) Evidence that each of FMM and FMS is duly licensed or qualified to
transact business in all jurisdictions where the character of the property owned
or leased or the nature of the business transacted by it makes such licensing or
qualification necessary.

          (g) A certificate  of an officer of each of FMM and FMS confirming the
representations and warranties set forth in Article V.

          (h) An opinion of  counsel  to each of FMM and FMS,  addressed  to the
Lender, together with the results of a litigation search or searches showing all
actions or  proceedings  where each of FMM and FMS is a defendant or involving a
claim against the Borrower.

          (i) the  Collateral  Assignment  of  Trademarks  properly  executed by
Borrower.

          (j) Guaranties, properly executed by the Guarantors, pursuant to which
Guarantors  unconditionally  guarantees the prompt payment of all Obligations to
the extent set forth in the applicable Guaranty.

          (k) All outstanding  subordinated  debt owed by the Guarantor has been
converted into equity.

          (l) An opinion of counsel to Guarantors, addressed to the Lender.

          (m)  Payment of the fees and  commissions  due through the date of the
Initial  Advance or Letter of Credit under Section 2.9 and expenses  incurred by
the Lender  through  such date and  required  to be paid by the  Borrower  under
Section 9.7,  including  all legal  expenses  incurred  through the date of this
Agreement.

          (n) The Patent Security Agreement properly executed by Borrower.

          (o) The  Collateral  Assignment  of  Trademarks  properly  executed by
Borrower.

          (p) The Amendment to the Mortgage Deed properly executed by FMM.

          (q) The Deeds of Trust  property  executed by Chris  Johnston and Lisa
Johnston.

                                       26
<PAGE>
          (r)  Current  certificates  issued  by the  Secretaries  of  State  of
Delaware and Connecticut  certifying that FMM and FMS are in compliance with all
applicable organizational requirements of such States.

          (s) Management  Support Agreement in favor of Lender properly executed
by John Lauchnor, Frank Mertes and Ronald Chalmers.

          (t)  Assignment  with  respect to Letter of Credit  proceeds  properly
executed by Borrower and Wells Fargo Bank N.A.

          (u)  An   irrevocable   letter  of  credit  in  the  face   amount  of
$1,000,000.00 issued by The Jackson State Bank and Trust Company in favor of the
Lender with an expiration date of not sooner than August 12, 2003 (the "Johnston
Letter of Credit").

          (v) Such  other  documents  as the Lender in its sole  discretion  may
require.

     Section 4.2 CONDITIONS PRECEDENT TO ALL ADVANCES AND LETTERS OF CREDIT. The
Lender's  obligation  to make each  Advance  or to cause the Issuer to issue any
Letter of Credit shall be subject to the further  conditions  precedent  that on
such date:

          (a) the  representations  and  warranties  contained  in Article V are
correct on and as of the date of such Advance or issuance of Letter of Credit as
though  made  on  and  as  of  such  date,   except  to  the  extent  that  such
representations and warranties relate solely to an earlier date; and

          (b) no event has occurred and is continuing, or would result from such
Advance or the  issuance  of such  Letter of Credit,  as the case may be,  which
constitutes a Default or an Event of Default.

     Section 4.3 [INTENTIONALLY DELETED]

                                   Article V.

                         REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Lender as follows:

     Section 5.1 CORPORATE  EXISTENCE AND POWER;  NAME; CHIEF EXECUTIVE  OFFICE;
INVENTORY  AND  EQUIPMENT  LOCATIONS;   TAX  IDENTIFICATION  NUMBER.  FMM  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the State of  Delaware  and is duly  licensed or  qualified  to transact
business in all  jurisdictions  where the  character  of the  property  owned or
leased or the nature of the business  transacted  by it makes such  licensing or
qualification  necessary and failure to so qualify would have a material adverse
effect on the financial  condition,  properties or operations of the Borrower or
any of its Affiliates, taken as a whole. FMS is a corporation duly incorporated,
validly  existing and in good standing  under the laws of the State of Delaware,
and is duly  licensed or  qualified  to transact  business in all  jurisdictions
where  the  character  of the  property  owned or  leased  or the  nature of the

                                       27
<PAGE>
business  transacted by it makes such licensing or  qualification  necessary and
failure to so qualify  would have a  material  adverse  effect on the  financial
condition,  properties or  operations of the Borrower or any of its  Affiliates,
taken as a whole. The Borrower has all requisite power and authority,  corporate
or otherwise,  to conduct its business, to own its properties and to execute and
deliver, and to perform all of its obligations under, the Loan Documents. During
its existence,  the Borrower has done business  solely under the names set forth
in Schedule 5.1 hereto.  The  Borrower's  chief  executive  office and principal
place of business is located at the  addresses set forth in Schedule 5.1 hereto,
and all of the Borrower's records relating to its business or the Collateral are
kept at said  location.  All Inventory and Equipment is located at that location
or at  one of the  other  locations  set  forth  in  Schedule  5.1  hereto.  The
Borrower's  tax  identification  number is  correctly  set forth in Section  3.6
hereto.

     Section  5.2  AUTHORIZATION  OF  BORROWING;   NO  CONFLICT  AS  TO  LAW  OR
AGREEMENTS. The execution,  delivery and performance by the Borrower of the Loan
Documents  and the  borrowings  from  time  to time  hereunder  have  been  duly
authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of the  stockholders  of either FMM or FMS which has not
been  obtained;  (ii)  require any  authorization,  consent or  approval  by, or
registration,  declaration  or filing  with,  or  notice  to,  any  governmental
department,  commission,  board, bureau, agency or instrumentality,  domestic or
foreign,  or any third  party,  except such  authorization,  consent,  approval,
registration,  declaration,  filing or notice as has been obtained, accomplished
or given prior to the date hereof,  or for required  disclosure in filings to be
made with the Securities and Exchange Commission; (iii) violate any provision of
any law, rule or regulation (including, without limitation,  Regulation X of the
Board of  Governors  of the  Federal  Reserve  System)  or of any  order,  writ,
injunction or decree  presently in effect having  applicability to either FMM or
FMS or of the articles of  incorporation or bylaws of either FMM or FMS; (iv) to
the best of  Borrower's  knowledge  after due inquiry,  result in a breach of or
constitute  a default  under any  indenture  or loan or credit  agreement or any
other  material  agreement,  lease or instrument to which either FMM or FMS is a
party or by which it or its properties  may be bound or affected;  or (v) result
in, or require,  the  creation or  imposition  of any  mortgage,  deed of trust,
pledge,  lien,  security  interest or other charge or  encumbrance of any nature
(other than the Security Interest) upon or with respect to any of the properties
now owned or hereafter acquired by either FMM or FMS.

     Section 5.3 LEGAL  AGREEMENTS.  This  Agreement  constitutes  and, upon due
execution by the Borrower,  the other Loan Documents will  constitute the legal,
valid and binding obligations of FMM and FMS, enforceable against FMM and FMS in
accordance with their respective terms,  except as enforceability may be subject
to the effect of any applicable bankruptcy, insolvency,  recognition, moratorium
or similar law affecting creditor's rights.

     Section  5.4  SUBSIDIARIES.  Except as set forth in  Schedule  5.4  hereto,
neither Borrower has Subsidiaries.

     Section 5.5  FINANCIAL  CONDITION;  NO ADVERSE  CHANGE.  The  Borrower  has
heretofore  furnished to the Lender consolidated audited financial statements of
Royal  Precision,  Inc. for its fiscal year ended May 31, 2001 and  consolidated
unaudited financial  statements for the fiscal year-to-date period ended May 31,
2002 and those statements fairly present the Borrower's  financial  condition on
the dates  thereof  and the  results  of its  operations  and cash flows for the

                                       28
<PAGE>
periods then ended and were prepared in accordance with GAAP except for footnote
disclosures  and  year  end  adjustments.  Since  the  date of the  most  recent
financial  statements to the date of this Agreement,  there has been no material
adverse change in the Borrower's business, properties or condition (financial or
otherwise).

     Section  5.6  LITIGATION.  To the best of  Borrower's  knowledge  after due
inquiry,  there  are  no  actions,  suits  or  proceedings  pending  or,  to the
Borrower's knowledge,  threatened against or affecting either Borrower or any of
their Affiliates or the properties of either Borrower or any of their Affiliates
before any court or governmental department,  commission,  board, bureau, agency
or instrumentality,  domestic or foreign,  which, if determined adversely to the
Borrower or any of its Affiliates,  would have a material  adverse effect on the
financial  condition,  properties  or  operations  of the Borrower or any of its
Affiliates.

     Section 5.7  REGULATION  U. Neither  Borrower is engaged in the business of
extending  credit for the purpose of purchasing or carrying margin stock (within
the meaning of  Regulation U of the Board of  Governors  of the Federal  Reserve
System),  and no part of the proceeds of any Advance will be used to purchase or
carry  any  margin  stock or to  extend  credit to  others  for the  purpose  of
purchasing or carrying any margin stock.

     Section 5.8 TAXES.  To the best of Borrower's  knowledge after due inquiry,
the  Borrower  and its  Affiliates  have paid or caused to be paid to the proper
authorities when due all federal,  state and local taxes required to be withheld
by each of them. The Borrower and its Affiliates  have filed all federal,  state
and local tax returns  which to the knowledge of the officers of the Borrower or
any  Affiliate,  as the case may be, are required to be filed,  and the Borrower
and its  Affiliates  have  paid or caused  to be paid to the  respective  taxing
authorities all taxes as shown on said returns or on any assessment  received by
any of them to the extent such taxes have become due.

     Section 5.9 TITLES AND LIENS.  The Borrower has clear and absolute title to
all Collateral  described in the collateral  reports  provided to the Lender and
all other  Collateral,  properties and assets  reflected in the latest financial
statements  referred to in Section 5.5 and all proceeds thereof,  free and clear
of all  mortgages,  security  interests,  liens  and  encumbrances,  except  for
Permitted Liens. No financing statement naming the Borrower as debtor is on file
in any office except to perfect only Permitted Liens.

     Section 5.10 PLANS.  Except as disclosed to the Lender in writing  prior to
the date hereof,  neither Borrower nor any of their Affiliates  maintains or has
maintained any Plan.  Neither Borrower nor any Affiliate has received any notice
or has any knowledge to the effect that it is not in full compliance with any of
the  requirements  of ERISA.  No Reportable  Event or other fact or circumstance
which may have an adverse  effect on the Plan's tax  qualified  status exists in
connection with any Plan. Neither Borrower nor any of their Affiliates has:

          (a) Any accumulated funding deficiency within the meaning of ERISA; or

          (b) Any  liability or knows of any fact or  circumstances  which could
result  in any  liability  to the  Pension  Benefit  Guaranty  Corporation,  the
Internal  Revenue  Service,  the  Department  of  Labor  or any  participant  in

                                       29
<PAGE>
connection with any Plan (other than accrued  benefits which or which may become
payable to participants or beneficiaries of any such Plan).

     Section 5.11 DEFAULT.  The Borrower is in compliance with all provisions of
all  agreements,  instruments,  decrees  and orders to which it is a party or by
which it or its  property is bound or  affected,  the breach or default of which
could have a material  adverse  effect on the  Borrower's  financial  condition,
properties or operations.

     Section 5.12 ENVIRONMENTAL MATTERS.

          (a) DEFINITIONS.  As used in this Agreement, the following terms shall
have the following meanings:

               (i) "Environmental Law" means any federal,  state, local or other
governmental statute,  regulation,  law or ordinance dealing with the protection
of human health and the environment.

               (ii)  "Hazardous  Substances"  means  pollutants,   contaminants,
hazardous substances, hazardous wastes, petroleum and fractions thereof, and all
other  chemicals,  wastes,  substances and materials  listed in, regulated by or
identified in any Environmental Law.

