S-1

As filed with the Securities and Exchange Commission on October 20, 2009

Registration No. 333-          

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FREEDOM GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 3484
(Primary Standard Industrial
Classification Code number) 26-0174491
(I.R.S. Employer
Identification Number)

870 Remington Drive
Madison, North Carolina 27025-1776
(336) 548-8700
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Fredric E. Roth, Jr.
General Counsel and Secretary
Freedom Group, Inc.
870 Remington Drive P.O. Box 1776
Madison, North Carolina 27025-1776
(336) 548-8700
(Name, address, including zip code and telephone number, including area code, of agent for service)

Please address a copy of all communications to:
Arnold B. Peinado, III, Esq. Roland Hlawaty, Esq. Milbank, Tweed, Hadley & McCloy LLP 1 Chase Manhattan Plaza New York, NY 10005 (212) 530-5000	William J. Miller, Esq. Jonathan A. Schaffzin, Esq. Cahill Gordon & Reindel LLP 80 Pine Street New York, NY 10005 (212) 701-3000

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

                 If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. o

                 If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                 If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                 If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer ý
(Do not check if a smaller reporting company) Smaller reporting company o

CALCULATION OF REGISTRATION FEE

Title of each class of Securities to be registered	Proposed maximum aggregate offering price(1)(2)	Amount of Registration fee
Common Stock, $0.01 par value	$200,000,000	$11,160

(1)

Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(o) under the Securities Act.

(2)

Includes shares which may be sold pursuant to the underwriters' over-allotment option.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated            , 2009

PROSPECTUS

            Shares

Common Stock

              This is Freedom Group, Inc.'s initial public offering. We are selling            shares of our common stock and the selling stockholders are selling            shares of our common stock. We will not receive any proceeds from the sale of shares to be offered by the selling stockholders.

              We expect the public offering price to be between $            and $            per share. Currently, no public market exists for the shares. After pricing of the offering, we expect that the shares will trade on the            under the symbol "            ."

Investing in the common stock involves risks that are described in the "Risk Factors" section beginning on page 19 of this prospectus.

	Per Share	Total
Public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to us	$	$
Proceeds, before expenses, to the selling stockholders	$	$

              The underwriters may also purchase up to an additional            shares from us, and up to an additional            shares from the selling stockholders, at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments, if any.

              Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

              The shares will be ready for delivery on or about            , 2009.

The date of this prospectus is            , 2009.

TABLE OF CONTENTS

	Page
Prospectus Summary	1
Risk Factors	19
Special Note Regarding Forward-Looking Statements	35
Use of Proceeds	38
Dividend Policy	38
Capitalization	39
Dilution	42
Selected Historical Consolidated Financial Data	44
Unaudited Pro Forma Condensed Consolidated Financial Information	46
Management's Discussion and Analysis of Financial Condition and Results of Operations	55
Business	83
Management	107
Compensation Discussion and Analysis	112
Certain Relationships and Related Person Transactions	138
Principal and Selling Stockholders	141
Description of Certain Indebtedness	144
Description of Capital Stock	147
Shares Eligible for Future Sale	151
Certain United States Federal Income and Estate Tax Considerations for Non-U.S. Holders	153
Underwriting	157
Legal Matters	162
Experts	162
Where You Can Find More Information	162
Index to Financial Statements	F-1

              You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission (the "SEC"). Neither we, the selling stockholders nor the underwriters have authorized anyone to provide you with additional information or information different from that contained in this prospectus or in any free writing prospectus filed with the Securities and Exchange Commission. We and the selling stockholders are offering to sell, and seeking offers to buy, our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

MARKET AND INDUSTRY DATA

              Market and industry data used throughout this prospectus, including information relating to our relative position in the shooting sports industry, is based on the good faith estimates of management, which in turn are based upon management's review of internal surveys, independent industry surveys and publications and other publicly available information, including reports and information prepared by the Sports Marketing Research Group ("SMRG"), the National Shooting Sports Foundation ("NSSF"), the National Rifle Association ("NRA"), the Annual Firearms Manufacturing and Export Report ("AFMER") and Jane's Strategic Advisory Services, in each case with respect to 2007 data, and SportsOneSource, with respect to 2008 data. Market share information is subject to change, however, and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data-gathering process and other limitations and uncertainties inherent in any statistical survey of market share. In addition, customer preferences can and do change and the definition of the relevant market is a matter of judgment and analysis. As a result, you should be aware that market share, ranking and other similar information set

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forth in this prospectus and estimates and beliefs based on such data, may not be reliable. By including such market and industry data and information, we do not undertake a duty to provide such data and information in the future or to update such data and information if it is updated.

TRADEMARKS AND TRADE NAMES

              We own or have rights to trademarks or trade names that we use in conjunction with the operation of our business. In addition, our name, logo and website name and address are our service marks or trademarks. Each trademark, trade name or service mark by any other company appearing in this prospectus belongs to its holder. Some of the more important trademarks that we use include Remington®, Peters®, UMC®, Premier®, Express®, Ultra-Mag™, Core-Lokt®, Core-Lokt Ultra™, Fireball™, Model 870™, Model 1100™, Model 11-87™, Model 11-87 Super Magnum™, Model 700™, EtronX®, Model 700 Etron X™, Model Seven™, Model 7400™, Model 7600™, Model 597™, Model 300™, M-27™, ARMORLOKT®, Marlin®, H&R 1871®, Parker®, LC Smith®, Bushmaster®, DPMS™, Panther Arms®, EOTAC™, Dakota™, Miller Arms®, Nesika®, RemOil®, Brite-Bore™ and RemAction Cleaner™.

EBITDA

              We use the term EBITDA throughout this prospectus. EBITDA is not a measure of performance defined in accordance with generally accepted accounting principles in the United States ("GAAP"). We use EBITDA as a supplement to our GAAP results in evaluating certain aspects of our business, as described below.

              EBITDA is included in this prospectus because it is a primary component of the fixed charge coverage ratio used in covenants under the indenture governing the Notes (as defined under "Prospectus Summary—Recent Transactions") and is a basis upon which our management assesses performance. EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it excludes items that we do not believe reflect our core operating performance.

              We believe that EBITDA is useful to investors in evaluating our performance because it is a commonly used financial metric for measuring and comparing the operating performance of companies in our industry. We believe that the disclosure of EBITDA offers an additional financial metric that, when coupled with the GAAP results and the reconciliation to GAAP results, provides a more complete understanding of our results of operations and the factors and trends affecting our business. Further, we believe the inclusion of EBITDA is appropriate to provide additional information to investors about the calculation of certain covenants in the indenture governing the Notes.

              EBITDA should not be considered as an alternative to net income (loss), as an indicator of our performance, as an alternative to net cash provided by operating activities, as a measure of liquidity, or as an alternative to any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as EBITDA. Although we believe that EBITDA may make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations:

(i)

other companies in our industry may define EBITDA differently than we do and, as a result, it may not be comparable to similarly titled measures used by other companies in our industry; and



(ii)

it excludes financial information that some may consider important in evaluating our performance.

              We compensate for these limitations by providing disclosure of the differences between EBITDA and GAAP results, including providing a reconciliation of EBITDA to GAAP results, to enable investors to perform their own analysis of our operating results. For a reconciliation of

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consolidated EBITDA to its most directly comparable GAAP measure, net income (loss), see footnote 5 in "Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial Data."

              Because of these limitations, EBITDA should not be considered as a measure of the income generated by our business or discretionary cash available to us to invest in the growth of our business. Our management compensates for these limitations by relying primarily on our GAAP results and using EBITDA as a supplemental financial metric for evaluation of our operating performance. See our consolidated statements of operations and consolidated statements of cash flows in our consolidated financial statements included elsewhere in this prospectus.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read together with, the more detailed information and financial statements and related notes thereto appearing elsewhere in this prospectus. You should read the entire prospectus carefully, particularly the "Risk Factors" beginning on page 19 and our consolidated financial statements and the related notes thereto. In this prospectus, unless otherwise indicated or the context otherwise requires, references to (1) the terms "we," "us," "our," the "Company" and "Freedom Group" refer to Freedom Group, Inc. and its subsidiaries on a consolidated basis, (2) the term "FGI" refers to Freedom Group, Inc., (3) the term "Remington" refers to Remington Arms Company, Inc. and its direct and indirect subsidiaries, (4) the terms "Bushmaster" and "BFI" refer to Bushmaster Firearms International, LLC and its direct and indirect subsidiaries, (5) the term "Marlin" refers to the Marlin Firearms Company, (6) the term "DPMS" refers to DPMS Firearms LLC, (7) the term "EOTAC" refers to EOTAC, LLC, (8) the term "INTC" refers to INTC USA, LLC, (9) the term "Precision Arms Center" refers to Precision Arms Center, LLC, (formerly known as Bushmaster Custom Shop, LLC), (10) the term "Dakota Arms" refers to Dakota Arms, LLC, (11) the term "CCM" refers only to Cerberus Capital Management L.P., (12) the term "Cerberus" refers to Cerberus Capital Management, L.P., along with its affiliates, (13) the term "Remington Acquisition" refers to our acquisition of 100% of the shares of RACI Holding, Inc., the then parent company of Remington, on May 31, 2007, (14) the term "Marlin Acquisition" refers to Remington's acquisition of 100% of the shares of Marlin and its subsidiary, H&R 1871, LLC, on January 28, 2008 and (15) the term "Dakota Acquisition" refers to our acquisition of certain assets of Dakota Arms on June 5, 2009. The term "Refinancings" has the meaning given to it in "—Recent Transactions" and the term "Recapitalization" has the meaning given to it in "—The Offering." The Refinancings, the Marlin Acquisition, the Dakota Acquisition, the Recapitalization and the offering referred to in this prospectus are referred to collectively herein as the "Transactions." References to EBITDA are to EBITDA as defined in footnote 5 in "—Summary Historical and Pro Forma Consolidated Financial Data." References to "preferred stock" are to our Series A preferred stock.

Our Company

              We are one of the leading firearms, ammunition and related products companies in the world, with #1 commercial market positions across all of our major product categories in the United States, the largest firearms and ammunition market globally. We are an innovator, designer, manufacturer and marketer of an increasingly broad product line which services the hunting, shooting sports, law enforcement and military end-markets under some of the most globally recognized brands including Remington, Marlin, Bushmaster, and DPMS, among others. With a history dating back to 1816, we are America's oldest and largest manufacturer of firearms and ammunition. We believe that our long heritage and reputation for quality have resulted in strong brand recognition and customer loyalty. For example, our Remington brand, which we believe represents an enduring symbol of American values and is trusted and respected by generations of sportsmen, is ranked #2 in brand awareness, second only to Nike among sportsmen according to the SportsOneSource 2009 Brand Index. We believe our scale and product breadth are unmatched within the industry, with approximately 1.1 million long guns and 2.0 billion rounds of ammunition sold during the twelve months ended June 30, 2009. For the twelve months ended June 30, 2009, we generated pro forma net sales and EBITDA of $835.3 million and $150.8 million, respectively.

              We are the only major U.S. manufacturer of both firearms and ammunition, which we believe is a significant competitive advantage and supports our market leadership position. We believe this leadership position across all of our major product categories is evidenced by our #1 U.S. commercial market shares in shotguns, rifles, and ammunition. We estimate that in calendar year 2008 over 85% of our domestic sales came from product categories where we hold the #1 U.S. commercial market share position. We have a focus on innovation that we believe results in category-defining products, strong brand recognition and long-term customer loyalty.

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              The following table details our U.S. commercial market leadership for the major product categories in which we participate.

Categories		U.S. Market Position		U.S. Market Share			Selected Brands
Firearms
	Shotguns		#1		31	%	Remington, Marlin, Parker, H&R, L.C. Smith, Dakota Arms
	Traditional Rifles		#1		36	%	Remington, Marlin, H&R, Dakota Arms
	Modern Sporting Rifles		#1		49	%	Bushmaster, DPMS, Remington
Ammunition			#1		33	%	Remington, UMC, Dakota

Note:

Based on 2007 Firearms and 2006 Ammunition Market Data from SMRG and AFMER, and excludes law enforcement, international and military sales.

              In addition to our significant commercial business, we sell products to law enforcement, international, government and military end-markets where we already have a strong presence. For example, we have a significant market share in the domestic law enforcement shotgun market and have a leading market share in military sniper rifles. We believe that our increasingly focused law enforcement and global military products divisions will increase our presence in the law enforcement and defense markets beyond our existing customers, which include the Texas Department of Public Safety, Los Angeles County Sheriff's Department, Los Angeles Police Department, the California Highway Patrol, the Federal Law Enforcement Training Center ("FLETC"), the U.S. Department of Defense ("DOD"), the United States Special Operations Command ("SOCOM"), and the United States Secret Service, as well as international governments including Colombia, the Republic of Georgia, Italy, Poland, Malaysia, Mexico, and Oman.

              Today the Freedom Group includes over 10 well-regarded brands, collaborating across all disciplines, from product development to distribution, delivering end-user driven products to the hunting, shooting sports, law enforcement and military end-markets. We have made significant progress in our transition to a customer-focused sales and marketing organization by shifting to a two-tiered sales structure whereby dedicated key account managers sell the full FGI product offering to our top retail accounts while our internal field sales force calls on our network of distributors and dealers. This has allowed us to create a unified customer facing platform capable of selling our entire suite of brands and products across multiple end-markets while providing the ability to leverage our flexible manufacturing capacity to quickly respond to changes in customer preferences and demands.

              Our 11 manufacturing facilities and over 2,700 employees represent the largest domestic manufacturing presence in our industry, enabling us to deliver our products throughout the U.S. and internationally to over 80 countries. In addition, our product leadership and innovation are supported by what we believe to be the industry's only domestic freestanding and dedicated research and development facility. Our customer focused sales force, together with our flexible manufacturing capability and research and development efforts, have resulted in 19 planned new product launches in 2009 and a robust future product pipeline.

Our Products

Firearms

              We design, manufacture and market our firearms primarily under the Remington, Marlin, Bushmaster, DPMS, H&R, L.C. Smith, Parker, Dakota Arms, Miller Arms, and Nesika brand names. Through our diversified portfolio of leading brands, we offer a wide variety of long guns including pump-action shotguns, auto-loading shotguns, side-by-side shotguns, over-and-under shotguns, break-

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action shotguns and a comprehensive variety of centerfire and rimfire rifle types, including custom and precision guns, lever-action rifles, bolt-action rifles, break-action rifles, single-shot rifles, and modern sporting rifles. We also produce components, including uppers, lowers, barrels and spare parts, which enable gun enthusiasts to build and continually upgrade and customize their firearms. Our brand strategy allows us to address a variety of end-user preferences, ranging from hunting and shooting sports to government, military and law enforcement applications, from beginner to accomplished shooters, as well as build strong brand awareness and generate attractive cross-selling opportunities. As the largest firearms manufacturer in the United States, we sold approximately 1.1 million long guns during the twelve months ended June 30, 2009.

              For the twelve months ended June 30, 2009, on a pro forma basis, firearms accounted for $508.3 million in net sales, or 60.9% of our total net sales.

Ammunition

              As the only major supplier of both firearms and ammunition in the United States, we believe our ability to sell ammunition creates a unique competitive advantage within the industry and allows us to solidify and extend our existing long-term relationship with our loyal customer base. Our ammunition product offerings consist of a comprehensive line of sporting ammunition and ammunition reloading components, along with ammunition for the government, military, and law enforcement markets, marketed under the Remington, UMC, and Dakota brand names both domestically and internationally. The NRA estimates 70 to 80 million people in the United States own approximately 250 million firearms, creating a large installed base for our ammunition products. We are the largest manufacturer of commercial ammunition in the United States, and sold approximately 2.0 billion rounds of ammunition during the twelve months ended June 30, 2009.

              We market an extensive line of ammunition products that range from high volume, promotionally priced ammunition products to premium, high performance products that meet the needs of the most demanding hunters and shooters as well as the military and law enforcement users. This is evidenced by the fact that we have developed and/or manufactured more cartridges than any other ammunition manufacturer. We produce over 1,000 SKUs of ammunition across 60 calibers and gauges for use across the entire spectrum of firearms. We also market frangible training ammunition specifically tailored to meet the requirements of law enforcement and military customers. Additionally, we believe our ability to deliver a complete military solution of firearms and ammunition is distinctive.

              Product performance and innovation are core focuses for us and are important differentiators within the industry. We believe we are one of the world's largest producers of centerfire rifle hunting ammunition, and that our Remington Core-Lokt centerfire rifle ammunition is the most widely used. Our Premier STS and Nitro 27 shotshell target loads, viewed as the performance leader in trap, skeet and sporting clays shooting, have won more trophies at the Grand American Trap and World Skeet championship than any other brand.

              For the twelve months ended June 30, 2009, on a pro forma basis, ammunition accounted for $307.4 million in net sales, or 36.8% of our total net sales.

Accessories, Licensing and Other

              We sell a wide variety of branded accessories, including gun care and cleaning products and folding and collectible knives. We believe we are one of the top brands in complete firearm care, including cleaning chemicals, tools, and kits. Our wide range of oil and lubricants include RemOil, Brite-Bore, RemAction Cleaner and Rem-DriLube, which are highly versatile and widely used firearm oils and cleaning products. Through our majority owned joint venture, EOTAC, we market high quality tactical and discreet garments for military, law enforcement and the private sector. In addition, we hold

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a minority ownership stake in INTC, a leading producer of non-toxic premium based centerfire and shotshell projectiles and a leading manufacturer of frangible bullets.

              We also license our trademarks to a discrete number of third parties that manufacture and market sporting and outdoor products that complement our product lines. We offer approximately 3,500 SKUs of licensed product and generate over $110 million in sales for our retail partners. Currently, our trademarks are licensed for use on, among other things, automobiles, sporting and outdoor apparel, caps, gun cases and slings, tree stands, wildlife feeders, sporting dog equipment, air guns, game decoys and calls, hunting and shooting safety and security products, gun safes, and various other nostalgia and novelty goods. We strive to ensure that the quality, image and appeal of these licensed products are consistent with the high-quality nature of our products and brand strength. We believe that these licenses increase the market recognition of our brands, enhance our ability to market our core products, and generate attractive, high margin income. Additionally, we believe there are significant opportunities for our licensed products as we believe consumer preference is continuing to move toward an outdoor lifestyle.

              For the twelve months ended June 30, 2009, on a pro forma basis, all other businesses accounted for $19.6 million in net sales, or 2.3% of our total net sales. Licensing represented $3.4 million in other income during the same period.

Our Industry

              We compete in the global marketplace for firearms, ammunition, accessories and licensed products in over 80 countries. End customers include police departments, domestic and foreign government organizations, including the U.S. military, and consumers, such as sportsmen, hunters, and recreational shooters. Consumer distribution channels are diverse, and include major chain retail stores, major distributors, smaller dealers, gun clubs and ranges.

              Based on data from the NSSF, we estimate that the annual domestic commercial long gun market is approximately $1.1 billion and the commercial ammunition market is approximately $1.0 billion. We estimate total annual purchases of firearms and ammunition by U.S. military and law enforcement are $1.7 billion and $475 million, respectively. Additionally, we believe there are significant opportunities in the international market for our products.

              The long gun market represents a significant variety of firearms, including both shotguns and rifles. The use of these firearms ranges from hunting, to law enforcement and defense, to other shooting sports, such as skeet, trap, sporting clays and target shooting. According to the NSSF, domestic consumer long gun sales (based on excise tax data) have grown at a 5% compounded annual growth rate, or the CAGR, from 2004 to 2007 and at higher rates in 2008 and 2009. Within those numbers, we believe the commercial modern sporting rifle market, in which we believe we are the largest producer, has grown at a 36% CAGR. Further, the NSSF estimates that consumer ammunition sales grew at a 17% CAGR during the same period and at higher rates in 2008 and 2009.

              Our consumers include people of all ages, gender, educational backgrounds and income levels. The NRA estimates 70 to 80 million people in the U.S. own approximately 250 million firearms. This represents a significant installed base that generates a recurring revenue stream for ammunition, parts and accessory sales. In addition, we believe that a number of other developments in the industry are broadening and renewing consumer interest in hunting and shooting sports, including a renewed interest in the outdoors and product offerings designed to introduce new shooters to hunting and shooting.

              We believe the accessories market for our products creates a significant opportunity for revenue growth and enhances the perception of our overall product portfolio. Accessory opportunities range from gun care products and gun parts in our hunting and shooting sports categories to trigger,

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barrel, stock, and grip upgrades, and caliber-changing upper assemblies in the tactical and modern sporting rifle lines.

              We believe that a meaningful percentage of current firearm sales are being made to first time gun purchasers, particularly women. We further believe that the introduction of first time shooters, as well as the renewed interest of many existing shooters, will translate to increased participation across the ever-widening array of shooting sports. In addition, the continued adoption of the modern sporting rifle has led to increased growth in the long gun market, especially with a younger demographic of users and those who like to customize or upgrade their firearms. We view this current increase in demand as having significant long-term benefits, including expanding the popularity of shooting sport categories, as well as providing an opportunity to cultivate new, and renew existing, long-term customer relationships across our portfolio of products and brands.

Our Competitive Strengths

              We believe our business model provides a broad and attractive value proposition to our customers and we believe that we are distinguished by the following competitive strengths:

Category-Defining Brands

              We believe our brand names are some of the most globally recognized in the hunting, shooting sports, law enforcement, and military firearm and ammunition end-markets. This recognition is enhanced by our deep rooted philosophy and heritage of investing in the great American outdoors that is actively driven through our partnerships with hunting, shooting, outdoor sports and conservation organizations.

              Built on a legacy of quality and innovation, we believe that the Remington brand represents an enduring symbol of American values and is trusted and respected by generations of sportsmen, lawmen and soldiers. Established in 1816, the Remington brand is ranked #2 in brand awareness, second only to Nike among sportsmen and 8th overall among all sports brands in the SportsOneSource 2009 Brand Index. The brand has been judiciously deployed across virtually every category of our firearms and ammunition. Remington has some of the best-known and longest-selling products in the hunting and shooting sports market, which we believe define their respective categories. For example, the 10 millionth Model 870 pump-action shotgun was produced in April 2009 and we have produced more than 5 million Model 700 bolt-action rifles, which we believe is currently the most widely-distributed rifle in its class.

              The Bushmaster and DPMS brands, established in 1973 and 1986, respectively, represent the largest and second largest designers and suppliers of modern sporting rifles, components and parts for the commercial market, in addition to sales to the law enforcement, military and international markets. Bushmaster was one of the first to introduce modern sporting rifles to the consumer market, a segment which is growing faster than the general firearms industry.

              Our other firearms brands are leaders in their niche markets:

•

Marlin—Key producer of lever-action and bolt-action rifles

•

Harrington & Richardson—Producer of break-action single-shot rifles and shotguns

•

L.C. Smith—Major producer of aspirational side-by-side and over-under shotguns

•

Parker—Key producer of aspirational high-end brand of artisanal shotguns

•

Dakota Arms—Key producer of aspirational rifles and shotguns often chambered in large calibers

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•

Miller Arms—Producer of customized precision single-shot rifles

•

Nesika—Producer of precision bolt-action rifles and actions

              Our ammunition brands, including Remington, UMC and Dakota, also enjoy leading market positions, strong brand recognition and generations of customer loyalty. We believe that Remington Core-Lokt centerfire ammunition is the most widely used, and the Premier STS and Nitro 27 target loads have won more trophies at the Grand American Trap and World Skeet championship than any other brand.

              Our EOTAC and INTC joint ventures extend into tactical and discreet clothing and frangible ammunition, respectively.

Leading Market Share Positions

              Our core products are ranked #1 across their respective U.S. commercial product categories.

Categories		U.S. Market Position		U.S. Market Share
Firearms
	Shotguns		#1		31	%
	Traditional Rifles		#1		36	%
	Modern Sporting Rifles		#1		49	%
Ammunition			#1		33	%

Note:

Based on SMRG and AFMER data and excludes law enforcement, international and military sales.

Broad Product Portfolio

              We have the broadest firearms, ammunition, components, parts and accessory portfolio in our industry. Our products range in price from entry level firearms under the Harrington & Richardson brand to the aspirational hand-crafted Parker Gun and Dakota brands in addition to our core brands of Remington, Bushmaster, DPMS and Marlin. We are the only company in the United States that is a major supplier of both firearms and ammunition. We further leverage consumer loyalty to our brands by offering components and parts for firearms as well as accessories. We also license our trademarks to a discrete number of third parties that manufacture and market sporting and outdoor products that complement our product lines.

Expertise in Designing Innovative, High-Quality Products

              We focus on providing generations of consumers with the combined advantage of safety and high-performance products through our superior design and construction, proprietary technology and advanced materials. We are an innovation leader in our industry, supported by more than 45 engineers and technicians and what we believe to be the industry's only domestic freestanding and dedicated firearms research and development facility. Our technicians are keenly focused on aligning our products with the growth trend among consumers for increasingly sophisticated products.

              This strategy results in a robust new product pipeline, including our M887 Nitro Mag shotgun, an innovative new pump-action shotgun that features ARMORLOKT, our proprietary protective coating designed for the harshest environments. In addition, we have developed various innovative products for the international, law enforcement and government end-markets under the Remington, Bushmaster and DPMS brands. For example, Remington supplies the M24 Sniper Weapon System to the U.S. Army. Finally, Bushmaster and DPMS, which supplied over 30,000 firearms to law

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enforcement and international customers in 2008, provide firearms to various federal agencies including the DOD.

              Recent ammunition product introductions have focused on developing exclusive or proprietary technology with application to performance oriented hunting and shooting sports users and special application law enforcement and military needs.

Multiple Distribution Channels Reaching Diverse End-Markets

Commercial

              The combination of our strong brands, wide product breadth, leading market shares and the ability to offer both firearms and ammunition has made us a key partner with our commercial retailers and distributors. We have strong relationships with all of the major chain retail stores that sell firearms and ammunition, including Bass Pro Shops, Cabela's, Dick's Sporting Goods, Gander Mountain, Academy, Big Five and Wal-Mart, as well as with major sporting goods distributors. In addition, we have strong relationships with dealers and shooting ranges, and are actively working with them to grow sales within this channel. Within the commercial business, our products are used across a wide variety of shooting activities, resulting in numerous diverse customer end-markets serving hunters as well as skeet, trap and target shooters, competitive target shooters and a broad variety of recreational shooters.

Military/Law Enforcement/International

              In addition to our significant commercial business, we sell products to law enforcement, international, government and military end-markets. These markets represented approximately 19% of our 2008 net sales. We believe that our increasingly focused law enforcement and global military products divisions will increase our presence in the law enforcement and defense markets beyond our existing customers, which include the Texas Department of Public Safety, Los Angeles County Sheriff's Department, Los Angeles Police Department, the California Highway Patrol, FLETC, DOD, the United States SOCOM, and the United States Secret Service, as well as international governments including Colombia, the Republic of Georgia, Italy, Poland, Malaysia, Mexico and Oman. All firearms and ammunition that we sell and export to foreign countries, whether sold commercially or to international governments and militaries, must be licensed and approved by the U.S. Department of State or the U.S. Department of Commerce.

Differentiated, Customer-Focused Sales and Marketing Approach

              We have significantly grown and transitioned our dedicated sales force to a two-tiered structure whereby dedicated key account managers sell the full FGI product offering to our top eight retail accounts while our internal field sales force calls on our network of approximately 800 distributors and dealers. This investment and effort has significantly reduced our use of third-party, non-exclusive sales representatives. This sales structure is similar to those utilized by many leading consumer products companies and allows for us to more effectively sell our entire suite of brands and products to our key customers and distributors. We believe this sales structure will lead both to increased market share with our key customers as well as to provide the ability to leverage our flexible manufacturing capacity to quickly respond to changes in customer preferences and demands.

              We have also shifted our business from a manufacturing-based "push system" to a customer-focused "pull system," driven by our Chief Sales and Marketing Officers. We have the ability to mine our extensive and proprietary database of consumer contacts and are an industry leader in our ability to capture and analyze point-of-sale and sell through data from our key customers and distributors to determine what products our customers demand. Additionally our key account managers have access to the full suite of FGI products and we believe are leveraged by our retail partners to assist in long range sales planning.

7

              Our law enforcement and global military products divisions capitalize on key relationships to identify customer needs, so that research and development investments are focused and timely in providing products that meet these needs. We supplement our law enforcement and military efforts through the consultation of our board members who have extensive knowledge and experience.

Attractive Cash Flow Generation

              We believe our recurring revenue model further supports our ability to generate strong future cash flows that can be re-invested in research and development, the growth of sales within our distribution channels and in the acquisition of select complementary businesses. We have achieved substantial working capital improvements since 2007 by decreasing average days sales outstanding by 10 days and inventory days by 45 days from January 2007 through June 2009. Our attractive operating margins, variable cost structure, relatively low maintenance capital expenditures and low working capital needs all result in strong cash flow generation.

Proven and Experienced Management Team

              Our senior management team has substantial industry and related operational, sales and marketing and financial experience. For example, our Chief Executive Officer, Ted Torbeck, joined us after a 28 year career with General Electric, our Chief Sales Officer, Scott Blackwell, has over 20 years experience in the firearm and law enforcement industry and our Chief Financial Officer, Stephen Jackson, has been with the Company for six years and has over 19 years of financial and accounting experience. Immediately after the offering, our management will own approximately        % of our common stock (on a fully diluted basis). In addition to key managers that have been in place at our companies, we have added numerous experienced external professionals to execute our business strategy. Our management team is also supported by a dedicated group of employees who embody an innovation driven culture. The team continues to focus on upside opportunities to establish permanent competitive advantages and drive operational synergies from successfully executed acquisitions and integrations.

Our Growth Strategy

              Our fundamental strategy is to continue to strengthen and broaden our leading market positions across the firearms, ammunition and related product markets. We do so by actively and collectively managing our broad portfolio of powerful brands and products across a diverse set of end-markets. Our core strengths described above, augmented by a constant focus on operational improvements designed to increase manufacturing efficiency, quality and profitability, have been implemented and are continuously refined by our highly experienced management team. Specific additional strategic initiatives include:

Increase Commercial Market Share through Marketing-Focused Organization

              The combination of our strong brands, wide product breadth, leading market shares and the ability to offer both firearms and ammunition has cultivated a broad and loyal customer base across a wide range of commercial retailers and distributors. We have invested in our commercial sales organization, growing our headcount by 44% over the past two years, to increase the experience, reach and impact of our team. This investment and effort has significantly reduced our use of third-party, non-exclusive sales representatives. We expect to continue to grow our commercial market share by leveraging our strong brand and product portfolio with our dedicated sales force to increase shelf space. As we continue to see results of our sales and marketing optimization efforts, we will benefit from the key account managers developing stronger ties to and long term plans with our core retailers while the broader sales force capitalizes on an extensive existing dealer network. By increasing our

8

consumer points-of-contact and continued focus on a customer driven platform, we believe we will continue to expand our leading market position.

Further Penetrate the Domestic and International Defense and Law Enforcement Channels

              Our global military products division, operating under a unified leadership across all of our brands, has focused research efforts on developing products in advance of key emerging imminent firearms solicitation windows for the DOD over the next several years. We have significantly ramped up and augmented our business to take advantage of these opportunities. While we have supplied a number of products to the military and law enforcement channels for many years, we view this area as having high potential for further penetration and growth for a wide variety of our existing products, as well as products we have recently developed and continue to develop. As noted above, our law enforcement and global military products divisions use key relationships to identify customer needs in anticipation of formal bids, so that research and development investments are focused and timely in providing products that meet those needs. Specific opportunities include the development of the next generation tactical sniper system for special operations and conventional military customers, the next generation service rifle for the U.S. Army, an upgrade option to our current M24 Sniper Weapon System for the U.S. Army for greater range and capability, and a materials and coatings sniper rifle study for the Defense Advanced Research Projects Agency (DARPA) that focuses on barrel life and long range accuracy. In addition, we are aligning ourselves with certain suppliers to exploit our competitive advantages and secure future government-funded research and development opportunities in this area.

              Our international presence has increased significantly in net sales over the last two years with firearms (sniper systems, shotguns, and service rifles) and ammunition sales to governmental customers in Mexico, Thailand, Malaysia and Afghanistan, among other countries. In addition to the new products mentioned above, we are developing several products specific to the foreign markets, including a 7.62mm semi-auto sniper system and several personal defense weapons. We believe we are well-positioned as an important player in this growing global market and can offer full firearms and ammunition solutions to existing and new foreign military customers. We believe leveraging current and future DOD contracts will further enhance our ability to win international business. All firearm export sales need to be licensed and approved by the United States Department of State or the United States Department of Commerce, and we have a successful track record of obtaining such approvals.

Continued Focus on Innovation and New Product Development

              Our team develops new products, such as the weather-resistant M887 Nitro Mag shotgun which was launched in May 2009, as well as processes to bring new products such as the XL7 series of rifles to market more quickly and cost effectively. Our focus on innovation has resulted in the introduction of diverse products such as the Remington R-15 modern sporting rifle, the R-25 modern sporting rifle, the Bushmaster .50 BMG bolt action rifle, and the .308 DPMS modern sporting rifle. In 2009, we also launched the Remington M597 VTR rimfire rifle, the Marlin .338 MXLR/MX lever action line of rifles and the Remington R-15 styled rifle for the new Remington 30AR cartridge, along with a variety of other new ammunition products. We are driving product development for our law enforcement, international and military efforts, as well as additional sales to existing commercial customers with additional part configurations and calibers for the modern sporting rifle. Specific examples include the Adaptive Combat Rifle and 7.62mm semi-auto sniper system. We have numerous new products in development with multiple new firearms product platforms and extensions to existing product lines scheduled for introduction in 2010 and beyond.

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Continue to Optimize Manufacturing Operations

              We have augmented and integrated our facilities over the last 18 months and have focused on improving our operating efficiency. To this end, we have completed a number of lean manufacturing projects, including a factory consolidation and six sigma efforts led by the introduction of more than 50 black belt process experts since implementation of the program. Such projects have increased throughput and reduced direct labor, square footage and equipment downtime along with improved cash flow from lower inventory levels. These activities, which we call "continuous cost improvements," will continue to be a cornerstone of our organization as we build and optimize our world class manufacturing platform.

              Our manufacturing optimization efforts have also included the shift of some modern sporting rifle components and parts production into our plants and away from third-party vendors. These efforts have made the combined organization considerably more flexible, improved our quality and margins and enabled us to more quickly and efficiently address future changes in demand. The benefits of our past work are starting to appear in our ability to leverage our existing manufacturing footprint during periods of high demand while maintaining variability in our cost structure. We enhance this variability through our use of third parties for many modern sporting rifle components with no long-term contracts, so that we can adjust our inventory quickly and at a low cost.

Pursue Complementary Acquisitions and Strategic Investments

              We have built and strengthened our family of brands and products over the past three years, primarily through the successful integration of four primary acquisitions (Bushmaster, Remington, DPMS and Marlin) made between April 2006 and January 2008. We did so with the goal of creating the world's leading firearms and ammunition company. We have a proven track record of successfully identifying and integrating acquisitions, as demonstrated by the integration of our brands, and have achieved significant operational improvements as a result. We intend to continue to identify and pursue add-on strategic acquisitions or investments that expand and enhance our brand, product and intellectual property portfolio. We seek to acquire highly complementary products, intellectual property or external capabilities to expand our portfolio or extend our brands and channel relationships.

              We have recently completed three acquisitions which we believe will enhance our business performance. On June 5, 2009, we acquired certain assets of Dakota Arms, a producer of high-end rifles, shotguns and ammunition for approximately $1.8 million, which primarily consisted of inventory and equipment. This acquisition positions us in the largely customized, high precision, large caliber and safari segments of the market, with premium and aspirational firearm and ammunition brands including Dakota Arms, Miller Arms and Nesika, as well as Dan Walter premium gun cases. In addition, on September 22, 2009, we acquired certain assets from S&K Industries, Inc. ("S&K"), a supplier of high quality walnut and laminate wood stocks for our firearms operations for approximately $3.8 million. The assets acquired are primarily inventory, machinery and equipment. We believe this acquisition will reduce certain costs of acquiring the wood stocks and improve efficiencies in our firearms manufacturing processes. Finally, on October 2, 2009, we completed the acquisition of certain assets of Advance Armament Corporation ("AAC") for approximately $10.2 million, with additional contingent consideration of approximately $8.0 million due in 2015 upon achievement of certain employment and financial conditions. AAC manufactures and markets a full line of firearm accessory products used in certain military (including current use by the DOD), law enforcement and commercial markets and provides us further product portfolio expansion.

Recent Transactions

              In July 2009, we issued $200.0 million of 10.25% Senior Secured Notes due 2015 at an issue price of 97.827% (the "Notes"), and entered into a new $180.0 million senior secured asset-based

10

revolving credit facility (the "ABL Revolver"). We used the proceeds of the Notes together with proceeds from borrowings under the ABL Revolver and cash on hand to repay outstanding indebtedness, and to pay related transaction fees and expenses.

              The issuance of the Notes, the borrowing under our ABL Revolver and the related repayments of outstanding indebtedness (including the termination of any commitments thereunder) described above are referred to collectively as the "Refinancings." Prior to the Refinancings, FGI maintained two separate capital structures at its two principal subsidiaries: Remington and BFI. The Refinancings consolidated all significant debt at FGI with all wholly-owned domestic subsidiaries being borrowers and/or guarantors.

Ownership

              Immediately after the offering, funds and accounts managed by Cerberus or its affiliated management companies, which we refer to collectively as our controlling stockholder, will control approximately            % (approximately            % if the underwriters' option to purchase additional shares to cover over-allotments is exercised in full) of our common stock. Established in 1992, Cerberus, along with its affiliates, is one of the world's leading private investment firms. Cerberus currently holds controlling or significant minority investments in companies around the world. Cerberus invests in divestitures, turnarounds, recapitalizations, financial restructurings, public-to-privates and management buyouts in a variety of sectors.

Corporate Information

              Our principal executive offices are located at 870 Remington Drive, P.O. Box 1776, Madison, North Carolina 27025-1776, and our telephone number is (336) 548-8700. For information on our corporate history, see "Business—Company Overview—Our History and Corporate Structure."

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THE OFFERING

Common stock offered:
	By Freedom Group, Inc.	shares (or            shares if the underwriters exercise their over-allotment option in full).
	By the selling stockholders	shares (or            shares if the underwriters exercise their over-allotment option in full).
Shares outstanding after the offering		shares (or            shares if the underwriters exercise their over-allotment option in full).
Shares outstanding or issuable after the offering		shares (or            shares if the underwriters exercise their over-allotment option in full).
Use of proceeds		The net proceeds to us from this offering will be approximately $             million after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering for working capital and other general corporate purposes. See "Use of Proceeds." We will not receive any proceeds from the sale of shares by the selling stockholders.
Dividend Policy		The declaration and payment of any dividends will be at the sole discretion of our board of directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions with respect to the payment of dividends, and other considerations that our board of directors deems relevant. See "Dividend Policy."
Risk factors		See "Risk Factors" and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.
Proposed ticker symbol		"            "

              The number of shares of common stock outstanding after the offering is based on            shares of common stock outstanding as of            , 2009 (assuming that the Recapitalization had taken place) and includes common stock underlying options that are exercisable within 60 days of            , 2009, but excludes common stock underlying all other options. The number of shares excluded in the previous sentence are included in the number of shares of common stock outstanding or issuable after this offering (which includes the shares issuable upon the exercise of all outstanding options).

              Unless otherwise indicated, all information contained in this prospectus assumes:

•

that the underwriters do not exercise their option to purchase up to            additional shares of our common stock from us and the selling stockholders to cover over-allotments, if any;

•

the        -for-1 reverse split of all our outstanding common stock and the reclassification of all our outstanding preferred stock into a calculated amount of shares of our common stock, which will occur immediately prior to the closing of this offering (the foregoing, collectively, the "Recapitalization"); the amount of shares of common stock to be issued upon the reclassification of such preferred stock will be determined by                  ; and

12

•

the filing of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws, which will occur immediately prior to the closing of this offering.

              For more detailed information regarding our common stock and options, see "Description of Capital Stock."

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SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

              As a result of the acquisition of the assets of Bushmaster by CCM, which was effective as of April 1, 2006, our financial results for 2006 have been separately presented in our consolidated financial statements for the "Predecessor Entity" for the period January 1, 2006 through March 31, 2006 and for the "Successor Entity" for the period April 1, 2006 through December 31, 2006. We have combined the 2006 Predecessor Entity and Successor Entity periods from January 1, 2006 through December 31, 2006 in the summary historical and pro forma consolidated financial data below, as we believe this combination is more useful to explain our results of operations. This presentation is not a measure under GAAP and it is provided to enhance the reader's understanding of our results of operations for the period presented.

              The summary historical financial data below for each of the years ended December 31, 2008 and 2007 and the period from April 1, 2006 to December 31, 2006 are derived from the consolidated financial statements of Freedom Group. The summary historical financial data for the period from January 1, 2006 through March 31, 2006 is derived from the consolidated financial statements of Bushmaster Firearms, Inc. and its subsidiaries. All financial statements described above have been audited by Grant Thornton LLP, independent registered public accounting firm, and are included elsewhere in this prospectus. The summary historical financial data for each of the six month periods ended June 30, 2009 and 2008 are derived from the unaudited consolidated financial statements of Freedom Group included elsewhere in this prospectus. Such unaudited consolidated financial statements, in the opinion of our management, include all adjustments necessary for the fair presentation of our financial condition, results of operations and cash flows for such periods and as of such dates.

              The summary unaudited condensed consolidated pro forma financial information for the twelve months ended June 30, 2009 has been derived from the unaudited pro forma consolidated financial information for the year ended December 31, 2008 and for the six months ended June 30, 2008 and 2009 included in "Unaudited Pro Forma Condensed Consolidated Financial Information." The unaudited pro forma consolidated statement of operations data has been adjusted to give effect to the Marlin Acquisition, the Refinancings and the Dakota Acquisition as if they had occurred on January 1, 2008, and the unaudited pro forma, as adjusted consolidated statement of operations data has been adjusted to give effect to the Transactions as if they had occurred on January 1, 2008. The unaudited pro forma consolidated balance sheet data reflects our financial position as if the Refinancings had occurred as of June 30, 2009 and the unaudited pro forma, as adjusted consolidated balance sheet data reflects our financial position as if the Refinancings, the Recapitalization and the offering of our common stock and the use of proceeds thereof had occurred as of June 30, 2009.

              The summary unaudited pro forma consolidated financial data is for informational purposes only and does not purport to present what our results of operations and financial condition would have been had these transactions actually occurred as of the dates indicated, nor does it project our results of operations for any future period or our financial condition at any future date.

              You should read the following audited and unaudited summary historical and pro forma consolidated financial data of Freedom Group in conjunction with "Selected Historical Consolidated Financial Data," "Capitalization," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical financial statements and their notes and other financial information appearing elsewhere in this prospectus.

              Our results of operations for the year ended December 31, 2006 reflect the combined predecessor and successor operations of Bushmaster. Our results of operations for the year ended December 31, 2007 also include the results of operations of Remington, which we acquired on May 31, 2007. Due to the significant impact of the acquired Remington operations, our financial results for

14

periods subsequent to May 31, 2007 may not be comparable to our results from prior-year periods. In addition, on December 13, 2007 we consummated the acquisition of certain assets of DPMS and on January 28, 2008, we consummated the Marlin Acquisition. Due to the impact of the acquired Marlin and DPMS operations, our results of operations for 2008 may not be comparable to our results from prior-year periods. For additional information regarding our acquisitions, see "Business—Company Overview—Our History and Corporate Structure."

	Year Ended December 31,									Six Months Ended June 30, (Unaudited)						Twelve Months Ended June 30, (Pro Forma) (Unaudited)			Twelve Months Ended June 30, (Pro Forma, as Adjusted) (Unaudited)
	2006			2007(3)			2008(3)			2008(3)			2009			2009			2009
	(in millions, except share and per share data)
Income Statement and Other Data
Net Sales(1)	$	58.1		$	384.9		$	722.5		$	316.8		$	427.3		$	835.3		$
Cost of Goods Sold		34.4			306.0			524.4			229.8			282.4			577.6
Gross Profit		23.7			78.9			198.1			87.0			144.9			257.7
Operating Expenses		12.7			70.1			186.9			66.0			78.7			201.9
Operating Income		11.0			8.8			11.2			21.0			66.2			55.8
Interest Expense		4.6			21.2			30.8			15.2			14.6			27.2
Income (Loss) before Taxes		6.4			(12.4	)		(19.6	)		5.8			51.6			28.6
Net Income (Loss)		5.2			(9.0	)		(28.6	)		3.6			33.0			2.2
Net Income (Loss) Applicable to Common Stock		5.2			(9.9	)		(48.2	)		(6.1	)		23.0			(17.7	)
Net Income (Loss) Per Share
Basic	$	0.33		$	(0.62	)	$	(2.97	)	$	(0.38	)	$	1.41		$	(1.09	)	$	(2)
Diluted	$	0.32		$	(0.62	)	$	(2.97	)	$	(0.38	)	$	1.39		$	(1.09	)	$	(2)
Weighted Average Number of Shares Outstanding
Basic		15,937,801			16,084,174			16,236,305			16,166,948			16,332,431			16,318,669			(2)
Diluted		16,052,595			16,084,174			16,236,305			16,166,948			16,554,230			16,318,669			(2)
Operating and Other Financial Data
Net Cash provided by (used in):
Operating Activities	$	6.4		$	70.8		$	52.9		$	(39.4	)	$	53.3
Investing Activities		(77.3	)		(90.7	)		(57.1	)		(49.0	)		(7.9	)
Financing Activities		71.7			43.9			57.3			74.9			(12.2	)

	As of June 30, 2009 (Unaudited)
	Actual			Pro Forma			Pro Forma, as Adjusted
	(in millions)
Balance Sheet Data
Cash and Cash Equivalents	$	111.0		$	18.6		$
Working Capital		271.6			181.0
Total Assets		734.0			655.6
Total Debt(4)		324.3			250.3
Stockholders' Equity (Deficit)		(80.3	)		(82.9	)

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	Year Ended December 31,									Six Months Ended June 30						Twelve Months Ended June 30, (Pro Forma)			Twelve Months Ended June 30, (Pro Forma, as Adjusted)
	2006			2007(2)			2008(2)			2008(3)			2009			2009			2009
	(in millions)
Other Financial Data
EBITDA(5)	$	13.2		$	54.6		$	104.7		$	49.5		$	96.2		$	150.8		$
EBITDA Margin(6)		22.7	%		14.2	%		14.5	%		15.6	%		22.5	%		18.1	%		%
Capital Expenditures	$	0.3		$	8.4		$	18.4		$	7.4		$	4.3		$	15.3		$

	Twelve Months Ended June 30, 2009 (Pro Forma) (Unaudited)
	(in millions, except ratios)
Pro Forma Data
Ratio of Total Debt to EBITDA(4)(5)		1.7	x
Ratio of EBITDA to Interest Expense(5)		5.5	x
Interest Expense	$	27.2

(1)

Presented net of federal excise taxes. Federal excise taxes were $54.5 million, $31.0 million and $3.8 million for the years ended 2008, 2007 and 2006, respectively. Federal excise taxes were $38.7 million and $22.4 million for each of the six months ended June 30, 2009 and 2008, respectively. Pro Forma federal excise taxes for the twelve months ended June 30, 2009 were $70.8 million.

(2)

Net income (loss) per share and weighted average number of shares outstanding give effect to our proposed Recapitalization.

(3)

Results for the year ended December 31, 2007 reflect the impact of the acquired Remington and DPMS operations, which were acquired in May 2007 and December 2007, respectively. Results for the year ended December 31, 2008 and the six months ended June 30, 2008 reflect the impact of the acquired Marlin operations, which was effective January 28, 2008, and the acquired DPMS operations, which was effective December 13, 2007.

(4)

Consists of short-term and long-term debt, current portion of long-term debt and capital lease obligations.

(5)

"EBITDA" is defined in the indenture governing the Notes. In addition to adjusting net income (loss) to exclude income taxes, interest expense, and depreciation and amortization, EBITDA also adjusts net income (loss) by excluding items or expenses as set forth below. EBITDA is a primary component of the fixed charge coverage ratio used in covenants under the indenture governing the Notes and is a basis on which management assesses performance.

EBITDA is not a measure of performance defined in accordance with GAAP. However, management believes that EBITDA is useful to investors in evaluating our performance because it is a commonly used financial analysis tool for measuring and comparing companies in our industry in areas of operating performance. Management believes that the disclosure of EBITDA offers an additional financial metric that, when coupled with the GAAP results and the reconciliation to GAAP results, provides a more complete understanding of our results of operations and the factors and trends affecting our business.

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EBITDA should not be considered as an alternative to net income (loss) as an indicator of our performance or as an alternative to net cash provided by operating activities as a measure of liquidity or as an alternative to any other measure prescribed by GAAP. The primary material limitations associated with the use of EBITDA as compared to GAAP results are (i) it may not be comparable to similarly titled measures used by other companies in our industry, and (ii) it excludes financial information that some may consider important in evaluating our performance. We compensate for these limitations by providing the following disclosure of the differences between EBITDA and GAAP results, including providing a reconciliation of EBITDA to GAAP results, to enable investors to perform their own analysis of our operating results.

EBITDA is calculated as follows:

		Year Ended December 31,								Six Months Ended June 30, (Unaudited)				Twelve Months Ended June 30, (Pro Forma) (Unaudited)
		2006		2007			2008			2008		2009		2009
		(in millions)
Net Income (Loss)		$	5.2	$	(9.0	)	$	(28.6	)	$	3.6	$	33.0	$	2.2
Adjustments:
	Depreciation		0.3		8.7			16.4			8.2		8.3		16.5
	Interest		4.6		21.2			30.8			15.2		14.6		27.2
	Income Tax Expense (Benefit)		1.1		(4.0	)		9.1			2.2		18.7		26.6
	Amortization of Intangibles		1.0		3.0			6.7			4.0		3.6		6.3
	Impairment Charges		—		—			47.4			—		—		47.4
	Other Non-cash Charges(A)		0.2		(2.6	)		4.9			2.4		7.5		10.0
	Non-recurring Charges(B)		0.8		37.3			18.0			13.9		10.5		14.6
	Total Adjustments		8.0		63.6			133.3			45.9		63.2		148.6
	EBITDA	$	13.2	$	54.6		$	104.7		$	49.5	$	96.2	$	150.8

(A)

Other non-cash charges include the following:

		Year Ended December 31,								Six Months Ended June 30, (Unaudited)					Twelve Months Ended June 30, (Pro Forma) (Unaudited)
		2006		2007			2008			2008			2009		2009
		(in millions)
Retiree Benefits and Pension Expenses		$	—	$	3.5		$	0.9		$	0.4		$	3.4	$	3.9
Plan Amendments/Curtailment(i)			—		(6.4	)		—			—			—		—
Stock Option Expense			0.2		0.1			1.4			0.8			0.3		0.9
Loss on Disposal of Assets			—		—			0.7			—			0.3		1.0
Inventory Write-off			—		0.3			2.0			1.3			3.5		4.2
Miscellaneous and Non-cash Rent			—		(0.1	)		(0.1	)		(0.1	)		—		—
	Total Other Non-cash Charges	$	0.2	$	(2.6	)	$	4.9		$	2.4		$	7.5	$	10.0

(i)

Consists of non-cash gain related to the amendment of our defined benefit plan.

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(B)

Non-recurring charges include the following:

		Year Ended December 31,							Six Months Ended June 30, (Unaudited)				Twelve Months Ended June 30, (Pro Forma) (Unaudited)
		2006		2007		2008			2008		2009		2009
		(in millions)
Restructuring and Integration Expenses(i)		$	0.1	$	4.0	$	4.9		$	3.0	$	1.1	$	3.0
Purchase Accounting(ii)			0.4		31.8		6.1			5.6		—		0.5
Write off of Surveillance Products Inventory(iii)			—		—		3.1			3.1		—		—
Gain on Sale of Investment(iv)			—		—		(1.4	)		—		—		(1.4	)
Employee Related Costs(v)			0.1		0.3		3.3			1.8		1.4		2.9
Product Safety Program(vi)			—		—		—			—		6.6		6.6
Other Fees and Transaction Costs(vii)			0.2		1.2		2.0			0.4		1.4		3.0
	Total Non-recurring Charges	$	0.8	$	37.3	$	18.0		$	13.9	$	10.5	$	14.6

(i)

Consists of factory integration costs associated with lean six sigma implementation and Marlin back-office integration including external consulting, consulting services by Cerberus Operations and Advisory Company, LLC, an affiliate of Cerberus, travel and equipment transportation expenses.

(ii)

Consists of purchase accounting adjustments related to the write-up of inventory and recording of hedging agreements at estimated fair value in accordance with Statement of Financial Accounting Standards ("SFAS") No. 141 (revised 2007), Business Combinations ("SFAS 141(R)"), that were rolled out over the subsequent period for which inventory was sold and period for which hedging contracts were expected to mature.

(iii)

Consists of cost of write-downs on inventory incurred upon exit of technology business.

(iv)

Consists of gain associated with sale of investment.

(v)

Consists of employee separation benefits, relocation and employment search fees.

(vi)

Consists of an accrual to reflect the estimated costs related to a product warning campaign related to 17 HMR ammunition and Remington Model 597 17 HMR semi-automatic rifles.

(vii)

Consists of costs incurred for the development of DOD organization and fees and expenses associated with due diligence for potential acquisitions and the current refinancing, offset by a gain associated with a federal excise tax audit.

(6)

Defined as EBITDA divided by Net Sales.

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RISK FACTORS

An investment in our common stock is subject to a number of risks. You should carefully consider the risks described below together with all the other information contained in this prospectus before deciding whether to purchase our common stock. If any of the following risks occurs, our business, financial condition, prospects or results of operations could be harmed. In such an event, the trading price of our common stock could decline and you may lose part or all of your investment.

Risks Relating to Our Business

Unfavorable market trends and regulatory concerns could adversely affect demand for our products and our business.

              We believe that a number of trends that currently exist may affect the hunting and shooting sports market:

•

the development of rural property in many locations has curtailed or eliminated access to private and public lands previously available for hunting;

•

environmental issues, such as concern about lead in the environment; and

•

decreases in consumer confidence and levels of consumer discretionary spending.

              These trends may have a material adverse effect on our business by impairing industry sales of firearms, ammunition and other shooting-related products.

Our business could be materially adversely affected as a result of general economic and market conditions. Continued volatility and disruption of the credit and capital markets may negatively impact our revenues and our, or our suppliers' or customers', ability to access financing on favorable terms or at all.

              We are subject to the effects of general global economic and market conditions. Increases in commodity prices, higher levels of unemployment, higher consumer debt levels, declines in consumer confidence, uncertainty about economic stability and other economic factors that may affect consumer spending or buying habits could adversely affect the demand for products we sell. If the current economic conditions and the related factors remain uncertain or persist, spread or deteriorate further, our business, results of operations or financial condition could be materially adversely affected.

              While we intend to finance expansion, renovation and other projects with existing cash, cash flow from operations and borrowings under the ABL Revolver, we may require additional financing to support our continued growth. As widely reported in recent months, the financial crisis in the banking sector and financial markets has resulted in a tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in fixed income, credit and equity markets. Possible consequences from the financial crisis to our business include decreased revenues from our operations attributable to decreases in consumer spending, limitations on our, or our suppliers' or customers', access to capital on terms acceptable to each party or at all, potential failure to satisfy the financial and other restrictive covenants to which we are subject under the ABL Revolver or the indenture governing the Notes, insolvency of key suppliers resulting in product delays, inability of customers to obtain credit to finance purchases of our products and/or customer insolvencies, increased risk that customers may delay payments, fail to pay or default on credit extended to them, and counterparty failures negatively impacting our treasury operations, each of which could have a material adverse effect on our results of operations or financial condition.

Our business is subject to economic, market and other factors beyond our control or ability to predict.

              The sale of our products depends upon a number of factors related to the level of consumer spending, including the general state of the economy and the willingness of consumers to spend on

19

discretionary items. Historically, the general level of economic activity has significantly affected the demand for sporting goods products in the hunting and shooting sports and related markets. As economic activity slows, consumer confidence and discretionary spending by consumers decline. Competitive pressures arising from any significant or prolonged economic downturn could have a material adverse impact on our financial condition and results of operations, and such impact could be intensified by our leveraged condition.

              Moreover, additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business and operations. These risks and uncertainties include, but are not limited to, weather and other Acts of God that could result in the loss or destruction of warehoused inventory and stoppages in our ability to manufacture our key products for a sustained period of time.

Significant increases in commodity and energy prices could have a material impact on our financial condition, results of operations or cash flows.

              The manufacturing of our products is dependent upon the availability of raw materials such as lead, copper, zinc, steel and brass. Increases in the prices of any of these raw materials as well as an increase in energy prices could have a material impact on our financial condition. We can provide no assurance as to the future trends of these conditions or to what extent future increases could be offset through customer price increases.

Our results of operations are affected by seasonal fluctuations in business, and our inventory management practices have had an effect on our business.

              Many of our firearms products are purchased in anticipation of use during the fall hunting season. As a result of the seasonal nature of our sales, our historical working capital financing needs generally have exceeded cash provided by operations during certain parts of the year. Our recent efforts to shorten terms and reduce dating plan billing practices, under which a distributor may purchase these products beginning in December (the start of our firearms dating plan year) and pay for them on extended terms, have moderated this seasonal aspect of working capital financing needs as compared to prior years. However, our working capital financing needs still tend to be higher during the spring and summer months, decreasing during the fall and reaching their lowest points during the winter.

              In addition, we believe that worsening economic conditions have caused other customers (dealers and chains) to defer purchases of our products until later in the core fall hunting seasons (September through December) and to utilize lower inventory levels than during prior periods. This overall trend in demand continues to date, and there can be no assurance that such trends will not continue.

              As a result of the seasonal nature of our sales and our customers' inventory management practices, our working capital financing needs may significantly exceed cash provided by operations during certain periods in a year.

A substantial amount of our business comes from one "national account" customer. A substantial portion of our accounts receivable is concentrated with two customers. Loss of business from either of these customers could adversely affect our financial condition, results of operations or cash flows.

              Our dedicated sales force and key account managers market our products directly to national accounts (consisting primarily of mass merchandisers) and to federal, state and local government agencies. Approximately 15% and 9% of our total sales for the year ended December 31, 2008 and for the six months ended June 30, 2009, respectively, and 13% and 6% of our accounts receivable balance as of December 31, 2008 and as of June 30, 2009, respectively, were attributable to one national

20

account, Wal-Mart. Our sales to Wal-Mart are generally not governed by a written long-term agreement. In the event that Wal-Mart significantly reduces or terminates its purchases of firearms and/or ammunition from us, our financial condition, results of operations or cash flows, could be adversely affected.

              Wal-Mart, together with another customer, accounted for approximately 21% and 16% of our accounts receivable balance as of December 31, 2008 and as of June 30, 2009, respectively. This other customer, due to the timing of its purchasing, usually maintains significant amounts of accounts receivable at the end of our fiscal year. In the event that this customer incurs financial difficulty and is unable to pay its account in full, our financial condition, results of operations or cash flows could be adversely affected.

We have experienced a significant increase in demand for certain of our products since late 2008. There can be no assurance that this increased demand for certain firearms and ammunition will continue.

              Demand for firearms and ammunition has increased significantly since late 2008, which we believe has been due in part to increased consumer uncertainty relating to new and potentially more restrictive legislation, and the increase of home defense spending in light of the global economic downturn. While we view this increase in demand as a significant long-term opportunity to expand our customer base and strengthen our customer relationships, there can be no assurance that this increased demand will continue or that demand will not decrease in the near or long-term. Any decrease in market demand for our products could have a material adverse effect on our business, financial condition, results of operations or cash flows.

We are dependent on a number of key suppliers. Loss of or damage to our relationships with these suppliers could have a material adverse effect on our business, financial condition, results of operations or cash flows.

              To manufacture our various products, we use many raw materials, including steel, zinc, lead, brass, copper, plastics and wood, as well as manufactured parts purchased from independent manufacturers. An extended interruption in the supply of these or other raw materials or in the supply of suitable substitute materials would disrupt our operations, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, we may incur additional costs in sourcing raw materials from alternative producers.

              For a number of our raw materials, we rely on one or a few suppliers. Alternative sources, many of which are foreign, exist for each of these materials. We do not, however, currently have significant supply relationships with any of these alternative sources. We cannot estimate with any certainty the length of time that would be required to establish alternative supply relationships, or whether the quantity or quality of materials that could be so obtained would be sufficient.

              In addition, we rely on a limited number of vendors to perform machining processes on key rifle components. Any disruption of the operations of one of our key vendors could materially impact our ability to obtain certain rifle components. In the event that we lose one of our principal vendors, we may not be able to find an alternative vendor in a timely fashion, and as a result, our ability to produce rifles could be materially and adversely affected.

We have been increasing the prices on certain of our products and shortening sales terms. These higher product selling prices coupled with reduced sales terms could limit sales, which could negatively impact our business, financial condition, results of operations or cash flows.

              We have imposed price increases on our customers in an attempt to offset cost increases relating to materials and energy (including lead, copper, zinc, brass, steel and fuel) that we have experienced. We have also worked to reduce sales terms over the past several years related to certain working capital initiatives. These higher product prices and shorter sales terms could limit our sales in

21

the future and could negatively impact our business, financial condition, results of operations or cash flows.

We may not be able to compete successfully within our highly competitive markets, which could adversely affect our business, financial condition, results of operations or cash flows.

              The markets in which we operate are highly competitive. Product image, name, quality and innovation are the primary competitive factors in the firearms industry. Product differentiation exists to a much lesser extent in the ammunition industry, where price is the primary competitive factor. Reductions in price by our competitors in the ammunition industry could force us to reduce prices or otherwise alter terms of sale as a competitive measure, which could adversely affect our business, financial condition, results of operations or cash flows.

              Our competitors vary by product line. Some of our competitors are subsidiaries of large corporations with substantially greater financial resources than us. Although we believe that we compete effectively with all of our present competitors, we may not continue to do so, and our ability to compete could be adversely affected by our leveraged condition. See "Business—Competition."

An increase in revenues to government, law enforcement and military sales channels could result in increased uncertainty to the timing of our sales revenues.

              Government, law enforcement and military sales channels are typically in the form of contract sales arrangements. We are exposed to these channels through our sale of certain firearms and ammunition products. An increasing percentage of our sales revenues could therefore be subject to contract negotiations. This trend could cause sales revenue amounts to be increasingly volatile and uncertain with respect to the timing of orders.

We intend to evaluate acquisitions, joint ventures and other strategic initiatives, any of which could distract our management or otherwise have a material adverse effect on our business, financial condition, results of operations or cash flows.

              Our future success may depend on opportunities to buy or obtain rights to other businesses or technologies that could complement, enhance or expand our current business or products or that might otherwise offer us growth opportunities. In particular, we intend to evaluate potential mergers, acquisitions, joint venture investments, strategic initiatives, alliances, vertical integration opportunities and divestitures. However, we may not experience the anticipated benefits of these transactions. In addition, we may be unable to effectively integrate any acquired businesses into our organization, and may not succeed in managing such acquired businesses or the larger company that results from such acquisitions. If we attempt to engage in these transactions, we expose ourselves to various inherent risks, including:

•

accurately assessing the value, future growth potential, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition candidates;

•

unanticipated expenses and potential delays related to integration of the operations, technology, and other resources of the acquired companies;

•

the potential loss of key personnel of an acquired or combined business;

•

our ability to achieve projected economic and operating synergies;

•

difficulties successfully integrating, operating, maintaining and managing newly-acquired operations or employees;

•

difficulties maintaining uniform standards, controls, procedures and polices;

•

unanticipated changes in business and economic conditions affecting an acquired business;

22

•

the possibility we could incur impairment charges if an acquired business performs below expectations;

•

the potential strain on our financial and managerial controls and reporting systems and procedures;

•

exposure to legal claims for activities of the acquired business prior to acquisition; and

•

the diversion of our management's attention from our existing business to integrate the operations and personnel of the acquired or combined business or implement the strategic initiative.

              If any of the foregoing risks materializes, our results of operations and the results of the proposed transactions would likely differ from our expectations and market expectations, and our stock price could, accordingly, decline. In addition, we may not be able to complete desirable transactions for reasons including a failure to secure financing or due to restrictions in agreements with third parties.

If we are unable to retain key management personnel, our business could be adversely affected.

              Our success is dependent to a large degree upon the continued service of our executive management team. We have entered into employment agreements with certain of our executives. The loss of any member of our executive management team could have a material adverse effect on our business, financial condition and results of operations.

Because of the nature of potential injuries relating to firearms and ammunition, certain public perceptions of our products, and recent efforts to expand liability of manufacturers of firearms and ammunition, product liability cases and claims, and insurance costs associated with such cases and claims, may cause us to incur significant costs.

              We are currently defending product liability litigation involving Remington brand firearms (including firearms manufactured under the Marlin, H&R and L.C. Smith names) and our ammunition products (including ammunition manufactured under the UMC and Peters names). As of August 31, 2009, approximately 16 individual bodily injury cases or claims were pending, primarily alleging defective product design, defective manufacture and/or failure to provide adequate warnings. Some of these cases seek punitive as well as compensatory damages. There were no pending product liability cases involving our other brands.

              Because the nature and extent of liability based on the manufacture and/or sale of allegedly defective products is uncertain, particularly as to firearms and ammunition, our resources may not be adequate to cover pending and/or future product liability occurrences, cases or claims, in the aggregate, and such cases and claims may have a material adverse effect upon our business, financial condition or results of operations. Insurance coverage for these risks is expensive and relatively difficult to obtain. Our insurance costs were approximately $5.6 million for the fiscal year ended December 31, 2008. Any inability to obtain insurance, any significant increases in the cost of insurance we obtain, or any losses in excess of our insurance coverage could have a material adverse effect on our business, financial condition or results of operations. See "Business—Legal Proceedings and Related Matters."

Our business is subject to extensive governmental legislation and regulation that may restrict our operations, increase our costs of operations, or adversely affect the demand for our products by limiting the availability and/or increasing the cost of our products.

              The manufacture, sale and purchase of firearms and ammunition are subject to extensive federal, state and local and foreign governmental regulation. Although we do not believe that current regulations have had such an impact to date, future regulations may adversely affect our operations by limiting the types of products that we can manufacture and/or sell, or imposing additional costs on us or on our customers in connection with the manufacture and/or sale of our products. Such regulations

23

may also adversely affect demand for our products by imposing limitations that increase the costs of our products, making it more difficult or cumbersome for our distributors or end users to transfer and own our products, or creating negative consumer perceptions with respect to our products.

              Current federal regulations include:

•

licensing requirements for the manufacture and/or sale of firearms and ammunition;

•

a national system of instant background checks for all purchases of firearms from federal license holders, including purchases of our firearms products and purchases from license holders at gun shows; and

•

a federal system of Department of State and Commerce Department licensing governing the sale, export and distribution of firearms and ammunition.

              In addition, bills have been introduced in Congress to establish, and to consider the feasibility of establishing, a nationwide database recording so-called "ballistic images" of ammunition fired from new guns. Should such a mandatory database be established, the cost to us, our distributors and our customers could be significant, depending on the type of firearms and ballistic information included in the database. Bills have also been introduced in Congress in the past several years that would affect the manufacture and sale of ammunition, including bills to regulate the manufacture, importation and sale of armor-piercing bullets, to prohibit the manufacture, transfer or importation of .25 caliber, .32 caliber and 9 mm handgun ammunition, and to increase or impose new taxes on the sales of certain types of ammunition, as well as bills addressing the use of lead in ammunition. Certain of these bills would apply to ammunition of the kind we produce, and accordingly, if enacted, could have a material adverse effect on our business.

              In September 2004, the United States Congress declined to renew the Federal Assault Weapons Ban of 1994 ("AWB"), which generally prohibited the manufacture of certain firearms defined under that statute as "assault weapons" and the sale or possession of "assault weapons." Various states and local jurisdictions have adopted their own version of the AWB, some of which apply to Bushmaster, DPMS and certain Remington sporting firearms products. If a statute similar to AWB were to be re-enacted it could have a material adverse effect on our business.

              State and local laws and regulations may place additional restrictions on gun ownership and transfer as described below.

•

Some states have recently enacted, and others are considering, legislation restricting or prohibiting the ownership, use or sale of specified categories of firearms and ammunition. Many states currently have mandatory waiting period laws in effect for the purchase of firearms, including rifles and shotguns. Although there are few restrictive state or local regulations applicable to ammunition, several jurisdictions are considering such restrictions on a variety of bases.

•

Some states have enacted regulations prohibiting the sale of firearms unless accompanied by an internal and/or external locking device. In several states, this requirement is imposed on both handguns and long guns. Some states are also considering mandating the inclusion of various design features on safety grounds. Most of these regulations as currently contemplated would be applicable only to handguns.

•

To date, two states have established registries of so-called "ballistic images" of ammunition fired from new guns. Although neither law mandates the inclusion of such "imaging" data from long guns in their registries, these or other states may do so in the future. Proposed legislation in at least one other state would be applicable to our rifles and would call for "imaging" of both cartridges and projectiles.

24

              We believe that existing federal and state legislation relating to the regulation of firearms and ammunition have not had a material adverse effect on our sales of these products. However, the regulation of firearms and ammunition may become more restrictive in the future and any such development might have a material adverse effect on our business, financial condition, results of operations or cash flows. In addition, regulatory proposals, even if never enacted, may affect firearms or ammunition sales as a result of consumer perceptions. See "Business—Regulation."

              Although we are primarily a manufacturer of long guns, the trends regarding firearms regulation, as well as pending industry litigation, and the consumer perception of such developments, may adversely affect sales of firearms, ammunition and other shooting-related products by such means as increasing costs of production and/or reducing the number of distribution outlets for our products.

Environmental litigation and regulations may restrict or increase the cost of our operations and/or impair our financial condition.

              We are subject to a variety of federal, state and local environmental laws and regulations which govern, among other things, the discharge of hazardous materials into the air and water, the handling, treatment, storage and disposal of such materials, as well as remediation of contaminated soil and groundwater. We have programs in place that monitor compliance with those requirements and believe that our operations are in material compliance with them. In the normal course of our manufacturing operations, we are subject to occasional governmental proceedings and orders pertaining to waste disposal, air emissions and water discharges into the environment.

              Based on information known to us, we do not expect current environmental regulations or environmental proceedings and claims to have a material adverse effect on our financial condition, results of operations or cash flows. However, it is not possible to predict with certainty the impact on us of future environmental compliance requirements or of the cost of resolution of future environmental proceedings and claims, in part because the scope of the remedies that may be required is not certain, liability under federal environmental laws is, under certain circumstances, joint and several in nature, and environmental laws and regulations are subject to modifications and changes in interpretation. Environmental regulations may become more burdensome in the future and any such development, or discovery of unknown conditions, may require us to make material expenditures or otherwise materially adversely affect the way we operate our business, as well as have a material adverse effect on our financial condition, results of operations or cash flows. See "Business—Environmental Matters."

Worse-than-assumed economic and demographic experience for our postretirement benefit plans (e.g., discount rates, investment returns, and health care cost trends) could negatively impact our financial condition, results of operations or cash flows.

              We sponsor plans to provide postretirement pension and health care for certain of our retired employees. The measurement of our obligations, costs and liabilities associated with these benefits requires that we estimate the present values of projected future payments to all participants. We use many assumptions in calculating these estimates, including discount rates, investment returns on designated plan assets, health care cost trends, and demographic experience (e.g., mortality and retirement rates). To the extent that actual results are less favorable than our assumptions there could be a substantial adverse impact on our financial condition, results of operations or cash flows.

Our future pension costs and required level of contributions could be unfavorably impacted by changes in actuarial assumptions and future market performance of plan assets, which could adversely affect our financial condition, results of operations or cash flows.

              We have significant defined benefit pension obligations. The funding position of our pension plans is impacted by the performance of the financial markets, particularly the equity markets, and the

25

discount rates used to calculate our pension obligations for funding and expense purposes. Recent significant declines in the financial markets have negatively impacted the value of the assets in our pension plans. In addition, lower bond yields may reduce our discount rates resulting in increased pension contributions and expense.

              Funding obligations are determined under government regulations and are measured each year based on the value of assets and liabilities on a specific date. If the financial markets do not provide the long-term returns that are expected under the governmental funding calculations, we could be required to make larger contributions. The equity markets can be, and recently have been, very volatile, and therefore our estimate of future contribution requirements can change dramatically in relatively short periods of time. Similarly, changes in interest rates can impact our contribution requirements. In a low interest rate environment, the likelihood of higher contributions in the future increases.

A disruption to certain of our manufacturing and distribution facilities could have a material adverse effect on our financial condition, results of operations or cash flows.

              The Ilion, New York, Lonoke, Arkansas, Mayfield, Kentucky, North Haven, Connecticut, Elizabethtown, Kentucky, Memphis, Tennessee, Windham, Maine, St. Cloud, Minnesota and Madison, North Carolina facilities are critical to our success. These facilities house our principal production, research, development, engineering, design, shipping and headquarters functions. Any event that causes a disruption of the operation of any of these facilities for even a relatively short period of time might have a material adverse affect on our ability to produce and ship products and to provide service to our customers.

Resources devoted to research and development may not yield new products that achieve commercial success.

              We devote significant resources to investment in research and development. The research and development process is expensive, prolonged and entails considerable uncertainty. Development of a new firearms product typically takes between one and three years. Because of the complexities and uncertainties associated with research and development, products that we are currently developing may not complete the development process or obtain the regulatory approvals required for us to market such products successfully. The development of new products may take longer and cost more to develop and may be less successful than we currently anticipate as a result of:

•

products that may appear promising in development but fail to reach market within the expected or optimal time frame, or fail to ever reach market, for any number of reasons, including efficacy and the difficulty or excessive cost to manufacture; or

•

failure to enter into or successfully implement optimal alliances where appropriate for the discovery and commercialization of products, or otherwise to maintain a consistent scope and variety of promising late-stage pipeline products; or

•

failure of one or more of our products to achieve or maintain commercial viability.

              We cannot assure you that any of our products currently in our development pipeline will be commercially successful.

If we are unable to favorably assess the effectiveness of our internal control over financial reporting, or if our independent registered public accounting firm is not able to provide an unqualified attestation report on the effectiveness of our Company's internal controls over financial reporting, our stock price could be materially adversely affected.

              We will be required to certify to and report on, and our independent registered public accounting firm will be required to attest to, the effectiveness of our internal control over financial reporting on an annual basis, beginning with the second Annual Report on Form 10-K that we file with the SEC after completion of this offering. Following this offering, we expect to devote considerable

26

resources, including management's time and other internal resources, to a continuing effort to comply with regulatory requirements relating to internal controls, as we have not previously been subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended. If we cannot favorably assess the effectiveness of our internal control over financial reporting, or if our independent registered public accounting firm is unable to provide an unqualified attestation report on the effectiveness of our Company's internal controls over financial reporting, investor confidence and, in turn, our stock price could be materially adversely affected.

Our success depends on sustaining the strength of our brands.

              The willingness of consumers to purchase our products depends in part upon our ability to offer attractive brand value propositions. This in turn depends in part on consumers attributing a higher value to our products than to alternatives. If the difference in the value attributed to our products as compared to those of our competitors narrows, or if there is a perception of such a narrowing, consumers may choose not to buy our products. If we fail to promote and maintain the brand equity of our products, then consumer perception of our products' quality may be diminished and our financial condition, results of operations or cash flows could be materially adversely affected.

Our inability to protect our intellectual property or obtain the right to use intellectual property from third parties could impair our competitive advantage, reduce our revenue, and increase our costs.

              Our success and ability to compete depend in part on our ability to protect our intellectual property. We rely on a combination of patents, copyrights, trade secrets, trademarks, confidentiality agreements, and other contractual provisions to protect our intellectual property, but these measures may provide only limited protection. Our failure to enforce and protect our intellectual property rights or obtain the right to use necessary intellectual property from third parties could reduce our sales and increase our costs. In addition, the laws of some foreign countries do not protect proprietary rights as fully as do the laws of the United States.