          (b) The Premises were acquired by Borrower from Brunswick Corporation.
In accordance  with the provisions of the  Connecticut  Transfer Act,  Brunswick
Corporation accepted  responsibility for environmental  remediation of the site.
Other than Hazardous  Substances for which Brunswick has assumed  responsibility
and except for the  information  in this Section 5.12 below,  to the  Borrower's
best knowledge  except as disclosed in writing to Lender,  there are not present
in, on or under the Premises any  Hazardous  Substances in such form or quantity
as to create any liability or  obligation  for either the Borrower or the Lender
under  common law of any  jurisdiction  or under any  Environmental  Law, and no
Hazardous Substances have ever been stored, buried, spilled, leaked, discharged,
emitted or released  in, on or under the Premises in such a way as to create any
such liability,  except for those Hazardous  Substances  identified in the April
1996  Phase  II   Environmental   Site   Assessment   of  the  Premises  by  GZA
GeoEnvironmental,   Inc.  with  respect  to  which   Brunswick   Corporation  is
contractually obligated to remediate.

          (c)  To  the  Borrower's  best  knowledge   except  as  identified  in
subparagraph   5.12(d)  below,  the  Borrower  has  not  disposed  of  Hazardous
Substances in such a manner as to create any liability  under any  Environmental
Law.

          (d) Except for the ongoing actions by Brunswick  Corporation under the
Connecticut  Transfer Act and except as noted in the concluding  three sentences
of this subparagraph 5.12(d), there are no material requests,  claims,  notices,
investigations,  demands,  administrative  proceedings,  hearings or litigation,
relating in any way to the Premises or the Borrower,  alleging  liability under,
violation of, or noncompliance with any Environmental Law or any license, permit
or other authorization  issued pursuant thereto that have not been appropriately
resolved to the satisfaction of the  administrative  agency having  jurisdiction
over the matter. Provided,  however, there is an outstanding Notice of Violation

                                       30
<PAGE>
for  noncompliance  with a State of  Connecticut  water  discharge  permit.  The
Borrower  has taken  appropriate  steps to resolve  this issue with the State of
Connecticut  and had made  changes in its  discharge  system to prevent  further
violations.  The Borrower's  financial  statements  make provisions for the fine
that might be imposed.

          (e) Except as set forth in Section  5.12(d),  to the  Borrower's  best
knowledge,  the  Borrower's  businesses  are and  have in the past  always  been
conducted  substantially  in  accordance  with  all  Environmental  Laws and all
licenses,   permits   and  other   authorizations   required   pursuant  to  any
Environmental  Law and necessary for the lawful and efficient  operation of such
businesses are in the Borrower's possession and are in full force and effect. No
permit for which an  application  is  required  under any  Environmental  Law is
scheduled  to expire  within 12 months  (other than those that are renewed on an
annual  basis) and there is no threat known to the Borrower that any such permit
currently held by Borrower will be withdrawn,  terminated, limited or materially
changed.

          (f) To the Borrower's  best  knowledge,  the Premises is not listed on
the  National  Priorities  List,  or any similar  federal,  state or local list,
schedule, log, inventory or database.  Provided, however, the premises have been
listed on the Comprehensive  Environmental Response,  Compensation and Liability
Information System.

          (g)  The  Borrower  has  agreed  to  make   available  to  Lender  all
environmental  assessments  in  Borrower's  possession  or  which  Borrower  has
knowledge of, audits, reports,  permits, licenses and other documents describing
or relating in any way to the Premises or Borrower's businesses (while under the
ownership of the Borrower).

     Section 5.13  SUBMISSIONS  TO LENDER.  All financial and other  information
provided to the Lender by or on behalf of the  Borrower in  connection  with the
Borrower's  request for the credit  facilities  contemplated  hereby is true and
correct in all material respects and, as to projections,  valuations or proforma
financial  statements,  present a good  faith  opinion  as to such  projections,
valuations and proforma condition and results.

     Section 5.14 FINANCING STATEMENTS.  The Borrower has provided to the Lender
signed  financing  statements  sufficient  when  filed to perfect  the  Security
Interest and the other  security  interests  created by the Security  Documents.
When such  financing  statements  are filed in the offices  noted  therein,  the
Lender will have a valid and perfected  security  interest in all Collateral and
all other  collateral  described in the Security  Documents  which is capable of
being perfected by filing financing statements.  None of the Collateral or other
collateral covered by the Security Documents is or will become a fixture on real
estate, unless a sufficient fixture filing is in effect with respect thereto.

     Section  5.15  RIGHTS TO  PAYMENT.  Except as  disclosed  in writing to the
Lender,  each  right to  payment  in  excess  of  $500.00  and each  instrument,
document,   chattel  paper  and  other  agreement   constituting  or  evidencing
Collateral or other collateral  covered by the Security Documents is (or, in the
case of all future Collateral or such other collateral,  will be when arising or
issued) the valid,  genuine and legally  enforceable  obligation,  subject to no
defense,  setoff or  counterclaim,  of the account debtor or other obligor named

                                       31
<PAGE>
therein or in the Borrower's  records  pertaining  thereto as being obligated to
pay such obligation.

                                  Article VI.

                        BORROWER'S AFFIRMATIVE COVENANTS

     So long as the  Obligations  shall remain  unpaid,  or the Credit  Facility
shall  remain   outstanding,   the  Borrower  will  comply  with  the  following
requirements, unless the Lender shall otherwise consent in writing:

     Section 6.1 REPORTING REQUIREMENTS.  The Borrower will deliver, or cause to
be delivered,  to the Lender each of the  following,  which shall be in form and
detail acceptable to the Lender:

          (a) as soon as  available,  and in any event within 120 days after the
end of each fiscal year of the Borrower  consolidated and consolidating  audited
financial  statements of FMM, FMS and the Covenant Entities with the unqualified
opinion of Ernst & Young,  L.L.P.  or such other  independent  certified  public
accountants  selected by the Borrower and acceptable to the Lender, which annual
financial  statements shall include the  consolidated  balance sheet of FMM, FMS
and the  Covenant  Entities  as at the end of such  fiscal  year and the related
consolidated  statements  of income,  retained  earnings and cash flows,  all in
reasonable  detail  and  prepared  in  accordance  with GAAP  applied on a basis
consistent  with the accounting  practices  applied in the financial  statements
referred  to in  Section  5.5  hereof,  together  with a report  signed  by such
accountants stating that in making the investigations necessary for said opinion
they obtained no knowledge,  except as  specifically  stated,  of any Default or
Event of  Default  hereunder  and all  relevant  facts in  reasonable  detail to
evidence,  and  the  computations  as to,  whether  or not  the  Borrower  is in
compliance  with the  requirements  set forth in Sections  6.12 through 6.15 and
Section  7.10  hereof  (provided  that for fiscal  year end May 31,  2002,  such
opinion may have a going concern qualification;

          (b) as soon as available and in any event within 25 days after the end
of each month, a consolidated unaudited/internal balance sheet and statements of
income and retained  earnings of FMM and FMS as at the end of and for such month
and for the year to date period then ended, prepared, if the Lender so requests,
on a consolidating  and consolidated  basis to include the Covenant Entities and
any other  Affiliates,  in reasonable detail and stating in comparative form the
figures  for the  corresponding  date and  periods  in the  previous  year,  all
prepared in accordance  with GAAP,  subject to year-end  audit  adjustments  and
without  footnote  disclosure;  and  accompanied  by a  certificate  of the Vice
President of Finance or any other officer of each of FMM and FMS,  substantially
in the form of Exhibit C hereto stating (i) that such financial  statements have
been prepared in accordance with GAAP, subject to year-end audit adjustments and
the absence  footnotes,  (ii) whether or not such  officer has  knowledge of the
occurrence of any Default or Event of Default hereunder not theretofore reported
and remedied  and, if so,  stating in  reasonable  detail the facts with respect
thereto, and (iii) all relevant facts in reasonable detail to evidence,  and the
computations  as to,  whether  or not the  Borrower  is in  compliance  with the
requirements set forth in Sections 6.12 through 6.15 and 7.10;

                                       32
<PAGE>
          (c)  within  15  days  after  the  end of  the  month,  agings  of the
Borrower's  accounts  receivable  and  its  accounts  payable  and an  inventory
certification report as at the end of such month, provided however, in the event
that Advances are made under the Seasonal Overadvance, the Borrower shall submit
inventory ineligible certifications and associated inventory reports on a weekly
basis.  The obligation to submit such weekly reports shall cease at such time as
the  Advances  outstanding  under  the  Seasonal  Overadvance  are not more than
$500,000.00 for 30 consecutive  days. The weekly reporting  requirement shall be
reinstated in the event that at some point in the future,  Advances in excess of
$500,000.00 are made under the Seasonal Overadvance;

          (d) at least 30 days before the  beginning  of each fiscal year of the
Borrower,  the projected  balance sheets and income statements for each month of
such year,  each in reasonable  detail,  representing  the Borrower's good faith
projections  and certified by the  Borrower's  Vice  President of Finance or any
other officer as being the most accurate projections  available and identical to
the projections used by the Borrower for internal  planning  purposes,  together
with  such  supporting  schedules  and  information  as  the  Lender  may in its
discretion reasonably require;

          (e) immediately after the commencement  thereof,  notice in writing of
all  litigation and of all  proceedings  before any  governmental  or regulatory
agency  affecting  the  Borrower of the type  described in Section 5.12 or which
seek a monetary recovery against the Borrower in excess of $25,000.00;

          (f) as promptly as  practicable  (but in any event not later than five
business  days)  after an  officer  of the  Borrower  obtains  knowledge  of the
occurrence  of any  breach,  default  or event of  default  under  any  Security
Document or any event which constitutes a Default or Event of Default hereunder,
notice of such occurrence,  together with a detailed  statement by a responsible
officer of the  Borrower of the steps  being  taken by the  Borrower to cure the
effect of such breach, default or event;

          (g) as soon as  possible  and in any event  within  30 days  after the
Borrower knows or has reason to know that any  Reportable  Event with respect to
any Plan has occurred, the statement of the Borrower's Vice President of Finance
setting  forth  details as to such  Reportable  Event and the  action  which the
Borrower  proposes to take with  respect  thereto,  together  with a copy of the
notice of such Reportable Event to the Pension Benefit Guaranty Corporation;

          (h) as soon as  possible,  and in any event  within 10 days  after the
Borrower fails to make any quarterly  contribution  required with respect to any
Plan under Section 412(m) of the Internal Revenue Code of 1986, as amended,  the
statement of the Borrower's  Vice President of Finance  setting forth details as
to such failure and the action which the Borrower  proposes to take with respect
thereto,  together  with a copy of any  notice of such  failure  required  to be
provided to the Pension Benefit Guaranty Corporation;

          (i) promptly  upon  knowledge  thereof,  notice of (i) any disputes or
claims by the Borrower's customers in excess of $20,000.00; (ii) credit memos in
excess of  $20,000.00;  (iii) any goods returned to or recovered by the Borrower

                                       33
<PAGE>
valued in excess of $20,000.00;  and (iv) any change in the persons constituting
the Borrower's officers and directors;

          (j) promptly upon knowledge thereof, notice of any loss of or material
damage to any Collateral or other collateral  covered by the Security  Documents
or of any substantial  adverse change in any Collateral or such other collateral
or the prospect of payment thereof;

          (k)  promptly  upon  their  distribution,   copies  of  all  financial
statements,  reports and proxy  statements which the Borrower shall have sent to
its stockholders;

          (l)  promptly  after  the  sending  or filing  thereof,  copies of all
regular and periodic  reports which the Borrower  shall file with the Securities
and Exchange Commission or any national securities exchange;

          (m) daily  copies of all invoices in excess of  $100,000.00,  together
with all shipping documentation applicable thereto;

          (n)  promptly  upon  knowledge  thereof,   notice  of  the  Borrower's
violation of any law, rule or regulation,  the  non-compliance  with which could
materially  and  adversely  affect  the  Borrower's  business  or its  financial
condition; and

          (o)  from  time  to  time,  with  reasonable  promptness,  any and all
receivables schedules, collection reports, deposit records, equipment schedules,
copies of invoices to account debtors,  shipment documents and delivery receipts
for goods sold, and such other material,  reports, records or information as the
Lender may request.