              Patents may not be issued for the patent applications that we have filed or may file in the future. Our issued patents may be challenged, invalidated, or circumvented, and claims of our patents may not be of sufficient scope or strength, or issued in the proper geographic regions, to provide meaningful protection or any commercial advantage. We have registered certain of our trademarks in the United States and other countries. We may be unable to enforce existing trademarks or obtain new registrations of principle or other trademarks in key markets. Failure to obtain or enforce such registrations could compromise our ability to protect fully our trademarks and brands and could increase the risk of challenge from third parties to our use of our trademarks and brands.

Labor disputes may cause work stoppages, strikes and disruptions.

              The workforce at our Ilion, New York manufacturing facility is unionized and covered by a collective bargaining agreement, which expires on October 28, 2012. As a result, any labor disputes at this facility, including work stoppages, strikes and disruptions, could have a material adverse impact on our business.

27

Risks Relating to our Indebtedness

We have a substantial amount of indebtedness, which could have a material adverse effect on our financial health and on our ability to obtain financing in the future and to react to changes in our business and which could adversely affect the price of our common stock.

              We have substantial indebtedness. As of June 30, 2009, after giving effect to the Transactions and the use of proceeds of this offering, we would have had $             million of total indebtedness. In addition, subject to restrictions in our debt instruments, we may incur additional indebtedness in the future. If new debt is added to our current debt levels, the related risks that we now face could intensify.

              Our significant amount of debt could limit our ability to satisfy our obligations, limit our ability to operate our business and impair our competitive position. For example, it could:

•

adversely affect our stock price;

•

make it more difficult for us to satisfy our obligations under the Notes or the ABL Revolver;

•

increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings are and will continue to be at variable rates of interest;

•

require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures or other general corporate purposes;

•

limit our flexibility in planning for, or reacting to, changes in our business and industry;

•

place us at a disadvantage compared to competitors that may have proportionately less debt;

•

limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements; and

•

increase our cost of borrowing.

              In addition, we cannot assure you that we will be able to refinance any of our debt or that we will be able to refinance our debt on commercially reasonable terms. If we were unable to make payments or refinance our debt or obtain new financing under these circumstances, we would have to consider other options, such as:

•

sales of assets;

•

sales of equity; or

•

negotiations with our lenders to restructure the applicable debt.

Our debt instruments may restrict, or market or business conditions may limit, our ability to use some of our options.

Our debt instruments may restrict our current and future operations.

              The indenture governing the Notes and the credit agreement governing the ABL Revolver impose significant operating and financial restrictions on us and our subsidiaries. These restrictions limit our ability and the ability of our subsidiaries to, among other things:

•

incur or guarantee additional debt, incur liens, or issue disqualified or preferred stock;

•

declare or make distributions to our stockholders, repurchase equity or prepay subordinated debt;

•

make loans and certain investments;

•

enter into transactions with affiliates;

28

•

enter into mergers, acquisitions and other business combinations;

•

consolidate or sell all or substantially all of our assets;

•

amend or modify our governing documents;

•

engage in businesses other than our business as currently conducted; and

•

allow certain restrictions on the ability of the Guarantors to pay dividends or make other payments to the Company.

              In addition to the covenants listed above, the ABL Revolver requires us, under certain circumstances, to meet a specified financial ratio. Any of these restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs and could otherwise restrict corporate activities. See "Description of Certain Indebtedness."

              Our ability to comply with these covenants may be affected by events beyond our control, and an adverse development affecting our business could require us to seek waivers or amendments of covenants, alternative or additional sources of financing or reductions in expenditures. We cannot assure you that these waivers, amendments or alternative or additional financings could be obtained, or if obtained, would be on terms acceptable to us.

              A breach of any of the covenants or restrictions contained in any of our existing or future financing agreements, including our inability to comply with the financial covenant in the ABL Revolver, could result in an event of default under those agreements. Our default could allow the lenders under our financing agreements, if the agreements so provide, to discontinue lending, to accelerate the related debt as well as any other debt to which a cross acceleration or cross default provision applies, and to declare all borrowings outstanding under our financing arrangements to be due and payable. In addition, the lenders could terminate any commitments they had made to supply us with further funds. If the lenders require immediate repayments, we will not be able to repay them in full.

Substantially all of our assets are pledged as collateral under the Notes and the ABL Revolver.

              As of                        , 2009, there was $         million and $         million of senior secured indebtedness outstanding under the Notes and the ABL Revolver, respectively. Substantially all of our assets are pledged as collateral for these borrowings. As of                        , 2009, the ABL Revolver permitted additional borrowings of up to a maximum of $         million under the borrowing base as of that date. Furthermore, all of our wholly-owned domestic subsidiaries are guarantors of our obligations under the Notes and all of our wholly-owned domestic subsidiaries are either borrowers or guarantors under the ABL Revolver. Substantially all of our assets are pledged as collateral for these guarantees. If we are unable to repay all secured borrowings when due, whether at maturity or if declared due and payable following a default, the trustee or the lenders, as applicable, would have the right to proceed against the collateral pledged to the indebtedness and may sell the assets pledged as collateral in order to repay those borrowings, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Risks Relating to Owning Our Common Stock

Cerberus controls us and may have conflicts of interest with other stockholders in the future.

              Immediately after the offering, funds and accounts managed by Cerberus or its affiliated management companies, which we will refer to collectively as our controlling stockholder, will control approximately            % (approximately            % if the underwriters' option to purchase additional shares to cover over-allotments is exercised in full) of our common stock. As a result, our controlling stockholder will continue to be able to control the election of our directors, determine our corporate and management policies and determine, without the consent of our other stockholders, the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including

29

potential mergers or acquisitions, asset sales and other significant corporate transactions. Our controlling stockholder will also have sufficient voting power to amend our organizational documents. We cannot assure you that the interests of our controlling stockholder will coincide with the interests of other holders of our common stock. Additionally, our controlling stockholder is in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Our controlling stockholder may also pursue, for its own account, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as our controlling stockholder continues to own a significant amount of the outstanding shares of our common stock, it will continue to be able to strongly influence or effectively control our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions.

Shares eligible for future sale may cause the market price of our common stock to decline, even if our business is doing well.

              Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales may occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Upon completion of this offering, our amended and restated certificate of incorporation will authorize us to issue            shares of common stock and we will have            shares of common stock outstanding. Of these outstanding shares, the            shares of common stock sold in this offering will be freely tradable, without restriction, in the public market unless purchased by our affiliates. The remaining            shares of common stock will be "restricted securities," as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), which will be freely tradable subject to applicable holding period, volume and other limitations under Rule 144 or Rule 701 of the Securities Act. As of                        , 2009, there were a total of            options outstanding, of which            were vested. Upon completion of this offering,             shares of these restricted securities will be subject to a lock-up agreement with the underwriters, restricting the sale of such shares for 180 days after the date of this offering. This lock-up agreement is subject to a number of exceptions and holders may be released from these agreements without prior notice at the discretion of                        . Moreover, after this offering, holders of an aggregate of                shares of our common stock will have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. Once we register these shares, they can be freely sold in the public market upon issuance, subject to the lock-up agreements described in the "Shares Eligible for Future Sale" section of this prospectus. See "Shares Eligible for Future Sale."

The shares you purchase in this offering will experience immediate and substantial dilution.

              The initial public offering price of our common stock will be substantially higher than the tangible book value per share of our outstanding common stock. Assuming an initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus, purchasers of our common stock will effectively incur dilution of $            per share in the net tangible book value of their purchased shares. The shares of our common stock owned by existing stockholders will receive a material increase in the net tangible book value per share. You may experience additional dilution if we issue common stock in the future. As a result of this dilution, you may receive significantly less than the full purchase price you paid for the shares in the event of a liquidation. See "Dilution."

Provisions in our charter documents, certain agreements governing our indebtedness and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders.

              Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws that will become effective upon the closing of this offering may discourage, delay or

30

prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team. Among others, these provisions:

•

establish a staggered board of directors such that not all members of the board are elected at one time;

•

upon such date that Cerberus, its Affiliates (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), or any person who is an express assignee or designee of Cerberus's rights under our amended and restated certificate of incorporation (and such assignee's or designee's Affiliates) (of these entities, the entity that is the beneficial owner of the largest number of shares is referred to as the Designated Controlling Stockholder) ceases to own, in the aggregate, at least 50% of the outstanding shares of our common stock, which we refer to as the 50% Trigger Date, allow the authorized number of our directors to be changed only by the affirmative vote of two-thirds of our shares of common stock or by resolution of our board of directors;

•

upon the 50% Trigger Date, limit the manner in which stockholders can remove directors from the board;

•

upon such date that Cerberus, its Affiliates, or any express assignee or designee of Cerberus, and such assignees or designee's Affiliates cease to own, in the aggregate, at least 30% of the outstanding shares of our common stock, which we refer to as the 30% Trigger Date, establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;

•

upon the 30% Trigger Date, require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;

•

limit who may call stockholder meetings;

•

require any stockholder (or group of stockholders acting in concert) who seek to transact business at a meeting or nominate directors for election to submit a list of derivative interests in any company securities, including any short interests and synthetic equity interests held by such proposing stockholder;

•

require any stockholder (or group of stockholders acting in concert) who seeks to nominate directors for election to submit a list of "related party transactions" with the proposed nominee(s) (as if such nominating person were a registrant pursuant to Item 404 of Regulation S-K, and the proposed nominee was an executive officer or director of the "registrant"); and

•

authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a "poison pill" that would work to dilute the stock ownership of a potential hostile acquiror, effectively preventing acquisitions that have not been approved by our board of directors.

              Our amended and restated certificate of incorporation authorizes the board of directors to issue up to            shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined by our board of directors at the time of issuance or fixed by resolution without further action by the stockholders. These terms may include voting rights, preferences as to dividends and liquidation, conversion rights, redemption rights, and sinking fund

31

provisions. The issuance of preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of our common stock. In addition, specific rights granted to holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of our board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent, or make it more costly to acquire or effect a change in control, thereby preserving the current stockholders' control.

              Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. The restrictions contained in Section 203 are not applicable to any of our existing stockholders that will own 15% or more of our outstanding voting stock upon the closing of this offering.

              In addition, under the credit agreement governing the ABL Revolver, a change in control may lead the lenders to exercise remedies such as acceleration of the loan, termination of their obligations to fund additional advances and collection against the collateral securing such loan. Also, under the indenture governing the Notes, a change of control may require us to offer to repurchase the all of the outstanding Notes for cash at a premium to the principal amount of the Notes.

A trading market may not develop for our common stock, and you may not be able to sell your stock.

              There is no established trading market for our common stock, and the market for our common stock may be highly volatile or may decline regardless of our operating performance. You may not be able to sell your shares at or above the initial public offering price.

              Prior to this offering, you could not buy or sell our common stock publicly. Subject to official notice of issuance, our common stock has been approved for quotation on the             . However, an active public market for our common stock may not develop or be sustained after this offering. If a market does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at a price that is attractive to you, or at all.

              The initial public offering price will be determined through negotiation between us and representatives of the underwriters, and may not be indicative of the market price for our common stock after this offering.

The stock price of our common stock may be volatile.

              The price at which our common stock will trade after this offering may be volatile due to a number of factors, including:

•

actual or anticipated fluctuations in our financial condition or annual or quarterly results of operations;

•

changes in investors' and financial analysts' perception of the business risks and conditions of our business;

•

changes in, or our failure to meet, earning estimates and other performance expectations of investors or financial analysts;

•

unfavorable commentary or downgrades of our stock by equity research analysts;

•

our success or failure in implementing our growth plans;

•

changes in the market valuations of companies viewed as similar to us;

•

changes or proposed changes in governmental regulations affecting our business;

•

changes in key personnel;

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•

depth of the trading market in our common stock;

•

failure of securities analysts to cover our common stock after this offering;

•

termination of the lock-up agreement or other restrictions on the ability of our existing stockholders to sell shares after this offering;

•

future sales of our common stock;

•

the granting or exercise of employee stock options or other equity awards;

•

increased competition;

•

realization of any of the risks described above; and

•

general market and economic conditions.

              In addition, equity markets have experienced significant price and volume fluctuations that have affected the market prices for the securities of newly public companies for a number of reasons, including reasons that may be unrelated to our business or operating performance. These broad market fluctuations may result in a material decline in the market price of our common stock and you may not be able to sell your shares of common stock at prices you deem acceptable. In the past, following periods of volatility in the equity markets, securities class action lawsuits have been instituted against public companies. Such litigation, if instituted against us, could result in substantial cost and the diversion of management attention.

We have never operated as a public company and the obligations incident to being a public company will require additional expenditures of both time and resources.

              Prior to the consummation of this offering, we have never operated as a public company, and we expect that the obligations of being a public company, including substantial public reporting, auditing and investor relations obligations, will require significant additional expenditures, place additional demands on our management and require the hiring of additional personnel. These obligations will increase our operating expenses and could divert our management's attention from our operations. The Sarbanes-Oxley Act of 2002 and the SEC rules and regulations implementing that Act, as well as various            rules, will require us to implement additional corporate governance practices and may require further changes. These new rules and regulations will increase our legal and financial compliance costs, and make some activities more difficult, time-consuming and/or costly. In particular, our management will be required to conduct an annual evaluation of our internal controls, and have that evaluation attested to by our independent auditor. We also expect these new rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These new rules and regulations could also make it more difficult for us to attract and retain qualified independent members of our board of directors and qualified members of our management team.

We are a "controlled company" within the meaning of the            rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

              Upon completion of this offering, Cerberus or its affiliated management companies will continue to control a majority of our outstanding common stock. As a result, we are a "controlled company" within the meaning of the            corporate governance standards. Under the            rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain            corporate governance requirements, including:

•

the requirement that a majority of the board of directors consist of independent directors;

33

•

the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;

•

the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

•

the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.

              Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of independent directors nor will our nominating/corporate governance and compensation committees consist entirely of independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the             corporate governance requirements.

We will have broad discretion over the use of the proceeds to us from this offering, and we may not use these funds in a manner of which you would approve or which would enhance the market price of our common stock.

              We will have broad discretion to use the net proceeds we receive from this offering, and you will be relying on the judgment of our board of directors and management regarding the use of these proceeds. Although we expect to use the net proceeds from this offering for working capital and other general corporate purposes, we have not allocated these net proceeds for specific purposes and cannot assure you that we will use these funds in a manner of which you would approve.

We may be restricted from paying dividends on our common stock.

              We are a holding company that does not conduct any business operations of our own, and, therefore, we are dependent upon cash dividends and other transfers from our subsidiaries to make dividend payments on our common stock.

              In addition, our ability to pay dividends will be restricted by agreements governing our debt, including the credit agreement governing our ABL Revolver and the indenture governing the Notes, and may be restricted by agreements governing any of our future indebtedness. Furthermore, we are permitted under the terms of our debt agreements to incur additional indebtedness that may severely restrict or prohibit the payment of dividends.

              Under the DGCL, our board of directors may not authorize payment of a dividend unless it is either paid out of our surplus, as calculated in accordance with the DGCL, or if we do not have a surplus, it is paid out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

Our dividend policy may change.

              We are not required to pay dividends, and our stockholders will not be guaranteed, or have contractual or other rights, to receive dividends. Our board of directors may decide, in its discretion, at any time, to decrease the amount of dividends, otherwise modify or repeal the dividend policy or discontinue entirely the payment of dividends. Our board of directors could depart from or change our dividend policy, for example, if it were to determine that we had insufficient cash to take advantage of other opportunities with attractive rates of return.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

              This prospectus contains statements which constitute forward-looking statements, including statements relating to trends in the operations and financial results and the business and the products of Freedom Group as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. The following important factors, and those important factors described elsewhere in this prospectus, including the matters set forth under the section entitled "Risk Factors," could affect (and in some cases have affected) our actual results and could cause such results to differ materially from estimates or expectations reflected in such forward-looking statements.

•

We are subject to the effects of general global economic and market conditions. Increases in commodity prices, higher levels of unemployment, higher consumer debt levels, declines in consumer confidence, uncertainty about economic stability and other economic factors that may affect consumer spending or buying habits could adversely affect the demand for products we sell. If the current economic conditions and the related factors remain uncertain or persist, spread or deteriorate further, our business, results of operations or financial condition could be materially adversely affected.

•

Continued volatility and disruption in the credit and capital markets may negatively impact our revenues and our, or our suppliers' or customers', ability to access financing on favorable terms or at all.

•

Our ability to make scheduled payments of principal or interest on, or to refinance our obligations with respect to, our indebtedness, as well as our ability to comply with the covenants and restrictions contained in the instruments governing such indebtedness, will depend on our future operating performance and cash flow, which are subject to prevailing economic conditions, prevailing interest rate levels, and financial, competitive, business and other factors beyond our control including the responses of competitors, changes in customer inventory management practices, changes in customer buying patterns, regulatory developments and increased operating costs, all of which could materially adversely affect our business.

•

The degree to which we are leveraged could have important consequences, all of which could materially adversely affect our business, including the following: (i) our ability to obtain additional financing for working capital or other purposes in the future may be limited; (ii) a substantial portion of our cash flow from operations is dedicated to the payment of principal and interest on our indebtedness, thereby reducing funds available for operations; (iii) certain of our borrowings are at variable rates of interest, which could cause us to be vulnerable to increases in interest rates; and (iv) we may be more vulnerable to economic downturns and be limited in our ability to withstand competitive pressures.

•

The development of rural property in many locations has curtailed or eliminated access to private and public lands previously available for hunting, and the continuation of the development of rural property could materially adversely affect our industry as well as our business and results of operations.

•

A significant portion of our sales are seasonal. As a result of the seasonal nature of our sales, our historical working capital financing needs generally have exceeded cash provided by operations during certain parts of the year. Our ability to meet our debt service and other obligations depends in significant part on customers purchasing our products during the fall hunting season. Notwithstanding our cost containment initiatives and continuing management

35

of costs, a decrease in demand during the fall hunting season for our higher priced, higher margin products would require us to further reduce costs or increase our reliance on borrowings under our credit facility to fund operations. If we are unable to reduce costs or increase our borrowings sufficiently to adjust to such a reduction in demand, our financial condition and results of operations could be adversely affected.

•

Lead, copper, steel, brass and zinc prices historically have experienced significant increases and volatility primarily due to increased global demand. Furthermore, fuel and energy costs have increased and have remained volatile over the same time period, although at a slower rate of increase. We currently purchase copper and lead options contracts to hedge against price fluctuations of anticipated commodity purchases. With the volatility of pricing that we have recently experienced, there can be no assurance that we will not see further material adverse changes in commodity pricing or energy costs, and such further changes, were they to occur, could have a material adverse impact on our consolidated financial position, results of operations, or cash.

•

Achieving the benefits of our acquisitions will depend in part on the integration of products and internal operating systems in a timely and efficient manner. Such integration may be unpredictable, and subject to delay because the products and systems typically were developed independently and were designed without regard to such integration. If we cannot successfully integrate such products and internal operating systems on a timely basis, we may lose customers and our business and results of operations may be harmed.

•

We face significant domestic and international competition and our competitors vary according to product line. Certain of these competitors are subsidiaries of large corporations with substantially greater financial resources than we have. There can be no assurance that we will continue to compete effectively with all of our present competition, and our ability to so compete could be adversely affected by our leveraged condition.

•

Sales made to Wal-Mart accounted for approximately 15% and 9% of our total sales for the year ended December 31, 2008 and for the six months ended June 30, 2009, respectively, and 12.9% and 6.3% of our accounts receivable balance as of December 31, 2008 and as of June 30, 2009, respectively. Wal-Mart, together with another customer, accounted for approximately 21.3% and 16.2% of our accounts receivable balance as of December 31, 2008 and as of June 30, 2009, respectively. Our sales to Wal-Mart are generally not governed by a written long-term contract between the parties. In the event that Wal-Mart were to significantly reduce or terminate its purchases of firearms, ammunition and/or other products from us, our financial condition or results of operations could be adversely affected.

•

We utilize numerous raw materials, including steel, zinc, lead, copper, brass, plastics and wood, as well as manufactured parts, which are purchased from one or a few suppliers. Any disruption in our relationship with these suppliers could increase our cost of operations. Such a disruption may result from or be amplified by the recent volatility of and uncertainty in the U.S. and global financial markets.

•

The manufacture, sale and purchase of firearms and ammunition are subject to extensive governmental regulation on the federal, state and local levels. Changes in regulation could materially adversely affect our business by restricting the types of products we manufacture or sell or by imposing additional costs on us or our customers in connection with the manufacture or sale of our products. Regulatory proposals, even if never enacted, may affect firearms or ammunition sales as a result of consumer perceptions. While we do not believe that existing federal and state legislation relating to the regulation of firearms and ammunition had a material adverse effect on our sales, no assurance can be given that more

36

restrictive regulations, if proposed or enacted, will not have a material adverse effect on us in the future.

•

As a manufacturer of firearms, we were previously named as a defendant in certain lawsuits brought by municipalities or organizations challenging manufacturers' distribution practices and alleging that the defendants have also failed to include a variety of safety devices in their firearms. Our insurance primarily excludes coverage regarding such claims. In the event that additional such lawsuits were filed, or if certain legal theories advanced by plaintiffs were to be generally accepted by the courts, our financial condition and results of operations could be adversely affected.

•

Our operation as a public company as a result of this offering will require significant additional expenditures, place additional demands on our management and require the hiring of more personnel to meet public reporting, auditing and investor relations requirements under the Sarbanes-Oxley Act of 2002 and the SEC rules and regulations implementing that Act, as well as various          rules. Our management will be required to conduct an annual evaluation of our internal controls, and have that evaluation attested to by our independent auditor. We expect these new rules and regulations to make director and officer liability insurance more expensive

              Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after the date of this prospectus.

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USE OF PROCEEDS

              We estimate that the net proceeds from the shares offered by us will be approximately $           million, after deducting the underwriting discount and estimated expenses of this offering and assuming we sell the shares for $          per share, the midpoint of the estimated price range set forth on the cover page of this prospectus.

              We will retain broad discretion over the allocation of the net proceeds of this offering. We intend to use the net proceeds of this offering for working capital and other general corporate purposes.

              We will not receive any proceeds from the sale of shares by the selling stockholders.

              Pending specific application of the net proceeds to us, we currently plan to invest the net proceeds received in a variety of capital preservation investments, including short-term, investment grade, interest-bearing securities.

DIVIDEND POLICY

              We are not required to pay dividends, and our stockholders will not be guaranteed, or have contractual or other rights to receive, dividends. The declaration and payment of any dividends will be at the sole discretion of our board of directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions with respect to the payment of dividends, and other considerations that our board of directors deems relevant. Our board of directors may decide, in its discretion, at any time, to decrease the amount or dividends, otherwise modify or repeal the dividend policy or discontinue entirely the payment of dividends.

              The agreements governing our indebtedness contain, and agreements governing any of our future indebtedness may contain, various covenants that limit our ability to pay dividends. We are also a holding company that does not conduct any business operations of our own. As a result, we are dependent upon cash dividends and distributions and other transfers from our subsidiaries to make dividend payments on our common stock. In addition, our subsidiaries are permitted to pay dividends to us subject to general restrictions imposed on dividend payments under the jurisdiction of incorporation or organization of each subsidiary. See "Risk Factors—Risks Related to the Offering—We may be restricted from paying dividends on our common stock" and "Risk Factors—Risks Related to Owning Our Capital Stock—Our dividend policy may change."

              The ability of our board of directors to declare a dividend is also subject to limits imposed by Delaware corporate law. Under Delaware law, our board of directors and the boards of directors of our corporate subsidiaries incorporated in Delaware, may declare dividends only to the extent of our "surplus," which is defined as total assets at fair market value minus total liabilities, minus statutory capital, or if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

              We did not pay any dividends during 2007, 2008 and to date during 2009.

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CAPITALIZATION

              The following table sets forth our cash and cash equivalents and our capitalization on a consolidated basis as of June 30, 2009:

•

on an actual basis;

•

on a pro forma basis, giving effect to the Refinancings, as if they had occurred on June 30, 2009; and

•

on a pro forma, as adjusted basis, giving effect to the Refinancings, the Recapitalization and the sale by us of           shares of common stock in this offering at an assumed initial public offering price of $          per share, the midpoint of the range on the cover of this prospectus, and the receipt of the net proceeds thereof, after deducting underwriting discounts and commissions and the estimated offering expenses payable by us, as if they had occurred on June 30, 2009.

              The pro forma information below is illustrative only and our capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. This table should be read in conjunction with "Use of Proceeds," "Selected Historical Consolidated Financial Data," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of

39

Operations" and our historical financial statements and their notes appearing elsewhere in this prospectus.

				As of June 30, 2009
				(Unaudited)
				Actual			Pro Forma			Pro Forma, as Adjusted(1)
				(in millions, except share and per share data)
Cash and Cash Equivalents(2)				$	111.0		$	18.6		$
Long-term debt, including current portion:
	FGI
		ABL revolver(3)		$	—		$	51.9		$
		101/4% Senior Secured Notes due 2015(4)			—			195.7
	Remington
		ABL revolver(5)			51.8			—			—
		Term loan(5)			17.7			—			—
		Capital leases			1.3			1.3
		101/2% Senior Notes due 2011(6)			201.6			—			—
	BFI
		Term loans(7)			29.1			—			—
		Capital Leases			0.4			0.4			—
		15% Subordinated Notes due 2012(8)			21.4			—			—
			Total long-term debt, including current portion		323.3			249.3
Mezzanine Equity:
	Preferred Stock, $0.10 par value, 20,000,000 shares authorized of which 19,000,000 are Series A preferred, 18,697,464 Series A shares issued and outstanding, $227.4 aggregate liquidation preference, actual;        shares authorized, no shares issued and outstanding, no aggregate liquidation preference, pro forma and pro forma, as adjusted				227.4			227.4			—
Stockholders' Equity (Deficit):
	Common Stock, $0.01 par value, 20,000,000 shares authorized, 16,673,920 and 16,619,922 shares issued and outstanding, actual;        shares authorized,        shares issued and outstanding, pro forma;        shares authorized,         shares issued and outstanding, pro forma, as adjusted				0.0			0.0
	Additional Paid-in Capital				0.0			0.0
	Accumulated Equity (Deficit)				(43.3	)		(45.9	)
	Accumulated Other Comprehensive Income (Loss)				(37.0	)		(37.0	)
			Total Stockholders' Equity (Deficit)(9)		(80.3	)		(82.9	)
Total Capitalization				$	470.4		$	393.8		$

(1)

A $1.00 increase (decrease) in the assumed initial public offering price of $        per share, the midpoint of the range on the cover of this prospectus, would result in an approximately $         million increase or decrease in each of the pro forma, as adjusted, cash and cash equivalents, pro forma, as adjusted, additional paid-in capital, pro forma, as adjusted, total stockholders' equity (deficit) and pro forma, as adjusted, total capitalization assuming the number of shares offered by us, as set forth on the cover page of this prospectus (assuming that the Recapitalization had taken place and excluding shares issuable under options

40

outstanding other than shares underlying options that are exercisable within 60 days of                        , 2009), remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us. An increase or decrease of 1.0 million shares in the number of shares offered by us would result in an approximately $             million increase or decrease in each of the pro forma, as adjusted, cash and cash equivalents, pro forma, as adjusted, additional paid-in capital, pro forma, as adjusted, total stockholders' equity (deficit) and pro forma, as adjusted, total capitalization, assuming the assumed initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus, remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us.

(2)

Cash on hand was approximately $111.0 million at June 30, 2009. As of August 31, 2009, cash on hand was approximately $8.5 million.

(3)

Consists of a $180.0 million senior secured asset based revolving credit facility. As of August 31, 2009, $13.8 million was outstanding under the ABL Revolver.

(4)

Consists of $200.0 million aggregate principal amount of the Notes, offered at a discounted price of 97.827%. The discount will be amortized into interest expense until the Notes mature.

(5)

The ABL revolver and term loan outstanding under the asset-based senior secured revolving credit facility under Remington's amended and restated credit agreement dated March 15, 2006 (the "Old Remington Credit Agreement") were repaid on July 28, 2009 in connection with the Refinancings.

(6)

The 10¹/2% Senior Notes due 2011 were redeemed on August 7, 2009 in connection with the Refinancings.

(7)

The term loans outstanding under BFI's amended and restated loan agreement, dated April 13, 2007 (the "Old BFI Credit Agreement") were repaid on July 29, 2009 in connection with the Refinancings.

(8)

The 15.0% Subordinated Notes due 2012 were repaid on August 7, 2009 in connection with the Refinancings.

(9)

When we repaid our indebtedness in the Refinancings, we wrote off approximately $2.3 million of deferred financing costs associated with such indebtedness, net of tax, which reduced our total stockholders' equity and our total capitalization.

              This table is based on            shares of common stock outstanding as of                        , 2009 (assuming that the Recapitalization had taken place and including common stock underlying options that are exercisable within 60 days of                        , 2009) and excludes, as of                        , 2009,            shares of common stock issuable upon exercise of options with a weighted average exercise price of $            per share.

41

DILUTION

              Purchasers of the common stock in the offering will suffer an immediate dilution in net tangible book value per share. Dilution is the amount by which the price paid by the purchasers of common stock in this offering will exceed the pro forma net tangible book value per share of common stock immediately after this offering. Our net tangible book value at June 30, 2009 was $       million or $      per share of common stock. Net tangible book value per share represents our tangible assets less total liabilities and preferred stock, divided by the number of shares of common stock outstanding as of June 30, 2009. Our pro forma net tangible book value as of June 30, 2009 was $             million or $        per share of common stock. Pro forma net tangible book value gives effect to the Refinancings and the Recapitalization. After giving effect to the consummation of this offering, assuming an initial public offering price of $        per share, the midpoint of the range on the cover of this prospectus, and the application of the net proceeds therefrom, our pro forma net tangible book value as of June 30, 2009 would have been $         million or $        per share of common stock. This represents an immediate increase in pro forma net tangible book value to existing stockholders of $        per share of common stock and an immediate dilution to new investors of $        per share of common stock. The following table illustrates this per share dilution:

Assumed initial public offering price per share	$
Net tangible book value per share as of June 30, 2009
Decrease per share attributable to reclassification of preferred stock
Pro forma net tangible book value per share as of June 30, 2009
Increase in pro forma net tangible book value per share resulting from this offering
Pro forma net tangible book value per share after this offering
Pro forma dilution per share to new investors	$
Pro forma fully diluted dilution per share to new investors	$

              A $1.00 increase (decrease) in the assumed initial public offering price of $      per share, the midpoint of the range on the cover of this prospectus, would increase or decrease our as adjusted net tangible book value by $       million, the net tangible book value per share of common stock after this offering by $      per share of common stock, and the dilution per share of common stock to new investors is adjusted by $      per share of common stock, assuming the number of shares offered by us, as set forth on the cover page of this prospectus (assuming that the Recapitalization had taken place), remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us.

              The following table summarizes, on the pro forma basis set forth above as of June 30, 2009, the difference between the total cash consideration paid and the average price per share paid by existing stockholders and the purchasers of common stock in this offering with respect to the number

42

of shares of common stock purchased from us, before deducting estimated underwriting discounts, commissions and offering expenses payable by us.

	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percent			Amount	Percent
Existing stockholders				%	$			%	$
Purchasers of common stock in this offering(1)				%				%
Total			100	%	$		100	%

(1)

The            shares of common stock sold in this offering include            shares of common stock to be sold by existing stockholders.

              A $1.00 increase or decrease in the assumed initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus, would increase or decrease total consideration paid by new investors and total consideration paid by all stockholders by $             million, assuming that the number of shares offered by us, as set forth on the front cover of this prospectus (assuming that the Recapitalization had taken place), remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us. An increase or decrease of 1.0 million shares in the number of shares offered by us would increase or decrease the total consideration paid to us by new investors and total consideration paid to us by all stockholders by $             million, assuming the assumed initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus, remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us.

              The tables above are based on            shares of common stock outstanding as of June 30, 2009 (assuming that the Recapitalization had taken place) and assumes an initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus. The number of shares of common stock outstanding after this offering excludes, as of June 30, 2009,            shares issuable upon exercise of options with a weighted average exercise price of $            per share. To the extent these options are exercised, there will be further dilution to purchasers of common stock in this offering. The amount presented in "Pro forma fully diluted dilution per share to new investors" assumes full exercise of the outstanding options listed above.

              If the underwriters exercise their over-allotment option to purchase shares from us and the selling stockholders in full, the following will occur:

•

the pro forma percentage of shares of our common stock held by existing stockholders will decrease to approximately             % of the total number of pro forma shares of our common stock outstanding after this offering; and

•

the pro forma number of shares of our common stock held by new public investors will increase to            , or approximately            % of the total pro forma number of shares of our common stock outstanding after this offering.

43

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

              The selected historical financial data below for each of the years ended December 31, 2008 and 2007 and the period from April 1, 2006 to December 31, 2006 are derived from the consolidated financial statements of Freedom Group and the selected historical financial data below for the period from January 1, 2006 to March 31, 2006 is derived from the consolidated financial statements of Bushmaster Firearms, Inc. and its subsidiaries. Those consolidated financial statements have been audited by Grant Thornton LLP, registered independent public accounting firm, and are included elsewhere in this prospectus. The consolidated financial statements of Bushmaster Firearms, Inc. (predecessor) for the years ended December 31, 2005 and 2004 are not included in this prospectus. The selected historical financial data for each of the six month periods ended June 30, 2009 and 2008 are derived from the unaudited condensed consolidated financial statements of Freedom Group included elsewhere in this prospectus. Such unaudited condensed consolidated financial statements, in the opinion of our management, include all adjustments necessary for the fair presentation of our financial condition, results of operations and cash flows for such periods and as of such dates.

              You should read the following audited and unaudited selected historical financial data of Freedom Group in conjunction with "Capitalization," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical financial statements and other financial information appearing elsewhere in this prospectus.

              The results of operations for the years ended December 31, 2004, 2005 and 2006 reflect the results of operations of Bushmaster. Our results of operations for the year ended December 31, 2007 also include the results of operations of Remington, which we acquired on May 31, 2007. Due to the significant impact of the acquired Remington operations, our financial results for periods subsequent to May 31, 2007 may not be comparable to our results from prior-year periods. In addition, on December 13, 2007 we consummated the acquisition of certain assets of DPMS and on January 28, 2008, we consummated the Marlin Acquisition. Due to the impact of the acquired Marlin and DPMS operations, our results of operations for 2008 may not be comparable to our results from prior-year periods. For additional information regarding our acquisitions, see "Business—Company Overview—Our History and Corporate Structure."

              The following additional financial information has not been included here or elsewhere in this filing due to timing and the corresponding audited and unaudited financial information required: S&K related financial information, which we acquired on September 22, 2009, and AAC related financial information, which we acquired on October 2, 2009.

44

		Predecessor									Successor
		Year Ended December 31, (Unaudited)						January 1 through March 31,			April 1 through December 31,			Year Ended December 31,						Six Months Ended June 30, (Unaudited)
		2004			2005			2006			2006			2007(2)			2008(2)			2008			2009
		(in millions, except share and per share data)
Statement of Operations Data:
Net Sales(1)		$	46.6		$	60.8		$	16.8		$	41.3		$	384.9		$	722.5		$	316.8		$	427.3
Cost of Goods Sold			28.7			37.3			9.8			24.6			306.0			524.4			229.8			282.4
Gross Profit			17.9			23.5			7.0			16.7			78.9			198.1			87.0			144.9
Operating Expenses			10.4			12.0			3.8			8.9			70.1			186.9			66.0			78.7
Operating Income			7.5			11.5			3.2			7.8			8.8			11.2			21.0			66.2
Interest Expense			0.3			0.4			0.1			4.5			21.2			30.8			15.2			14.6
Income (Loss) before Taxes			7.3			11.2			3.1			3.3			(12.4	)		(19.6	)		5.8			51.6
Net Income (Loss)			7.3			11.2			3.1			2.1			(9.0	)		(28.6	)		3.6			33.0
Net Income (Loss) Applicable to Common Stock			7.3			11.2			3.1			2.1			(9.9	)		(48.2	)		(6.1	)		23.0
Net Income (Loss) Per Share(3):
Basic		$	0.46		$	0.70		$	0.19		$	0.13		$	(0.62	)	$	(2.97	)	$	(0.38	)	$	1.41
Diluted		$	0.46		$	0.70		$	0.19		$	0.13		$	(0.62	)	$	(2.97	)	$	(0.38	)	$	1.39
Weighted Average Number of Shares Outstanding(3):
Basic			15,917,341			15,917,341			15,917,341			15,958,261			16,084,174			16,236,305			16,166,948			16,332,431
Diluted			15,917,341			15,917,341			15,917,341			16,187,849			16,084,174			16,236,305			16,166,948			16,554,230
Operating and Other Financial Data:
Net Cash provided by (used in):
	Operating Activities	$	6.8		$	10.1		$	3.0		$	3.4		$	70.8		$	52.9		$	(39.4	)	$	53.3
	Investing Activities		1.2			2.8			—			(77.3	)		(90.7	)		(57.1	)		(49.0	)		(7.9	)
	Financing Activities		(8.2	)		(12.9	)		(2.9	)		74.6			43.9			57.3			74.9			(12.2	)

	As of December 31,													As of June 30,
	2004			2005		2006		2007			2008			2008			2009
	(in millions, except share and per share data)
Balance Sheet Data (end of period):
Cash and Cash Equivalents	$	—		$	—	$	0.7	$	24.7		$	77.8		$	11.3		$	111.0
Working Capital(4)		(2.3	)		1.2		6.8		175.7			224.8			227.3			271.6
Total Assets		20.5			18.5		86.1		628.3			672.9			725.0			734.0
Long-Term Debt		4.3			2.4		52.0		296.8			334.2			350.5			323.3
Total Debt(5)		14.3			11.2		52.0		300.3			337.4			352.2			324.3
Stockholders' Equity (Deficit)		0.7			2.4		27.3		(24.0	)		(106.8	)		(32.6	)		(80.3	)

(1)

Presented net of federal excise taxes. Federal excise taxes were $54.5, $31.0, $1.1, $2.7, $4.1 and $2.5 for the years ended 2008 and 2007, the three months ended March 31, 2006, the nine months ended December 31, 2006, and the years ended 2005 and 2004, respectively. Federal excise taxes were $38.7 and $22.4 for the six month periods ended June 30, 2009 and 2008, respectively.

(2)

Results for the year ended December 31, 2007 reflect the impact of the acquired Remington and DPMS operations, which were acquired in May 2007 and December 2007, respectively. Results for the year ended December 31, 2008 reflect the impact of the acquired Marlin operations, which was effective in January 28, 2008.

(3)

Net income (loss) per share and weighted average number of shares outstanding give effect to our proposed Recapitalization.

(4)

Working capital is defined as current assets less current liabilities.

(5)

Consists of short-term and long-term debt, current portion of long-term debt and capital lease obligations.

45

UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL INFORMATION

              The following unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2009 is based on our historical consolidated financial statements, after giving effect to the Refinancings and the Dakota Acquisition as if they had occurred on January 1, 2009. The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2008 and the year ended December 31, 2008 are based on our historical consolidated financial statements and the historical financial statements of Marlin, after giving effect to the Marlin Acquisition, the Refinancings and the Dakota Acquisition as if they had occurred on January 1, 2008. The unaudited pro forma condensed consolidated statements of operations for the twelve months ended June 30, 2009 are based on our historical consolidated financial statements, after giving effect to the Refinancings and the Dakota Acquisition as if they had occurred on July 1, 2008. The twelve months ended June 30, 2009 have been provided as management believes this is the most indicative period given the operational changes and acquisitions of the business. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2009 is based on our historical consolidated financial statements, after giving effect to the Refinancings as if they had occurred on June 30, 2009. The pro forma condensed, as adjusted consolidated statements of operations and balance sheet reflect the above adjustments and, in addition, give effect to the Recapitalization and the offering of our common stock and the use of proceeds thereof.

              Pro forma adjustments for the Marlin Acquisition were made to reflect Marlin's results of operations for the one month of January 2008 and the effects of purchase price accounting in connection with the acquisition thereof. The pro forma adjustments for the acquisition of Dakota Arms were made to reflect the acquisition as if it took place at the beginning of the period covered by the respective pro forma consolidated statement of operations.

              Pro forma adjustments for the Refinancings were made to reflect:

•

the offering of the Notes, issued at a discounted price of 97.827%;

•

a $51.9 million borrowing under the ABL Revolver;

•

the repayment of $51.8 million of indebtedness outstanding under the Old Remington Credit Agreement;

•

the repayment of $17.7 million of indebtedness outstanding under the term loan under the Old Remington Credit Agreement;

•

the repayment of $29.1 million of indebtedness outstanding under the Old BFI Credit Agreement;

•

the repayment of $200.0 million of Remington's outstanding 10.5% Senior Notes due 2011;

•

the repayment of $21.4 million of BFI's outstanding 15.0% Subordinated Notes due 2012;

•

the write-off of deferred financing costs of $3.8 million associated with debt being refinanced, and $1.6 million of unamortized bond premium;

•

interest expense resulting from the issuance of $200.0 million of the Notes and the $51.9 million borrowing under the ABL Revolver;

46

•

amortization of certain deferred financing costs of $17.8 million on the Notes and the ABL Revolver;

•

an assumed effective tax rate of 40.0%; and

              Non-capitalized transaction fees and expenses of $2.2 million were not included as a pro forma adjustment to the consolidated statements of operations nor were pro forma adjustments related to the Dakota Acquisition as the purchase price allocations are not yet complete and are not expected to be material.

              Pro forma adjustments for the Recapitalization were made to reflect the            -for-1 reverse split of all our outstanding common stock and the reclassification of all our outstanding preferred stock into a number of shares of our common stock determined by                        which will occur immediately prior to the closing of this offering.

              Pro forma adjustments for the offering give effect to the sale by us of            shares of common stock and the use of the proceeds thereof. The pro forma data assumes that the common stock is offered at $            per share, the midpoint of the range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions on the shares offered by us and the estimated offering expenses payable by us.

              The unaudited pro forma consolidated financial information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," our historical consolidated financial statements and our notes and the historical consolidated financial statements of Marlin and the associated notes included elsewhere in this prospectus. The unaudited pro forma consolidated financial information is being furnished solely for informational purposes and is not intended to represent or be indicative of the consolidated results of operations or financial position that we would have reported had these transactions been completed as of the dates and for the periods presented, nor is it necessarily indicative of future results.

Additional Pro Forma Information

              The following additional pro forma financial information has not been included here or elsewhere in this filing due to timing and the corresponding audited and unaudited financial information required.

•

S&K related financial information, which we acquired on September 22, 2009.

•

AAC related financial information, which we acquired on October 2, 2009.

47

Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2009

(in millions, except share and per share data)

								Pro Forma Adjustments
					Dakota Arms Historical Jan 1 – May 31, 2009
		FGI Historical Jan 1 – June 30, 2009						Refinancings			Recapitalization and Common Stock Offering			Pro Forma Jan 1 – June 30, 2009
Net Sales		$	427.3		$	1.1		$	—		$			$	428.4
Cost of Goods Sold			282.4			0.4			—						282.8
	Gross Profit		144.9			0.7			—						145.6
Selling, General and Administrative Expenses			75.2			1.0			—						76.2
Research and Development Expenses			5.4			—			—						5.4
Other (Income) Expense			(1.9	)		—			—						(1.9	)
	Operating Income (Loss)		66.2			(0.3	)		—						65.9
Interest Expense			14.6			—			(1.1	)(a)					13.5
	Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture and Noncontrolling Interest in Consolidated Subsidiary		51.6			(0.3	)		1.1						52.4
Income Tax Provision (Benefit)			18.7			(0.1	)		0.4	(b)					19.0
Equity in Losses from Unconsolidated Joint Venture			0.1			—			—						0.1
Net Income (Loss)			32.8			(0.2	)		0.7			—			33.3
Add: Net Loss Attributable to Noncontrolling Interest			0.2			—			—						0.2
	Net Income (Loss) Attributable to Controlling Interest	$	33.0		$	(0.2	)	$	0.7		$			$	33.5
Accretion of Preferred Stock			10.0			—			—			—			10.0
Net Income (Loss) Applicable to Common Stock		$	23.0		$	(0.2	)	$	0.7		$			$	23.5
Net Income (Loss) Per Share—Basic			1.41			—			—				(c)
Net Income (Loss) Per Share—Diluted			1.39			—			—				(c)
Weighted Average Number of Shares Outstanding—Basic			16,332,431			—			—				(c)
Weighted Average Number of Shares Outstanding—Diluted			16,554,230			—			—				(c)

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

48

Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008

(in millions, except share and per share data)

		FGI Historical Jan 1 – June 30, 2008			Historical Dakota Arms Jan 1 – June 30, 2008					Pro Forma Adjustments
								Historical Marlin Jan 1 – 31, 2008											Pro Forma Jan 1 – June 30, 2008
										Marlin			Refinancings			Recapitalization and Common Stock Offering
Net Sales		$	316.8		$	1.8		$	4.9	$	—		$	—		$			$	323.5
Cost of Goods Sold			229.8			0.4			4.0		0.1	(d)		—						234.3
	Gross Profit		87.0			1.4			0.9		(0.1	)		—						89.2
Selling, General and Administrative Expenses			62.4			1.7			0.2		—			—						64.3
Research and Development Expenses			3.4			—			0.1		—			—						3.5
Impairment Charges			—			—			—		—			—						—
Other (Income) Expense			0.2			—			—		—			—						0.2
	Operating Income		21.0			(0.3	)		0.6		(0.1	)		—						21.2
Interest Expense			15.2			—			—		—			(1.6	)(e)					13.6
	Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture and Noncontrolling Interest in Consolidated Subsidiary		5.8			(0.3	)		0.6		(0.1	)		1.6						7.6
Income Tax Provision (Benefit)			2.2			(0.1	)		0.2		(0.0	)		0.6	(b)					2.9
Equity in Losses from Unconsolidated Joint Venture			—			—			—		—			—						—
Net Income (Loss)			3.6			(0.2	)		0.4		(0.1	)		1.0			—			4.7
Add: Net Loss Attributable to Noncontrolling Interest			—			—			—		—			—						—
	Net Income (Loss) Attributable to Controlling Interest	$	3.6		$	(0.2	)	$	0.4	$	(0.1	)	$	1.0		$			$	4.7
Accretion of Preferred Stock			9.7			—			—		—			—			—			9.7
Net Income (Loss) Applicable to Common Stock		$	(6.1	)	$	(0.2	)	$	0.4	$	(0.1	)	$	1.0		$			$	(5.0	)
Net Income (Loss) Per Share— Basic			(0.38	)		—			—		—			—				(c)
Net Income (Loss) Per Share—Diluted			(0.38	)		—			—		—			—				(c)
Weighted Average Number of Shares Outstanding—Basic			16,166,948			—			—		—			—				(c)
Weighted Average Number of Shares Outstanding—Diluted			16,166,948			—			—		—			—				(c)

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

49

Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2008

(in millions, except share and per share data)

											Pro Forma Adjustments
			FGI Historical Jan 1 – Dec 31, 2008						Historical Marlin Jan 1 – 31, 2008
						Historical Dakota Arms Jan 1 – Dec 31, 2008					Marlin			Refinancings			Recapitalization and Common Stock Offering			Pro Forma Jan 1 – Dec 31, 2008
Net Sales			$	722.5		$	3.0		$	4.9	$	—		$	—		$			$	730.4
Cost of Goods Sold				524.4			0.6			4.0		0.1	(d)		—						529.1
	Gross Profit			198.1			2.4			0.9		(0.1	)		—						201.3
Selling, General and Administrative Expenses				133.7			2.8			0.2		—			—						136.7
Research and Development Expenses				7.1			—			0.1		—			—						7.2
Impairment Charges				47.4			—			—		—			—						47.4
Other (Income) Expense				(1.3	)		0.2			—		—			—						(1.1	)
	Operating Income			11.2			(0.6	)		0.6		(0.1	)		—						11.1
Interest Expense				30.8			—			—		—			(3.5	)(f)					27.3
	Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture and Noncontrolling Interest in Consolidated Subsidiary			(19.6	)		(0.6	)		0.6		(0.1	)		3.5						(16.2	)
Income Tax Provision (Benefit)				9.1			(0.2	)		0.2		(0.0	)		1.4	(b)					10.5
Equity in Losses from Unconsolidated Joint Venture				—			—			—		—			—						—
Net Income (Loss)				(28.7	)		(0.4	)		0.4		(0.1	)		2.1			—			(26.7	)
Add: Net Loss Attributable to Noncontrolling Interest				0.1			—			—		—			—						0.1
		Net Income (Loss) Attributable to Controlling Interest	$	(28.6	)	$	(0.4	)	$	0.4	$	(0.1	)	$	2.1		$			$	(26.6	)
Accretion of Preferred Stock				19.6			—			—		—			—			—			19.6
Net Income (Loss) Applicable to Common Stock			$	(48.2	)	$	(0.4	)	$	0.4	$	(0.1	)	$	2.1		$			$	(46.2	)
Net Income (Loss) Per Share—Basic				(2.97	)		—			—		—			—				(c)
Net Income (Loss) Per Share—Diluted				(2.97	)		—			—		—			—				(c)
Weighted Average Number of Shares Outstanding—Basic				16,236,305			—			—		—			—				(c)
Weighted Average Number of Shares Outstanding—Diluted				16,236,305			—			—		—			—				(c)

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

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Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Twelve Months Ended June 30, 2009

(in millions, except share and per share data)

											Add Dakota Arms Historical July 1, 2008 – June 30, 2009									Twelve Months Ended Pro Forma June 30, 2009
		FGI Historical Jan 1 – Dec 31, 2008			Less Historical Jan 1 – June 30, 2008			Add Historical Jan 1 – June 30, 2009						Pro Forma Adjustments
														Refinancings			Recapitalization and Common Stock Offering
Net Sales		$	722.5		$	316.8		$	427.3		$	2.3		$	—		$			$	835.3
Cost of Goods Sold			524.4			229.8			282.4			0.6			—						577.6
	Gross Profit		198.1			87.0			144.9			1.7			—						257.7
Selling, General and Administrative Expenses			133.7			62.4			75.2			2.1			—						148.6
Research and Development Expenses			7.1			3.4			5.4			—			—						9.1
Impairment Charges			47.4			—			—			—			—						47.4
Other (Income) Expense			(1.3	)		0.2			(1.9	)		0.2			—						(3.2	)
	Operating Income		11.2			21.0			66.2			(0.6	)		—						55.8
Interest Expense			30.8			15.2			14.6			—			(3.0	)(g)					27.2
	Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture and Noncontrolling Interest in Consolidated Subsidiary		(19.6	)		5.8			51.6			(0.6	)		3.0						28.6
Income Tax Provision (Benefit)			9.1			2.2			18.7			(0.2	)		1.2	(b)					26.6
Equity in Losses from Unconsolidated Joint Venture			—			—			0.1			—			—						0.1
Net Income (Loss)			(28.7	)		3.6			32.8			(0.4	)		1.8			—			1.9
Add: Net Loss Attributable to Noncontrolling Interest			0.1			—			0.2			—			—						0.3
	Net Income (Loss) Attributable to Controlling Interest	$	(28.6	)	$	3.6		$	33.0		$	(0.4	)	$	1.8		$			$	2.2
Accretion of Preferred Stock			19.6			9.7			10.0			—			—			—			19.9
Net Income (Loss) Applicable to Common Stock		$	(48.2	)	$	(6.1	)	$	23.0		$	(0.4	)	$	1.8					$	(17.7	)
Net Income (Loss) Per Share—Basic			(2.97	)		—			—			—			—				(c)
Net Income (Loss) Per Share—Diluted			(2.97	)		—			—			—			—				(c)
Weighted Average Number of Shares Outstanding— Basic			16,236,305			—			—			—			—				(c)
Weighted Average Number of Shares Outstanding— Diluted			16,236,305			—			—			—			—				(c)

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

51

Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2009

(in millions, except share and per share data)

					Pro Forma Adjustments
		FGI Historical June 30, 2009			Refinancings			Recapitalization and Common Stock Offering		Pro Forma June 30, 2009
ASSETS
Current Assets
Cash and Cash Equivalents		$	111.0		$	(92.4	)(h)	$		$	18.6
Accounts Receivable Trade—net			134.2								134.2
Inventories—net			129.2								129.2
Supply Inventory—net			5.7								5.7
Prepaid Expenses and Other Current Assets			20.6								20.6
Assets Held for Sale			1.9								1.9
Deferred Tax Assets			12.3								12.3
	Total Current Assets		414.9			(92.4	)				322.5
Property, Plant and Equipment—net			117.1								117.1
Goodwill and Intangibles—net			181.9								181.9
Debt Issuance Costs—net			3.8			14.0	(i)				17.8
Other Noncurrent Assets			16.3								16.3
	Total Assets	$	734.0		$	(78.4	)	$		$	655.6
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable		$	61.9							$	61.9
Book Overdraft			—								—
Short-Term Debt			1.0								1.0
Current Portion of Long-Term Debt			0.7								0.7
Current Portion of Product Liability			3.5								3.5
Income Taxes Payable			11.3			(1.8	)(j)				9.5
Other Accrued Liabilities			64.9								64.9
	Total Current Liabilities		143.3			(1.8	)				141.5
Long-Term Debt, net of Current Portion			322.6			(74.0	)(k)				248.6
Retiree Benefits, net of Current Portion			84.3								84.3
Product Liability, net of Current Portion			11.0								11.0
Deferred Tax Liabilities			11.8								11.8
Other Long-Term Liabilities			13.9								13.9
	Total Liabilities		586.9			(75.8	)			$	511.1
Preferred Stock, $0.10 par value, 20,000,000 shares authorized of which 19,000,000 are Series A preferred, 18,697,464 Series A shares issued and outstanding,            aggregate liquidation preference, actual;            shares authorized, no shares issued and outstanding, no aggregate liquidation preference, pro forma			227.4						(l)
	Total Mezzanine Equity		227.4
Accumulated Equity (Deficit)			(80.3	)		(2.6	)(m)
	Total Stockholders' (Deficit)		(80.3	)		(2.6	)
	Total Liabilities, Stockholders' Equity (Deficit) and Mezzanine Equity	$	734.0		$	(78.4	)			$

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

52

Freedom Group, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

(a)

Adjustments made to eliminate historical interest expense of $14.4 million for the six months ended June 30, 2009, which reflects the elimination of historical interest expense on the revolving credit facility and term loan under the Old Remington Credit Agreement, Remington's 10.5% Senior Notes due 2011, the term loans under the Old BFI Credit Agreement and BFI's 15.0% Subordinated Notes due 2012 (collectively, the "Refinanced Debt"). The adjustments also reflect a $0.3 million elimination of deferred financing costs amortization for the six months ended June 30, 2009.

Adjustments reflect incremental interest expense of $11.8 million related to the issuance of the Notes and borrowings under the ABL Revolver, which represents a blended weighted-average interest rate of 9.3%. For each 0.25% increase or decrease in the blended weighted-average interest rate, our annual interest expense would increase or decrease by $0.7 million. The interest expense adjustment includes amortization of deferred financing costs and original issue discount of $1.8 million related to the Refinanced Debt.

(b)

Reflects the estimated tax effect of the pro forma adjustments on the historical results of Freedom Group, utilizing an estimated combined federal and state statutory tax rate of 40.0% to compute the estimated tax expense or benefit of the Refinancings.

(c)

Net income (loss) per share and weighted average number of shares outstanding gives effect to our proposed Recapitalization.

(d)

Reflects adjustment related to the rollout of inventory to fair value in connection with purchase accounting for the Marlin Acquisition pursuant to SFAS 141R.

(e)

Adjustments made to eliminate historical interest expense of $14.9 million for the six months ended June 30, 2008, which reflects the elimination of historical interest expense on the Refinanced Debt. The adjustments also reflect a $0.3 million elimination of deferred financing costs amortization for the six months ended June 30, 2008.

Adjustments reflect incremental interest expense of $11.8 million related to the issuance of the Notes and borrowings under the ABL Revolver, which represents a blended weighted-average interest rate of 9.3%. The interest expense adjustment includes an amortization of deferred financing costs and original issue discount of $1.8 million related to the Refinanced Debt.

(f)

Adjustments made to eliminate historical interest expense of $30.1 million for the year ended December 31, 2008, which reflects the elimination of historical interest expense on the Refinanced Debt. The adjustments also reflect a $0.6 million elimination of deferred financing costs amortization for the year ended December 31, 2008.

Adjustments reflect incremental interest expense of $23.6 million related to the issuance of the Notes issued in the Refinancings and borrowings under the ABL Revolver, which represents a blended weighted-average interest rate of 9.3%. The interest expense adjustment includes an amortization of deferred financing costs and original issue discount of $3.6 million related to the Refinanced Debt.

(g)

Adjustments made to eliminate historical interest expense of $29.6 million for the pro forma twelve months ended June 30, 2009, which reflects the elimination of historical interest expense on the Refinanced Debt. The adjustments also reflect a $0.6 million elimination of deferred financing costs amortization for the pro forma twelve months ended June 30, 2009.

Adjustments reflect incremental interest expense of $23.6 million related to the issuance of the Notes and borrowings under the ABL Revolver, which represents a blended weighted-average

53

Freedom Group, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information (Continued)

interest rate of 9.3%. The interest expense adjustment includes an amortization of deferred financing costs and original issue discount of $3.6 million related to the Refinanced Debt.

(h)

Reflects the use of $92.4 million cash on hand in connection with the Refinancings.

(i)

Adjustment reflects the write-off of $3.8 million of unamortized deferred financing costs related to the Refinanced Debt, offset by $17.8 million of assumed deferred financing costs related to the Refinancings.

(j)

Reflects the estimated tax effect of the pro forma adjustments associated with the elimination of unamortized deferred financing fees, the non-capitalized fees paid in connection with the Refinancings and the removal of the premium of the Refinanced Debt.

(k)

This adjustment reflects the repayment of the Refinanced Debt, offset by the long-term debt incurred as part of the Refinancings.

(in millions)
Long-term debt being repurchased or repaid	$	(321.6	)
ABL Revolver borrowing		51.9
Notes (issued at a discount to maturity)		195.7
Net adjustment	$	(74.0	)

(l)

Reflects the reclassification of all our outstanding preferred stock into a number of shares of our common stock determined by            , which will occur immediately prior to the closing of this offering.

(m)

Reflects the tax effected adjustments at a 40% assumed statutory rate associated with the elimination of unamortized deferred financing fees, the non-capitalized fees paid in connection with the Refinancings and the removal of the premium of the Refinanced Debt.

54

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our results of operations and financial condition together with the "Selected Historical Consolidated Financial Data," "Unaudited Pro Forma Condensed Consolidated Financial Information" and the audited and unaudited historical consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of this prospectus. Actual results may differ materially from those contained in any forward-looking statements. Certain monetary amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

Company Overview

              We are one of the leading firearms, ammunition and related products companies in the world, with #1 commercial market positions across all of our major product categories in the United States, the largest firearms and ammunition market globally. With a history dating back to 1816, we are America's oldest and largest manufacturer of firearms and ammunition. We are the only major U.S. manufacturer of both firearms and ammunition, which we believe is a significant competitive advantage and supports our market leadership position. We believe our scale and product breadth are unmatched within the industry, with approximately 1.1 million long guns and 2.0 billion rounds of ammunition sold during the twelve months ended June 30, 2009. We believe this leadership position across all of our major product categories is evidenced by our #1 U.S. commercial market shares in shotguns, rifles and ammunition.

              We have made significant progress in our transition to a customer-focused sales and marketing organization, successfully creating a single customer facing platform with the ability to leverage our flexible manufacturing capability across our end-markets to quickly respond to changes in customer preferences and demands. Our 11 manufacturing facilities and over 2,700 employees represent the largest domestic manufacturing presence in the industry, enabling us to deliver our products throughout the United States and internationally to over 80 countries. In addition, our product leadership and innovation is supported by our freestanding research and development facility.

              We continue to look for opportunities to improve our quality and efficiencies in our manufacturing facilities as we strive to be a customer focused company in an increasingly demanding global marketplace. Accordingly, we have undertaken an effort to accelerate existing initiatives in the area of lean manufacturing, six sigma and other continuous improvement projects focused on inventory management, cost reductions and productivity.

              In addition, we are committed to enhancing our core businesses and positioning ourselves to take advantage of opportunities to strategically grow and improve our business by identifying and pursuing add-on strategic acquisitions or investments that expand and enhance our brand, product and intellectual property portfolio. We seek to acquire highly complementary products, brands or external capabilities to fill gaps in our portfolio or extend our brands and channel relationships.

              Despite the current macroeconomic environment, we have experienced no significant adverse impact in our overall sales. We believe the overall demand for certain of our products has picked up since the change in U.S. Presidential administration and consumers' concerns that the new administration may support more restrictive firearms and ammunition legislation. Management's strategy in light of this uncertain economic and political environment has been to focus on manufacturing efficiencies, research and development and meeting our customers' demands. In

55

addition, we have remained committed and focused on our marketing and merchandising efforts across all product categories.

              One of our core strategies is to consistently introduce new and innovative products. These efforts are focused on the introduction or planned launch of the M887 Nitro Mag shotgun, the ..30 R-15, R-15, R-25, Adaptive Combat Rifle, .50 BMG, .338 MXLR/MX, M597 VTR, and .308 DPMS firearms, and a variety of new ammunition products. We are also engaged in selective efforts to promote certain of our products through marketing and promotional activities, including ammunition and firearms customer and end-user rebates.

              Due to continuing volatility of metal, energy and transportation costs, management continues to assess our pricing strategies. As a result of this approach, firearms prices generally held steady during 2008 and into 2009 in most categories, and demand remained stable. In our ammunition segment, pricing has been relatively flat across our product offerings since mid-2008 although commodity costs associated with ammunition have continued to show volatility.

              Management's strategy in light of the current economic and political environment has been to continue to introduce new products, enhance our sales and marketing efforts and improve overall performance in working capital and operating productivity. Finally, we continue to pursue growth initiatives in our government, military, and law enforcement divisions along with broadening our brand awareness with selective licensing arrangements.

Recent Developments

Recent Transactions

              In July 2009, in connection with the Refinancings, we issued $200.0 million of the Notes, and entered into the ABL Revolver. We used the proceeds of the Notes, together with proceeds from $51.9 million of borrowings under the ABL Revolver and cash on hand, to repay the outstanding indebtedness (including any interest due and owing to the date of redemption or repayment), and to pay related transaction fees and expenses of $20.1 million. See Note 8 to Freedom Group's June 30, 2009 unaudited consolidated financial statements for further information regarding the Refinancings.

Acquisition of Dakota Arms

              On June 5, 2009, we acquired certain assets of Dakota Arms, LLC, which primarily consisted of inventory and equipment for approximately $1.8 million. Dakota Arms is a producer of high-end rifles, shotguns and ammunition. This acquisition positions us in the largely customized, precision, large caliber and safari segments of the market, with premium and aspirational firearms and ammunition brands including Dakota Arms, Miller Arms and Nesika, as well as Dan Walter premium gun cases.

Acquisition of S&K

              On September 22, 2009 we acquired certain assets from S&K Industries, Inc. ("S&K"), a supplier of wood stocks for our firearms operations for approximately $3.8 million. S&K was founded as a wood product manufacturing company in 1961 and is based in Lexington, Missouri. The assets acquired are primarily inventory, machinery and equipment. We believe this acquisition will improve efficiencies in our firearms manufacturing processes as well as reduce certain costs of acquiring the wood stocks.

Acquisition of Advanced Armament Corporation

              On October 2, 2009 we completed the acquisition of certain assets of Advance Armament Corporation ("AAC") for approximately $10.2 million, with additional contingent consideration of approximately $8.0 million due in 2015 upon achievement of certain employment and financial

56

conditions. AAC manufactures and markets a full line of firearm accessory products used in certain military (including current use by the DOD), law enforcement and commercial markets.

Current Sales Demand

              Our industry has experienced a significant increase in certain firearms and ammunition demand since late 2008. We believe a number of consumers have been concerned about increased firearms and ammunition regulations as a result of the new administration in connection with the 2008 Presidential election. We view these increases in demand as having significant long-term benefits, including expanding the popularity of shooting sport categories, as well as providing an opportunity to cultivate new, and renew existing, long-term customer relationships across our portfolio of products and brands. These increases have resulted in sales growth of 47.2% and 38.7% in our firearms and ammunition segments, respectively, during the three months ended June 30, 2009 versus the three months ended June 30, 2008, and sales growth of 41.6% and 27.1% in our firearms and ammunitions segments, respectively, during the six months ended June 30, 2009 versus the six months ended June 30, 2008 (including five months of sales related to the Marlin Acquisition). The remaining month of activity for Marlin is not significant. However, these increases may not be sustainable, and demand for our firearms and ammunition may decrease for any number of reasons. See "Risk Factors—Risks Relating to Our Business—We have experienced a significant increase in demand for our products since late 2008. There can be no assurance that this increased demand for firearms and ammunition will continue in the medium to long-term."

Increase of Management Depth

              We have strived to assemble a senior management team with a broad array of functional expertise and industry experience in an effort to increase our leadership position in the industry and create depth and expertise in critical areas such as operations, sales and marketing and back-office support. During the last two years we filled the following important positions with highly experienced managers: Chief Executive Officer, Chief Operating Officer, Chief Sales Officer, Chief Information Officer, Chief Marketing Officer, Chief Technology Officer and General Counsel. We believe we have sufficient talent to manage our continued growth, whether organic or through additional acquisitions.

17 HMR Ammunition Recall

              On August 14, 2009, the Company announced a product warning campaign directed towards the public and its consumers concerning the 17 HMR ammunition it markets and sells under the Remington brand name. The Company purchases this ammunition from a third party and was advised by the manufacturer that its ammunition should not be used with any semi-automatic firearms. The Company is recalling the ammunition to apply applicable safety warnings. Also, since there is not another source of ammunition for the Remington Model 597 17 HMR semi-automatic rifles, the Company is offering a coupon for the voluntary replacement of the Remington Model 597 17 HMR semi-automatic rifle with other Remington firearms. The Company manufactured and sold this semi-automatic rifle from July 2002 to June 2007. The Company accrued $6.6 million as of and for the three months ending June 30, 2009 to reflect the estimated cost of this ammunition recall and rifle replacement program. Actual costs related to these actions will depend on several factors, including the number of consumers who respond to the program, the costs of administration of the program, and whether costs will be recovered from the supplier.

57

Results of Operations

Three and Six Month Periods Ended June 30, 2009 as Compared to the Three and Six Month Periods Ended June 30, 2008

Net Sales

              The following table compares net sales by reporting segment for each of the periods presented:

		Three Months Ended June 30,
		2008		Percentage of Total			2009		Percentage of Total			Increase (Decrease)		Percentage Change
		(dollars in millions)
Firearms		$	101.4		61.7	%	$	149.3		63.5	%	$	47.9		47.2	%
Ammunition			58.6		35.7			81.3		34.6			22.7		38.7
All Other			4.3		2.6			4.5		1.9			0.2		4.7
	Total	$	164.3		100.0	%	$	235.1		100.0	%	$	70.8		43.1	%

		Six Months Ended June 30,
		2008		Percentage of Total			2009		Percentage of Total			Increase (Decrease)			Percentage Change
		(dollars in millions)
Firearms		$	190.9		60.3	%	$	270.3		63.2	%	$	79.4			41.6	%
Ammunition			116.3		36.7			147.8		34.6			31.5			27.1
All Other			9.6		3.0			9.2		2.2			(0.4	)		(4.2	)
	Total	$	316.8		100.0	%	$	427.3		100.0	%	$	110.5			34.9	%

Firearms

              Net sales for the three months ended June 30, 2009 were $149.3 million, an increase of $47.9 million, or 47.2%, as compared to the three months ended June 30, 2008. Centerfire rifle sales increased by $36.3 million, or 50.6%, as compared to the prior-year period, primarily due to an increase of $30.9 million as a result of higher sales volumes of Bushmaster and DPMS branded modern sporting rifles and an increase of $2.1 million due to sales of newly launched Remington branded modern sporting rifles. Shotgun sales increased by $9.0 million, or 40.5%, as compared to the prior-year period. Rimfire rifle sales increased by $1.9 million, or 34.1%, as compared to the prior-year period.

              Net sales for the six months ended June 30, 2009 were $270.3 million, an increase of $79.4 million, or 41.6%, as compared to the six months ended June 30, 2008 (including five months of sales related to the Marlin Acquisition). Centerfire rifle sales increased by $59.0 million, or 44.2%, as compared to the prior-year period, primarily due to an increase of $50.5 million as a result of higher sales volumes of Bushmaster and DPMS branded modern sporting rifles and an increase of $4.9 million due to sales of newly launched Remington branded modern sporting rifles. Shotgun sales increased by $11.5 million, or 26.8%, as compared to the prior-year period, mainly due to a $13.0 million increase in sales of certain of our shotguns, partially offset by a $1.0 million decrease in shotgun sales of our internationally sourced Remington branded products. Rimfire rifle sales increased by $2.2 million, or 20.7%, as compared to the prior-year period.

Ammunition

              Net sales for the three months ended June 30, 2009 were $81.3 million, an increase of $22.7 million, or 38.7%, as compared to the three months ended June 30, 2008. Centerfire ammunition

58

sales increased by $13.8 million, or 42.9%, as compared to the prior-year period. The increase in sales is attributable mainly to strong market demand for rifle and pistol ammunition combined with volume growth across most other product categories. Rimfire ammunition sales increased by $2.0 million, or 44.3%, as compared to the prior-year period, primarily due to increased volume associated with additional production capacity within these product categories. Shotshell ammunition sales increased by $4.1 million, or 25.5%, as compared to the prior-year period, primarily due to an increased allocation of production capacity to higher margin products.

              Net sales for the six months ended June 30, 2009 were $147.8 million, an increase of $31.5 million, or 27.1%, as compared to the six months ended June 30, 2008, primarily due to increased sales volumes of our centerfire and rimfire products as a result of increased demand from our wholesalers, dealers and chain customers. Centerfire ammunition sales increased by $21.0 million, or 33.3%, as compared to the prior-year period. The increase in sales is attributable mainly to strong market demand for rifle and pistol ammunition combined with volume growth across most other product categories. Rimfire ammunition sales increased by $4.1 million, or 47.8%, as compared to the prior-year period, primarily due to increased volume associated with additional production capacity within these product categories. Shotshell ammunition sales increased by $3.0 million, or 9.1%, as compared to the prior-year period, primarily due to an increased allocation of production capacity to higher margin products.

All Other

              Net sales were $4.5 million in all other businesses for the three months ended June 30, 2009, an increase of $0.2 million, or 4.7%, as compared to the prior-year period. This increase was principally due to sales increases in our accessories business and the launch of our EOTAC apparel joint venture in late 2008.

              Net sales were $9.2 million in all other businesses for the six months ended June 30, 2009, a decrease of $0.4 million, or 4.2%, as compared to the prior-year period. This decrease was principally due to sales declines within our clay targets business, partially offset by sales increases in our accessories business and the launch of our EOTAC apparel joint venture in late 2008.

Cost of Goods Sold and Gross Profit

              The table below compares cost of goods sold and gross profit by reporting segment for each of the periods presented:

		Three Months Ended June 30,
		2008		Percentage of Net Sales			2009		Percentage of Net Sales			Increase (Decrease)		Percentage Change
		(dollars in millions)
Cost of Goods Sold
Firearms		$	71.1		70.1	%	$	101.5		68.0	%	$	30.4		42.8	%
Ammunition			42.4		72.4			45.4		55.8			3.0		7.1
All Other			2.6		60.5			2.8		62.2			0.2		7.7
	Total	$	116.1		70.7	%	$	149.7		63.7	%	$	33.6		28.9	%
Gross Profit
Firearms		$	30.3		29.9	%	$	47.8		32.0	%	$	17.5		57.8	%
Ammunition			16.2		27.6			35.9		44.2			19.7		121.6
All Other			1.7		39.5			1.7		37.8			—		—
	Total	$	48.2		29.3	%	$	85.4		36.3	%	$	37.2		77.2	%

59

		Six Months Ended June 30,
		2008		Percentage of Net Sales			2009		Percentage of Net Sales			Increase (Decrease)			Percentage Change
		(dollars in millions)
Cost of Goods Sold
Firearms		$	137.0		71.8	%	$	188.9		69.9	%	$	51.9			37.9	%
Ammunition			83.6		71.9			87.5		59.2			3.9			4.7
All Other			9.2		95.8			6.0		65.2			(3.2	)		(34.8	)
	Total	$	229.8		72.5		$	282.4		66.1	%	$	52.6			22.9	%
Gross Profit
Firearms		$	53.9		28.2	%	$	81.4		30.1	%	$	27.5			51.0	%
Ammunition			32.7		28.1			60.3		40.8			27.6			84.4
All Other			0.4		4.2			3.2		34.8			2.8			*
	Total	$	87.0		27.5	%	$	144.9		33.9	%	$	57.9			66.6	%

*

Not Meaningful

Firearms

              Gross profit for the three months ended June 30, 2009 was $47.8 million, an increase of $17.5 million, or 57.8%, as compared to the prior-year period. Gross margin was 32.0% for the three months ended June 30, 2009 and 29.9% for the three months ended June 30, 2008. The improvement in gross margin was mainly due to increased production levels, leveraging our fixed overhead utilization, favorable sales mix toward higher margin centerfire rifle products and continued factory improvements through the implementation of lean manufacturing principles, six sigma and other initiatives.

              Gross profit for the six months ended June 30, 2009 was $81.4 million, an increase of $27.5 million, or 51.0%, as compared to the prior-year period. Gross margin was 30.1% for the six months ended June 30, 2009 and 28.2% for the six months ended June 30, 2008. The improvement in gross margin was mainly due to increased production levels, leveraging our fixed overhead utilization, favorable sales mix toward higher margin centerfire rifle products and continued factory improvements through the implementation of lean manufacturing principles, six sigma and other initiatives.

Ammunition

              Gross profit for the three months ended June 30, 2009 was $35.9 million, an increase of $19.7 million, or 121.6%, as compared to the prior-year period. Gross margin was 44.2% for the three months ended June 30, 2009 and 27.6% for the three months ended June 30, 2008. Significant gains achieved in gross margin, which improved by 16.6%, were primarily due to lower material costs of $10.5 million, driven by commodity cost reductions net of hedging contract costs, offset by unfavorable pricing of $0.4 million driven by increased rebates on certain product categories.

              Gross profit for the six months ended June 30, 2009 was $60.3 million, an increase of $27.6 million, or 84.4%, as compared to the prior-year period. Gross margin was 40.8% for the six months ended June 30, 2009 and 28.1% for the six months ended June 30, 2008. Significant gains achieved in gross margin, which improved by 12.4%, were primarily due to lower material costs of $12.6 million, driven by commodity cost reductions net of hedging contract costs, a favorable sales mix driven by higher demand for pistol and revolver related products of $0.6 million, and favorable pricing of $0.2 million driven by reduced rebates on certain product categories

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All Other

              Gross profit for the three months ended June 30, 2009 was $1.7 million, resulting in no change as compared to the prior-year period.

              Gross profit for the six months ended June 30, 2009 was $3.2 million, an increase of $2.8 million, as compared to the prior-year period. Results for the six months ended June 30, 2008 included a $3.1 million write-off of remaining technology products inventory in connection with the discontinuation of our technology products business.

Operating Expenses

              Operating expenses consist of selling, general and administrative expenses, research and development expenses and other (income) expenses. The following table sets forth certain information regarding operating expenses for the three months and six months ended June 30, 2009 and 2008:

		Three Months Ended June 30,
		2008		2009		Increase (Decrease)			Percentage Change
		(dollars in millions)
Selling, general and administrative expenses		$	33.8	$	43.3	$	9.5			28.1	%
Research and development expenses			1.5		3.1		1.6			106.7
Other (income) expense			0.8		0.1		(0.7	)		(87.5	)
	Total	$	36.1	$	46.5	$	10.4			28.8	%

		Six Months Ended June 30,
		2008		2009			Increase (Decrease)			Percentage Change
		(dollars in millions)
Selling, general and administrative expenses		$	62.4	$	75.2		$	12.8			20.5	%
Research and development expenses			3.4		5.4			2.0			58.8
Other (income) expense			0.2		(1.9	)		(2.1	)		*
	Total	$	66.0	$	78.7		$	12.7			19.2	%

*

Not Meaningful

              Total operating expenses for the three months ended June 30, 2009 were $46.5 million, an increase of $10.4 million, or 28.8%, as compared to the prior-year period. Selling, general and administrative expenses increased $9.5 million, or 28.1%, primarily due to a $6.6 million accrual to reflect the estimated cost of the 17 HMR ammunition and rifle replacement safety notice, a $1.8 million increase in costs associated with incentive compensation accruals driven by financial performance, an increase of $0.5 million associated with commission expense primarily related to increases in sales demand in international markets and law enforcement firearms, and an increase of $0.4 million related to the addition of the EOTAC apparel line. Research and development expenses increased $1.6 million, or 106.7%, reflecting development costs associated with current initiatives to compete for incremental opportunities within the law enforcement and defense markets and to a lesser extent to implement continuous improvement processes to deliver products to the commercial market. Other expense (income) improved $0.7 million, primarily as a result of reduced stock option expense due to the departure of the former CEO.

              Total operating expenses for the six months ended June 30, 2009 were $78.7 million, an increase of $12.7 million, or 19.2%, as compared to the prior-year period. Selling, general and administrative expenses increased $12.8 million, or 20.5%, primarily due to a $6.6 million accrual to

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reflect the estimated cost of the 17 HMR ammunition and rifle replacement safety notice, a $1.6 million increase in wage, benefit and travel costs as a result of the addition of experienced management personnel and continued development of a customer-focused sales and marketing structure, $2.5 million increase in costs associated with incentive compensation accruals driven by financial performance, a $0.9 million increase in commission expense primarily related to increases in sales demand in international markets and law enforcement firearms, and an increase of $0.7 million related to the addition of the EOTAC apparel line. Research and development expenses increased $2.0 million, or 58.8%, reflecting development costs associated with current initiatives to compete for incremental opportunities within the law enforcement and defense markets and to a lesser extent to implement continuous improvement processes to deliver products to the commercial market. Other expense (income) improved $2.1 million, primarily as a result of reducing an estimated liability from the Marlin Acquisition associated with a federal excise tax audit that settled in March 2009 beyond the one-year period for adjustments to be applied against goodwill.

Interest Expense

              Interest expense was $7.5 million and $7.1 million for the three months ended June 30, 2009 and June 30, 2008, respectively. The $0.4 million increase in interest expense over the prior-year period was primarily related to higher interest expense on revolving debt.

              Interest expense was $14.6 million and $15.2 million for the six months ended June 30, 2009 and June 30, 2008, respectively. The $0.6 million decrease in interest expense over the prior-year period was primarily related to favorable rate movement on interest rate swaps in the first quarter of 2009 associated with BFI's term loans, offset by higher interest expense on revolving debt.

Income Tax Provision

              Our effective tax rate on continuing operations for the six months ended June 30, 2009 and 2008 was 36.2% and 37.9%, respectively. The difference between the actual effective tax rate and the federal statutory rate of 35% is principally due to state income taxes, permanent differences, and tax credit usage as of June 30, 2009 and 2008.

Years Ended December 31, 2007 and 2008

Net Sales

              The following table compares net sales by reporting segment for each of the periods presented:

		Year Ended December 31,
		2007		Percentage of Total			2008		Percentage of Total			Increase (Decrease)		Percentage Change
		(dollars in millions)
Firearms		$	201.6		52.4	%	$	426.6		59.0	%	$	225.0		111.6	%
Ammunition			169.3		44.0			275.9		38.2			106.6		63.0
All Other			14.0		3.6			20.0		2.8			6.0		42.9
	Total	$	384.9		100.0	%	$	722.5		100.0	%	$	337.6		87.7	%

Firearms

              Net sales for the year ended December 31, 2008 were $426.6 million, an increase of $225.0 million, or 111.6%, as compared to the year ended December 31, 2007, primarily due to the impact of the acquired Remington, DPMS and Marlin operations, which collectively accounted for $199.2 million of the increase in firearms sales. Excluding the impact of the acquired Remington, DPMS and Marlin operations, net sales for the year ended December 31, 2008 were $88.7 million, an

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increase of $25.8 million, or 41%, as compared to the year ended December 31, 2007. Discussion of major product category results is included below.

              Centerfire rifle sales increased by $154.9 million, or 112.2%, as compared to the prior-year period, principally due to a $129.1 million increase due to the impact of a full year of sales for the acquired Remington and DPMS operations and eleven months of sales for the acquired Marlin operations and a $25.8 million increase due to higher sales volumes of Bushmaster branded modern sporting rifles.

              Shotgun sales increased by $44.8 million, or 85.7%, as compared to the prior-year period, mainly due to the impact of a full year of sales for the acquired Remington operations and eleven months of sales for the acquired Marlin operations.

              Rimfire rifle sales increased by $18.6 million, or 391.2%, as compared to the prior-year period, mainly due to the impact of a full year of sales for the acquired Remington operations and eleven months of sales for the acquired Marlin operations.

Ammunition

              Net sales for the year ended December 31, 2008, were $275.9 million, an increase of $106.6 million, or 63%, as compared to the year ended December 31, 2007, principally due to an $81.1 million increase due to the impact of the acquired Remington operations and a $44.1 million increase due to price increases on most categories of ammunition, partially offset by a $17.7 million decrease in sales of ammunition due to lower sales volumes as a result of decreased production during late 2008. Discussion of major product category results is included below.

              Centerfire ammunition sales increased by $65.2 million, or 77.9%, as compared to the prior-year period, which included a $47.3 million increase attributable to the full-year impact of the acquired Remington operations and a $18.8 million increase due to incremental price increases on most centerfire categories. In addition, we experienced volume increases within the centerfire ammunition category during late 2008 due to increased market demand for rifle and pistol ammunition.

              Shotshell ammunition sales increased by $24.8 million, or 40.9%, as compared to the prior-year period, which included a $23.3 million increase attributable to the full-year impact of the acquired Remington operations and a $14.6 million increase due to incremental price increases on most shotshell categories, partially offset by a $13.9 million decrease in sales of shotshell ammunition due to lower sales volumes as a result of decreased production during late 2008.

              Rimfire ammunition sales increased by $6.4 million, or 54.6%, as compared to the prior-year period, which included a $6.1 million increase attributable to the full-year impact of the acquired Remington operations and a $3.8 million increase due to incremental price increases on most rimfire categories, partially offset by a $3.4 million decrease in sales of rimfire ammunition due to lower sales driving a level of reduced production during late 2008.

All Other

              Net sales were $20.0 million in all other businesses for the year ended December 31, 2008, an increase of $6.0 million, or 42.9%, as compared to the prior-year period due mainly to continued growth within the accessories business, including a $4.6 million increase from efforts of our newly developed internal sales force, a $1.8 million increase due to aggregate sales volume increases for most other businesses and a $0.9 million increase attributable to the full-year impact of the acquired Remington operations, partially offset by a $1.2 million decrease due to declining sales volumes within technology products as part of exiting that business.

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Cost of Goods Sold and Gross Profit

              The table below compares cost of goods sold and gross profit by reporting segment for the years ended December 31, 2007 and 2008:

		Year Ended December 31,
		2007		Percentage of Net Sales			2008		Percentage of Net Sales			Increase (Decrease)			Percentage Change
		(dollars in millions)
Cost of Goods Sold
Firearms		$	145.5		72.2	%	$	309.1		72.5	%	$	163.6			112.4	%
Ammunition			150.1		88.7			198.8		72.1			48.7			32.4
All Other			10.4		74.3			16.5		82.5			6.1			5.7
	Total	$	306.0		79.5	%	$	524.4		72.6	%	$	218.4			71.4	%
Gross Profit
Firearms		$	56.1		27.8	%	$	117.5		27.5	%	$	61.4			109.4	%
Ammunition			19.2		11.3			77.1		27.9			57.9			301.6
All Other			3.6		25.7			3.5		17.5			(0.1	)		(2.8	)
	Total	$	78.9		20.5	%	$	198.1		27.4	%	$	119.2			151.1	%

Firearms

              Gross profit for the year ended December 31, 2008 was $117.5 million, an increase of $61.4 million, or 109.4%, as compared the year ended December 31, 2007, primarily due to the impact of the acquired Remington, DPMS and Marlin operations, which collectively accounted for $50.9 million of the firearms gross profit increase. Excluding the impact of the acquired Remington, DPMS and Marlin operations, total gross profit for the year ended December 31, 2008 was $36.7 million, an increase of $10.5 million, or 40%, as compared to the year ended December 31, 2007. Gross margin was 27.5% for the year ended December 31, 2008 and 27.8% for the year ended December 31, 2007. Gross margin remained relatively flat, declining 0.3% due to the impact of the acquired Remington, DPMS and Marlin businesses, which have inherently lower margin products, partially offset by increased production levels on certain centerfire rifles products leveraging our fixed overhead utilization and lower rollout of purchase accounting related amortization as a result of our acquisitions of $12.2 million.

              In connection with accounting for our acquisitions as business combinations using the purchase method of accounting, inventories were required to be written up to their estimated selling prices less the costs to complete and dispose and a reasonable selling profit. As a result, inventory subsequently sold has negatively impacted cost of goods sold. The impact for the year ended December 31, 2008 was approximately $2.8 million, compared to the impact for the year ended in 2007 of $15.0 million, a net decrease to cost of goods sold of $12.2 million.

Ammunition

              Gross profit for the year ended December 31, 2008 was $77.1 million, an increase of $57.9 million, or 301.6%, as compared to the year ended December 31, 2007, primarily due to the impact of the acquired Remington operations, which collectively accounted for $22.1 million of the ammunition gross profit increase. Excluding the impact of the acquired Remington operations, total gross profit for the year ended December 31, 2008 was $55.0 million, an increase of $35.8 million, or 186.5%, compared to the year ended December 31, 2007. Gross margin was 27.9% for the year ended December 31, 2008 and 11.3% for the year ended December 31, 2008. Gross margin improved 16.6%,

64

reflecting higher realized prices in 2008 for most categories and decreased impact of purchase accounting related amortization as a result of the Remington Acquisition, partially offset by unfavorable cost absorption driven by lower production volumes during late 2008.

              In connection with accounting for the Remington Acquisition as a business combination using the purchase method of accounting, inventories were required to be written up to their estimated selling prices less the costs to complete and dispose and a reasonable selling profit. As a result, inventory subsequently sold in 2007 negatively impacted cost of goods sold. The impact for the year ended December 31, 2007 was approximately $13.1 million and was included in cost of goods sold.

All Other

              Gross profit for the year ended December 31, 2008 was $3.5 million, a decrease of $0.1 million, as compared to the year ended December 31, 2007. The full year impact of the acquired Remington operations accounted for an increase of $2.1 million for all other gross profit. Excluding the impact of the acquired Remington operations, total gross profit for the year ended December 31, 2008 was $1.4 million, a decrease of $2.2 million, or 61.1%, compared to the year ended December 31, 2007, as a result of the write-off of remaining technology products inventory of $3.1 million as part of exiting this business partially offset by lower rollout of purchase accounting related amortization of $0.6 million as a result of the Remington Acquisition.

              In connection with accounting for the Remington Acquisition as a business combination using the purchase method of accounting, inventories were required to be written up to their estimated selling prices less the costs to complete and dispose and a reasonable selling profit. As a result of this write-up, estimated inventory subsequently sold increased cost of goods sold. The impact for the year ended December 31, 2007 was approximately $0.6 million and was included in cost of goods sold.

Operating Expenses

              Operating expenses consist of selling, general and administrative expense, research and development expenses and other (income) expense. The following table sets forth certain information regarding operating expenses for the years ended December 31, 2007 and 2008:

		Year Ended December 31,
		2007			2008			Increase (Decrease)		Percentage Change
		(dollars in millions)
Selling, general and administrative		$	68.1		$	133.7		$	65.6		96.3	%
Research and development expenses			3.8			7.1			3.3		86.8
Impairment charges			0.0			47.4			47.4		N/A
Other (income) expense			(1.8	)		(1.3	)		0.5		(27.8	)
	Total	$	70.1		$	186.9		$	116.8		166.6	%

              Total operating expenses for the year ended December 31, 2008 were $186.9 million, an increase of $116.8 million, or 166.6%, as compared to the year ended December 31, 2007, primarily due to the impact of the acquired Remington, DPMS and Marlin operations, which collectively accounted for an increase of $45.1 million. Excluding the impact of the acquired Remington, DPMS and Marlin operations, total operating expenses for the year ended December 31, 2008 were $141.8 million, an increase of $71.7 million, or 102.3%, compared to the year ended December 31, 2007, of which $47.4 million was related to impairment charges recorded in December 2008. The impairment charge was caused by a combination of factors that occurred during 2008, including the deterioration of the economic and credit environment and market conditions in the hunting industry.

65

              As part of our annual impairment testing conducted with the assistance of third-party valuation specialists under SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144") and SFAS No. 142, Goodwill and Other Intangible Assets, ("SFAS 142"), we recorded non-cash impairment charges related to goodwill of $44.3 million and certain trademarks of $3.1 million for the year ended December 31, 2008.

              Selling, general and administrative expenses increased $65.6 million, or 96.3%, primarily due to the impact of the acquired Remington, DPMS and Marlin operations, which collectively accounted for an increase of $46.6 million. Excluding the impact of the acquired Remington, DPMS and Marlin operations, selling, general and administrative expenses were $87.1 million, an increase of $19 million, or 27.9%, compared to December 31, 2007, primarily due to a $3.9 million increase in wage, benefits and travel costs reflecting continued development of a customer-focused sales and marketing structure, a $3.6 million increase in wage, benefit and travel costs due to the addition of experienced management personnel, a $3.0 million increase due to incremental amortization as a result of the DPMS acquisition, a $1.6 million increase due to costs associated with incentive compensation accruals as plan participation increased and other expenses.

              Research and development expenses increased $3.3 million, or 86.8%, primarily due to a $3.2 million increase attributable to the full year impact of the acquired Remington, DPMS and Marlin operations.

              Other expense (income) decreased $0.5 million, or 27.8%, driven mainly by recorded stock option expense of $1.4 million in 2008 and higher intangible amortization of $1.1 million partially offset by the impact of the acquired Remington operations on licensing income of $1.5 million.

Interest Expense

              Interest expense for the year ended December 31, 2008 was $30.8 million, an increase of $9.6 million, or 45.3%, as compared to the year ended December 31, 2007, primarily due to the full-year impact of the acquired Remington and DPMS operations.

Income Tax Provision (Benefit)

              The Company recorded tax expense of $9.1 million for the year ended December 31, 2008, an effective rate of approximately 47.6%. This tax rate was primarily driven by a permanent tax difference associated with the impairment of goodwill. Excluding the impact of the goodwill impairment, the effective tax rate would have been 31.4% for this period. The effective tax rate for the twelve months ended December 31, 2007 was 31.0%. The difference between the actual effective tax rate for the respective periods above and the U.S. federal statutory rate of 35% is principally due to permanent differences including the impairment of goodwill, utilization of research and development tax credits and the impact of the valuation allowance.

              We are currently subject to ongoing audits by federal and various state tax authorities. Depending on the outcome of these audits, we may be required to pay additional taxes. However, we do not believe that any additional taxes and related interest or penalties would have a material impact on our financial position, results of operations, or cash flows.

Year Ended December 31, 2007 and Combined Year Ended December 31, 2006

              As a result of the acquisition of Bushmaster by CCM, which was effective on April 1, 2006, our financial results for 2006 have been separately presented in our consolidated financial statements for the "Predecessor Entity" for the period January 1, 2006 through March 31, 2006 and for the "Successor Entity" for the period April 1, 2006 through December 31, 2006. For comparative purposes, we have combined the period from January 1, 2006 through December 31, 2006 in our discussion below, as we

66

believe this combination is useful to provide the reader a more accurate comparison. This presentation is not a GAAP measure and it is provided to enhance the reader's understanding of our results of operations for the period presented.

Net Sales

              The following table compares net sales by reporting segment for each of the predecessor period January 1, 2006 to March 31, 2006, the successor period April 1, 2006 to December 31, 2006, the combined year ended December 31, 2006 and the year ended December 31, 2007:

	Predecessor Entity		Successor Entity		Combined					Successor Entity					Combined Year Ended December 31, 2006 Compared to Year Ended December 31, 2007
	Period January 1 to March 31, 2006		Period April 1 to December 31, 2006		Year Ended December 31, 2006		Percentage of Total			Year Ended December 31, 2007		Percentage of Total			Increase (Decrease)		Percentage Change
	(dollars in millions)
Firearms	$	16.8	$	41.3	$	58.1		100.0	%	$	201.6		52.4	%	$	143.5		247.0	%
Ammunition		—		—		—		—			169.3		44.0			169.3		—
All Other		—		—		—		—			14.0		3.6			14.0		—
Total	$	16.8	$	41.3	$	58.1		100.0	%	$	384.9		100.0	%	$	326.8		562.5	%

Firearms

              Net sales for the year ended December 31, 2007, were $201.6 million, an increase of $143.5 million, or 247%, as compared to the combined year ended December 31, 2006, primarily due to a $138.7 million increase as a result of the impact of the acquired Remington operations. Excluding the impact of the acquired Remington operations, net sales for the year ended December 31, 2007 were $62.9 million, an increase of $4.8 million, or 8.3%, as compared to the combined year ended December 31, 2006, reflecting higher sales volumes of Bushmaster branded products. Discussion of major product category results is included below.

              Centerfire rifle sales increased by $78.2 million, or 134.6%, as compared to the combined prior-year period, principally due to a $73.4 million increase as a result of higher sales volumes of the acquired Remington operations and a $4.8 million increase due to higher sales volumes of Bushmaster branded products.

              Shotgun and rimfire rifle sales increased by $52.0 million and $6.0 million, respectively, or 100%, as compared to the prior-year period, due solely to increased sales volumes as a result of the impact of the acquired Remington operations.

Ammunition

              Net sales for the year ended December 31, 2007, were $169.3 million, an increase of $169.3 million, or 100%, as compared to the combined year ended December 31, 2006, due solely to the impact of the acquired Remington operations. Discussion of major product category results is included below.

              Centerfire, shotshell and rimfire ammunition sales increased by $83.6 million, $60.6 million and $11.8 million, respectively, or 100%, as compared to the prior-year period, due solely to increased sales volumes as a result of the impact of the acquired Remington operations.

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All Other

              Net sales were $14.0 million in all other businesses for the year ended December 31, 2007, an increase of $14.0 million, or 100%, as compared to the combined year ended December 31, 2006 due solely to increased sales volumes as a result of the impact of the acquired Remington operations.

Cost of Goods Sold and Gross Profit

              The table below presents the cost of goods sold and gross profit by reporting segment for each of the predecessor period January 1, 2006 to March 31, 2006, the successor period April 1, 2006 to December 31, 2006, the combined year ended December 31, 2006 and the year ended December 31, 2007:

	Predecessor Entity		Successor Entity		Combined					Successor Entity					Year Ended December 31, 2007 Compared to Combined Year Ended December 31, 2006
	Period January 1 to March 31, 2006		Period April 1 to December 31, 2006		Year Ended December 31, 2006		Percentage of Net Sales			Year Ended December 31, 2007		Percentage of Net Sales			Increase (Decrease)		Percentage Change
	(dollars in millions)
Cost of Goods Sold
Firearms	$	9.8	$	24.6	$	34.4		59.2	%	$	145.5		72.2	%	$	111.1		323.0	%
Ammunition		—		—		—		—			150.1		88.7			150.1		—
All Other		—		—		—		—			10.4		74.3			10.4		—
Total	$	9.8	$	24.6	$	34.4		59.2	%	$	306.0		79.5	%	$	271.6		789.5	%
Gross Profit
Firearms	$	7.0	$	16.7	$	23.7		40.8	%	$	56.1		27.8	%	$	32.4		136.7	%
Ammunition		—		—		—		—			19.2		11.3			19.2		—
All Other		—		—		—		—			3.6		25.7			3.6		—
Total	$	7.0	$	16.7	$	23.7		40.8	%	$	78.9		20.5	%	$	55.2		233.9	%

Firearms

              Gross profit for the year ended December 31, 2007 was $56.1 million, an increase of $32.4 million, or 136.7% as compared to the combined year ended December 31, 2006. The 2007 impact of acquiring Remington compared to the combined year ended December 31, 2006 accounted for $29.9 million. Total gross profit for the year ended December 31, 2007 (excluding incremental activity from the acquired Remington operations) was $26.2 million, an increase of $2.5 million, or 10.5%, as compared to the combined period ended December 31, 2006. Gross margin was 27.8% for the year ended December 31, 2007 and 40.8% for the combined year ended December 31, 2006. Gross margin declined 13.0% mainly due to the acquisition of the Remington business with inherently lower margin products partially offset by favorable segment mix with relatively higher margins within the Bushmaster branded products.

Ammunition

              Gross profit for the year ended December 31, 2007 was $19.2 million, an increase of $19.2 million, or 100% as compared to the combined year ended December 31, 2006, due solely to the impact of the acquired Remington operations.

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All Other

              Gross profit for the year ended December 31, 2007 was $3.6 million, an increase of $3.6 million, or 100% as compared to the combined year ended December 31, 2006, due solely to the impact of the acquired Remington operations.

Operating Expenses

              Operating expenses consist of selling, general and administrative expense, research and development expenses and other (income) expense. The table below presents the operating expenses by reporting segment for each of the predecessor period January 1, 2006 to March 31, 2006, the successor period April 1, 2006 to December 31, 2006, the combined year ended December 31, 2006 and the year ended December 31, 2007:

	Predecessor Entity		Successor Entity		Combined					Successor Entity						Year Ended December 31, 2007 Compared to Combined Year Ended December 31, 2006
	Period January 1 to March 31, 2006		Period April 1 to December 31, 2006		Year Ended December 31, 2006		Percentage of Net Sales			Year Ended December 31, 2007			Percentage of Net Sales			Increase (Decrease)			Percentage Change
	(dollars in millions)
Selling, general and administrative expenses	$	3.8	$	8.9	$	12.7		100.0	%	$	68.1			97.1	%	$	55.4			436.2	%
Research and development expenses		—		—		—		—			3.8			5.4			3.8			—
Other (Income) Expense		—		—		—		—			(1.8	)		(2.5	)		(1.8	)		—
Total	$	3.8	$	8.9	$	12.7		100.0	%	$	70.1			100.0	%	$	57.4			451.5	%

              Total operating expenses for the year ended December 31, 2007 were $70.1 million, an increase of $57.4 million, or 451.5%, as compared to the combined year ended December 31, 2006, primarily due to the impact of the acquired Remington operations, which accounted for an increase of $54.0 million. Excluding the impact of the acquired Remington operations, total operating expenses for the year ended December 31, 2007 were $16.1 million, an increase of $3.4 million, or 26.8%, as compared to the combined year ended December 31, 2006.

              Selling, general and administrative expenses increased $55.4 million, or 436.2%, primarily due to the impact of the acquired Remington operations, which accounted for an increase of $52.1 million. Excluding the impact of the acquired Remington operations, selling, general and administrative expenses for the year ended December 31, 2007 were $16.0 million, an increase of $3.3 million, or 26.0%, as compared to the combined year ended December 31, 2006 primarily due to higher incentive compensation costs.

              Research and development expenses increased $3.8 million, or 100%, primarily due to the impact of the acquired Remington operations.

              Other (income) expense decreased $1.8 million, or 100%, solely due to the impact of the acquired Remington operations.

Interest Expense

              Interest expense for the year ended December 31, 2007 was $21.1 million, an increase of $16.5 million, or 358.7%, as compared to the combined year ended December 31, 2006, primarily due to the impact of the acquired Remington operations.

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Income Tax Provision (Benefit)

              Our effective tax rate was 31.0%, 42.3% and 0.2% for the year ended December 31, 2007, the successor period April 1, 2006 through December 31, 2006 and the predecessor period January 1, 2006 through March 31, 2006, respectively. The difference between the actual effective tax rate for the respective periods above and the U.S. federal statutory rate of 35% is principally due to state income taxes and permanent differences.

              We are currently subject to ongoing audits by various state tax authorities. Depending on the outcome of these audits, we may be required to pay additional taxes. However, we do not believe that any additional taxes and related interest or penalties would have a material impact on Remington's financial position, results of operations, or cash flows.

              We adopted FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, we recognized no material adjustment in our liability for unrecognized tax benefits.

Liquidity and Capital Resources

Cash Flows and Working Capital

              Net cash provided by operating activities was $53.3 million for the six months ended June 30, 2009 compared to net cash used in operating activities of $39.4 million for the six months ended June 30, 2008. The $92.7 million increase in cash provided by operating activities for the six months ended June 30, 2009 compared to the prior-year period resulted primarily from:

•

the recognition of net income of $33.0 million for the six months ended June 30, 2009 compared to net income of $3.6 million for the six months ended June 30, 2008;

•

accounts receivable increasing by $22.6 million over the six months ended June 30, 2009 compared to an increase of $27.8 million over the six months ended June 30, 2008, primarily due to enhanced initiatives to shorten historical sales program terms as part of efforts to improve working capital offset by higher sales volume;

•

inventory increasing by $4.8 million over the six months ended June 30, 2009 compared to an increase of $25.0 million over the six months ended June 30, 2008, primarily due to higher sales volumes offset by enhanced initiatives to reduce inventory levels;

•

income taxes payable increasing by $11.7 million over the six months ended June 30, 2009 compared to a decrease of $0.6 million over the six months ended June 30, 2008, primarily due to increased pre-tax income of $45.9 million;

•

accounts payable increasing by $14.3 million over the six months ended June 30, 2009 compared to an increase of $6.5 million over the six months ended June 30, 2008, primarily due to increased inventory needs to support increased production to satisfy sales demands in certain products; and

•

prepaid and other current assets decreasing by $3.6 million over the six months ended June 30, 2009 compared to an increase of $1.7 million over the six months ended June 30, 2008, primarily due to fewer hedging contracts outstanding in 2009 resulting in lower prepaid hedging expense.

              Net cash used in investing activities was $7.9 million for the six months ended June 30, 2009 and $49.0 million for the six months ended June 30, 2008. The $41.1 million decrease in cash used in investing activities was primarily related to a $46.6 million payment in connection with the Marlin Acquisition in 2008, net of cash acquired, while investing activities in 2009 were primarily for capital expenditures and the acquisition of Dakota.

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              Net cash used in financing activities for the six months ended June 30, 2009 was $12.2 million compared to net cash provided by financing activities of $74.9 million during the six months ended June 30, 2008. The $87.1 million decrease in net cash provided by financing activities for the six months ended June 30, 2009 compared to the six months ended June 30, 2008 primarily resulted from $59.1 million in lower net borrowings under our revolving credit facilities, as well as a $25.8 million capital contribution from CCM to fund the Marlin Acquisition and expenses related to corporate activities which occurred in the six months ending June 30, 2008.

              Net cash provided by operating activities was $52.9 million for the year ended December 31, 2008 compared to net cash provided by operating activities of $70.8 million for the year ended December 31, 2007. The $17.9 million decrease in cash provided by operating activities for the fiscal year ended December 31, 2008 compared to the prior-year period resulted primarily from:

•

the recognition of net loss of $28.6 million for the year ended December 31, 2008 compared to net loss of $9.0 million for the year ended December 31, 2007, partially offset by non-cash impairment charges of $47.4 million and an increase of $12.0 million in depreciation and amortization for the year ended December 31, 2008;

•

accounts receivable increasing by $19.4 million over the year ended December 31, 2008 compared to a decrease of $22.7 million over the year ended December 31, 2007, primarily due to increased sales, partially offset by our efforts to shorten historical sales terms as part of our efforts to improve working capital;

•

inventory decreasing by $32.6 million over the year ended December 31, 2008 compared to a decrease of $61.7 million over the year ended December 31, 2007, primarily due to higher sales volumes and management initiatives to reduce inventory; and

•

prepaid and other current assets decreasing by $4.7 million over the year ended December 31, 2008 compared to an increase of $11.9 million over the year ended December 31, 2007, primarily due to fewer hedging contracts in 2008 resulting in lower prepaid hedging expense.

              Net cash used in investing activities for the year ended December 31, 2008 was $57.1 million compared to $90.7 million for the year ended December 31, 2007. The $33.6 million decrease in cash used in investing activities was primarily related to a $46.6 million payment in connection with the Marlin Acquisition in 2008, net of cash acquired, and $17.3 million in purchases of property, plant and equipment for the year ended December 31, 2008, compared to a $48.3 million payment for the purchase of RACI Holding, Inc., the then parent of Remington ("RACI"), net of cash acquired, a $22.8 million payment for the purchase of DPMS, net of cash acquired, a $5.0 million payment for the purchase of Cobb Manufacturing, Inc., net of cash acquired, $11.7 million of transaction costs related to the RACI, DPMS Firearms, LLC and Cobb Manufacturing, Inc. acquisitions and $8.4 million in purchases of property, plant and equipment for the fiscal year ended December 31, 2007.

              Net cash provided by financing activities was $57.3 million for the year ended December 31, 2008 compared to net cash provided by financing activities of $43.9 million for the year ended December 31, 2007. The $13.4 million increase in net cash provided by financing activities primarily resulted from $50.2 million of proceeds received from revolving credit facilities, and $25.8 million of capital contributions, partially offset by $12.7 million of principal payments on long-term debt for the year ended December 31, 2008 compared to $43.0 million of proceeds received from borrowings of long-term debt and $133.3 million of capital contributions, partially offset by $83.6 million of payments on revolving credit facilities, and $48.2 million of principal payments on RACI notes for the year ended December 31, 2007.

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Sources and Uses of Liquidity

              We generally expect to fund expenditures for operations, administrative expenses, capital expenditures, debt service obligations and dividend payments with internally generated funds from operations, and satisfy working capital needs from time to time with borrowings under our revolving credit facility. We believe that we will be able to meet our debt service obligations, fund our short-term and long-term operating requirements, and make permissible dividend payments in compliance with our various debt instruments in the future with cash flow from operations and borrowings under the ABL Revolver, although no assurance can be given in this regard. We continue to focus on working capital management by monitoring key metrics associated with inventory, accounts receivable and accounts payable while recognizing changes to our sales demand can impact our working capital strategies.

Historical Debt

              As of June 30, 2009, we had outstanding indebtedness of approximately $324.3 million, which consisted of the following:

•

$51.8 million of indebtedness outstanding under the asset-based senior secured revolving credit facility under the Old Remington Credit Agreement;

•

$17.7 million of indebtedness outstanding under the term loan under the Old Remington Credit Agreement;

•

$29.1 million of indebtedness outstanding under the term loans under the Old BFI Credit Agreement;

•

$201.6 million of Remington's outstanding 10.5% Senior Notes due 2011 including capitalized deferred financing costs of $1.9 million;

•

$21.4 million of BFI's outstanding 15.0% Subordinated Notes due 2012; and

•

$2.7 million of capital lease obligations and other debt.

              In connection with the Refinancings as discussed under "Recent Developments" above, we have subsequently repaid all of the amounts outstanding under these notes and credit facilities (and terminated all commitments thereunder) with the proceeds of the Notes and with a borrowing under the ABL Revolver, except for capital leases and other debt.

Capital and Operating Leases and Other Long-Term Obligations

              We maintain capital leases mainly for computer equipment and lighting. We have several operating leases, including a lease for our Memphis warehouse that expires in late 2010 and leases for several of our BFI manufacturing facilities that expire on various dates between 2009 and 2012. We also maintain contracts including, among other things, a services contract with our third-party warehouse provider.

Capital Expenditures

              Gross capital expenditures for the six months ended June 30, 2009, the year ended December 31, 2008 and the six months ended June 30, 2008 were $4.3 million, $18.4 million and $7.4 million, respectively, consisting primarily of capital expenditures both for new equipment related to the manufacture of firearms and ammunition, as well as maintenance of existing facilities. We expect total capital expenditures for 2009 to be in the range of $13.0 million to $18.0 million, of which approximately $9.0 million is expected to be maintenance related.

Off-Balance Sheet Arrangements

              Our only off balance sheet arrangements consist of our obligations in respect of standby letters of credit.

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Contractual Obligations and Commercial Commitments

              We have various purchase commitments for services incidental to the ordinary conduct of business, including, among other things, a services contract with our third-party warehouse provider. We do not believe such commitments are at prices in excess of current market prices. Included in those purchase commitments are purchase contracts with certain raw materials suppliers, for periods ranging from one to five years, some of which contain firm commitments to purchase minimum specified quantities. However, such contracts had no material impact on our financial condition, results of operations, or cash flows during the reporting periods presented herein.

              We support service and repair facilities for all of our firearm products in order to meet the service needs of our distributors, customers and consumers nationwide. We provide consumer warranties against manufacturing defects in all firearm products we manufacture in the United States. Estimated future warranty costs are accrued at the time of sale which are primarily based upon historical experience. Product modifications or corrections are voluntary steps taken by us to assure proper usage or performance of a product by consumers. The cost associated with product modifications and/or corrections are recognized in accordance with SFAS No. 5, Accounting for Contingencies ("SFAS 5"), and charged to operations. The cost of these programs is not expected to have a material adverse impact on our operations, liquidity or cash flows.

              The following represents our contractual obligations and other commercial commitments as of June 30, 2009 after giving effect to the Refinancings:

			Pro Forma Payments Due by Period
			Total Amounts Committed		Less Than 1 Year		1 – 3 Years		3 – 5 Years		Over 5 Years
			(dollars in millions)
Contractual Obligations:
	New Debt(a)		$	251.9	$	—	$	—	$	51.9	$	200.0
	Expected Interest Payments on Notes			123.0		10.2		41.0		41.0		30.8
	Expected Interest Payments on ABL Revolver(b)			11.7		2.9		5.7		3.1		—
	Required Pension Contributions			53.6		8.9		36.0		8.7		—
	Capital Lease Obligations			1.2		0.5		0.6		0.1		—
	Operating Lease Obligations			3.1		1.7		1.1		0.3		—
	Other Long-term Purchase Obligations(c)			9.0		5.3		2.8		0.9		—
		Total Contractual Cash Obligations(d)	$	453.5	$	29.5	$	87.2	$	106.0	$	230.8
Other Commercial Commitments:
	Standby Letters of Credit		$	7.8	$	7.8	$	—	$	—	$	—
		Total Commercial Commitments	$	7.8	$	7.8	$	—	$	—	$	—

(a)

Excludes cash interest expense. Represents new debt incurred in connection with the Refinancings, including the Notes and borrowings under the ABL Revolver.

(b)

Expected interest payments on the ABL Revolver is estimated based on prime plus 2% and a margin of 3.5, or 5.5%.

(c)

Other Long-term Purchase Obligations includes minimum obligations due under various contracts, including a services contract with our third-party warehouse provider, and minimum purchases associated with certain materials necessary for the manufacturing process.

(d)

Contractual cash obligations above exclude: (a) income taxes that may be paid in future years; (b) any impact for likely future reversal of net deferred income tax liabilities when reversal occurs; (c) income tax liabilities of approximately $6.9 million as of June 30, 2009 for unrecognized tax benefits due to uncertainty on the timing of related payments, if any; and (d) capital expenditures that may be made although not under contract as of June 30, 2009 (cash paid for capital expenditures was approximately $5.4 million in the first six months of 2009) and (e) pension contributions beyond 5 years.

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Quantitative and Qualitative Analysis of Market Risk

              We are exposed to market risk in the normal course of our business operations due to our purchases of certain commodities and our ongoing investing and financing activities. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies and procedures governing our management of market risks and the use of financial instruments to manage exposure to such risks.

              Certain of our financial instruments are subject to interest rate risk. As of June 30, 2009 and 2008, we had long-term borrowings of $322.6 million and $331.6 million, respectively, excluding $0.7 million and $18.9 million, respectively, classified as the current portion of long-term debt, of which $98.6 million and $107.0 million, respectively, were issued at variable rates. Assuming no changes in the monthly average variable-rate debt levels of $117.6 million and $81.6 million for the twelve months ended June 30, 2009 and 2008, respectively, we estimate that a hypothetical change of 100 basis points in the LIBOR and Alternate Base Rate interest rates would impact interest expense for the twelve months ending June 30, 2009 and 2008 by $1.3 million and $0.9 million, respectively, on an annualized pretax basis.

              We were party to several interest rate swap agreements with respect to our variable outstanding rate indebtedness at BFI as of December 31, 2008 and 2007. The purpose of entering into these interest rate swap arrangements was to hedge against the risk of interest rate increases on the related variable rate indebtedness and not to hold the instrument for trading purposes. The interest rate swap agreement, which is a derivative financial instrument, is classified as a cash flow hedge. We were required to enter into these interest rate swaps in accordance with certain BFI debt instruments. We account for these as a derivative financial instrument in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"). Accordingly, the derivative financial instruments are reflected on the balance sheet at their fair market value. However, as the interest rate swaps do not meet specific hedge accounting criteria, the change in fair value over the period covered is reflected in interest expense.

              We purchase copper and lead options contracts to hedge against price fluctuations of anticipated commodity purchases. Lead and copper prices have experienced significant volatility over the past five years primarily due to increased demand (including increased demand from India and China).

              The amounts of premiums paid for commodity contracts outstanding at June 30, 2009 were $3.6 million, which was $5.5 million lower than the same date in 2008, as fewer contracts were entered into in the last twelve months. At June 30, 2009 and 2008, the market value of our outstanding contracts relating to firm commitments and anticipated purchases up to fifteen and eighteen months, respectively, from the respective date was $6.3 million and $4.1 million, respectively, as determined with the assistance of the Company's counterparty. Assuming a hypothetical 10% increase in lead and copper commodity prices which are currently hedged at June 30, 2009 and 2008, we would experience an approximate $3.0 million and $7.2 million, respectively, increase in our cost of related inventory purchased on an annualized pretax basis, which would be partially offset by an approximate $2.0 million and $3.2 million, respectively, increase in the value of related hedging instruments.

              We also purchase steel supplies for use in the manufacture of certain firearms, ammunition, and accessory products. Assuming a hypothetical 10% increase in steel prices at June 30, 2009 and 2008, we would experience an approximate $0.4 million increase in each period in our cost of related inventory purchased on an annualized pretax basis.

              We do not believe that we have a material exposure to fluctuations in foreign currencies. We do not hold or issue financial instruments for speculative purposes.

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Critical Accounting Policies and Estimates

              Our discussion and analysis of our financial condition, results of operations, and cash flows are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to inventories, supplies, accounts receivable, warranties, long-lived assets, product liability, revenue recognition (inclusive of cash discounts, rebates, and sales returns), advertising and promotional costs, self-insurance, pension and post-retirement benefits, deferred tax assets, and goodwill. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. As noted below, in some cases, our estimates are also based in part on the assistance of independent advisors. Actual results may differ from these estimates under different assumptions or conditions.

              Management has addressed and reviewed our critical accounting policies and considers them appropriate. We believe the following critical policies utilize significant judgments and estimates used in the preparation of our consolidated financial statements:

Fair Value Measurements

              We adopted SFAS No. 157, Fair Value Measurements ("SFAS 157"), and SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159"), on January 1, 2008. SFAS 157 (1) creates a single definition of fair value, (2) establishes a framework for measuring fair value, and (3) expands disclosure requirements about items measured at fair value. SFAS 157 applies both to items recognized and reported at fair value in the financial statements and items disclosed at fair value in the notes to the financial statements. SFAS 157 does not change existing accounting rules governing what can or what must be recognized and reported at fair value in the financial statements, or disclosed at fair value in the notes to the financial statements. Additionally, SFAS 157 does not eliminate practicability exceptions that exist in accounting pronouncements amended by SFAS 157 when measuring fair value. As a result, we will not be required to recognize any new assets or liabilities at fair value.

              Prior to SFAS 157, certain measurements of fair value were based on the price that would be paid to acquire an asset, or received to assume a liability (an entry price). SFAS 157 clarifies the definition of fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (that is, an exit price). The exit price is based on the amount that the holder of the asset or liability would receive or need to pay in an actual transaction (or in a hypothetical transaction if an actual transaction does not exist) at the measurement date. In some circumstances, the entry and exit price may be the same; however, they are conceptually different.

              Fair value is generally determined based on quoted market prices in active markets for identical assets or liabilities. If quoted market prices are not available, we use valuation techniques that place greater reliance on observable inputs and less reliance on unobservable inputs. In measuring fair value, we may make adjustments for risks and uncertainties, if a market participant would include such an adjustment in its pricing.

              SFAS 157 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and our assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or

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level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1	—	Quoted market prices in active markets for identical assets or liabilities;
Level 2	—	Inputs other than level 1 inputs that are either directly or indirectly observable; and
Level 3	—	Unobservable inputs developed using our estimates and assumptions, which reflect those that market participants would use. The following table presents information about assets and liabilities measured at fair value on a recurring basis:

	Fair value measurements at June 30, 2009 using:
	Quoted prices in active markets for identical assets	Significant other observable inputs	Significant unobservable inputs
	Level 1	Level 2	Level 3	Total
Assets:
Commodity Contract Derivatives	Not applicable	$6.3 million	Not applicable	$6.3 million
Marlin Life Insurance Policies	$0.1 million	Not applicable	Not applicable	$0.1 million
Liabilities:
Interest Rate Swap	Not applicable	$0.2 million	Not applicable	$0.2 million

              As shown above, commodity contract derivatives valued by using quoted prices are classified within level 2 of the fair value hierarchy. Marlin life insurance policies valued by using cash surrender values, net of related policy loans, are classified within level 1 of the fair value hierarchy. We value the interest rate swap using the Income Approach valuation technique. This method uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts.

              The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors, and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.

              Most derivative contracts are not listed on an exchange and require the use of valuation models. Consistent with SFAS 157, we attempt to maximize the use of observable market inputs in our models. When observable inputs are not available, we default to unobservable inputs. Derivatives valued based on models with significant unobservable inputs and that are not actively traded, or trade activity is one way, are classified within level 3 of the fair value hierarchy.

              Some financial statement preparers have reported difficulties in applying SFAS 157 to certain nonfinancial assets and nonfinancial liabilities, particularly those acquired in business combinations and those requiring a determination of impairment. To allow the time to consider the effects of the implementation issues that have arisen, the FASB issued FSP SFAS 157-2 ("FSP 157-2") on February 12, 2008 to provide a one-year deferral of the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed in financial statements at fair value on a recurring basis (that is, at least annually). As a result of FSP 157-2, the Company has not yet adopted SFAS 157 for nonfinancial assets and liabilities (such as those related to the Marlin Acquisition) that are valued at fair value on a non-recurring basis. We are evaluating the impact that the application of SFAS 157 to those nonfinancial assets and liabilities will have on our financial statements.

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              In February 2007, the FASB issued SFAS 159. SFAS 159 provides an option to elect fair value as the initial and subsequent measurement attribute for most financial assets and liabilities and certain other items. The fair value option election is applied on an instrument-by-instrument basis (with some exceptions), is irrevocable, and is applied to an entire instrument. The election may be made as of the date of initial adoption for existing eligible items. Subsequent to initial adoption, we may elect the fair value option at initial recognition of eligible items, on entering into an eligible firm commitment, or when certain specified reconsideration events occur. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings.

              Upon adoption of SFAS 159 on January 1, 2008, we did not elect to account for any assets and liabilities under the scope of SFAS 159 at fair value. In October 2008, the FASB issued FSP SFAS 157-3, Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active, which clarifies the application of SFAS 157 in a market that is not active.

Revenue Recognition

              Sales, net of an estimate for discounts, returns and allowances, and related cost of sales are recorded when goods are shipped, at which time risk of loss and title transfer to the customer. We continually evaluate our sales terms against criteria outlined in SEC Staff Accounting Bulletin 104, Revenue Recognition, which supersedes SAB 101, Revenue Recognition in Financial Statements. While we follow the industry practice of selling select firearms pursuant to a "dating" plan, allowing the customer to purchase these products commencing in December (the start of our dating plan year) and to pay for them on extended terms, we have now commenced to shorten the duration of these terms. Historically, use of the dating plan has had the effect of shifting some firearms sales from the second and third quarters to the first and fourth quarters. As a competitive measure, we offer extended terms on select ammunition purchases. However, use of the dating plans also results in deferral of collection of accounts receivable until the latter part of the year. Customers do not have the right to return unsold product. Management uses historical trend information as well as other economic data to estimate future discounts, returns, rebates and allowances.

Allowance for Doubtful Accounts

              We maintain an allowance for doubtful receivables for estimated losses resulting from the inability of our trade customers to make required payments. We provide an allowance for specific customer accounts where collection is doubtful and also provide an allowance for customer deductions based on historical collection and write-off experience. Additional allowances would be required if the financial conditions of our customers deteriorated.

Inventories

              Our inventories are valued at the lower of cost or market. We evaluate the quantities of inventory held against past and future demand and market conditions to determine excess or slow moving inventory. For those product classes of inventory identified, we estimate their market value based on current and projected selling prices. If the projected market value is less than cost, we provide an allowance to reflect the lower value of that inventory. This methodology recognizes projected inventory losses at the time such losses are evident rather than at the time goods are actually sold.

              As part of the Marlin Acquisition, we now account for a portion of our inventory, the North Haven manufactured firearms, under a Last-In First-Out ("LIFO") assumption under the double extension method. As of June 30, 2009 and June 30, 2008, approximately 8.5% and 11.3%, respectively, of our total inventory excluding the LIFO adjustment was accounted for under the LIFO method.

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Under a First In First Out assumption, inventories would have been lower by $1.2 million and $1.4 million at June 30, 2009 and June 30, 2008, respectively.

Property, Plant and Equipment

              Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated lives of the assets. The estimated useful lives are principally 1 to 43 years for buildings and improvements, and 1 to 15 years for machinery and equipment.

              In accordance with SFAS 144, management assesses property, plant and equipment for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. To analyze recoverability, management projects undiscounted future cash flows resulting from the use of the asset over the remaining life of the asset. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If these projected cash flows are less than the carrying amount of the asset, an impairment loss is recognized, resulting in a write-down of property, plant and equipment with a corresponding charge to operating income. Any impairment loss is measured based upon the difference between the carrying amount of the asset and the present value of future cash flows. We use a discount rate equal to our average cost of funds to discount the expected future cash flows.

              Maintenance and repairs are charged to operations; replacements and betterments are capitalized. Computer hardware and software costs under capital leases are amortized over the term of the lease. The cost and related accumulated depreciation applicable to assets sold or retired are removed from the accounts and the gain or loss on disposition is recognized in operations, included in the other income and expenses.

              Interest is capitalized in connection with the construction of major projects. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset's useful life.

Goodwill, Goodwill Impairment, Intangible Assets and Debt Issuance Costs

              We adopted the provisions of SFAS 142 for goodwill and intangible assets pursuant to SFAS 142. Each year we test for impairment of goodwill according to a two-step approach. In the first step, we estimate the fair values of our reporting units using a combination of the present value of future cash flows approach, market approach and a transactional approach, all equally weighted, subject to a comparison for reasonableness to our market capitalization at the date of valuation. Our market capitalization is developed with the assistance of third parties and is computed primarily using the income approach but validated using the market approach. We use a market-based control premium when reconciling the aggregate of our reporting unit fair values to our market capitalization. If the carrying amount exceeds the fair value, the second step of the goodwill impairment test is performed to measure the amount of the impairment loss, if any. In the second step the implied fair value of the goodwill is estimated as the fair value of the reporting unit used in the first step less the fair values of all other net tangible and intangible assets of the reporting unit. If the carrying amount of the goodwill exceeds its implied fair market value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. In addition, goodwill of a reporting unit is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. In 2008, impairment charges of $44.3 million were recorded to goodwill and identifiable intangible assets. Impairment charges to goodwill of $35.2 million related to the Remington Acquisition. Goodwill impairment charges of $9.1 million and trademark impairment charges of $3.1 million related to the Marlin Acquisition. No impairment provisions were necessary during 2007 or 2006. For other intangible assets,

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the impairment test consists of a comparison of the fair value of the intangible assets to their respective carrying amount.

              The determination of future cash flows is based on the Company's plans and long range planning forecasts. The revenue growth rates (based on the Company's business plans until 2012, estimated at 2.3% from 2013 to 2016 and trended down to 2% over the long term) included in the plans are based on our assumptions of macro economic effects on our industry. We use market share data by customer based on known and targeted awards. The projected profit margin assumptions included in the plans are based on the current cost structure and anticipated cost reductions. We employed a weighted average cost of capital ("WACC") approach to determine our discount rates of approximately 15-18% for goodwill recoverability testing. Our WACC calculation includes factors such as the risk-free rate of return, cost of debt and expected equity premiums. The assumptions used in the current year changed primarily from the prior year due to revised cash flows and growth rates in light of the deterioration in the global economic condition. Other valuation methods, such as a market approach utilizing market multiples, are used to corroborate the discounted cash flow analysis performed at the reporting unit. If different assumptions were used in these plans, the related cash flows used in measuring impairment could be different and additional impairment of assets might be required to be recorded. We use a discount rate equal to our average cost of funds to discount the expected future cash flows. Debt issuance costs are amortized over the life of the related debt or amendment.

              In the asset purchases of BFI, Cobb Manufacturing, Inc., and DPMS, we recorded an initial estimate associated with goodwill of $42.0 million. Thereafter net adjustments of $0.1 million increased the balance of goodwill related to acquisition costs and accruals related to the acquisition of DPMS in December 2008.

              As part of the application of purchase accounting resulting from the Remington Acquisition, on May 31, 2007, we recorded an initial estimate associated with goodwill and identifiable intangible assets to each reporting segment of $67.0 million and $73.9 million, respectively. Subsequent to May 31, 2007, goodwill was adjusted downward by $43.0 million to $24.0 million, primarily due to the impairment charges discussed above and intangible assets were adjusted downward by $0.9 million to $73.0 million based on additional information relating to applying the purchase method of accounting.

              As part of the application of purchase accounting resulting from the Marlin Acquisition, on February 1, 2008, we recorded an initial estimate associated with goodwill and identifiable intangible assets to each reporting segment of $6.0 million and $10.9 million, respectively. Subsequent to February 1, 2008 and through June 30, 2009, goodwill has been adjusted downward to zero, primarily due to the impairment charges. Identifiable intangible assets have been adjusted downward approximately $3.1 million based on additional information relating to applying the purchase method of accounting, as well as impairment charges.

Reserves for Product Liability

              We provide for estimated defense and settlement costs related to product liabilities when it becomes probable that a liability has been incurred and reasonable estimates of such costs are available. Estimates for accruals for product liability matters are based on historical patterns of the number of occurrences, costs incurred and a range of potential outcomes. We also utilize the assistance of independent advisors to assist in analyzing the adequacy of such reserves. Due to the inherently unpredictable nature of litigation, actual results will likely differ from estimates and those differences could be material.

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Employee Benefit Plans

              We have defined benefit plans that cover a significant portion of our salaried and hourly paid employees. As a result of amendments to our defined benefit plans, future accrued benefits for all employees were frozen as of January 1, 2008. We derive pension benefit expense from an actuarial calculation based on the defined benefit plans' provisions and management's assumptions regarding discount rate, rate of increase in compensation levels and expected long-term rate of return on assets. Management determines the expected long-term rate of return on plan assets based upon historical actual asset returns and the expectations of asset returns over the expected period to fund participant benefits based on the current investment mix of our plans. Management sets the discount rate based on the yield of high quality fixed income investments expected to be available in the future when cash flows are paid. The rate of increase in compensation levels is established based on management's expectations of current and foreseeable future increases in compensation. In addition, management also consults with independent actuaries in determining these assumptions.

Self-Insurance

              We are self-insured for elements of our employee benefit plans including, among others, medical, workers' compensation and elements of our property and liability insurance programs, but limit our liability through stop-loss insurance and annual plan maximum coverage limits. Self-insurance liabilities are based on claims filed and estimates for claims incurred but not yet reported.

Reserves for Workers' Compensation Liability

              We provide for estimated medical and indemnity compensation costs related to workers' compensation liabilities when it becomes probable that a liability has been incurred and reasonable estimates of such costs are available. Estimates for accruals for workers compensation liability matters are based on historical patterns of the number of occurrences, costs incurred and a range of potential outcomes. We also utilize the assistance of independent advisors to assist in analyzing the adequacy of such reserves.

Income Taxes

              Income tax expense is based on pretax financial accounting income. We recognize deferred tax assets and liabilities based on the difference between the financial reporting and tax bases of assets and liabilities, applying tax rates applicable to the year in which the differences are expected to reverse, in conjunction with SFAS 109. A valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be realized.

Recent Accounting Pronouncements

              In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets an amendment of SFAS 140 ("SFAS 166"). This standard removes the concept of a qualifying special-purpose entity from SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishing of Liabilities, and removes the exception from applying FASB Interpretation 46, Consolidation of Variable Interest Entities. The statement clarifies the objective of whether a transferor has surrendered control over the financial assets and limits the circumstances in which a financial asset should be derecognized. The statement requires that all assets acquired and liabilities incurred resulting from the transfer of a financial asset be initially measured at fair value. SFAS 166 is effective for interim and annual periods ending after November 15, 2009. We do not expect the adoption of SFAS 166 will have a significant impact on our results of operations, financial condition and equity.

              In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation 46(R) ("SFAS 167"). The statement requires a reporting enterprise to perform an analysis and ongoing

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reassessments to determine whether the enterprise's variable interest gives it a controlling financial interest. It also requires an enterprise to assess whether it has an implicit financial responsibility to ensure a variable interest operates as designed when determining whether it has the power to control the variable interest. The statement eliminates the quantitative approach previously required when determining the primary beneficiary of a variable interest and augments current disclosures. SFAS 167 is effective for interim and annual periods ending after November 15, 2009. We do not expect the adoption of SFAS 167 will have a significant impact on our results of operations, financial condition and equity.

              In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles ("SFAS 168"). This standard establishes the Accounting Standards Codification ("Codification") as the source of authoritative U.S. generally accepted accounting principles for all nongovernmental entities and supersedes SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. On the effective date of this statement, all then-existing and non-SEC accounting and reporting standards will be nonauthoritative and superseded by the Codification. New standards by the FASB, will be issued through Accounting Standards Updates. Accounting Standard Updates are not considered authoritative in their own right, but will update, guide, and provide the bases for conclusions on changes in the Codification. SFAS 168 is effective for financial statements issued after September 15, 2009.

Recently Adopted Accounting Pronouncements

              Accounting pronouncements adopted by the Company in 2009 are as follows:

              In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, ("SFAS 160"). This standard improves, simplifies, and converges internationally the reporting of noncontrolling interests in consolidated financial statements. SFAS 160 requires all entities to report noncontrolling (minority) interests in subsidiaries in the same way as equity in the consolidated financial statements. Moreover, SFAS 160 requires that transactions between an entity and noncontrolling interests be treated as equity transactions. SFAS 160 is effective for fiscal years beginning after December 15, 2008 and, consequently, was implemented by Freedom Group on January 1, 2009.

              Upon adoption of SFAS 160, the Company reclassified minority interests in its consolidated balance sheet from other noncurrent liabilities to the equity section. Additionally, the Company changed the way non-controlling interests are presented within the consolidated statement of operations such that the statement of operations reflects results attributable to both the Company's interests and non-controlling interests. The results attributable to the Company's interests did not change upon the adoption of SFAS 160.

              In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. The new standard is also intended to improve transparency about the location and amounts of derivative instruments in an entity's financial statements; how derivative instruments and related hedged items are accounted for under SFAS 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. SFAS 161 requires disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk-related and requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and, consequently, was

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implemented by Freedom Group on January 1, 2009. Upon adoption of SFAS 161, the Company enhanced its disclosures for derivative instruments and hedging activities by providing additional information regarding the underlying risk, objectives, extent of hedging activity, and accounting designation. Since SFAS 161 requires additional disclosures, its adoption did not affect the Company's financial position or results of operations.

              In April 2009, the FASB issued FSP SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, ("FSP 157-4"). FSP 157-4 provides guidelines for making fair value measurements more consistent with the principles presented in SFAS 157. FSP 157-4 relates to determining fair values when there is no active market or where the price inputs being used represent distressed sales. It reaffirms what SFAS 157 states is the objective of fair value measurement: to reflect how much an asset would be sold for in an orderly transaction (as opposed to a distressed or forced transaction) at the date of the financial statements under current market conditions. Specifically, it reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. FSP 157-4 is effective for interim and annual periods ending after June 15, 2009. The adoption of FSP 157-4 has not had a significant impact on our results of operations, financial condition and equity.

              In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments ("FSP 107-1"). FSP 107-1 enhances consistency in financial reporting by increasing the frequency of fair value disclosures. FSP 107-1 relates to fair value disclosures for any financial instruments that are not currently reflected on the balance sheet of companies at fair value. Prior to issuing FSP 107-1, fair values for these assets and liabilities were only disclosed once a year. FSP 107-1 now requires these disclosures on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. FSP 107-1 is effective for interim and annual periods ending after June 15, 2009.

              In April 2009, the FASB issued FSP SFAS 115-2 and SFAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments ("FSP 115-2"), which provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. FSP 115-2 on other-than-temporary impairments is intended to bring greater consistency to the timing of impairment recognition, and provide greater clarity to investors about the credit and noncredit components of impaired debt securities that are not expected to be sold. The measure of impairment in comprehensive income remains fair value. FSP 115-2 also requires increased and more timely disclosures sought by investors regarding expected cash flows, credit losses, and an aging of securities with unrealized losses. FSP 115-2 is effective for interim and annual periods ending after June 15, 2009. The adoption of FSP 115-2 has not had a significant impact on our results of operations, financial condition and equity.

              In May 2009, the FASB issued SFAS No. 165, Subsequent Events ("SFAS 165"). This standard establishes general guidelines for accounting and disclosing events that occur subsequent to an entity's balance sheet date but prior to issuance of its financial statements. SFAS 165 defines the period after the balance sheet date and the circumstances which an entity should recognize events in its financial statements. SFAS 165 is effective for interim and annual periods ending after June 15, 2009. The adoption of SFAS 165 has not had a significant impact on our results of operations, financial condition and equity.

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BUSINESS

Company Overview

Our Company

              We are one of the leading firearms, ammunition and related products companies in the world, with #1 commercial market positions across all of our major product categories in the United States, the largest firearms and ammunition market globally. We are an innovator, designer, manufacturer and marketer of an increasingly broad product line which services the hunting, shooting sports, law enforcement and military end-markets under some of the most globally recognized brands including Remington, Marlin, Bushmaster, and DPMS, among others.

              Established in 1816, we are America's oldest and largest manufacturer of firearms and ammunition. In addition, we are the only major U.S. manufacturer of both firearms and ammunition, which we believe is a significant competitive advantage and supports our market leadership position. We believe this leadership position across all of our major product categories is evidenced by our #1 U.S. commercial market shares in shotguns, rifles, and ammunition.

              Today, Freedom Group includes over 10 well-regarded brands, collaborating across all disciplines, from product development to distribution, delivering end-user driven products to the hunting, shooting sports, law enforcement and military end-markets. We have made significant progress in our transition to a customer-focused sales and marketing organization by shifting to a two-tiered sales structure whereby dedicated key account managers sell the full FGI product offering to our top retail accounts while our internal field sales force calls on our network of distributors and dealers. This has allowed us to create a unified customer facing platform capable of selling our entire suite of brands and products across multiple end-markets while providing the ability to leverage our flexible manufacturing capacity to quickly respond to changes in customer preferences and demands.

Our Industry

              We compete in the global marketplace for firearms, ammunition, accessories and licensed products in over 80 countries. End customers include police departments, domestic and foreign government organizations, including the U.S. military, and consumers, such as sportsmen, hunters, and recreational shooters. Consumer distribution channels are diverse, and include major chain retail stores, major distributors, smaller dealers, gun clubs and ranges.

              Based on data from the NSSF, we estimate that the annual domestic commercial long gun market is approximately $1.1 billion and the commercial ammunition market is approximately $1.0 billion, based on data from the NSSF. We estimate total annual purchases of firearms and ammunition by U.S. military and law enforcement are $1.7 billion and $475 million, respectively. Additionally, we believe there are significant opportunities in the international market for our products.

              The long gun market represents a significant variety of firearms, including both shotguns and rifles. The use of these firearms ranges from hunting, to law enforcement and defense, to other shooting sports, such as skeet, trap, sporting clays and target shooting. According to the NSSF, domestic consumer long gun sales (based on excise tax data) have grown at a 5% CAGR from 2004 to 2007 and at higher rates in 2008 and 2009. Within those numbers, we believe the commercial modern sporting rifle market, in which we believe we are the largest producer, has grown at a 36% CAGR. Further, the NSSF estimates that consumer ammunition sales grew at a 17% CAGR during the same period and at higher rates in 2008 and 2009.

              Our consumers include people of all ages, gender, educational backgrounds and income levels. The NRA estimates 70 to 80 million people in the U.S. own approximately 250 million firearms. This represents a significant installed base that generates a recurring revenue stream for ammunition, parts and accessory sales. In addition, we believe that a number of other developments in the industry are broadening and renewing consumer interest in hunting and shooting sports, including a renewed

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interest in the outdoors and product offerings designed to introduce new shooters to hunting and shooting.

              We believe the accessories market for our products creates a significant opportunity for revenue growth and enhances the perception of our overall product portfolio. Accessory opportunities range from gun care products and gun parts in our hunting and shooting sports categories to trigger, barrel, stock, and grip upgrades, and caliber-changing upper assemblies in the tactical and modern sporting rifle lines.

              We believe that a meaningful percentage of current firearm sales are being made to first time gun purchasers, particularly women. We further believe that the introduction of first time shooters, as well as the renewed interest of many existing shooters, will translate to increased participation across the ever-widening array of shooting sports. In addition, the continued adoption of the modern sporting rifle has led to increased growth in the long gun market, especially with a younger demographic of users and those who like to customize or upgrade their firearms. We view this current increase in demand as having significant long-term benefits, including expanding the popularity of shooting sport categories, as well as providing an opportunity to cultivate new, and renew existing, long-term customer relationships across our portfolio of products and brands.

Our Competitive Strengths

              We believe our business model provides a broad and attractive value proposition to our customers and we believe that we are distinguished by the following competitive strengths:

Category-Defining Brands

              We believe our brand names are some of the most globally recognized in the hunting, shooting sports, law enforcement, and military firearm and ammunition end-markets. This recognition is enhanced by our deep rooted philosophy and heritage of investing in the great American outdoors that is actively driven through our partnerships with hunting, shooting, outdoor sports and conservation organizations.

              Built on a legacy of quality and innovation, we believe that the Remington brand represents an enduring symbol of American values and is trusted and respected by generations of sportsmen, lawmen and soldiers. Established in 1816, the Remington brand is ranked #2 in brand awareness, second only to Nike among sportsmen and 8th overall among all sports brands in the SportsOneSource 2009 Brand Index. The brand has been judiciously deployed across virtually every category of our firearms and ammunition. Remington has some of the best-known and longest-selling products in the hunting and shooting sports market, which we believe define their respective categories. For example, the 10 millionth Model 870 pump-action shotgun was produced in April 2009 and we have produced more than 5 million Model 700 bolt-action rifles, which we believe is currently the most widely-distributed rifle in its class. The Remington brand is licensed to third parties for use in related products, is heavily used in our accessories businesses and is well-known in the domestic and international law enforcement and military channels.

              The Bushmaster and DPMS brands, established in 1973 and 1986, respectively, represent the largest and second largest designers and suppliers of modern sporting rifles, components and parts for the commercial market, in addition to sales to the law enforcement, military and international markets. Bushmaster was one of the first to introduce modern sporting rifles to the consumer market, a segment which is growing faster than the general firearms industry.

              Our other firearms brands are leaders in their niche markets:

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Marlin—Key producer of lever-action and bolt-action rifles

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Harrington & Richardson—Producer of break-action single-shot rifles and shotguns

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•

L.C. Smith—Major producer of aspirational side-by-side and over-under shotguns

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Parker—Key producer of aspirational high-end brand of artisanal shotguns

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Dakota Arms—Key producer of aspirational rifles and shotguns often chambered in large calibers

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Miller Arms—Producer of customized precision single-shot rifles

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Nesika—Producer of precision bolt-action rifles and actions

              Our ammunition brands, including Remington, UMC and Dakota, also enjoy leading market positions, strong brand recognition and generations of customer loyalty. We believe that Remington Core-Lokt centerfire ammunition is the most widely used, and the Premier STS and Nitro 27 target loads have won more trophies at the Grand American Trap and World Skeet championship than any other brand.

              Our EOTAC and INTC joint ventures extend into tactical and discreet clothing and frangible ammunition, respectively.

Leading Market Share Positions

              Our core products are ranked #1 across their respective U.S. commercial product categories.

Categories		U.S. Market Position		U.S. Market Share
Firearms
	Shotguns		#1		31	%
	Traditional Rifles		#1		36	%
	Modern Sporting Rifles		#1		49	%
Ammunition			#1		33	%

Note: Based on 2007 Firearms and 2006 Ammunition Market Data from SMRG and AFMER, and excludes law enforcement, international and military sales.

Broad Product Portfolio

              We have the broadest firearms, ammunition, components, parts and accessory portfolio in our industry:

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Firearms—We provide a wide variety of firearms, including a full product line of both shotguns and rifles. Our shotgun firearm types include single-shot, pump-action, auto-loading, over-and-under, break-action and side-by-side. Our rifles are both centerfire and rimfire, and include lever-action, bolt-action, break-action, single-shot and modern sporting rifle firearm types. Our products range in price from entry level firearms under the Harrington & Richardson brand to the aspirational hand-crafted Parker Gun and Dakota brands in addition to our core brands of Remington, Bushmaster, DPMS and Marlin. Varied price points enable us to build lifetime relationships and brand loyalty with our customers as they mature in, and expand across additional categories of, the outdoor marketplace. In addition, we believe that we offer the widest variety of shotgun gauges and rifle caliber chamberings of any long gun manufacturer, and also offer high-end precision, aspirational and custom firearms.

•

Ammunition—We are the only company in the United States that is a major supplier of both firearms and ammunition. Our prominence in the ammunition market and ability to leverage brand loyalty creates a recurring and stable revenue stream in ammunition to complement our firearms business. We produce over 1,000 SKUs of ammunition (loaded rounds and components) across 60 calibers and gauges for use across the entire spectrum of firearms,

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including centerfire rifles, rimfire rifles, shotguns, and handguns, at a variety of price points and for a broad spectrum of applications.

•

Components and Parts—Our business of providing components and parts to customize firearms, particularly modern sporting rifles, generates additional sales to existing customers, with component systems and parts often generating higher margins than complete rifles, which are reported within our firearms segment. Most of these components and parts, with the exception of the serialized lower receiver, can be sold directly to consumers without going through a federally licensed firearms dealer.

•

Accessories—We sell a wide variety of branded accessories, including gun care and cleaning products, Dan Walter protective firearms cases and folding and collectible knives. Through our EOTAC majority owned joint venture, we market high quality tactical and discreet garments for military, law enforcement and the commercial sector.

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Licensing—We license our trademarks to a discrete number of third parties that manufacture and market sporting and outdoor products that complement our product lines. We currently offer approximately 3,500 SKUs and generate over $110 million in sales from our retail partners. Currently, our trademarks are licensed for use on, among other things, automobiles, sporting and outdoor apparel, caps, gun cases and slings, tree stands, wildlife feeders, sporting dog equipment, air guns, game decoys and calls, hunting and shooting safety and security products, gun safes, and various other nostalgia and novelty goods. We strive to ensure that the quality, image and appeal of these licensed products are consistent with the high-quality nature of our products and brand strength. We believe that these licenses increase the market recognition of our brands, enhance our ability to market our core products, and generate attractive, high margin income. Additionally, we believe there are significant opportunities for our licensed products as we believe consumer preference is continuing to move toward an outdoor lifestyle.

              Our broad product portfolio provides a wide assortment of choices and options for end-users, so that we can provide a solution for any firearm or any ammunition application. This enables us to be a key supplier to our commercial, law enforcement and military customers with significant cross-selling and bundling opportunities, while building strong brand loyalty across all shooting sports and needs.

Multiple Distribution Channels Reaching Diverse End-Markets

Commercial

              The combination of our strong brands, wide product breadth, leading market shares and the ability to offer both firearms and ammunition has made us a key partner with our commercial retailers and distributors. We have strong relationships with all of the major chain retail stores that sell firearms and ammunition, including Bass Pro Shops, Cabela's, Dick's Sporting Goods, Gander Mountain, Academy, Big Five and Wal-Mart, as well as with major sporting goods distributors. In addition, we have strong relationships with dealers and shooting ranges, and are actively working with them to grow sales within this channel. Within the commercial business, our products are used across a wide variety of shooting activities, resulting in numerous diverse customer end-markets serving hunters as well as skeet, trap and target shooters, competitive target shooters and a broad variety of recreational shooters.

Military/Law Enforcement/International

              In addition to our significant commercial business, we sell products to law enforcement, international, government and military end-markets where we already have a strong presence. For example, we have a significant market share in the domestic law enforcement shotgun market and have a leading market share in military sniper rifles. These markets represented approximately 19% of our 2008 net sales. We believe that our increasingly focused law enforcement and global military products divisions will increase our presence in the law enforcement and defense markets beyond our existing

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customers, which include the Texas Department of Public Safety, Los Angeles County Sheriff's Department, Los Angeles Police Department, the California Highway Patrol, FLETC, DOD, the United States SOCOM, and the United States Secret Service, as well as international governments including Colombia, the Republic of Georgia, Italy, Poland, Malaysia, Mexico and Oman. All firearms and ammunition that we sell and export to foreign countries, whether sold commercially or to international governments and militaries, must be licensed and approved by the U.S. Department of State or the U.S. Department of Commerce.

Differentiated, Customer-Focused Sales and Marketing Approach

              We have significantly grown and transitioned our dedicated sales force to a two-tiered structure whereby dedicated key account managers sell the full FGI product offering to our top eight retail accounts while our internal field sales force calls on our network of approximately 800 distributors and dealers. This investment and effort has significantly reduced our use of third-party, non-exclusive sales representatives. This sales structure is similar to those utilized by many leading consumer products companies and allows for us to more effectively sell our entire suite of brands and products to our key customers and distributors. We believe this sales structure will lead both to increased market share with our key customers as well as to provide the ability to leverage our flexible manufacturing capacity to quickly respond to changes in customer preferences and demands.

              We have also shifted our business from a manufacturing-based "push system" to a customer-focused "pull system," driven by our Chief Sales and Marketing Officers. We have the ability to mine our extensive and proprietary database of consumer contacts and are an industry leader in our ability to capture and analyze point-of-sale and sell through data from our key customers and distributors to determine what products our customers demand. Additionally, our key account managers have access to the full suite of FGI products and we believe are leveraged by our retail partners to assist in long range sales planning.

              Our law enforcement and global military products divisions capitalize on key relationships to identify customer needs, so that research and development investments are focused and timely in providing products that meet these needs. We supplement our law enforcement and military efforts through the consultation of our board members who have new, extensive knowledge and experience.

Attractive Cash Flow Generation

              We believe our recurring revenue model further supports our ability to generate strong future cash flows that can be re-invested in research and development, the growth of sales within our distribution channels and in the acquisition of select complementary businesses. We have achieved substantial working capital improvements since 2007 by decreasing average days sales outstanding by 10 days and inventory days by 45 days from January 2007 through June 2009. Our attractive operating margins, variable cost structure, relatively low maintenance capital expenditures and low working capital needs all result in strong cash flow generation.

Proven and Experienced Management Team and Board of Directors

              Our senior management team has substantial industry and related operational, sales and marketing and financial experience. For example, our Chief Executive Officer, Ted Torbeck, joined us after a 28 year career with General Electric, our Chief Sales Officer, Scott Blackwell, has over 20 years experience in the firearm and law enforcement industry and our Chief Financial Officer, Stephen Jackson, has been with the Company for six years and has over 19 years of financial and accounting experience. Immediately after the offering, our management will own approximately        % of our common stock (on a fully diluted basis). In addition to key managers that have been in place at our companies, we have added numerous experienced external professionals to execute our business strategy including a Chief Operating Officer, Chief Sales Officer, Chief Information Officer, Chief

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Marketing Officer, Chief Technology Officer and General Counsel. Further, our board members provide a wealth of relevant experience and expertise across operations, sales and marketing and defense, including Edward Rensi, the former Chief Executive Officer of McDonalds U.S.A.; retired four star Generals Michael Hagee, former Commandant of the United States Marine Corps, and George Joulwan, former SACEUR (Supreme Allied Commander Europe and Head of NATO); Bobby Brown, former President of Remington; Jim Pike, Chief Executive Officer of CTA Acoustics and Maul Technology; David Bell, former Chairman Emeritus of Interpublic Group; Grant Gregory, Vice Chairman of Cerberus Capital Management; and Jeff Bleustein, former Chairman and Chief Executive Officer of Harley-Davidson.

Our Growth Strategy

              Our fundamental strategy is to continue to strengthen and broaden our leading market positions across the firearms, ammunition and related product markets. We do so by actively and collectively managing our broad portfolio of powerful brands and products across a diverse set of end-markets. Our core strengths described above, augmented by a constant focus on operational improvements designed to increase manufacturing efficiency, quality and profitability, have been implemented and are continuously refined by our highly experienced management team. Specific additional strategic initiatives include:

Increase Commercial Market Share through Marketing-Focused Organization

              The combination of our strong brands, wide product breadth, leading market shares and the ability to offer both firearms and ammunition has cultivated a broad and loyal customer base across a wide range of commercial retailers and distributors. We have invested in our commercial sales organization, growing our headcount by 44% over the past two years, to increase the experience, reach and impact of our team. This investment and effort has significantly reduced our use of third-party, non-exclusive sales representatives. We expect to continue to grow our commercial market share by leveraging our strong brand and product portfolio with our dedicated sales force to increase shelf space. As we continue to see results of our sales and marketing optimization efforts, we will benefit from the key account managers developing stronger ties to and long term plans with our core retailers while the broader sales force capitalizes on an extensive existing dealer network. By increasing our consumer points-of-contact and continued focus on a customer driven platform, we believe we will continue to expand our leading market position.

Further Penetrate the Domestic and International Defense and Law Enforcement Channels

              Our global military products division, operating under a unified leadership across all of our brands, has focused research efforts on developing products in advance of key emerging imminent firearms solicitation windows for the DOD over the next several years. We have significantly ramped up and augmented our business to take advantage of these opportunities. While we have supplied a number of products to the military and law enforcement channels for many years, we view this area as having high potential for further penetration and growth for a wide variety of our existing products, as well as products we have recently developed and continue to develop. Specific opportunities include the development of the next generation tactical sniper system for special operations and conventional military customers, the next generation service rifle for the U.S. Army, an upgrade option to our current M24 Sniper Weapon System for the U.S. Army for greater range and capability, and a materials and coatings sniper rifle study for the Defense Advanced Research Projects Agency (DARPA) that focuses on barrel life and long range accuracy. In addition, we are aligning ourselves with certain suppliers to exploit our competitive advantages and secure future government-funded research and development opportunities in this area.

              Our international presence has increased significantly in net sales over the last two years with firearms (sniper systems, shotguns, and service rifles) and ammunition sales to governmental customers

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in Mexico, Thailand, Malaysia and Afghanistan, among other countries. In addition to the new products mentioned above, we are developing several products specific to the foreign markets, including a 7.62mm semi-auto sniper system and several personal defense weapons. We believe we are well-positioned as an important player in this growing global market and can offer full firearms and ammunition solutions to existing and new foreign military customers. We believe leveraging current and future DOD contracts will further enhance our ability to win international business. All firearm export sales need to be licensed and approved by the United States Department of State or the United States Department of Commerce, and we have a successful track record of obtaining such approvals.