     Section 6.2 BOOKS AND RECORDS;  INSPECTION  AND  EXAMINATION.  The Borrower
will keep  accurate  books of record and  account for itself  pertaining  to the
Collateral and pertaining to the Borrower's business and financial condition and
such other matters as the Lender may from time to time request in which true and
complete  entries will be made in  accordance  with GAAP and,  upon the Lender's
request,  will permit any  officer,  employee,  attorney or  accountant  for the
Lender to audit,  review,  make  extracts from or copy any and all corporate and
financial  books  and  records  of the  Borrower  at all times  during  ordinary
business  hours,  to send and discuss  with account  debtors and other  obligors
requests for  verification  of amounts owed to the Borrower,  and to discuss the
Borrower's affairs with any of its directors, officers, employees or agents. The
Borrower will permit the Lender,  or its  employees,  accountants,  attorneys or
agents, to examine and inspect any Collateral,  other collateral  covered by the
Security  Documents  or any other  property  of the  Borrower at any time during
ordinary  business  hours.  The Lender will  exercise  such care to maintain the
confidentiality  of  the  documents  and  information  obtained  from  any  such
inspection or examination as the Lender takes with respect to similarly situated
borrowers.

     Section 6.3 ACCOUNT VERIFICATION.  The Lender may at any time and from time
to time send or require  the  Borrower  to send  requests  for  verification  of
accounts or notices of assignment  to account  debtors and other  obligors.  The
Lender may also at any time and from time to time telephone  account debtors and
other obligors to verify accounts.

                                       34
<PAGE>
     Section 6.4 COMPLIANCE WITH LAWS.

          (a) The Borrower will (i) comply with the  requirements  of applicable
laws and  regulations,  the  non-compliance  with  which  would  materially  and
adversely  affect its business or its financial  condition and (ii) use and keep
the Collateral,  and require that others use and keep the  Collateral,  only for
lawful purposes,  without violation of any federal,  state or local law, statute
or ordinance.

          (b)  Without  limiting  the  foregoing   undertakings,   the  Borrower
specifically  agrees that it will comply with all applicable  Environmental Laws
and obtain and comply with all permits,  licenses and similar approvals required
by any Environmental Laws, and will not generate,  use, transport,  treat, store
or  dispose  of any  Hazardous  Substances  in such a manner  as to  create  any
liability  or  obligation  under  the  common  law  of any  jurisdiction  or any
Environmental  Law,  except any liability which is only derivative in nature and
which arises solely as a result of the negligence or intentional misconduct of a
third party.

     Section 6.5 PAYMENT OF TAXES AND OTHER  CLAIMS.  The  Borrower  will pay or
discharge,  when due, (a) all taxes, assessments and governmental charges levied
or imposed upon it or upon its income or profits,  upon any properties belonging
to it (including,  without  limitation,  the  Collateral) or upon or against the
creation,  perfection or continuance of the Security Interest, prior to the date
on which  penalties  attach  thereto,  (b) all  federal,  state and local  taxes
required to be withheld  by it, and (c) all lawful  claims for labor,  materials
and supplies which are due and, if unpaid,  might by law become a lien or charge
upon any  properties of the Borrower;  provided,  that the Borrower shall not be
required  to pay any  such  tax,  assessment,  charge  or  claim  whose  amount,
applicability  or  validity  is being  contested  in good  faith by  appropriate
proceedings  and so long as the  Collateral  and Lender's lien thereon is not in
any manner  impaired  by any  enforcement  remedy  available  to the tax levying
entity during the period of such contest.

     Section 6.6 MAINTENANCE OF PROPERTIES.

          (a) The  Borrower  will keep and maintain  the  Collateral,  the other
collateral  covered by the Security  Documents  and all of its other  properties
necessary or useful in its business in good condition,  repair and working order
(normal wear and tear excepted) and will from time to time replace or repair any
worn, defective or broken parts; provided, however, that nothing in this Section
6.6 shall prevent the Borrower from  discontinuing the operation and maintenance
of any of its properties if such  discontinuance  is, in the Lender's  judgment,
desirable in the conduct of the Borrower's  business and not  disadvantageous in
any material respect to the Lender.

          (b) The  Borrower  will  defend the  Collateral  against all claims or
demands of all persons  (other than the Lender)  claiming the  Collateral or any
interest therein.

          (c) The Borrower will keep all Collateral and other collateral covered
by the Security  Documents free and clear of all security  interests,  liens and
encumbrances except Permitted Liens.

                                       35
<PAGE>
     Section 6.7  INSURANCE.  The Borrower will obtain and at all times maintain
insurance  with  insurers  believed  by  the  Borrower  to  be  responsible  and
reputable,  in such  amounts and against  such risks as may from time to time be
reasonably required by the Lender, but in all events in such amounts and against
such risks as exist as of the date  hereof and is usually  carried by  companies
engaged in similar  business and owning  similar  properties in the same general
areas in which the Borrower  operates.  Without  limiting the  generality of the
foregoing,  the Borrower will at all times keep all tangible  Collateral insured
against risks of fire (including so-called extended coverage),  theft, collision
(for  Collateral  consisting of motor vehicles) and such other risks and in such
amounts as the  Lender  may  reasonably  request,  with any loss  payable to the
Lender to the extent of its interest,  and all policies of such insurance  shall
contain a lender's loss payable  endorsement for the Lender's benefit acceptable
to the Lender. All policies of liability insurance required hereunder shall name
the Lender as an additional insured.

     Section 6.8  PRESERVATION  OF  EXISTENCE.  Each  Borrower will preserve and
maintain  its  existence  and  all  of its  rights,  privileges  and  franchises
necessary or desirable in the normal  conduct of its business and shall  conduct
its  business in all  material  respects in an  orderly,  efficient  and regular
manner.

     Section 6.9 DELIVERY OF INSTRUMENTS,  ETC. Upon request by the Lender,  the
Borrower  will  promptly  deliver  to the  Lender  in  pledge  all  instruments,
documents and chattel papers constituting Collateral,  duly endorsed or assigned
by the Borrower.

     Section 6.10 COLLATERAL ACCOUNTS.

          (a) Each  Borrower  agrees to  deposit  in its  respective  Collateral
Accounts or, at the Lender's option, to deliver to the Lender all collections on
Accounts,   contract   rights,   chattel  paper  and  other  rights  to  payment
constituting  Collateral  (but not the  proceeds  of any loan to  Borrower  as a
borrower  made by any party other than Lender and  permitted  under the terms of
this Agreement),  and all other cash proceeds of Collateral,  which the Borrower
may receive immediately upon receipt thereof,  in the form received,  except for
the Borrower's endorsement when deemed necessary.  Until delivered to the Lender
or  deposited  in the  Collateral  Accounts,  all  proceeds  or  collections  of
Collateral shall be held in trust by the Borrower for and as the property of the
Lender and shall not be  commingled  with any funds or property of the Borrower.
Amounts  deposited in the Collateral  Accounts shall not bear interest and shall
not be subject to  withdrawal  by the  Borrower,  except  after full payment and
discharge of all Obligations.  All such collections shall constitute proceeds of
Collateral and shall not constitute  payment of any Obligation.  Collected funds
from the  Collateral  Accounts  shall be  transferred  to the  Lender's  general
account,  and the Lender may deposit in its general account or in the Collateral
Accounts any and all collections received by it directly from the Borrower.  The
Lender may commingle  such funds with other  property of the Lender or any other
person.  The Lender or the Borrower shall, after allowing two Banking Days after
deposit in the Collateral  Accounts,  deposit such funds to the Lender's Account
No.  6355010053  at Wells  Fargo Bank N.A.  The Lender  from time to time at its
discretion shall, after allowing (i) one Banking Day after direct deposit in the
Lender's Account No. 6355010053 at Wells Fargo Bank N.A., and/or (ii) such later
date as may be required for  collection,  apply such funds to the payment of any
and all Obligations,  in any order or manner of application  satisfactory to the
Lender,  provided  however such  application may not be made to payments not yet

                                       36
<PAGE>
due on the Term Note or the Capital  Expenditures  Note or made in contradiction
to the effective Borrowing Base allocation. All items delivered to the Lender or
deposited in the Collateral  Accounts shall be subject to final payment.  If any
such item is returned uncollected, the Borrower will immediately pay the Lender,
or, for items deposited in the Collateral  Accounts,  the bank  maintaining such
account,  the amount of that item, or such bank at its discretion may charge any
uncollected  item to the Borrower's  commercial  account or other  account.  The
Borrower shall be liable as an endorser on all items deposited in the Collateral
Accounts, whether or not in fact endorsed by the Borrower.

          (b) If a Default  or  Default  Period  exists  and upon  demand of the
Lender, the Borrower shall establish one or more lockbox accounts as directed by
the Lender with such banks or depository  institutions  as shall be satisfactory
to the  Lender  and shall  irrevocably  direct all  present  and future  Account
debtors and other Persons obligated to make payments constituting  Collateral to
make such  payments  directly to such  lockbox  account.  All of the  Borrower's
invoices, account statements and other written or oral communications directing,
instructing,  demanding or requesting payment of any Account or any other amount
constituting  Collateral shall conspicuously direct that all payments be made to
such lockbox and shall include such lockbox  address or addresses.  All payments
received in such lockbox accounts shall be processed to the Collateral Accounts.

          (c)  Amounts  deposited  in the  Collateral  Accounts  shall  not bear
interest and shall not be subject to withdrawal  by the  Borrower,  except after
full payment and discharge of all Obligations.

     Section 6.11  PERFORMANCE BY THE LENDER.  If the Borrower at any time fails
to perform or observe any of the foregoing  covenants  contained in this Article
VI or elsewhere  herein,  and if such failure shall continue for a period of ten
calendar days after the Lender gives the Borrower  written notice thereof (or in
the case of the agreements contained in Sections 6.5, 6.7 and 6.10,  immediately
upon the  occurrence  of such  failure,  without  notice or lapse of time),  the
Lender may, but need not,  perform or observe such covenant on behalf and in the
name,  place and stead of the  Borrower  (or,  at the  Lender's  option,  in the
Lender's  name) and may, but need not,  take any and all other actions which the
Lender may reasonably deem necessary to cure or correct such failure (including,
without  limitation,   the  payment  of  taxes,  the  satisfaction  of  security
interests, liens or encumbrances, the performance of obligations owed to account
debtors or other obligors,  the  procurement  and maintenance of insurance,  the
execution of assignments,  security agreements and financing statements, and the
endorsement of instruments);  and the Borrower shall thereupon pay to the Lender
on  demand  the  amount  of all  monies  expended  and all  costs  and  expenses
(including reasonable attorneys' fees and legal expenses) incurred by the Lender
in  connection  with or as a result of the  performance  or  observance  of such
agreements  or the taking of such action by the Lender,  together  with interest
thereon from the date  expended or incurred at the Floating  Rate. To facilitate
the Lender's  performance or observance of such  covenants of the Borrower,  the
Borrower  hereby  irrevocably  appoints the Lender,  or the  Lender's  delegate,
acting alone, as the Borrower's  attorney in fact (which  appointment is coupled
with an interest) with the right (but not the duty) from time to time to create,
prepare,  complete,  execute, deliver, endorse or file in the name and on behalf
of the  Borrower  any  and all  instruments,  documents,  assignments,  security
agreements,   financing   statements,   applications  for  insurance  and  other

                                       37
<PAGE>
agreements and writings required to be obtained, executed, delivered or endorsed
by the Borrower under this Section 6.11.