Continued Focus on Innovation and New Product Development

              We are an innovation leader in our industry, supported by more than 45 engineers and technicians and what we believe to be the industry's only domestic freestanding and dedicated firearms research and development facility. Our team develops new products, such as the weather-resistant M887 Nitro Mag shotgun which was launched in May 2009, as well as processes to bring new products such as the XL7 series of rifles to market more quickly and cost effectively. Our focus on innovation has resulted in the introduction of diverse products such as the Remington R-15 modern sporting rifle, the R-25 modern sporting rifle, the Bushmaster .50 BMG bolt action rifle, and the .308 DPMS modern sporting rifle. In 2009, we also launched the Remington M597 VTR rimfire rifle, the Marlin .338 MXLR/MX lever action line of rifles and the Remington R-15 styled rifle for the new Remington 30AR cartridge, along with a variety of other new ammunition products. We are driving product development for our law enforcement, international and military efforts, as well as additional sales to existing commercial customers with additional part configurations and calibers for the modern sporting rifle. Specific examples include the Adaptive Combat Rifle and 7.62mm semi-auto sniper system. We have numerous new products in development with multiple new firearms product platforms and extensions to existing product lines scheduled for introduction in 2010 and beyond.

Continue to Optimize Manufacturing Operations

              We have augmented and integrated our facilities over the last 18 months and have focused on improving our operating efficiency. To this end, we have completed a number of lean manufacturing projects, including a factory consolidation and six sigma efforts led by the introduction of more than 50 black belt process experts since implementation of the program. Such projects have increased throughput and reduced direct labor, square footage and equipment downtime along with improved cash flow from lower inventory levels. These activities, which we call "continuous cost improvements," will continue to be a cornerstone of our organization as we build and optimize our world class manufacturing platform.

              Our manufacturing optimization efforts have also included the shift of some modern sporting rifle components and parts production into our plants and away from third-party vendors. These efforts have made the combined organization considerably more flexible, improved our quality and margins and enabled us to more quickly and efficiently address future changes in demand. The benefits of our past work are starting to appear in our ability to leverage our existing manufacturing footprint during periods of high demand while maintaining variability in our cost structure. We enhance this variability through our use of third parties for many modern sporting rifle components with no long-term contracts, so that we can adjust our inventory quickly and at a low cost.

Pursue Complementary Acquisitions and Strategic Investments

              We have built and strengthened our family of brands and products over the past three years, primarily through the successful integration of four primary acquisitions (Bushmaster, Remington, DPMS and Marlin) made between April 2006 and January 2008. We did so with the goal of creating the world's leading firearms and ammunition company. We have focused on integrating and optimizing our consolidated business operations since the spring of 2008. We have a proven track record of

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successfully identifying and integrating acquisitions, as demonstrated by the integration of our brands, and have achieved significant operational improvements as a result. We intend to continue to identify and pursue add-on strategic acquisitions or investments that expand and enhance our brand, product and intellectual property portfolio. We seek to acquire highly complementary products, intellectual property or external capabilities to fill gaps in our portfolio or extend our brands and channel relationships.

              We have recently completed three acquisitions which we believe will enhance our business performance. On June 5, 2009, we acquired certain assets of Dakota Arms, a producer of high-end rifles, shotguns and ammunition for approximately $1.8 million, which primarily consisted of inventory and equipment. This acquisition positions us in the largely customized, high precision, large caliber and safari segments of the market, with premium and aspirational firearm and ammunition brands including Dakota Arms, Miller Arms and Nesika, as well as Dan Walter premium gun cases. In addition, on September 22, 2009, we acquired certain assets from S&K Industries, Inc. ("S&K"), a supplier of high quality walnut and laminate wood stocks for our firearms operations for approximately $3.8 million. The assets acquired are primarily inventory, machinery and equipment. We believe this acquisition will reduce certain costs of acquiring the wood stocks and improve efficiencies in our firearms manufacturing processes. Finally, on October 2, 2009, we completed the acquisition of certain assets of Advance Armament Corporation ("AAC") for approximately $10.2 million, with additional contingent consideration of approximately $8.0 million due in 2015 upon achievement of certain employment and financial conditions. AAC manufactures and markets a full line of firearm accessory products used in certain military and commercial markets and provides us further product portfolio expansion.

Our History and Corporate Structure

              We have over 190 years of operational history in firearms, ammunition and related products. Our predecessor company was created on February 17, 2006 by CCM for the purpose of acquiring Bushmaster Firearms, Inc. Effective April 1, 2006, CCM completed the acquisition of certain assets and assumed certain liabilities of Bushmaster Firearms, Inc. With the goal of creating the world's leading firearms, ammunition and related products company, CCM has built and strengthened a family of brands and products with the successful integration of three primary acquisitions subsequent to the acquisition of Bushmaster (Remington, DPMS and Marlin).

              FGI (formerly American Heritage Arms, Inc.) was formed on March 30, 2007 by CCM principally for the purpose of acquiring Remington Arms Company, Inc. On December 12, 2007, through a series of transactions, Bushmaster Firearms International, LLC and Remington Arms Company, Inc. became wholly owned subsidiaries of FGI. On December 13, 2007, through our subsidiary DPMS Firearms, LLC, we acquired certain assets and assumed certain liabilities of Defense Procurement/Manufacturing Services, Inc. On January 28, 2008, we acquired 100% of the shares of the Marlin Firearms Company and its subsidiary H&R 1871, LLC through our Remington subsidiary. We have focused on integrating and optimizing our consolidated business operations for the past 18 months.

              We have made an additional small strategic acquisition to supplement and expand the current brand portfolio. On June 5, 2009, through our wholly owned subsidiary DA Acquisitions, LLC, we acquired certain assets and assumed certain liabilities of Dakota Arms.

              We have entered into three strategic joint-ventures through our non-wholly owned subsidiaries. On March 19, 2007, we purchased an 80% ownership interest in Precision Arms Center. On November 3, 2008, we purchased 27.1% ownership interest in INTC USA, LLC. On July 30, 2008, we purchased a 61.8% ownership interest in EOTAC, LLC.

              On February 13, 2009 we formed E-RPC, LLC as a wholly owned domestic subsidiary principally to carry out certain operating activities related to our re-entrance into the handgun market.

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              The following chart shows our corporate structure as of the date of this prospectus:

(1)

73% owned by third parties.

(2)

38% owned by third parties.

(3)

50% owned by Spectrum Brands Inc.

(4)

20% owned by third parties.

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Segment Overview

              We operate our business under three separate reporting segments: (1) our "firearms" segment, which designs, manufactures, assembles, imports and markets primarily shotguns, centerfire rifles and rimfire rifles; (2) our "ammunition" segment which designs, manufactures and markets primarily sporting ammunition and ammunition reloading components; and (3) an "all other" reporting segment which includes accessories, other gun-related products, licensed products and apparel. The following table sets forth our sales for our reportable operating segments for the periods shown:

	Predecessor		Successor
	January 1 through March 31,		April 1 through December 31,		Year Ended December 31,				Six Months Ended June 30, (Unaudited)				Twelve Months Ended June 30, (Unaudited)
	2006		2006		2007		2008		2008		2009		2009
			(dollars in millions)
Firearms	$	16.8	$	41.3	$	201.6	$	426.6	$	190.9	$	270.3	$	506.0
Ammunition		—		—		169.3		275.9		116.3		147.8		307.4
Subtotal		16.8		41.3		370.9		702.5		307.2		418.1		813.4
All other		—		—		14.0		20.0		9.6		9.2		19.6
Totals	$	16.8	$	41.3	$	384.9	$	722.5	$	316.8	$	427.3	$	833.0

Firearms

Overview

              We design, manufacture and market our firearms primarily under the Remington, Marlin, Bushmaster, DPMS, H&R, L.C. Smith, Parker, Dakota Arms, Miller Arms, and Nesika brand names. Through our diversified portfolio of leading brands, we offer a wide variety of long guns including pump-action shotguns, auto-loading shotguns, side-by-side shotguns, over-and-under shotguns, break-action shotguns, and a comprehensive variety of centerfire and rimfire rifle types, including custom and precision guns, lever-action rifles, bolt-action rifles, break-action rifles, single-shot rifles, and modern sporting rifles. Our products appeal to a broad range of gun owners, attracting novice and experienced consumers alike. We offer our products at a range of price points, from entry level, value priced guns to premium brands that appeal to gun enthusiasts and collectors worldwide. We also produce components, including uppers, lowers, barrels and spare parts, which enable gun enthusiasts to build and continually upgrade and customize their firearms. Our brand strategy allows us to address a variety of end-user preferences, ranging from hunting and shooting sports to government, military and law enforcement applications, from beginner to accomplished shooters, as well as build strong brand awareness and generate attractive cross-selling opportunities. As the largest firearms manufacturer in the United States, we sold approximately 1.1 million long guns during the twelve months ended June 30, 2009.

              We believe our portfolio contains powerful brands acknowledged throughout the broader U.S. sporting goods and outdoor recreation markets and that our products are recognized by sportsmen and shooters worldwide for superior value, performance and durability. One of our core strategies is to consistently introduce new and innovative products. This strategy results in a robust new product pipeline, including our M887 Nitro Mag shotgun, an innovative new pump-action shotgun that features ARMORLOKT, our proprietary protective coating designed for the harshest environments. In addition, we have developed various innovative products for the international, law enforcement and government end-markets under the Remington, Bushmaster and DPMS brands. For example, Remington supplies the M24 Sniper Weapon System to the U.S. Army. Finally, Bushmaster and DPMS, which supplied over

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30,000 firearms to law enforcement and international customers in 2008, provide firearms to various federal agencies including the DOD.

              According to the SMRG, we had the #1 market share position in the U.S. for traditional rifles and shotguns in 2007. Based on sales volume, our U.S. market share was approximately 36% and 31% in 2007, respectively. We also held the #1 market share position in the U.S. for modern sporting rifles, according to 2007 AFMER data, with an estimated 49% market share.

              According to NSSF, 2007 shooting sports participation includes approximately 20 million target shooters, 19 million hunters and 7 million sporting clays, trap and skeet shooters. NSSF estimates participation of roughly 6 million archers and at least 9 million air gun shooters as well. We believe that the hunting and shooting sports industry is growing. Based on NSSF analysis of U.S. excise tax data, the sporting equipment market was approximately $2.8 billion in 2007, consisting of $1.1 billion in long guns, $1.1 billion in ammunition and $0.7 billion in handguns.

Products

              Our most popular Remington shotguns are the Model 870 pump-action shotgun and the Model 1100 and Model 11-87 auto-loading shotguns. Remington shotguns are offered in versions that are marketed to both novices and experienced gun owners. Specialty shotguns focus on the deer, turkey and other specialized hunting markets, recreational and competitive clay target shooting, and various law enforcement and military applications. We also offer premium over/under, side-by-side, and entry-level single-shot shotguns.

              Our most popular Remington rifles are the Model 700, Model Seven and Model 770 centerfire rifles and the Model 597 rimfire rifles. To appeal to a broad range of gun owners, we manufacture these rifles in a wide variety of chamberings, configurations and finishes. In addition, Remington offers the R-15 and R-25 modern sporting rifles for hunting use.

              Marlin is synonymous with lever-action rifles. The Model 336, Model 1895, Model 1894 and the recently introduced XLR configurations are designed for high performance and durability across multiple medium and large centerfire calibers. Marlin also produces the Model 39A lever action rimfire rifle, which is the longest continuously manufactured rifle in the world, having commenced production in 1891. In addition to lever-action rifles, Marlin is also known for its rimfire rifle offerings particularly, the Model 60, as well as the Model 795, Model 925 and Model 917. Marlin also offers a bolt-action centerfire rifle in the competitively priced XL7 series rifle.

              Bushmaster produces superior quality and highly advanced modern sporting rifles, used worldwide in the commercial, law enforcement, international and military markets. Bushmaster produces a wide range of upper and lower assemblies for modern sporting rifles, carbon composite carbines, M4 type carbines and a wide range of custom products with a primary focus on the .223 and 5.56mm caliber. Bushmaster has introduced innovative products and caliber offerings such as the .50 BMG and .450 Bushmaster with several new platforms currently under development.

              DPMS is a leading innovator of modern sporting rifles with a broad range of caliber offerings such as .308, .338 and .243. In addition, DPMS produces a range of upper and lower assemblies, stocks and other gun components to a diverse customer base including dealers and end-users.

              Harrington & Richardson offers competitively priced break-action single-shot shotguns and rifles. Popular models include the Pardner line of single-shot shotguns as well as the Handi-Rifle single-shot rifle and Ultra Slug Hunter rifled slug shotguns.

              Recently, we completed the acquisition of Dakota Arms. Dakota Arms is a manufacturer of premier rifles used in the high precision, large caliber and safari segments of the market.

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Product Introductions

              We focus our product development efforts on satisfying customer preferences. Recent Remington product introductions include the Model 887 Nitro Mag, an innovative new pump-action shotgun fully encased in a rugged polymer shell, the Model 700 XHR rifle with a triangular profiled barrel and the Model R-15 rifle chambered in the new .30 Remington modern sporting cartridge. Additionally, Remington upgraded the X-Mark Pro trigger for the Model 700 series with external trigger pull weight adjustment capability. Recent Marlin introductions include the .338 MXLR and .338 MX rifles chambered for the new .338 Marlin Express cartridge, short-action chamberings in the X7 series rifles as well as a big loop lever version of the 1895 series rifle. New products under development include the Remington ACR and the .30 Remington.

Ammunition

Overview

              As the only major supplier of both firearms and ammunition in the United States, we believe our ability to sell ammunition creates a unique competitive advantage within the industry and allows us to solidify and extend our existing long-term relationship with our loyal customer base. Our ammunition product offerings consist of a comprehensive line of sporting ammunition and ammunition reloading components, along with ammunition for the government, military, and law enforcement markets, marketed under the Remington, UMC, and Dakota brand names both domestically and internationally. The NRA estimates 70 to 80 million people in the United States own approximately 250 million firearms, creating a large installed base for our ammunition products. We believe we are the largest manufacturer of commercial ammunition in the United States, and sold approximately 2.0 billion rounds of ammunition during the twelve months ended June 30, 2009.

              We market an extensive line of ammunition products that range from high volume, promotionally priced ammunition products to premium, high performance products that meet the needs of the most demanding hunters and shooters as well as the military and law enforcement users. This is evidenced by the fact that we have developed and/or manufactured more cartridges than any other ammunition manufacturer. We produce over 1,000 SKUs of ammunition across 60 calibers and gauges for use across the entire spectrum of firearms. We also market frangible training ammunition specifically tailored to meet the requirements of law enforcement and military customers. Additionally, we believe our ability to deliver a complete military solution of firearms and ammunition is distinctive. We also produce and market sporting ammunition components used by smaller ammunition manufacturers, as well as by individual consumers engaged in the practice of reloading centerfire cases or shotgun shells.

              According to the SMRG, we had the #1 market share position in the U.S. ammunition market in 2006. Based on sales volume, our U.S. market share was approximately 33% in 2006.

Products

              Our most popular ammunition products include Core-Lokt centerfire rifle ammunition, Premier STS and Nitro 27 target loads, which management believes are widely viewed as the performance leader in trap, skeet and sporting clays shooting by virtue of their combination of superior first firing performance and reloadability.

Product Introductions

              We focus our product development efforts on introducing new products that satisfy the need for specialized, high-performance ammunition. Recent ammunition product introductions have focused on developing exclusive or proprietary technology with application to performance oriented hunting

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segments and special application law enforcement and military needs. For 2009, we are expanding our AccuTip slug offering to include two 20 gauge loads in 2³/4" and 3". To strengthen our product position in lead-free hunting areas, we are introducing a variety of new products including Steel Game and Target shotshell loads in 12 and 20 gauge, Disintegrator Varmint Ammunition featuring Jacketed Iron Core HP bullets in 2 key centerfire calibers and a new line of big game centerfire hunting ammunition, Premier Copper Solid, in six key calibers. The 2009 introduction of a brand new cartridge, the .30 Remington, a co-development project with the Remington and DPMS firearms businesses, is designed to cement Remington's leadership in the modern sporting rifle segment. The .30 Remington is the first .30 caliber cartridge providing deer-sized big game hunting performance in a lightweight R-15 firearm platform.

Accessories, Licensing and Other

              We sell a wide variety of branded accessories, including gun care and cleaning products and folding and collectible knives. We believe we are one of the top brands in complete firearm care, including cleaning chemicals, tools, and kits. Our wide range of oil and lubricants include RemOil, Brite-Bore, RemAction Cleaner and Rem-DriLube, which are highly versatile and widely used firearm oils and cleaning products. Through our majority owned joint venture, EOTAC, we market high quality tactical and discreet garments for military, law enforcement and the private sector. In addition, we also hold a minority ownership stake in INTC, a leading producer of non-toxic premium based centerfire and shotshell projectiles and a leading manufacturer of frangible bullets.

              We also license our trademarks to a discrete number of third parties that manufacture and market sporting and outdoor products that complement our product lines. We offer approximately 3,500 SKUs of licensed product and generate over $110 million in sales for our retail partners. Currently, our trademarks are licensed for use on, among other things, automobiles, sporting and outdoor apparel, caps, gun cases and slings, tree stands, wildlife feeders, sporting dog equipment, air guns, game decoys and calls, hunting and shooting safety and security products, gun safes, and various other nostalgia and novelty goods. We strive to ensure that the quality, image and appeal of these licensed products are consistent with the high-quality nature of our products and brand strength. We believe that these licenses increase the market recognition of our brands, enhance our ability to market our core products, and generate attractive, high margin income. Additionally, we believe there are significant opportunities for our licensed products as we believe consumer preference is continuing to move toward an outdoor lifestyle.

Competition

              Product image, performance, quality and innovation are the primary competitive factors in the firearms industry, with price and customer service also being important. Our shotgun products compete with products offered by O.F. Mossberg & Sons, Inc., Winchester, Browning Arms Company, and Fabbrica d'Armi Pietro Beretta S.p.A. Our centerfire and rimfire rifles compete with products offered by Sturm, Ruger & Co., Inc., Savage Arms, Inc., Browning Arms Company, Colt Defense, FN Herstal, Smith & Wesson, Rock River Arms, Stag Arms and Armalite.

              In the ammunition market, we compete with the Winchester division of Olin Corporation, and Federal Cartridge Co., a subsidiary of Alliance Techsystems. Additionally, some imported ammunition brands compete in the domestic market.

Manufacturing

              We are one of the largest manufacturers of firearms in the United States with eight dedicated firearms manufacturing facilities. Our facilities in Ilion, New York, North Haven, Connecticut, Windham, Maine, Mayfield, Kentucky, Sturgis, South Dakota, St. Cloud, Minnesota, Lake Havasu,

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Arizona, Dallas, Georgia and Jacksonville, North Carolina manufacture a wide selection of shotguns, centerfire rifles, rimfire rifles, modern sporting rifles, barrels and gun components and parts, in addition to high-end custom and precision firearms. Stringent quality control processes are employed throughout production and purchasing. Two of these firearms manufacturing facilities in Ilion and Windham, which we consider our key facilities, have ISO 9001-2000 certifications. Certain of these facilities also provide factory repair services.

              We have two facilities that manufacture ammunition and ammunition components located in Lonoke, Arkansas and Sturgis, South Dakota. Primer mixture manufactured on site is combined with parts and raw materials to produce ammunition. Some parts are manufactured on site, while other components are purchased from independent suppliers. Throughout the various processes, our technicians continuously monitor and test the velocity, pressure and accuracy levels of our ammunition. Our main ammunition manufacturing facility is ISO 9001-2000 certified.

              In the past we have imported certain firearm products from selected foreign vendors, which we have significantly curtailed.

Seasonality

              Although the sales of many of our products fall outside the core fall hunting season of September through December, a significant portion of our sales are seasonal and concentrated toward the fall hunting season. As a result of the seasonal nature of our sales, our historical working capital financing needs generally have exceeded cash provided by operations during certain parts of the year. Our recent efforts to shorten terms and reduce dating plan billing practices have moderated this seasonal aspect of working capital financing needs as compared to prior years.

Supply of Raw Materials

              We have augmented and integrated our facilities and supply chain over the last 18 to 24 months and have focused on improving our operating efficiency. To manufacture our various firearms, ammunition and related products, we utilize numerous raw materials, including steel, wood, lead, brass, powder and plastics, as well as parts purchased from independent manufacturers. We have completed numerous lean manufacturing projects and six sigma efforts focused on supply chain rationalization.

              For a number of our raw materials, we rely on a limited number of suppliers. For example, a major portion of our requirements for barrel blanks and wood stocks are each currently being met by several vendors. In addition, our brass strip and lead requirements are being serviced primarily by several vendors and our requirements for smokeless powder are primarily met by three suppliers, which are the only sources of smokeless powder in the United States and Canada. Many of our machining processes on certain of our firearms components are performed by a limited number of vendors. We are actively working to develop in-house capabilities at our Ilion facility to mitigate some of the supply chain concentration associated with our products. See "Risk Factors" for additional information regarding the risks associated with our dependence on a limited number of suppliers and the risks related to importing products from foreign vendors.

              We generally have written purchase agreements with our suppliers, some of which (primarily with utilities) contain minimum purchase requirements. We have had long-term relationships with most of our vendors and believe that all such relationships are good, and do not currently anticipate any material shortages or disruptions in supply from these vendors.

              The price and availability of production materials are affected by a wide variety of interrelated economic and other factors, including alternative uses of materials and their components, changes in production capacity, energy prices, commodity prices, and governmental regulations. Specifically, some

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of our manufacturing sites have experienced volatility in acquisition costs related to purchases of metals and other materials related to our business, increased processing charges and increased energy costs. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" and "—Quantitative and Qualitative Analysis of Market Risk."

Service and Warranty

              We support service and repair facilities for our firearms products in order to meet the service needs of our distributors, customers and consumers nationwide. We provide warranties for our new firearms products manufactured in the United States to the original purchaser to be free from defects in material and workmanship for periods of one to five years. These warranty periods commence with the registered date of purchase by the end consumer. Our imported firearms products are warranted by our vendors for a period of one year commencing with the registered date of purchase by the end consumer and we also provide limited warranties for our ammunition products. Warranty costs associated with these programs were $2.1 million for the six months ended June 30, 2009 and $3.6 million, $1.3 million, and less than $1.0 million for each of the years ended December 31, 2008, 2007, and 2006, respectively.

Marketing and Distribution

              We are a leading marketer and supplier of one of the broadest portfolios of firearms, ammunition and related products in our industry. Our portfolio of products is marketed to the hunting, shooting sports, law enforcement and military end-markets under some of the most globally recognized brands including Remington, Marlin, Bushmaster and DPMS, among others. Our portfolio holds the #1 commercial market positions across all of our major product categories.

              We have shifted our business from a manufacturing-based "push system" to a customer-focused "pull system," driven by our Chief Sales and Marketing Officers. In addition to mining our extensive and proprietary database of consumer contacts, we are a leader in the industry in capturing and analyzing point of sale and sell through data from our key customers and distributors to determine what products are in demand by our customers.

              We market our products and sell through both our in-house direct sales representatives and, to a lesser extent, manufacturers' sales representatives. Both groups market and sell principally to wholesalers, dealers and chains. Our in-house direct sales representatives market and sell only Freedom Group firearms, ammunition and related products. Our manufacturers' sales representatives market and sell other product lines as well. Our manufacturers' sales representatives are prohibited from selling directly competing goods from other manufacturers and are paid variable commissions based on the type of products that are sold.

              We have adjusted our selling process to be more streamlined and focused on customer types, including chains, distributors, gun clubs, law enforcement, international, military and government agencies. We have invested in our commercial sales organization, growing our headcount by 44% over the past two years, to increase the experience, reach and impact of our sales team. In addition to overhauling our commercial sales organization, we have materially expanded and refocused our law enforcement, international and military sales and marketing organizations with the same objectives.

              Our portfolio of leading products and brands, with significant #1 shares, positions us as a key partner with commercial retailers, including Bass Pro Shops, Cabela's, Dick's Sporting Goods, Gander Mountain and Wal-Mart, as well as distributors. Our Remington Law Enforcement Division is focused on the specialized needs of this predominantly law enforcement channel. The Texas Department of Public Safety, Los Angeles County Sheriff's Department and the California Highway Patrol represent a few of our law enforcement customers. In addition, our Remington Military Products Division is focused on the specialized needs and regulatory considerations to serve various military customers in the United States and around the world. Today, for example, we are a supplier to the DOD supplying the M24 Sniper Weapon System to the U.S. Army and have sold military products to countries including Colombia, the Republic of Georgia, Malaysia, Mexico and Oman. We support our products internationally with dedicated international sales representatives in Norway, Spain and Germany.

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Geographic Areas

              Revenues from customers outside of the United States were $97.3 million, $47.8 million, and $5.0 million, for fiscal years 2008, 2007, and 2006, respectively. The Company does not maintain any long-lived assets outside of the United States.

Customer Concentration

              Approximately 11% and 9% of total net sales from all reportable business segments for the six months ended June 30, 2008 and 2009, respectively, consisted of sales made to one customer. Due to the seasonal nature of our business, six months of results are not necessarily indicative of a full year's performance. Approximately 15% of our total net sales from all reportable business segments for the year ended December 31, 2008 consisted of sales made to one customer, Wal-Mart. The loss of this customer or a substantial reduction in sales to this customer could adversely affect our financial condition, results of operations or cash flows. No other single customer comprises more than 10% of total sales. No material portion of our business is subject to renegotiation of profits or termination of contracts at the election of a governmental or any other type of purchaser. See "Risk Factors—Risks Relating to Our Business—A substantial amount of our business comes from one "national account" customer. A substantial portion of our accounts receivable is concentrated with two customers. Loss of business from either of these customers could adversely affect our revenues, operating results and statements of cash flows."

              Wal-Mart, together with another customer, accounted for approximately 21% and 16% of our accounts receivable balance as of December 31, 2008 and June 30, 2009, respectively. This other customer, due to the timing of its purchasing, usually maintains significant amounts of accounts receivable at the end of our fiscal year. In the event that this customer incurs financial difficulty and is unable to pay its account in full, our cash flows and operating results could be adversely affected.

              International sales accounted for approximately 11% for the six months ended June 30, 2009, 13% in 2008, 12% in 2007, and 12% in 2006 of our total net sales. Our sales personnel and manufacturers' sales representatives market to foreign distributors generally on a nonexclusive basis and for a one-year term.

Research and Development

              With more than 45 engineers and technicians and what we believe to be the industry's only domestic freestanding and dedicated firearms research and development facility, we are a leader of innovation in the industry. Our team is focused on new product development as well as improving existing products based on consumer needs and demands as well as in response to the competition in the market. Upcoming long gun and handgun product introductions include the weather-resistant M887 Nitro Mag shotgun. Recent efforts also include process improvements to bring new products such as the XL7 to market more quickly and cost effectively as well as existing products like our 870 shotgun. We are actively driving product development in the modern sporting rifle market to tap commercial, law enforcement, international and military channels with innovative products components, parts and additional calibers. These efforts have resulted in the introduction or planned launch of the .30 R-15, R-15, R-25, ACR, .50BMG, .338 MXLR/MX, M597 VTR, and .308 DPMS firearms, and a variety of new ammunition products, among others. Research and development expenditures for our continuing operations were approximately $5.4 million in the six months ended June 30, 2009, and approximately $7.1 million and $3.8 million in the years ended December 31, 2008 and 2007, respectively.

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Patents, Trademarks and Copyrights

              Our operations are not dependent upon any single trademark other than the Remington and Bushmaster word marks and the Remington and Bushmaster logo marks. In addition, we also own the Marlin, H&R, L.C. Smith, Dakota and DPMS trade names and trademarks as well as other trade names and trademarks. Some of the other trademarks that we use, however, are nonetheless identified with and important to the sale of our products. Our business is not dependent to a material degree on patents, copyrights, or trade secrets. We do not believe that the expiration of any of our patents will have a material adverse effect on our financial condition or our results of operations. We likewise do not believe that any of our licenses of intellectual property to third parties are material to our business, taken as a whole.

              In June 2000, Remington formed RA Brands L.L.C., a Delaware limited liability company and wholly-owned subsidiary of Remington ("RA Brands"), to which Remington transferred ownership of all of its patents, trademarks and copyrights. RA Brands owns all of the Remington trademarks and licenses them to Remington at an arm's length royalty rate. We believe that we have adequate policies and procedures in place to protect our intellectual property.

Regulation

              The manufacture, sale, purchase, possession and use of firearms are subject to extensive federal, state and local governmental regulations. The primary federal laws are the National Firearms Act of 1934 ("NFA"), the Gun Control Act of 1968 ("GCA"), the Arms Export Control Act of 1976 ("AECA") and the Firearms and Ammunition Excise Tax ("FAET"), which have been amended from time to time. The NFA, GCA and imports under the AECA are administered and enforced by the Bureau of Alcohol, Tobacco, Firearms and Explosives through the Department of Justice; exports under the AECA are administered and enforced by the Directorate of Defense Trade Controls through the Department of State and by the Bureau of Industry and Security through the Department of Commerce; and the FAET is administered and enforced by the Alcohol and Tobacco Tax and Trade Bureau through the Department of Treasury. We maintain valid federal licenses and registrations at our locations as required by these agencies for the Company to import, manufacture and sell firearms and ammunition. The NFA places various restrictions on certain firearms defined in that regulation including fully automatic firearms, short barreled rifles, short barreled shotguns, silencers and destructive devices. We do manufacture or import limited products regulated under the NFA primarily for official government and law enforcement end users. The GCA places certain restrictions on the interstate sale of firearms, among other things. The AECA requires approved licenses to be in place prior to the import or export of certain firearms, ammunition and explosives. The FAET imposes a federal tax on the sale of or use by the manufacturer, producer or importer of firearms and ammunition. There is no assurance that the administrative branches responsible for approving import and export licenses or transfers of NFA firearms or other firearms to our customers will do so in all cases, and failure to obtain such approvals could adversely affect our business. In addition, changes in the tax laws or rates could adversely affect our business.

              In September 2004, the United States Congress declined to renew the AWB which generally prohibited the manufacture of certain firearms defined under that statute as "assault weapons" as well as the sale or possession of "assault weapons" except for those that, prior to the law's enactment, were legally in the owner's possession. Various states and local jurisdictions have adopted their own version of the AWB and some of those apply to Bushmaster, DPMS and certain Remington sporting firearms products. We cannot guarantee that an "assault weapons" ban similar to the AWB, or another version thereof, will not be re-enacted. Legislation of this type, if enacted, could have a material adverse effect on our business.

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              At the federal level, bills have been introduced in Congress to establish, and to consider the feasibility of establishing, a nationwide database recording so-called "ballistic images" of ammunition fired from new firearms. Should such a mandatory database be established, the cost to the Company and its customers could be significant, depending on the type of firearms and ballistic information included in the database. Other bills have been introduced in Congress in the past several years that would restrict or prohibit the manufacture, transfer, importation or sale of certain calibers of handgun ammunition, impose a tax and import controls on bullets designed to penetrate bullet-proof vests, impose a special occupational tax and registration requirements on manufacturers of handgun ammunition, and increase the tax on handgun ammunition in certain calibers. In addition to federal requirements, state and local laws and regulations may place additional restrictions on firearms and ammunition manufacture, sale, purchase, possession and use. For example, two states have established regulations requiring "ballistic imaging" registries of ammunition fired from new handguns; one has established regulations requiring ammunition "microstamping" capabilities for all new introductions of handgun models to be transferred for sale into that state; several others ban the sale, possession and use of firearms altogether; and several others require firearms to be sold with internal or external locking mechanisms. At least four states have current bills proposing requirements for "bullet serialization" for ammunition or "microstamping" capabilities for certain firearms. Some of these bills would apply to ammunition and firearms of the kind we produce. Generally, there are numerous other bills proposed at both the state and local levels that could restrict or otherwise prohibit the manufacture, sale, purchase, possession or use of firearms and ammunition. In summary, there can be no assurance that the regulation of firearms and ammunition will not become more restrictive in the future, and more restrictive legislation could have a material adverse effect on the business of the Company.

              Some states and other governmental entities have recently enacted, and others are considering, legislation restricting or prohibiting the ownership, use or sale of certain categories of firearms and/or ammunition. Although numerous jurisdictions presently have mandatory waiting periods for the sale of handguns (and some for the sale of long guns as well), there are currently few restrictive state or municipal regulations applicable to handgun ammunition. Our firearms are covered under several recently enacted state regulations requiring guns to be sold with internal or external locking mechanisms. Some states are considering mandating certain design features on safety grounds, most of which would be applicable only to handguns. We believe that hunter safety issues may affect sales of firearms, ammunition and other shooting-related products. There can be no assurance that the regulation of firearms and ammunition will not become more restrictive in the future, and more restrictive legislation in this area could have a material adverse effect on the business of the Company.

              We are no longer a defendant in any lawsuits brought by municipalities against participants in the firearms industry. In addition, legislation has been enacted in approximately 34 states precluding such actions. Similar federal legislation, entitled "The Protection of Lawful Commerce in Arms Act" was signed into law by President Bush on October 26, 2005, after being passed by the U.S. Senate in August 2005 and by the House of Representatives in October 2005. However, the applicability of the law to various types of governmental and private lawsuits has been challenged. Any court decision restricting the applicability of the law could adversely impact the business of the Company.

              We believe that existing federal and state regulation regarding firearms and ammunition has not had a material adverse effect on our sales of these products to date. However, there can be no assurance that federal, state, local or foreign regulation of firearms and/or ammunition will not become more restrictive in the future and that any such development would not have a material adverse effect on our business either directly or by placing additional burdens on those who distribute and sell our products or those consumers who purchase our products. See "Risk Factors—Risks Relating to Our Business—Our business is subject to extensive governmental legislation and regulation that may restrict

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our operations, increase our costs of operations, or adversely affect the demand for our products by limiting the availability and/or increasing the cost of our products."

Environmental Matters

              Our operations are subject to a variety of federal, state and local environmental laws and regulations which govern, among other things, the discharge of hazardous materials into the air and water, handling, treatment, storage and disposal of such materials, as well as remediation of contaminated soil and groundwater. We have in place programs that monitor compliance with these requirements and believe our operations are in material compliance with them. In the normal course of our manufacturing operations, we are subject to occasional governmental proceedings and orders pertaining to waste disposal, air emissions and water discharges into the environment. We believe that we are in compliance with applicable environmental regulations in all material respects, and that the outcome of any such proceedings and orders will not have a material adverse effect on our business.

              Under the terms of a legacy asset purchase agreement from 1993 ("Purchase Agreement") with E.I. DuPont Nemours & Company ("DuPont") relating to the Remington business ("Asset Purchase"), DuPont agreed to retain responsibility for certain pre-closing environmental liabilities. Remington also entered into an agreement with DuPont with respect to cooperation and responsibility for specified environmental matters. See "—Legal Proceedings and Related Matters" and "Legal Proceedings and Related Matters—Certain Indemnities."

              There are various pending proceedings associated with environmental liability naming us for which DuPont and its affiliates have accepted liability. Our obligations in these cases are not expected to be material.

              Based on information known to us, we do not expect current environmental regulations or environmental proceedings and claims to have a material adverse effect on our results of operations, financial condition or cash flows. However, it is not possible to predict with certainty the impact of future environmental compliance requirements or of the cost of resolution of any future environmental proceedings and claims, in part because the scope of the remedies that may be required is not certain, liability under some federal environmental laws is under certain circumstances joint and several in nature, and environmental laws and regulations are subject to modification and changes in interpretation. There can be no assurance that environmental regulation will not become more burdensome in the future or that unknown conditions will not be discovered and that any such development would not have a material adverse effect on our business. We do not anticipate incurring any material capital expenditures for environmental control facilities for 2009 or 2010.

              The Marlin Firearms Acquisition triggered the Connecticut Transfer Act (the "CTA") with respect to the facility located in North Haven, Connecticut. The CTA is designed to identify properties contaminated with hazardous wastes and to ensure that such properties are cleaned up to the satisfaction of the Connecticut Department of Environmental Protection ("DEP"). Under the CTA, Marlin is required to investigate areas of environmental concern at the North Haven facility and to clean up contamination exceeding state standards to the satisfaction of the DEP. The investigation of the North Haven facility is ongoing. Remediation costs may be incurred, but such costs at this time are not expected to be material to operations or cash flows.

              Marlin has also conducted other remediation activities at its idled Gardner, Massachusetts facility and a former facility in New Haven, Connecticut. Costs for remediation at both of these locations are not expected to be material.

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Legal Proceedings and Related Matters

              Under the terms of the Purchase Agreement, DuPont and its affiliates retained liability for, and are required to indemnify us against, with respect to Remington:

•

liability in excess of our limited financial responsibility for environmental claims and disclosed product liability claims relating to pre-closing occurrences;

•

liability for product liability litigation related to discontinued products; and

•

certain tax liabilities, and employee and retiree compensation and benefit liabilities and intercompany accounts payable which do not represent trade accounts payable.

              These indemnification obligations of DuPont and its affiliates are not subject to any survival period limitation. We have no current information on the extent, if any, to which DuPont and its affiliates have insured these indemnification obligations. Except for certain cases and claims relating to shotguns as described below, and except for all cases and claims relating to products discontinued prior to the Asset Purchase, we generally bear financial responsibility for the costs of product liability cases and claims relating to occurrences after the Asset Purchase and are required to indemnify DuPont and its affiliates against such cases and claims. See "—Certain Indemnities."

              There are no current DPMS or Bushmaster legal proceedings; however, we are voluntarily developing and submitting a stewardship plan for the Maine DEP for certain sites Bushmaster leased for firearms testing. Costs for the stewardship efforts at these sites are not expected to be material.

              The main types of legal proceedings to which we are subject include:

•

product liability litigation filed by individuals;

•

product liability litigation filed by municipalities; and

•

environmental litigation.

Product Liability Litigation

              We maintain insurance coverage for product liability claims subject to certain self-insured retentions on a per-occurrence basis for personal injury or property damage with respect to Remington (relating to occurrences arising after the Asset Purchase), Marlin, Bushmaster, DPMS and our other brands and products. We believe that our current product liability insurance coverage for personal injury and property damage is adequate for our needs. Our current product liability insurance policy provides for certain self-insured retention amounts per occurrence. The policy excludes from coverage any pollution-related liability. Based in part on the nature of our products, there can be no assurance that we will be able to obtain adequate product liability insurance coverage upon the expiration of the current policy. Our current product liability insurance policies have various renewal dates through April 2010.

              As of June 30, 2009, Bushmaster and DPMS did not have any bodily injury cases or claims pending relating to their firearms.

              As a result of contractual arrangements, we manage the joint defense of product liability litigation involving Remington brand firearms and our ammunition products for both Remington and DuPont and its affiliates. As of June 30, 2009, approximately 16 individual bodily injury cases and claims were pending relating to firearms and our ammunitions products, primarily alleging defective product design, defective manufacture and/or failure to provide adequate warnings; some of these cases seek punitive as well as compensatory damages. We have previously disposed of a number of other cases involving post-Asset Purchase occurrences involving Remington brand firearms and our

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ammunition products by settlement. The 16 pending cases involve pre- and post-Asset Purchase occurrences for which we or DuPont bear responsibility under the Purchase Agreement.

              The relief sought in individual cases includes compensatory and, sometimes, punitive damages. Certain of the claims and cases seek unspecified compensatory and/or punitive damages. In others, compensatory damages sought may range from less than $50,000 to in excess of $1 million and punitive damages sought may exceed $1 million. Of the individual post-Asset Purchase bodily injury cases and claims pending as of June 30, 2009, plaintiffs and claimants seek either compensatory and/or punitive damages in unspecified amounts or in amounts within these general ranges. In our experience, initial demands do not generally bear a reasonable relationship to the facts and circumstances of a particular matter, and in any event, are typically reduced significantly as a case proceeds. We believe that our accruals for product liability cases and claims, as described below, are a better quantitative measure of the cost of product liability cases and claims.

              At June 30, 2009, our accrual for product liability cases and claims was approximately $14.5 million. The amount of our accrual for product liability cases and claims is based upon estimates developed as follows. We establish reserves for anticipated defense and disposition costs to us of those pending cases and claims for which we are financially responsible. Based on those estimates and an actuarial analysis of actual defense and disposition costs incurred by us with respect to product liability cases and claims in recent years, we determine the estimated defense and disposition costs for unasserted product liability cases and claims. We combine the estimated defense and disposition costs for both pending and unasserted cases and claims to determine the amount of our accrual for product liability cases and claims. It is reasonably possible additional experience could result in further increases or decreases in the period in which such information is made available. We believe that our accruals for losses relating to such cases and claims are adequate. Our accruals for losses relating to product liability cases and claims include accruals for all probable losses the amount of which can be reasonably estimated. Based on the relevant circumstances (including, with respect to Remington-based claims, the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, our accruals for the uninsured costs of such cases and claims and DuPont's agreement to be responsible for a portion of certain post-Asset Purchase product liability costs, as well as the type of firearms products that we make), we do not believe with respect to product liability cases and claims that any probable loss exceeding amounts already recognized through our accruals has been incurred.

              Because our assumption of financial responsibility for certain Remington product liability cases and claims involving pre-Asset Purchase occurrences was limited to an amount that has now been fully paid, with DuPont and its affiliates retaining liability in excess of that amount and indemnifying us in respect of such liabilities, and because of our accruals with respect to such cases and claims, we believe that Remington product liability cases and claims involving occurrences arising prior to the Asset Purchase are not likely to have a material adverse effect upon our financial condition, results of operations or cash flows, nor do we believe at this time that there is an estimated range of reasonably possible additional losses. Moreover, although it is difficult to forecast the outcome of litigation, we do not believe, in light of relevant circumstances (including with respect to Remington-based claims, the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, our accruals for the uninsured costs of such cases and claims and the agreement of DuPont and its affiliates to be responsible for a portion of certain post-Asset Purchase product liability costs, as well as the type of firearms products that we make), that the outcome of all pending product liability cases and claims will be likely to have a material adverse effect upon our financial condition, results of operations or cash flows. Nonetheless, in part because the nature and extent of liability based on the manufacture and/or sale of allegedly defective products (particularly as to firearms and ammunition) is uncertain, there can be no assurance that our resources will be adequate to cover pending and future product liability occurrences, cases or

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claims, in the aggregate, or that a material adverse effect upon our financial condition, results of operations or cash flows will not result therefrom. However, it is reasonably possible that a significant shift in the litigation environment or deterioration in our loss development experience could result in an additional estimated expense of up to $2.8 million. Because of the nature of our products, we anticipate that we will continue to be involved in product liability litigation in the future. Because of the potential nature of injuries relating to firearms and ammunition, certain public perceptions of our products, and recent efforts to expand liability of manufacturers of firearms and ammunition, product liability cases and claims, and insurance costs associated with such cases and claims, may cause us to incur material costs.

Municipal Litigation

              In addition to these individual cases, as a manufacturer of shotguns and rifles, we have been named previously in several actions brought by various municipalities, primarily against manufacturers, distributors and sellers of handguns. However, we are not a defendant in any pending municipal litigation.

              A majority of states have enacted some limitation on the ability of local governments to file such lawsuits against firearms manufacturers. However, the applicability of the laws to various types of governmental and private lawsuits has been challenged in both state and federal courts. Any court decision restricting the applicability of these laws could adversely impact our business.

Litigation Outlook

              We are involved in lawsuits, claims, investigations and proceedings, including commercial, environmental, trade mark, trade dress and employment matters, which arise in the ordinary course of business. We do not expect that the ultimate costs to resolve these matters will have a material adverse effect on our financial position, results of operations or cash flows.

Certain Indemnities

              As of the closing of the Asset Purchase in December 1993 under the Purchase Agreement, Remington assumed:

•

a number of specified liabilities, including certain trade payables and contractual obligations of DuPont and its affiliates;

•

limited financial responsibility for specified product liability claims relating to disclosed occurrences arising prior to the Asset Purchase;

•

limited financial responsibility for environmental claims relating to the operation of the Remington business prior to the Asset Purchase; and

•

liabilities for product liability claims relating to occurrences after the Asset Purchase, except for claims involving products discontinued at the time of closing.

              All other liabilities relating to or arising out of the operation of the Remington business prior to the Asset Purchase from DuPont are excluded liabilities ("Excluded Liabilities"), which DuPont and its affiliates retained. DuPont and its affiliates are required to indemnify us in respect of the Excluded Liabilities, which include, among other liabilities:

•

liability in excess of our limited financial responsibility for environmental claims and disclosed product liability claims relating to pre-closing occurrences;

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•

liability for product liability litigation related to discontinued products; and

•

certain tax liabilities, and employee and retiree compensation and benefit liabilities and intercompany accounts payable which do not represent trade accounts payable.

              DuPont and its affiliates' overall liability in respect of their representations, covenants and the Excluded Liabilities under the Purchase Agreement, excluding environmental liabilities and product liability matters relating to events occurring prior to the purchase but not disclosed, or relating to discontinued products, is limited to $324.8 million. With a few exceptions, DuPont and its affiliates' representations under the Purchase Agreement have expired. We made claims for indemnification involving product liability issues prior to such expiration. See "—Product Liability Litigation."

              In addition, DuPont and its affiliates agreed in 1996 to indemnify Remington against a portion of certain product liability costs involving various shotguns manufactured prior to 1995 and arising from occurrences on or prior to November 30, 1999. These indemnification obligations of DuPont and its affiliates relating to product liability and environmental matters (subject to a limited exception) are not subject to any survival period limitation, deductible or other dollar threshold or cap. We and DuPont and its affiliates are also party to separate agreements setting forth agreed procedures for the management and disposition of environmental and product liability claims and proceedings relating to the operation or ownership of the Remington business prior to the Asset Purchase, and are currently engaged in the joint defense of certain product liability claims and proceedings. See "—Product Liability Litigation."

Employees

              As of July 31, 2009, we employed approximately 2,780 full-time employees, approximately 2,160 of whom were engaged in manufacturing and approximately 620 of whom were engaged in sales, general administration and research and development. An additional work force of temporary employees is engaged during peak production schedules at certain of our manufacturing facilities.

              As of July 31, 2009, approximately 750 employees were members of the United Mine Workers of America ("UMWA") at our Ilion, New York manufacturing facility. The collective bargaining agreement with the UMWA was renegotiated effective October 2007 and expires on October 28, 2012. We also have a labor agreement with Local 2021 of the United Automobile, Aircraft and Agricultural Implement Workers of America, which represents less than 10 hourly employees at our plant in Findlay, Ohio. This labor agreement is terminable by either party upon notice to the other party. Employees at our other manufacturing facilities are not represented by unions. There have been no significant interruptions or curtailments of operations due to labor disputes since prior to 1968 and we believe that our relations with our employees are satisfactory.

Properties

              We are headquartered in Madison, North Carolina in a 43,000 square foot facility that we own and an 11,500 square foot facility that we lease. These facilities are utilized for management offices as well as certain sales, marketing, human resources, information technology, finance, treasury, and customer and consumer service functions. We believe that these facilities are suitable for the activities conducted therein and are appropriately utilized.

              We lease a 250,000 square foot distribution facility in Memphis, Tennessee. The facility is staffed by a contracted logistics and distribution service company. This facility provides for the centralized distribution for all of our reporting segments. We believe that this facility is suitable for the activities conducted therein and is appropriately utilized.

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              Research and development is conducted at two facilities, one which we own in Elizabethtown, Kentucky and one in Dallas, Georgia which we lease. We believe that these facilities are suitable for the activities conducted therein and are appropriately utilized.

              We currently operate 10 facilities for our manufacturing operations and maintain 2 idle facilities. The following table sets forth selected information regarding each of these facilities:

Plant	Principal Products	Segment	Square Feet (in thousands)		Ownership
Ilion, New York	Shotguns centerfire and rimfire rifles	Firearms		1,000	Owned
Lonoke, Arkansas	Shotshell, rimfire and centerfire ammunition	Ammunition		750	Owned
North Haven, Connecticut	Centerfire and rimfire rifles	Firearms		227	Owned
Gardner, Massachusetts	Shotguns, centerfire and rimfire rifles (Idle—held for sale)	Firearms		105	Owned
Windham, Maine	Centerfire rifles	Firearms		55	Leased
Mayfield, Kentucky	Centerfire and rimfire rifles	Firearms		44	Owned
Findlay, Ohio	Clay targets	All Other		40	Owned
Sturgis, South Dakota	Centerfire rifles	Firearms		28	Leased
Ada, Oklahoma	Clay targets (Idle)	All Other		21	Owned
St. Cloud, Minnesota	Centerfire rifles	Firearms		18	Leased
Jacksonville, North Carolina	Rifles	Firearms		16	Leased
Lake Havasu, Arizona	Centerfire rifles	Firearms		9	Leased

              We believe that the above facilities that we are currently utilizing are suitable for the manufacturing conducted therein and have capacities appropriate to meet existing production requirements. The Ilion, Lonoke, North Haven, and Mayfield facilities each contain enclosed ranges for testing firearms and ammunition. The Ada, Oklahoma facility is currently idle due to supply limitations.

              We acquired the Connecticut and the Massachusetts facilities in the Marlin Acquisition. On April 7, 2008, we announced a strategic manufacturing consolidation decision that resulted in the closure of our manufacturing facility in Gardner, Massachusetts. The Gardner facility was closed in October 2008 and is currently for sale.

              Holders of the Notes have a first-priority security interest in the real property owned by us identified in the chart above and in our Madison, North Carolina headquarters and our Elizabethtown, Kentucky research and development facility.

              EOTAC currently leases office and warehouse space in West Columbia, South Carolina.

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MANAGEMENT

              The following table sets forth information regarding our board of directors and executive officers upon completion of this offering. Immediately after this offering, our board of directors will be divided into three classes with staggered three-year terms.

Name	Age		Position
Walter McLallen(a)(b)		43	Director, Chairman of the Board
Jeff Bleustein(d)		70	Director
Bobby R. Brown(b)		77	Director
Grant Gregory		68	Director
General Michael W. Hagee (Ret.)(a)		64	Director
General George A. Joulwan (Ret.)(c)		69	Director
George Kollitides, II(a)(b)(c)		40	Director
James J. Pike(c)		66	Director
Edward H. Rensi(d)		65	Director
Frank A. Savage		62	Director
George Zahringer III		56	Director
David Bell		66	Director
Theodore H. Torbeck(a)		53	Director, Chief Executive Officer
Stephen P. Jackson, Jr.		41	Chief Financial Officer and Treasurer
E. Scott Blackwell		47	Chief Sales Officer
Marc Hill		37	Chief Marketing Officer
Fredric E. Roth, Jr.		54	General Counsel and Corporate Secretary
Joseph P. Gross		50	Vice President, Manufacturing
Melissa Cofield		42	Chief Human Resources Officer

(a)

Member, Executive Committee

(b)

Member, Audit Committee

(c)

Member, Compensation Committee

(d)

Member, Sales and Marketing Committee

              None of our officers or directors has any family relationship with any director or other officer. "Family relationship" for this purpose means any relationship by blood, marriage or adoption, not more remote than first cousin.

              The business experience during the past five years of each of the directors and executive officers listed above is as follows:

Walter McLallen became our Chairman of the Board on September 3, 2009. Since January 2004, Mr. McLallen served as a Managing Director of Meritage Capital Advisors. Prior to January 2004, Mr. McLallen was a Managing Director at CIBC World Markets. Mr. McLallen also serves on the board of directors of Tier 1 Group and Alpha Media Group.

Jeffrey L. Bleustein served as Chairman of the Board of Harley-Davidson, Inc. from prior to 2004 until April 2009. Mr. Bleustein also served as President and Chief Executive Officer of Harley-Davidson, Inc. from July 1997 until April 2005. Since January 2008, Mr. Bleustein has served as a consultant to Cerberus. Mr. Bleustein also served on the board of directors of Harley-Davidson, Inc. until April 2009 and currently serves on the board of directors of Brunswick Corporation.

Bobby R. Brown has served as a director of FGI since 2007 and Remington Arms Company Inc. since prior to 2004. Mr. Brown also serves on the board of directors of Delta Trust and

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Bank and Patriot Coal Company, Inc. In addition, Mr. Brown serves on the compensation committee of Delta Trust and Bank and the executive committee and the compensation committee of Patriot Coal Company, Inc.

Grant Gregory joined Cerberus in 2005 and is now Vice Chairman of Cerberus Capital Management and Cerberus Operations and Advisory Company, LLC. Prior to joining Cerberus, Mr. Gregory spent 17 years at Gregory and Hoenemeyer, Inc., which he founded in 1988. From 1964 to 1988, Mr. Gregory worked with Touche Ross & Co. where he ultimately was Chairman of the Board. Mr. Gregory has also served in numerous leadership roles, including Director Emeritus of The National Board of Directors of Junior Achievement and Chairman Emeritus of the National Forest Foundation.

General Michael W. Hagee (Ret.) served as the 33rd Commandant of the Marine Corps from prior to 2004 until November 2006 and retired January 1, 2007. General Hagee (Ret.) also serves on the board of directors of IAP World Wide Services, National Interest Security Co. LLC and Silicon Graphics International Corp.

General George A. Joulwan (Ret.) has served as President of One Team, Inc. since prior to 2004. He has been retired from the United States Army since prior to 2004. General Joulwan (Ret.) also serves on the board of directors of General Dynamics Corporation, Alion, nGRAIN and IAP World Wide Services.

George Kollitides has been employed with Cerberus since 2004, and is presently a Managing Director. Mr. Kollitides was appointed by the board to serve as a member of the Audit Committee, Compensation Committee and the Executive Committee. From prior to 2004 until joining Cerberus, he was President and Managing Director of TenX Capital Management. Mr. Kollitides also serves on the board of directors of IAP World Wide Services, Rafaella Apparel Group, Inc., Tier 1 Group and Controlled Solutions, Inc.

James J. Pike has served as Chief Executive Officer of CTA Acoustics, Inc., and Maul Technology since prior to 2004. In addition, he served as Chief Executive Officer for Thermafiber, Inc. from prior to 2004 until August 2007 and served as Chief Executive Officer of Wise Manufacturing from prior to 2004 until December 2007. Mr. Pike also serves on board of directors of the Lindsey Wilson College Board of Trustees and the Board of Ducks Unlimited, Inc.

Edward H. Rensi has been an owner and Chief Executive Officer of Team Rensi Motorsports since prior to 2004. Team Rensi Motorsports partnered with Bobby Hamilton Jr. and became Rensi Hamilton Racing, effective January 1, 2009. Prior to 2004, Mr. Rensi served as President and Chief Executive Officer of McDonald's U.S.A. Mr. Rensi also serves on the board of directors of Great Wolf Resorts, Inc., International Speedway Corporation and Snap-On Incorporated.

Frank A. Savage has served as a Managing Director for Lazard Freres & Co. LLC since prior to 2004.

George Zahringer III has served as Managing Director at Deutsche Bank Securities Inc. since June 2008. From prior to 2004 until June 2008, he served as a Senior Managing Director at Bear Stearns & Co. Inc. Mr. Zahringer also serves on the board of directors for NewPage Corporation.

David Bell became a director of FGI on September 3, 2009. Mr. Bell currently serves as a Senior Advisor to AOL LLC. From March 2006 until March 2007, Mr. Bell served as Chairman Emeritus of The Interpublic Group of Companies, Inc. where he held several leadership positions including Chairman and CEO from prior to 2004 to January 2005. Mr. Bell also serves on the board of directors of The Warnaco Group, Inc., PRIMEDIA Inc. and Lighting Science Group Corporation (LSCG).

Theodore H. Torbeck has served as Chief Executive Officer of FGI and Remington since March 14, 2009. Mr. Torbeck served as President of FGI and Remington from March 4, 2009 until

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March 14, 2009 and served as its Chief Operating Officer from February 2008 until March 2009. From prior to 2004 until his employment with FGI and Remington, Mr. Torbeck had been an employee of General Electric Company serving in various positions, including the Vice President Operations of GE Industrial from October 2006 until November 2007, President and Chief Executive Officer of GE Rail Services from October 2004 until October 2006, and Vice President and General Manager—Global Supply Chain of GE Aircraft Engines from prior to 2004 until September 2004.

Stephen P. Jackson, Jr. has served as Chief Financial Officer and Treasurer of FGI since March 2009. Mr. Jackson has also served as Chief Financial Officer, Corporate Secretary and Treasurer of Remington since March 2006. From April 2006 until May 2007, Mr. Jackson served as Senior Vice President, Chief Financial Officer, Treasurer, and Corporate Secretary of Remington. From June 2005 until March 2006, he served as Remington's Senior Vice President—Finance and Service Operations, Treasurer, and Corporate Secretary. From prior to 2004 until June 2005, he served as Vice President—Finance, Treasurer, and Corporate Secretary of Remington.

E. Scott Blackwell has served as Chief Sales Officer of FGI and Remington since January 2009. From July 2007 until January 2009, he served as President, Global Sales and Marketing of FGI and Remington. From September 2006 until July 2007, he served as President and Chief Sales and Marketing Officer of Bushmaster Firearms International LLC. From prior to 2003 until September 2006, Mr. Blackwell served as Division Manager and Executive Vice President of Law Enforcement of Beretta USA Corp.

Marc Hill has served as Chief Marketing Officer of FGI and Remington since December 2008. From May 2008 to December 2008, Mr. Hill owned and operated Pacific Rim Strategies, a consulting firm, guiding Asian companies to raise capital and U.S. companies investing in Asia. From February 2006 until May 2008, he served as Senior Vice President of Techtronic Industries, managing marketing, sales engineering and purchasing for the power tool and accessory business which included Milwaukee Electric Tool, Ryobi, AEG and a variety of OEMs such as Craftsman and Ridgid. From 2001 until January 2006, Mr. Hill served as Vice President of Marketing for Newell/Rubbermaid, introducing the Irwin Industrial Tool brand to the global market.

Fredric E. Roth, Jr. has served as General Counsel and Secretary of FGI and General Counsel of Remington since June 2008. Since 2004 until joining FGI, he served as General Counsel and Secretary of Siemens VDO Automotive Corporation.

Joseph P. Gross has served as Vice President, Manufacturing Operations of FGI since January 2009 and has served as Chief Operating Officer of FGI and Remington since April 2009. From February 2008 until April 2009, Mr. Gross served as Vice President, Firearms Manufacturing of Remington and as a Plant Manager for Remington from January 2006 to February 2008. Prior to joining Remington, Mr. Gross had been an employee of Moen, Inc. since 2004, serving as Moen's Plant Manager from 2004 to 2006.

Melissa Cofield has served as Chief Human Resources Officer for FGI and Remington since July 2009. Before July 2009 she served as Vice President of Human Resources for FGI and Remington from July 2008 until July 2009. From 2004 until July 2008, she served as Director of Human Resources of Remington.

Board Composition

              Our board of directors currently has 13 members, comprised of one executive officer and            independent directors.

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              In accordance with our amended and restated certificate of incorporation, immediately following this offering our board of directors will be divided into the following three classes with staggered three-year terms:

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Class I, whose initial term will expire at the annual meeting of stockholders to be held in 2010;

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Class II, whose initial term will expire at the annual meeting of stockholders to be held in 2011; and

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Class III, whose initial term will expire at the annual meeting of stockholders to be held in 2012.

              The Class I directors will be            ,            and            , the Class II directors will be            ,             and            and the Class III directors will be            ,             and            .

              At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.

Board Committees

              Upon completion of this offering, Cerberus or its affiliated management companies will continue to control a majority of our outstanding common stock. As a result, we are a "controlled company" within the meaning of the            corporate governance standards. Under the            rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain            corporate governance requirements, including:

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the requirement that a majority of the board of directors consist of independent directors;

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the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;

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the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

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the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.

              Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of independent directors nor will our nominating/corporate governance and compensation committees consist entirely of independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the             corporate governance requirements.

              Audit Committee.    The audit committee of the board of directors will consist of            members. The committee assists the board in its oversight responsibilities relating to the integrity of our financial statements, the qualifications, independence and performance of our independent auditors, the performance of our internal audit function and the compliance of our company with any reporting and regulatory requirements we may be subject to. Upon the consummation of this offering, we will have            independent directors serving on our audit committee. We intend to have a

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completely independent audit committee within one year of this offering. Our board of directors will determine which member of our audit committee qualifies as an "audit committee financial expert" under SEC rules and regulations.

              Prior to the consummation of this offering our board of directors will adopt a written charter under which the audit committee will operate. A copy of the charter, which will satisfy the applicable standards of the SEC and the                        , will be available on our website.

              Compensation Committee.    The compensation committee of the board of directors will consist of four members. The compensation committee of the board of directors is authorized to review our compensation and benefits plans to ensure they meet our corporate objectives, approve the compensation structure of our executive officers and evaluate our executive officers' performance and advise on salary, bonus and other incentive and equity compensation.

Compensation Committee Interlocks and Insider Participation

              None of our executive officers serves as a member of the compensation committee or board of directors of any other entity that has an executive officer serving as a member of our board of directors or compensation committee.

Code of Business Conduct and Ethics

              We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The code of business conduct and ethics will be available on our website at www.freedom-group.com. We expect that any amendments to the code, or any waivers of its requirements, will be disclosed on our website.

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COMPENSATION DISCUSSION AND ANALYSIS

Introduction

              The following discusses the executive compensation programs of FGI, Remington and Bushmaster, and the compensation of the Named Executive Officers for the year ended December 31, 2008. As used herein, the term "Named Executive Officers" refers to:

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Theodore H. Torbeck, Chief Operating Officer and President of FGI through March 14, 2009, and Chief Executive Officer of FGI and Remington since March 14, 2009;

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Stephen P. Jackson, Jr., Chief Financial Officer and Treasurer of FGI and Remington, and Corporate Secretary of Remington;

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E. Scott Blackwell, Chief Sales Officer of FGI and Remington;

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Thomas L. Millner, Chief Executive Officer of FGI and Remington through March 13, 2009; and

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John DeSantis, head of Strategic Projects for Remington through October 31, 2008, Vice President of FGI and President of Bushmaster since November 1, 2008.

While each of the Named Executive Officers holds positions with and/or serves policy-making functions for FGI, their compensation is paid by Remington or Bushmaster, as applicable.

              As noted above, Mr. Millner served as Chief Executive Officer until March 13, 2009, when he (1) terminated his employment with FGI and its affiliates and (2) resigned as a member of its board of directors. Mr. Torbeck, who was hired as Chief Operating Officer of FGI and Remington on February 4, 2008 and was subsequently promoted to President of FGI and Remington, was unanimously approved as successor to Mr. Millner as Chief Executive Officer on March 14, 2009.

Compensation Program Objectives and Philosophy

              The primary objectives of the compensation programs, are to (i) attract, motivate and retain the best executives officers with the skills necessary to successfully manage our business, (ii) align the interests of our executive officers with stockholders by rewarding them for strong company performance; and (iii) create an environment that fosters and rewards measured risk-taking. In support of these objectives, we:

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seek to provide a total compensation package that is competitive with other companies in our industry and other companies of a similar size, based on institutional knowledge of our industry and research regarding the compensation practices typical of our industry and companies of similar size;

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evaluate and reward executive officers based on dynamic factors such as whether they are willing and able to challenge existing processes, adapt to sudden changes in priorities and capitalize on windows of opportunity; and

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provide a significant portion of the total compensation package in the form of short-term and long-term incentive awards, which are tied to the achievement of measureable business objectives including, operating performance, working capital management, and business process improvement. Our primary performance measure is earnings before interest, taxes, depreciation and amortization, as adjusted for certain non-recurring or unusual transactions (referred to herein as "EBITDA", which is substantially consistent with the term "EBITDA" under the indenture governing the Notes and defined in footnote 5 under "Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial Data").

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Compensation-Setting Process

              The compensation committees of Remington and Bushmaster Holdings LLC ("Remington's Compensation Committee" and "Bushmaster's Compensation Committee," respectively) determined the compensation of their respective officers prior to the creation of our current compensation committee on October 6, 2009, after which the current compensation committee determines the compensation of all of our senior executive officers (the term "Compensation Committee" refers to Remington's Compensation Committee and Bushmaster's Compensation Committee prior to October 6, 2009 and to our current compensation committee on and after such date). The Compensation Committees are composed of non-management directors. As previously noted in this document, even upon completion of this offering, we will be a "controlled company" within the meaning of the corporate governance standards, and therefore will not be required to have a compensation committee that is composed entirely of independent directors.

              The Compensation Committees evaluate the percentage mix of compensation components that they believe are appropriate for each of the executive officers, using their judgment and experience. The Compensation Committees have responsibility for oversight and review of our total compensation strategy, taking into consideration existing company-wide benefit plans, and have responsibility for certain executive benefit plans, including administering the annual cash bonus incentive compensation plan, determining the compensation for the Chief Executive Officer and reviewing and approving the compensation for the Chief Financial Officer and other executive officers at the Vice President level and above, including the Named Executive Officers.

              The Compensation Committees review, on at least an annual basis, the appropriateness and effectiveness of the compensation processes and programs. The Compensation Committees approve, on an annual basis, target award opportunities and performance criteria to be utilized in the annual cash bonus incentive compensation plan. In addition, the Compensation Committees consider, on an annual basis and subject to periodic review, discretionary bonuses, equity-based awards and long-term incentive plans, including the 2006 LTIP (as defined below).

              The Compensation Committees informally consider competitive market practices with respect to the compensation of our executive officers. They review the market practices by speaking to recruitment agencies and reviewing annual reports on Form 10-K and other available information of other companies within our industry and companies of a similar size. In addition, the Compensation Committees have the authority to engage outside compensation and benefits consultants to make recommendations relating to the overall compensation philosophy, comparable base salary levels, short-term and long-term incentive compensation plans, appropriate performance parameters for such plans, and related compensation matters. The Compensation Committees did not engage any consultant during 2008. However, the Compensation Committees retained Hewitt Associates in February 2009 to review the annual base salaries and annual cash bonus incentive compensation program, which has been changed for fiscal 2009 (see "—Annual Cash Bonus Incentive Compensation" below).

Components of Compensation

              The compensation programs consist of the following components, each of which are summarized below (although individuals may not be eligible for each component):

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Annual base salary

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Annual cash bonus incentive compensation

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Equity incentive awards

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Long-term incentive cash compensation

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Pension and retirement benefits

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•

Severance benefits

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Perquisites and other benefits

Annual Base Salary

              Base salary is used to attract and retain highly qualified executive officers. Base salary is designed to be competitive by position relative to the marketplace and to recognize the experience, skills, knowledge and responsibilities required of the executive officers in their roles. When establishing base salaries for the Named Executive Officers, the Compensation Committees and the Chief Executive Officer (other than for himself) consider a number of factors including the seniority of the individual, the individual's prior salary, the functional role of the position, and the level of the Named Executive Officer's responsibility. Base salaries are reviewed on an annual basis, as well as at the time of promotion or other changes in responsibilities. The leading factors in determining increases in base salary include the employment market for senior executives with similar levels of experience and skills, attainment of corporate and individual goals and objectives for the prior year, and our ability to replace the Named Executive Officer with an individual with similar skills and experience.

              On June 22, 2009, based on the above considerations, and as part of the companywide annual salary review process, the Compensation Committees approved increases in the base salaries of Messrs. Jackson and Blackwell by 15% and 5%, respectively. Mr. Jackson's increase became effective March 1, 2009 to reflect his promotion to Chief Financial Officer of FGI. Mr. Blackwell's increase became effective July 1, 2009. As discussed above, Mr. Torbeck was appointed Chief Executive Officer on March 14, 2009; his base salary did not change at that time. Effective September 28, 2009, Mr. Torbeck's salary was increased by 20%. Mr. DeSantis's base salary did not change in 2009.

              As shown in the 2008 Summary Compensation Table below, base salary generally constitutes less than 50% of our Named Executive Officers' total compensation in an effort to reward the Named Executive Officers for operating performance and to encourage long-term strategic action.

Annual Cash Bonus Incentive Compensation

              Each year, the Compensation Committees consider whether to adopt an annual cash bonus incentive compensation plan for executives officers, including the Named Executive Officers, and certain other employees based on the budgeted performance and other financial and non-financial targets of Remington and/or Bushmaster, as applicable. The annual cash bonus incentive compensation plan is designed as a retention tool and to reward participating individuals for outstanding individual and corporate achievement for the year.

2008 Annual Incentive Compensation Plan

              In February 2008, Remington's Compensation Committee approved the 2008 Annual Incentive Compensation Plan, which provided eligible participants, including the Named Executive Officers, an opportunity to earn incentive compensation upon Remington's achievement of certain EBITDA targets and other measurable objectives. Each participating employee was assigned a target award as a percentage of year-end base salary. The Named Executive Officers each had a target award of 100% of year-end base salary. For Messrs. Jackson, Torbeck and Blackwell, 80% of the target award was based on company performance goals, i.e., on Remington's achievement of EBITDA thresholds. The remaining 20% of the target award was based on achievement of individual performance goals, but it was also subject to achievement of the target EBITDA threshold. The individual performance goals for Messrs. Jackson, Torbeck and Blackwell included the integration of the FGI companies' processes and procedures between Remington, Bushmaster and Marlin, maximizing cost containment, and developing a documented strategic company plan in their various areas. For Messrs. Millner and DeSantis, the

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target award was based entirely on the achievement of the EBITDA threshold, and did not include the individual performance component.

              For 2008, 50% of the company performance component of the incentive award was to be awarded if Remington's EBITDA equaled or exceeded $65.4 million, 100% of the company performance component of the incentive award was to be awarded if Remington's EBITDA equaled or exceeded $72.7 million and 150% of the company performance component of the incentive award was to be awarded if EBITDA equaled or exceeded $80 million.

              For 2008, Remington's EBITDA was $70.8 million. EBITDA excluded the results from the Marlin Acquisition due to the timing of the Marlin Acquisition and the uncertainty of details available to develop realizable targets at the time of the Marlin Acquisition. On March 4, 2009, Remington's Compensation Committee approved payment of the company performance component at the target level of 100% to all participating employees, including Messrs. Torbeck, Jackson, Blackwell and Millner in recognition of the financial results during a year of multiple management initiatives and difficult economic times. In addition, Messrs. Torbeck, Jackson and Blackwell achieved their respective individual goals. Accordingly, Messrs. Millner, Torbeck, Jackson and Blackwell received payment on March 9, 2009 in the amounts of $630,000, $550,000, $330,000 and $400,000, respectively, for the year ended December 31, 2008.

              Pursuant to the terms of the Letter Agreement and General Release between Mr. DeSantis and Remington, effective as of October 31, 2008 (the "DeSantis Letter Agreement"), Mr. DeSantis, who terminated his employment in connection therewith, received $375,000 representing his pro rata payment earned under the Remington 2008 Annual Incentive Compensation Plan. See "—Potential Payments Upon Termination or Change in Control—Severance—John DeSantis." This amount was paid to Mr. DeSantis on March 9, 2009. On November 1, 2008, Mr. DeSantis became employed by Bushmaster as President and General Manager. During November and December 2008, Mr. DeSantis was eligible to earn a prorated annual cash bonus incentive of up to 100% of his Bushmaster base salary with the opportunity to earn up to 200% of his Bushmaster base salary based on the level of achievement of individual and/or performance goals as established by Bushmaster's board of directors. Mr. DeSantis received an award of $116,967 (equal to 200% of his Bushmaster pro rata base salary) for his achievement of 2008 Bushmaster goals.

              In addition to the bonuses paid pursuant to the 2008 Annual Incentive Compensation Plan, on March 4, 2009, Remington's Compensation Committee approved a one-time cash award of $100,000 to Mr. Millner. The cash award was granted in recognition of Remington's significant improvement in core working capital components related to inventory and receivables during 2008, as well as Mr. Millner's skill in managing Remington through the difficult and uncertain economic times experienced in 2008. In addition, Remington's Compensation Committee instructed Mr. Millner to allocate and distribute a specified aggregate dollar amount, in individual amounts to be determined in his discretion, to those Remington employees who contributed to Remington's 2008 working capital improvements. Each of Messrs. Jackson, Torbeck and Blackwell received a discretionary award in the amount of $50,000.

2009 Annual Incentive Compensation Plan

              On May 7, 2009, the Compensation Committees approved the 2009 Annual Incentive Compensation Plan. Given the financial performance of Remington and Bushmaster for the first quarter of fiscal 2009, the Compensation Committees determined that all participants in this plan, including Messrs. Torbeck, Jackson, Blackwell and DeSantis, earned 25% of their target bonus (i.e., 25% of year-end base salary for the Named Executive Officers). The remaining 75% of the target bonus (i.e., 75% of year-end base salary) will be determined based 20% on the achievement of certain individual performance metrics, and 80% on achievement of EBITDA and net sales thresholds. The

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EBITDA and net sales metrics will be weighted 75% for achievement of the EBITDA threshold and 25% for achievement of the net sales threshold.

              For Messrs. Torbeck and Jackson, the EBITDA and net sales metrics will be based 67% on Remington results and 33% on Bushmaster results. For Mr. Blackwell, the EBITDA and net sales metrics will be based 75% on Remington results and 25% on Bushmaster results. Mr. DeSantis' EBITDA and net sales metric will be based 25% on Remington results and 75% on Bushmaster results. The achievement of the 20% individual performance metrics will be determined entirely at the discretion of the Compensation Committees. The amount of each Named Executive Officer's cash bonus for the second through fourth quarters of 2009 is expected to range from 38% to 150% of the individual's target bonus, based on achievement of individual performance metrics and achievement of 90% to 150% of the financial performance metrics for Remington, and achievement of 90% to 160% of the financial performance metrics for Bushmaster. The EBITDA and net sales 2009 metric targets for the second through fourth quarters are $66.9 million and $468.5 million, respectively, for Remington and $15.1 million and $81.0 million for Bushmaster.

Equity Incentive Awards

Stock Incentive Plan

              We believe that equity-based compensation is essential to the overall compensation package for executive officers to encourage their efforts towards the continuing success of the companies (both in the long-term and short-term), incent management continuity and retention, reward strong performance and align executive management's interests directly with those of FGI and its stockholders. Accordingly, on May 14, 2008, our board of directors adopted our Stock Incentive Plan. The Stock Incentive Plan is designed to provide a means by which employees, directors and other current or prospective service providers of FGI or its subsidiaries, may be given an opportunity to benefit from increases in the value of FGI common stock through the grant of equity awards. The awards under the Stock Incentive Plan may be in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock and stock units. The maximum aggregate number of shares of FGI common stock that may be issued under all awards granted to participants under the Stock Incentive Plan is approximately 2.4 million shares, subject to certain adjustments as set forth in the Stock Incentive Plan.

              Under the Stock Incentive Plan, our board of directors (or a designated committee thereof) has the discretion to determine, with respect to each award granted thereunder, the form of award, the number of shares/units or other rights subject to the award, the exercise price of the award (if any), the time or times at which the award will become vested, exercisable or payable, the performance criteria, performance goals and other conditions of an award, the duration of the award, and all other terms of the award. The requirements for vesting and exercisability of an award may be based on the continued service of the participant or on the attainment of a specified performance goal (or goals). The exercise price of stock options and stock appreciation rights may not be less than the fair market value on the date of grant.

              On May 14, 2008, our board of directors, following consultation with the Compensation Committees, granted 2,082,703 nonqualified stock option awards to various members of Remington's and Bushmaster's executive management and board of directors. Each of Messrs. Millner, Jackson, Torbeck, Blackwell and DeSantis were granted stock options. The board of directors chose to grant stock options to these executives because stock options (1) reward participants only if the stock price increases from the date of grant and (2) give participants the opportunity to become our stockholders and align their interests with current and future stockholders. In determining the numbers of shares subject to each such stock option award, the board of directors considered a number of factors including, the expected contribution of each executive to our future success and the other compensation then being earned by the executive. Messrs. Millner, Jackson, Blackwell and DeSantis were granted

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stock options with respect to 437,197, 109,558, 109,558 and 27,122 shares, respectively, each of which is subject to service-based vesting requirements. Pursuant to the terms of his employment agreement, Mr. Torbeck was granted an option to purchase 379,504 shares, which is subject to service-based vesting requirements. In connection with his termination of employment, all of Mr. Millner's outstanding stock options, whether vested or unvested, were cancelled. See "—2008 Grants of Plan-Based Awards" and "—2008 Outstanding Equity Awards at Fiscal Year-End" below for additional information regarding the foregoing options.

Other Equity Awards

              In connection with the merger of FGI and the parent company of Bushmaster in December 2007, Messrs. Blackwell and DeSantis received performance-based and service-based restricted common stock of FGI. These awards replaced the performance-based and service-based restricted units in Bushmaster common equity interests that had been awarded to Messrs. Blackwell and DeSantis in connection with their employment with Bushmaster. A portion of the shares of FGI restricted common stock owned by Messrs. Blackwell and DeSantis as of December 31, 2008 vested based upon Messrs. Blackwell and DeSantis' service to FGI's portfolio companies. On May 14, 2008, a modification was made resulting in the restricted common stock becoming all service-based in order to be consistent with the awards granted under the Stock Incentive Plan, rather than both performance-based and service-based. See "—2008 Outstanding Equity Awards at Fiscal Year-End" below for additional information regarding the awards.

Long-Term Incentive Cash Compensation

              In 2006, Remington implemented the 2006 Long-Term Incentive Compensation Plan (the "2006 LTIP"), which was designed to reward eligible participants for improved company performance and to foster executive retention. Messrs. Millner and Jackson participated in the 2006 LTIP upon its implementation, and Messrs. Blackwell and DeSantis were added to the 2006 LTIP in 2007 upon joining Remington. The 2006 LTIP is based on Remington's total EBITDA performance for each individual year from 2006 through 2009 and the total amount earned during that period will be paid out in the first quarter of 2010. In order to receive the 2010 payment, the participant generally must be an employee of Remington on December 31, 2009, although participants are entitled to receive payments under the 2006 LTIP in the event of a "change in control" or upon their termination of employment under certain circumstances.

              Under this plan, Remington's Compensation Committee approved a target payout for the 2006 LTIP participants, including certain of the Named Executive Officers, of 40% of base salary as of the end of each calendar year over the 2006-2009 periods. It established EBITDA target goals of $40 million, $42 million, $44.1 million and $46.3 million for 2006, 2007, 2008 and 2009, respectively. Remington achieved its 2006 LTIP target goals in 2006, 2007 and 2008. Messrs. Jackson and Blackwell are currently eligible to participate in the 2006 LTIP and earned awards for 2008 in the amounts of $132,000 and $160,000, respectively. Mr. DeSantis, who terminated his employment with Remington in October 2008, is eligible to receive a total of $360,000 with respect to the 2006 LTIP pursuant to the DeSantis Letter Agreement. See "—Potential Payments Upon Termination or Change in Control—Severance—John DeSantis." This amount will be paid to Mr. DeSantis in March 2010 in connection with the expected payment of the 2006 LTIP. Mr. Millner forfeited his benefit under the 2006 LTIP in connection with his termination of employment.

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Pension and Retirement Benefits

Defined Benefit Plans

              The Remington Arms Company, Inc. Pension and Retirement Plan (the "Retirement Plan") was established effective December 1, 1993 to provide retirement income and survivor benefits to Remington's employees and their beneficiaries through a tax-qualified program. Remington also adopted the Retirement Plan in order to maintain, and to decrease, employee turnover levels, as well as to protect our competitive benefits position in our industry. Pension benefits under the Retirement Plan are limited in accordance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), governing tax-qualified pension plans. The Retirement Plan provides retirement benefit based upon the highest of 3 formulae. Generally, the formula for a Named Executive Officer would be the product of years of service with Remington, average monthly compensation for 2006 and 2007 and 1.2%, reduced by 50% of the Named Executive Officer's projected social security benefit. Mr. Millner is the only Named Executive Officer that has accrued benefits under the Retirement Plan.

              Remington also adopted the Remington Supplemental Pension Plan (the "Supplemental Plan," and together with the Retirement Plan, "Pension Plans") effective January 1, 1998, a non-qualified pension plan providing a pension amount as a percent of salary, for those employees whose salaries are above certain Code limitations. The Supplemental Plan provides eligible participants with retirement benefits of 2% of average monthly compensation for 2006 and 2007 multiplied by years of service with Remington, reduced by the amount actually earned by such participants under the Retirement Plan. Benefits under the Supplemental Plan are not funded and are paid from Remington's general assets when due. Messrs. Millner, Jackson, DeSantis and Blackwell participate in the Supplemental Plan.

              Retirement benefits are generally paid in annuity form, for life, commencing at the employee's 65th birthday, although longer service employees may elect to commence receiving retirement income at an earlier age. Compensation for purposes of the Pension Plans includes base salary and 50% of annual cash incentive compensation awards. Compensation does not include awards and payments under any other special compensation plans such as the 2006 LTIP, payments for severance, relocation or other special payments. Accrued benefits under the Pension Plans vest over a five-year period of service with Remington.

              In October 2006, the Remington board of directors, upon the recommendation of its Benefit and Investment Committee, approved an amendment to freeze benefit accruals under the Retirement Plan as of December 31, 2007. Benefit accruals under the Supplemental Plan were also frozen as of December 31, 2007. Years of service with Remington will continue to accrue when calculating eligibility for early retirement.

Defined Contribution Plan

              Remington maintains the Remington Arms Company 401(k) Plan (the "401(k) Plan"), a qualified defined contribution plan for non-union employees, pursuant to which Remington matches 100% of the first 4% of a participant's contributions. All nonunion employees of Remington participate in the 401(k) Plan, including each of the Named Executive Officers other than Mr. DeSantis, who terminated participation in 2008 in connection with his termination of employment from Remington.

Severance Benefits

              Remington and Bushmaster, as applicable, have entered into employment agreements with the Named Executive Officers. The employment agreements provide for the payment of severance benefits to the Named Executive Officers under specified circumstances. In entering into these agreements, the companies considered (1) the benefit of receiving confidentiality, non-competition and non-solicitation protections post-termination for a reasonable and measurable cost and (2) an estimated length of time

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for an individual to find comparable employment at a similar level. The amount and type of benefits under the employment agreements are described below under "—Potential Payments Upon Termination or Change in Control—Severance—Employment Agrements." Mr. Millner's employment agreement terminated in March 2009.

Perquisites and Other Benefits

Personal Financial Services Consulting

              We retain the services of a financial services firm to assist certain executive officers with their personal asset management. Remington provides this benefit in order for these officers to focus more of their time on the direction of the companies operations. See the footnotes in "—2008 Summary Compensation Table" for a breakout of the cost of these services, including tax gross-up amounts, for Messrs. Millner and Jackson, the Named Executive Officers entitled to this perquisite as of December 31, 2008. Currently, only Mr. Jackson is entitled to receive this perquisite.

Living and Commuting Expenses Reimbursement

              In 2008, Remington provided basic living and commuting expenses and income tax gross-ups with respect to such expenses for Messrs. Torbeck, Blackwell and DeSantis. The expenses for Messrs. Torbeck and Blackwell were incurred in connection with their fulfillment of duties and responsibilities, primarily with respect to the corporate office in Madison, North Carolina. The primary residences of each of Messrs. Torbeck and Blackwell are outside the state of North Carolina. Mr. DeSantis' expenses were incurred in connection with his fulfillment of duties and responsibilities with respect to Remington's manufacturing operations in New York and Kentucky. Mr. DeSantis' primary residence is outside the states of New York and Kentucky. Remington provided these amounts because of the responsibilities related to these particular positions and unique skills required to perform these responsibilities, which required significant travel and time away from their primary residences. See the footnotes in the "—2008 Summary Compensation Table" for the amounts, including tax gross-up amounts, of these costs for each of Messrs. Torbeck, Blackwell and DeSantis. Currently, only Messrs. Torbeck and Blackwell are receiving this perquisite.

Death Benefit Plan

              In January 2001, the Remington Arms Company, Inc. Death Benefit Plan was adopted to cover certain employees who don't participate in the Supplemental Plan. The Death Benefit Plan provides that in the event of the death of the employee while employed by Remington, a covered employee's beneficiary receives two times the deceased employee's annual base salary to be paid over a period of four years. Payments commence on the first day of the month beginning after the anniversary of the employee's death. We are not insured for these potential amounts owed and proceeds would be paid by Remington. Currently, Mr. Torbeck is the only Named Executive Officer eligible for this benefit.

Role of Executive Officers in Executive Compensation

              The Compensation Committees recommend and approve the final determination of total compensation for our Chief Executive Officer. The Compensation Committees evaluate the total compensation of our other Named Executive Officers acting with advice from our Chief Executive Officer. Our Chief Executive Officer plays no role in determining his own compensation. Although the Compensation Committees utilize and consider comments, advice and recommendations of our Chief Executive Officer, the final decision with respect to compensation levels and components of the other Named Executive Officers remains with the Compensation Committees.

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Internal Revenue Code Section 162(m)

              Section 162(m) of the Code generally disallows a tax deduction for any publicly held corporation of certain items of compensation paid to the chief executive officer and the three most highly compensated executive officers (other than the chief financial officer) to $1,000,000 annually, unless the compensation qualifies as "performance-based" or is otherwise exempt from Section 162(m). As our shares of common stock have not been publicly held, the Compensation Committees have not previously taken this deductibility limit into consideration in setting compensation. Under a transition rule, for a limited period of time after a company becomes publicly held, the deduction limits do not apply to any compensation paid pursuant to a compensation plan or agreement that existed during the period in which the corporation was not publicly held. We expect that the Compensation Committee will adopt a policy to consider the potential impact of Section 162(m) on compensation decision, but to ultimately maintain flexibility to approve compensation for an executive officer that does not meet the deductibility requirements of Section 162(m) in order to provide competitive compensation packages.

Compensation Tables

              The following table summarizes the compensation paid by Remington to the Named Executive Officers for services rendered during the fiscal years ended December 31, 2008, 2007 and 2006 (as applicable). The table also reflects the compensation paid by Bushmaster to Mr. DeSantis for the portion of 2008 during which he was employed by that entity. Mr. Millner is included in the tables below because he served as our Chief Executive Officer at December 31, 2008. As discussed in "—Introduction" above, on March 13, 2009, Mr. Millner terminated his employment with Remington.

2008 Summary Compensation Table

Name & Principal Position		Year*		Salary ($)		Bonus ($)(1)		Stock Awards ($)(2)		Option Awards ($)(3)		Non-Equity Incentive Plan Compensation ($)(4)		Change in Pension Value and NQDC Earnings ($)			All Other Comp. ($)			Total ($)
Theodore H. Torbeck,			2008	$	548,076	$	50,000	$	—	$	93,690	$	550,000		—		$	85,365	(9)	$	1,327,131
	Chief Operating Officer and President (through March 14, 2009), Chief Executive Officer (as of March 14, 2009)
Stephen P. Jackson, Jr.,			2008	$	315,000	$	50,000	$	—	$	54,575	$	462,000	$	3,484	(5)	$	28,046	(10)	$	913,105
	Chief Financial Officer and		2007	$	279,167	$	966,667	$	—	$	48,760	$	624,000	$	37,951		$	33,442		$	1,989,987
	Treasurer		2006	$	233,333	$	—	$	—	$	20,111	$	218,000	$	36,641		$	16,245		$	524,330
E. Scott Blackwell,			2008	$	367,500	$	50,000	$	56,238	$	54,575	$	560,000	$	11,213	(6)	$	78,619	(11)	$	1,178,145
	Chief Sales Officer
John DeSantis,			2008	$	433,333	$	—	$	92,254	$	13,511	$	116,967	$	31,668	(7)	$	578,376	(12)	$	1,266,109
	Vice President		2007	$	225,000	$	—	$	—	$	—	$	558,000		—		$	37,409		$	820,409
Thomas L. Millner,			2008	$	630,000	$	100,000	$	—	$	228,879	$	882,000	$	111,558	(8)	$	43,369	(13)	$	1,995,806
	Chief Executive Officer		2007	$	602,900	$	1,933,333	$	283,383	$	260,434	$	1,310,400	$	450,562		$	33,593		$	4,874,605
	(through March 13, 2009)		2006	$	528,000	$	—	$	—	$	107,418	$	543,000	$	256,673		$	32,954		$	1,468,045

*

Compensation is disclosed to the extent the individual was a named executive officer of FGI and/or Remington for the applicable fiscal year.

(1)

For 2008, represents one-time discretionary cash award. See "—Components of Compensation—Annual Cash Bonus Incentive Compensation—2008 Annual Incentive Compensation Plan" for a discussion of this award. For Messrs. Millner and Jackson for 2007, the amount reflects the cash bonus paid from proceeds due to the sellers in connection with the Remington Acquisition.

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(2)

The amounts in this column reflect for each fiscal year shown dollar amounts recognized as compensation expense for financial reporting purposes with respect to awards of restricted stock granted prior to or during the year, in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment ("SFAS 123(R)") (see Note 15 to Freedom Group's consolidated financial statements included in this prospectus). With respect to 2007, the amounts shown reflect, in accordance with SFAS 123(R), the Named Executive Officer's portion of deferred shares of RACI that were converted to equity and subsequently purchased by FGI in connection with the Remington Acquisition.

(3)

The amounts in this column reflect for each fiscal year shown dollar amounts recognized as compensation expense for financial reporting purposes with respect to awards of stock options granted prior to or during the year to our Named Executive Officers in accordance with SFAS 123(R) (see Note 15 to Freedom Group's consolidated financial statements included in this prospectus). With respect to 2007 and 2006, the amounts shown reflect, in accordance with SFAS 123(R), the Named Executive Officer's portion of the options to purchase RACI common stock that immediately vested and were subsequently cancelled and paid in connection with the Remington Acquisition.

(4)

For Messrs. Millner, Jackson and Blackwell, the amounts include the annual cash incentive compensation earned pursuant to the 2008 Annual Incentive Compensation Plan and the 2006 LTIP as follows: Mr. Millner—$630,000 and $252,000, respectively; Mr. Jackson—$330,000 and $132,000, respectively; and Mr. Blackwell—$400,000 and $160,000, respectively. For Mr. Torbeck, the amount represents the annual cash incentive compensation earned pursuant to the 2008 Annual Incentive Compensation Plan. For Mr. DeSantis, the amount represents the annual cash incentive compensation earned with respect to his employment with Bushmaster for November and December 2008. The amounts payable as severance to Mr. DeSantis in respect of his awards under the 2008 Annual Incentive Compensation Plan and the 2006 LTIP pursuant to the terms of the DeSantis Letter Agreement are reflected in the "all other compensation" column.

(5)

For 2008, amount reflects change in amount accrued from December 31, 2007 to December 31, 2008 for the Supplemental Plan of $3,484.

(6)

For 2008, amount reflects change in amount accrued from December 31, 2007 to December 31, 2008 for the Supplemental Plan of $11,213.

(7)

For 2008, amount reflects change in amount accrued from December 31, 2007 to December 31, 2008 for the Supplemental Plan of $31,668.

(8)

For 2008, amount reflects change in amount accrued from December 31, 2007 to December 31, 2008 for the Retirement Plan of $17,065 and the Supplemental Plan of $94,493.

(9)

Amount reflects premiums paid by Remington for the company-wide life insurance plan, living and commuting expenses, a tax gross up on the living and commuting expenses, and Company matching contributions to the 401(k) Plan in the amounts of $3,271, $44,706, $28,188 and $9,200, respectively.

(10)

For 2008, amount reflects premiums for the life insurance plan, personal financial consulting services, a tax gross-up on these personal financial consulting services, and Company matching contributions to the 401(k) Plan of $774, $10,728, $7,344 and $9,200, respectively.

(11)

Amount reflects premiums for the life insurance plan, living and commuting expenses, a tax gross-up on living and commuting expenses, and Company matching contributions to the 401(k) Plan of $1,473, $44,892, $23,054 and $9,200, respectively.

(12)

For 2008, includes the amounts payable to Mr. DeSantis in respect of his awards under the 2008 Annual Incentive Compensation Plan and the 2006 LTIP pursuant to the terms of the DeSantis Letter Agreement, including $375,000 for his award under the 2008 Annual Incentive Compensation Plan and $180,000 for his award under the 2006 LTIP. See "Severance—John DeSantis". Amount for 2008 also includes premiums for the life insurance plan, living and commuting expenses, a tax gross up on living and commuting expenses, and Company matching contributions to the 401(k) Plan of $4,460, $7,971, $4,428 and $6,517, respectively.

(13)

For 2008, amount reflects premiums paid by Remington for a disability insurance policy, premiums for the life insurance plan, personal financial consulting services, a tax gross-up on these personal financial consulting services, Company matching contributions to the 401(k) Plan and the increase in 2008 of the present value of benefits under Remington's retiree medical plan in the amounts of $4,151, $5,851, $10,690, $8,034, $9,200 and $5,443, respectively.

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Grants of Plan-Based Awards

              The following Grants of Plan-Based Awards table summarizes the awards made to our Named Executive Officers under various plans in 2008.

2008 Grants of Plan-Based Awards

										All Other Stock Awards: Number of Shares of Stock or Units (#)	All Other Awards: Number of Securities Underlying Options (#)
				Estimated Possible Payouts Under Non-Equity Incentive Plan Awards											Grant Date Fair Value of Stock and Option Awards(3)
													Exercise or Base Price of Option Awards ($/Sh)
Name		Grant Date		Threshold ($)		Target ($)		Maximum ($)
Theodore H. Torbeck,					—
	President and COO (through March 14, 2009), CEO (as of March 14, 2009)
	2008 Stock Incentive Plan		5/14/2008									379,504	$	2.55	$	599,616
	2008 Ann. Inc. Comp. Plan(1)		2/5/2008	$	220,000	$	550,000	$	825,000
Stephen P. Jackson, Jr.,					—
	Chief Financial Officer and Treasurer
	2008 Stock Incentive Plan		5/14/2008									109,558	$	2.55	$	173,102
	2008 Ann. Inc. Comp. Plan(1)		2/5/2008	$	132,000	$	330,000	$	495,000
E. Scott Blackwell,					—				—
	Chief Sales Officer
	2008 Stock Incentive Plan		5/14/2008									109,558	$	2.55	$	173,102
	2008 Ann. Inc. Comp. Plan(1)		2/5/2008	$	160,000	$	400,000	$	600,000
John DeSantis,					—				—
	Vice President
	2008 Stock Incentive Plan		5/14/2008									27,122	$	2.55	$	42,853
	2008 Ann. Inc. Comp. Plan(1)		2/5/2008	$	225,000	$	450,000	$	675,000
	Bushmaster Award(2)		11/1/2008		—	$	58,484	$	116,967
Thomas L. Millner,
	Chief Executive Officer (through March 13, 2009) 2008 Stock Incentive Plan		5/14/2008									437,197	$	2.55	$	690,771
	2008 Ann. Inc. Comp. Plan(1)		2/5/2008	$	315,000	$	630,000	$	945,000

(1)

Dollar amounts represent the potential award opportunities, at the threshold, target and maximum levels, under the 2008 Annual Incentive Compensation Plan at the time the plan was implemented. As discussed in the narrative to this plan in "—Components of Compensation—Annual Cash Bonus Incentive Compensation—2008 Annual Incentive Compensation Plan," the Named Executive Officers have already been paid at the target level and Mr. DeSantis has already been paid $375,000 with respect to the plan. The amounts paid to Messrs. Millner, Torbeck, Jackson and Blackwell under the 2008 Annual Incentive Compensation Plan are reflected in the "non-equity incentive plan compensation" column in "—2008 Summary Compensation Table." The amounts paid to Mr. DeSantis in respect of his award under the 2008 Annual Incentive Compensation Plan pursuant to the terms of the DeSantis Letter Agreement are reflected in the "all other compensation column" in "—2008 Summary Compensation Table."

(2)

Dollar amount represents the potential award opportunities with respect to his employment with Bushmaster for November and December 2008. The amount paid to Mr. DeSantis under the Bushmaster Award is reflected in the "non-equity incentive plan compensation" column in "—2008 Summary Compensation Table."

(3)

Represents the grant date fair value of stock option awards during the year determined in accordance with SFAS 123(R) (see Note 15 to Freedom Group's consolidated financial statements included in this prospectus).

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Outstanding Equity Awards at Fiscal Year-End Table

              The following 2008 Outstanding Equity Awards at Fiscal Year-End table summarizes our Named Executive Officers' outstanding equity awards under any plan at December 31, 2008.

2008 Outstanding Equity Awards at Fiscal Year-End

				Option Awards									Stock Awards
Name		Grant Date		Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)
Theodore H. Torbeck,
	President and COO
	(through March 14, 2009)
	and CEO (as of March 14, 2009)		5/14/2008		—		379,504	(1)	$	2.55		5/13/2018
Stephen P. Jackson, Jr.,
	Chief Financial
	Officer and Treasurer		5/14/2008		16,434		93,124	(2)	$	2.55		5/13/2018
E. Scott Blackwell,
	Chief Sales Officer		5/14/2008		16,434		93,124	(2)	$	2.55		5/13/2018
			9/8/2006											52,126	(4)		173,058	(5)
John DeSantis,
	Vice President		5/14/2008		4,068		23,054	(3)	$	2.55		5/13/2018
			4/13/2006											74,875	(3)	$	248,585	(5)
Thomas L. Millner,
	Chief Executive Officer (through March 13, 2009)		5/14/2008		74,296		362,901	(2)	$	2.55		5/13/2018

(1)

The unexercisable portion of this stock option as of December 31, 2008 vests and becomes exercisable as follows: 15% of the initial award on May 14, 2009, 20% of the initial award on May 14, 2010, 30% of the initial award on May 14, 2011 and 35% of the initial award on May 14, 2012.

(2)

The unexercisable portion of this stock option as of December 31, 2008 vests and becomes exercisable as follows: 20% of the initial award on May 31, 2009, 30% of the initial award on May 31, 2010 and 35% of the initial award on May 31, 2011. Mr. Millner's options were cancelled in connection with his termination of employment.

(3)

All of the restricted stock is based on service and vests as follows: March 31, 2009—17,278 shares, April 30, 2009—17,279 shares, March 31, 2010—20,159 shares and April 13, 2010—20,159 shares. The May 14, 2008 modification to these restricted stock awards is discussed further under "—Components of Compensation—Equity Incentive Awards."

(4)

All of the restricted stock is based on service and vests as follows: March 31, 2009—12,029 shares, October 19, 2009—12,029 shares, March 31, 2010—14,034 shares, and October 19, 2010—14,034 shares. The May 14, 2008 modification to these restricted stock awards is discussed further under "—Components of Compensation—Equity Incentive Awards."

(5)

There is no established market value for the FGI common stock. As such, the value is based upon $3.32 per share, the fair value of the FGI common stock as of December 31, 2008 (based on an October 1, 2008 third-party valuation).

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Option Exercises and Stock Vested Table

              The table below shows the restricted shares of FGI common stock acquired by the Named Executive Officers upon vesting in 2008. No options were exercised by the Named Executive Officers in 2008.

	Stock Awards
Name	Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)(1)
Theodore H. Torbeck, President and COO (through March 14, 2009) CEO (as of March 14, 2009)		—		—
Stephen P. Jackson, Jr., Chief Financial Officer and Treasurer		—		—
E. Scott Blackwell, Chief Sales Officer		22,054	$	73,219
John DeSantis, President and General Manager, Bushmaster		31,678	$	120,111
Thomas L. Millner, Chief Executive Officer (through March 13, 2009)		—		—

(1)

There is no established market value for the FGI common stock. As such, the value is based upon $3.32 per share, the fair value of the FGI common stock as of December 31, 2008 (based on an October 1, 2008 third-party valuation).

Pension and Retirement Benefits

              Refer to "—Components of Compensation—Pension and Retirement Benefits" for a description of our pension and retirement benefit plans, the reasons for the establishment of multiple plans, and the material terms and conditions of benefits under each plan, including benefit formulas and eligibility standards with respect to normal retirement payment. The following tables summarize pension and retirement benefits as of December 31, 2008 for each of our Named Executive Officers. The changes in the amounts accrued under the Pension Plans from December 31, 2007 to December 31, 2008 are reflected in the "Change in Pension Value and NQDC Earnings" column of the 2008 Summary Compensation Table.

              The amounts presented below for the Pension Plans represent the present value of the accrued accumulated benefit obligation as of December 31, 2008, and are based on a 6% discount rate and use the adjusted RP-2000 Combined Mortality Table for males and females for determining 2008 IRS target liability.

              In order to be eligible for early retirement under the Pension Plans, the Named Executive Officer must be at least age 50 and have at least 15 years of qualifying service. Once these two criteria have been met, the Named Executive Officer can receive payments under the Pension Plans before the age of 65 at a reduced level.

              Payment provisions for the Pension Plans are the same under early and normal retirements, and in order to get payment other than in the form of a single life annuity or 50% joint and survivor annuity, an employee must have 15 years of service. Once an employee has more than 15 years of service, the available payment options include single life annuity, qualified joint and survivor, and

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income leveling (only for early retirements prior to age 62), the last two of which have several options for structuring payments to surviving spouses.

Name(1)		Plan Name	Number of Years of Credited Service (#)		Present Value of Accumulated Benefit ($)			Payments During Last Fiscal Year ($)
Stephen P. Jackson, Jr.,		Supplemental Plan		5.5	$	81,163		$	—
	Chief Financial Officer and
	Treasurer
E. Scott Blackwell,		Supplemental Plan		1.5	$	11,213		$	—
	Chief Sales Officer
John DeSantis,		Supplemental Plan		1.5	$	31,668		$	—
	Vice President
Thomas L. Millner,		Retirement Plan		14.6	$	211,653		$	—
	Chief Executive Officer	Supplemental Plan		14.6		1,128,404	(2)		—
	(through March 13, 2009)

(1)

Mr. Torbeck is not eligible to participate in the Pension Plans. Messrs. Jackson, Blackwell and DeSantis are not eligible to participate in the Retirement Plan.

(2)

The amount presented does not include three years of additional service credit potentially provided to Mr. Millner by Remington under the terms of Mr. Millner's executive employment agreement in the event he terminates employment under specified circumstances. The present value of such additional service credit as of December 31, 2008 was $295,046. Ultimately, Mr. Millner was not entitled to receive the additional service credit upon his termination of employment in 2009.

Potential Payments Upon Termination or Change in Control

Severance—Employment Agreements

              Remington and Bushmaster, as applicable, have employment agreements with each of Messrs. Torbeck (dated February 4, 2008), Jackson (dated May 31, 2007), Blackwell (dated May 31, 2007) and DeSantis (dated November 1, 2008). Prior to his termination of employment, Remington had an employment agreement with Mr. Millner (dated May 31, 2007), which is described herein because it was in effect as of December 31, 2008. Each of the employment agreements was approved and authorized by the applicable Compensation Committee or board of directors. Remington's employment agreements with each of Messrs. Millner, Jackson, Torbeck and Blackwell continue until terminated by the company or by the executive. Bushmaster's employment agreement with Mr. DeSantis continues until November 2010. Each agreement provides for a minimum annual base salary ($630,000 for Mr. Millner, $300,000 for Mr. Jackson, $600,000 for Mr. Torbeck, $335,000 for Mr. Blackwell and $350,000 for Mr. DeSantis) that may increase from time to time at the discretion of the applicable company. Each of the agreements also provides for eligibility for annual incentive compensation at the target level of 100% of base salary.

              If the employment of any of Messrs. Millner, Jackson, Torbeck, Blackwell or DeSantis terminates due to death or disability, or if we terminate his employment for "Cause," he will receive the amount of his base salary earned and due but not paid through the date of termination. In addition, if the termination is due to death or disability, Messrs. Millner, Jackson, Torbeck and Blackwell also will receive a pro rata amount of the incentive compensation earned pursuant to the annual cash bonus incentive compensation plan as then in effect. If the executive's employment is

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terminated without "Cause" or the executive terminates for "Good Reason," the individual is entitled to receive the following:

•

Base salary in effect on the date of termination, payable in semi-monthly installments during the severance period;

•

A pro rata portion of cash bonus incentive compensation for the year in which employment terminates, with achievement of performance objectives determined as of the termination date (Messrs. Millner, Jackson, Torbeck and Blackwell);

•

Any incentive compensation earned under the 2006 LTIP as of the termination date (Messrs. Millner, Jackson and Blackwell);

•

Continuation of health and insurance benefits until the later of the end of the severance period or the date the executive attains age 65 (although Messrs. Torbeck and DeSantis are eligible only until the end of the severance period);

•

Reimbursement of premiums paid by the executive during the severance period on any supplemental long-term disability policy maintained by the executive as of January 1, 2007 (Mr. Millner);

•

Financial planning services and a gross-up payment for the tax liability attributable to receipt of such services (Messrs. Millner and Jackson);

•

Vested accrued benefits under any qualified retirement plans;

•

Benefits under his Supplemental Plan (Messrs. Millner, Jackson, Blackwell and DeSantis); and

•

Continuation in the group life insurance plan (Messrs. Millner, Jackson, and Blackwell).

The severance period begins on the termination date and lasts three years in the case of Mr. Millner, two years for Mr. DeSantis, and one year for each of Messrs. Jackson, Torbeck and Blackwell. During the term of employment and any severance period, each executive is restricted from competing with us or soliciting any of our employees or customers.

              With respect to Messrs. Millner, Jackson, Torbeck and Blackwell, in the event of a resignation without Good Reason the employment agreements allow for the employer to provide for a severance payment of up to twelve (12) months of base salary in exchange for the executive's compliance with certain restrictive covenants. In the event we experience a change in control, the employment agreements of Messrs. Millner, Jackson, Blackwell and Torbeck requires that we obtain the agreement of any successor to assume and perform the obligations under the employment agreement. If we do not obtain such agreement from a successor, the executive will be entitled to severance benefits as if he were terminated without "Cause."

              Severance payments for Messrs. Millner, Jackson, Blackwell and Torbeck are in addition to our obligation to pay such officer's salary during the requisite notice period, which is generally 30 days.

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              As used in these employment agreements of Messrs. Millner, Jackson, Torbeck and Blackwell, "Cause" generally means:

•

the failure of the executive to substantially perform his duties (other than any such failure due to physical or mental illness) or other material breach by the executive of any of his obligations, after a demand for substantial performance or cure of such breach is delivered, and a reasonable opportunity to cure is given, to the executive by Remington, which demand identifies the manner in which Remington believes that the executive has not substantially performed his duties or breached his obligations;

•

the executive's gross negligence or serious misconduct that has caused, or would reasonably be expected to result in, material injury to Remington or any of its affiliates;

•

the executive's conviction of, or entering a plea of nolo contendere to, a crime that constitutes a felony; or

•

generally, a violation of any provision of Remington's business ethics policy.

Mr. DeSantis' employment agreement generally defines "Cause" as:

•

conviction of, or plea to, a felony or any crime involving moral turpitude;

•

material failure of the executive to comply with applicable laws or regulations respecting Bushmaster's operations or the performance of the executive's duties;

•

action by the executive involving embezzlement, theft, sexual harassment, discrimination, fraud, or other activity of a criminal nature by the executive in his dealings with Bushmaster or its employees or representatives;

•

executive's continued failure to perform his substantial job functions after written notice from Bushmaster;

•

executive's material violation of any written policy of Bushmaster; or

•

executive's failure to fully cooperate in any investigation or audit of Bushmaster or its affiliates.

              As used in the employment agreements of Messrs. Millner, Jackson, Torbeck and Blackwell, "Good Reason" generally means termination of employment by the executive within thirty days following the occurrence of any of the following without the executive's consent:

•

the assignment of the executive to a position the duties of which are a material diminution of the duties of his current title and position;

•

a reduction of the executive's base salary or the percentage of such base salary made available as an incentive compensation opportunity;

•

the assignment of the executive to a principal office located beyond a 50-mile radius of the executive's current work place (Messrs. Millner, Jackson and Blackwell); or

•

a material breach by Remington of any of its obligations under the employment agreement.

In addition to the events described above, Mr. Torbeck shall have the right to terminate his employment for "Good Reason" if Remington requires him to relocate his primary residence at any time during the first twenty-four months of his employment.

              Mr. DeSantis' employment agreement provides for the severance payments and benefits described above in the event he terminates employment because of:

•

a material adverse change in his duties from those described in the employment agreement;

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•

a requirement of Bushmaster that he relocates his place of residence by more than 50 miles; or

•

a material breach of the employment agreement by Bushmaster.

Long Term Incentive Plan

              Upon a "change in control," each participant who is actively employed by Remington, or was actively employed by Remington immediately prior to such change in control, will be entitled to a lump sum payment equal to (i) the amount, if any, credited to each 2006 LTIP participant as of the date of the change in control, plus (ii) the amount that would have been credited to each 2006 LTIP participant in respect of the fiscal year of the change in control and each subsequent fiscal year if the participant had remained employed through the vesting date and Remington had achieved the aggregate EBITDA target for each such fiscal year. Such payment shall be made on the date of such change in control. Notwithstanding the foregoing, if the acquirer in the change in control decides to continue the 2006 LTIP at the targets outlined following the change in control, the amounts will not be paid and the 2006 LTIP will continue through the original payment date.

              A change in control is generally defined in the 2006 LTIP as:

•

the acquisition by any person, entity or "group" (as defined in Section 13(d) of the Exchange Act), other than Remington, any of its affiliates, any employee benefit plan of Remington or any of its affiliates, or certain funds managed by one or more affiliates of CCM, of 50% or more of the combined voting power of Remington's then outstanding voting securities;

•

the merger or consolidation of Remington, as a result of which any person, entity or "group" (as defined in Section 13(d) of the Exchange Act), other than Remington, any of its affiliates, any employee benefit plan of Remington or any of its affiliates, owns, directly or indirectly, more than 50% of the combined voting power entitled to vote generally in the election of directors of the merged or consolidated company; or

•

the sale, transfer or other disposition of all or substantially all of the assets of Remington to any person, entity or "group" (as defined in Section 13(d) of the Exchange Act), other than Remington, any of its affiliates, any employee benefit plan of Remington or any of its affiliates.

              In the event of a termination of a participant by Remington without "cause" or by reason of death or disability, the participant is entitled to receive (i) the amount earned as of the date of such termination and (ii) the amount that would have been earned in respect of the fiscal year of such termination if the participant had remained in employment on December 31, 2009, pro-rated to the date of termination.

Stock Incentive Plan

              Awards granted to executive officers (including the Named Executive Officers) in 2008 and 2009 under the Stock Incentive Plan provide for partial accelerated vesting in the event the executive is terminated without "cause" or the executive resigns for "good reason" (each as defined in the applicable award agreement). The portion of the award subject to such acceleration is equal to the number of shares/options otherwise scheduled to vest on the next vesting date, multiplied by a fraction, the numerator of which is the number of days elapsed before the executive's termination during the then-current vesting period, and the denominator of which is 365.

Pension Plans

              See "—Pension and Retirement Benefits" for the actuarial present value of the accumulated pension benefits payable to Named Executive Officers upon termination of employment.

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Summary Tables for Potential Payments upon Termination or Change in Control

              The following tables set forth potential payments to the Named Executive Officers upon termination of their employment or a change in control under their current employment agreements and other applicable agreements as of December 31, 2008. Although Mr. Millner terminated employment as of March 16, 2009, he is included in the tables below because he served as Chief Executive Officer during 2008. Mr. Millner's termination of employment was treated as a resignation without "Good Reason" for purposes of his employment agreement with Remington, dated as of May 31, 2007.

Thomas L. Millner
Chief Executive Officer (through March 13, 2009)

	Death and Disability		Terminated with Cause		Terminated without Cause			Resign with Good Reason			Resign without Good Reason(10)		Change in Control(11)
Salary(1)				—	$	1,890,000	(1)	$	1,890,000	(1)	$	630,000	$	1,890,000	(1)
Cash Bonus(2)		630,000		—		630,000			630,000			—		630,000
Supplemental Plan(3)				—		295,046			295,046			—		295,046
Stock Options(4)				—		38,369			38,369			—		279,434
Extended Medical(5)						7,094			7,094					7,094
2006 LTIP(6)		715,200		—		715,200			715,200			—		967,200
Disability Premiums(7)				—		12,453			12,453			—		12,453
Life Insurance(8)				—		17,553			17,553			—		17,553
Financial Planning(9)				—		56,172			56,172			—		56,172
	$	1,345,200	$	—	$	3,661,887		$	3,661,887		$	630,000	$	4,154,952

(1)

Salary is three times Mr. Millner's base salary paid in equal semi-monthly installments over 3 years in accordance with Mr. Millner's employment agreement.

(2)

Cash Bonus is Mr. Millner's annual cash incentive compensation that would have been payable assuming he was terminated at the end of the year, to be paid in a lump sum amount in accordance with Mr. Millner's executive employment agreement.

(3)

Supplemental Plan is the estimated actuarial present value of an additional three years of service potentially credited to Mr. Millner with respect to the Supplemental Plan pursuant to the terms of his employment agreement.

(4)

Mr. Millner has 362,901 unvested options to purchase FGI common stock. The columns "terminated without cause" and "terminated with good reason" reflect the pro-rated acceleration of the next installment of the executive's options pursuant to the terms of his option award. The column "change in control" reflects the immediate vesting of all unvested stock options. Mr. Millner's unvested options to purchase FGI common stock have a strike price of $2.55 per share and the market value of FGI common stock as of December 31, 2008 was $3.32 per share (based on an October 1, 2008 third-party valuation).

(5)

Extended Medical is the estimated annual amount of healthcare costs expected to be paid by the Company for Mr. Millner and his family, which is received until the age of 65. The estimate is computed using the current annual COBRA cost less the amount to be paid by Mr. Millner.

(6)

LTIP is amount earned for years 2006, 2007 and 2008 and, in the case of a change in control, 2009 (unless the plan is continued by the successor).

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(7)

Disability Premiums is the estimated annual amount of premiums paid for a supplemental long-term disability policy, based on 2008 premiums, for the three year severance period.

(8)

Life Insurance is the estimated annual amount of insurance premiums to participate in the Remington life insurance plan, based on 2008 premiums, for the three year severance period.

(9)

Financial Planning is the estimated annual amount for personal financial consulting services plus a tax gross-up on these personal financial consulting services, based on 2008 expenses, for the three year severance period.

(10)

Assumes that employer has exercised its right under the employment agreement to provide one year of salary in exchange for restrictive covenants.

(11)

Per Mr. Millner's executive employment agreement, any successor must assume and perform the same employment agreement or the executive is entitled to severance benefits as if he were terminated Without Cause. The amount herein assumes no such assumption and termination had occurred. See "—Severance—Thomas Millner."

Stephen P. Jackson, Jr.
Chief Financial Officer

	Death and Disability		Terminated with Cause		Terminated without Cause			Resign with Good Reason			Resign without Good Reason(8)		Change in Control(9)
Salary(1)			$	—	$	330,000	(1)	$	330,000	(1)	$	330,000	$	330,000	(1)
Cash Bonus(2)	$	330,000		—		330,000			330,000			—		330,000
Stock Options(3)				—		9,846			9,846			—		71,705
Extended Medical(4)				—		10,467			10,467			—		10,467
2006 LTIP(5)		352,000		—		352,000			352,000			—		503,800
Life Insurance(6)				—		774			774			—		774
Financial Planning(7)				—		18,072			18,072			—		18,072
	$	682,000	$	—	$	1,051,159		$	1,051,159		$	330,000	$	1,264,818

(1)

Salary is one times Mr. Jackson's base salary payable in equal installments over one year in accordance with Mr. Jackson's employment agreement.

(2)

Cash Bonus is Mr. Jackson's portion of annual cash incentive compensation that would have been payable assuming he was terminated at the end of the year, to be paid in a lump sum amount in accordance with Mr. Jackson's executive employment agreement.

(3)

Mr. Jackson has 93,124 unvested options to purchase FGI common stock. The columns "terminated without cause" and "terminated with good reason" reflect the pro-rated acceleration of the next installment of the executive's options pursuant to the terms of his option award. The column "change in control" reflects the immediate vesting of all unvested stock options. Mr. Jackson's unvested options to purchase FGI common stock have a strike price of $2.55 per share and the market value of FGI common stock as of December 31, 2008 was $3.32 per share (based on an October 1, 2008 third-party valuation).

(4)

Extended Medical is the estimated annual amount of healthcare costs expected to be paid by the Company for Mr. Jackson and his family, which is received until the age of 65. The estimate is computed using the current annual COBRA cost less the amount to be paid by Mr. Jackson.

(5)

LTIP is amount earned for years 2006, 2007 and 2008 and, in the case of a change in control 2009 (unless the plan is continued by the successor).

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(6)

Life Insurance is the estimated annual amount of insurance premiums to participate in the Remington life insurance plan based on 2008 premiums, for the one year severance period.

(7)

Financial Planning is the estimated annual amount for personal financial consulting services plus a tax gross-up on these personal financial consulting services, based on 2008 expenses, for the one year severance period.

(8)

Assumes that employer has exercised its right under the employment agreement to provide one year of salary in exchange for restrictive covenants.

(9)

Per Mr. Jackson's executive employment agreement, any successor must assume and perform the same employment agreement or the executive is entitled to severance benefits as if he were terminated Without Cause. The amount herein assumes no such assumption and performance has occurred.

Theodore H. Torbeck
Chief Operating Officer (through March 14, 2009), Chief Executive Officer (as of March 14, 2009)

	Death and Disability		Terminated with Cause		Terminated without Cause			Resign with Good Reason			Resign without Good Reason(5)		Change in Control(6)
Salary(1)			$	—	$	600,000	(1)	$	600,000	(1)	$	600,000	$	600,000	(1)
Cash Bonus(2)		550,000		—		550,000			550,000			—		550,000
Stock Options(3)				—		25,579			25,579			—		292,218
Extended Medical(4)				—		10,467			10,467			—		10,467
	$	550,000	$	—	$	1,186,046		$	1,186,046		$	600,000	$	1,452,685

(1)

Salary is one times Mr. Torbeck's base salary paid in equal installments over one year in accordance with Mr. Torbeck's executive employment agreement.

(2)

Cash Bonus is Mr. Torbeck's portion of annual cash incentive compensation that would have been payable assuming he was terminated at the end of the year, to be paid in a lump sum amount in accordance with Mr. Torbeck's executive employment agreement.

(3)

Mr. Torbeck has 379,504 unvested options to purchase FGI common stock. The columns "terminated without cause" and "terminated with good reason" reflect the pro-rated acceleration of the next installment of Mr. Torbeck's option award pursuant to the terms of his employment agreement. The column "change in control" reflects the immediate vesting of all unvested stock options. Mr. Torbeck's unvested options to purchase FGI common stock have a strike price of $2.55 per share and the market value of FGI common stock as of December 31, 2008 was $3.32 per share (based on an October 1, 2008 third-party valuation).

(4)

Extended Medical is the estimated annual amount of healthcare costs expected to be paid by the Company for Mr. Torbeck and his family for the one year severance period in accordance with Mr. Torbeck's executive employment agreement. The estimate is computed using the current annual COBRA cost less the amount to be paid by Mr. Torbeck.

(5)

Assumes that employer has exercised its right under the employment agreement to provide one year of salary in exchange for restrictive covenants.

(6)

Per Mr. Torbeck's executive employment agreement, any successor must assume and perform the same employment agreement or the executive is entitled to severance benefits as if he were terminated Without Cause. The amount herein assumes no such assumption and performance has occurred.

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E. Scott Blackwell
Chief Sales Officer

	Death and Disability		Terminated with Cause		Terminated without Cause			Resign with Good Reason			Resign without Good Reason(8)		Change in Control(9)
Salary(1)			$	—	$	400,000	(1)	$	400,000	(1)	$	400,000	$	400,000	(1)
Cash Bonus(2)		400,000		—		400,000			400,000			—		400,000
Restricted Stock(3)				—		38,076			38,076			—		173,058
Stock Options(4)				—		9,846			9,846			—		71,705
Extended Medical(5)				—		10,467			10,467			—		10,467
2006 LTIP(6)		294,000		—		294,000			294,000			—		462,000
Life Insurance(7)				—		1,473			1,473			—		1,473
	$	694,000	$	—	$	1,153,862		$	1,153,862		$	400,000	$	1,518,703

(1)

Salary is one times Mr. Blackwell's base salary paid in equal installments over one year in accordance with Mr. Blackwell's executive employment agreement.

(2)

Cash Bonus is Mr. Blackwell's portion of annual cash incentive compensation that would have been payable assuming he was terminated at the end of the year, to be paid in a lump sum amount in accordance with Mr. Blackwell's executive employment agreement.

(3)

Mr. Blackwell has 52,126 unvested shares of FGI restricted stock. The columns "terminated without cause" and "terminated with good reason" reflect the pro-rated acceleration of the next installment of the executive's restricted stock pursuant to the terms of his restricted stock award. The column "change in control" reflects the immediate vesting of all restricted stock. The value of Mr. Blackwell's unvested shares is based on the market value of FGI common stock as of December 31, 2008 of $3.32 per share (based on an October 1, 2008 third-party valuation).

(4)

Mr. Blackwell has 93,124 unvested options to purchase FGI common stock. The columns "terminated without cause" and "terminated with good reason" reflect the pro-rated acceleration of the next installment of the executive's options pursuant to the terms of his option award. The column "change in control" reflects the immediate vesting of all unvested stock options. Mr. Blackwell's unvested options to purchase FGI common stock have a strike price of $2.55 per share and the market value of FGI common stock as of December 31, 2008 was $3.32 per share (based on an October 1, 2008 third-party valuation).

(5)

Extended Medical is the estimated annual amount of healthcare costs expected to be paid by the Company for Mr. Blackwell and his family, which is received until the age of 65. The estimate is computed using the current annual COBRA cost less the amount to be paid by Mr. Blackwell.

(6)

LTIP is amount earned for 2007 and 2008 and, in the case of a change in control, 2009 (unless the plan is continued by the successor).

(7)

Life Insurance is the estimated annual amount of insurance premiums to participate in the Remington life insurance plan, based on 2008 premiums, for the one year severance period.

(8)

Assumes that employer has exercised its right under the employment agreement to provide one year of salary in exchange for restrictive covenants.

(9)

Per Mr. Blackwell's executive employment agreement, any successor must assume and perform the same employment agreement or the executive is entitled to severance benefits as if he were terminated Without Cause. The amount herein assumes no such assumption and performance has occurred.

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John DeSantis
Vice President

	Terminated with Cause		Terminated without Cause			Resign with Good Reason			Resign without Good Reason(5)		Change in Control(6)
Salary(1)	$	—	$	700,000	(1)	$	700,000	(1)	$	700,000	$	700,000
Restricted Stock(2)		—		84,397			84,397			—		248,585
Stock Options(3)		—		2,437			2,437			—		17,752
Extended Medical(4)		—		27,114			27,114			—		27,114
	$	—	$	813,948		$	813,948		$	700,000	$	993,451

(1)

Salary is two times Mr. DeSantis' base salary paid in equal installments over two years in accordance with Mr. DeSantis' executive employment agreement.

(2)

Mr. DeSantis has 74,875 unvested shares of FGI restricted stock. The columns "terminated without cause" and "terminated with good reason" reflect the pro-rated acceleration of the next installment of the executive's restricted stock pursuant to the terms of his restricted stock award. The column "change in control" reflects the immediate vesting of all restricted stock. The value of Mr. DeSantis' unvested shares is based on the market value of FGI common stock as of December 31, 2008 of $3.32 per share (based on an October 1, 2008 third-party valuation).

(3)

Mr. DeSantis has 23,054 unvested options to purchase FGI common stock. The columns "terminated without cause" and "terminated with good reason" reflect the pro-rated acceleration of the next installment of the executive's options pursuant to the terms of his option award. The column "change in control" reflects the immediate vesting of all unvested stock options. Mr. DeSantis' unvested options to purchase FGI common stock have a strike price of $2.55 per share and the market value of FGI common stock as of December 31, 2008 was $3.32 per share (based on an October 1, 2008 third-party valuation).

(4)

Extended Medical is the estimated annual amount of healthcare costs expected to be paid by the Company for Mr. DeSantis and his family for the two year severance period in accordance with Mr. DeSantis' executive employment agreement. The estimate is computed using the current annual COBRA cost less the amount to be paid by Mr. DeSantis.

(5)

Assumes that employer has exercised its right under the employment agreement to provide two years of salary in exchange for restrictive covenants.

(6)

Reflects payments and benefits to Mr. DeSantis in the event his employment agreement terminates in connection with a change in control.

Severance—John DeSantis

              On October 28, 2008, Mr. DeSantis announced his intention to terminate his employment from Remington, effective October 31, 2008 and, accordingly, received no payments under the terms of his employment agreement with Remington for salary and other benefits. In connection with Mr. DeSantis' termination, Mr. DeSantis and Remington entered into the DeSantis Letter Agreement. Pursuant the terms of the DeSantis Letter Agreement, Mr. DeSantis is entitled to receive his share under the Remington Long Term Incentive Plan in the amount of $360,000, which is expected to be paid in the spring of 2010. In addition, on March 9, 2009, Mr. DeSantis received a payment equal to the bonus he would have received under the 2008 Annual Incentive Compensation Plan, pro rata to the date of termination, in the amount of $375,000.

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Severance—Thomas Millner

              Mr. Millner entered into an agreement with FGI pursuant to which he agreed to terminate his employment with FGI and its affiliates, and resign as a member of FGI's board of directors, effective as of March 13, 2009. As an inducement to enter into this agreement, FGI agreed to pay Mr. Millner a sum of $324,600. Pursuant to this agreement, FGI agreed to purchase from Mr. Millner: (i) 70,000 shares of common stock for an aggregate price of $225,400, and (ii) 70,000 shares of preferred stock for an aggregate price of $831,434. In addition, all of the stock options that had been granted to Mr. Millner pursuant to the Stock Incentive Plan, whether vested or unvested, were canceled as of March 13, 2009. Mr. Millner also entered into an agreement with Remington, in which Remington agreed to permit Mr. Millner and his qualified dependents to participate in the health, dental and prescription drug benefit plans provided by Remington to its active employees and their qualified dependents, until Mr. Millner attains the age of 65. Mr. Millner is responsible for paying the premiums for this coverage, at the applicable active employee rate.

Director Compensation

              During 2008, members of the board of directors of FGI and Remington who were not employees of Remington, Bushmaster, FGI or Cerberus, who we refer to as eligible Remington directors, received a per meeting fee of $1,000 for each Remington or FGI board of directors and committee meeting attended in person and $500 for each meeting attended via teleconference. In addition, each eligible Remington director received an annual retainer of $25,000 paid in January of the year following service. Members of the board of directors of Bushmaster who were not employees of Remington, Bushmaster, FGI or Cerberus, who we refer to as eligible Bushmaster directors, received a $50,000 annual retainer. During 2008, Messrs. Bobby R. Brown, General Michael W. Hagee (Ret.), George A. Joulwan (Ret.) and Walter McLallen were eligible Remington directors and eligible Bushmaster directors. In addition, during 2008 Messrs. Stephen L. Hammerman (who resigned in 2008), James J. Pike, Edward H. Rensi, General George Zahringer, Frank A. Savage and Robert H. Behn were eligible Remington directors. The 2008 annual retainer was pro rated for Messrs. Rensi and Behn, who joined the board of directors of FGI and Remington in March 2008 and May 2008, respectively. An additional fee of $1,000 per meeting was paid to the chairman of each committee. All directors were reimbursed for reasonable travel and lodging expenses incurred to attend meetings.

              On August 19, 2009, our Board approved a new director compensation program for all directors not employed by the Company or Cerberus. The new compensation structure calls for each eligible board member to receive a $90,000 annual retainer. Additionally, those directors that serve on a committee of our Board will receive a fee of $10,000 as a member and an additional $10,000 if a Chairperson, except for the Audit Committee Chairperson, who will receive $15,000 per annum. These amounts will be paid quarterly to each eligible director and committee member. Finally, all directors will be reimbursed for reasonable travel and lodging expenses incurred in connection with their roles.

Severance—Paul Miller

              Mr. Miller entered into an agreement with FGI pursuant to which he agreed to resign as Chairman of the Board, effective as of August 31, 2009. In connection with this resignation, Mr. Miller received accelerated vesting of 57,510 shares of restricted stock and 127,392 options. The vested common shares and options were purchased by FGI at the estimated fair value of approximately $391,000 and $541,000, respectively. All other unvested awards of restricted stock and options were cancelled.

              As an inducement to enter into this agreement, FGI also paid Mr. Miller approximately $640,000 and has agreed to pay him an additional $1,000,000, $500,000 and $500,000, respectively, on each of the anniversary dates of the agreement over the next three years. Additionally, Mr. Miller received approximately $233,000 for his accrued incentive compensation and an amount equal to one

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year of his base salary ($350,000) payable in 12 monthly installments. Mr. Miller is subject to noncompetition and nonsolicitation covenants for three years, as well as other restrictive covenants.

              The following table summarizes our director compensation during the 2008 fiscal year.

Director Compensation

Name	Fees Earned or paid in cash ($)		Change in Pension Value and NQDC Earnings		Stock Awards ($)(1)		Option Awards ($)(1)		All Other Compensation ($)			Total ($)
Bobby R. Brown	$	43,000	$	—	$	—	$	4,684	$	—		$	47,684
General Michael W. Hagee (Ret.)		82,500		—		4,093		2,316		—			88,909
General George A. Joulwan (Ret.)		79,500		—		2,693		2,316		—			84,509
James J. Pike		30,000		—		—		4,684		—			34,684
Walter McLallen		45,083		—		314,711		161,948		13,262	(2)		535,004
Frank A. Savage		29,500		—		—		4,684		—			34,184
George Zahringer III		33,500		—		—		4,684		—			38,184
Paul A. Miller		—		—		22,502		149,098		118,160	(3)		289,760
Grant Gregory		—		—		—		—		—			—
George Kollitides, II		—		—		—		—		—			—
Scott Parker		—		—		—		—		—			—
Madhu Satyanarayana		—		—		—		—		—			—
Edward H. Rensi*		23,833		—		—		4,684		—			28,517
Stephen L. Hammerman****		—		—		—		—		—			—
Robert H. Behn**		19,667		—				4,684		140,000	(4)		164,351
Jeff Bleustein***		—											—

*

Mr. Rensi was appointed March 24, 2008.

**

Mr. Behn was appointed May 14, 2008.

***

Mr. Bleustein was appointed July 22, 2008.

****

Mr. Hammerman resigned effective March 12, 2008.

(1)

Amount reflects the portion of SFAS 123(R) expense for restricted stock and for stock options awarded under the Stock Incentive Plan. There were no forfeitures of FGI restricted stock or FGI options in 2008.

The following table shows the grant date and the grant date fair value of stock and stock option awards granted to directors (other than Mr. Millner) during fiscal 2008. The values

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below were determined in accordance with SFAS 123(R) (see Note 15 to Freedom Group's consolidated financial statements included in this prospectus).

Name	Grant Date		Grant Date Fair Value of Stock Awards		Grant Date Fair Value of Option Awards
Bobby R. Brown		05/14/08	$	—	$	29,981
General Michael W. Hagee (Ret.)		05/14/08		—		14,187
General George A. Joulwan (Ret.)		05/14/08		—		14,187
James J. Pike		05/14/08		—		29,981
Walter McLallen		05/14/08		314,710		161,948
Frank A. Savage		05/14/08		—		29,981
George Zahringer III		05/14/08		—		29,981
Paul A. Miller		05/14/08		—		472,910
Edward H. Rensi		05/14/08		—		29,981
Robert H. Behn		05/14/08		—		29,981

The following table shows the aggregate number of unvested stock awards and the aggregate number of stock options held by each director (other than Mr. Millner) as of 2008 fiscal year-end.

Name	Outstanding Stock Awards at Fiscal Year-End		Outstanding Option Awards at Fiscal Year-End
Bobby R. Brown		—		18,975
General Michael W. Hagee (Ret.)		4,797		9,378
General George A. Joulwan (Ret.)		4,797		9,378
James J. Pike		—		18,975
Walter McLallen		—		102,499
Frank A. Savage		—		18,975
George Zahringer III		—		18,975
Paul A. Miller		80,194		299,310
Edward H. Rensi		—		18,975
Robert H. Behn		—		18,975

(2)

Amount represents medical benefits paid on behalf of Mr. McLallen for 2008.

(3)

Amount represents compensation earned as an employee of Remington during 2008 as Mr. Miller became an employee of Remington in November 2008. Includes salary of $58,333, incentive compensation of $58,333, life insurance of $327, and matching contributions to the 401(k) plan of $1,167.

(4)

Amount represents earnings paid to Mr. Behn in 2008 as a result of a consulting agreement between Remington and Mr. Behn.

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Compensation Committee Interlocks and Insider Participation

              On October 6, 2009, our board of directors established our current Compensation Committee, consisting of Messrs. Joulwan, Kollitides and Pike. Prior to October 6, 2009, our board of directors had established two Compensation Committees with its affiliate companies to review all compensation arrangements for executive officers of Remington and Bushmaster, which from January 2008 to November 2008 consisted of Paul A. Miller, Chairman, General George A. Joulwan (Ret.) and George Kollitides, II. Mr. Miller became an employee of the Company effective November 1, 2008 and resigned from the Compensation Committees immediately prior to his employment. James J. Pike succeeded Mr. Miller as the chairman of the Compensation Committees. George Kollitides is an officer of the Company, and was also a member of our Compensation Committees. No other member of our Compensation Committees has ever served as an officer or employee of the Company. During 2008, none of our executive officers served on the compensation committees (or equivalent), or a board of directors, of another entity whose executive officer(s) served on our Compensation Committees or board of directors. In addition, during 2008 none of the members of our Compensation Committees had any relationship requiring disclosure under Item 404 of Regulation S-K.

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

              We paid Meritage Capital Advisors, LLC ("Meritage") fees totaling $0.2 million, $2.3 million and $1.2 million for the years ended December 31, 2008 and 2007 and the nine months ended December 31, 2006, respectively, in connection with transaction advisory services. In 2009 we also paid Meritage, for advisory services in relation to the issue of our Notes, a $2.0 million fee plus out-of-pocket expenses, net of any prior amounts paid. Walter McLallen, the Chairman of our Board of Directors, is a managing director of Meritage.

              We paid Cerberus Operations and Advisory Company, LLC, an affiliate of Cerberus, fees totaling $0.7 for the six months ended June 30, 2009 and $1.5 million and $0.5 million for the years ended December 31, 2008 and 2007, respectively, for consulting services provided in connection with improving operations. We made no such payments to Cerberus in the nine months ended December 31, 2006.

              In 2009, for advisory services in relation to the issue of our Notes, we paid Deutsche Bank Securities Inc. ("Deutsche Bank") and Lazard Frères & Co. LLC ("Lazard") $2.2 million and $0.6 million fees plus out-of-pocket expenses, respectively. In addition, we have entered into an advisory services agreement with Lazard that provides for a fee of $0.4 million plus out-of-pocket expenses upon the completion of this offering. George Zahringer III and Frank A. Savage are members of our Board of Directors, and are managing directors of Deutsche Bank and Lazard, respectively. Mr. Zahringer may be entitled to receive a portion of the fees paid to Deutsche Bank, as initial purchaser, in connection with the July 29, 2009 Notes offering.

              We have a consulting agreement with Robert W. Behn, a former member of our Board of Directors, which provides for an aggregate annual payment of $0.2 million, payable monthly. We have paid $0.1 million for the six months ended June 30, 2009 and $0.1 million during 2008 for services rendered under this agreement during which commenced in May 2008.

              We paid other fees for relocation services totaling approximately $0.3 million for the six months ended June 30, 2009 and $0.3 million during 2008 and provided certain products totaling approximately $0.1 million to other entities affiliated through common ownership during the six months ended June 30, 2009.

              We paid less than $0.1 million for the six months ended June 30, 2009 and $0.1 million in 2008 in connection with certain operating leases to an entity where the owner is an employee of the Company.

              Several of our board members are employees of Cerberus, and funds managed by one or more affiliates of CCM own a substantial portion of our equity.

Registration Rights Agreement

Registration Rights

              In connection with this offering, FGI will enter into a registration rights agreement with Cerberus. Cerberus's rights under such agreement are described below.

Demand Rights

              Under the registration rights agreement, Cerberus holds registration rights that allow it at any time after twelve months following the consummation of this offering (but not within 180 days after the consummation of any other public offering) to request that we register the resale under the Securities Act, of all or any portion of the shares of our common stock that Cerberus owns. Cerberus is entitled to an unlimited number of such demand registrations. We are not required to maintain the effectiveness of any resale registration statement for more than 210 days (of which the effectiveness of

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the registration statement may be suspended pursuant to a stop order or the like for up to 30 days). We are also not required to effect any demand registration within 30 days prior to the filing of, or during the 180 days following the effectiveness of, a registration statement for which Cerberus holds "piggyback" registration rights (as described below) and are given the opportunity to sell shares pursuant to such registration statement. We may refuse a request for demand registration if, in our reasonable judgment, it is not feasible for us to proceed with the registration because of the existence of any acquisition, disposition or other material transaction or financing activity involving us, or because of the unavailability of audited financial statements or our possession of material information that it would not be in our best interests to disclose in a registration statement, provided that such refusal only results in one 180 day delay to the registration and only occurs one time in any twelve-month period.

Piggyback Rights

              Cerberus also holds "piggyback" registration rights exerciseable at any time commencing six months following this offering that allow it to include the shares of our stock that it owns in any public offering of equity securities initiated by us (other than those public offerings pursuant to registration statements on forms that do not permit registration for resale by them) or by any of our other holders of equity securities that have registration rights. These "piggyback" registration rights are subject to proportional cutbacks based on the manner of such offering and the identity of the party initiating such offering.

Indemnification; Expenses

              We have agreed to indemnify Cerberus against any losses or damages resulting from any untrue statement or omission of material fact in any registration statement or prospectus pursuant to which it sells our shares, unless such liability arose from Cerberus's misstatement or omission, and Cerberus has agreed to indemnify us against all losses caused by its misstatements or omissions. We will pay all expenses incidental to our performance under the registration rights agreement, and Cerberus will pay its respective portion of all underwriting discounts, commissions and transfer taxes relating to the sale of its shares under the registration rights agreement.

Related Person Transaction Policy

              The Company's Board of Directors recognizes that related person transactions, as defined in our related person transaction policy, present a heightened risk of actual or perceived conflicts of interest that could damage the reputation and public trust of the Company. The Board therefore has adopted this policy to govern the procedures for review and consideration of all related person transactions involving us to help ensure that any such transactions are timely identified and given appropriate consideration. It is the Company's policy to enter into or ratify related person transactions only when the Board, acting through the Audit Committee or as otherwise prescribed by the related person transaction policy, determines that the related person transaction in question is in, or is not inconsistent with, the best interests of the Company and its stockholders.

              The Audit Committee will annually review this policy and will recommend amendments, if any, to the Board for its consideration. In addition, the Board has determined that the Audit Committee of the Board shall consider and, if deemed advisable, approve each related person transaction. The Audit Committee will consider all of the relevant facts and circumstances available to the Audit Committee, including but not limited to (i) the benefits to the Company; (ii) the impact on a director's independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, stockholder or executive officer; (iii) the availability of other sources for comparable products or services; (iv) the terms of the proposed related person transaction; and (v) the terms available to unrelated third parties or to employees generally in an

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arms-length negotiation. No member of the Audit Committee will participate in any review, consideration or approval of any related person transaction with respect to which such member or any of his or her immediate family members is the related person.

Shares Issued to Insiders

              The following table summarizes issuances of our equity securities since January 1, 2006 to our officers and directors and holders of more than 5% of our equity securities, other than shares issued in exchange for existing shares in FGI in connection with the Recapitalization.

	Date	Options to Purchase FGI Common Stock			FGI Common Stock			FGI Preferred Stock			Total Consideration
Cerberus	May 31, 2007					12,430,000	(2)		12,430,000	(1)	$	124,300,000
Thomas Millner	May 31, 2007					70,000	(2)		70,000	(1)	$	700,000
Cerberus	December 12, 2007					3,417,341	(4)		3,020,825				(3)
Directors and executive officers of Bushmaster	December 12, 2007					623,063	(5)						(6)
Cerberus	December 13, 2007								783,476		$	8,250,000
Randy Luth	December 13, 2007					10,101	(5)
Cerberus	January 3, 2008								208,926		$	2,200,000
Cerberus	January 28, 2008								2,184,236.5		$	23,000,000
Walter McLallen	May 14, 2008					123,416					$	0
Issuances to employees under Stock Incentive Plan	Between May 14, 2008 and June 30, 2009		2,253,480	(7)							$	0

(1)

As American Heritage Arms, LLC, we issued and sold 125,000 of our limited liability company preferred membership units which, on December 11, 2007 when we converted from a limited liability company to a corporation, were each converted into 100 shares of preferred stock. As a result, Cerberus received 12,430,000 shares of preferred stock and Thomas Millner received 70,000 shares of preferred stock.

(2)

As American Heritage Arms, LLC, we issued one of our limited liability company common membership units for each of our limited liability company preferred membership units issued on May 31, 2007. On December 11, 2007, when we converted from a limited liability company to a corporation, each outstanding limited liability company common membership unit was converted into 100 shares of common stock. As a result, Cerberus received 12,430,000 shares of common stock and Thomas Millner received 70,000 shares of common stock.

(3)

Consideration was Cerberus' preferred membership interest in Bushmaster.

(4)

Consideration was Cerberus' common membership interest in Bushmaster.

(5)

Issued as restricted common stock.

(6)

The consideration was the common membership interests in Bushmaster of each of the Directors and executive officers of Bushmaster.

(7)

Between May 14, 2008 and June 30, 2009, we have granted options to purchase an aggregate of 2,253,480 shares of our common stock under our 2008 Stock Incentive Plan. Exercise prices range from $2.55 to $3.32 per share. None of these options to purchase our common stock have been exercised.

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PRINCIPAL AND SELLING STOCKHOLDERS

              The following table sets forth certain information as of July 31, 2009, with respect to the beneficial ownership of our common stock, after giving effect to the Recapitalization and this offering, by:

•

each of the executive officers named in the table under "Management—Compensation Discussion and Analysis—Summary Compensation Table;"

•

each of our directors;

•

all of our directors and executive officers as a group;

•

each person or group of affiliated persons who is known by us to beneficially own more than 5% of our common stock; and

•

each selling stockholder.

              The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. Unless otherwise indicated below, each beneficial owner named in the table below has sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. The information set forth in the following table excludes any shares of our common stock purchased in this offering by the respective beneficial owner and assumes that the Recapitalization had taken place.

              The number of shares of common stock outstanding, on an as converted basis, used in calculating the percentage for each listed person or entity includes common stock underlying options held by the person or entity that are exercisable within 60 days of            , 2009, but excludes common stock underlying options held by any other person or entity. Options issued under our stock option plans are generally not exercisable prior to the completion of this offering. Percentage of beneficial ownership is based on            shares of common stock outstanding as of             , 2009 (assuming that the Recapitalization had taken place) and excludes, as of            , 2009,             shares of common stock issuable upon exercise of options with a weighted average exercise price of $            per share. Unless

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otherwise indicated, the address of each beneficial owner is c/o Freedom Group, Inc., 870 Remington Drive, Madison, North Carolina 27025-1776.

	Shares Beneficially Owned Prior to Offering						Shares Beneficially Owned After Offering
						Shares Being Offered**
Name of Beneficial Owner	Number		Percent				Number	Percent
Named Executive Officers and Directors:
Theodore H. Torbeck(1)		56,926		*					%
Stephen P. Jackson, Jr.(2)		38,346		*
E. Scott Blackwell(3)		118,540		*
John DeSantis(4)		124,684		*
Jeff Bleustein(5)		—		*
Bobby Brown(6)		2,846		*
Grant Gregory(7)		—		*
General (ret.) Michael Hagee(8)		6,206		*
General (ret.) George Joulwan(9)		6,207		*
George Kollitides(10)		—		*
Walter McLallen(11)		379,504		2.3	%
James J. Pike(12)		2,846		*
Frank A. Savage(13)		2,846		*
Ed Rensi(14)		2,846		*
George Zahringer III(15)		2,846		*
David Bell(16)		—		*
Executive officers and directors as a group (13 persons)(17)		754,238		4.5	%
5% Stockholders
Stephen Feinberg(18)		15,847,341		94.3	%
Total

*

Less than 1%.

**

Assumes the underwriters do not exercise their over-allotment option. If the over-allotment option is exercised shares will be allocated pro rata based on the share amounts listed below.

(1)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(2)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(3)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(4)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(5)

Mr. Bleustein is a consultant to Cerberus and/or one or more of its affiliates.

(6)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(7)

Mr. Gregory is an employee of Cerberus and/or one or more of its affiliates. His business address is c/o Cerberus Capital Management, L.P., 299 Park Avenue, New York, New York 10171.

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(8)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(9)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(10)

Mr. Kollitides is an employee of Cerberus and/or one or more of its affiliates. His business address is c/o Cerberus Capital Management, L.P., 299 Park Avenue, New York, New York 10171.

(11)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(12)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(13)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(14)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(15)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(16)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009.

(17)

Includes            shares issuable upon exercise of options that are exercisable within 60 days of            , 2009. Immediately after the offering, our management will own approximately    % of our common stock (on a fully diluted basis).

(18)

One or more affiliates of Cerberus owns            % of our common stock. Stephen Feinberg exercises voting and investment authority over all of our securities owned by the affiliates of Cerberus. Thus, pursuant to Rule 13d-3 under the Exchange Act of 1934, as amended (the "Exchange Act"), Stephen Feinberg is deemed to beneficially own            % of our common stock. The address for Mr. Feinberg is c/o Cerberus Capital Management, L.P., 299 Park Avenue, New York, NY 10171.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

              The following is a summary of the material provisions of the instruments evidencing our material indebtedness. It does not include all of the provisions of our material indebtedness, copies of which have been filed as exhibits to our registration statement filed in connection with this offering.

ABL Revolver

              On July 29, 2009, we and certain of our subsidiaries entered into the ABL Revolver. The ABL Revolver is a four-year $180 million senior secured asset-based revolving credit facility, including sub-limits for letters of credit and swingline loans. Subject to certain terms and conditions, the ABL Revolver may be increased by an aggregate of $75 million during its term up to $255 million.

Security and Guarantees

              The ABL Revolver is secured by a first-priority lien on the present and future accounts receivable, inventory and certain general intangibles (including intellectual property), certain other assets and proceeds relating thereto of ours and each of the other borrowers and the guarantors. Obligations under the ABL Revolver are also secured by a second-priority lien in the collateral securing the Notes, other than owned real property of ours and the Guarantors (as defined below). Matters relating to the collateral are governed by the terms of security documents and an intercreditor agreement.

              Each of our existing wholly-owned domestic subsidiaries on the closing date of the ABL Revolver is either a borrower or a guarantor under the ABL Revolver. We may designate, in our discretion, from time to time, subsidiaries that are not borrowers to be joined as guarantors.

Interest

              Borrowings under the ABL Revolver bear interest at an annual rate of either (a) the LIBOR rate plus a spread or (b) the base rate plus a spread. The ABL Revolver includes an unused line fee charged at an annual rate to be paid monthly in arrears. LIBOR and base rate margins and the unused line fee will adjust within the ranges noted above from time to time based on excess availability as provided in the ABL Revolver. We will pay a fee on letters of credit equal to the applicable LIBOR margin and a fronting fee equal to 0.125% per annum, in each case to be paid monthly in arrears.

Covenants

              The ABL Revolver contains customary covenants applicable to us and our subsidiaries, other than certain unrestricted subsidiaries. The ABL Revolver contains certain financial covenants, as well as restrictions on, among other things, our ability to: incur debt; incur liens; declare or make distributions to our stockholders; make loans and investments; repay debt; enter into mergers, acquisitions and other business combinations; engage in asset sales; amend or modify our governing documents; engage in businesses other than our business as currently conducted; and enter into transactions with affiliates.

Events of Default

              The ABL Revolver includes customary events of default, including cross-defaults to the Notes and other indebtedness.

Senior Secured Notes due 2015

              On July 29, 2009, we issued an aggregate original principal amount of $200 million of 10¹/4% Senior Secured Notes due 2015 at an issue price of 97.827% in a private placement to initial purchasers who resold the Notes pursuant to Rule 144A in the United States and in accordance with Regulation S

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outside of the United States. The Notes are guaranteed by each of our existing wholly-owned domestic subsidiaries (the "Guarantors"), that are borrowers or guarantors under the ABL Revolver, which was entered into contemporaneously with the issuance of the Notes. Interest is payable on the Notes semi-annually on February 1 and August 1, commencing on February 1, 2010.

              We may redeem some or all of the Notes at any time prior to August 1, 2012 at a price equal to 100% of the principal amount thereof plus the make-whole premium described in the Notes. Thereafter, we may redeem some or all of the Notes at the redemption prices set forth in the Notes. We may also redeem up to 35% of the outstanding Notes on or prior to August 1, 2012 with the proceeds of certain equity offerings and capital contributions, subject to limitations, at the redemption price of 110.25%. In addition, on or prior to August 1, 2012, we may also redeem, no more than once in any twelve-month period, up to 10% of the original aggregate principal amount of the Notes at a price equal to 103% of the principal amount of the Notes.

Security

              The Notes and guarantees are secured by (i) a first-priority lien on substantially all existing and future personal property of ours and the Guarantors (other than assets securing the ABL Revolver with a first-priority lien), including 100% of the equity interests in the Guarantors, (ii) a first-priority lien on certain owned real property of ours and the Guarantors and (iii) a second-priority lien on intellectual property and working capital of ours and the Guarantors, such as receivables, inventory, related general intangibles, and other assets and proceeds thereof that secure the ABL Revolver on a first-priority basis.

Covenants

              The indenture governing the Notes contains covenants which include, among others, limitations on the ability of ours and some of our subsidiaries to: incur or guarantee additional debt or issue disqualified or preferred stock; pay dividends, repurchase equity or prepay subordinated debt; make certain investments; enter into transactions with affiliates; merge, consolidate or sell all or substantially all assets; allow certain restrictions on the ability of the Guarantors to pay dividends or make other payments to us; and incur liens on assets. The term EBITDA used throughout this prospectus is a primary component of the fixed charge coverage ratio used in certain of the covenants in the indenture governing the Notes.

Events of Default

              The indenture governing the Notes contains events of default with respect to: default in payments of interest after a 30-day grace period or a default in the payment of principal when due; our failure to comply with a covenant in the indenture limiting its ability to merge, consolidate or sell all or substantially all of its assets; default in the performance of the change of control covenant in the indenture that continues for more than 30 days after notice of default has been provided to us; default in the performance of any other covenant that continues for more than 60 days after notice of default has been provided to us; failure to make any payment when due, including applicable grace periods, under any indebtedness for money borrowed by us or one of our significant subsidiaries having a principal amount in excess of $20 million; the acceleration of the maturity of any indebtedness for money borrowed by us or one of our significant subsidiaries having a principal amount in excess of $20 million; failure by us or one of our significant subsidiaries to pay final judgments aggregating in excess of $20 million, which judgments are not discharged, waived or stayed for 60 days; certain events of bankruptcy, insolvency or reorganization of us or one of our significant subsidiaries; the guarantee of the Notes by one of our significant subsidiaries ceases to be in full force and effect and such default continues for 10 days; certain defaults, repudiations or judicial determinations with respect to the performance of the security documents relating to the Notes, which materially adversely affect the

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enforceability, validity, perfection or priority of the liens on a material portion of the collateral for the Notes, which default, repudiation or determination is not rescinded, stayed or waived within 60 days after notice is given.

              If any of these events of default occurs and is continuing with respect to the Notes, the trustee or the holders of not less than 25% in principal amount of the Notes may declare the entire principal amount of the Notes to be immediately due and payable. If any event of default with respect to the Notes occurs because of events of bankruptcy, insolvency or reorganization, the entire principal amount of the Notes will be automatically accelerated, without any action by the trustee or any holder.

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DESCRIPTION OF CAPITAL STOCK

              The following description of our capital stock and provisions of our amended and restated certificate of incorporation and amended and restated bylaws are summaries. You should refer to the amended and restated certificate of incorporation and the amended and restated bylaws that will be in effect upon completion of this offering, copies of which have been filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part. The description of our common stock and preferred stock reflect the Recapitalization which will occur prior to the closing of this offering.

              Upon the closing of this offering, our authorized capital stock will consist of                  shares of common stock, par value $0.01 per share, and                  shares of preferred stock, par value $0.01 per share, all of which preferred stock will be undesignated.

              As of            , 2009, we had issued and outstanding:

•

shares of common stock held by            stockholders of record; and

•

shares of preferred stock held by            stockholders of record.