     Section 6.12 DEBT SERVICE COVERAGE RATIO. [INTENTIONALLY DELETED]

     Section 6.13 NET WORTH. The Borrower covenants that as of May 31, 2002, the
aggregate  consolidated  Net Worth of FMM,  FMS and the  Covenant  Entities  was
$3,718,000.00. The Borrower covenants that said aggregate consolidated Net Worth
as of the end of each  future  month end shall  increase by not less than (or in
the event a decrease  is  allowed,  decrease  by not more than) the  amounts set
forth  below as  measured  from the  immediately  preceding  fiscal  year ending
aggregate consolidated Net Worth.

     MONTH ENDING                         NET WORTH INCREASE (DECREASE)
     ------------                         -----------------------------
     August 31, 2002                             ($1,000,000.00)
     September 30, 2002                          ($1,200,000.00)
     October 31, 2002                            ($1,400,000.00)
     November 30, 2002                           ($1,400,000.00)
     December 31, 2002                           ($1,500,000.00)
     January 31, 2003                            ($1,400,000.00)
     February 28, 2003                           ($1,250,000.00)
     March 31, 2003                              ($800,000.00)
     April 30, 2003                              ($350,000.00)
     May 31, 2003                                $100,000.00

     Section  6.14 NET INCOME.  The  Borrower  covenants  that FMM,  FMS and the
Covenant Entities shall achieve an aggregate consolidated Net Income of at least
(or, in the event a Net Loss is allowed for such fiscal  quarter,  a Net Loss of
not more than) the amount set forth  below for each month as  measured  from the
immediately preceding fiscal year end.

     MONTH ENDING                         NET WORTH INCREASE (DECREASE)
     ------------                         -----------------------------
     August 31, 2002                             ($1,000,000.00)
     September 30, 2002                          ($1,200,000.00)
     October 31, 2002                            ($1,400,000.00)
     November 30, 2002                           ($1,400,000.00)
     December 31, 2002                           ($1,500,000.00)
     January 31, 2003                            ($1,400,000.00)
     February 28, 2003                           ($1,250,000.00)
     March 31, 2003                              ($800,000.00)
     April 30, 2003                              ($350,000.00)
     May 31, 2003                                $100,000.00

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<PAGE>
     Section 6.15 STOP LOSS. The Borrower  covenants that beginning with July 1,
2002,  and  continuing  for each month  thereafter,  FMM,  FMS and the  Covenant
Entities  shall not achieve an aggregate  consolidated  Net Loss  (exclusive  of
non-cash  extraordinary  adjustments)  in excess of $500,000.00 for any month as
measured from the last day of the immediately preceding month.

                                  Article VII.

                               NEGATIVE COVENANTS

     So long as the  Obligations  shall remain  unpaid,  or the Credit  Facility
shall remain  outstanding,  the Borrower agrees that, without the Lender's prior
written consent:

     Section 7.1 LIENS.  The Borrower will not create,  incur or suffer to exist
any mortgage,  deed of trust,  pledge,  lien,  security interest,  assignment or
transfer  upon or of any of its  assets,  now owned or  hereafter  acquired,  to
secure  any  indebtedness;   EXCLUDING,  HOWEVER,  from  the  operation  of  the
foregoing, the following (collectively, "Permitted Liens"):

          (a)  in the  case  of any of  the  Borrower's  property  which  is not
Collateral or other collateral  described in the Security Documents,  covenants,
restrictions,  rights,  easements and minor irregularities in title which do not
materially  interfere  with the  Borrower's  business or operations as presently
conducted;

          (b) mortgages,  deeds of trust, pledges, liens, security interests and
assignments  in  existence on the date hereof and listed in Schedule 7.1 hereto,
securing indebtedness for borrowed money permitted under Section 7.2;

          (c) the Security Interest and liens and security  interests created by
the Security Documents; and

          (d) purchase money security interests relating to Capital Expenditures
(and which attach only to the assets acquired by such Capital Expenditures) made
after the date of this Agreement by the Borrower or any Affiliate so long as the
Borrower is in, and  maintains,  compliance  with every other  provision of this
Agreement.

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<PAGE>
          (e) liens for governmental  charges or levies not yet due or which are
being  contested  in good faith by  appropriate  action  and for which  adequate
reserves in accordance with GAAP have been made; legal or equitable encumbrances
deemed to exist by reason of the  existence  of any  litigation  or other  legal
proceedings or arising out of any judgment or award, the existence of which does
not violate Section 8.1(h); vendors',  carriers',  warehousemen's,  repairmen's,
construction  or other like liens  arising by  operation  of law in the ordinary
course of  business  or  incident  to the  construction  or  improvement  of any
property  in  respect  of  obligations  which are not yet due or which are being
contested  in good  faith by  appropriate  proceedings  by or on  behalf  of the
Borrower  and for which an  adequate  reserve in  accordance  with GAAP has been
made, all of which in the aggregate may not secure in excess of $100,000.00; and

          (f) real property taxes or assessments not yet due and payable.

     Section 7.2 INDEBTEDNESS.  The Borrower will not incur,  create,  assume or
permit to exist any indebtedness or liability on account of deposits or advances
or any  indebtedness  for  borrowed  money or  letters  of credit  issued on the
Borrower's  behalf, or any other  indebtedness or liability  evidenced by notes,
bonds, debentures or similar obligations, except:

          (a) indebtedness arising hereunder;

          (b)  indebtedness  of the Borrower in existence on the date hereof and
listed in Schedule 7.2 hereto;

          (c)  indebtedness  relating  to liens  permitted  in  accordance  with
Section 7.1;

          (d) indebtedness permitted pursuant to Section 7.19.

     Section 7.3 GUARANTIES. The Borrower will not assume, guarantee, endorse or
otherwise  become  directly  or  contingently  liable  in  connection  with  any
obligations of any other Person, except:

          (a) the  endorsement  of  negotiable  instruments  by the Borrower for
deposit  or  collection  or  similar  transactions  in the  ordinary  course  of
business;

          (b)   guaranties,   endorsements   and  other  direct  or   contingent
liabilities in connection with the obligations of other Persons, in existence on
the date hereof and listed in Schedule 7.2 hereto; and

          (c) indemnifications arising in the ordinary course of business.

     Section 7.4 INVESTMENTS AND SUBSIDIARIES.

          (a) The Borrower will not purchase or hold  beneficially  any stock or
other  securities or evidences of  indebtedness  of, make or permit to exist any
loans or advances to, or make any investment or acquire any interest  whatsoever

                                       40
<PAGE>
in,  any  other  Person,  including  specifically  but  without  limitation  any
partnership or joint venture, except:

               (i)  investments  in direct  obligations  of the United States of
America or any agency or  instrumentality  thereof whose obligations  constitute
full  faith and credit  obligations  of the  United  States of America  having a
maturity of one year or less, commercial paper issued by U.S. corporations rated
"A-1" or "A-2" by  Standard  & Poors  Corporation  or "P-1" or "P-2" by  Moody's
Investors  Service or certificates of deposit or bankers'  acceptances  having a
maturity  of one year or less issued by members of the  Federal  Reserve  System
having  deposits in excess of  $100,000,000  (which  certificates  of deposit or
bankers'  acceptances  are  fully  insured  by  the  Federal  Deposit  Insurance
Corporation);

               (ii) travel  advances  or loans to the  Borrower's  officers  and
employees not exceeding at any one time an aggregate of $75,000.00; and

               (iii) advances in the form of progress payments, prepaid rent not
exceeding 2 months or security deposits.

               (iv) loans,  advances or any other credits at any time  disbursed
and  outstanding  after the date of this Agreement shown on the balance sheet of
Borrower  granted to the Covenant  Entities not to exceed in the  aggregate  (i)
$1,500,000.00  through  the first  anniversary  date of the Funding  Date,  (ii)
$2,250,000.00 after the first anniversary of the Funding Date through the second
anniversary  of the  Funding  Date,  and (iii)  $3,000,000.00  after the  second
anniversary of the Funding Date through the Termination Date.

               (v)  payments  to the  Covenant  Entities  so long  as  they  are
expensed  in  accordance  with  GAAP,  and  appear on all  statements  of income
required pursuant to Section 6.1

          (b) The  Borrower  will not create or permit to exist any  Subsidiary,
other than the  Subsidiar(y)(ies)  in existence on the date hereof and listed in
Schedule 5.4.

     Section  7.5  DIVIDENDS.  Except  for  dividends  payable  solely  to Royal
Precision, Inc. for actual operating expenses of Royal Precision, Inc., Borrower
will not declare or pay any dividends  (other than  dividends  payable solely in
stock of the  Borrower) on any class of its stock or make any payment on account
of the purchase,  redemption or other  retirement of any shares of such stock or
make any distribution in respect thereof, either directly or indirectly.

     Section 7.6 SALE OR TRANSFER OF ASSETS;  SUSPENSION OF BUSINESS OPERATIONS.
The Borrower will not sell, lease, assign,  transfer or otherwise dispose of (i)
the stock of any Subsidiary,  (ii) all or a substantial  part of its assets,  or
(iii) any Collateral or any interest therein (whether in one transaction or in a
series of  transactions) to any other Person other than the sale of Inventory in
the  ordinary  course of business  and will not  liquidate,  dissolve or suspend
business  operations.  The Borrower will not in any manner transfer any property
without prior or present receipt of full and adequate consideration.

                                       41
<PAGE>
     Section 7.7 CONSOLIDATION AND MERGER; ASSET ACQUISITIONS. The Borrower will
not  consolidate  with or merge into any Person,  or permit any other  Person to
merge into it, or acquire (in a transaction  analogous in purpose or effect to a
consolidation  or  merger)  all or  substantially  all the  assets  of any other
Person.

     Section  7.8 SALE AND  LEASEBACK.  The  Borrower  will not  enter  into any
arrangement,  directly or indirectly, with any other Person whereby the Borrower
shall sell or  transfer  any real or  personal  property,  whether  now owned or
hereafter acquired, and then or thereafter rent or lease as lessee such property
or any part thereof or any other property which the Borrower  intends to use for
substantially  the same  purpose  or  purposes  as the  property  being  sold or
transferred.

     Section 7.9  RESTRICTIONS  ON NATURE OF  BUSINESS.  The  Borrower  will not
engage in any line of business materially  different from that presently engaged
in by the Borrower and will not purchase,  lease or otherwise acquire assets not
related to its business.

     Section 7.10 CAPITAL EXPENDITURES.  FMM, FMS and the Covenant Entities will
not incur or contract to incur  Capital  Expenditures  in the  aggregate of more
than  $50,000.00 for the fiscal quarter ending August 31, 2002,  $100,000.00 for
the fiscal quarter ending November 30, 2002,  $200,000.00 for the fiscal quarter
ending  February 28, 2003 and  $650,000.00 for the fiscal quarter ending May 31,
2003,  as each of said  figures is  measured  from May 31,  2002.  In  addition,
commencing  with the Borrower's 2004 fiscal year and continuing each fiscal year
thereafter, the Borrower and the Covenant Entities will not incur or contract to
incur Capital  Expenditures in the aggregate of more than $650,000.00 during any
fiscal year. In addition,  FMM, FMS and the Covenant  Entities will not incur or
contract  to incur  Capital  Expenditures  in excess of  $500,000.00  in any one
transaction  without the prior  approval of Lender which approval can be granted
or withheld in the Lender's sole discretion.

     Section 7.11 ACCOUNTING. The Borrower will not adopt any material change in
accounting  principles  other than as required by GAAP.  The  Borrower  will not
adopt, permit or consent to any change in its fiscal year.

     Section 7.12  DISCOUNTS,  ETC. The Borrower will not, after notice from the
Lender during the existence of any Default Period, grant any discount, credit or
allowance to any customer of the Borrower or accept any return of goods sold, or
at any time  (whether  before or after  notice from the Lender)  modify,  amend,
subordinate,  cancel or terminate the  obligation of any account debtor or other
obligor of the Borrower.

     Section 7.13 DEFINED  BENEFIT  PENSION PLANS.  The Borrower will not adopt,
create,  assume or become a party to any defined  benefit  pension plan,  unless
disclosed to the Lender pursuant to Section 5.10.

     Section  7.14 OTHER  DEFAULTS.  The  Borrower  will not permit any  breach,
default or event of default to occur under any note, loan agreement,  indenture,
lease,  mortgage,  contract for deed,  security  agreement or other  contractual
obligation  binding  upon the  Borrower,  which in the  aggregate  are valued in
excess of $100,000.00.

                                       42
<PAGE>
     Section 7.15 PLACE OF BUSINESS;  NAME.  The Borrower  will not transfer its
chief executive office or principal place of business, or move, relocate,  close
or sell any  business  location.  The  Borrower  will not  permit  any  tangible
Collateral  or any records  pertaining  to the  Collateral  to be located in any
state or area in which,  in the event of such  location,  a financing  statement
covering  such  Collateral  would be  required  to be, but has not in fact been,
filed in order to perfect the Security  Interest.  The Borrower  will not change
its name.

     Section 7.16  ORGANIZATIONAL  DOCUMENTS.  The  Borrower  will not amend its
certificate of incorporation, articles of incorporation or bylaws.

     Section 7.17 SALARIES.  The Borrower will not pay excessive or unreasonable
salaries,   bonuses,   commissions,   consultant  fees  or  other   compensation
(collectively "Compensation"); or increase the Compensation of any director in a
director capacity,  officer or any member of their families, by more than 10% in
any one year, either  individually or for all such persons in the aggregate,  or
pay any such increase  from any source other than profits  earned in the year of
payment.  Notwithstanding  anything  to the  contrary,  in no  event  shall  the
Borrower  increase the  Compensation  of any director,  officer or any member of
their families during the existence of an Event of Default or Default Period.

     Section 7.18 ISSUANCE OF STOCK/LOSS  OF VOTING  CONTROL.  The Borrower will
not issue or sell any stock of the  Borrower.  The Borrower  shall not permit or
suffer to occur any transfer,  assignment, pledge or other disposition of any or
all of the issued and  outstanding  stock of the  Borrower  so as to  materially
change the voting control of the Borrower.

     Section 7.19 PAYMENTS TO AFFILIATES. Neither FMM nor FMS shall, without the
express written  consent of Lender,  which consent may be granted or withheld in
Lender's sole discretion, make any transfer,  conveyance, loan or payment of any
kind to FMS (from FMM),  FMM (from FMS) to any  Covenant  Entity or to any other
Affiliates (i) in the aggregate in excess of  $1,500,000.00  per fiscal year, or
(ii) which is not for fair and adequate consideration.

     Section 7.20 MANAGEMENT CONTROL. The Borrower shall not permit or suffer to
occur any change in its  current  executive  management  personnel  without  the
consent of the Lender, which consent shall not be unreasonably withheld.

                                 Article VIII.

                     EVENTS OF DEFAULT, RIGHTS AND REMEDIES

     Section 8.1 EVENTS OF DEFAULT.  "Event of Default",  wherever  used herein,
means any one of the following events:

          (a) Default in the payment of the Obligations when they become due and
payable;

          (b)  Failure  to pay when due any  amount  specified  in  Section  2.3
relating  to the  Borrower's  Obligation  of  Reimbursement,  or  failure to pay
immediately  when due or upon  termination  of the Credit  Facility  any amounts
required to be paid for deposit in the Special Account under Section 2.4 or;

                                       43
<PAGE>
          (c) Default in the payment of any fees, commissions, costs or expenses
required to be paid by the Borrower under this Agreement;

          (d)  Default  in  the  performance,  or  breach,  of any  covenant  or
agreement of the Borrower  contained in this Agreement  other than a covenant or
agreement  which  is  specifically  dealt  with  in  this  Section  8.1  and the
continuance thereof for a period of 5 days after the actual knowledge thereof by
an executive  officer of either  Borrower or receipt of written  notice  thereof
from the Lender; or

          (e)  Any of  FMM,  FMS or  any  Covenant  Entity  shall  be or  become
insolvent,  or admit in writing  its  inability  to pay its or his debts as they
mature,  or make an assignment for the benefit of creditors;  or any of FMM, FMS
or any  Covenant  Entity  shall apply for or consent to the  appointment  of any
receiver,  trustee, or similar officer for it or for all or any substantial part
of its property; or such receiver, trustee or similar officer shall be appointed
without the  application or consent of FMM, FMS or any Covenant  Entity,  as the
case  may be;  or any of FMM,  FMS or a  Covenant  Entity  shall  institute  (by
petition, application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization,  arrangement,  readjustment of debt, dissolution, liquidation or
similar  proceeding  relating to it under the laws of any  jurisdiction;  or any
such  proceeding  shall be instituted  (by petition,  application  or otherwise)
against  FMM, FMS or any  Covenant  Entity and shall not be dismissed  within 60
calendar  days; or any judgment,  writ,  warrant of  attachment,  garnishment or
execution or similar  process  shall be issued or levied  against a  substantial
part of the property of FMM, FMS or any Covenant Entity; or

          (f) A petition  shall be filed by or against (which when filed against
shall not be dismissed  within 60 calendar days) any of FMM, FMS or any Covenant
Entity under the United States Bankruptcy Code naming FMM or FMS as debtor; or

          (g)  Any  representation  or  warranty  made by the  Borrower  in this
Agreement,  by  Guarantors  in any guaranty  delivered to the Lender,  or by the
Borrower (or any of its officers) or Guarantors in any  agreement,  certificate,
instrument or financial statement or other statement  contemplated by or made or
delivered  pursuant to or in connection with this Agreement or any such guaranty
shall prove to have been  incorrect  in any  material  respect when deemed to be
effective;

          (h) The  rendering  against  either  FMM or FMS of a  final  judgment,
decree  or order  for the  payment  of money in  excess  of  $25,000.00  and the
continuance of such judgment,  decree or order unsatisfied and in effect for any
period of 30 consecutive days without a stay of execution;

          (i) A default  under any bond,  debenture,  note or other  evidence of
indebtedness  of either  Borrower  owed to any Person other than the Lender,  or
under  any  indenture  or other  instrument  under  which any such  evidence  of
indebtedness  has been issued or by which it is governed,  or under any lease of
any of the Premises, in any case in excess of $25,000.00,  and the expiration of

                                       44
<PAGE>
the  applicable  period  of  grace,  if  any,  specified  in  such  evidence  of
indebtedness, indenture, other instrument or lease;

          (j) Any Reportable  Event,  which the Lender  determines in good faith
might constitute  grounds for the termination of any Plan or for the appointment
by the  appropriate  United States District Court of a trustee to administer any
Plan, shall have occurred and be continuing 30 days after written notice to such
effect shall have been given to the Borrower by the Lender;  or a trustee  shall
have been appointed by an appropriate United States District Court to administer
any Plan; or the Pension  Benefit  Guaranty  Corporation  shall have  instituted
proceedings  to  terminate  any Plan or to appoint a trustee to  administer  any
Plan; or the Borrower  shall have filed for a distress  termination  of any Plan
under Title IV of ERISA; or the Borrower shall have failed to make any quarterly
contribution  required  with  respect  to any Plan under  Section  412(m) of the
Internal Revenue Code of 1986, as amended,  which the Lender  determines in good
faith may by itself,  or in  combination  with any such failures that the Lender
may determine are likely to occur in the future,  result in the  imposition of a
lien on the Borrower's assets in favor of the Plan;

          (k) An event of default  shall  occur under any  Security  Document or
under any other security agreement, mortgage, deed of trust, assignment or other
instrument or agreement  securing any  obligations of the Borrower  hereunder or
under any note;

          (l) An event of default shall occur under that certain  Second Amended
and Restated Credit and Security  Agreement of even date herewith by and between
Lender,  Royal  Grip,  Inc.  and Royal  Grip  Headwear  Company  (the "RG Credit
Agreement"),  as the RG  Credit  Agreement  may from  time to time be  modified,
amended or restated. Borrower hereby acknowledges that it shall have no right to
approve any such modifications, amendments or restatements;

          (m) An event of default shall occur under any document,  instrument or
agreement  executed from time to time in connection with the RG Credit Agreement
(collectively,  the "RG Security  Documents"),  as the RG Security Documents may
from time to time be modified, amended or restated. Borrower hereby acknowledges
that it shall have no right to approve  any such  modifications,  amendments  or
restatements;

          (n) Either Borrower shall  liquidate,  dissolve,  terminate or suspend
its  business  operations  or  otherwise  fail to operate  its  business  in the
ordinary  course,  or sell all or substantially  all of its assets,  without the
Lender's prior written consent;

          (o) Either Borrower shall fail to pay, withhold,  collect or remit any
tax or tax  deficiency  when due (other than any tax  deficiency  which is being
contested  in good faith and by proper  proceedings  and for which it shall have
set aside on its books  adequate  reserves  therefor)  or notice of any state or
federal tax liens shall be filed or issued;

          (p) Default in the  payment of any amount owed by the  Borrower to the
Lender other than any indebtedness arising hereunder;

                                       45
<PAGE>
          (q) Any  Guarantors  shall  repudiate,  purport  to  revoke or fail to
perform any such  Guarantor's  obligations  under such  Guarantor's  guaranty in
favor of the Lender, any Guarantors shall cease to validly exist;

          (r) Any event or circumstance with respect to the Borrower shall occur
such that the Lender shall believe in good faith that the prospect of payment of
all or any part of the  Obligations or the performance by the Borrower under the
Loan  Documents  is impaired or any material  adverse  change in the business or
financial condition of the Borrower shall occur.

          (s) Any breach,  default or event of default by or attributable to any
Affiliate under any agreement between such Affiliate and the Lender.

     Section 8.2 RIGHTS AND REMEDIES.  During any Default Period, the Lender may
exercise any or all of the following rights and remedies:

          (a) the Lender may, by notice to the Borrower,  declare the Commitment
to be terminated, whereupon the same shall forthwith terminate;

          (b) the Lender may, by notice to the Borrower, declare the Obligations
to be forthwith due and payable,  whereupon all Obligations  shall become and be
forthwith due and payable, without presentment,  notice of dishonor,  protest or
further notice of any kind, all of which the Borrower hereby expressly waives;

          (c) the Lender may, without notice to the Borrower and without further
action,  apply any and all money  owing by the  Lender  to the  Borrower  to the
payment of the Obligations;

          (d) the Lender may make demand upon the Borrower and,  forthwith  upon
such demand, the Borrower will pay to the Lender in immediately  available funds
for deposit in the Special  Account  pursuant to Section 2.14 an amount equal to
the aggregate  maximum amount  available to be drawn under all Letters of Credit
then   outstanding,   assuming   compliance  with  all  conditions  for  drawing
thereunder;

          (e) the  Lender  may  exercise  and  enforce  any and all  rights  and
remedies  available  upon default to a secured  party under the UCC,  including,
without limitation,  the right to take possession of Collateral, or any evidence
thereof,  proceeding  without judicial process or by judicial process (without a
prior hearing or notice thereof, which the Borrower hereby expressly waives) and
the right to sell,  lease or otherwise  dispose of any or all of the Collateral,
and,  in  connection  therewith,  the  Borrower  will  on  demand  assemble  the
Collateral  and make it available to the Lender at a place to be  designated  by
the Lender which is reasonably convenient to both parties;

          (f) the Lender may exercise and enforce its rights and remedies  under
the Loan Documents; and

                                       46
<PAGE>
          (g) the Lender may exercise any other rights and remedies available to
it by law or agreement.