              As of            , 2009, we also had outstanding options to purchase            shares of common stock at a weighted average exercise price of $            per share.

Common Stock

              Upon the closing of this offering, there will be            shares of common stock outstanding (assuming no exercise of the underwriters' over-allotment option and the Recapitalization, including common stock underlying options that are exercisable within 60 days of                        , 2009, but excluding common stock underlying all other options). All outstanding shares of common stock are fully paid and nonassessable, and the shares of our common stock that will be issued on completion of this offering will be fully paid and nonassessable.

              Subject to preferences that may be applicable to any then outstanding series of preferred stock, the holders of common stock are entitled to receive ratably any dividends that may be declared from time to time by the board of directors. In the event of our liquidation, dissolution or winding-up, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding. Our common stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to our common stock.

              The holders of our common stock are entitled to one vote per share and do not have cumulative voting rights. As a result, stockholders owning or controlling more than 50% of the total votes cast for election of directors can elect all the directors in that slate for the year.

Preferred Stock

              Our board of directors has the authority, by adopting resolutions, to issue shares of preferred stock in one or more series, with the designations and preferences for each series set forth in the adopting resolutions. Our certificate of incorporation authorizes our board of directors to determine, among other things, the rights, preferences and limitations pertaining to each series of preferred stock. Our board of directors could authorize the issuance of preferred stock with terms and conditions that could discourage a takeover or other transaction that some holders of our common stock might believe to be in their best interests or in which holders of common stock might receive a premium for their shares over and above market price.

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Limitations on Directors' Liability

              Our amended and restated certificate of incorporation and amended and restated bylaws, which will be filed immediately prior to the closing of this offering, will indemnify our directors to the fullest extent permitted by the DGCL. The DGCL permits a corporation to limit or eliminate a director's personal liability to the corporation or the holders of its capital stock for breach of duty. This limitation is generally unavailable for acts or omissions by a director which (i) were in bad faith, (ii) were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated or (iii) involved a financial profit or other advantage to which such director was not legally entitled. The DGCL also prohibits limitations on director liability for acts or omissions which resulted in a violation of a statute prohibiting certain dividend declarations, certain payments to stockholders after dissolution and particular types of loans. The effect of these provisions is to eliminate the rights of our Company and our stockholders (through stockholders' derivative suits on behalf of our company) to recover monetary damages against a director for breach of fiduciary duty as a director (including breaches resulting from grossly negligent behavior), except in the situations described above. These provisions will not limit the liability of directors under the federal securities laws of the United States.

Transfer Agent and Registrar

              The Transfer Agent and Registrar for our common stock is            .

Anti-Takeover Effects of Delaware Law and our Corporate Charter Documents

Delaware Law

              We are subject to Section 203 of the DGCL. Subject to certain exceptions, Section 203 prevents a publicly held Delaware corporation from engaging in a "business combination" with any "interested stockholder" for three years following the date that the person became an interested stockholder, unless the interested stockholder attained such status with the approval of our board of directors or unless the business combination is approved in a prescribed manner. A "business combination" includes, among other things, a merger or consolidation involving us and the "interested stockholder" and the sale of more than 10% of our assets. In general, an "interested stockholder" is any entity or person beneficially owning 15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person. The restrictions contained in Section 203 are not applicable to any of our existing stockholders that will own 15% or more of our outstanding voting stock upon the closing of this offering.

Staggered Board

              Our amended and restated certificate of incorporation and our amended and restated bylaws allow for not less than            and not more than            directors. In addition, our amended and restated certificate of incorporation and our amended and restated bylaws provide that upon such date that Cerberus, its Affiliates, or any person who is an express assignee or designee of Cerberus of its rights under our amended and restated certificate of incorporation (and such assignee's or designee's Affiliates) (of these entities, the entity that is the beneficial owner of the largest number of shares is referred to as the Designated Controlling Stockholder) ceases to own, in the aggregate, at least 50% of the outstanding shares of our common stock, which we refer to as the 50% Trigger Date, directors may be removed only for cause and only by the affirmative vote of the holders of two-thirds of our outstanding shares of capital stock, unless approved by our board of directors. Under our amended and restated certificate of incorporation and amended and restated bylaws, any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, upon the 50% Trigger Date, may be filled only by vote of a majority of our directors then in office (prior to such date

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any vacancy on the board of directors may be filled by the Designated Controlling Stockholder). Furthermore, our amended and restated certificate of incorporation provides that upon the 50% Trigger Date, the authorized number of directors may be changed only by the affirmative vote of two-thirds of our outstanding shares of capital stock or by the resolution of our board of directors (prior to such date, the authorized number of directors may be changed by the Designated Controlling Stockholder). The classification of our board of directors and the limitations on the ability of our stockholders to remove directors, change the authorized number of directors and fill vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of our company.

Stockholder Action; Special Meeting of Stockholders; Advance Notice Requirements for Stockholder Proposals and Director Nominations

              Our amended and restated certificate of incorporation and our amended and restated bylaws provide that upon such date that Cerberus, its Affiliates, or any assignee or designee of Cerberus, and such assignees or designee's Affiliates cease to own, in the aggregate, at least 30% of the outstanding shares of our common stock, which we refer to as the 30% Trigger Date, any action required or permitted to be taken by our stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting, and if the acting stockholders have fulfilled certain informational requirements, including apprising us of their derivative holdings in the company, and, in the case of director nominations, whether the nominating stockholder has engaged in any related party transactions with the nominee. Our amended and restated certificate of incorporation and our amended and restated bylaws provide that, upon the 30% Trigger Date, action may not be taken by written action in lieu of a meeting (prior to such time action may be taken by written consent). Our amended and restated certificate of incorporation and our amended and restated bylaws also provide that, upon the 30% Trigger Date except as otherwise required by law, special meetings of the stockholders can only be called by the chairman of our board of directors, or at the written request of a majority of our board of directors (prior to such time, special meetings of stockholders may be called by any of Cerberus, its Affiliates, or any assignee or designee of Cerberus, and such assignee's or designee's Affiliates or any director employed by any of them). These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of our outstanding voting securities.

Voting

              The DGCL provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation's certificate of incorporation or bylaws, unless a corporation's certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Our amended and restated bylaws may be amended or repealed by a majority vote of our board of directors or, prior to the 50% Trigger Date, by the Designated Controlling Stockholder and upon the 50% Trigger Date, by our stockholders at any respective regular or special meeting, provided notice of such action must be included in the notice of a special meeting; except for: any amendment or repeal of a bylaw provision requiring a supermajority vote of the stockholders to take action under such provision, which amendment or repeal also requires the same supermajority vote of the stockholders; and indemnification rights conferred upon directors or officers of Cerberus by the amended and restated bylaws, which may only be amended or repealed prospectively.

              In addition, on or after the 50% Trigger Date, two-thirds of the outstanding voting stock, voting as a single class, shall be required to: (i) change the number of directors serving on the board of directors; (ii) remove a director from office; (iii) approve a Business Combination (as defined in the amended and restated certificate of incorporation) without the fulfillment of several pre-conditions, including: certain minimum requirements with respect to consideration paid in such Business

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Combination, form of consideration, payment of dividends, minimum dividend payments, as well as prohibitions on interested stockholder transactions and procedural requirements related to the delivery of reports to stockholders.

"Blank Check" Preferred Stock

              We will be authorized to issue, without any further vote or action by the stockholders, up to            shares of preferred stock in one or more classes or series and, with respect to each such class or series, to fix the number of shares constituting the class or series and the designation of the class or series, the voting powers (if any) of the shares of the class or series, and the preferences and relative, participating, optional and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of such class or series.

Credit Facility

              Under the credit agreement governing the ABL Revolver, a change of control may lead the lenders to exercise remedies, such as acceleration of the loan, termination of their obligations to fund additional advances and collection against the collateral securing such loan.

Notes

              Under the indenture governing the Notes, a change of control may require us to offer to repurchase the all of the outstanding Notes for cash at a premium to the principal amount of the Notes.

Registration Rights

              Upon the closing of this offering, Cerberus, the holder of            shares of our common stock, will have the right to require us to register its shares under the Securities Act under specified circumstances.

Demand and Form S-3 Registration Rights

              Beginning twelve months after the closing of this offering, Cerberus, subject to specified limitations, may require that we register all or part of its shares of our common stock for sale under the Securities Act on an unlimited number of occasions. In addition, Cerberus may from time to time make demand for registrations on Form S-3, a short form registration statement, when we are eligible to use that form.

Piggyback Registration Rights

              If we register any of our common stock, either for our own account or for the account of other securityholders, Cerberus is entitled to notice of the registration and to include its shares of common stock in the registration.

Limitations and Expenses

              Other than in a demand registration, with specified exceptions, Cerberus's right to include shares in a registration is subject to the right of the underwriters to limit the number of shares included in the offering. All fees, costs and expenses of any demand registrations and any registrations on Form S-3 will be paid by us, and all selling expenses, including underwriting discounts and commissions, will be paid by the holders of the securities being registered.

              For additional information, see "Certain Relationships and Related Person Transactions—Registration Rights Agreement."

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SHARES ELIGIBLE FOR FUTURE SALE

              Prior to this offering, there has been no market for our common stock, and a liquid trading market for our common stock may not develop or be sustained after this offering. Future sales of substantial amounts of our common stock, including shares issued upon exercise of outstanding options or in the public market after this offering, or the anticipation of those sales, could adversely affect the price of our common stock from time to time and could impair our ability to raise capital through sales of our equity securities.

              Based on            shares of common stock outstanding as of            , 2009 (assuming that the Recapitalization had taken place) and excluding, as of            , 2009,             shares of common stock issuable upon exercise of options with a weighted average exercise price of $            per share, upon the completion of this offering, we will have outstanding            shares of common stock, after giving effect to the issuance of            shares of common stock in this offering.

              Of the shares to be outstanding after the completion of this offering, the            shares sold in this offering will be freely tradable without restriction under the Securities Act unless purchased by our "affiliates," as that term is defined in Rule 144 under the Securities Act. Of the remaining            shares of common stock,             are held by "affiliates" and therefore are "restricted securities" under Rule 144. After the 180-day lock-up period, these restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration, such as under Rule 144 or Rule 701 under the Securities Act. All of these restricted securities and all other shares of common stock other than those sold in this offering will be subject to the 180-day lock-up period described below.

Rule 144

              In general, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three month period only a number of securities that does not exceed the greater of either of the following:

•

1% of the number of shares of our common stock then outstanding, which will equal approximately            shares immediately after this offering assuming no exercise of the underwriters' over-allotment option, based on            shares of our common stock and preferred stock outstanding as of June 30, 2009; or

•

the average weekly trading volume of our common stock on the            during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sales both by affiliates and by non-affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

Lock-Up Agreements

              We, our directors and executive officers and the selling stockholders have agreed that, without the prior written consent of                                     , we and they will not, during the period ending 180 days after the date of this prospectus, subject to exceptions specified in the lock-up agreements, dispose of or hedge any shares of our common stock or any securities convertible into or exchangeable for our common stock.                                    may waive these restrictions in its discretion. Currently,

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                                    has no intention to release the abovementioned holders of our common stock from the lock-up restrictions described above.

Rule 701

              Rule 701, as currently in effect, permits resales of shares in reliance upon Rule 144 but without compliance with certain restrictions, including the holding period requirement, of Rule 144. Any of our employees, officers, directors or consultants who purchased shares under a written compensatory plan or contract may be entitled to rely on the resale provisions of Rule 701. Rule 701 permits affiliates to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. Rule 701 further provides that non-affiliates may sell their shares in reliance on Rule 144 without having to comply with the holding period, public information, volume limitation or notice provisions of Rule 144. All holders of Rule 701 shares are required to wait until 90 days after the date of this prospectus before selling their shares.

Registration Rights

              Upon the closing of this offering, the holders of an aggregate of            shares of our common stock will have the right to require us to register these shares under the Securities Act under specified circumstances. After registration pursuant to these rights, these shares will become freely tradable without restriction under the Securities Act. Please see "Description of Capital Stock—Registration Rights Agreement" for additional information regarding these registration rights.

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CERTAIN UNITED STATES FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS

              The following is a general discussion of certain United States federal income and estate tax consequences of the ownership and disposition of our common stock by a non-U.S. holder that purchases shares pursuant to this offer. As used in this discussion, the term non-U.S. holder means a beneficial owner of our common stock that, for U.S. federal income tax purposes, is an individual, corporation, estate or trust other than:

•

an individual who is a citizen or resident of the United States;

•

a corporation (including any entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any State thereof or the District of Columbia;

•

an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or

•

a trust (1) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust, or (2) that has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.

              If any entity taxed as a partnership for U.S. federal income tax purposes holds common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. A partnership and a partner of a partnership holding our common stock are urged to consult their own tax advisor.

              This discussion does not consider:

•

federal gift tax consequences, U.S. state or local or non-U.S. tax consequences (and holders should also note that the rules for determining whether an individual is a non-resident alien for income tax purposes may differ from those applicable for estate tax purposes);

•

specific facts and circumstances that may be relevant to a particular non-U.S. holder's tax position, including, if the non-U.S. holder is a partnership or trust, that the U.S. tax consequences of holding and disposing of our common stock may be affected by certain determinations made at the partner or beneficiary level;

•

the tax consequences for the stockholders or beneficiaries of a non-U.S. holder;

•

special tax rules that may apply to particular non-U.S. holders, such as financial institutions, insurance companies, tax-exempt organizations, hybrid entities, broker-dealers, traders in securities, U.S. expatriates and former long-term permanent residents of the United States, an integral part or controlled entity of a foreign sovereign, regulated investment companies, "controlled foreign corporations," "passive foreign investment companies," "foreign personal holding companies," corporations that accumulate earnings to avoid U.S. federal income tax, tax-qualified retirement plans, holders subject to the alternative minimum tax, persons who own more than 5% of our common stock and persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation; or

•

special tax rules that may apply to a non-U.S. holder that holds our common stock as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment.

              The following discussion is based on provisions of the Internal Revenue Code of 1986, as amended (the "Code"), applicable U.S. Treasury regulations and administrative and judicial

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interpretations, all as in effect on the date of this prospectus, and all of which are subject to change, retroactively or prospectively. We have not requested, and do not intend to request, a ruling from the U.S. Internal Revenue Service (the "IRS") with respect to any of the U.S. federal income or estate tax consequences described below, and as a result there can be no assurance that the IRS will agree with the conclusions we have reached and describe herein. The following summary assumes that a non-U.S. holder holds our common stock as a "capital asset" within the meaning of section 1221 of the Code (generally, property held for investment). Each non-U.S. holder should consult a tax advisor regarding the U.S. federal, state, local and non-U.S. income and other tax consequences of acquiring, holding and disposing of shares of our common stock.

Distributions and Dividends

              Generally, distributions paid to a non-U.S. holder with respect to our common stock will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the non-U.S. holder's investment, up to such holder's tax basis in the common stock. Any remaining excess will be treated as capital gain, subject to the tax treatment described below in "Gain on Disposition of Common Stock."

              In the event that we pay dividends on our common stock, we will have to withhold a U.S. federal withholding tax at a rate of 30%, or a lower rate under an applicable income tax treaty, from the gross amount of dividends paid to a non-U.S. holder.

              Dividends that are effectively connected with a non-U.S. holder's conduct of a trade or business in the United States and, if an income tax treaty applies, attributable to a permanent establishment in the United States ("ECI"), are taxed on a net income basis at the regular graduated rates and in the manner applicable to U.S. persons. In that case, we will not have to withhold U.S. federal withholding tax if the non-U.S. holder complies with applicable certification and disclosure requirements. In addition, in the case of a holder that is a foreign corporation and has ECI, a branch profits tax may be imposed at a 30% rate, or a lower rate under an applicable income tax treaty, on such holder's dividend equivalent amount.

              In order to claim the benefit of an income tax treaty or claim exemption from withholding because the income is effectively connected with the conduct of a trade or business in the United States, the non-U.S. holder must provide a properly executed Form W-8BEN, for treaty benefits, or W-8ECI, for effectively connected income, prior to the payment of dividends. These forms must be periodically updated. Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty and their ability to claim exemption from withholding because the income is effectively connected with the conduct of a trade or business in the United States, and related certification requirements.

              A non-U.S. holder that is eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by filing an appropriate claim for a refund with the IRS in a timely manner.

Gain on Disposition of Common Stock

              A non-U.S. holder generally will not be taxed on gain recognized on a disposition of our common stock unless:

•

the gain is effectively connected with a non-U.S. holder's conduct of a trade or business in the United States and, if an income tax treaty applies, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States; in this case, the gain

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will be taxed on a net income basis at the regular graduated rates and in the manner applicable to U.S. persons, unless an applicable treaty provides otherwise, and, if the non-U.S. holder is a foreign corporation, the branch profits tax described above may also apply;

•

the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition and meets other requirements; in this case, the non-U.S. holder will be subject to a 30% tax on the gain derived from the disposition; or

•

we are or have been a United States real property holding corporation, or "USRPHC," for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. holder held our common stock; in this case, the non-U.S. holder may be subject to U.S. federal income tax on its net gain derived from the disposition of our common stock at regular graduated rates and in the manner applicable to U.S. persons. Generally, a corporation is a USRPHC if the fair market value of its U.S. real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. If we are, or were to become, a USRPHC, gain realized upon disposition of our common stock by a non-U.S. holder that did not directly or indirectly own more than 5% of our common stock during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. holder held our common stock generally would not be subject to U.S. federal income tax, provided that our common stock is "regularly traded on an established securities market" within the meaning of Section 897(c)(3) of the Code. We believe that we are not currently, and we do not anticipate becoming in the future, a USRPHC.

Federal Estate Tax

              Common stock owned or treated as owned by an individual who is a non-U.S. holder (as specifically defined for estate tax purposes) at the time of death, will be included in the individual's gross estate for U.S. federal estate tax purposes, and therefore may be subject to U.S. federal estate tax, unless an applicable estate tax or other treaty provides otherwise.

Information Reporting and Backup Withholding Tax

              We must report annually to the IRS and to each non-U.S. holder the amount of dividends paid to that holder and the tax withheld from those dividends. These reporting requirements apply regardless of whether withholding was reduced or eliminated by an applicable income tax treaty. Copies of the information returns reporting those dividends and withholding may also be made available to the tax authorities in the country in which the non-U.S. holder is a resident under the provisions of an applicable income tax treaty or agreement.

              Under some circumstances, U.S. Treasury regulations require additional information reporting and backup withholding (currently at a rate of 28%) on some payments on our common stock. The gross amount of dividends paid to a non-U.S. holder that fails to certify its non-U.S. holder status in accordance with applicable U.S. Treasury regulations generally will be reduced by backup withholding at the applicable rate.

              The payment of the proceeds of the disposition of our common stock by a non-U.S. holder to or through the U.S. office of any broker generally will be reported to the IRS and reduced by backup withholding unless the non-U.S. holder either certifies its status as a non-U.S. holder under penalties of perjury or otherwise establishes an exemption. The payment of the proceeds of the disposition of our common stock by a non-U.S. holder to or through a non-U.S. office of a non-U.S. broker generally will not be reduced by backup withholding or reported to the IRS unless the non-U.S. broker has certain

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enumerated connections with the United States. In general, the payment of proceeds from the disposition of our common stock by or through a non-U.S. office of a broker that is a U.S. person or that has certain enumerated connections with the United States will be reported to the IRS and may, in limited circumstances, be reduced by backup withholding, unless the broker receives a statement from the non-U.S. holder, signed under penalty of perjury, certifying its non-U.S. status or the broker has documentary evidence in its files that the holder is a non-U.S. holder.

              Non-U.S. holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

              Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder will be refunded, or credited against the holder's U.S. federal income tax liability, if any, provided that the required information or appropriate claim for refund is furnished to the IRS in a timely manner.

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UNDERWRITING

                                                   are acting as representatives of each of the underwriters named below. Subject to the terms and conditions set forth in a purchase agreement among us, the selling stockholders and the underwriters, we and the selling stockholders have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us and the selling stockholders, the number of shares of common stock set forth opposite its name below.

Underwriter
Number of
Shares

              Subject to the terms and conditions set forth in the purchase agreement, the underwriters have agreed, severally and not jointly, to purchase all of the shares sold under the purchase agreement if any of these shares are purchased. If an underwriter defaults, the purchase agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the purchase agreement may be terminated.

              We and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

              The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the purchase agreement, such as the receipt by the underwriters of officer's certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Commissions and Discounts

              The representatives have advised us and the selling stockholders that the underwriters propose initially to offer the shares to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $            per share. The underwriter may allow, and the dealers may reallow, a discount not in excess of $            per share to other dealers. After the initial offering, the public offering price, concession or any other term of the offering may be changed.

              The following table shows the public offering price, underwriting discount and proceeds before expenses to us and the selling stockholders. The information assumes either no exercise or full exercise by the underwriters of their over-allotment option.

	Per Share	Without Option	With Option
Public offering price	$	$	$
Underwriting discount	$	$	$
Proceeds, before expenses, to us	$	$	$
Proceeds, before expenses, to the selling stockholders	$	$	$

              The expenses of the offering, not including the underwriting discount, are estimated at $            and are payable by us and the selling stockholders.

Over-allotment Option

              We and the selling stockholders have granted an option to the underwriters to purchase up to            additional shares at the public offering price, less the underwriting discount. The underwriters may exercise this option for 30 days from the date of this prospectus solely to cover any

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over-allotments. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the purchase agreement, to purchase a number of additional shares proportionate to that underwriter's initial amount reflected in the above table.

No Sales of Similar Securities

              We and the selling stockholders and our executive officers and directors have agreed not to sell or transfer any common stock or securities convertible into, exchangeable for, exercisable for, or repayable with common stock, for 180 days after the date of this prospectus without first obtaining the written consent of                                     . Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:

•

offer, pledge, sell or contract to sell any common stock,

•

sell any option or contract to purchase any common stock,

•

purchase any option or contract to sell any common stock,

•

grant any option, right or warrant for the sale of any common stock,

•

lend or otherwise dispose of or transfer any common stock,

•

request or demand that we file a registration statement related to the common stock, or

•

enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any common stock whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.

              This lock-up provision applies to common stock and to securities convertible into or exchangeable or exercisable for or repayable with common stock. It also applies to common stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition. In the event that either (x) during the last 17 days of lock-up period referred to above, we issue an earnings release or material news or a material event relating to the Company occurs or (y) prior to the expiration of the lock-up period, we announce that we will release earnings results or become aware that material news or a material event will occur during the 16-day period beginning on the last day of the lock-up period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

Listing

              We expect the shares to be approved for listing on the            under the symbol "            ."

              Before this offering, there has been no public market for our common stock. The initial public offering price will be determined through negotiations among us, the selling stockholders and the representatives. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:

•

the valuation multiples of publicly traded companies that the representatives believe to be comparable to us,

•

our financial information,

•

the history of, and the prospects for, our company and the industry in which we compete,

•

an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues,

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•

the present state of our development, and

•

the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

              An active trading market for the shares may not develop. It is also possible that after the offering the shares will not trade in the public market at or above the initial public offering price.

              The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.

Price Stabilization, Short Positions and Penalty Bids

              Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our common stock. However, the representatives may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix or maintain that price.

              In connection with the offering, the underwriters may purchase and sell our common stock in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than it is required to purchase in the offering. "Covered" short sales are sales made in an amount not greater than the underwriters' option to purchase additional shares in the offering. The underwriters may close out any covered short position by either exercising their over-allotment option or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. "Naked" short sales are sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of common stock made by the underwriters in the open market prior to the completion of the offering.

              The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

              Similar to other purchase transactions, the underwriters' purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market.

              Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Electronic Offer, Sale and Distribution of Shares

              In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail. In addition, certain of the underwriters may facilitate Internet distribution for this offering to certain of its Internet subscription customers. Such

159

underwriters may allocate a limited number of shares for sale to its online brokerage customers. An electronic prospectus is available on the Internet web site maintained by                                    . Other than the prospectus in electronic format, the information on the                                    web site is not part of this prospectus.

Other Relationships

              Some of the underwriters and their affiliates that may participate in this offering have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. Also, George Zahringer III, one of the members of our board of directors, is a managing director of Deutsche Bank. Mr. Zahringer may be entitled to a portion of the fees paid to Deutsche Bank, as initial purchaser, in connection with our offering of the Notes (as described herein).

Notice to Prospective Investors in the EEA

              In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (as defined below) (each, a "Relevant Member State") an offer to the public of any shares which are the subject of the offering contemplated by this prospectus may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a)

to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;



(b)

to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year, (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;



(c)

by the underwriters to fewer than 100 natural or legal persons (other than "qualified investors" as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives for any such offer; or



(d)

in any other circumstances falling within Article 3(2) of the Prospectus Directive;

provided that no such offer of shares shall result in a requirement for the publication by us or any representative of a prospectus pursuant to Article 3 of the Prospectus Directive.

              Any person making or intending to make any offer of shares within the EEA should only do so in circumstances in which no obligation arises for us or the underwriter to produce a prospectus for such offer. Neither we nor the underwriters have authorized, nor do they authorize, the making of any offer of shares through any financial intermediary, other than offers made by the underwriters which constitute the final offering of shares contemplated in this prospectus.

              For the purposes of this provision, and your representation below, the expression an "offer to the public" in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase any shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

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              Each person in a Relevant Member State who receives any communication in respect of, or who acquires any shares under, the offer of shares contemplated by this prospectus will be deemed to have represented, warranted and agreed to and with us and each underwriter that:

(a)

it is a "qualified investor" within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive; and



(b)

in the case of any shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the shares acquired by it in the offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than "qualified investors" (as defined in the Prospectus Directive), or in circumstances in which the prior consent of the representatives has been given to the offer or resale; or (ii) where shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those shares to it is not treated under the Prospectus Directive as having been made to such persons.

Notice to Prospective Investors in Switzerland

              This document, as well as any other material relating to the shares which are the subject of the offering contemplated by this prospectus, do not constitute an issue prospectus pursuant to Article 652a of the Swiss Code of Obligations. The shares will not be listed on the SWX Swiss Exchange and, therefore, the documents relating to the shares, including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of SWX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SWX Swiss Exchange. The shares are being offered in Switzerland by way of a private placement, i.e., to a small number of selected investors only, without any public offer and only to investors who do not purchase the shares with the intention to distribute them to the public. The investors will be individually approached by us from time to time. This document, as well as any other material relating to the shares, is personal and confidential and do not constitute an offer to any other person. This document may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available to other persons without our express consent. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.

Notice to Prospective Investors in the Dubai International Financial Centre

              This document relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. This document is intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no responsibility for reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not approved this document nor taken steps to verify the information set out in it, and has no responsibility for it. The shares which are the subject of the offering contemplated by this prospectus may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this document you should consult an authorised financial adviser

161

LEGAL MATTERS

              Milbank, Tweed, Hadley & McCloy LLP, New York, New York, will pass upon the validity of the common stock offered hereby. Cahill Gordon & Reindel LLP, New York, New York, is counsel for the underwriters in connection with this offering.

EXPERTS

              The consolidated financial statements and schedule of Freedom Group, Inc. as of and for the years ended December 31, 2008 and 2007 and the period from April 1, 2006 through December 31, 2006, and the consolidated financial statements of Bushmaster Firearms, Inc. and subsidiaries for the period from January 1, 2006 through March 31, 2006, included in this prospectus and elsewhere in the registration statement have been so included in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing in giving said reports.

              The statements of operations, shareholders' equity and cash flow of Defense Procurement/Manufacturing Services, Inc. for the period of January 1, 2007 through December 13, 2007, included in this prospectus and elsewhere in the registration statement have been so included in reliance upon the report of Grant Thornton LLP, independent certified public accountants, upon the authority of said firm as experts in accounting and auditing in giving said reports.

              The consolidated financial statements of RACI Holding, Inc. and subsidiaries for the period from January 1, 2007 through May 31, 2007 and for the year ended December 31, 2006 included in this prospectus and elsewhere in the registration statement have been so included in reliance upon the report of Grant Thornton LLP, independent certified public accountants, upon the authority of said firm as experts in accounting and auditing in giving said reports.

              The consolidated financial statements of The Marlin Firearms Company and its subsidiary as of December 31, 2007 and 2006 and for each of the three years in the period ended December 31, 2007 included in this prospectus have been so included in reliance upon the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

              We have filed with the SEC a registration statement on Form S-1 under the Securities Act to register our common stock being offered in this prospectus. This prospectus, which forms part of the registration statement, does not contain all the information included in the registration statement and the amendments, exhibits and schedules thereto. For further information about us and the common stock being offered in this prospectus, we refer you to the registration statement and the exhibits and schedules thereto. We are not currently subject to the informational requirements of the Exchange Act. As a result of the offering of the shares of our common stock, we will become subject to the informational requirements of the Exchange Act, and, in accordance therewith, will file quarterly and annual reports and other information with the SEC. The registration statement including the exhibits and schedules thereto, such reports and other information may be read and copied at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site (http://www.sec.gov) that contains our SEC filings. Statements made in this prospectus about legal documents may not necessarily be complete and you should read the documents which are filed as exhibits to the registration statement otherwise filed with the SEC.

162

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Freedom Group Inc. and Subsidiaries
Audited Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm		F-3
Consolidated Balance Sheets as of December 31, 2008, December 31, 2007 and December 31, 2006		F-4
Consolidated Statements of Operations for the years ended December 31, 2008 and December 31, 2007 and the period from April 1, 2006 through December 31, 2006		F-5
Consolidated Statements of Stockholders' Equity (Deficit), Mezzanine Equity and Accumulated Other Comprehensive Income (Loss) for the years ended December 31, 2008 and 2007 and for the period from April 1, 2006 to December 31, 2006		F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2008 and December 31, 2007, and the period from April 1, 2006 through December 31, 2006		F-7
Notes to Consolidated Financial Statements		F-9
Unaudited Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2009 and June 30, 2008		F-60
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2009 and June 30, 2008		F-61
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and June 30, 2008		F-62
Notes to Consolidated Unaudited Financial Statements		F-63
Bushmaster Firearms, Inc. and Subsidiaries (Predecessor)
Report of Independent Registered Public Accounting Firm		F-91
Consolidated Statement of Income for the period from January 1, 2006 to March 31, 2006		F-92
Consolidated Statement of Changes in Stockholders' Equity for the period from January 1, 2006 through March 31, 2006		F-93
Consolidated Statement of Cash Flows for the period from January 1, 2006 through March 31, 2006		F-94
Notes to Consolidated Financial Statements		F-95
Significant Acquired Businesses:
RACI Holding, Inc. and Subsidiaries
Report of Independent Certified Public Accountants		F-104
Consolidated Statements of Operations for the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006		F-105
Consolidated Statements of Shareholders' Deficit and Comprehensive Loss for the period from January 1, 2007 through May 31, 2007 and for the year ended December 31, 2006		F-106
Consolidated Statements of Cash Flows for the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006		F-107
Notes to Consolidated Financial Statements		F-108
The Marlin Firearms Company and Subsidiary
Report of Independent Auditors		F-138
Consolidated Balance Sheets as of December 31, 2007 and December 31, 2006		F-139
Consolidated Statements of Income for the years ended December 31, 2007, December 31, 2006 and December 31, 2005		F-140
Statements of Changes in Stockholders' Equity and Comprehensive Income for the years ended December 31, 2007, December 31, 2006 and December 31, 2005		F-141

F-1

	Page
Consolidated Statements of Cash Flows for the years ended December 31, 2007, December 31, 2006 and December 31, 2005		F-142
Notes to Consolidated Financial Statements		F-143
Defense Procurement/Manufacturing Services, Inc.
Report of Independent Certified Public Accountants		F-155
Statement of Operations for the period January 1, 2007 through December 13, 2007		F-156
Statement of Changes in Stockholders' Equity for the period January 1, 2007 through December 13, 2007		F-157
Statement of Cash Flows for the period January 1, 2007 through December 13, 2007		F-158
Notes to Financial Statements		F-159

F-2

Report of Independent Registered Public Accounting Firm

To the Board of Directors of
Freedom Group, Inc.:

              We have audited the accompanying consolidated balance sheets of Freedom Group, Inc. and its subsidiaries (collectively, the Company), as of December 31, 2008, 2007 and 2006, and the related consolidated statements of operations, stockholders' equity (deficit), mezzanine equity and accumulated other comprehensive income (loss), and cash flows for the years ended December 31, 2008, December 31, 2007, and the period from April 1, 2006, to December 31, 2006. Our audits of the basic financial statements included the financial statement schedule listed in the index appearing under Item 16(b). These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audits.

              We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

              In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Freedom Group, Inc. and subsidiaries as of December 31, 2008, December 31, 2007, and as of December 31, 2006, and the results of its operations and its cash flows for the years ended December 31, 2008, December 31, 2007, and the period from April 1, 2006, to December 31, 2006, in conformity with accounting principles generally accepted by the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

              As discussed in Note 16 to the consolidated financial statements, the Company adopted Financial Accounting Standards Board Statement (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," as of January 1, 2007. Also, as discussed in Note 17 to the consolidated financial statements, the Company adopted FASB No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans," as of December 31, 2007.

/s/ Grant Thornton LLP

Charlotte, North Carolina
July 2, 2009 (except for
        Note 14, as to which
        the date is October 20, 2009)

F-3

Freedom Group, Inc. and Subsidiaries

Consolidated Balance Sheets

(Dollars in Millions, Except Share and Per Share Data)

		December 31, 2008			December 31, 2007			December 31, 2006
ASSETS
Current Assets
Cash and Cash Equivalents		$	77.8		$	24.7		$	0.7
Accounts Receivable Trade—net			108.6			79.5			6.2
Inventories—net			122.8			133.4			9.1
Supplies Inventory—net			6.5			6.3			—
Prepaid Expenses and Other Current Assets			19.2			24.1			0.6
Assets Held for Sale			1.9			—			—
Deferred Tax Assets			10.9			13.3			0.3
	Total Current Assets		347.7			281.3			16.9
Property, Plant and Equipment—net			120.2			105.6			1.0
Goodwill and Intangibles—net			185.0			220.6			66.5
Debt Issuance Costs—net			4.9			7.4			1.7
Other Noncurrent Assets			15.1			13.4			—
	Total Assets	$	672.9		$	628.3		$	86.1
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable		$	45.2		$	34.9		$	3.2
Book Overdraft			—			5.7			—
Short-Term Debt			3.2			3.5			—
Current Portion of Long-Term Debt			19.2			12.1			4.7
Current Portion of Product Liability			2.8			3.1			—
Income Taxes Payable			—			2.2			0.3
Other Accrued Liabilities			52.5			44.1			1.9
	Total Current Liabilities		122.9			105.6			10.1
Long-Term Debt, net of Current Portion			315.0			284.7			47.3
Retiree Benefits, net of Current Portion			85.0			42.8			—
Product Liability, net of Current Portion			10.6			9.3			—
Deferred Tax Liabilities			11.4			29.8			1.1
Other Long-Term Liabilities			17.4			7.5			0.2
	Total Liabilities		562.3			479.7			58.7
Preferred Stock, $0.1 par value, 20,000,000 shares authorized, of which 19,000,000 shares are Series A preferred, 18,697,464 Series A issued and outstanding, $217.4 aggregate liquidation preference at 12/31/08			217.4			172.6
	Total Mezzanine Equity		217.4			172.6			—
Stockholders' Equity
Common Stock			0.2			0.2			—
Additional Paid-in Capital			—			—			25.2
Accumulated Other Comprehensive Loss			(41.6	)		(5.7	)		—
Accumulated Equity (Deficit)			(65.4	)		(18.5	)		2.1
	Total Parent's Equity (Deficit)		(106.8	)		(24.0	)		27.3
Noncontrolling Interest Equity			—			—			0.1
	Total Stockholders' Equity (Deficit)		(106.8	)		(24.0	)		27.4
	Total Liabilities, Mezzanine Equity and Stockholders' Equity (Deficit)	$	672.9		$	628.3		$	86.1

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Freedom Group, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in Millions, Except Share and Per Share Data)

		For the Year Ended December 31, 2008			For the Year Ended December 31, 2007			For the period April 1 – December 31, 2006
Net Sales		$	722.5		$	384.9		$	41.3
Cost of Goods Sold			524.4			306.0			24.6
	Gross Profit		198.1			78.9			16.7
Selling, General and Administrative Expenses			133.7			68.1			8.9
Research and Development Expenses			7.1			3.8			—
Impairment Charges			47.4			—			—
Other Income			(1.3	)		(1.8	)		—
	Operating Income		11.2			8.8			7.8
Interest Expense			30.8			21.2			4.5
	Income (Loss) from Continuing Operations before Taxes and Equity in Losses from Unconsolidated Joint Venture		(19.6	)		(12.4	)		3.3
Income Tax Provision (Benefit)			9.1			(4.0	)		1.1
Equity in Losses from Unconsolidated Joint Venture			—			0.5			—
	Net Income (Loss)		(28.7	)		(8.9	)		2.2
	Add: Net Loss (Income) Attributable to Noncontrolling Interest		0.1			(0.1	)		(0.1	)
	Net Income (Loss) Attributable to Controlling Interest	$	(28.6	)	$	(9.0	)	$	2.1
Net Income (Loss) Attributable to Controlling Interest		$	(28.6	)	$	(9.0	)	$	2.1
Accretion of Preferred Stock			(19.6	)		(0.9	)		—
Net Income (Loss) Applicable to Common Stock		$	(48.2	)	$	(9.9	)	$	2.1
Net Income (Loss) Per Common Share, Basic		$	(2.97	)	$	(0.62	)	$	0.13
Net Income (Loss) Per Common Share, Diluted		$	(2.97	)	$	(0.62	)	$	0.13
Weighted Average Number of Shares Outstanding, Basic			16,236,305			16,084,174			15,958,261
Weighted Average Number of Shares Outstanding, Diluted			16,236,305			16,084,174			16,187,849

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Freedom Group, Inc. and Subsidiaries

Consolidated Statements of Stockholders' Equity (Deficit), Mezzanine Equity and
Accumulated Other Comprehensive Income (Loss)

For the years ended December 31, 2008 and 2007 and the period from April 1, 2006 through
December 31, 2006

(Dollars in Millions, Except Share and Per Share Data)

					Common Stock		Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Equity (Deficit)			Total Parents' Equity (Deficit)			Non- Controlling Interest			Total Stockholders' Equity (Deficit)			Mezzanine Equity Preferred Stockholders
Balance, April 1, 2006					$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—
	Capital Contribution (for 1,000 shares; no par value)					—		25.0			—			—			25.0			—			25.0			—
	Capital Contribution					—		0.1			—			—			0.1			—			0.1
	Share-Based Compensation					—		0.1			—			—			0.1			—			0.1			—
	Comprehensive Income:
	Net Income					—		—			—			2.1			2.1			0.1			2.2			—
	Total Comprehensive Income					—		—			—			2.1			2.1			0.1			2.2			—
Balance, December 31, 2006						—		25.2			—			2.1			27.3			0.1			27.4			—
	Capital Contribution					—		2.1			—			—			2.1			—			2.1			125.0
	Preferred Accretion through Dec. 11, 2007					—		—			—			(6.6	)		(6.6	)		—			(6.6	)		6.6
	Share-Based Compensation					—		0.1			—			—			0.1			—			0.1			—
	Distribution					—		—			—			(0.2	)		(0.2	)		—			(0.2	)		—
	FGI Conversion to C-Corp and Merger of Cerberus BFI Investor, Inc. into FGI					0.2		(27.5	)		—			(4.5	)		(31.8	)		—			(31.8	)		31.8
	Noncontrolling Interest					—		0.7			—			—			0.7			(0.2	)		0.5			—
	Accretion of Preferred Stock					—		(0.6	)		—			(0.3	)		(0.9	)		—			(0.9	)		0.9
	Capital Contribution					—		—			—			—			—			—			—			8.3
	Comprehensive Loss:
		Net Income (Loss)				—		—			—			(9.0	)		(9.0	)		0.1			(8.9	)		—
		Other comprehensive income (loss):
			Minimum pension liability, net of tax effect of ($3.0)			—		—			(5.4	)		—			(5.4	)		—			(5.4	)		—
				Net derivative gains, net of tax effect of $0.5		—		—			0.8			—			0.8			—			0.8			—
				Net derivative gains reclassified as earnings, net of tax effect of ($0.7)		—		—			(1.1	)		—			(1.1	)		—			(1.1	)		—
	Total Comprehensive Loss					—		—			(5.7	)		(9.0	)		(14.7	)		0.1			(14.6	)		—
Balance, December 31, 2007					$	0.2	$	—		$	(5.7	)	$	(18.5	)	$	(24.0	)	$	—		$	(24.0	)	$	172.6
	Comprehensive Loss:
		Net Loss				—		—			—			(28.6	)		(28.6	)		(0.1	)		(28.7	)		—
		Other comprehensive income (loss):																								—
			Minimum pension liability, net of tax effect of ($19.2)			—		—			(31.4	)		—			(31.4	)		—			(31.4	)		—
				Net derivative losses, net of tax effect of ($2.3)		—		—			(3.6	)		—			(3.6	)		—			(3.6	)		—
				Net derivative gains reclassified as earnings, net of tax effect of ($0.5)		—		—			(0.9	)		—			(0.9	)		—			(0.9	)		—
	Total Comprehensive Loss					—		—			(35.9	)		(28.6	)		(64.5	)		(0.1	)		(64.6	)		—
	Share-Based Compensation					—		1.5			—			—			1.5			—			1.5			—
	Distribution					—		—			—			(0.2	)		(0.2	)		—			(0.2	)		—
	Accretion of Preferred Stock					—		(1.5	)		—			(18.1	)		(19.6	)		—			(19.6	)		19.6
	Capital Contribution					—		—			—			—			—			0.1			0.1			25.2
Balance, December 31, 2008					$	0.2	$	—		$	(41.6	)	$	(65.4	)	$	(106.8	)	$	—		$	(106.8	)	$	217.4

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Freedom Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2008 and 2007 and
the period from April 1, 2006 through December 31, 2006

(Dollars in Millions, Except Share and Per Share Data)

				For the Year Ended December 31, 2008			For the Year Ended December 31, 2007			For the period April 1 – December 31, 2006
Operating Activities
	Net Income (Loss)			$	(28.7	)	$	(8.9	)	$	2.2
Adjustments to reconcile Net Income (Loss) to Net Cash used in Operating Activities:
		Impairment Charges			47.4			—			—
		Non-cash Interest Expense			—			1.1			0.4
		Depreciation and Amortization			24.5			12.5			1.5
		Equity in Losses from Unconsolidated Joint Venture			(0.1	)		0.6			0.1
		Pension Plan Contributions			(15.6	)		(11.0	)		—
		Pension Plan Expense (Benefit)			(0.4	)		3.2			—
		Pension Curtailment			—			(6.4	)		—
		Provision for Deferred Income Taxes—net			1.1			(4.8	)		1.1
		Share Based Compensation Charges			1.5			0.1			0.1
		Other Non-Cash Charges			0.8			6.9			0.1
		Changes in Operating Assets and Liabilities net of effects of acquisitions:
			Accounts Receivable Trade—net		(19.4	)		22.7			1.4
			Inventories—net		32.6			61.7			(3.6	)
			Prepaid Expenses and Other Current and Long-Term Assets		4.7			(11.9	)		(0.2	)
			Accounts Payable		6.4			(9.3	)		(0.2	)
			Income Taxes Payable		(2.2	)		2.8			1.1
			Other Accrued and Long-Term Liabilities		0.3			11.5			(0.6	)
	Net Cash provided by (used in) Operating Activities				52.9			70.8			3.4
Investing Activities
		Acquisition of Cobb Manufacturing, net of Cash Acquired			—			(5.0	)		—
		Acquisition of DPMS Firearms, LLC, net of Cash Acquired			—			(22.8	)		—
		Acquisition of RACI, net of Cash Acquired			—			(48.3	)		—
		Acquisition of BFI, net of Cash Acquired			—			—			(77.0	)
		Acquisition of Marlin Firearms, net of Cash Acquired			(46.3	)		—			—
		Option Cancellation Payments			—			(1.1	)		—
		Deferred Acquisition Costs			(0.1	)		—			—
		Purchase of Property, Plant and Equipment			(17.3	)		(8.4	)		(0.3	)
		Premiums paid for Company Owned Life Insurance			—			(0.3	)		—
		Cash Contribution to Membership Interest			(0.8	)		—			—
		Cash Received on Sale of Noncurrent Assets			1.5			—			—
		Cash Received Marlin Escrow			0.3			—			—
		Cash Received on Termination of Company Owned Life Insurance			5.6			3.7			—
		Cash Received on Sale of Unconsolidated Joint Venture			—			3.0			—
		Contingent Consideration from Bushmaster Acquisition			—			0.2			—
		Transaction Costs Related to the Acquisitions			—			(11.7	)		—
	Net Cash used in Investing Activities				(57.1	)		(90.7	)		(77.3	)

The accompanying notes are an integral part of these consolidated financial statements.

F-7

Freedom Group, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

For the years ended December 31, 2008 and 2007 and
the period from April 1, 2006 through December 31, 2006

(Dollars in Millions, Except Share and Per Share Data)

				For the Year Ended December 31, 2008			For the Year Ended December 31, 2007			For the period April 1 – December 31, 2006
Financing Activities
		Proceeds from Revolving Credit Facilities			196.9			88.8			—
		Payments on Revolving Credit Facilities			(146.7	)		(172.4	)		—
		Payment of RACI Holding Notes			—			(48.2	)		—
		Capital Contributions			25.8			133.3			25.1
		Debt Issuance Costs			(0.1	)		(1.9	)		(2.0	)
		Principal Borrowings on Long-term Debt			—			43.0			54.0
		Principal Payments on Long-Term Debt			(12.7	)		(5.0	)		(2.3	)
		Issuance of Preferred Membership Units			—			2.2			—
		Distributions Paid to Members			(0.2	)		—			—
		Change in Book Overdraft			(5.7	)		4.1			(0.2	)
	Net Cash (used in) provided by Financing Activities				57.3			43.9			74.6
Change in Cash and Cash Equivalents					53.1			24.0			0.7
Cash and Cash Equivalents at Beginning of Year					24.7			0.7			—
Cash and Cash Equivalents at End of Year				$	77.8		$	24.7		$	0.7
Supplemental Cash Flow Information:
		Cash Paid During the Year for:
			Interest	$	29.8		$	17.3		$	3.8
			Income Taxes		6.8			0.1			—
			Previously accrued Capital Expenditures		0.9			—			—
		Noncash Financing and Investing Activities:
			Financing of insurance policies		3.2			3.5			—
			Capital Lease Obligations Incurred		0.5			—			—

The accompanying notes are an integral part of these consolidated financial statements.

F-8

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

1. Description of Business

              Freedom Group, Inc. ("FGI" or "the Company") is a leading manufacturer of firearms, ammunition and related accessories. FGI's products are distributed throughout the United States and in over 60 other countries. In the United States, FGI's products are distributed primarily through a network of wholesalers and retailers who purchase the product directly from FGI for resale to gun dealers and end users, respectively. The end users include sportsmen, hunters, target shooters, gun collectors, and members of the military, law enforcement and other government organizations. The Company operates principally through two subsidiaries, Remington Arms Company, Inc. ("Remington"), which also owns The Marlin Firearms Company ("Marlin"), and Bushmaster Firearms International, LLC ("BFI" or "Bushmaster"), which also owns DPMS Firearms, LLC ("DPMS").

              Remington, founded in 1816, designs, manufactures and markets a comprehensive line of primarily firearms, ammunition and related products for the global hunting and shooting sports marketplace, under the Remington® brand name. Remington is engaged primarily in the design, manufacture, import and sale of sporting goods products for the hunting/shooting sports and related markets. Remington also designs, manufactures and sells firearms and ammunition products to certain federal agency, law enforcement, and military markets. Product lines are sold under the Remington, Marlin, H&R 1871, L.C. Smith and Parker names and other labels. Remington's principal manufacturing facilities are located in New York, Arkansas and Connecticut. Remington was acquired by the Company on May 31, 2007.

              Bushmaster is a leading manufacturer of high quality firearms, spare parts and accessories for the commercial, law enforcement, government, and international markets under the brands Bushmaster® and Panther Arms. BFI's predecessor (Bushmaster Firearms, Inc.) was founded in 1973. Principal products include rifles, carbines, machine guns, upper and lower receivers and other parts and accessories. Bushmaster's principal facilities are located in Maine and Minnesota. Bushmaster was acquired by the Company as of April 1, 2006.

Basis of Presentation and Organizational History

              For financial reporting purposes, the Company was effectively established when BFI was formed at the direction of Cerberus Capital Management L.P. ("CCM"), and acquired certain assets and assumed certain liabilities of Bushmaster Firearms, Inc. in April 2006. As additional acquisitions subsequently occurred under the common control of CCM, the results of operations from those acquisitions are included in these financial statements since the date of each acquisition. Each of these entities are ultimately owned by FGI. A summary of the key transactions follows:

•

As of April 1, 2006, BFI acquired certain assets and assumed certain liabilities of Bushmaster Firearms, Inc. At the date of acquisition, BFI was a wholly-owned subsidiary of Bushmaster Holdings, LLC ("BH") and BH was jointly owned by two commonly-controlled CCM entities, Cerberus BFI Investors, Inc. ("CBFII", an 80.4% owner of BH) and Cerberus Partners, L.P. ("CPLP", a 19.6% owner of BH).

•

On March 31, 2007, American Heritage Arms, LLC ("AHA, LLC") was formed at the direction of CCM principally for the purpose of acquiring Remington.

•

On May 31, 2007, 100% of the shares of the RACI Holding, Inc. ("RACI") were purchased by AHA, LLC. RACI is the sole shareholder of Remington Arms Company, Inc. and its

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

1. Description of Business (Continued)

subsidiaries, RA Brands, L.L.C., Remington Steam LLC, and RA Factors, Inc. (merged with and into Remington as of December 31, 2006).

•

Bushmaster Custom Shop was formed on March 19, 2007. BFI owns 100% of the preferred units, and 80% of the common units of Bushmaster Custom Shop. The remaining 20% of the common units are owned by an unaffiliated third party. BCS assembles high-end custom rifles.

•

On August 17, 2007, BFI acquired certain assets and assumed certain liabilities of Cobb Manufacturing, Inc. ("Cobb").

•

On December 11, 2007, AHA, LLC was converted to a "C" Corporation and became American Heritage Arms, Inc. ("AHA").

•

On December 12, 2007, CBFII merged with and into AHA. Simultaneously, CPLP and other common unit holders exchanged their ownership interests in BH for shares of AHA. Minority interest owners of the restricted common units of BFI also exchanged their ownership in BFI for shares of AHA.

•

On December 13, 2007, BFI acquired certain assets and assumed certain liabilities of DPMS.

•

On January 28, 2008, Remington acquired 100% of the shares of Marlin and its subsidiary, H&R 1871, LLC ("H&R") (the "Marlin Acquisition"). Marlin primarily manufactures shotguns and rifles.

•

On July 30, 2008, Remington and an unrelated entity formed EOTAC, LLC. Remington owns 61.8% of the members' interest. The remaining 38.2% of the members' interests are owned by unaffiliated third parties. EOTAC is a tactical and outdoor apparel business.

•

On October 15, 2008, AHA changed its name to Freedom Group, Inc.

              For financial reporting purposes, all of the entities included in these financial statements are 1) under the common control of CCM and have been included in these financial statements from the earliest date of common control; and 2) owned by FGI or one of FGI's subsidiaries as of December 31, 2008. The Company has evaluated the requirements of Statement of Financial Accounting Standards ("SFAS") No. 141 Business Combinations ("SFAS 141") and EITF 02-5 Definition of "Common Control" in Relation to FASB Statement No. 141 in determining which entities to consolidate and for what periods. Accordingly, the results of operations of the following entities under the common control of CCM are included in these financial statements as follows:

1.

CBFII and CPLP's 19.6% ownership interest in BH since April 1, 2006 (CBFII merged with FGI on December 12, 2007 and CPLP exchanged its ownership interest in BH for AHA shares on December 12, 2007). CBFII's sole activities during the periods presented related to its ownership of BH and BH's sole activities related to its ownership of BFI. Only CPLP's investment in BH is included in these financial statements.



2.

As of April 1, 2006, BFI acquired certain assets and assumed certain liabilities of Bushmaster Firearms, Inc. and BFI's results of operations have been included since

F-10

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

1. Description of Business (Continued)

that date. The results of operations of certain other businesses acquired by BFI during the periods presented are also included in these financial statements as follows:

•

DPMS Firearms, LLC (established as an acquisition vehicle by BFI) since BFI acquired certain of the assets and assumed certain of the liabilities of DPMS, Inc. on December 13, 2007.

•

Cobb since BFI acquired certain of its assets and assumed certain of its liabilities on August 17, 2007.

•

Bushmaster Custom Shop, LLC since its formation and investment by BFI on March 19, 2007.



3.

AHA, LLC since its inception on March 31, 2007. AHA, LLC acquired RACI on May 31, 2007. These financial statements include the results of operations of RACI, its wholly-owned subsidiary, Remington Arms Company, Inc. and its subsidiaries, RA Brands L.L.C. ("RA Brands"), Remington Steam LLC, and RA Factors, Inc. since May 31, 2007. In addition, these financial statements include the results of operations of Marlin and its subsidiary, H&R, since February 1, 2008. These financial statements also include the results of operations of EOTAC, LLC since its formation and investment by Remington in September 2008.

              Because FGI, CBFII and CPLP are under common control, the merger of CBFII into FGI and the exchange of CPLP ownership interests for FGI shares in December 2007 were accounted for using BFI's carryover basis rather than at fair value. This accounting treatment is consistent with the requirements of SFAS 141. The exchange by minority interest owners of the restricted common units of BFI for shares of AHA has been accounting for using fair market value.

              CBFII, the ultimate parent company of Bushmaster, is the principal reporting entity within these financial statements for the period from April 1, 2006 to May 30, 2007. CBFII and AHA, the ultimate parent of Remington, are the principal reporting entities for the period from May 31, 2007 to December 12, 2007 and their combined financial statements are represented for that period. On December 12, 2007, CBFII was merged into AHA. AHA converted to a C corporation on December 11, 2007 ultimately changing its name to FGI, and that entity is the principal reporting entity for the period since December 11, 2007. As all of these entities are under common control, and for convenience and clarity purposes, each of these reporting entities may be referred to as Freedom Group, Inc., FGI, or the Company in these financial statements for all periods presented.

Basis for Consolidation

              The accompanying consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All significant intercompany transactions are eliminated in consolidation.

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies

Cash and Cash Equivalents

              Cash and cash equivalents include demand deposits with banks and highly liquid investments with remaining maturities, when purchased, of three months or less and treasury reserve funds.

Inventories

              The Company's inventories are stated at the lower of cost or market. The majority of the Company's inventories are determined by the first-in, first-out ("FIFO") method. As part of the Marlin Acquisition, the Company now accounts for a portion of its firearms inventory under a Last In First Out ("LIFO") method.

              Inventory costs associated with Semi-Finished Products and Finished Products include material, labor, and overhead; while costs associated with Raw Materials include only material. The Company provides inventory allowances for any excess and obsolete inventories.

Supplies Inventory

              The cost of supplies is determined by the average cost method adjusted to the lower of cost or market.

Service and Warranty

              The Company supports service and repair facilities for all of its firearm products, with the exception of its internationally sourced product lines, which are serviced and repaired by the Company's third party vendor, in order to meet the service needs of its distributors, customers and consumers worldwide.

              The Company provides consumer warranties against manufacturing defects in all firearm products manufactured in the United States. Estimated future warranty costs are accrued at the time of sale. Product modifications or corrections are voluntary steps taken by the Company to assure proper usage or performance of a product by consumers. The cost associated with product modifications and/or corrections is recognized in accordance with SFAS No. 5, Accounting for Contingencies ("SFAS 5"), and charged to operations.

Property, Plant and Equipment

              Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated lives of the assets. The estimated useful lives range from 1 to 43 years for buildings and improvements, and range from 1 to 15 years for machinery and equipment.

              Maintenance and repairs are charged to operations, and replacements and betterments are capitalized. Computer hardware and software costs under capital leases are amortized over the term of the lease. The cost and related accumulated depreciation applicable to assets sold or retired are removed from the accounts and the gain or loss on disposition is recognized in operations, included in the other income, net line item on the consolidated statement of operations.

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

Goodwill, Goodwill Impairment, Intangible Assets and Debt Issuance Costs

              Management assesses goodwill for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. Each year the Company tests for impairment of goodwill according to a two-step approach. In the first step, the Company estimates the fair values of its reporting units using a combination of the present value of future cash flows approach, market approach and a transactional approach, subject to a comparison for reasonableness to its market capitalization at the date of valuation. If the carrying amount exceeds the fair value, the second step of the goodwill impairment test is performed to measure the amount of the impairment loss, if any. In the second step the implied fair value of the goodwill is estimated as the fair value of the reporting unit used in the first step less the fair values of all other net tangible and intangible assets of the reporting unit. If the carrying amount of the goodwill exceeds its implied fair market value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. In addition, goodwill of a reporting unit is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. For other intangible assets, the impairment test consists of a comparison of the fair value of the intangible assets to their respective carrying amount. The Company uses a discount rate equal to its average cost of funds to discount the expected future cash flows. See Note 4 for impairment charges incurred in 2008. There was no goodwill or intangible assets deemed impaired as of December 31, 2007 or the period from April 1, 2006 through December 31, 2006.

              Debt issuance costs are amortized over the life of the related debt agreements or amendments primarily using the effective interest method with a charge to interest expense. As of December 31, 2008, 2007 and 2006, the Company has deferred financing costs net of accumulated amortization of $5.8, $6.5 and $7.4, respectively.

              Amortization of deferred financing costs was $2.5, $1.5 and $0.4 in the years ending December 31, 2008 and 2007, and the period from April 1, 2006 through December 31, 2006 respectively.

              Amounts scheduled to be amortized to interest expense for remaining deferred financing costs are as follows:

Year		Amount
2009		$	2.4
2010			2.1
2011			0.4
Thereafter			—
	Total	$	4.9

Fair Value Measurements

              The Company adopted SFAS No. 157, Fair Value Measurements ("SFAS 157"), and SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159"), on January 1, 2008. SFAS 157 (1) creates a single definition of fair value, (2) establishes a framework for measuring

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

fair value, and (3) expands disclosure requirements about items measured at fair value. SFAS 157 applies to both items recognized and reported at fair value in the financial statements and items disclosed at fair value in the notes to the financial statements. SFAS 157 does not change existing accounting rules governing what can or what must be recognized and reported at fair value in the Company's financial statements, or disclosed at fair value in the Company's notes to the financial statements. Additionally, SFAS 157 does not eliminate practicability exceptions that exist in accounting pronouncements amended by SFAS 157 when measuring fair value. As a result, the Company will not be required to recognize any new assets or liabilities at fair value.

              Prior to SFAS 157, certain measurements of fair value were based on the price that would be paid to acquire an asset, or received to assume a liability (an entry price). SFAS 157 clarifies the definition of fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (that is, an exit price). The exit price is based on the amount that the holder of the asset or liability would receive or need to pay in an actual transaction (or in a hypothetical transaction if an actual transaction does not exist) at the measurement date. In some circumstances, the entry and exit price may be the same; however, they are conceptually different.

              Fair value is generally determined based on quoted market prices in active markets for identical assets or liabilities. If quoted market prices are not available, the Company uses valuation techniques that place greater reliance on observable inputs and less reliance on unobservable inputs. In measuring fair value, the Company may make adjustments for risks and uncertainties, if a market participant would include such an adjustment in its pricing.

              SFAS 157 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company's assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1	—	Quoted market prices in active markets for identical assets or liabilities;
Level 2	—	Inputs other than level 1 inputs that are either directly or indirectly observable; and
Level 3	—	Unobservable inputs developed using the Company's estimates and assumptions, which reflect those that market participants would use.

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

              The following table presents information about assets and liabilities measured at fair value on a recurring basis:

	Fair value measurements at December 31, 2008 using:
	Quoted prices in active markets for identical assets	Significant other observable inputs	Significant unobservable inputs
	Level 1	Level 2	Level 3	Total
Assets:
Commodity Contract Derivatives	Not applicable	$0.8	Not applicable	$	0.8
Life Insurance Policies	$0.1	Not applicable	Not applicable	$	0.1
Liabilities:
Interest Rate Swaps	Not applicable	$0.7	Not applicable	$	0.7

              As shown above, commodity contract derivatives valued based on fair values provided by the Company's commodity brokers are classified within level 2 of the fair value hierarchy. Life insurance policies valued by using cash surrender values, net of related policy loans, are classified within level 1 of the fair value hierarchy. The determination of where an asset or liability falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter based on various factors and it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between different levels will be rare.

              Interest rate swaps are valued using the Income Approach valuation technique. This method uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts.

              Most derivative contracts are not listed on an exchange and require the use of valuation models. Consistent with SFAS 157, the Company attempts to maximize the use of observable market inputs in its models. When observable inputs are not available, the Company defaults to unobservable inputs. Derivatives valued based on models with significant unobservable inputs and that are not actively traded, or trade activity is one way, are classified within level 3 of the fair value hierarchy.

              The FASB issued FAS 157-2 ("FSP FAS 157-2") on February 12, 2008 to provide a one-year deferral of the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed in financial statements at fair value on a recurring basis (that is, at least annually). The Company adopted FSP FAS 157-2 as of January 1, 2009, noting no significant impact on its operations or financial position.

              In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS 159 provides the Company with an option to elect fair value as the initial and subsequent measurement attribute for most financial assets and liabilities and certain other items. The fair value option election is applied on an instrument-by-instrument basis (with some exceptions), is irrevocable, and is applied to an entire instrument. The election may be made as of the date of initial adoption for existing eligible items. Subsequent to initial adoption, the Company may elect the

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

fair value option at initial recognition of eligible items, on entering into an eligible firm commitment, or when certain specified reconsideration events occur. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. Upon adoption of SFAS 159 on January 1, 2008, the Company did not elect to account for any assets and liabilities at fair value under the scope of SFAS 159.

              In October 2008, the FASB issued FSP FAS 157-3 ("FSP FAS 157-3"), Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active, which clarifies the application of SFAS 157 in a market that is not active. The effective date for FSP FAS 157-3 was October 10, 2008. The adoption of FSP FAS 157-3 by the Company was insignificant to the Company's operations or financial position.

Investments

              The equity method of accounting is used for companies and other investments in which the Company has significant influence or control. Generally this represents common stock ownership or partnership equity of at least 20% and not more than 50% (see Note 9). Accordingly, investments are recognized on the Company's balance sheet under "Other Noncurrent Assets" at the carrying value of cumulative cash contributions adjusted for cumulative equity in earning/(losses) recorded in the Company's statement of operations (included in "Equity in Earnings/losses from unconsolidated venture") during each period. If the Company's share of cumulative net losses exceed the Company's investment, the Company will discontinue recognition of net losses in accordance with APB 18 as the Company does not guarantee or is not otherwise committed to fund the obligations of the investments.

Product Liability

              The Company provides for estimated defense and settlement costs related to product liabilities when it becomes probable that a liability has been incurred and reasonable estimates of such costs are available in accordance with SFAS 5. The Company maintains insurance coverage for product liability claims, subject to certain policy limits and to certain self-insured retentions for personal injury or property damage. Our current insurance policies have various renewal dates through April 2010. Product liabilities are recorded at the Company's best estimate of the most probable exposure in accordance with SFAS 5, including consideration of historical payment experience and the self-insured retention limits. For the years ended December 31, 2008 and 2007 and the period from April 1 through December 31, 2006, there were no recoveries recorded. The Company's estimate of its discounted liability for product liability cases and claims outstanding at December 31, 2008, 2007 and 2006 was $13.4, 12.4 and zero, respectively. Management uses independent advisors in their determination of the accrual for certain companies. Associated with product liability cases, the Company has also recorded a receivable in Other Noncurrent Assets of $3.9, $3.7 and zero, respectively, at December 31, 2008, 2007 and 2006 for the estimated liabilities expected to be recovered through insurance coverage. The Company made total payments in 2008, 2007 and for the period from April 1 through December 31, 2006 of $2.5, $1.4 and zero, respectively, related to defense and settlement costs.

              As December 31, 2008, accrued product liability is recorded at its discounted present value at a discount rate of 4.75%. The aggregate undiscounted product liability, net of estimated recoveries from

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

insurance, at December 31, 2008 was $10.0. Expected payments for each of the five succeeding years and aggregate amount thereafter are:

Year		Amount
2009		$	2.4
2010			2.3
2011			1.9
2012			1.4
2013			0.8
Thereafter			1.2
	Total	$	10.0

Workers Compensation

              As of December 31, 2008, any significant workers compensation accruals are discounted to their present value at a discount rate of 4.75%. The aggregate undiscounted workers' compensation liability, net of estimated recoveries from insurance, at December 31, 2008 was $5.8. Management uses independent advisors to assist in their determination of the accrual. Expected payments for each of the five succeeding years and aggregate amount thereafter are:

Year		Amount
2009		$	1.4
2010			1.3
2011			1.0
2012			0.8
2013			0.6
Thereafter			0.7
	Total	$	5.8

Revenue Recognition

              Sales, net of estimates for discounts, returns, rebates, allowances and excise taxes, along with related cost of sales are recorded in income when risk of loss and title transfers to the customer in accordance with Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements ("SAB 101"), as amended by Staff Accounting Bulletin No. 104, Revenue Recognition ("SAB 104"). Sales are presented net of Federal Excise Taxes of $54.6, $31.0 and $2.7 for the years ended December 31, 2008 and 2007 and the period from April 1, 2006 through December 31, 2006, respectively.

Shipping and Handling Costs

              Shipping and handling costs are included in Selling, General and Administrative expense and are expensed as incurred. Shipping and handling costs totaled $18.3, $9.7 and $0.4 for the years ended

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

December 31, 2008 and 2007 and the period from April 1, 2006 through December 31, 2006, respectively.

Advertising and Promotions

              Advertising and promotional costs including print ads, commercials, catalogs, brochures and co-op are expensed when incurred. Advertising and promotional costs totaled $17.0 and $5.4, respectively, for the years ended December 31, 2008 and 2007 and $0.6 for the period from April 1, 2006 through December 31, 2006.

Licensing Income

              The Company licenses certain of its brands and trademarks. The income from such licensing was $3.8 and $2.3, respectively, for the years ended December 31, 2008 and 2007, which is reflected in Other Income, net. There was no income from such licensing for the period from April 1, 2006 through December 31, 2006.

Research and Development Costs

              Internal research and development costs including salaries, administrative expenses, building operating costs of our research and development facilities, and related project expenses are expensed as incurred. Research and development costs totaled $7.1, $3.8, and zero for the years ended December 31, 2008 and 2007 and the period from April 1, 2006 through December 31, 2006, respectively.

Self-Insurance

              The majority of FGI is self-insured for elements of its employee benefit plans including, among others, medical, workers' compensation and elements of its property and liability insurance programs, but limits its liability through stop-loss insurance and annual plan maximum coverage limits. Self-insurance liabilities are based on claims filed and estimates for claims incurred but not yet reported.

Stock-Based Compensation Options and Restricted Stock/Restricted Units

              Stock-based compensation awards, which are associated with the common stock of FGI, have been considered equity awards under SFAS No. 123(R), Share-Based Payment ("SFAS 123(R)"). SFAS 123(R) requires the Company to measure the cost of all employee stock-based compensation awards that are expected to be exercised based on the grant-date fair value of those awards and to record that cost as compensation expense over the period during which the employee is required to perform service in exchange for the award (generally over the vesting period of the award).

              The Company accounts for restricted common unit/share awards in accordance SFAS 123R. The fair value of the restricted common unit/share awards at their grant date, which was determined using a total enterprise valuation, is recognized as compensation expense over the vesting period for the awards.

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

Income Taxes

              The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes ("SFAS 109"). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be recognized.

              We adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of Statement of FASB Statement No. 109, Accounting for Income Taxes ("FIN 48") ("SFAS 109"), on January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with SFAS 109, Accounting for Income Taxes. Adoption of FIN 48 for all acquisitions after January 1, 2007 occurred as part of purchase price accounting. FIN 48 requires a company to evaluate whether the tax position taken by a company will more likely than not be sustained upon examination by the appropriate taxing authority. It also provides guidance on how a company should measure the amount of benefit that the company is to recognize in its financial statements as well as guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company's reassessment of our tax positions in accordance with FIN 48 did not have a material impact on our results of operations, financial condition or liquidity. The Company's continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

              The Company files its income taxes in a consolidated tax return. Current and deferred tax expense is allocated to the members based on an adjusted separate return methodology.

Use of Estimates

              The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reported period. The Company is subject to management's estimates and assumptions, the most significant of which include reserves for product liability claims, medical claims, workers compensation claims, warranty claims, employee benefit plans, inventory obsolescence, allowance for doubtful accounts and impairment of long-lived assets. Actual amounts may differ from those estimates and such differences could be material.

New Accounting Pronouncements

              In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations ("SFAS 141(R)"). SFAS 141(R) retains the fundamental requirements of the original pronouncement requiring that the purchase method be used for all business combinations. SFAS 141(R) defines the acquirer as the entity that obtains control of one or more businesses in the business combination, establishes the acquisition date as the date that the acquirer achieves control and requires the acquirer

F-19

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

to recognize the assets acquired, liabilities assumed and any non-controlling interest at their fair values as of the acquisition date. SFAS 141(R) also requires that acquisition-related costs be recognized separately from the acquisition. SFAS 141(R) amends the goodwill impairment test requirements in SFAS 142. For a goodwill impairment test as of a date after the effective date of SFAS 141(R), the value of the reporting unit and the amount of implied goodwill, calculated in the second step of the test, will be determined in accordance with the measurement and recognition guidance on accounting for business combinations under SFAS 141(R). This change could effect the determination of what amount, if any, should be recognized as an impairment loss for goodwill recorded before the effective date of SFAS 141(R). This accounting became effective January 1, 2009 for the Company and applies to goodwill related to acquisitions accounted for originally under SFAS 141 as well as those accounted for under SFAS 141(R). The adoption did not have a material impact on the Company's results of operations, financial condition and equity.

              In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements ("SFAS 160"). This standard is expected to improve, simplify, and converge internationally the reporting of noncontrolling interests in consolidated financial statements. SFAS 160 requires all entities to report noncontrolling (minority) interests in subsidiaries in the same way as equity in the consolidated financial statements. Moreover, SFAS 160 requires that transactions between an entity and noncontrolling interests be treated as equity transactions. SFAS 160 was effective for fiscal years beginning after December 15, 2008. The adoption of SFAS 160 did not have a material impact on our results of operations, financial condition and equity. The accompanying consolidated financial statements have been presented in accordance with SFAS No. 160.

              In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. The new standard is also intended to improve transparency about the location and amounts of derivative instruments in an entity's financial statements; how derivative instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"); and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. SFAS 161 requires disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk-related and requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. It was effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS 161 did not have a material impact on the Company's results of operations, financial condition and equity.

              In April 2008, the FASB issued Final FASB Staff Position (FSP) No. FAS 142-3, Determination of the Useful Life of Intangible Assets ("FSP 142-3"). The guidance is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets, and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), Business Combinations, and other guidance under GAAP. FSP 142-3 was effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim

F-20

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

periods within those years. The adoption of FSP 142-3 did not have an impact on the Company's results of operations, financial condition and equity.

              In September 2008, the FASB issued FSP 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 ("FSP 133-1"). FSP 133-1 is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. It amends FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, to require disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The FSP also amends FASB Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, to require an additional disclosure about the current status of the payment/performance risk of a guarantee. FSP 133-1 was effective for reporting periods (annual or interim) ending after November 15, 2008. The adoption of FSP 133-1 did not have an impact on the Company's results of operations, financial condition and equity.

              In November 2008, the FASB issued EITF Issue 08-6, Equity Method Investment Accounting Considerations ("EITF 08-6"). EITF 08-6 addresses questions about the potential effect of FASB Statement 141R Business Combinations and FASB Statement 160 Noncontrolling Interests in Consolidated Financial Statements on equity-method accounting under Opinion 18. EITF 08-6 was effective prospectively for fiscal years beginning on or after December 15, 2008. The adoption of EITF 08-6 did not have a material impact on the Company's results of operations, financial condition and equity.

              In December 2008, the FASB issued FSP FAS 132(R)-1, Employers' Disclosures about Postretirement Benefit Plan Assets ("FSP 132R-1"). This FASB Staff Position (FSP) amends FASB Statement No. 132 (revised 2003), Employers' Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employer's disclosures about plan assets of a defined benefit pension or other postretirement plan. The effective date for FSP 132R-1 is for fiscal years ending after December 15, 2009, although early adoption is permitted. Comparative disclosures for earlier periods are not required at initial adoptions, although comparative disclosures are required for periods subsequent to initial adoption. The Company is currently evaluating the potential impact of adopting FSP 132R-1.

              In April 2009, the FASB issued FSP SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly ("FSP SFAS 157-4"). FSP SFAS 157-4 provides guidelines for making fair value measurements more consistent with the principles presented in SFAS 157, Fair Value Measurements ("SFAS 157"). FSP SFAS 157-4 relates to determining fair values when there is no active market or where the price inputs being used represent distressed sales. It reaffirms what SFAS 157 states is the objective of fair value measurement—to reflect how much an asset would be sold for in an orderly transaction (as opposed to a distressed or forced transaction) at the date of the financial statements under current market conditions. Specifically, it reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. FSP SFAS 157-4 is effective for interim and annual periods ending after June 15, 2009. The

F-21

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

Company does not expect the adoption of FSP SFAS 157-4 will have a significant impact on its results of operations, financial condition and equity.

              In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments ("FSP SFAS 107-1"). FSP SFAS 107-1 enhances consistency in financial reporting by increasing the frequency of fair value disclosures. FSP SFAS 107-1 relates to fair value disclosures for any financial instruments that are not currently reflected on the balance sheet of companies at fair value. Prior to issuing FSP SFAS 107-1, fair values for these assets and liabilities were only disclosed once a year. FSP SFAS 107-1 now requires these disclosures on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. FSP SFAS 107-1 is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP SFAS 107-1 will have a significant impact on its results of operations, financial condition and equity.

              In April 2009, the FASB issued FSP SFAS 115-2 and SFAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments ("FSP SFAS 115-2"), provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. FSP SFAS 115-2 on other-than-temporary impairments is intended to bring greater consistency to the timing of impairment recognition, and provide greater clarity to investors about the credit and noncredit components of impaired debt securities that are not expected to be sold. The measure of impairment in comprehensive income remains fair value. FSP SFAS 115-2 also requires increased and more timely disclosures sought by investors regarding expected cash flows, credit losses, and an aging of securities with unrealized losses. FSP SFAS 115-2 is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP SFAS 115-2 will have a significant impact on its results of operations, financial condition and equity.

              In May 2009, the FASB issued SFAS 165, Subsequent Events ("SFAS 165"). This standard establishes general guidelines for accounting and disclosing events that occur subsequent to an entity's balance sheet date but prior to issuance of its financial statements. SFAS 165 defines the period after the balance sheet date and the circumstances which an entity should recognize events in its financial statements. SFAS 165 is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of SFAS 165 will have a significant impact on its results of operations, financial condition and equity.

              In June 2009, the FASB issued SFAS 166, Accounting for Transfers of Financial Assets an amendment of SFAS 140 ("SFAS 166"). This standard removes the concept of a qualifying special-purpose entity from SFAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishing of Liabilities, and removes the exception from applying FASB Interpretation 46, Consolidation of Variable Interest Entities. The statement clarifies the objective of whether a transferor has surrendered control over the financial assets and limits the circumstances in which a financial asset should be derecognized. The statement requires that all assets acquired and liabilities incurred resulting from the transfer of a financial asset be initially measured at fair value. SFAS 166 is effective for interim and annual periods ending after November 15, 2009. The Company does not expect the adoption of SFAS 166 will have a significant impact on its results of operations, financial condition and equity.

F-22

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

2. Significant Accounting Policies (Continued)

              In June 2009, the FASB issued SFAS 167, Amendments to FASB Interpretation 46(R). The statement requires a reporting enterprise to perform an analysis and ongoing reassessments to determine whether the enterprise's variable interest gives it a controlling financial interest. It also requires an enterprise to assess whether it has an implicit financial responsibility to ensure a variable interest operates as designed when determining whether it has the power to control the variable interest. The statement eliminates the quantitative approach previously required when determining the primary beneficiary of a variable interest and augments current disclosures. SFAS 167 is effective for interim and annual periods ending after November 15, 2009. The Company does not expect the adoption of SFAS 167 will have a significant impact on its results of operations, financial condition and equity.

3. Business Combinations

Bushmaster Firearms, Inc.

              As of April 1, 2006, the Company formed BFI, which acquired certain assets and assumed certain liabilities of Bushmaster Firearms, Inc. for $76.4 including acquisition costs of $0.8 in exchange for cash. The acquisition was financed with $25.0 of funds contributed by CCM through CBFII and CPLP, $20.0 of mezzanine debt to various investors and a $34.0 bank loan.

RACI Holding, Inc.

              The shares of RACI, the sole stockholder of Remington, were purchased by the Company on May 31, 2007 (the "Closing Date"), pursuant to the stock purchase agreement dated as of April 4, 2007 (the "Stock Purchase Agreement"), between RACI, its stockholders and holders of deferred stock (including the ownership interests represented by Bruckmann, Rosser, Sherrill & Co. II, L.P. and the Clayton & Dubilier Private Equity Fund IV Limited Partnership (the "CDR Fund")), as well as the RACI's stock option holders (the "RACI Acquisition"). FGI completed the RACI Acquisition as part of its ongoing strategy to acquire dominant brands and create a diversified product portfolio within the family of firearms, ammunition and related products.

              The RACI Acquisition was financed with $125.0 of funds contributed to the Company by its members and approximately $14.5 of borrowings from Remington's Revolving Credit Facility. The following is a summary of the transactions between the Company, RACI and Remington, which disbursed funds as follows:

•

The Company paid sellers $48.3, net of $10.0 cash acquired and $10.7 of costs incurred by the sellers, certain seller withholding taxes, and amounts to be placed in escrow.

•

The Company provided the escrow agent $5.0 representing amounts withheld from the sellers' gross sales price.

•

The Company paid $0.7 of seller-incurred legal fees with amounts withheld from the sellers' gross sales price.

•

The Company provided $48.2 to RACI for the payment of the Holding Notes and $0.7 for certain tax withholdings due from sellers.

F-23

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

3. Business Combinations (Continued)

•

The Company provided Remington with $5.1 for payment of the management bonus and cancellation of options, net of seller-related expenses.

•

RACI paid $48.2 to satisfy in full notes due to certain sellers.

•

RACI paid $3.7 of certain RACI Acquisition-related costs with funds provided from Remington and provided Remington with $0.7 associated with tax withholdings from the sellers.

•

Remington provided RACI with $3.8 from Remington's Revolving Credit Facility to pay for certain buyer-related RACI Acquisition costs described above.

•

Remington paid $10.3 from Remington's Revolving Credit Facility in connection with obtaining waivers, amendments and consents to Remington's Revolving Credit Facility and $200.0 10.5% Senior Notes due 2011.

•

Remington paid $0.7 for cancellation of options and $1.1 of withholding taxes from amounts withheld from sellers and option holders.

•

Remington paid $4.0 in management bonuses and related withholding taxes from amounts that were withheld from the sellers and from funds provided by the Company.

              The value of the RACI Acquisition as of May 31, 2007, was $416.6, based on valuation estimates, which included the assumption of all of Remington's approximately $85.2 of funded indebtedness related to the Amended and Restated Credit Agreement, the $200.0 principal amount ($203.8 estimated fair value at May 31, 2007) of Remington's 10¹/2% Senior Notes due 2011 (the "Notes") and approximately $3.4 of certain other indebtedness at the Closing Date. The payment for the Common Stock and converted deferred shares of Common Stock, the Stock Option cancellation payment and repayment of the Holding Notes was funded by the Company's available cash. In addition, Remington obtained all necessary waivers, amendments and consents so that Remington's Revolving Credit Facility and the indebtedness evidenced by the Notes remained outstanding and not in default.

Cobb Manufacturing, Inc. and DPMS, Inc.

              On August 17, 2007, BFI acquired certain assets and assumed certain liabilities of Cobb for a total purchase price of $5.0. The funds for the purchase price were generated from the operating cash of BFI. On December 13, 2007, BFI acquired certain assets and assumed certain liabilities of DPMS, Inc. for a total purchase price of $23.0 which includes transaction costs of $1.1. The acquisition was financed by approximately $18.0 of borrowings through BFI's Amended and Restated Loan Agreement and $7.6 of funds contributed by FGI. The primary purpose of these acquisitions was to increase the Company's caliber offerings and ability to penetrate military markets.

The Marlin Firearms Company ("Marlin") and its subsidiary H&R 1871, LLC ("H&R")

              Remington completed its acquisition of all of the outstanding shares of Class A and Class B Common Stock (collectively, the "Shares") of Marlin on January 28, 2008 (the "Marlin Closing Date"), from the shareholders of Marlin (collectively, the "Marlin Sellers") pursuant to a stock purchase agreement (the "Marlin Stock Purchase Agreement") dated as of December 21, 2007 by and among

F-24

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

3. Business Combinations (Continued)

Marlin, Remington, the Marlin Sellers party thereto, and Frank Kenna, III, solely in his capacity as the Shareholders' Representative. The Marlin Acquisition includes Marlin's 100% ownership interest in H&R. Remington completed the Marlin Acquisition in an effort to grow its leadership position in shotguns and rifles in the United States, to further develop market presence internationally and to benefit from operational improvements and integrating certain selling, marketing and administrative functions.

              On the Marlin Closing Date, Remington acquired all of the capital stock of Marlin, consisting of 86,773 shares of issued and outstanding Class A Common Stock and 760,936 shares of issued and outstanding Class B Common Stock.

              The total acquisition cost for the Marlin Acquisition was estimated to be $48.1 (the "Acquisition Cost"). The following is a summary of certain material transactions related to the closing of the Marlin Acquisition:

•

Remington purchased the Shares and paid other related fees and expenses associated with the Marlin Acquisition with available cash on hand, funds available under existing credit facilities and an equity contribution provided by FGI to Remington through Remington's parent, RACI.

•

Remington paid the Marlin Sellers aggregate consideration of $38.6 (the "Consideration"), of which $2.6 was withheld to pay fees incurred by the Marlin Sellers and $5.2 was withheld and deposited into an escrow account to secure certain indemnity obligations of the Marlin Sellers (the "Escrow Amount") under the Marlin Stock Purchase Agreement. As of April 30, 2009, $0.3 has been paid related to federal excise tax and $4.9 remains in the escrow account and subject to release in accordance with the Marlin Stock Purchase Agreement. The $0.3 has reduced the aggregate consideration of $38.6 to $38.3.

•

Remington paid approximately $3.2 of Marlin Acquisition-related fees and expenses.

•

At the Marlin Closing Date and on behalf of Marlin, Remington repaid approximately $6.3 of borrowings under the Marlin Amended and Restated Commercial Revolving Line of Credit Agreement between Marlin and Webster Bank, National Association.

•

In addition to the Consideration, $2.8 was withheld in accordance with the Marlin Stock Purchase Agreement related to the estimated underfunding of Marlin's pension plan as of the Marlin Closing Date. The actual amount of the underfunding was subsequently determined to be $0.3 and was paid on May 1, 2008.

              For income tax purposes, since the RACI and Marlin acquisitions were purchases of stock, the tax basis of the assets and liabilities were not changed. The identifiable intangibles and goodwill are not deductible for tax purposes.

F-25

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

3. Business Combinations (Continued)

              The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in accordance with SFAS 141:

		Bushmaster		RACI		Cobb		DPMS		Marlin
Accounts Receivable		$	7.6	$	94.0	$	—	$	2.1	$	9.6
Inventory			5.5		178.8		—		5.2		24.6
Other Current Assets			0.3		44.4		0.1		—		5.4
Property, Plant and Equipment			0.9		104.5		0.4		0.2		12.7
Goodwill			35.1		59.2		1.7		5.2		9.1
Identifiable Intangible Assets			32.2		73.0		3.1		13.0		10.9
Other Long-Term Assets			—		22.1		—		—		5.9
	Total Assets Acquired		81.6		576.0		5.3		25.7		78.2
Current Liabilities			5.2		91.3		—		2.7		17.4
Capital Leases			—		—		0.3		—		—
Revolving Credit Facility			—		85.2		—		—		—
101/2% Senior Notes Due 2011			—		203.8		—		—		—
Pension & OPEB			—		31.4		—		—		7.1
Other Non-Current Liabilities			—		39.3		—		—		5.6
	Total Liabilities Assumed		5.2		451.0		0.3		2.7		30.1
Estimated Acquisition Cost		$	76.4	$	125.0	$	5.0	$	23.0	$	48.1

Pro Forma Financial Information (Unaudited)

              The following unaudited pro forma results of operations assume that the acquisitions of RACI, Cobb and DPMS occurred as of April 1, 2006 and the Marlin Acquisition occurred as of January 1, 2007, adjusted for the impact of certain items, such as additional depreciation expense of property, plant and equipment; additional amortization expense of identified intangible assets; additional interest expense on acquisition debt, net of bond premium amortization; reduced pension expense; recognition of write-up in cost of sales as inventory is sold and the related income tax effects. Income taxes are provided at the estimated statutory rate. This unaudited pro forma information should not be relied upon as necessarily being indicative of historical results that would have been obtained if the acquisitions had actually occurred on that date, nor of the results that may be obtained in the future.

Unaudited Pro Forma Financial Results	For the Year Ended December 31, 2008			For the Year Ended December 31, 2007			For the Period April 1, 2006 to December 31, 2006
Net Sales	$	727.4		$	666.6		$	407.5
Operating Income (Loss)		11.8			28.9			3.0
Net Loss		(28.2	)		(7.0	)		(17.7	)

F-26

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

4. Impairment Charges

              As a result of the acquisitions discussed in Note 3, the values of goodwill, intangible assets and fixed assets were initially determined with the assistance of third party valuations. The Company assesses the potential impairment of identifiable intangible assets and fixed assets whenever events or changes in circumstances indicate that the carrying values may not be recoverable and at least annually. Factors the Company considers important, which could trigger an impairment of such assets, include the following:

•

significant underperformance relative to historical or projected future operating results;

•

significant changes in the manner of or use of the acquired assets or the strategy for our overall business; and

•

significant negative industry or economic trends.

              Future adverse changes in these or other unforeseeable factors could result in an impairment charge that would materially impact future results of operations and financial position in the reporting period identified.

              In accordance with Statement of Financial Accounting Standards 142 ("SFAS 142") Goodwill and Other Intangible Assets, the Company tests goodwill and intangible assets for impairment on an annual basis as of October 1 and between annual tests if indicators of potential impairment exist. The impairment test compares the fair value of each reporting unit to its carrying amount, including goodwill and intangible assets with indefinite lives, to assess whether impairment is present. The Company has reviewed the provisions of SFAS 142 with respect to the criteria necessary to evaluate the number of reporting units that exist. Based on a combination of factors that occurred during 2008, including the deterioration of the economic and credit environment and market conditions in the hunting industry, the Company determined that indicators for potential impairment of goodwill and intangible assets existed in our reporting units. As a result, the Company conducted an evaluation of these assets pursuant to SFAS 142 at October 1, 2008. The fair values of the reporting units were estimated using a combination of the expected present value of future cash flows, market approach and a transactional approach.

              In accordance with SFAS 144 Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144"), the Company periodically reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of those assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flows to the recorded carrying value for the asset. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flow analysis. Based on this assessment, under SFAS 144, we concluded that no impairment charge was necessary to reflect the excess of the carrying value of long-lived intangible assets over the discounted cash flows.

              Significant judgments and estimates are involved in determining the useful lives of our long-lived assets, determining what reporting units exist, and assessing when events or circumstances would require an interim impairment analysis of goodwill or other long-lived assets to be performed. Changes in our organization or our management reporting structure, as well as other events and circumstances, including technological advances, increased competition, and changing economic or

F-27

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

4. Impairment Charges (Continued)

market conditions, could result in (a) shorter estimated useful lives, (b) additional reporting units, which may require alternative methods of estimating fair values or greater disaggregation or aggregation in our analysis by reporting unit, and/or (c) other changes in previous assumptions or estimates. In turn, this could have an additional impact on our consolidated financial statements through accelerated amortization and/or impairment charges.

              For the year ended December 31, 2008, the Company recorded goodwill impairment charges of $44.3 and trademark impairment charges of $3.1. The impairment testing, conducted with assistance from outside valuation experts, resulted in non-cash impairment charges to goodwill of $35.2 related to the RACI Acquisition, non-cash impairment charges to goodwill of $9.1 related to the Marlin Acquisition and non-cash impairment charges to trademarks of $3.1 million related to the Marlin Acquisition.

              No impairment charges were recorded by the Company for the year ended December 31, 2007 and the period April 1, 2006 through December 31, 2006.

5. Concentrations

              Sales to the Company's largest customer, Wal-Mart, comprised approximately 14%, 15% and 0% in 2008, 2007 and for the period from April 1, 2006 through December 31, 2006, respectively. The accounts receivable balance from Wal-Mart comprised approximately 12%, 12% and 0% at December 31, 2008, 2007 and 2006, respectively, of total outstanding accounts receivable. No other customer accounted for sales equal to or greater than 10% of sales for the years and period presented. In addition, no other customers accounted for accounts receivable greater than 10% at December 31, 2008, 2007 and 2006.

6. Inventories

              At December 31, Inventories consist of the following:

		2008		2007		2006
Raw Materials		$	26.7	$	23.8	$	0.9
Semi-Finished Products			31.6		30.3		3.4
Finished Products			63.4		79.3		4.8
	Subtotal		121.7		133.4		9.1
	LIFO Adjustment		1.1		—		—
	Total	$	122.8	$	133.4	$	9.1

              As noted previously, following the Marlin Acquisition the Company now accounts for a portion of its inventory under a LIFO assumption. As of December 31, 2008, approximately 11.0% of the Company's total inventory, excluding the LIFO adjustment, was accounted for under the LIFO method. Under a FIFO assumption, inventories would have been lower by $1.1 at December 31, 2008.

F-28

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

7. Property, Plant and Equipment

              At December 31, Property, Plant and Equipment consist of the following:

	2008			2007			2006
Land	$	16.0		$	13.7		$	0.0
Building and Improvements		44.1			38.7			0.1
Machinery and Equipment		74.7			55.0			1.0
Equipment Leased Under Capital Leases		1.8			1.3			0.0
Vehicles		0.4			0.3			0.1
Construction in Progress		7.7			5.5			0.0
Subtotal		144.7			114.5			1.2
Less: Accumulated Depreciation		(24.5	)		(8.9	)		(0.2	)
Total	$	120.2		$	105.6		$	1.0

              Depreciation expense for the years ended December 31, 2008, and 2007 and the period from April 1, 2006 through December 31, 2006, was $16.3, $8.7 and $0.2, respectively. Accumulated depreciation on assets leased under capital leases was $0.2, $0.2 and zero as of December 31, 2008, 2007 and 2006, respectively.

              The above data excludes the $1.9 fair value of the assets held for sale associated with the Gardner, Massachusetts manufacturing facility which was closed in October 2008 and is classified in current assets at December 31, 2008. The closure was related to a strategic manufacturing consolidation decision and all employees were notified in April 2008.

8. Goodwill and Other Intangible Assets

              In 2008, impairment charges of $47.4 (see Note 4) were recorded to goodwill and identifiable intangible assets (of which $35.2 related to the RACI Acquisition and $12.2 related to the Marlin Acquisition). No impairment provisions were necessary during 2007 or 2006.

F-29

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

8. Goodwill and Other Intangible Assets (Continued)

              The following tables summarize goodwill and major identifiable intangible assets, along with the accumulated amortization and amortization period:

	12/31/2008			12/31/2007			12/31/2006
Goodwill
Firearms	$	42.4		$	70.6		$	35.3
Ammunition		24.0			25.1			—
All Other		—			7.6			—
Total	$	66.4		$	103.3		$	35.3
Identifiable Intangible Assets
Firearms	$	102.4		$	95.1		$	32.2
Ammunition		10.5			10.5			—
All Other		16.5			15.7			—
Total		129.4			121.3			32.2
Less: Accumulated Amortization		(10.8	)		(4.0	)		(1.0	)
Total	$	118.6		$	117.3		$	31.2
Total Goodwill and Intangibles	$	185.0		$	220.6		$	66.5

		12/31/2008 Gross Balance		Accum. Amort.			12/31/2008 Net Balance		Amortization Period
Goodwill		$	66.4		N/A		$	66.4	Indefinite
Identifiable Intangible Assets
Tradenames/Trademarks		$	67.7		N/A		$	67.7	Indefinite
Customer Relationships/Lists			38.2		(5.4	)		32.8	17.1 Years*
License Agreements			8.5		(1.9	)		6.6	7 Years*
Unpatented Technology			11.9		(2.1	)		9.8	6 Years
Other			3.1		(1.4	)		1.7	4.7 Years*
	Total Intangible Assets		129.4		(10.8	)		118.6	11.7 Years*
Total Goodwill and Intangibles		$	195.8		(10.8	)	$	185.0

*

Represents weighted average amortization period.

F-30

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

8. Goodwill and Other Intangible Assets (Continued)

		12/31/2007 Gross Balance		Accum. Amort.			12/31/2007 Net Balance		12/31/2006 Gross Balance		Accum. Amort.			12/31/2006 Net Balance
Goodwill		$	103.3		N/A		$	103.3	$	35.3		N/A		$	35.3
Identifiable Intangible Assets
Tradenames/Trademarks		$	61.8		N/A		$	61.8	$	20.9		N/A		$	20.9
Customer Relationships/Lists			36.0		(3.0	)		33.0		10.5		(1.0	)		9.5
License Agreements			8.5		(0.7	)		7.8		—		—			—
Unpatented Technology			11.9		(0.3	)		11.6		0.8		—			0.8
Other			3.1		—			3.1		—		—			—
	Total		121.3		(4.0	)		117.3		32.2		(1.0	)		31.2
Total Goodwill and Intangibles		$	224.6		(4.0	)	$	220.6	$	67.5		(1.0	)	$	66.5

              Amortization expense related to intangible assets for 2008, 2007 and for the period from April 1, 2006 to December 31, 2006 was $6.8, $3.0 and $1.0, respectively. Estimated annual amortization for identifiable intangible assets over the next five calendar years is as follows:

Year	Amount
2009	$	6.1
2010		5.6
2011		5.7
2012		5.6
2013		5.3

9. Investments

Remington ELSAG Law Enforcement Systems, LLC

              Prior to its acquisition by the Company, Remington was party to a joint venture agreement with ELSAG, Inc., an unaffiliated third party, which formed the joint venture Remington ELSAG Law Enforcement Systems, LLC ("RELES") in August 2004. The agreement provided Remington a 50% ownership interest. The agreement called for each member to invest 50% of required capital investments and receive 50% of distributions, with an original maximum contribution amount of $1.5 by each party. Since inception, Remington had achieved its total of $1.5 (no contributions were made during 2007) in cumulative cash contributions to RELES and, accordingly, Remington had no more contractual commitments to fund RELES.

              Management assessed the accounting treatment of RELES under the provisions of FASB Interpretation No. 46R, Consolidation of Variable Interest Entities (revised December 2003)—an interpretation of ARB No. 51 ("FIN 46R"), and APB 18, The Equity Method of Accounting for Investments in Common Stock ("APB 18"), and concluded that RELES was a variable interest entity. However, as Remington was not the primary beneficiary, RELES was accounted for under the equity method of accounting.

F-31

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

9. Investments (Continued)

              The RACI Acquisition resulted in a new basis of the value of Remington's interest in the joint venture. Accordingly, Remington's investment was adjusted to a preliminary estimated fair value as of May 31, 2007 of $2.8 based on a letter of intent less estimated selling costs.

              The operating agreement of the joint venture provided a provision for ELSAG, Inc. to acquire Remington's interest in the joint venture upon a change in control. As a result of the RACI Acquisition, ELSAG, Inc. elected to pursue this option. On September 26, 2007 (the "RELES Closing Date"), Remington entered into a Membership Interest Purchase and Sale Agreement with ELSAG, Inc. and closed the sale of Remington's 50% interest in RELES to ELSAG, Inc. In full payment for the transferred interest, ELSAG, Inc. paid Remington $3.0. In connection with the sale of RELES, Remington recorded a gain of $0.5, which is included in Other Income.

              The following summarizes Remington's investment account balance associated with RELES at:

Account	June 1 – December 31, 2007
Investment in RELES	$	—
Equity in Losses from RELES		0.5

INTC USA

              On October 31, 2008, the Company, through Remington, entered into a membership interest purchase and investment agreement between Remington, International Non-Toxic Composites Corp., and INTC USA, LLC ("INTC USA"). Remington contributed an initial investment of approximately $0.8, with a commitment to fund subsequent cash contributions up to a total of $1.5. The Company owns 27.1% of the issued and outstanding membership interests in INTC USA. INTC USA owns a majority interest in Springfield Munitions Company, LLC, which with Delta Frangible Ammunition, LLC owns intellectual property rights related to manufacturing rights for various shot, ammunition and other products. The Company believes this membership interest will allow INTC USA to acquire, construct and/or lease and thereafter equip and operate a manufacturing facility for the production of products for sale to the Company and unrelated third parties.

              Management has assessed the accounting treatment of INTC USA and is accounting for its investment under the equity method of accounting as outlined in the provisions of APB Opinion 18.

              The following summarizes the Company's investment account balance associated with INTC USA at December 31, 2008:

Account	Amount
Investment in Membership Interest	$	0.8
Equity in (Earnings) Losses from Membership Interest		—

F-32

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

10. Other Accrued Liabilities

              At December 31, Other Accrued Liabilities consist of the following:

		2008		2007		2006
Retiree Benefits		$	1.3	$	0.8	$	0.0
Marketing			10.5		10.4		0.0
Healthcare Costs			4.1		5.1		0.0
Workers Compensation			1.8		1.8		0.0
Incentive Compensation			8.8		7.5		0.3
Excise Tax			5.3		2.4		0.3
Payroll & Related Payroll Taxes			5.1		2.1		0.5
Interest			2.0		2.1		0.2
Escrow			4.9		0.0		0.0
Other			8.7		11.9		0.6
	Total	$	52.5	$	44.1	$	1.9

11. Warranty Accrual

              Warranties are offered on the majority of products sold by FGI and manufactured in the U.S. Estimated future warranty costs are accrued at the time of sale, using the percentage of actual historical repairs to shipments for the same period, and is included in other accrued liabilities. Product modifications or corrections are voluntary steps taken by the Company to assure proper usage or performance of a product by consumers. The cost associated with product modifications and or corrections are recognized in accordance with SFAS 5, and charged to operations.

              Activity in the warranty accrual consisted of the following at:

	January 1 – December 31, 2008			January 1 – December 31, 2007			April 1 – December 31, 2006
Beginning warranty accrual	$	0.8		$	0.1		$	0.1
Accrual from acquisitions		0.5			0.7			—
Current period accruals		3.6			1.3			—
Current period charges		(3.4	)		(1.3	)		—
Ending warranty accrual	$	1.5		$	0.8		$	0.1

12. Debt

              Short-term debt of $3.2 and $3.5, at December 31, 2008 and December 31, 2007, respectively, consisted of unsecured, fixed interest agreements for financing insurance premiums. The interest rates under these agreements were 4.6% and 4.9% at December 31, 2008 and 2007, respectively.

F-33

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

12. Debt (Continued)

              Long-term debt at December 31, 2008, 2007 and 2006 consisted of the following:

		2008		2007		2006
Remington 10.5% Senior Notes due 2011		$	202.1	$	203.2		—
BFI Subordinated Notes			21.4		20.9		20.3
Remington Term Loan			20.3		25.0		—
BFI Term Loans			37.5		45.0		31.7
Remington Credit Facility			51.8		—		—
BFI Credit Facility			—		1.6		—
Capital Lease Obligations			1.1		1.1		—
	Subtotal		334.2		296.8		52.0
Less: Current Portion			19.2		12.1		4.7
	Total	$	315.0	$	284.7	$	47.3

Remington 10.5% Senior Notes due 2011

              The Company, through Remington, has 10.5% Senior Notes due 2011 (the "2011 Notes"), which were adjusted to their fair value of $203.8 as of May 31, 2007. The premium associated with the adjustment is being amortized through interest expense over the remaining term of the 2011 Notes. Debt acquisition costs associated with obtaining waivers, consents and amendments in the amount of $4.2 related to the 2011 Notes and $1.0 related to the Remington Credit Facility (defined below) were capitalized and are being amortized into interest expense over the remaining term of the Notes.

              The 2011 Notes are redeemable at the option of the Company through Remington, in whole or in part, any time with a redemption price of 100% of the principal amount. The 2011 Notes are unsecured senior obligations of Remington that are contractually pari passu with all existing and future senior indebtedness, if any, of Remington, but are effectively subordinate to secured indebtedness, including its indebtedness under the Remington Amended and Restated Credit Agreement (defined below) to the extent of the assets securing such indebtedness.

              Pursuant to the Second Supplemental Indenture to the Notes, dated May 12, 2008, RA Brands, Marlin and H&R became guarantors and unconditionally guarantee all obligations under the Notes on the terms and subject to the conditions of the Indenture.

              The Indenture and the Remington Amended and Restated Credit Agreement, as amended by the First Amendment, Second Amendment and the Letter Amendment, contain various restrictions on Remington's ability to incur debt, pay dividends and enter into certain other transactions. In addition, the Indenture permits repurchases of the Notes on the open market, subject to an aggregate discounted amount of $20.0 contained in the Remington Amended and Restated Credit Agreement.

BFI 15.5% Subordinated Notes due 2012

              BFI has subordinated notes comprising ten subordinated notes payable to various entities totaling $20.0 plus any paid-in-kind (PIK) interest due on April 13, 2012. Interest on the unpaid

F-34

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

12. Debt (Continued)

balance is 15.0% per annum, payable quarterly, commencing on June 15, 2006, and continuing until the principal is paid in full.

              Should BFI's ratio of operating cash flow to debt service fall below 1.85:1.00, BFI has the option of electing to accrue any interest payable in excess of 12% on any interest payment date prior to the final maturity date as PIK interest that, as of the relevant interest payment date, will be added to the outstanding principal amount of this note on the applicable interest payment. The outstanding principal amount of this note will be increased by the amount of the PIK interest. All PIK interest shall be paid in full in cash on the final maturity date. BFI paid PIK interest of $0.2 in 2008. BFI did not pay any PIK interest in 2007 or 2006.

Remington Term Loan

              The Company, through its Remington subsidiary, added a $25.0 Term Loan on November 13, 2007 ("Remington Term Loan"), at an interest rate of LIBOR plus 200 basis points (which was 6.84% at December 31, 2007) with monthly principal payments of $0.5, plus interest, due to begin on May 1, 2008 and cease on June 30, 2010. As a part of the Second Amendment, the Company can elect the interest rate of LIBOR plus 200 basis points or prime plus 50 basis points. The Remington Term Loan interest rate was in LIBOR plus 200 basis points (or 3.88%) at December 31, 2008. The weighted average interest rate of the Remington Term Loan at December 31, 2008 was 5.02%.

              Substantially all of Remington's assets are pledged as security for our obligations under the Amended and Restated Credit Agreement pursuant to the Second Amendment thereto.

BFI Term Loans

              The Company, through its BFI subsidiary, has term loans payable to Citizens Bank with fixed monthly principal payments that adjust every year as outlined in the loan agreements, plus interest calculated at 30-day LIBOR plus 2.4% ("Term Loan A") and 2.6% ("Term Loan B") for 2008 and 2007 and plus 2.4% for 2006 (Term Loan A) (3.8% and 4.0%, respectively, at December 31, 2008; 7.6% and 7.8%, respectively, at December 31, 2007; and 7.8% at December 31, 2006). Term Loan A is being amortized over a 60-month period and Term Loan B over a 40-month period. The term loans are collateralized by a blanket lien on all business assets of BFI. On or before April 30 of each year, the Company is required to make a mandatory prepayment equal to 35% of free cash flow, as defined in the agreement, measured as of December 31 of the fiscal year most recently ended. The mandatory prepayment was $5.6 and $1.4 at December 31, 2008 and 2007, respectively, and is classified as a current liability in the accompanying financial statements. Each of the term loans is subject to certain financial covenants.

Revolving Credit Facilities

              The Company maintains revolving credit facilities in different entities within FGI:

              Remington Credit Facility.    The Company, through Remington, has a Revolving Credit Facility (the "Remington Credit Facility"), which is governed by an amended and restated credit agreement (the "Remington Amended and Restated Credit Agreement"). The Remington Amended and Restated Credit Agreement, as amended through December 31, 2008, provides up to $155.0 of borrowings under

F-35

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

12. Debt (Continued)

an asset-based senior secured revolving credit facility through June 30, 2010; specifies that amounts available are subject to a borrowing base limitation based on certain percentages of eligible accounts receivable and eligible inventory in addition to a minimum availability requirement of $27.5; includes a letter of credit sub-facility of up to $15.0, under which Remington has aggregate outstanding letters of credit of $7.1 as of December 31, 2008; defines Applicable Margin so that the interest margin applicable to loans under the Remington Amended and Restated Credit Agreement is based on Average Excess Availability, and names RA Brands, Marlin and H&R as borrowers.

              The interest rate margin for the Alternate Base Rate and the Euro-Dollar loans at December 31, 2008 was (0.50%) and 1.00%, respectively. The weighted average interest rate under the Remington Credit Facility was 3.89% and 7.09% for the years ended December 31, 2008 and the seven months ended December 31, 2007, respectively.

              As of December 31, 2008, approximately $49.8 in additional borrowings including the minimum availability requirement of $27.5 was available as determined pursuant to the Remington Amended and Restated Credit Agreement.

              See Note 23 below regarding an amendment to the Remington Amended and Restated Credit Agreement, which was entered into on April 14, 2009.

              BFI Credit Facility.    The Company, through BFI, maintains a line of credit agreement (the "BFI Credit Facility") which expires on April 13, 2011. The maximum borrowing available under the BFI Credit Facility is $11.0.

              The BFI Credit Facility is collaterized by a first security interest in all assets of BFI. Interest is paid monthly and calculated at LIBOR plus 2.1% (all-in-rate of 3.5% as of December 31, 2008, 7.3% as of December 31, 2007 and 7.5% as of December 31, 2006). At December 31, 2008, 2007 and 2006, zero, $1.6 and zero, respectively, was outstanding on the BFI Credit Facility. Borrowing availability at December 31, 2008 was $10.7. Standby letters of credit outstanding were $0.3 at both December 31, 2008 and 2007.

Maturities

              Following are maturities of debt for each of the next five years and thereafter (including capital lease maturities):

Year	Amount
2009	$	19.2
2010		78.2
2011		215.4
2012		21.4
2013		—
Thereafter		—

              At December 31, 2008 and 2007, the Company, through Remington and BFI, were in compliance with all financial covenants or had obtained necessary waivers.

F-36

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

13. Mezzanine Equity and Stockholders' Equity

Preferred Stock

              Preferred stock has a par value of $0.01 and consists of 20,000,000 shares authorized, with 19,000,000 designated as Series A preferred stock. As of December 31, 2008 and 2007, there were 18,697,464 and 16,304,301 shares issued and outstanding of Series A preferred stock, respectively.

              The holders of Series A preferred stock are entitled to the following rights:

Voting rights:    One vote per share to be voted together with holders of Common Stock as a single class.

Dividend Rights:    Dividends may be declared and paid on the Series A preferred stock from funds lawfully available at the discretion of the Board of Directors.

Redemption Rights:    In the event of any liquidation, dissolution, or winding up of the Corporation, either voluntary or involuntary, the holders of Series A preferred stock will be entitled to receive, prior and in preference to any distributions of assets or funds to the holders of its common stock, an amount per share equal to the sum of $10.53 for each outstanding share (the liquidation value). Also, the holders of Series A preferred stock will receive an additional amount equal to 10% of the liquidation value, compounded annually, pro rated from the later of the original issue date of the Series A preferred stock or the most recent anniversary of the issue date. Total redemption amount at December 31, 2008 is $217.4.

              Because redemption is considered outside the control of the Company in accordance with EITF Topic No. D-98, Classification and Measurement of Redeemable Securities, the Company has classified the Series A preferred stock as mezzanine equity.

Common Stock

              Common stock has a par value of $0.01 and consists of 20,000,000 shares authorized as of December 31, 2008. As of December 31, 2008 and 2007, there were 16,619,992 and 16,550,504 shares issued and outstanding of Common stock, respectively.

              The holders of common stock are entitled to the following rights:

Voting rights:    One vote per share.

Dividend Rights:    No dividends may be declared or paid on common stock so long as any Series A preferred stock is outstanding. If no Series A preferred stock is outstanding, dividends may be declared and paid on common stock from funds lawfully available; therefore as and when determined by the Board of Directors.

Redemption Rights:    The common stock is not redeemable.

              On December 11, 2007, AHA LLC was converted to a C Corporation, at which time all preferred and common units were converted to preferred and common stock. Preferred and common stock was issued to the preferred and common members at a rate of 100 shares of the same type for each held.

F-37

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

13. Mezzanine Equity and Stockholders' Equity (Continued)

              Activity in the common and preferred units, common stock, and Series A preferred stock for 2008, 2007, and 2006 is as follows:

		Preferred Units			Common Units			Preferred Stock		Common Stock
Balance, March 31, 2006			—			—			—		—
	Issuance of shares(1)		—			—			—		1,000
Balance, December 31, 2006			—			—			—		1,000
	Issuance of shares(2)		125,000			125,000			—		—
	Conversion of LLC to C-Corp(3),(4)		(125,000	)		(125,000	)		12,500,000		12,500,000
	Merger of CBFII with and into FGI		—			—			—		(1,000	)
	Exchange of units for shares		—			—			3,020,825		3,596,146
	Issuance of shares(5)		—			—			783,476		—
Balance, December 31, 2007			—			—			16,304,301		16,096,146
	Issuance of shares(6)		—			—			208,927		—
	Issuance of shares(7)		—			—			2,184,236		—
	Vesting of Restricted Stock		—			—			—		239,870
Balance, December 31, 2008(8)			—			—			18,697,464		16,336,016

(1)

1,000 shares of CBFII, $0 par value, for purchase of certain assets and certain liabilities of Bushmaster Firearms, Inc.

(2)

AHA purchase of Remington Arms Company, Inc.

(3)

As part of the merger of CBFII, entities under common control exchanged their member units of BH and BFI for AHA stock (includes CPLP and holders of minority interest of BFI)

(4)

Simultaneously with conversion to a C corporation, a 100:1 stock split was declared for the preferred and common stock

(5)

Contribution related to DPMS Acquisition

(6)

Contribution related to merger related expenses

(7)

Contribution related to Marlin Acquisition

(8)

Common stock represents vested shares. There are 283,976 non-vested shares, totaling 16,619,992 shares, outstanding at December 31, 2008

14. Net Income (Loss) Per Share

              Net income (loss) per share is computed under the provisions of SFAS No. 128, Earnings Per Share ("SFAS No. 128"). Basic income (loss) per share is computed using net income (loss) and the weighted average number of common shares outstanding. Diluted earnings per share reflect the weighted average number of common shares outstanding plus any potentially dilutive shares outstanding during the period. Potentially dilutive shares consist of shares issuable upon the exercise of stock options (using the treasury stock method) and restricted shares that are nonvested.

F-38

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

14. Net Income (Loss) Per Share (Continued)

              The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in millions, except share and per share amounts):

		Year Ended December 31,
								April 1 – December 31 2006
		2008			2007
Numerator:
	Net income (loss) attributable to controlling interest	$	(28.6	)	$	(9.0	)	$	2.1
	Accretion of preferred stock		19.6			0.9			—
	Net income (loss) applicable to common shareholders		(48.2	)		(9.9	)		2.1
Denominator:
	Weighted average common shares outstanding (basic)		16,236,305			16,084,174			15,958,261
	Weighted average common shares outstanding (diluted)		16,236,305			16,084,174			16,187,849
Income (loss) per common share:
	Basic	$	(2.97	)	$	(0.62	)	$	0.13
	Diluted		(2.97	)		(0.62	)		0.13

              The following table shows the common equivalent shares related to non-vested restricted stock and stock options that were not included in the computation of diluted earnings per share as their effect would have been antidilutive:

			Year Ended December 31,
							April 1 – December 31 2006
			2008		2007
Weighted Average Common Share Equivalents of Potentially Dilutive Securities:
	Restricted stock			210,779		278,197		—
	Stock options			1,280,933		—		—
		Total		1,491,712		278,197		—

15. Stock Compensation Plans

Restricted Stock/Restricted Units

              In 2006, certain employees and directors were granted 145,222 common units, of which 102,750 common units were subject to vesting over a four year period based on service or performance provisions as authorized by the Board of Directors.

              On December 12, 2007, CBFII was merged into FGI. In connection with the merger, BFI's common unit holders (the minority interest) agreed to exchange their restricted common unit interests for an equivalent interest in restricted common stock of FGI. The exchange ratio resulted in one restricted common unit of BFI being equal to 3.6162 shares of restricted common stock of FGI.

F-39

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

15. Stock Compensation Plans (Continued)

              The following table summarizes restricted common unit/share activity, adjusted for the 3.6162 conversion factor referenced above on a retroactive basis:

	Restricted Common Units/Shares Outstanding			Weighted Average Grant Date Fair Value		Units/Shares Vested
Balance April 1, 2006—Initial Grants		191,986		$	4.43
Granted		179,581			4.13
Balance December 31, 2006		371,567			4.29		153,587
Granted		97,906			11.89
Balance December 12, 2007		469,473		$	5.87		178,805
Conversion to AHA Shares		469,473		$	1.65
Granted		10,101			3.96
Balance December 31, 2007		479,574			1.70		178,805
Forfeited*		(53,928	)		1.60
Balance December 31, 2008		425,646		$	1.71		137,170

*

As of December 31, 2008, these shares had been forfeited and are held in treasury.

              The vesting of the restricted stock occurs at various times through 2012. Compensation expense was $0.3, $0.1 and $0.2 for the years ended December 31, 2008, 2007 and the period from April 1, 2006 to December 31, 2006, respectively. The remaining compensation cost of $0.4 will be recognized through 2012.

Stock Options

              On May 14, 2008, the board of directors of FGI (the "FGI Board") adopted the American Heritage Arms, Inc. 2008 Stock Incentive Plan (the "Plan"). The Plan is designed to provide a means by which certain current employees, officers, non-employee directors and other individual service providers may be given an opportunity to benefit from increases in the value of FGI common stock (the "Common Stock"), through the grant of awards. FGI, by means of the Plan, seeks to retain the services of such eligible persons and to provide incentives for such persons to exert maximum efforts for the success of FGI and its subsidiaries.

              The awards under the Plan may be in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards and stock unit awards. The maximum aggregate number of shares of Common Stock that may be issued under all awards granted to participants under the Plan is 2,424,703 shares, subject to certain adjustments as set forth in the Plan.

              On May 14, 2008, the FGI Board adopted the form of Nonqualified Stock Option Award Agreement (the "Form Award Agreement"). The Form Award Agreement outlines terms relating to stock option awards, including (i) the exercise price per share of each option granted, which shall be the fair market value of a share of the Common Stock on the date of grant (as defined in the Plan), (ii) the vesting schedule of the options granted, and (iii) acceleration provisions upon the occurrence of a change in control, termination of employment without cause or termination of employment for good reason.

F-40

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

15. Stock Compensation Plans (Continued)

              In 2008, the FGI Board granted 2,082,703 nonqualified stock option awards to various members of management and the board of directors. The vesting of the options occurs at various times through July 2012. Also in 2008, 147,213 nonqualified stock option awards were forfeited due to the departure of certain members of management. For the year ended December 31, 2008, the Company recognized $1.3 in expense related to these options. In addition, the Company expects to recognize approximately $3.4 in total stock compensation expense in relation to these grants through 2012.

              A summary of the stock option activity for the Plan for 2008 follows:

		2008
		Number of Awards			Weighted Average Exercise Price
Awards outstanding, January 1, 2008			—			—
	Granted		2,082,703		$	2.55
	Forfeited		(147,213	)	$	2.55
Awards outstanding, December 31, 2008			1,935,490		$	2.55
Awards vested, December 31, 2008			310,712		$	2.55
Shares available for grant, December 31, 2008			365,797

              The following table summarizes information about stock options outstanding in connection with the Plan at December 31, 2008:

	Awards Outstanding						Awards Vested
Exercise Price	Number of Shares		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
$2.55		1,935,490		6.43	$	2.55		310,712	$	2.55

              The fair value of granted options for the Plan was estimated at the grant date using the Black-Scholes pricing model with the following assumptions and results:

Year Ended December 31,	2008
Expected dividend yield		—
Expected volatility		63	%
Weighted average risk-free interest rate		3.03	%
Expected holding period (in years)		6.43
Weighted average fair value of awards	$	1.58

F-41

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

16. Income Taxes

              The provision (benefit) for income taxes consists of the following components:

		Year Ended 2008		Year Ended 2007			April 1 – December 31, 2006
Federal:
	Current	$	5.9	$	1.4		$	0.3
	Deferred		1.4		(5.2	)		0.6
State:
	Current		1.8		0.6			—
	Deferred		—		(0.8	)		0.2
		$	9.1	$	(4.0	)	$	1.1

              The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below as of December 31:

		2008					2007						2006
		Current		Noncurrent			Current			Noncurrent			Current		Noncurrent
Deferred tax assets:
	Accrued employee and retiree benefits	$	3.2	$	12.1		$	3.7		$	9.5		$	—	$	—
	Product liabilities, deferred revenue and other liabilities		3.9		7.4			2.4			4.2			0.2		(0.3	)
	Receivables and inventory		0.1		—			4.5			—			0.1		—
	Debt Acquisition Costs and Bond Accretion		—		1.8			—			2.7			—		—
	Other comprehensive income hedging		2.9		—			0.2			—			—		—
	Other comprehensive income pension		—		22.5			—			3.3			—		—
	Federal tax credits		—		—			0.3			0.2			—		—
	State tax credits		0.1		1.6			0.2			1.5			—		—
	Net operating losses		0.7		0.6			3.2			0.8			—		—
	Total deferred tax assets		10.9		46.0			14.5			22.2			0.3		(0.3	)
	Valuation allowance		—		(0.1	)		—			—			—		—
Net deferred tax assets			10.9		45.9			14.5			22.2			0.3		(0.3	)
Deferred tax liabilities:
	Deferred revenue		—		—			(1.2	)		—			—		—
	Property, plant and equipment		—		(25.5	)		—			(23.5	)		—		—
	Intangible assets		—		(31.8	)		—			(28.5	)		—		(0.8	)
Total deferred tax liabilities			—		(57.3	)		(1.2	)		(52.0	)		—		(0.8	)
Net deferred tax asset (liability)		$	10.9	$	(11.4	)	$	13.3		$	(29.8	)	$	0.3	$	(1.1	)

              As of December 31, 2008, a valuation allowance of $0.1 is required as compared to no valuation allowance established against deferred tax assets for both December 31, 2007 and 2006 in

F-42

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

16. Income Taxes (Continued)

accordance with the provisions of SFAS No. 109. The $0.1 change in the valuation allowance is for certain state benefits related to net operating loss carryforwards and tax credits that the Company does not believe will be realized before the benefits expire.

              Income tax payments were approximately $6.8 and $0.1 for the years ended December 31, 2008 and 2007, respectively. There were no payments for the period ended December 31, 2006.

              At December 31, 2008 and 2007, the Company has various losses, credit and other carry-forwards available to reduce future taxable income and tax thereon. The carry-forwards, as well as the related tax benefits associated with the carry-forwards, will expire as follows:

		As of December 31, 2008
Expiration		US Federal loss carry-forwards		State loss carry-forwards		Tax credit and other carry-forwards
1 – 5 years		$	—	$	0.4	$	0.4
6 – 20 years			—		1.5		0.1
Beyond 20 years			—		—		2.1
	Total	$	—	$	1.9	$	2.6

		As of December 31, 2007
Expiration		US Federal loss carry-forwards		State loss carry-forwards		Tax credit and other carry-forwards
1 – 5 years		$	—	$	0.2	$	—
6 – 20 years			7.3		2.1		1.1
Beyond 20 years			—		—		2.1
	Total	$	7.3	$	2.3	$	3.2

              The following is a reconciliation of the statutory federal income tax rate to the Company's effective income tax rates:

		January 1 – December 31, 2008			January 1 – December 31, 2007			April 1 – December 31, 2006
Federal statutory rate			(35.0	)%		(35.0	)%		35.0	%
State income taxes, net of federal benefits			4.9			1.2			5.7
Permanent differences, goodwill impairment			78.8			—			—
Permanent differences, other			(0.4	)		4.0			—
State tax credits, net of federal benefits			0.1			(0.1	)		—
State net operating loss			1.2			(2.0	)		—
Federal tax credits			(5.2	)		—			—
Other			3.2			0.9			1.6
	Effective income tax rate		47.6	%		(31.0	)%		42.3	%

F-43

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

16. Income Taxes (Continued)

              The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48"), on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no material adjustment in the liability for unrecognized tax benefits.

              A reconciliation of the change in gross unrecognized tax benefits from January 1, 2007 to December 31, 2008 is as follows:

Gross Unrecognized Tax Benefits		2008		2007
Balance January 1,		$	1.2	$	1.2
Gross increases/(decreases) in unrecognized benefits taken during prior period (predecessor)			4.4		—
Gross increases/(decreases) in unrecognized benefits taken during current period			—		—
Gross decreases because of settlement			—		—
Gross decreases because of lapse in applicable statute of limitations			—		—
	Balance December 31,	$	5.6	$	1.2

              The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company recognized an immaterial amount of expense associated with interest and penalties for the years ended December 31, 2008 and 2007. The Company had approximately $0.6, $0.7 and $0.9 accrued for interest/penalties at December 31, 2006, December 31, 2007, and December 31, 2008, respectively.

              The Company is currently subject to ongoing audits by various state tax authorities. Depending on the outcome of these audits, the Company may be required to pay additional taxes. However, the Company does not believe that any additional taxes and related interest or penalties would have a material impact on the Company's financial position, results of operations or cash flow.

17. Retiree Benefits

Defined Benefit Pension Plans:

              As a result of the RACI and Marlin Acquisitions, the Company sponsors two defined benefit pension plans (the "DB Plans") and a supplemental defined benefit pension plan (the "SERP") for certain of its employees. For disclosure purposes, the DB Plans and the SERP have been combined and are collectively referred to as the "Plans". Vested employees who retire will receive an annual benefit equal to a specified amount per month per year of credited service, as defined by the Plans.

              On December 31, 2007, the Company adopted SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132R ("SFAS 158"). SFAS 158 requires the Company to recognize the funded status of its defined benefit post retirement plan in the Company's statement of financial position. SFAS 158 does not change the accounting for the Company's defined contribution plans.

F-44

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

17. Retiree Benefits (Continued)

              The adoption of SFAS 158 had the following effect on the Company's statement of financial position as of December 31, 2007 related to the Plans. There was no impact on the Company's Postretirement Benefit Obligation:

	As of December 31, 2007
	Prior to adoption of FASB 158		Effect of adopting FASB 158			As Adjusted
Current Liability for Pension Benefits	$	14.8	$	(14.6	)	$	0.2
Long-term Liability for Pension Benefits	$	13.5	$	14.6		$	28.1

              The adoption of SFAS 158 did not affect the Company's statement of operations for the year ended December 31, 2007, or any prior periods.

Pension Curtailment:

              As part of the collective bargaining agreement reached on October 26, 2007, with a portion of the Remington workforce in Ilion, New York, an amendment was made to the defined benefit plan associated with that group for certain of our hourly union paid employees to be effective January 1, 2008 (the "2007 Amendment"). In addition, on October 9, 2006, Remington's Board of Directors approved amendments to the Remington defined benefit plan and the SERP for certain of our salaried employees and non union hourly employees (the "2006 Amendments") also to be effective January 1, 2008. The remaining defined benefit plan, acquired as part of the Marlin Acquisition, had certain amendments made prior to the Marlin Acquisition related to future benefits. As a result of the amendments made to the Plans, all future benefits were frozen as of January 1, 2008. For service accrued up to January 1, 2008, the pension calculations did not change. The amendments resulted in the Company recognizing curtailment gains of $6.4 in 2007.

Results at December 31, 2008:

              The following provides a reconciliation of benefit obligations, plan assets and funded status of the Plans:

Change in Benefit Obligation:

	2008			June 1 – December 31, 2007
Benefit Obligation at Beginning of Period	$	180.1		$	182.2
Impact of Marlin Acquisition		14.9			—
Service Cost		—			2.9
Interest Cost		11.4			6.3
Plan Amendments/Curtailment		—			(6.4	)
Actuarial Assumption Changes		2.3			(1.0	)
Actuarial (Gain)/Loss		12.1			1.0
Benefits Paid		(10.2	)		(4.9	)
Benefit Obligation at End of Period	$	210.6		$	180.1

F-45

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

17. Retiree Benefits (Continued)

Change in Plan Assets:

	2008			June 1 – December 31, 2007
Fair Value of Plan Assets at Beginning of Period	$	151.8		$	148.6
Impact of Marlin Acquisition		12.6			—
Actual Return on Plan Assets		(25.6	)		(3.0	)
Employer Contributions		15.9			11.1
Expenses		(0.5	)		—
Benefits Paid		(10.2	)		(4.9	)
Fair Value of Plan Assets at End of Period	$	144.0		$	151.8

	2008			June 1 – December 31, 2007
Funded Status	$	(66.7	)	$	(28.3	)
Unamortized Prior Service Cost		—			—
Unrecognized Net Actuarial Loss		—			—
Net amount recognized in the balance sheet	$	(66.7	)	$	(28.3	)

Amounts recognized in the balance sheet as of:

	2008			December 31, 2007
Accrued Benefit Liability	$	(66.7	)	$	(28.3	)
Accumulated other comprehensive income		31.4			5.4
Deferred Tax Assets		19.2			3.3
Net Amount Recognized	$	(16.1	)	$	(19.6	)

              The accrued benefit liability is recorded on the consolidated balance sheet in the "Retiree Benefits, net of Current Portion," as well as in the "Other Accrued Liabilities" line item as described in Note 10.

              Following is certain information about our pension plans that have accumulated benefit obligations in excess of the fair value of their plan assets as of:

	2008		December 31, 2007
Projected benefit obligation	$	195.7	$	180.1
Impact of Marlin Acquisition		14.9		—
Accumulated benefit obligation		210.6		180.1
Fair value of plan assets		143.9		151.8

F-46

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

17. Retiree Benefits (Continued)

Components of Net Periodic Pension Cost:

	2008			June 1 – December 31, 2007
Service Cost	$	—		$	2.9
Interest Cost		11.4			6.3
Return on Assets		(13.4	)		(6.7	)
Amortization of Prior Service Cost		—			—
Recognized Net Actuarial Loss		1.7			0.9
Net Periodic Pension (Benefit)/Cost		(0.3	)		3.4
Curtailment Gain		—			(6.4	)
Total Cost	$	(0.3	)	$	(3.0	)

	2008			2007
Weighted average assumptions used to determine net periodic benefit cost:
Discount Rate		6.00	%		6.25	%
Expected Long-Term Return on Plan Assets		8.00			8.00
Rate of Compensation Increase*		N/A			4.00

	2008			2007
Weighted average assumptions used to determine benefit obligations at December 31:
Discount Rate		6.25	%		6.00	%
Rate of Compensation Increase*		N/A			4.00

*The rate of Compensation Increases in the above tables is not applicable in 2008 due to the freezing of the benefit plans.

              Our policy is to review the pension assumptions annually. Pension benefit income or expense is determined using assumptions as of the beginning of the year, while the funded status is determined using assumptions as of the end of the year. The assumptions are determined by management and established at the respective balance sheet date using the following principles: (1) The expected long-term rate of return on plan assets is established based upon historical actual asset returns and the expectations of asset returns over the expected period to fund participant benefits based on the current investment mix of the Plans; (2) The discount rate is set based on the yield of high quality fixed income investments expected to be available in the future when cash flows are paid; and (3) The rate of increase in compensation levels is established based on management's expectations of current and foreseeable future increases in total eligible compensation, while maintaining a consistent inflation component for all economic assumptions. In addition, management considers advice from independent actuaries on each of these three assumptions.

              Our investment strategy for Plans' assets is based on the long-term growth of principal while attempting to mitigate overall risk to ensure that funds are available to pay benefit obligations. The

F-47

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

17. Retiree Benefits (Continued)

Plans have adopted a strategic asset allocation designed to meet the Plans' long-term obligations. The Plans' assets are invested in a variety of investment classes, including domestic and international equities, domestic and international fixed income securities and other investments. Allowable investment structures include mutual funds, separate accounts, commingled funds, and collective trust funds. Prohibited investments are defined as commodities, private placements, and derivative instruments used solely for leverage. The Plans also invest in certain private investment (hedge) funds that are deemed permitted under the Plans' current investment strategy. These private investment funds are not currently subject to any direct regulation by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, or any other federal regulating commissions.

              The Plans weighted average asset allocations at December 31, 2008 and 2007 by asset category are as follows:

	Target Allocations						Actual Allocations
	2008			2007			2008			2007
Asset Category:
Domestic equity funds		30.0	%		50.0	%		3.0	%		43.0	%
International equity funds		20.0			15.0			4.0			16.0
Domestic fixed income funds		20.0			20.0			20.0			19.0
International fixed income funds		—			5.0			5.0			5.0
Private investment (hedge) funds		30.0			10.0			10.0			12.0
Cash and cash equivalents		—			—			58.0			5.0
Total		100.0	%		100.0	%		100.0	%		100.0	%

Anticipated Contributions:

              The Company expects to make aggregate cash contributions of approximately $7.7 to the Plans during the year ending December 31, 2009.

              Estimated Future Benefit Payments—Following is a summary, as of December 31, 2008, of the estimated future benefit payments from the Plans to our retirees in each of the next five fiscal years and in the aggregate for five fiscal years thereafter.

2009	$	11.1
2010		11.7
2011		12.4
2012		13.1
2013		13.8
Years 2014 – 2018		76.8

Savings Plans:

              The Company sponsors five defined contribution plans covering substantially all of its employees. Each of the individual plans contains various matching provisions ranging from 2% to 4%

F-48

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

17. Retiree Benefits (Continued)

of total compensation. In addition, vesting of these matching contributions ranges from zero to six years. The Company's matching expense to these plans was $3.4, $1.3 and zero for the years ended December 31, 2008, December 31, 2007, and the period April 1 through December 31, 2006, respectively.

              Effective January 1, 1998, the Company adopted a non-qualified defined contribution plan. The Company's matching expense and contribution was zero in 2008 and 2007 and $0.1 in 2006. This plan was amended in 2006 to allow participants to make an election to receive a distribution of their full accounts balance. On January 16, 2007, $2.1 was distributed to the participants.

Postretirement Benefit Plan:

              The Company sponsors two unfunded postretirement defined benefit plans which provide certain employees and their eligible dependents and beneficiaries with retiree health and welfare benefits. The Marlin defined benefit postretirement healthcare plan (the "Marlin Postretirement Plan") covers certain employees from the Marlin Acquisition who have 17 years of service at retirement. The Marlin Postretirement Plan is a contributory plan for which certain of Marlin retirees and their spouses are eligible. The Company's contribution is limited to a specified amount per month per retiree employee or retiree spouse, as defined by the Marlin Postretirement Plan.

              The Remington defined benefit postretirement healthcare plan (the "Remington Postretirement Plan") covers certain eligible employees and their spouses from the RACI Acquisition. The Remington Postretirement Plan provides retirees and their eligible spouses postretirement medical benefits until age 65 and then provides a monthly supplement based on years of service as defined by the Remington Postretirement Plan.

              In 2007, the RACI Acquisition resulted in a new basis for the value of the Remington postretirement defined benefit plan. Accordingly, the Company decreased its estimated liability to equal the estimated projected benefit obligation in connection with applying the purchase method of accounting. This resulted in decreasing the liability for the plan by $9.5.

              The following tables include amounts for all unfunded postretirement benefit plans unless noted otherwise:

Change in Benefit Obligation:

	2008			June 1 – December 31, 2007
Benefit Obligation at Beginning of Year	$	15.2		$	15.3
Impact of Marlin Acquisition		4.7			—
Service Cost		0.5			0.3
Interest Cost		1.2			0.5
Participant Contributions		0.2			—
Actuarial Loss		(1.7	)		(0.6	)
Benefits Paid		(1.0	)		(0.3	)
Benefit Obligation at End of Year	$	19.1		$	15.2

F-49

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

17. Retiree Benefits (Continued)

Accrued Benefit Cost:

	2008			June 1 – December 31, 2007
Unfunded Status	$	(19.1	)	$	(15.2	)
Unrecognized Net Actuarial Loss (Gain)		(0.2	)		—
Employer Contributions		0.3			—
Unrecognized Prior Service Cost		—			—
Accrued Postretirement Benefit Obligation	$	(19.0	)	$	(15.2	)

              The accrued postretirement benefit obligation is recorded on the consolidated balance sheet in the "Retiree Benefits, net of Current Portion" line.

Components of Net Periodic Benefit Cost for the periods:

	2008		2007
	December 31		June 1 – December 31
Service Cost	$	0.5	$	0.3
Interest Cost		1.2		0.5
Net Amortization and Deferral		—		(0.8	)
Net Periodic Benefit Cost	$	1.7	$	0.0

Weighted average assumptions used to determine net periodic benefit cost for periods ended:

	2008			2007
	December 31			June 1 – December 31
Discount Rate		6.00	%		6.00	%
Rate of compensation increase		4.00	%		4.00	%

Assumed Healthcare cost trend rates at December 31:

	2008			2007
Healthcare cost trend rate assumed for next year		10.00	%		10.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		4.50	%		4.25	%
Year that the rate reaches the ultimate trend rate		2013			2012

F-50

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

17. Retiree Benefits (Continued)

Weighted average assumptions used to determine benefit obligations at:

	2008			2007
	December 31			June 1 – December 31
Discount Rate		6.25	%		6.00	%
Rate of compensation increase		4.00	%		4.00	%

              Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects:

	1-Percentage Point Increase		1-Percentage Point Decrease
Effect on total of service and interest cost	$	—	$	—
Effect on accumulated postretirement benefit obligation		0.2		(0.2	)

              Estimated Future Benefit Payments—Following is a summary, as of December 31, 2008, of the estimated future benefit payments for our postretirement benefit plan in each of the next five fiscal years and in the aggregate for five fiscal years thereafter.

2009	$	1.0
2010		1.2
2011		1.3
2012		1.4
2013		1.7
Years 2014 – 2018		8.8

              Amounts recognized in accumulated other comprehensive income (loss) for all plans consisted of $31.4 and $5.4 at December 31, 2008 and 2007, respectively. The estimated net loss for the postretirement benefit plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $6.2.

18. Leases

              Future minimum lease payments under capital leases and noncancellable operating leases with at least 12 months remaining, together with the present value of the net minimum capital lease payments at December 31, 2008, are as follows:

			Capital Leases		Operating Leases
Minimum Lease Payments for Years Ending December 31:
	2009		$	0.6	$	1.5
	2010			0.2		1.4
	2011			0.3		0.2
	2012			—		0.1
		Total Minimum Lease Payments		1.1	$	3.2
Less: Amount representing interest				—
		Present Value of Net Minimum Lease Payments	$	1.1

F-51

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

18. Leases (Continued)

              Rental expenses for operating leases for the periods ended December 31, 2008, 2007 and April 1 through December 31, 2006 were $2.0, $1.1 and $0.2, respectively.

19. Related Party Transactions

              The Company paid Meritage Capital Advisors, LLC ("Meritage") fees totaling $0.2 and $2.3 in 2008 and 2007, respectively, in connection with transaction advisory services. A director serves as a member of the Company's Board of Directors and is a managing director of Meritage.

              The Company paid Cerberus Partners fees totaling $1.5 and $0.5 in 2008 and 2007, respectively, for consulting services provided in connection with improving operations. Cerberus Partners is an affiliated entity of Cerberus. Cerberus owns over 95% of FGI.

              The Company paid other fees for relocation services totaling approximately $0.3 and provided certain products totaling approximately $0.1 to other entities affiliated through common ownership in 2008.

              The Company paid $0.1 in 2008 in connection with certain operating leases to an entity where the owner is an employee of the Company.

              The Company paid a director of the Company approximately $0.1 for consulting services in 2008. The consulting agreement did not exist prior to 2008.

              The Company paid approximately $0.1 and $0.1 in consulting services to an owner of a joint venture of the Company in 2008 and 2007, respectively.

20. Commitments and Contingencies

Purchase Commitments

              The Company has various purchase commitments, approximating $5.7, $1.8, $0.8, $0.5 and $0.4 for 2009, 2010, 2011, 2012 and 2013, respectively, for services incidental to the ordinary conduct of business, including, among other things, a services contract with its third party warehouse provider. Such commitments are not at prices in excess of current market prices. Included in the purchase commitment amounts are the Company's purchase contracts with certain raw materials suppliers, for periods ranging from one to seven years, some of which contain firm commitments to purchase minimum specified quantities. The Company has also leased equipment that allows the Company to manufacture its own steam supply.

Product Liability Litigation

              Remington entered into an Asset Purchase Agreement (the "1993 Purchase Agreement") with E.I. DuPont Nemours & Company ("DuPont") and its affiliates (collectively, the "1993 Sellers") in 1993 (the "1993 Asset Purchase"). As a result of this agreement and other contractual arrangements, the Company manages the joint defense of product liability litigation involving Remington brand firearms and the Company's ammunition products for both Remington and the 1993 Sellers. As of December 31, 2008, approximately 19 individual bodily injury cases and claims were pending, primarily alleging defective product design, defective manufacture and/or failure to provide adequate warnings;

F-52

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

20. Commitments and Contingencies (Continued)

some of these cases seek punitive as well as compensatory damages. The Company has previously disposed of a number of other cases involving post-1993 Asset Purchase occurrences by settlement. The 19 pending cases involve post-1993 Asset Purchase occurrences for which the Company bears responsibility under the 1993 Purchase Agreement.

              The relief sought in individual cases includes compensatory and, sometimes, punitive damages. Certain of the claims and cases seek unspecified compensatory and/or punitive damages. In others, compensatory damages sought may range from less than $50,000 to in excess of $1.0 and punitive damages sought may exceed $1.0. Of the individual post-1993 Asset Purchase bodily injury cases and claims pending as of December 31, 2008, the plaintiffs and claimants seek either compensatory and/or punitive damages in unspecified amounts or in amounts within these general ranges. In the Company's experience, initial demands do not generally bear a reasonable relationship to the facts and circumstances of a particular matter, and in any event, are typically reduced significantly as a case proceeds. The Company believes that its accruals for product liability cases and claims, as described below, are a superior quantitative measure of the cost to it of product liability cases and claims.

              At December 31, 2008 and 2007, the Company's accrual for product liability cases and claims was $13.4 and $10.5, respectively. The amount of the Company's accrual for product liability cases and claims is based upon estimates developed as follows. The Company establishes reserves for anticipated defense and disposition costs to us of those pending cases and claims for which it is financially responsible. Based on those estimates and an actuarial analysis of actual defense and disposition costs incurred by the Company with respect to product liability cases and claims in recent years, the Company determines the estimated defense and disposition costs for unasserted product liability cases and claims. The Company combines the estimated defense and disposition costs for both pending and unasserted cases and claims to determine the amount of the Company's accrual for product liability cases and claims. It is reasonably possible additional experience could result in further increases or decreases in the period in which such information is made available. The Company believes that its accruals for losses relating to such cases and claims are adequate. The Company's accruals for losses relating to product liability cases and claims include accruals for all probable losses the amount of which can be reasonably estimated. Based on the relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the 1993 Asset Purchase, the Company's accruals for the uninsured costs of such cases and claims and the 1993 Sellers' agreement to be responsible for a portion of certain post-1993 Asset Purchase shotgun-related product liability costs, as well as the type of firearms products that the Company makes), the Company does not believe with respect to product liability cases and claims that any probable loss exceeding amounts already recognized through the Company's accruals has been incurred. However, it is reasonably possible that a significant shift in the litigation environment or deterioration in our loss development experience could result in additional expense of up to $2.8 million.

Municipal Litigation

              In addition to these individual cases, as a manufacturer of shotguns and rifles, the Company, through Remington and BFI, has been named previously in several actions brought by various

F-53

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

20. Commitments and Contingencies (Continued)

municipalities, primarily against manufacturers, distributors and sellers of handguns. However, the Company or its subsidiaries are not a defendant in any pending municipal litigation.

              A majority of states have enacted some limitation on the ability of local governments to file such lawsuits against firearms manufacturers. In addition, similar legislation limiting such lawsuits on a federal level has been proposed in both houses of Congress, most recently by the House of Representatives on October 20, 2005 and the Protection of Lawful Commerce in Arms Act was adopted in October 2005. However, the applicability of the law to various types of governmental and private lawsuits has been challenged in both state and federal courts.

Litigation Outlook

              The Company is involved in lawsuits, claims, investigations and proceedings, including commercial, environmental and employment matters, which arise in the ordinary course of business. The Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company's financial position, results of operations or cash flows.

Environmental

              The Company does not expect current environmental regulations to have a material adverse effect on its financial condition, results of operations or cash flows. However, the Company's liability for future environmental remediation costs is subject to considerable uncertainty due to the complex, ongoing and evolving process of identifying the necessity for, and generating cost estimates for, remedial work. Furthermore, there can be no assurance that environmental regulations will not become more restrictive in the future. The Company has not identified any loss contingencies with respect to environmental remediation costs the realization of which the Company believes to be reasonably possible.

21. Financial Instruments

              The estimated fair value of debt at December 31, 2008 was $293.3 compared to a carrying value of $337.4. These 2008 amounts include short-term debt of $3.2 for the financing of certain insurance policies. The estimated fair value of the Company's debt at December 31, 2007 was $286.1 compared to a carrying value of $300.3. These 2007 amounts include short-term debt of $3.5 for the financing of certain insurance policies. The estimated fair value of the Company's debt at December 31, 2006 was $52.0 compared to a carrying value of $52.0. Fair value for other fixed rate long term debt was based on three level inputs and values were determined by projecting market rates in effect at the end of each year over the expected maturities of the debt.

              At December 31, 2007, the fair value of outstanding option contracts designated as cash flow hedges relating to firm commitments and anticipated consumption (aggregate notional amount of 45 million pounds of copper, lead and zinc) up to eighteen months from such date was $6.8, as determined with the assistance of a third party. During the seven months ended December 31, 2007, a net gain on a net-of-tax basis of $1.1 on derivative instruments was reclassified to cost of sales from accumulated other comprehensive income, and a net gain on a net-of-tax basis of $0.8 was recorded to accumulated other comprehensive income and to prepaid expenses and other current assets.

F-54

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

21. Financial Instruments (Continued)

              At December 31, 2008, the fair value of outstanding option contracts designated as cash flow hedges relating to firm commitments and anticipated consumption (aggregate notional amount of 31 million pounds of copper and lead) up to 12 months from such date was $0.8, as determined with the assistance of the Company's commodity broker. During the year ended December 31, 2008, a net gain on a net-of-tax basis of $0.9 on derivative instruments was reclassified to cost of sales from accumulated other comprehensive income, and a net loss on a net-of-tax basis of $3.6 was recorded to accumulated other comprehensive income and to prepaid expenses and other current assets.

              The following interest rate swap agreements are related to the Notes Payable:

	Effective Date		Notional Amount		Rate			Termination Date
Swap A		17-May-06	$	7.7		7.83	%		13-May-09
Swap B		14-May-07	$	7.7		7.49	%		13-May-10
Swap C		14-Dec-07	$	5.4		6.71	%		13-Dec-09
Swap D		14-Dec-07	$	1.8		6.74	%		13-Dec-10

              The purpose in entering into these interest rate swap arrangements was to hedge against the risk of interest rate increases on the related variable rate debt and not to hold the instrument for trading purposes. The all-in rate for Swaps A and B equals the fixed rate plus the loan spread of 2.4%. For swaps C and D it is equal to the fixed rate plus the loan spread of 2.6%. The interest rate swap agreement, which is a derivative financial instrument, is classified as a cash flow hedge. The Company accounts for this derivative financial instrument in accordance with SFAS No. 133. Accordingly, the derivative financial instrument is reflected on the balance sheet at its fair market value. However, as the interest rate swaps do not meet specific hedge accounting criteria, the change in fair value over the period covered is reflected in interest expense.

              At December 31, 2008, 2007 and 2006, the fair value of the interest rate swaps was a liability of $0.7, $0.5 and $0.1, respectively. At December 31, 2008, $0.3 was included in short-term liabilities and $0.4 was included in long-term liabilities.

22. Segment Information

              The Company identifies its reportable segments in accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information ("SFAS 131"). Based upon SFAS 131, the Company's business is classified into two reportable segments: Firearms, which designs, manufactures, imports and markets primarily sporting shotguns, rifles and modern sporting rifles; and Ammunition, which designs, manufactures and markets sporting ammunition and ammunition reloading components. The remaining operating segments, which include accessories and other gun-related products, the manufacture and marketing of clay targets and powder metal products, licensed products, technology products and apparel are combined into our All Other reporting segment. Other reconciling items include corporate, other assets not allocated to the individual segments and discontinued operations. The chief operating decision makers are a group of executive officers.

              Although the Company reports its financial results in accordance with U.S. GAAP, the Company primarily evaluates the performance of its segments and allocates resources to them based on

F-55

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

22. Segment Information (Continued)

the non-GAAP financial measure "Management EBITDA", which is unaudited. Management EBITDA differs from the term "EBITDA" as it is commonly used, and is substantially similar to the measure "Consolidated EBITDA" that is used in the 10¹/2% Senior Note Agreement. In addition to adjusting net income (loss) to exclude income taxes, interest expense, and depreciation and amortization, Management EBITDA also adjusts net income (loss) by excluding items or expenses not typically excluded in the calculation of "EBITDA", such as noncash items, gain or loss on asset sales or write-offs, extraordinary, unusual or nonrecurring items.

              In managing the Company's business, the Company utilizes Management EBITDA to evaluate performance of the Company's business segments and allocate resources to those business segments. The Company believes that Management EBITDA provides useful supplemental information to investors and enables investors to analyze the results of operations in the same way as management.

		January 1 – December 31, 2008		January 1 – December 31, 2007		April 1 – December 31, 2006
Net Sales:
	Firearms	$	426.6	$	201.6	$	41.3
	Ammunition		275.9		169.3		—
	All Other		20.0		14.0		—
Consolidated Net Sales		$	722.5	$	384.9	$	41.3

              Revenues from customers outside of the United States were $97.3, $47.8, and $5.0, for fiscal years 2008, 2007, and 2006, respectively. The Company does not maintain any long-lived assets outside of the United States.

		January 1 – December 31, 2008			January 1 – December 31, 2007			April 1 – December 31, 2006
Management EBITDA:
	Firearms	$	58.9		$	35.7		$	9.7
	Ammunition		43.3			17.4			—
	All Other		3.4			2.3			—
	Other Reconciling Items		(4.2	)		(4.8	)		—
Management EBITDA		$	101.4		$	50.6		$	9.7

		December 31, 2008		December 31, 2007		December 31, 2006
Assets:
	Firearms	$	339.7	$	294.0	$	86.1
	Ammunition		156.7		162.1		—
	All Other		41.6		37.2		—
	Other Reconciling Items		134.9		135.0		—
Consolidated Assets		$	672.9	$	628.3	$	86.1

F-56

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

22. Segment Information (Continued)

		January 1 – December 31, 2008		January 1 – December 31, 2007		April 1 – December 31, 2006
Gross Capital Expenditures:
	Firearms	$	10.2	$	4.6	$	0.3
	Ammunition		4.9		2.6		—
	All Other		0.1		—		—
	Other Reconciling Items		3.2		1.2		—
Consolidated Gross Capital Expenditures		$	18.4	$	8.4	$	0.3

              The following table illustrates the calculation of Management EBITDA(B), by reconciling Net Income (Loss) to Management EBITDA:

		January 1 – December 31, 2008			January 1 – December 31, 2007			April 1 – December 31, 2006
Adjustments to Reconcile GAAP Net Income to Management EBITDA:
GAAP Net Income (Loss)		$	(28.6	)	$	(9.0	)	$	2.1
	Depreciation		16.4			8.7			0.1
	Interest(A)		30.8			21.2			4.5
	Intangibles Amortization		6.7			3.0			1.0
	Other Noncash Charges(C)		3.5			(6.0	)		0.2
	Nonrecurring Charges(D)		16.1			36.7			0.6
	Impairment Charges		47.4			—			—
	Income Tax Expense		9.1			(4.0	)		1.1
Management EBITDA		$	101.4		$	50.6		$	9.6

(A)

Interest expense includes amortization expense of deferred financing costs of $1.6, offset by $1.0, of amortization associated with the premium recorded on the Notes for the year ended December 31, 2008. Interest expense includes amortization expense of deferred financing costs of $1.0, offset by $0.6, of amortization associated with the premium recorded on the Notes for the seven month period ended December 31, 2007. Amortization expense of deferred financing costs included in the five month period ended May 31, 2007 is $0.6. Interest expense includes amortization of deferred financing costs of $1.6 for the year ended December 31, 2006.

(B)

Management EBITDA is substantially similar to the measure "Consolidated EBITDA" that is used in the 10¹/2% Senior Note Agreement.

(C)

Other Non-cash Charges consist of the following:

Other Non-cash Charges:		2008		2007			2006
Retiree Benefits		$	1.4	$	0.3		$	—
Pension Curtailment Gain			—		(6.4	)		—
Stock Option Expense			1.4		0.1			0.2
Disposal of Assets			0.7		—			—
	Total Non-cash Charge Items	$	3.5	$	(6.0	)	$	0.2

F-57

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

22. Segment Information (Continued)

(D)

Nonrecurring items are comprised of the items listed in the table below:

Nonrecurring Items:		2008			2007		2006
Restructuring Expenses		$	2.8		$	3.5	$	—
Rollout of Inventory Write Up and Hedging from Acquisitions			6.1			31.8		0.4
Marlin and H&R Integration Costs			2.1			—		—
Write off of Surveillance Products Inventory			3.1			—		—
Gain on Sale of Investment			(1.4	)
Certain Employee Separation Benefits			1.6			0.2		—
Other Fees and Transaction Costs			1.8			1.2		0.2
	Total Nonrecurring Items	$	16.1		$	36.7	$	0.6

Geographic Information:

              Foreign sales accounted for approximately 13.5% in 2008, 12.4% in 2007, and 12.1% in 2006 of our total net sales. Our sales personnel and manufacturer's sales representatives market to foreign distributors generally on a nonexclusive basis and for a one-year term.

23. Subsequent Events

Remington Credit Facility

              On April 14, 2009, the Company entered into the Third Amendment to the Remington Amended and Restated Credit Agreement among Remington, RA Brands, Marlin, H&R, and the lenders, which amended the Remington Amended and Restated Credit Agreement as amended by the First Amendment, the Second Amendment, the "Joinder" Agreement and the Letter Amendment.

              This Third Amendment provided for the following significant changes, by and among other things:

1)

Extending the stated maturity of the Remington Credit Facility (including the Term Loan) to January 4, 2011;



2)

Amending the interest rate applicable to the Term Loan to 2.50% plus the Alternate Base Rate, for any advance under the Term Loan that is a "Base Rate Loan" and 4.00% plus the relevant LIBOR for any advance under the Term Loan that is a "Euro-Dollar Loan";



3)

Increasing the fee for any available credit under the Remington Credit Facility to 0.50% of the average amount of available credit;



4)

Increasing the amount generally available for cash repurchases of the Notes from $20.0 million to $50.0 million; although under certain circumstances Remington may make cash repurchases of Notes in an aggregate amount greater than $50.0 million so long as the portion of the purchase price that exceeds $50.0 million is paid in cash provided by FGI;



5)

Including a covenant restricting certain capital expenditures by Remington in the aggregate not to exceed $15.0 million during any fiscal year;

F-58

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

23. Subsequent Events (Continued)

6)

Increasing Remington's limit on "Permitted Acquisitions" to $15.0 million;



7)

Providing for a consent to a potential acquisition by Remington; and



8)

Amending the pricing grid set forth under the definition of "Applicable Margin".