Notwithstanding  the  foregoing,  upon the  occurrence  of an  Event of  Default
described in  subsections  (e) or (f) of Section 8.1, the  Obligations  shall be
immediately due and payable automatically without presentment,  demand,  protest
or notice of any kind.

     Section  8.3 CERTAIN  NOTICES.  If notice to the  Borrower of any  intended
disposition of Collateral or any other  intended  action is required by law in a
particular  instance,  such notice shall be deemed  commercially  reasonable  if
given (in the manner specified in Section 9.3) at least ten calendar days before
the date of intended disposition or other action.

                                  Article IX.

                                  MISCELLANEOUS

     Section  9.1 NO  WAIVER;  CUMULATIVE  REMEDIES.  No failure or delay by the
Lender in exercising any right,  power or remedy under the Loan Documents  shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
such right,  power or remedy preclude any other or further  exercise  thereof or
the exercise of any other right,  power or remedy under the Loan Documents.  The
remedies  provided in the Loan Documents are cumulative and not exclusive of any
remedies provided by law.

     Section 9.2  AMENDMENTS,  ETC. No amendment,  modification,  termination or
waiver of any  provision of any Loan Document or consent to any departure by the
Borrower  therefrom  or any release of a Security  Interest  shall be  effective
unless  the same shall be in writing  and  signed by the  Lender,  and then such
waiver or consent shall be effective  only in the specific  instance and for the
specific  purpose for which given. No notice to or demand on the Borrower in any
case shall  entitle  the  Borrower  to any other or further  notice or demand in
similar or other circumstances.

     Section 9.3 ADDRESSES FOR NOTICES, ETC.

          (a)  Except as  otherwise  expressly  provided  herein,  all  notices,
requests, demands and other communications provided for under the Loan Documents
shall be in writing and shall be (i)  personally  delivered,  (ii) sent by first
class  United  States  mail,  (iii)  sent  by  overnight   courier  of  national
reputation,  or  (iv)  transmitted  by  telecopy,  in  each  case  addressed  or
telecopied  to the  party to whom  notice  is  being  given  at its  address  or
telecopier number as set forth below:

     If to FMM or FMS:

     c/o FM Precision Golf Manufacturing Corp.
     535 Migeon Avenue
     Torrington, Connecticut  06790
     Telecopier: (602) 627-0271
     Attention: Mr. John Lauchnor

                                       47
<PAGE>
     If to the Lender:

     Wells Fargo Business Credit, Inc.
     100 West Washington Street
     7th Floor, MAC S4101-076
     Phoenix, AZ  85003
     Telecopier: (602) 378-6215
     Attention: Keith Budoff

or,  as to each  party,  at such  other  address  or  telecopier  number  as may
hereafter  be  designated  by such party in a written  notice to the other party
complying  as to  delivery  with the terms of this  Section.  All such  notices,
requests, demands and other communications shall be deemed to have been given on
(a) the date received if personally delivered, (b) when deposited in the mail if
delivered by mail,  (c) the date sent if sent by overnight  courier,  or (d) the
date of transmission  if delivered by telecopy,  except that notices or requests
to the  Lender  pursuant  to any of the  provisions  of  Article II shall not be
effective until received by the Lender.

          (b) A copy of each notice to Borrower shall also be sent to:

     Mr. Ken Warren
     5134 Blazer Parkway
     Dublin, Ohio  43017
     Telecopier: (614) 766-1974

     The copies of  notices  sent in  accordance  with this  Section  9.3(b) are
informational  and are not required in order for the notices  given  pursuant to
Section 9.3(a) above to be effective.

     Section 9.4 FURTHER DOCUMENTS.  The Borrower will from time to time execute
and  deliver  or  endorse  any  and  all  instruments,  documents,  conveyances,
assignments,  security agreements, financing statements and other agreements and
writings  that the Lender may  reasonably  request in order to secure,  protect,
perfect or enforce the Security  Interest or the Lender's  rights under the Loan
Documents  (but any  failure to request or assure  that the  Borrower  executes,
delivers  or  endorses  any such item shall not  affect or impair the  validity,
sufficiency or enforceability  of the Loan Documents and the Security  Interest,
regardless  of  whether  any such  item was or was not  executed,  delivered  or
endorsed in a similar context or on a prior occasion).

     Section 9.5  COLLATERAL.  This  Agreement  does not  contemplate  a sale of
accounts,  contract  rights or chattel  paper,  and,  as  provided  by law,  the
Borrower is entitled to any surplus and shall remain liable for any  deficiency.
The  Lender's  duty of care with respect to  Collateral  in its  possession  (as
imposed by law) shall be deemed  fulfilled  if it exercises  reasonable  care in
physically keeping such Collateral,  or in the case of Collateral in the custody
or possession of a bailee or other third person,  exercises  reasonable  care in
the  selection  of the bailee or other  third  person,  and the Lender  need not
otherwise preserve, protect, insure or care for any Collateral. The Lender shall
not be obligated  to preserve  any rights the  Borrower  may have against  prior

                                       48
<PAGE>
parties,  to realize on the  Collateral  at all or in any  particular  manner or
order or to apply any cash proceeds of the Collateral in any particular order of
application.

     Section 9.6 COSTS AND  EXPENSES.  The Borrower  agrees to pay on demand all
costs and expenses,  including (without limitation) attorneys' fees, incurred by
the  Lender  in  connection  with  the  Obligations,  this  Agreement,  the Loan
Documents,  any Letters of Credit,  and any other document or agreement  related
hereto or thereto, and the transactions  contemplated hereby,  including without
limitation  all such costs,  expenses and fees incurred in  connection  with the
negotiation,  preparation,  execution, amendment,  administration,  performance,
collection  and  enforcement  of the  Obligations  and all  such  documents  and
agreements and the creation, perfection, protection,  satisfaction,  foreclosure
or enforcement of the Security Interest.

     Section 9.7 INDEMNITY.  In addition to the payment of expenses  pursuant to
Section 9.7, FMM and FMS, jointly and severally, agree to indemnify,  defend and
hold  harmless the Lender,  and any of its  participants,  parent  corporations,
subsidiary corporations,  affiliated corporations,  successor corporations,  and
all present and future officers, directors,  employees,  attorneys and agents of
the  foregoing  (the  "Indemnitees")  from  and  against  any of  the  following
(collectively, "Indemnified Liabilities"):

               (i) any and all transfer taxes, documentary taxes, assessments or
charges  made by any  governmental  authority  by  reason of the  execution  and
delivery of the Loan Documents or the making of the Advances;

               (ii) any claims,  loss or damage to which any  Indemnitee  may be
subjected if any  representation or warranty contained in Section 5.12 proves to
be  incorrect  in any respect or as a result of any  violation  of the  covenant
contained in Section 6.4(b); and

               (iii) any and all other liabilities,  losses, damages, penalties,
judgments,  suits,  claims,  costs and expenses of any kind or nature whatsoever
(including,  without  limitation,  the  reasonable  fees  and  disbursements  of
counsel)  in  connection  with  the  foregoing  and  any  other   investigative,
administrative or judicial proceedings,  whether or not such Indemnitee shall be
designated  a party  thereto,  which may be imposed on,  incurred by or asserted
against any such  Indemnitee,  in any manner  related to or arising out of or in
connection  with the making of the Advances and the Loan Documents or the use or
intended use of the proceeds of the Advances.

If any investigative,  judicial or administrative proceeding arising from any of
the foregoing is brought against any Indemnitee, upon such Indemnitee's request,
the  Borrower,  or counsel  designated by the Borrower and  satisfactory  to the
Indemnitee, will resist and defend such action, suit or proceeding to the extent
and in the manner directed by the  Indemnitee,  at the Borrower's sole costs and
expense.  Each  Indemnitee will use its best efforts to cooperate in the defense
of any  such  action,  suit  or  proceeding.  If the  foregoing  undertaking  to
indemnify,  defend and hold harmless may be held to be unenforceable  because it
violates any law or public  policy,  the Borrower  shall  nevertheless  make the
maximum  contribution to the payment and satisfaction of each of the Indemnified
Liabilities  which is permissible  under  applicable law. The obligations of FMM

                                       49
<PAGE>
and FMS under this Section 9.7 shall survive the  termination  of this Agreement
and the discharge of the Borrower's other obligations hereunder.

     Section 9.8 PARTICIPANTS.  The Lender and its participants, if any, are not
partners or joint  venturers,  and the Lender  shall not have any  liability  or
responsibility  for any obligation,  act or omission of any of its participants.
All rights and powers specifically  conferred upon the Lender may be transferred
or delegated to any of the Lender's participants, successors or assigns.

     Section  9.9  EXECUTION  IN  COUNTERPARTS.  This  Agreement  and other Loan
Documents may be executed in any number of  counterparts,  each of which when so
executed  and  delivered  shall be  deemed  to be an  original  and all of which
counterparts, taken together, shall constitute but one and the same instrument.

     Section 9.10 BINDING EFFECT;  ASSIGNMENT;  COMPLETE  AGREEMENT;  EXCHANGING
INFORMATION.  The Loan Documents  shall be binding upon and inure to the benefit
of the  Borrower  and the Lender and their  respective  successors  and assigns,
except  that the  Borrower  shall  not  have the  right  to  assign  its  rights
thereunder or any interest  therein without the Lender's prior written  consent.
This  Agreement,  together with the Loan  Documents,  comprises the complete and
integrated  agreement of the parties on the subject matter hereof and supersedes
all prior  agreements,  written or oral, on the subject matter  hereof.  Without
limiting the Lender's right to share information  regarding the Borrower and its
Affiliates  with the  Lender's  participants,  accountants,  lawyers  and  other
advisors,  the Lender,  Wells  Fargo  Corporation,  and all direct and  indirect
subsidiaries  of Wells Fargo  Corporation,  may exchange any and all information
they may have in their possession regarding the Borrower and its Affiliates, and
the  Borrower  waives any right of  confidentiality  it may have with respect to
such exchange of such information.

     Section 9.11  SEVERABILITY  OF PROVISIONS.  Any provision of this Agreement
which is prohibited or unenforceable  shall be ineffective to the extent of such
prohibition or unenforceability  without  invalidating the remaining  provisions
hereof.

     Section 9.12 HEADINGS.  Article and Section  headings in this Agreement are
included  herein for  convenience  of reference  only and shall not constitute a
part of this Agreement for any other purpose.

     Section 9.13 GOVERNING LAW; JURISDICTION,  VENUE; WAIVER OF JURY TRIAL. The
Loan  Documents  shall be  governed  by and  construed  in  accordance  with the
substantive  laws  (other  than  conflict  laws) of the State of  Arizona.  This
Agreement  shall be governed by and construed in accordance with the substantive
laws (other than  conflict  laws) of the State of  Arizona.  The parties  hereto
hereby (i) consents to the personal jurisdiction of the state and federal courts
located in the State of  Arizona,  County of  Maricopa  in  connection  with any
controversy  related to this  Agreement;  (ii) waives any argument that venue in
any such forum is not convenient,  (iii) agrees that any litigation initiated by
the Lender or the Borrower in connection  with this  Agreement or the other Loan
Documents  shall be venued in either  the  Superior  Court of  Maricopa  County,
Arizona,  or the United States  District  Court,  District of Arizona;  and (iv)
agrees that a final  judgment in any such suit,  action or  proceeding  shall be

                                       50
<PAGE>
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other  manner  provided by law.  THE PARTIES  WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING TO THIS AGREEMENT.

     Section  9.14  RELEASE.  FMM,  FMS  and  Guarantor  hereby  absolutely  and
unconditionally  releases  and forever  discharges  the Lender,  and any and all
participants,   parent   corporations,   subsidiary   corporations,   affiliated
corporations,  insurers,  indemnitors,  successors and assigns thereof, together
with all of the present and former directors,  officers, agents and employees of
any of the  foregoing,  from any and all claims,  demands or causes of action of
any  kind,  nature  or  description,  whether  arising  in law or equity or upon
contract or tort or under any state or federal law or otherwise,  which FMM, FMS
and  Guarantor  have had,  now has or has made  claim to have  against  any such
person for or by reason of any act, omission,  matter, cause or thing whatsoever
arising from the beginning of time to and including the date of this  Agreement,
whether  such  claims,  demands and causes of action are matured or unmatured or
known or unknown.

     Section 9.15 EFFECT OF AGREEMENT.  This  Agreement  shall become  effective
only upon the satisfaction of all of the conditions contained within Section 4.1
hereof.  At such  time as this  Agreement  becomes  effective,  it  shall in all
respects  supersede  the Original  Credit  Agreement,  and all  Advances  (past,
present and future) made by the Lender to the Borrower  shall in all respects be
governed by this Agreement.  Until such time as all of the conditions  contained
in Section 4.1 have been fully  satisfied,  this Agreement  shall be of no force
and effect,  and all Advances  (past,  present and future) made by the Lender to
the Borrower shall in all respects be governed by the Original Credit Agreement.

     Section 9.16  PRIORITY OF LIENS.  Nothing  herein is intended to change the
priority of any lien or security  interest the Lender has in any property of the
Borrower. All such liens and security interests remain in full force and effect,
unmodified, and in all respects are ratified, confirmed and approved.

     Section  9.17 RELEASE OF THE DEEDS OF TRUST.  The Lender shall  release the
Deeds of Trust if but only if, (i) Chris  Johnston  provides  the Lender with an
irrevocable  letter of credit (in form and substance  satisfactory to the Lender
in the Lender's sole discretion) in the face amount of $1,000,000.00 in favor of
the Lender  with an  expiration  date of not sooner than August 12, 2003 (the "C
Johnston  Letter of  Credit")  and (ii)  there is not a then  existing  Event of
Default or Default  Period.  Any such release  shall be made,  if at all, to the
person entitled thereto.

                                       51
<PAGE>
     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their respective  officers  thereunto duly authorized as of the date
first above written.

                                        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
                                                --------------------------------

                                        WELLS FARGO BUSINESS CREDIT, INC.,
                                        a Minnesota corporation

                                        By /s/ Keith Budoff
                                           -------------------------------------

                                           Its Officer
                                               ---------------------------------

                                       52
<PAGE>
                    ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR

     The  undersigned,  a guarantor of the  indebtedness  of FM  Precision  Golf
Manufacturing   Corp.,  and  FM  Precision  Golf  Sales  Corp.,   each  Delaware
corporations  (collectively,  jointly and severally,  the  "Borrowers") to Wells
Fargo Business Credit,  Inc., (the "Lender")  pursuant to a Guaranty dated as of
October  9,  1998 (the  "Guaranty"),  hereby  (i)  acknowledges  receipt  of the
foregoing  Amended and Restated  Credit  Agreement;  (ii)  consents to the terms
(including  without  limitation  the  release  set  forth  in  Section  9.14 and
execution thereof; (iii) reaffirms its obligations to the Lender pursuant to the
terms of its Guaranty; and (iv) acknowledges that the Lender may amend, restate,
extend,  renew or otherwise modify the Amended and Restated Credit Agreement and
any  indebtedness  or agreement of the Borrower,  or enter into any agreement or
extend additional or other credit accommodations, without notifying or obtaining
the  consent of the  undersigned  and without  impairing  the  liability  of the
undersigned  under the  Guaranty  for all of the  Borrowers'  present and future
indebtedness to the Lender.

                                        ROYAL PRECISION, INC.,
                                        a Delaware corporation

                                        By /s/ John C. Lauchnor
                                           -------------------------------------
                                           John C. Lauchnor, President

                                       53
<PAGE>
                         Table of Exhibits and Schedules

     Exhibit C                Compliance Certificate

     Exhibit D                Premises

                               -------------------

     Schedule 5.1             Trade Names,  Chief  Executive  Office,  Principal
                              Place of Business, and Locations of Collateral

     Schedule 5.4             Subsidiaries

     Schedule 7.1             Permitted Liens

     Schedule 7.2             Permitted Indebtedness and Guaranties
<PAGE>
                   Exhibit A to Credit and Security Agreement

                             [INTENTIONALLY DELETED]

                                      A-1
<PAGE>
                   Exhibit B to Credit and Security Agreement

                             [INTENTIONALLY DELETED]

                                      B-1
<PAGE>
                                      Exhibit C to Credit and Security Agreement

                             COMPLIANCE CERTIFICATE

To:      ______________________

         Wells Fargo Business Credit, Inc.

Date:    ______________________

Subject: FM Precision Golf Manufacturing Corp., a Delaware corporation and

         FM Precision Golf Sales Corp., a Delaware corporation

         Financial Statements

In accordance with our Amended and Restated Credit and Security  Agreement dated
as of  ___________,  2002 (the "Credit  Agreement"),  attached are the financial
statements of FM Precision Golf Manufacturing  Corp., a Delaware corporation and
FM  Precision  Golf  Sales  Corp.,  a  Delaware  corporation  (collectively  the
"Borrower"), as of and for ________________, ____ (the "Reporting Date") and the
year-to-date  period then ended (the  "Current  Financials").  All terms used in
this certificate have the meanings given in the Credit Agreement.

     I certify (as an officer of the Borrower,  but not in my personal capacity)
that the Current  Financials have been prepared in accordance with GAAP, subject
to year-end  audit  adjustments,  and fairly  present the  Borrower's  financial
condition and the results of its operations as of the date thereof.

     EVENTS OF DEFAULT.  (Check one):

     [ ] The undersigned  does not have knowledge of the occurrence of a Default
     or Event of Default under the Credit Agreement.

     [ ] The  undersigned  has knowledge of the occurrence of a Default or Event
     of Default under the Credit Agreement and attached hereto is a statement of
     the facts with respect to thereto.

     I hereby certify to the Lender as follows:

     [ ] The  Reporting  Date  does not  mark  the end of one of the  Borrower's
     fiscal quarters, hence I am completing only paragraph __ below.

     [ ] The  Reporting  Date  marks  the  end of one of the  Borrower's  fiscal
     quarters, hence I am completing all paragraphs below except paragraph __.

     [ ] The Reporting Date marks the end of the Borrower's fiscal year, hence I
     am completing all paragraphs below.

Compliance Certificate                C-1
<PAGE>
FINANCIAL  COVENANTS.  I  further  hereby  certify  that (as an  officer  of the
Borrower,  but not in my personal  capacity) the Borrower is in compliance  with
the  covenants  set forth in Sections  6.13,  6.14,  6.15,  7.10 and 7.17 of the
Agreement,  except  as  indicated  below.  The  calculations  made to  determine
compliance are as follows:

Covenant 6.13  Net Income/Net Loss

     Month Ending                  Minimum Net Income               Actual
     ------------                  ------------------               ------

     August 31, 2002               ($1,000,000.00)
     September 30, 2002            ($1,200,000.00)
     October 31, 2002              ($1,400,000.00)
     November 30, 2002             ($1,400,000.00)
     December 31, 2002             ($1,500,000.00)
     January 31, 2003              ($1,400,000.00)
     February 28, 2003             ($1,250,000.00)
     March 31, 2003                ($800,000.00)
     April 30, 2003                ($350,000.00)
     May 31, 2003                  $100,000.00

Covenant 6.14  Book Net Worth

     Month Ending                  Minimum Net Income               Actual
     ------------                  ------------------               ------

     August 31, 2002               ($1,000,000.00)
     September 30, 2002            ($1,200,000.00)
     October 31, 2002              ($1,400,000.00)
     November 30, 2002             ($1,400,000.00)
     December 31, 2002             ($1,500,000.00)
     January 31, 2003              ($1,400,000.00)
     February 28, 2003             ($1,250,000.00)
     March 31, 2003                ($800,000.00)
     April 30, 2003                ($350,000.00)
     May 31, 2003                  $100,000.00

Compliance Certificate                C-2
<PAGE>
Covenant 6.15  Stop Loss

     Month Ending            Maximum Allowable Net Loss            Actual
     ------------            --------------------------            ------

     Each month                    $500,000.00

Covenant 7.10 Capital Expenditures

                               Maximum Allowable Capital
     Quarter Ending                  Expenditures                  Actual
     --------------                  ------------                  ------

     August 31, 2002                 $ 50,000.00
     November 30, 2002               $100,000.00
     February 28, 2003               $200,000.00
     May 31, 2003                    $650,000.00

                               Maximum Allowable Capital
               Year                  Expenditures                  Actual
               ----                  ------------                  ------

     Borrower's 2004 fiscal
     year and each fiscal
     year thereafter                 $650,000.00

As of the Reporting  Date,  the Borrower ____ is ____ is not in compliance  with
Section 7.17 of the Credit Agreement  concerning  salary increases not to exceed
10% per annum.

                                                       TOTAL MANAGEMENT FEES
     OFFICERS             PERCENTAGE INCREASE            PAID YEAR TO DATE
     --------             -------------------            -----------------

     --------             -------------------            -----------------
     --------             -------------------            -----------------
     --------             -------------------            -----------------

     (To be completed  within 30 days of any salary  increase and within 30 days
of paying any increase)

Compliance Certificate                C-3
<PAGE>
     Attached  hereto are all relevant  facts in reasonable  detail to evidence,
and the computations of the financial covenants referred to above.

                                        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
                                               ---------------------------------

Compliance Certificate                C-4
<PAGE>
                                      Exhibit D to Credit and Security Agreement

                                    PREMISES

     The Premises  referred to in the Credit and Security  Agreement are legally
described as follows:

All that certain piece or parcel of land,  with the  buildings and  improvements
thereon,  situated in the Town of Torrington,  County of Litchfield and State of
Connecticut, more particularly bounded and described as follows:

     Commencing at a point in the southerly line of Migeon  Avenue,  which point
marks a corner of the parcel herein  described and the  northeasterly  corner of
land now or formerly  of Andrew  Joseph  Nargi,  and which point is marked by an
iron pin;  thence along the southerly line of Migeon Avenue S 72(degree) 30' 38"
E,  258.12' to a point;  thence along a curve to the right with a delta angle of
41(degree)  32' 40",  a radius of 89.64' and an arc length of 65.00' to a point;
thence S 30(degree)  58' 08" E, 374.33' to a point;  thence S 31(degree) 21' 38"
E,  103.90' to a corner of the parcel  herein  described  and the  northwesterly
corner of land now or formerly of William J. & Cheryl K.  Separy;  thence  along
land now or formerly of said William J. & Cherly K. Separy, S 58(degree) 54' 35"
W, 131.33' to a corner of the parcel herein  described;  thence still along land
now or formerly of said William J. & Cheryl K. Separy,  S 31(degree)  24' 25" E,
49.98' to a point in the  northerly  line of Williams  Avenue,  which point is a
corner of the parcel herein  described;  thence along the northerly line of said
Williams  Avenue,  S 69(degree)  10' 35" W, 54.40' and N  71(degree)  02' 45" W,
48.25' to the  northwesterly  terminus of said  Williams  Avenue and which point
marks a corner of the parcel herein  described;  Thence S 43(degree)  10' 56" W,
47.40' to the  southwesterly  terminus of said Williams Avenue,  and which point
marks the northwesterly  corner of land now or formerly of Donald J. & Katherine
A. Davis;  thence  along land now or  formerly of said Donald J. & Katherine  A.
Davis S 18(degree)  44' 34" W, 32.04' to a point; S 18(degree) 33' 47" W, 66.47'
to a point and S 17(degree)  58' 44" W, 72.32" to a point in the northerly  line
of  land  now or  formerly  of A.  B.  Leasing  Corp.,  which  point  marks  the
southwesterly  corner of land now or formerly  of said Donald J. & Katherine  A.
Davis and a corner of the parcel  herein  described;  thence along the northerly
line of land now or formerly of said A. B. Leasing Corp. S 80(degree) 03' 05" W,
242.00" to a corner of the  parcel  herein  described  S  27(degree)  11' 17" E,
125.68',  S 17(degree)  23' 04" E, 57.56' and S 5(degree)  36' 08" E, 119.08' to
the  southwesterly  corner of land now or formerly of said A. B. Leasing  Corp.,
the  northwesterly  corner  of land now or  formerly  of John R.  Horner,  Jr. &
Sharlene A. Horner, the northeasterly corner of land now or formerly of the City
of Torrington,  and a corner of the parcel herein described,  and which point is
marked by an iron pipe;  thence S 72(degree) 11' 47" W, 30.00' to a point on the
easterly   side  of  the  Naugatuck   River;   thence  along  the  easterly  and
northeasterly  sides of said  Naugatuck  River,  3,310' to a point,  which point
marks the southwesterly corner of land now or formerly of the City of Torrington
and a corner of the  parcel  herein  described.  The last  described  course has
closing  lines of N  26(degree)  51' 57" W,  946.80';  N  65(degree)  08' 06" W,
1251.62' and N 46(degree) 46' 44" W, 1073.11'; thence along lands of the City of
Torrington  and Joseph J.  Scarpelli,  partly of each, N  62(degree)  00' 00" E,
8.00';  S  54(degree)  51' 01" E,  112.44';  S 42(degree)  59' 59" E, 44.81';  S
58(degree)  16' 59" E, 154.61' and S 55(degree) 44' 59" E, 320.40' to a point in
the  westerly   line  of  Kellog  Street   (unimproved),   which  point  is  the
southeasterly  corner of land now or formerly of said Joseph J.  Scarpelli and a
corner of the parcel herein described;  thence along the westerly line of Kellog

                                      D-1
<PAGE>
Street (unimproved), N 35(degree) 53' 59" E, 262.23' to a point in the southerly
line of Migeon Avenue, which point marks the northeasterly corner of said Joseph
J.  Scarpelli  and a corner of the parcel  herein  described;  thence  along the
southerly  line of Migeon  Avenue,  S 50(degree) 13' 16" E, 20.05' to a point in
the  center of Kellog  Street  (unimproved)  and a corner of the  parcel  herein
described;  thence along the center of Kellog Street  (unimproved)  S 35(degree)
53' 59" W,  265.39' to a corner of the parcel  herein  described;  thence  along
Kellog  Street  (unimproved),  and  along  land now or  formerly  of  Martha  L.
Vurpillot,  S 54(degree) 59' 37" E, 79.93' and S 51(degree) 06' 01" E, 50.00' to
the southeasterly corner of land now or formerly of said Martha L. Vurpillot and
a corner of the parcel  herein  described,  and which point is marked by an iron
pin;  thence N 35(degree)  53' 59" E, 66.10' to a point in the southerly line of
Ryan Avenue (unimproved), which point marks the northeasterly corner of land now
or  formerly  of said  Martha L.  Vurpillot  and a corner of the  parcel  herein
described, and which point is marked by an iron pin; thence S 51(degree) 06' 01"
E,  50.00'  to the  northwesterly  corner of land now or  formerly  of Paul A. &
Theresa P.  Compagna,  which point is a corner of the parcel  herein  described;
thence S 35(degree) 53' 59" W, 78.20' to the southwesterly corner of land now or
formerly of said Paul A. & Theresa P.  Compagna,  which point is a corner of the
parcel herein described; thence along lands now or formerly of Paul A. & Theresa
P.  Compagna,  Edward J. & Linda J.  Krukar,  Elbert A.  Becker,  Jr. & Norma M.
Becker  and  Brennan  Street  (discontinued  &  abandoned),  partly  of each,  S
57(degree)  49' 06" E, 101.97' and S 70(degree) 08' 41" E, 125.39' to a point in
the center  terminus of said Brennan Street  (discontinued  & abandoned),  which
point is a corner of the parcel  herein  described;  thence  along the center of
said Brennan Street (discontinued & abandoned),  N 35(degree) 13' 49" E, 220.14'
to a point in the southerly  line of Migeon  Avenue,  which point is a corner of
the parcel herein described; thence along the southerly line of Migeon Avenue, S
60(degree)  17' 03" E, 20.09' to the  northeasterly  terminus of Brennan  Street
(discontinued & abandoned),  the northwesterly corner of land now or formerly of
the  Estate  of  Mary &  Stephen  Smigel,  and a  corner  of the  parcel  herein
described;  thence S  35(degree)  13' 49" W,  150.87' to a point in the easterly
line  of  Brennan  Street  (discontinued  &  abandoned),   which  point  is  the
southwesterly  corner of land now or  formerly  of the  Estate of Mary & Stephen
Smigel and a corner of the parcel herein described;  thence S 54(degree) 46' 11"
E, 48.97' to the southeasterly corner of the Estate of Mary & Stephen Smigel and
a corner of the parcel herein  described;  thence along the easterly line of the
Estate of Mary & Stephen  Smigel N 35(degree)  13' 49" E, 17.00' to an iron pipe
at the  southwesterly  corner of land now or  formerly  of  Emanuel & Elenore L.
Marroni  and a corner of the parcel  herein  described;  thence  along  lands of
Emanuel & Elenore L. Marroni and Michael P.  Durstin,  et al,  partly of each, S
70(degree)  10' 44" E, 113.90' and S 77(degree)  07' 03" E, 52.31' to a point in
the westerly line of land now or formerly of Francis P. McElwee,  which point is
a corner of the parcel herein  described;  thence S 29(degree) 59' 28" W, 27.72'
to an iron pin at the southwesterly corner of land now or formerly of Francis P.
McElwee and a corner of the parcel herein described; thence S 79(degree) 39' 11"
E, 204.06' to an iron pin at the southeasterly corner of land now or formerly of
Francis P.  McElwee  and the  southwesterly  corner of land now or  formerly  of
Donald L. & Leanor R. DeDominicis;  thence S 64(degree) 51' 21" E, 164.66' to an
iron pin at the  southeasterly  corner  of land now or  formerly  of Donald L. &
Leanor R. DeDominicis and the southwesterly corner of land now or formerly of V.
S. H. Realty; thence S 60(degree) 02' 12" E, 200.44' to the southeasterly corner
of land now or formerly of V. S. H. Realty and the southwesterly  corner of land
now or formerly of John A. & Loretta C. Miscikoski;  thence S 46(degree) 37' 42"
E,  87.07'  and  S  56(degree)  44'  17"  E,  70.34'  to a  drill  hole  at  the
southeasterly  corner of land now or formerly of John A. & Loretta C. Miscikoski
and a corner of the parcel  herein  described;  thence N  20(degree)  22' 33" E,
144.16' to a point in the southerly  line of Migeon Avenue at the  northeasterly

                                      D-2
<PAGE>
corner of land now or formerly of John A. & Loretta C.  Miscikoski  and a corner
of the parcel herein described; thence along the southerly line of Migeon Avenue
S  72(degree)  30' 38" E, 34.93' to an iron pin at the  northwesterly  corner of
land now or  formerly  of Jeanne  Lancaster  and a corner of the  parcel  herein
described; thence S 20(degree) 22' 33" W, 129.21' to the southwesterly corner of
land now or  formerly  of Jeanne  Lancaster  and a corner of the  parcel  herein
described;  thence S 53(degree) 47' 26" E, 92.99' to the southeasterly corner of
land now or  formerly  of Jeanne  Lancaster  and a corner of the  parcel  herein
described; thence along lands now or formerly of Jeanne Lancaster and William E.
& Sandra E.  Lamoin,  partly  of each,  N  48(degree)  25' 54" E,  38.34'  and N
65(degree) 30' 34" E, 48.60' to a corner of the parcel herein described;  thence
along lands now or formerly of William E. & Sandra E. Lamoin,  Eugene  Thebarge,
Jr. & Jean M.  Thebarge,  and Andrew Joseph Nargi,  partly of each, S 65(degree)
39' 56" E, 270.29' to the southeasterly corner of land now or formerly of Andrew
Joseph Nargi and a corner of the parcel  herein  described;  thence N 19(degree)
50' 34" E, 125.82' to an iron pin at the point and place of beginning.

     This  description  is  intended  to  include  any  interest  in  and to the
Naugatuck River.

     The parcel  described above is more  particularly  shown and described on a
map  entitled  "MAP  PREPARED  FOR -  BRUNSWICK  CORPORATION  - MIGEON  AVENUE &
WILLIAMS AVENUE - TORRINGTON,  CONNECTICUT", which map is drawn at a scale of 1"
= 40', dated March,  1996 and certified by William A.  Berglund,  Land Surveyor,
Torrington, Connecticut.

TOGETHER WITH:

a)   Rights  reserved in a Warranty Deed from Brunswick  Corporation to John and
     Sylvia Workman Home for the Sick, Inc. dated September 9, 1964 and recorded
     on  September  30,  1964 in Volume 239 at Page 506 of the  Torrington  Land
     Records; and

b)   Right of way as more particularly  described in an Agreement by and between
     Barbara  Capuano  and  Brunswick  Corporation  dated  November  4, 1978 and
     recorded on February  22, 1979 in Volume 327 at Page 162 of the  Torrington
     Land Records.

                                      D-3
<PAGE>
                                   Schedule 5.1 to Credit and Security Agreement

        Trade Names, Chief Executive Office, Principal Place of Business,
                          and Locations of Collateral

                                   TRADE NAMES

                                      None

               CHIEF EXECUTIVE OFFICE/PRINCIPAL PLACE OF BUSINESS

                    FM Precision Golf    535 Migeon Avenue
                    Manufacturing Corp.: Torrington, Connecticut  06790

                    FM Precision Golf    535 Migeon Avenue
                    Sales Corp.          Torrington, Connecticut  06790

                     OTHER INVENTORY AND EQUIPMENT LOCATIONS

                                      None

                                       1
<PAGE>
                                   Schedule 5.4 to Credit and Security Agreement

                                  SUBSIDIARIES

                             FMS is a subsidiary FMM

                                       1
<PAGE>
                                   Schedule 7.1 to Credit and Security Agreement

                                 PERMITTED LIENS

     CREDITOR      COLLATERAL      JURISDICTION      FILING DATE      FILING NO.
     --------      ----------      ------------      -----------      ----------

                                      NONE

                                       1
<PAGE>
                                   Schedule 7.2 to Credit and Security Agreement

                      PERMITTED INDEBTEDNESS AND GUARANTIES

                                  INDEBTEDNESS

    CREDITOR   PRINCIPAL AMOUNT   MATURITY DATE   MONTHLY PAYMENT   COLLATERAL
    --------   ----------------   -------------   ---------------   ----------

                                      None

                                   GUARANTIES

                            AMOUNT AND DESCRIPTION OF
    PRIMARY OBLIGOR           OBLIGATION GUARANTEED      BENEFICIARY OF GUARANTY
    ---------------           ---------------------      -----------------------

                                      None

                                       1

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