Stock Option Grants

              On March 24, 2009, the Board of Directors of FGI granted 170,777 options to certain employees consistent with prior grants and terms including a four year vesting schedule at a strike price of $3.32.

Repurchase of Preferred Common Shares/Common Shares

              On April 6, 2009, FGI agreed to repurchase 70,000 and 70,000 shares of preferred and common stock, respectively, from its former Chief Executive Officer in connection with his departure from the Company. The shares were repurchased at the estimated fair value of approximately $0.8 (including accreted valued) for the preferred shares and approximately $0.2 for the common shares. As an enticement to repurchase these shares, FGI paid the former CEO approximately $0.3, which has been expensed. The value of the shares was based on a third party appraisal completed in February 2009.

F-59

Freedom Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in Millions, Except Share and Per Share Data)

		Unaudited						Unaudited
		June 30, 2009			December 31, 2008			June 30, 2008
ASSETS
Current Assets
Cash and Cash Equivalents		$	111.0		$	77.8		$	11.3
Accounts Receivable Trade—net			134.2			108.6			118.8
Inventories—net			129.2			122.8			180.3
Supplies Inventory—net			5.7			6.5			5.9
Prepaid Expenses and Other Current Assets			20.6			19.2			19.3
Assets Held for Sale			1.9			1.9			—
Deferred Tax Assets			12.3			10.9			11.5
	Total Current Assets		414.9			347.7			347.1
Property, Plant and Equipment—net			117.1			120.2			120.1
Goodwill and Intangibles—net			181.9			185.0			236.7
Debt Issuance Costs—net			3.8			4.9			6.3
Other Noncurrent Assets			16.3			15.1			14.8
	Total Assets	$	734.0		$	672.9		$	725.0
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable			61.9			45.2		$	44.5
Book Overdraft			—			—			1.7
Short-Term Debt			1.0			3.2			1.7
Current Portion of Long-Term Debt			0.7			19.2			18.9
Current Portion of Product Liability			3.5			2.8			3.3
Income Taxes Payable			11.3			—			2.8
Other Accrued Liabilities			64.9			52.5			46.9
	Total Current Liabilities		143.3			122.9			119.8
Long-Term Debt, net of Current Portion			322.6			315.0			331.6
Retiree Benefits, net of Current Portion			84.3			85.0			45.0
Product Liability, net of Current Portion			11.0			10.6			11.0
Deferred Tax Liabilities			11.8			11.4			31.8
Other Long-Term Liabilities			13.9			17.4			11.0
	Total Liabilities		586.9			562.3			550.2
Commitments and Contingencies (Note 14)
Preferred Stock, $0.01 par value, 20,000,000 shares authorized, of which 19,000,000 shares are designated as Series A preferred, aggregate liquidation preference of $227.4, $217.4 and $207.4, as of June 30, 2009, December 31, 2008, and June 30, 2008, respectively			227.4			217.4			207.4
	Total Mezzanine Equity		227.4			217.4			207.4
Stockholders' Equity
Common Stock, $.01 par value, 20,000,000 shares authorized			0.2			0.2			0.2
Less: Treasury Stock			(0.2	)		—			—
Paid-in Capital			—			—			—
Accumulated Other Comprehensive Loss			(37.0	)		(41.6	)		(9.0	)
Deficit in Noncontrolling Interest			(0.2	)		—			—
Accumulated Deficit			(43.1	)		(65.4	)		(23.8	)
	Total Stockholders' Equity (Deficit)		(80.3	)		(106.8	)		(32.6	)
	Total Liabilities, Mezzanine Equity and Stockholders' Equity	$	734.0		$	672.9		$	725.0

The accompanying notes are an integral part of these consolidated financial statements.

F-60

Freedom Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Dollars in Millions, Except Share and Per Share Data)

(Unaudited)

		For the three months ended June 30, 2009			For the three months ended June 30, 2008			For the six months ended June 30, 2009			For the six months ended June 30, 2008
Net Sales		$	235.1		$	164.3		$	427.3		$	316.8
Cost of Goods Sold			149.7			116.1			282.4			229.8
	Gross Profit		85.4			48.2			144.9			87.0
Selling, General and Administrative Expenses			43.3			33.8			75.2			62.4
Research and Development Expenses			3.1			1.5			5.4			3.4
Other Income (Loss)			0.1			0.8			(1.9	)		0.2
	Operating Income		38.9			12.1			66.2			21.0
Interest Expense			7.5			7.1			14.6			15.2
Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture and Noncontrolling Interest in Consolidated Subsidiary			31.4			5.0			51.6			5.8
Income Tax Provision (Benefit)			11.6			1.8			18.7			2.2
Equity in Losses from Unconsolidated Joint Venture			0.1			—			0.1			—
Net Income (Loss)			19.7			3.2			32.8			3.6
	Add: Net Loss Attributable to Noncontrolling Interest		0.1			—			0.2			—
	Net Income Attributable to Controlling Interest	$	19.8		$	3.2		$	33.0		$	3.6
Net Income (Loss) Attributable to Controlling Interest		$	19.8		$	3.2		$	33.0		$	3.6
Accretion of Preferred Stock			(4.6	)		(4.9	)		(10.0	)		(9.7	)
Net Income (Loss) Applicable to Common Stock		$	15.2		$	(1.7	)	$	23.0		$	(6.1	)
Net Income (Loss) Per Common Share, Basic		$	0.93		$	(0.11	)	$	1.41		$	(0.38	)
Net Income (Loss) Per Common Share, Diluted		$	0.92		$	(0.11	)	$	1.39		$	(0.38	)
Weighted Average Number of Shares Outstanding, Basic			16,326,839			16,234,779			16,332,431			16,166,948
Weighted Average Number of Shares Outstanding, Diluted			16,556,465			16,234,779			16,554,230			16,166,948

              Net Sales are presented net of Federal Excise taxes of $23.2 and $12.5 for the three months ended June 30, 2009 and 2008, respectively. Net sales are presented net of Federal Excise Taxes of $38.7 and $22.4 for the six months ended June 30, 2009 and 2008, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

F-61

Freedom Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in Millions, Except Share and Per Share Data)

(Unaudited)

				For the Six Months Ended June 30, 2009			For the Six Months Ended June 30, 2008
Operating Activities
	Net Income			$	32.8		$	3.6
Adjustments to reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:
	Depreciation and Amortization				12.2			12.5
	Equity in Losses from Unconsolidated Joint Venture				0.1			—
	Loss on Disposal of Property, Plant, and Equipment				0.3			—
	Contributions to Pension Plans				(3.5	)		(4.3	)
	Pension Plan Expense (Benefit)				2.5			(0.2	)
	Provision for Deferred Income Taxes—net				(1.0	)		(3.0	)
	Share Based Compensation Charges				0.2			0.1
	Other Non-Cash Charges				(0.4	)		0.6
	Changes in Operating Assets and Liabilities net of effects of acquisitions:
		Accounts Receivable Trade—net			(22.6	)		(27.8	)
		Inventories—net			(4.8	)		(25.0	)
		Prepaid Expenses and Other Current and Long-Term Assets			3.6			(1.7	)
		Other Noncurrent Assets			(0.5	)		—
		Accounts Payable			14.3			6.5
		Income Taxes Payable			11.7			(0.6	)
		Other Accrued and Long-Term Liabilities			8.4			(0.1	)
	Net Cash provided by (used in) Operating Activities				53.3			(39.4	)
Investing Activities
		Acquisition of Marlin Firearms, net of Cash Acquired			—			(46.6	)
		Purchase of Property, Plant and Equipment			(5.4	)		(8.0	)
		Cash Contribution to Membership Interest			(0.7	)		—
		Cash Received on Termination of Company Owned Life Insurance			—			5.6
		Acquisition of Dakota Arms			(1.8	)		—
	Net Cash used in Investing Activities				(7.9	)		(49.0	)
Financing Activities
		Proceeds from Revolving Credit Facilities			—			105.3
		Payments on Revolving Credit Facilities			—			(46.2	)
		Capital Contributions			—			25.8
		Debt Issuance Costs			(0.2	)		(0.1	)
		Principal Payments on Long-Term Debt			(10.9	)		(5.9	)
		Repurchase of Preferred and Common Stock			(1.1	)		—
		Change in Book Overdraft			—			(4.0	)
	Net Cash (used in) provided by Financing Activities				(12.2	)		74.9
Change in Cash and Cash Equivalents					33.2			(13.5	)
Cash and Cash Equivalents at Beginning of Year					77.8			24.8
Cash and Cash Equivalents at End of Year				$	111.0		$	11.3
Supplemental Cash Flow Information:
		Cash Paid During the Period for:
			Interest	$	12.6		$	15.1
			Income Taxes		9.9			3.1
			Previously accrued Capital Expenditures		1.2			0.9
		Noncash Financing and Investing Activities:
			Financing of insurance policies		2.2			1.7
			Capital Lease Obligations Incurred		0.9			0.5

The accompanying notes are an integral part of these consolidated financial statements.

F-62

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 1—Basis of Presentation

              The accompanying unaudited interim consolidated financial statements of Freedom Group, Inc. ("FGI" or the "Company") include the financial results of Remington Arms Company, Inc. ("Remington"), which also owns The Marlin Firearms Company ("Marlin") and its subsidiary, H&R 1871, LLC ("H&R"), and the financial results of Bushmaster Firearms International, LLC ("BFI" or "Bushmaster"), which also owns DPMS Firearms, LLC ("DPMS"). All significant intercompany accounts and transactions have been eliminated.

              On January 28, 2008, 100% of the shares of Marlin were purchased by Remington (the "Marlin Acquisition"). The Marlin Acquisition includes Marlin's 100% ownership interest in H&R. Although the Marlin Acquisition closed on January 28, 2008, based on the accounting policies adopted by Marlin and in place prior to the Marlin Acquisition, full financial statements were not available for the resulting stub period from January 28 through January 31, 2008 (the "Stub Period"). In addition, it was determined by the Company that it would require significant effort and time to generate financial statements for the Stub Period. Based on materiality tests performed using guidance from Staff Accounting Bulletin ("SAB") Topic 1 (M1), the Stub Period was deemed immaterial to the unaudited interim consolidated financial statements and thus, the Company began reporting consolidated financial statements with Marlin financial data beginning February 1, 2008.

              These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of FGI and subsidiaries as of and for the year ended December 31, 2008. These unaudited interim statements include all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the periods presented. The results for the six month period may not be indicative of a full year's result.

Note 2—Business Combinations

Dakota Firearms, LLC

              On June 5, 2009, the Company completed its acquisition of certain assets, primarily including inventory and equipment of Dakota Arms, LLC, including the Dakota Arms, Miller Arms, Dan Walter and Nesika brands (collectively, "Dakota") (the "Dakota Acquisition"). Dakota is a producer of high-end rifles, shotguns and ammunition. The total acquisition cost of the Dakota Acquisition was approximately $1.8, and was funded from the operating cash of the Company. The Company completed the Dakota Acquisition in an effort to position the Company in the largely customized, high precision, large caliber and safari segments of the market, with premium aspirational firearm and ammunition brands including Dakota Arms, Miller Arms and Nesika, as well as Dan Walter premium gun cases.

              The Dakota Acquisition is being accounted for as a business combination using the purchase method of accounting, in accordance with Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations ("SFAS 141R"), whereby the final purchase price (including assumed liabilities) is allocated and pushed down to the assets acquired based on their estimated fair market values at the date of the Dakota Acquisition. The acquisition cost of the Dakota Acquisition will be allocated to reflect the fair value of the assets acquired and liabilities assumed as of the closing date in

F-63

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 2—Business Combinations (Continued)

accordance with SFAS 141R. The preliminary allocation is subject to valuations which are not yet complete.

	Preliminary Purchase Price Allocation
Inventory	$	1.6
Property, Plant and Equipment		1.3
Total Assets Acquired		2.9
Current Liabilities		0.6
Other Non-Current Liabilities		0.5
Total Liabilities Assumed		1.1
Preliminary Acquisition Cost	$	1.8

The Marlin Firearms Company and its subsidiary H&R 1871, LLC

              The Company completed its acquisition of all of the outstanding shares of Class A and Class B Common Stock (collectively, the "Shares") of Marlin on January 28, 2008 (the "Marlin Closing Date"), from the shareholders of Marlin (collectively, the "Marlin Sellers") pursuant to a stock purchase agreement (the "Marlin Stock Purchase Agreement") dated as of December 21, 2007 by and among Marlin, Remington, the Marlin Sellers party thereto, and Frank Kenna, III, solely in his capacity as the shareholders' representative. The Marlin Acquisition includes Marlin's 100% ownership interest in H&R. The Company completed the Marlin Acquisition in an effort to grow its leadership position in firearms in the United States, to further develop market presence internationally and to benefit from operational improvements and integrating certain selling, marketing and administrative functions.

              The Marlin Acquisition was accounted for as a business combination using the purchase method of accounting, in accordance with SFAS No. 141, Business Combinations ("SFAS 141R"), whereby the final purchase price (including assumed liabilities) is allocated and pushed down to the assets acquired based on their estimated fair market values at the date of the Marlin Acquisition.

              The total acquisition cost of the Marlin Acquisition was $48.1, which was allocated to reflect the fair value of the assets acquired and liabilities assumed as of the Marlin Closing Date in accordance with SFAS 141R.

F-64

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 2—Business Combinations (Continued)

              The final acquisition cost allocation for the Marlin Acquisition is listed in the table below:

	Purchase Price Allocation
Inventory	$	24.6
Other Current Assets		15.0
Property, Plant and Equipment		12.7
Goodwill		9.1
Trade Names and Trademarks		8.7
Customer Relationships		2.2
Other Long-Term Assets		5.9
Total Assets Acquired		78.2
Current Liabilities		17.4
Pension & OPEB		7.1
Other Non-Current Liabilities		5.6
Total Liabilities Assumed		30.1
Acquisition Cost	$	48.1

              For income tax purposes, since the Marlin Acquisition was a purchase of stock, the tax basis of the assets and liabilities were not changed. The identifiable intangibles and goodwill are not deductible for tax purposes.

              On April 7, 2008, the Company announced a strategic consolidation of manufacturing facilities that resulted in the closure of its manufacturing facility in Gardner, Massachusetts in October 2008. The Company notified affected employees of this decision on April 7, 2008.

              In connection with the closing, management recorded a $1.2 liability in the purchase price allocation in accordance with EITF 95-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs incurred in a Restructuring). As of June 30, 2009, approximately $1.1 of the $1.2 liability had been spent. In addition, $2.9 had been spent on the transfer of equipment, planning and site preparation, and purchases of new equipment.

              In March 2009, the Company recognized a $2.0 gain in Other Income from the release of an escrow relating to a federal excise tax audit settlement. Since the settlement was reached outside the measurement period, for purchase price accounting, the amount was recognized as a gain in the statement of operations rather than an adjustment to goodwill.

Pro Forma Financial Information

              The following unaudited pro forma results of operations assume that the Marlin Acquisition occurred on January 1, 2008 and that the Dakota Acquisition occurred on January 1 of each of the respective periods. The results have been adjusted for the impact of certain items related to the Marlin Acquisition and the Dakota Acquisition, such as additional depreciation expense of property, plant and equipment; additional amortization expense of identified intangible assets; recognition of write-up in cost of sales as inventory is sold and the related income tax effects. Income taxes are provided at the

F-65

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 2—Business Combinations (Continued)

estimated effective rate of 40%. This unaudited pro forma information should not be relied upon as necessarily being indicative of historical results, nor indicative of the results that may be obtained in the future.

	Three Months Ended June 30, (Pro Forma)				Six Months Ended June 30, (Pro Forma)
	2009		2008		2009		2008
Net Sales	$	235.5	$	165.2	$	428.4	$	323.5
Operating Income		38.7		12.0		65.9		21.2
Net Income		19.7		3.1		32.8		3.7

Note 3—Fair Value Measurements

              The Company adopted SFAS No. 157, Fair Value Measurements ("SFAS 157"), and SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159"), on January 1, 2008. SFAS 157 (1) creates a single definition of fair value, (2) establishes a framework for measuring fair value, and (3) expands disclosure requirements about items measured at fair value. SFAS 157 applies to both items recognized and reported at fair value in the financial statements and items disclosed at fair value in the notes to the financial statements. SFAS 157 does not change existing accounting rules governing what can or what must be recognized and reported at fair value in the Company's financial statements, or disclosed at fair value in the Company's notes to the financial statements. Additionally, SFAS 157 does not eliminate practicability exceptions that exist in accounting pronouncements amended by SFAS 157 when measuring fair value. As a result, the Company will not be required to recognize any new assets or liabilities at fair value.

              Prior to SFAS 157, certain measurements of fair value were based on the price that would be paid to acquire an asset, or received to assume a liability (an entry price). SFAS 157 clarifies the definition of fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (that is, an exit price). The exit price is based on the amount that the holder of the asset or liability would receive or need to pay in an actual transaction (or in a hypothetical transaction if an actual transaction does not exist) at the measurement date. In some circumstances, the entry and exit price may be the same; however, they are conceptually different.

              Fair value is generally determined based on quoted market prices in active markets for identical assets or liabilities. If quoted market prices are not available, the Company uses valuation techniques that place greater reliance on observable inputs and less reliance on unobservable inputs. In measuring fair value, the Company may make adjustments for risks and uncertainties, if a market participant would include such an adjustment in its pricing.

              SFAS 157 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company's assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either

F-66

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 3—Fair Value Measurements (Continued)

level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1	—	Quoted market prices in active markets for identical assets or liabilities;
Level 2	—	Inputs other than level 1 inputs that are either directly or indirectly observable; and
Level 3	—	Unobservable inputs developed using the Company's estimates and assumptions, which reflect those that market participants would use.

              The following table presents information about assets and liabilities measured at fair value on a recurring basis:

Fair value measurements at June 30, 2009 using:

	Quoted prices in active markets for identical assets	Significant other observable inputs		Significant unobservable inputs
	Level 1	Level 2		Level 3	Total
Assets:
Commodity Contract Derivatives	Not applicable		$6.3	Not applicable	$	6.3
Life Insurance Policies	$0.1		Not applicable	Not applicable	$	0.1
Liabilities:
Interest Rate Swaps	Not applicable		$0.2	Not applicable	$	0.2

              As shown above, commodity contract derivatives valued based on fair values provided by the Company's commodity brokers are classified within level 2 of the fair value hierarchy. Life insurance policies valued by using cash surrender values, net of related policy loans, are classified within level 1 of the fair value hierarchy. The determination of where an asset or liability falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter based on various factors and it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between different levels will be rare.

              Interest rate swaps are valued using the Income Approach valuation technique. This method uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts.

              Most derivative contracts are not listed on an exchange and require the use of valuation models. Consistent with SFAS 157, the Company attempts to maximize the use of observable market inputs in its models. When observable inputs are not available, the Company defaults to unobservable inputs. Derivatives valued based on models with significant unobservable inputs and that are not actively traded, or trade activity is one way, are classified within level 3 of the fair value hierarchy.

F-67

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 3—Fair Value Measurements (Continued)

              On February 12, 2008, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position ("FSP") No. FAS 157-2 "Effective Date of FASB Statement No. 157" ("FSP FAS 157-2") to provide a one-year deferral of the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed in financial statements at fair value on a recurring basis (that is, at least annually). The Company adopted FSP FAS 157-2 as of January 1, 2009, noting no significant impact on its operations or financial position.

              In February 2007, the FASB issued SFAS 159, which provides the Company with the option to elect fair value as the initial and subsequent measurement attribute for most financial assets and liabilities and certain other items. The fair value option election is applied on an instrument-by-instrument basis (with some exceptions), is irrevocable, and is applied to the entire instrument. The election may be made as of the date of initial adoption for existing eligible items. Subsequent to initial adoption, the Company may elect the fair value option at initial recognition of eligible items, on entering into an eligible firm commitment, or when certain specified reconsideration events occur. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. Upon adoption of SFAS 159 on January 1, 2008, the Company did not elect to account for any assets and liabilities under the scope of SFAS 159 at fair value.

              In October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active ("FSP FAS 157-3"), which clarifies the application of SFAS 157 in a market that is not active. The effective date for FSP FAS 157-3 was October 10, 2008. The adoption of FSP FAS 157-3 by the Company was insignificant to the Company's operations or financial position.

              Due to their liquid nature, the carrying values of cash and cash equivalents, accounts receivable, accounts payable and income taxes payable are considered representative of their fair values. The estimated fair value of the Company's debt was $319.7 and $293.3 as of June 30, 2009 and December 31, 2008, respectively. The carrying value of the Company's debt was $324.3 and $337.4 as of June 30, 2009 and December 31, 2008, respectively. Fair value for the Company's fixed rate, long term debt was estimated by projecting market rates based on level three inputs in effect as of the June 30, 2009 and December 31, 2008 over the expected maturities of the debt.

Note 4—Inventories

              Inventories consist of the following at:

	June 30, 2009		December 31, 2008		June 30, 2008
Raw Materials	$	33.0	$	26.7	$	40.6
Semi-Finished Products		32.7		31.6		37.5
Finished Products		62.3		63.4		100.8
Subtotal		128.0		121.7		178.9
LIFO Adjustment		1.2		1.1		1.4
Total	$	129.2	$	122.8	$	180.3

F-68

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 4—Inventories (Continued)

              The Company's inventories are stated at the lower of cost or market. The majority of the Company's inventories are determined by the First-In, First-Out ("FIFO") method. Inventory costs associated with Semi-Finished Products and Finished Products include material, labor, and overhead while costs associated with Raw Materials include primarily material. The Company provides inventory allowances based on excess and obsolete inventories.

              Following the Marlin Acquisition the Company now accounts for a portion of its inventory under a Last-In First-Out ("LIFO") assumption. As of June 30, 2009, December 31, 2008, and June 30, 2008, approximately 8.5%, 11.0%, and 11.3%, respectively, of the Company's total inventory excluding the LIFO adjustment was accounted for under the LIFO method. Under a FIFO assumption, inventories would have been lower by $1.2, $1.1, and $1.4 at June 30, 2009, December 31, 2008, and June 30, 2008, respectively.

              For the three months ended June 30, 2008, the Company recorded a charge of $3.1 to cost of goods sold against certain of its surveillance technology products inventory in the accompanying statement of operations as a result of the Company discontinuing its exclusive distribution rights agreement with the technology products manufacturer.

Note 5—Goodwill and Other Intangible Assets

              No impairment provisions were recorded during the six months ended June 30, 2009 and June 30, 2008. However, during the three months ended December 31, 2008, impairment charges of $44.3 were recorded against goodwill and identifiable intangible assets.

              The carrying amount of goodwill and identifiable intangible assets attributable to each reporting segment is outlined in the following table:

	June 30, 2009			December 31, 2008			June 30, 2008
Goodwill
Firearms	$	42.1		$	42.1		$	87.6
Ammunition		24.0			24.0			24.0
All Other		0.3			0.3			0.3
Total Goodwill	$	66.4		$	66.4		$	111.9
Identifiable Intangible Assets
Firearms	$	102.4		$	102.4		$	106.0
Ammunition		10.5			10.5			10.5
All Other		16.5			16.5			15.7
Total Identifiable Intangible Assets, Gross		129.4			129.4			132.2
Less: Accumulated Amortization		(13.9	)		(10.8	)		(7.4	)
Total Identifiable Intangible Assets, Net		115.5			118.6			124.8
Total Goodwill and Intangibles	$	181.9		$	185.0		$	236.7

F-69

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 5—Goodwill and Other Intangible Assets (Continued)

              The following tables summarize the amounts of goodwill and identifiable intangible assets, along with the accumulated amortization and amortization period:

		June 30, 2009 Gross Balance		Accumulated Amortization			June 30, 2009 Net Balance		Amortization Period
Goodwill		$	66.4		N/A		$	66.4	Indefinite
Identifiable Intangible Assets
Tradenames/Trademarks		$	67.7		N/A		$	67.7	Indefinite
Customer Relationships/Lists			38.2		(6.5	)		31.7	17.1 Years*
License Agreements			8.5		(2.6	)		5.9	7 Years*
Unpatented Technology			11.9		(3.0	)		8.9	6 Years
Other			3.1		(1.8	)		1.3	4.7 Years*
	Total Intangible Assets		129.4		(13.9	)		115.5	11.7 Years*
Total Goodwill and Intangibles		$	195.8		(13.9	)	$	181.9

		December 31, 2008 Gross Balance		Accumulated Amortization			December 31, 2008 Net Balance		Amortization Period
Goodwill		$	66.4		N/A		$	66.4	Indefinite
Identifiable Intangible Assets
Tradenames/Trademarks		$	67.7		N/A		$	67.7	Indefinite
Customer Relationships/Lists			38.2		(5.4	)		32.8	17.1 Years*
License Agreements			8.5		(1.9	)		6.6	7 Years*
Unpatented Technology			11.9		(2.1	)		9.8	6 Years
Other			3.1		(1.4	)		1.7	4.7 Years*
	Total Intangible Assets		129.4		(10.8	)		118.6	11.7 Years*
Total Goodwill and Intangibles		$	195.8		(10.8	)	$	185.0

		June 30, 2008 Gross Balance		Accumulated Amortization			June 30, 2008 Net Balance		Amortization Period
Goodwill		$	111.9		N/A		$	111.9	Indefinite
Identifiable Intangible Assets
Tradenames/Trademarks		$	70.5		N/A		$	70.5	Indefinite
Customer Relationships/Lists			38.2		(4.1	)		34.1	17.1 Years*
License Agreements			8.5		(1.3	)		7.2	7 Years*
Unpatented Technology			11.9		(1.1	)		10.8	6 Years
Other			3.1		(0.9	)		2.2	4.7 Years*
	Total Intangible Assets		132.2		(7.4	)		124.8	11.7 Years*
Total Goodwill and Intangibles		$	244.1		(7.4	)	$	236.7

*

Represents weighted average amortization period.

F-70

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 5—Goodwill and Other Intangible Assets (Continued)

              Amortization expense related to identifiable intangible assets for the six and three month periods ended June 30, 2009 was $3.1 and $1.5, respectively. Amortization expense related to identifiable intangible assets for the six and three month periods ended June 30, 2008 was $3.4 and $1.6, respectively. Amortization expense for the net carrying amount of identifiable intangible assets at June 30, 2009 over the next five calendar years is estimated to be:

Year	Amount
2009 (remainder of fiscal year)	$	3.0
2010		5.6
2011		5.7
2012		5.6
2013		5.3
Thereafter		90.3

Note 6—INTC USA

              On October 31, 2008, the Company entered into a membership interest purchase and investment agreement with Remington, International Non-Toxic Composites Corp., and INTC USA, LLC ("INTC USA"). The Company contributed an initial investment of approximately $0.8, with a commitment to fund subsequent cash contributions up to a total of $1.5. On May 8, 2009, the Company contributed $0.7 million in satisfaction of its remaining funding commitment. The Company owns 27.1% of the issued and outstanding membership interests in INTC USA. INTC USA owns a majority interest in Springfield Munitions Company, LLC, which with Delta Frangible Ammunition, LLC owns intellectual property rights related to manufacturing rights for various shot, ammunition and other products. The Company believes this membership interest will allow INTC USA to acquire, construct and/or lease and thereafter equip and operate a manufacturing facility for the production of various shot, ammunition and other products for sale to the Company and unrelated third parties.

              Management has assessed the investment in INTC USA and, as a result, accounts for its investment under the equity method of accounting as outlined in the provisions of APB Opinion 18.

              The following summarizes the Company's investment account balance associated with INTC USA at:

	June 30, 2009		December 31, 2008		June 30, 2008
Investment in Membership Interest	$	1.5	$	0.8	$	—
Equity in (Earnings) Losses from Membership Interest		0.1		—		—

F-71

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 7—Other Accrued Liabilities

              Other Accrued Liabilities consisted of the following at:

	June 30, 2009		December 31, 2008		June 30, 2008
Marketing		10.6		10.5		5.2
Incentive Compensation		8.4		8.8		2.8
Excise Tax		4.3		5.3		5.0
Payroll & Related Payroll Taxes		7.2		5.1		5.8
Interest		2.0		2.0		2.2
Escrow		4.9		4.9		5.2
Other		27.5		15.9		20.7
Total	$	64.9	$	52.5	$	46.9

Note 8—Debt

              Long-term debt consisted of the following at:

	June 30, 2009			December 31, 2008			June 30, 2008
Remington 10.5% Senior Notes due 2011	$	201.6		$	202.1		$	202.6
BFI Subordinated Notes		21.4			21.4			21.3
Remington Term Loan		17.7			20.3			24.0
BFI Term Loans		29.1			37.5			40.6
Remington Credit Facility		51.8			51.8			60.8
BFI Credit Facility		—			—			—
Capital Lease Obligations		1.7			1.1			1.2
Subtotal		323.3			334.2			350.5
Less: Current Portion		(0.7	)		(19.2	)		(18.9	)
Total	$	322.6		$	315.0		$	331.6

Remington 10.5% Senior Notes due 2011

              The 10.5% Senior Notes due 2011 (the "2011 Notes") are redeemable at the option of the Company through Remington, in whole or in part, at any time at a redemption price of 100% of the principal amount. The 2011 Notes are senior unsecured obligations of Remington that are contractually pari passu with all existing and future senior indebtedness, if any, of Remington, but are effectively subordinate to secured indebtedness, including its indebtedness under the Amended and Restated Credit Agreement (defined below) to the extent of the assets securing such indebtedness.

BFI 15.5% Subordinated Notes due 2012

              BFI has subordinated notes (the "BFI Subordinated Notes") comprising ten subordinated notes payable to various entities totaling $20.0 plus any paid-in-kind (PIK) interest due on April 13, 2012.

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 8—Debt (Continued)

Interest on the unpaid balance is 15.0% per annum, payable quarterly, commencing on June 15, 2006, and continuing until the principal is paid in full.

Remington Term Loan

              The Company, through its Remington subsidiary, added a $25.0 Term Loan on November 13, 2007 ("Remington Term Loan"), at an interest rate of LIBOR plus 200 basis points with monthly principal payments of $0.5, plus interest, due to begin May 1, 2008 and cease on June 30, 2010. The terms of the Third Amendment effective April 14, 2009, amended the interest rate applicable to the Term Loan to 2.50% plus the Alternate Base Rate, for any advance under the Term Loan that is a "Base Rate Loan" and 4.00% plus the relevant LIBOR for any advance under the Term Loan that is a "Euro-Dollar Loan" and extended the final installment date to January 4, 2011. The Remington Term Loan at June 30, 2009 and 2008 was at LIBOR plus 400 basis points (or 4.32%) and at LIBOR plus 200 basis points (or 4.48%), respectively.

              The weighted average interest rate of the Remington Term Loan as of June 30, 2009 and 2008 was 2.57% and 5.60%, respectively. Substantially all of Remington's assets are pledged as security for our obligations under the Remington Term Loan.

BFI Term Loans

              The Company, through its BFI subsidiary, has term loans payable with fixed monthly principal payments that adjust every year as outlined in the applicable loan agreements, plus interest calculated at 30-day LIBOR plus 2.0% ("Term Loan A") and 2.2% ("Term Loan B") for 2009. As of June 30, 2009 and 2008, the all-in-rate on Term Loan A was 2.31% and 4.46%, respectively, and the all-in-rate on Term Loan B was 2.51% and 4.66%, respectively. Term Loan A is being amortized over a 60-month period and Term Loan B over a 40-month period. The term loans are collateralized by a blanket lien on all business assets of BFI. On or before April 30 of each year and upon completion of the annual audit, BFI is required to make a mandatory prepayment equal to 35% of free cash flow generated from the most recent year-end, as defined in the applicable loan agreement. The mandatory prepayment related to the years ended December 31, 2008 and 2007 that were made in April of the following year were $5.3 and $1.5, respectively. These amounts were classified as a current liability in the accompanying financial statements as of December 31, 2008 and 2007. Each of the term loans is subject to certain financial covenants.

Revolving Credit Facilities

              The Company maintains revolving credit facilities in different entities within FGI:

              Remington Credit Facility.    The Company, through Remington, has a Revolving Credit Facility (the "Remington Credit Facility"), which is governed by an amended and restated credit agreement (the "Remington Amended and Restated Credit Agreement"). On April 14, 2009, the Company entered into the Third Amendment to the Remington Amended and Restated Credit Agreement among Remington, RA Brands, L.L.C., Marlin, H&R, and the lenders, which amended the Remington Amended and Restated Credit Agreement as amended by the First Amendment, effective May 31,

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 8—Debt (Continued)

2007, the Second Amendment, effective November 13, 2007, the "Joinder" Agreement, effective January 22, 2008, and the Letter Amendment, effective June 13, 2008.

              The Third Amendment provided for the following significant changes, among other things:

1)

Extended the stated maturity of the Remington Revolving Credit Facility (including the Term Loan) to January 4, 2011;



2)

Amending the interest rate applicable to the Remington Term Loan to 2.50% plus the Alternate Base Rate, for any advance under the Remington Term Loan that is a "Base Rate Loan" and 4.00% plus the relevant LIBOR for any advance under the Remington Term Loan that is a "Euro-Dollar Loan";

              The interest rate margin for the Alternate Base Rate and the Euro-Dollar loans was 2.50% and 4.00%, respectively, at June 30, 2009, and (0.50%) and 1.00%, respectively, at June 30, 2008. The weighted average interest rate under the Remington Credit Facility was 5.30% and 4.27% as of June 30, 2009 and 2008, respectively.

              As of June 30, 2009 approximately $41.9 in additional borrowings, including the minimum availability requirement of $27.5, was available as determined pursuant to the Remington Amended and Restated Credit Agreement. As a part of the Second Amendment, Remington could elect for the Remington Term Loan an interest rate of LIBOR plus 200 basis points or prime plus 50 basis points.

              BFI Credit Facility.    The Company, through its BFI subsidiary, maintains a line of credit agreement (the "BFI Credit Facility") which expires on April 13, 2011. The maximum borrowing available under the BFI Credit Facility is $11.0.

              The BFI Credit Facility is collaterized by a first security interest in all assets of BFI. Interest is paid monthly and calculated at LIBOR plus 2.1%. In 2009, the margin for the BFI Credit Facility was adjusted from plus 2.1% to plus 1.7% driven by the Funded Debt to EBITDA ratio falling below 2.00 based on the 2008 audited financial statements. The all-in-rate was 2.02% and 4.56% at June 30, 2009 and 2008, respectively. There were no amounts outstanding on the BFI Credit Facility at June 30, 2009 or 2008. Borrowing availability at June 30, 2009 was $10.7. Standby letters of credit outstanding were $0.3 and $0.3 at June 30, 2009 and 2008, respectively.

Subsequent Event—Debt Refinancing

              On July 29, 2009, the Company issued $200.0 in aggregate principal amount of 10¹/4% Senior Secured Notes due 2015 (the "2015 Notes"). The Company also contemporaneously entered into a senior secured asset-based revolving credit facility (the "ABL Revolver") and borrowed $51.9 thereunder. The Company used the proceeds of the 2015 Notes and the borrowing under the ABL Revolver, together with cash on hand, to repay the Remington Credit Facility, the Remington Term Loan, the BFI Term Loans and the BFI Subordinated Notes on July 29, 2009 and to redeem Remington's 2011 Notes on August 7, 2009.

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 8—Debt (Continued)

10¹/4% Senior Secured Notes due 2015

              The 2015 Notes are guaranteed by each of the Company's existing wholly-owned domestic subsidiaries (the "Guarantors"), that are borrowers or guarantors under the ABL Revolver. Interest is payable on the 2015 Notes semi-annually on February 1 and August 1, commencing on February 1, 2010.

              The Company may redeem some or all of the 2015 Notes at any time prior to August 1, 2012 at a price equal to 100% of the principal amount thereof plus the make-whole premium described in the 2015 Notes. Thereafter, the Company may redeem some or all of the 2015 Notes at the redemption prices set forth in 2015 Notes. The Company may also redeem up to 35% of the outstanding 2015 Notes on or prior to August 1, 2012 with the proceeds of certain equity offerings and capital contributions, subject to limitations, at the redemption price of 110¹/4%. In addition, on or prior to August 1, 2012, the Company may also redeem up to 10% of the original aggregate principal amount of the 2015 Notes at a price equal to 103% of the principal amount of the 2015 Notes, no more than once in any twelve-month period.

              The 2015 Notes and guarantees are secured by (i) a first-priority lien on substantially all existing and future personal property of the Company and the Guarantors (other than assets securing the ABL Revolver with a first-priority lien), including 100% of the equity interests in the Guarantors, (ii) a first-priority lien on certain owned real property of the Company and the Guarantors and (iii) a second-priority lien on intellectual property and working capital of the Company and the Guarantors, such as receivables, inventory, related general intangibles, and other assets and proceeds thereof that secure the ABL Revolver on a first-priority basis.

              The indenture governing the 2015 Notes contains covenants which include, among others, limitations on the ability of the Company and some of its subsidiaries to: incur or guarantee additional debt or issue disqualified or preferred stock; pay dividends, repurchase equity or prepay subordinated debt; make certain investments; enter into transactions with affiliates; merge, consolidate or sell all or substantially all assets; allow certain restrictions on the ability of the Guarantors to pay dividends or make other payments to the Company; and incur liens on assets.

ABL Revolver

              The ABL Revolver is a four-year, $180.0 asset-based revolving credit facility, including sub-limits for letters of credit and swingline loans. Each of the Company's wholly-owned subsidiaries is either a borrower or guarantor under the ABL Revolver. Subject to certain conditions, the ABL Revolver may be increased with lender consent at the request of the Company by an aggregate of $75.0 during its term up to a $255.0 maximum limit. The ABL Revolver is secured by (i) a first-priority lien on the Company's present and future accounts receivable, inventory, and certain general intangible assets, including intellectual property, certain other assets and proceeds relating thereto, as of the effective date of the agreement, and (ii) a second-priority lien on collateral secured by the 2015 Notes other than real property owned by the Company.

              Borrowings under the ABL Revolver bear interest at an annual rate of either (a) LIBOR plus a spread or (b) the base rate plus a spread. The ABL Revolver includes an unused line fee that will

F-75

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 8—Debt (Continued)

change at an annual rate to be paid monthly in arrears. Monthly fees are also chargeable on letters of credit equal to the applicable LIBOR margin and a fronting fee equal to 0.125% per annum.

              The ABL Revolver contains customary covenants applicable to the Company and its subsidiaries, other than unrestricted subsidiaries. The ABL Revolver contains certain financial covenants, as well as restrictions on, among other things, our ability to: incur debt; incur liens; declare or make distributions to our stockholders; make loans and investments; repay debt; enter into mergers, acquisitions and other business combinations; engage in asset sales; amend or modify our governing documents; engage in businesses other than our business as currently conducted; and enter into transactions with affiliates.

Note 9—Stock Compensation

Restricted Stock/Restricted Shares

              The following table summarizes restricted common share activity for the six months ended June 30, 2009:

		Restricted Common Shares Outstanding			Weighted Average Grant Date Fair Value		Shares Vested
Balance January 1, 2009			425,646		$	1.71		137,926
	Granted		—			—
	Forfeited		(27,470	)		3.54
Balance June 30, 2009			398,176		$	1.58		198,808

              The vesting of the restricted stock occurs at various times through 2012. Compensation expense was less than $0.1 for both the three months and six months ended June 30, 2009. The remaining compensation cost of $0.3 will be recognized through 2012.

Stock Options

              On May 14, 2008, the board of directors of FGI (the "FGI Board") adopted the American Heritage Arms, Inc. 2008 Stock Incentive Plan (the "Plan"). The Plan is designed to provide a means by which certain current employees, officers, non-employee directors and other individual service providers may be given an opportunity to benefit from increases in the value of FGI common stock ("Common Stock"), through the grant of awards. FGI, by means of the Plan, seeks to retain the services of such eligible persons and to provide incentives for such persons to exert maximum effort for the success of FGI and its subsidiaries.

              The awards under the Plan may be in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards and stock unit awards. The maximum aggregate number of shares of Common Stock that may be issued under all awards granted to participants under the Plan is 2,424,703 shares, subject to certain adjustments as set forth in the Plan.

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 9—Stock Compensation (Continued)

              On May 14, 2008, the FGI Board adopted the form of Nonqualified Stock Option Award Agreement (the "Form Award Agreement"). The Form Award Agreement outlines terms relating to stock option awards, including (i) the exercise price per share of each option granted, which shall be the fair market value of a share of the Common Stock on the date of grant (as defined in the Plan), (ii) the vesting schedule of the options granted, and (iii) acceleration provisions upon the occurrence of a change in control, termination of employment without cause or termination of employment for good reason.

              For the three months and six months ended June 30, 2009, the Company recognized $0.2 and $0.3, respectively, in expense related to the options outstanding under the Plan. In addition, the Company expects to recognize approximately $1.6 in total remaining stock compensation expense in relation to these options from July 1, 2009 through March 26, 2013.

              A summary of the stock option activity for the Plan for the six months ended June 30, 2009 follows:

		Number of Awards			Weighted Average Exercise Price
Awards outstanding, January 1, 2009			1,935,490		$	2.55
	Granted		170,777			3.32
	Forfeited		(448,082	)		2.55
Awards outstanding, June 30, 2009			1,658,185		$	2.62
Awards vested, June 30, 2009			458,897		$	2.55
Shares available for grant, June 30, 2009			643,102

              The fair value of granted options for the Plan was estimated at the grant date using the Black-Scholes pricing model with the following assumptions and results:

Expected dividend yield		—
Expected volatility		63	%
Weighted average risk-free interest rate		3.03	%
Expected holding period (in years)		6.43
Weighted average fair value of awards	$	1.58

Note 10—Mezzanine and Stockholders' Equity

              The Company is authorized to issue 20,000,000 shares of $0.01 par value preferred stock as approved by the Board of Directors. As of June 30, 2009, there were 19,000,000 shares of preferred stock approved for issuance as Series A with no other approved classes of preferred stock issued or outstanding. The Company is also authorized to issue 20,000,000 shares of $0.01 par value common

F-77

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 10—Mezzanine and Stockholders' Equity (Continued)

stock. The Company's treasury shares are recorded at cost. The changes in the number of shares of preferred and common stock issued, held in treasury, and outstanding are summarized below:

	Issued		Held in Treasury			Outstanding
Shares of Preferred Stock at December 31, 2008		18,697,464		—			18,697,464
Shares purchased from former executives		—		(70,000	)		(70,000	)
Shares of Preferred Stock at June 30, 2009		18,697,464		70,000			18,627,464
Shares of Common Stock at December 31, 2008		16,673,920		(53,928	)		16,619,992
Shares purchased from former executives		—		(70,000	)		(70,000	)
Forfeited shares returned to the Company		—		(27,470	)		(27,470	)
Shares of Common Stock at June 30, 2009		16,673,920		(151,398	)		16,522,522

              On April 6, 2009, FGI agreed to repurchase 70,000 shares each of preferred and common stock from its former Chief Executive Officer in connection with his departure from the Company. The shares were repurchased at the estimated fair value of approximately $0.9 (including accreted value) for the preferred stock and approximately $0.2 for the common stock. As an enticement to sell these shares, FGI paid the former CEO approximately $0.3, which was expensed in the three months ended June 30, 2009 when the shares were repurchased. The value of the shares was determined with the assistance of a third party appraisal dated October 1, 2008.

              Forfeitures of common stock represent unvested shares issued to participants covered by the Plan who failed to meet the Plan's vesting requirements. Under the Plan, unvested shares of common stock are remitted back to the Company and may be subject for future awards.

Note 11—Net Income (Loss) Per Share

              Net income (loss) per share is computed under the provisions of SFAS No. 128, Earnings Per Share ("SFAS No. 128"). Basic income (loss) per share is computed using net income (loss) and the weighted average number of common shares outstanding. Diluted earnings per share reflect the weighted average number of common shares outstanding plus any potentially dilutive shares outstanding during the period. Potentially dilutive shares consist of shares issuable upon the exercise of stock options (using the treasury stock method) and restricted shares that are nonvested.

F-78

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 11—Net Income (Loss) Per Share (Continued)

              The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in millions, except share and per share amounts):

		Three Months Ended June 30,					Six Months Ended June 30,
		2009		2008			2009		2008
		(unaudited)					(unaudited)
Numerator:
	Net income (loss)		19.8		3.2			33.0		3.6
	Accretion of preferred stock		4.6		4.9			10.0		9.7
	Net income (loss) applicable to common stock	$	15.2	$	(1.7	)	$	23.0	$	(6.1	)
Denominator:
	Weighted average common shares outstanding (basic)		16,326,839		16,234,779			16,332,431		16,166,948
	Weighted average common shares outstanding (diluted)		16,556,465		16,234,779			16,554,230		16,166,948
Income (loss) per common share:
	Basic		0.93		(0.11	)		1.41		(0.38	)
	Diluted		0.92		(0.11	)		1.39		(0.38	)

              The following table shows the common equivalent shares related to non-vested restricted stock and stock options that were not included in the computation of diluted earnings per share as their effect would have been antidilutive:

			Three Months Ended June 30,				Six Months Ended June 30,
			2009		2008		2009		2008
			(unaudited)				(unaudited)
Weighted Average Common Share Equivalents of Potentially Dilutive Securities:
	Restricted stock			—		204,669		—		206,682
	Stock options			384,015		1,858,267		445,126		1,233,392
		Total		384,015		2,062,936		445,126		1,440,074

F-79

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 12—Income Taxes

              Our effective tax rate on continuing operations for the six months ended June 30, 2009 and 2008 was 36.2% and 37.9%, respectively. The difference between the actual effective tax rate and the federal statutory rate of 35% is principally due to state income taxes, permanent differences, and tax credit usage. The decrease in the effective tax rate is the result of an estimated increase in benefit from research and development tax credits.

Note 13—Retiree Benefits

Defined Benefit Pension Plans:

              The Company, through Remington, sponsors two defined benefit pension plans (the "DB Plans") and a supplemental defined benefit pension plan (the "SERP") for certain of its employees. For disclosure purposes, the DB Plans and the SERP have been combined and are collectively referred to as the "Plans." Vested employees who retire will receive an annual benefit equal to a specified amount per month per year of credited service, as defined by the Plans.

              The following tables summarize the components of net periodic pension cost for the Company's Plans for the periods ended:

	Three Months Ended June 30,
	2009			2008
Service Cost	$	—		$	—
Interest Cost		3.2			2.9
Expected Return on Assets		(3.4	)		(3.4	)
Amortization of Prior Service Cost		—			—
Recognized Net Actuarial Loss		1.5			0.4
Net Periodic Pension Cost	$	1.3		$	(0.1	)

	Six Months Ended June 30,
	2009			2008*
Service Cost	$	—		$	—
Interest Cost		6.4			5.7
Expected Return on Assets		(6.8	)		(6.7	)
Amortization of Prior Service Cost		—			—
Recognized Net Actuarial Loss		2.9			0.9
Net Periodic Pension Cost	$	2.5		$	(0.1	)

*

Includes five months for the acquired Marlin pension plan for 2008.

              The following tables summarize the components of net periodic postretirement cost for the Company's postretirement plans for the periods ended:

	Three Months Ended June 30,
	2009			2008
Service Cost	$	0.1		$	0.1
Interest Cost		0.3			0.3
Net Amortization and Deferral		(0.1	)		—
Net Periodic Pension Cost	$	0.3		$	0.4

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FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 13—Retiree Benefits (Continued)

	Six Months Ended June 30,
	2009			2008*
Service Cost	$	0.2		$	0.3
Interest Cost		0.6			0.5
Net Amortization and Deferral		(0.1	)		—
Net Periodic Pension Cost	$	0.7		$	0.8

*

Includes five months for the acquired Marlin pension plan for 2008.

Anticipated Contributions

              The Company, through Remington, expects to make aggregate cash contributions of approximately $7.5 to the Plans during the year ending December 31, 2009. As of August 19, 2009, total contributions of $5.3 have been made, leaving an anticipated additional amount of approximately $2.2 to fund its required contributions for these plans during the remainder of 2009.

Note 14—Commitments and Contingencies

Purchase Commitments

              The Company has various purchase commitments for services incidental to the ordinary conduct of business, including, among other things, a services contract with its third party warehouse provider. Such commitments are not at prices in excess of current market prices. Included in the purchase commitment amounts are the Company's purchase contracts with certain raw materials suppliers, for periods ranging from one to seven years, some of which contain firm commitments to purchase specified minimum quantities. Otherwise, such contracts had no significant impact on the Company's financial condition, results of operations, or cash flows during the reporting periods presented herein.

Contingencies

              The Company is subject to various lawsuits and claims with respect to product liabilities, governmental regulations and other matters arising in the normal course of business. Pursuant to an asset purchase agreement (the "Purchase Agreement"), on December 1, 1993, Remington acquired certain assets and assumed certain liabilities (the "Asset Purchase") of the sporting goods business formerly operated by E. I. du Pont de Nemours and Company ("DuPont") and one of DuPont's subsidiaries (together with DuPont, the "1993 Sellers"). Under the Purchase Agreement, the Company generally bears financial responsibility for all product liability cases and claims relating to occurrences after the closing of the Asset Purchase, except for certain costs relating to certain shotguns, for all cases and claims relating to discontinued products and for limited other costs. Because the Company's assumption of financial responsibility for certain product liability cases and claims involving pre-Asset Purchase occurrences was limited to a fixed amount that has now been fully paid, and with the 1993 Sellers retaining liability in excess of that amount and indemnifying the Company in respect of such liabilities, the Company believes that product liability cases and claims involving occurrences arising prior to the Asset Purchase are not likely to have a material adverse effect upon the financial condition, results of operations or cash flows of the Company. Moreover, although it is difficult to

F-81

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 14—Commitments and Contingencies (Continued)

forecast the outcome of litigation, the Company does not believe, in light of relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, the Company's accruals for the uninsured costs of such cases and claims and the 1993 Sellers' agreement to be responsible for a portion of certain post-Asset Purchase shotgun-related product liability costs, as well as the type of firearms products made by the Company), as well as the passage of time, that the outcome of all pending post-Asset Purchase product liability cases and claims will be likely to have a material adverse effect upon the financial condition, results of operations, or cash flows of the Company. Nonetheless, in part because the nature and extent of manufacturer liability based on the manufacture and/or sale of allegedly defective products (particularly as to firearms and ammunition) is uncertain, there can be no assurance that the Company's resources will be adequate to cover pending and future product liability occurrences, cases or claims, in the aggregate, or that such a material adverse effect upon the Company's financial condition, results of operations or cash flows will not result therefrom. Because of the nature of its products, the Company anticipates that it will continue to be involved in product liability litigation in the future.

              The Company's accruals for losses relating to product liability cases and claims include accruals for all probable losses for which the amount can be reasonably estimated. Based on the relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, the Company's accruals for the uninsured costs of such cases and claims and the 1993 Sellers' agreement to be responsible for a portion of certain post-Asset Purchase shotgun-related product liability costs, as well as the type of firearms products made by the Company), the Company does not believe with respect to product liability cases and claims that any reasonably possible loss exceeding amounts already recognized through the Company's accruals has been incurred.

              The Marlin Acquisition triggered the Connecticut Transfer Act (the "Act") with respect to the facility located in North Haven, Connecticut. The Act is designed to identify properties contaminated with hazardous wastes and to ensure that such properties are cleaned up to the satisfaction of the Connecticut Department of Environmental Protection ("DEP"). Under the Act, Marlin is required to investigate areas of environmental concern at the North Haven facility and to clean up contamination exceeding state standards to the satisfaction of DEP. The investigation of the North Haven facility is ongoing. Remediation costs may be incurred, but such costs at this time are not expected to be material to operations or cash flows.

              Marlin is also conducting remediation of oil-related contamination at a former Marlin facility in New Haven, Connecticut. Costs for the New Haven remediation are not expected to be material.

Note 15—Accounting for Derivatives and Hedging Activities

              The Company purchases copper and lead options contracts to hedge against price fluctuations of anticipated commodity purchases. The options contracts are intended to limit the unfavorable effect that cost increases will have on these metal purchases.

              In accordance with the provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), as amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities—an amendment of FASB Statement No. 133 and by SFAS

F-82

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 15—Accounting for Derivatives and Hedging Activities (Continued)

No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, commodity contracts are designated as cash flow hedges, with the fair value of these financial instruments recorded in prepaid expenses and other current assets, changes in fair value recorded in accumulated other comprehensive income, and net gains/losses reclassified to cost of sales based upon inventory turnover, indicating consumption and sale of the underlying commodity in the Company's products. In March 2009, the Company adopted SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. SFAS 161 requires disclosure of gains and losses on derivative instruments in a tabular format.

              At June 30, 2009, the fair value of the Company's outstanding derivative contracts relating to firm commitments and anticipated consumption (aggregate notional amount of 24.6 million pounds of copper and lead) up to fifteen months from such date was $6.3 as determined with the assistance of the Company's commodity counterparty. At June 30, 2008, the fair value of the Company's outstanding derivative contracts relating to firm commitments and anticipated consumption (aggregate notional amount of 39.4 million pounds of copper and lead) up to eighteen months from such date was $4.1 as determined with the assistance of the Company's commodity counterparties.

              The volatility of pricing the Company has experienced to date has affected results of operations for the three months ended June 30, 2009 and 2008. The Company believes that further significant changes in commodity pricing could have a future material impact on the consolidated financial position, results of operations, and cash flows of the Company.

	Fair Values of Derivatives Instruments as of June 30,
	2009			2008
Derivatives designated as hedging instruments under SFAS 133	Balance Sheet	Fair Value		Balance Sheet	Fair Value
Commodity Contracts	Prepaid and Other Current Assets	$	6.3	Prepaid and Other Current Assets	$	4.1
Interest Rate Swaps	Other Accrued Liabilities	$	0.1	Other Accrued Liabilities	$	0.2
	Other Long-Term Liabilities	$	0.1	Other Long-Term Liabilities	$	0.3

	Amt of Gain (Loss) (net of tax) Recognized in OCI on Derivative (Effective Portion) and recorded in Prepaid Expenses and Other Current Assets at Fair Value													Amount of Gain (net of tax) or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
													Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
						Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Derivatives in Statement 133 Net Investment Hedging Relationships
	June 30, 2009		June 30, 2008				June 30, 2009			June 30, 2008				June 30, 2009		June 30, 2008
Commodity Contracts	$	2.3	($	1.1	)	Cost of Sales	($	2.3	)	($	2.2	)	N/A		N/A		N/A
Interest Rate Swaps		N/A		N/A		N/A		N/A			N/A		Interest Expense	$	0.6	($	0.1	)

F-83

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 15—Accounting for Derivatives and Hedging Activities (Continued)

              The following interest rate swap agreements are related to the BFI Term Loans:

	Effective Date		Notional Amount		Rate			Termination Date
Swap A		14-May-07	$	6.5		7.09	%		13-May-10
Swap B		14-Dec-07	$	4.7		6.31	%		13-Dec-09
Swap C		14-Dec-07	$	1.6		6.34	%		13-Dec-10
Swap D		14-Apr-09	$	6.5		3.30	%		13-Apr-11

              The purpose in entering into these interest rate swap arrangements was to hedge against the risk of interest rate increases on the related variable rate debt and not to hold the instrument for trading purposes. The all-in rate for Swaps A and B equals the fixed rate plus the loan spread of 2.0%, while for Swaps C and D it is equal to the fixed rate plus the loan spread of 2.2%. The interest rate swap agreement, which is a derivative financial instrument, is classified as a cash flow hedge. The Company accounts for this derivative financial instrument in accordance with SFAS 133. Accordingly, the derivative financial instrument is reflected on the balance sheet at its fair market value. However, as the interest rate swaps do not meet specific hedge accounting criteria as cash flow hedges, the change in fair value over the period covered is reflected in interest expense. The change in fair value of the interest rate swaps of $0.6 and $0.1 for the six months ended June 30, 2009 and 2008, respectively, have been recorded as interest expense.

              At June 30, 2009 and 2008, the fair value of the interest rate swaps was a liability of $0.1 and $0.5, respectively. At June 30, 2009, $0.1 was included in short-term liabilities and $0.1 was included in long-term liabilities. As a result of the debt refinancing as discussed in Note 8 above, these swaps were terminated subsequent to June 30, 2009.

Note 16—Segment Information

              The Company identifies its reportable segments in accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information ("SFAS 131"). Based upon SFAS 131, the Company's business is classified into two reportable segments: Firearms, which designs, manufactures, imports and markets primarily sporting shotguns, rifles and modern sporting rifles; and Ammunition, which designs, manufactures and markets sporting ammunition and ammunition reloading components. The remaining operating segments, which include accessories and other gun-related products, the manufacture and marketing of clay targets and powder metal products, licensed products, technology products and apparel are combined into our All Other reporting segment. Other reconciling items include corporate, other assets not allocated to the individual segments and discontinued operations. The chief operating decision makers are a group of executive officers.

              Although the Company reports its financial results in accordance with U.S. GAAP, the Company primarily evaluates the performance of its segments and allocates resources to them based on the non-GAAP financial measure "Management EBITDA," which is unaudited. Management EBITDA differs from the term "EBITDA" as it is commonly used, and is substantially similar to the measure "Consolidated EBITDA" that is used in certain of the Company's debt agreements. In addition to adjusting net income (loss) to exclude income taxes, interest expense, and depreciation and amortization, Management EBITDA also adjusts net income (loss) by excluding items or expenses not typically excluded in the calculation of "EBITDA", such as noncash items, gain or loss on asset sales or write-offs, extraordinary, unusual or nonrecurring items.

F-84

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 16—Segment Information (Continued)

              In managing the Company's business, the Company utilizes Management EBITDA to evaluate performance of the Company's business segments and allocate resources to those business segments. The Company believes that Management EBITDA provides useful supplemental information to investors and enables investors to analyze the results of operations in the same way as management.

		Three Months Ended June 30,				Six Months Ended June 30,
		2009		2008		2009		2008
Net Sales:
	Firearms	$	149.3	$	101.4	$	270.3	$	190.9
	Ammunition		81.3		58.6		147.8		116.3
	All Other		4.5		4.3		9.2		9.6
Consolidated Net Sales		$	235.1	$	164.3	$	427.3	$	316.8

		June 30, 2009		June 30, 2008
Assets:
	Firearms	$	294.6	$	362.3
	Ammunition		181.9		163.4
	All Other		26.3		26.1
	Other Reconciling Items		231.2		173.2
Consolidated Assets		$	734.0	$	725.0

		Unaudited
		Three Months Ended June 30,						Six Months Ended June 30,
		2009			2008			2009			2008
Management EBITDA:
	Firearms	$	29.3		$	14.3		$	47.7		$	26.9
	Ammunition		26.2			9.2			41.2			19.3
	All Other		0.4			0.8			1.0			2.0
	Other Reconciling Items		(3.1	)		(0.9	)		(4.1	)		(1.4	)
Consolidated Management EBITDA		$	52.8		$	23.4		$	85.8		$	46.8

F-85

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 16—Segment Information (Continued)

              The following table illustrates the calculation of Management EBITDA, by reconciling Net Income to Management EBITDA:

		Unaudited
		Three Months Ended June 30,				Six Months Ended June 30,
		2009		2008		2009		2008
Net Income		$	19.8	$	3.2	$	33.0	$	3.6
Adjustments:
Depreciation Expense			4.2		4.2		8.3		8.2
Interest Expense(A)			7.5		7.1		14.6		15.2
Intangibles Amortization			1.8		2.1		3.6		4.0
Other Noncash Charges(B)			0.8		1.0		1.8		1.3
Nonrecurring Charges(C)			7.2		4.0		5.8		12.3
Income Tax (Benefit) Expense			11.5		1.8		18.7		2.2
	Management EBITDA	$	52.8	$	23.4	$	85.8	$	46.8

(A)

Interest expense for the three months and six months ended June 30, 2009 includes amortization expense of deferred financing costs of $0.4 and $0.8, respectively, offset by $0.2 and $0.5, respectively, associated with amortization of the premium recorded on the 2011 Notes. Interest expense for the three months and six months ended June 30, 2008 includes amortization expense of deferred financing costs of $0.3 and $0.6, respectively, offset by $0.2 and $0.5, respectively, associated with amortization of the premium recorded on the 2011 Notes.



(B)

The following table disaggregates the significant components of Other Noncash Charges for the three months and six months ended June 30, 2009 and 2008:

			Unaudited
			Three Months Ended June 30,					Six Months Ended June 30,
			2009		2008			2009		2008
Other Noncash Charges:
	Retiree Benefits		$	0.5	$	0.3		$	1.2	$	0.6
	Stock Option Expense			0.2		0.8			0.3		0.8
	Disposal of Assets			0.1		—			0.3		—
	Other			—		(0.1	)		—		(0.1	)
		Total Noncash Charges	$	0.8	$	1.0		$	1.8	$	1.3

F-86

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 16—Segment Information (Continued)

(C)

The following table disaggregates the significant components of Nonrecurring Charges for the three months and six months ended June 30, 2009 and 2008:

			Unaudited
			Three Months Ended June 30,					Six Months Ended June 30,
			2009			2008		2009			2008
Nonrecurring Charges:
	Restructuring and Integration Expenses		$	(0.1	)	$	1.2	$	0.1		$	2.5
	Purchase Accounting			—			1.9		—			5.6
	Write Off of Surveillance Products Inventory			—			—		—			3.1
	Certain Employee Separation Benefits			0.3			0.8		0.3			0.8
	Product Safety Notice			6.6			—		6.6			—
	Other Fees and Transaction Costs			0.4			0.1		(1.2	)		0.3
		Total Nonrecurring Charges	$	7.2		$	4.0	$	5.8		$	12.3

Note 17—Customer Concentrations

              Approximately 6.8% and 10.2% of total net sales for the three months ended June 30, 2009 and 2008, respectively, and 9.0% and 11.2% of total net sales for the six months ended June 30, 2009 and 2008, respectively, consisted of sales made to one customer from all reportable business segments.

Note 18—Recent Accounting Pronouncements

              In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements ("SFAS 160"). This statement is intended to improve, simplify, and converge internationally the reporting of noncontrolling interests in consolidated financial statements. SFAS 160 requires all entities to report noncontrolling (minority) interests in subsidiaries in the same way as equity in the consolidated financial statements. Moreover, SFAS 160 requires that transactions between an entity and noncontrolling interests be treated as equity transactions. SFAS 160 is effective for fiscal years beginning after December 15, 2008. Consequently, SFAS 160 was implemented by the Company on January 1, 2009 and the accompanying consolidated financial statements for the current and prior periods have been presented in accordance with SFAS 160. As of January 1, 2009, the Company now accounts for its consolidated joint venture, EOTAC, under the rules of SFAS 160. Upon adoption of SFAS 160, the Company reclassified minority interests in its consolidated balance sheet from other noncurrent liabilities to the equity section. Additionally, the Company changed the way non-controlling interests are presented within the consolidated statement of operations such that the statement of operations reflects results attributable to both the Company's interests and non-controlling interests. The results attributable to the Company's interests did not change upon the adoption of SFAS 160.

              In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to

F-87

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 18—Recent Accounting Pronouncements (Continued)

better understand their effects on an entity's financial position, financial performance, and cash flows. The new standard is also intended to improve transparency about the location and amounts of derivative instruments in an entity's financial statements; how derivative instrument and related hedged items are accounted for under SFAS 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. SFAS 161 requires disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk-related and requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and, consequently, was implemented by Freedom Group on January 1, 2009. Upon adoption of SFAS 161, the Company enhanced its disclosures for derivative instruments and hedging activities by providing additional information regarding the underlying risk, objectives, extent of hedging activity, and accounting designation. Since SFAS 161 requires additional disclosures, its adoption did not affect the Company's financial position or results of operations.

              In April 2009, the FASB issued FSP SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly ("FSP 157-4"). FSP 157-4 provides guidelines for making fair value measurements more consistent with the principles presented in SFAS 157. FSP 157-4 relates to determining fair values when there is no active market or where the price inputs being used represent distressed sales. It reaffirms what SFAS 157 states is the objective of fair value measurement—to reflect how much an asset would be sold for in an orderly transaction (as opposed to a distressed or forced transaction) at the date of the financial statements under current market conditions. Specifically, it reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. FSP 157-4 is effective for interim and annual periods ending after June 15, 2009. The adoption of FSP 157-4 has had no significant impact on the Company's results of operations, financial condition and equity.

              In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments ("FSP 107-1"). FSP 107-1 enhances consistency in financial reporting by increasing the frequency of fair value disclosures. FSP 107-1 relates to fair value disclosures for any financial instruments that are not currently reflected on the balance sheet of companies at fair value. Prior to issuing FSP 107-1, fair values for these assets and liabilities were only disclosed once a year. FSP 107-1 now requires these disclosures on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. FSP 107-1 is effective for interim and annual periods ending after June 15, 2009.

              In April 2009, the FASB issued FSP SFAS 115-2 and SFAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments ("FSP 115-2"). FSP 115-2 provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. FSP 115-2 relates to other-than-temporary impairments and is intended to bring greater consistency to the timing of impairment recognition, and provide greater clarity to investors about the credit and noncredit components of impaired debt securities that are not expected to be sold. The measure of impairment in comprehensive income remains fair value. FSP 115-2 also requires increased and more timely disclosures sought by investors regarding expected cash flows, credit losses, and an

F-88

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 18—Recent Accounting Pronouncements (Continued)

aging of securities with unrealized losses. FSP 115-2 is effective for interim and annual periods ending after June 15, 2009. The adoption of FSP 115-2 has had no significant impact on the Company's results of operations, financial condition and equity.

              In May 2009, the FASB issued SFAS No. 165, Subsequent Events ("SFAS 165"). This statement establishes general guidelines for accounting and disclosing events that occur subsequent to an entity's balance sheet date but prior to issuance of its financial statements. SFAS 165 defines the period after the balance sheet date and the circumstances which an entity should recognize events in its financial statements. SFAS 165 is effective for interim and annual periods ending after June 15, 2009. The adoption of SFAS 165 has had no significant impact on the Company's results of operations, financial condition and equity.

              In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets an amendment of SFAS 140 ("SFAS 166"). This statement removes the concept of a qualifying special-purpose entity from SFAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishing of Liabilities, and removes the exception from applying FASB Interpretation 46, Consolidation of Variable Interest Entities. The statement clarifies the objective of whether a transferor has surrendered control over the financial assets and limits the circumstances in which a financial asset should be derecognized. The statement requires that all assets acquired and liabilities incurred resulting from the transfer of a financial asset be initially measured at fair value. SFAS 166 is effective for interim and annual periods ending after November 15, 2009. The Company does not expect that the adoption of SFAS 166 will have a significant impact on its results of operations, financial condition and equity.

              In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation 46(R) ("SFAS 167"). The statement requires a reporting enterprise to perform an analysis and ongoing reassessments to determine whether the enterprise's variable interest gives it a controlling financial interest. It also requires an enterprise to assess whether it has an implicit financial responsibility to ensure a variable interest operates as designed when determining whether it has the power to control the variable interest. The statement eliminates the quantitative approach previously required when determining the primary beneficiary of a variable interest and augments current disclosures. SFAS 167 is effective for interim and annual periods ending after November 15, 2009. The Company does not expect that the adoption of SFAS 167 will have a significant impact on its results of operations, financial condition and equity.

              In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles ("SFAS 168"). This statement establishes the Accounting Standards Codification ("Codification") as the source of authoritative U.S. generally accepted accounting principles for all nongovernmental entities and supersedes SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. On the effective date of this statement, all then-existing and non-SEC accounting and reporting standards will be nonauthoritative and superseded by the Codification. New standards by the Financial Accounting Standards Board, will be issued through Accounting Standards Updates. Accounting Standard Updates are not considered authoritative in their own right, but will update, guide, and provide the bases for conclusions on changes in the Codification. SFAS 168 is effective for financial statements issued after September 15, 2009.

F-89

FREEDOM GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS—(Continued)

($ IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Note 19—Subsequent Events

              On August 14, 2009, the Company announced a product warning campaign directed towards the public and its consumers concerning the 17 HMR ammunition it markets and sells under the Remington brand name. The Company purchases this ammunition from a third party and was advised by the manufacturer that its ammunition should not be used with any semi-automatic firearms. The Company is recalling the ammunition to apply applicable safety warnings and is offering a coupon for the voluntary replacement of the Remington Model 597 17 HMR semi-automatic rifle with other Remington firearms. As a result, the Company accrued $6.6 as of and for the three months ending June 30, 2009 to reflect the estimated cost of this ammunition recall and rifle replacement program.

              Effective August 31, 2009, FGI agreed to repurchase 57,510 shares of common stock and options to purchase 127,392 shares of common stock from Paul Miller, our former Chairman of the Board in connection with his departure from the Company. The common shares and options were repurchased at the estimated fair value of approximately $0.4 for the common shares and $0.5 for the options. As an enticement to repurchase these shares and in connection with his ongoing non-competition and other agreements, we paid him approximately $0.6 on the date of the repurchase and have agreed to pay him an additional $1.0, $0.5 and $0.5, respectively, on each of the next three anniversaries of the repurchase.

              On September 22, 2009 we acquired certain assets from S&K Industries, Inc. ("S&K"), a supplier of wood stocks for our firearms operations for approximately $3.8. S&K was founded as a wood product manufacturing company in 1961 and is based in Lexington, Missouri. The assets acquired are primarily inventory, machinery and equipment. We believe this acquisition will improve efficiencies in our firearms manufacturing processes as well as reduce certain costs of acquiring the wood stocks.

              On October 2, 2009 we completed the acquisition of certain assets of Advance Armament Corporation ("AAC") for approximately $10.2 million, with additional contingent consideration of approximately $8.0 million due in 2015 upon achievement of certain employment and financial conditions. AAC manufactures and markets a full line of firearm accessory products used in certain military and commercial markets.

              Subsequent events have been evaluated through October 20, 2009, which is the date the financial statements were available to be issued.

F-90

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Management Board and Members
Bushmaster Firearms International, LLC:

              We have audited the accompanying consolidated statements of income, stockholders' equity and cash flows of Bushmaster Firearms, Inc. (a Maine corporation) and Subsidiaries for the period from January 1, 2006, to March 31, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

              We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

              In our opinion, the financial statements referred to above present fairly, in all material respects, the results of the operations and cash flows of Bushmaster Firearms, Inc. and Subsidiaries for the period from January 1, 2006 to March 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Greensboro, North Carolina
August 17, 2009 (except for
              Note 11, as to which the
              date is October 20, 2009)

F-91

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

FOR THE PERIOD FROM JANUARY 1, 2006 TO MARCH 31, 2006

NET SALES		$	16,774,401
COST OF GOODS SOLD			9,813,139
GROSS PROFIT			6,961,262
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			3,790,028
OPERATING INCOME			3,171,234
OTHER INCOME (EXPENSE)
	Rental income		20,303
	Miscellaneous income		70,787
	Interest expense		(139,648	)
			(48,558	)
INCOME BEFORE PROVISION FOR INCOME TAXES			3,122,676
PROVISION FOR INCOME TAXES			(7,598	)
NET INCOME		$	3,115,078
NET INCOME PER COMMON SHARE, BASIC		$	0.19
NET INCOME PER COMMON SHARE, DILUTED		$	0.19
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC			15,917,341
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, DILUTED			15,917,341

The accompanying notes are an integral part of these financial statements.

F-92

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD FROM JANUARY 1, 2006 TO MARCH 31, 2006

		Common Stock		Additional Paid-In Capital		Retained Earnings			Total Stockholders' Equity
BALANCE, JANUARY 1, 2006		$	105,410	$	125,919	$	2,111,395		$	2,342,724
	Net Income		—		—		3,115,078			3,115,078
	Distributions paid		—		—		(2,600,000	)		(2,600,000	)
BALANCE, MARCH 31, 2006		$	105,410	$	125,919	$	2,626,473		$	2,857,802

The accompanying notes are an integral part of these financial statements.

F-93

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM JANUARY 1, 2006 TO MARCH 31, 2006

CASH FLOWS FROM OPERATING ACTIVITIES:
	Net Income		$	3,115,078
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization		157,543
		Gain on disposal of property and equipment		(2,500	)
		Deferred income taxes		4,400
	(Increase) decrease in operating assets:
		Accounts receivable		(883,172	)
		Inventory		415,273
		Prepaid expenses		60,506
	Increase (decrease) in operating liabilities:
		Accounts payable		248,707
		Accrued payroll and payroll taxes		197,388
		Other accrued expenses		(5,062	)
		Customer deposits		(278,516	)
		Total adjustments		(85,433	)
		Net Cash Provided By Operating Activities		3,029,645
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of property and equipment			(48,831	)
		Net Cash Used By Investing Activities		(48,831	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Net payments on line of credit			(234,466	)
	Distributions paid to owners			(2,350,000	)
	Principal payments on notes payable			(312,552	)
	Principal payments on capital leases			(33,587	)
		Net Cash Used In Financing Activities		(2,930,605	)
NET INCREASE IN CASH AND CASH EQUIVALENTS				50,209
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD				38,888
CASH AND CASH EQUIVALENTS AT END OF PERIOD			$	89,097
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
	Interest		$	142,814
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
	Notes receivable reduced by distributions		$	250,000

The accompanying notes are an integral part of these financial statements.

F-94

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of the Business

              Bushmaster Firearms, Inc., collectively with its wholly owned subsidiaries, Windham Excavating Company and BFI Helicopter of New Hampshire, Inc., is a leading manufacturer of high quality firearms, spare parts, and accessories for the commercial, law enforcement, government, and international markets. The Company operates from facilities located in Windham, Maine and Lake Havasu City, Arizona. Its products include rifles, carbines, machine guns and upper and lower receivers. Bushmaster was founded in 1973 and was initially known for a weapon widely used by pilots during the Vietnam War. The weapon was known as the Bushmaster. In 2003, the Company acquired Professional Ordinance of Lake Havasu City, Arizona, which produced a proprietary carbon fiber technology. This technology, called Carbon-15, enables the Company to manufacture very strong, light weight rifles that absorb less heat than aluminum predecessors.

              Windham Excavating Company was founded in 1967 and leases commercial property located in Windham, Maine. BFI Helicopter of New Hampshire, Inc. was founded in September 1999 and provides commercial air transportation services.

              The Company operates under one reporting segment under SFAS 131 "Disclosures about Segments of an Enterprise and Related Information."

Estimates

              The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

              The consolidated financial statements include the accounts of Bushmaster Firearms, Inc. and its wholly owned subsidiaries, Windham Excavating Company and BFI Helicopter of New Hampshire, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. Bushmaster Firearms, Inc. leases its Windham facility from Windham Excavating Company. The revenue and related expenses are eliminated in consolidation.

Accounts Receivable

              The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated credit risk by performing credit checks and actively pursuing past due accounts. Accounts receivable are recorded at net realizable value consisting of the carrying amount less the allowance for uncollectible accounts.

              The Company uses the allowance method to account for uncollectible accounts receivable balances. Under the allowance method, an estimate of uncollectible customer balances is made based on balances that exceed 60 days old using factors such as the credit quality of the customer and the economic conditions in the market. Accounts are considered past due once the unpaid balance is 90 days or more outstanding, unless payments terms are extended. When an account balance is past due and attempts have been made to collect the receivable through legal or other means, the amount is

F-95

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1: NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

considered uncollectible and is written off against the allowance balance. An allowance for doubtful accounts has not been established since management is of the opinion that all accounts receivable at March 31, 2006 are fully collectible.

Inventory

              Inventory is valued at the lower of cost or market, with cost determined on the average and first-in first-out (FIFO) cost methods. Management established an inventory reserve totaling $144,000 at March 31, 2006 to adjust inventory to the lower of cost or market.

Property and Equipment

              The Company records its property and equipment at cost and uses the straight-line method of computing depreciation based upon estimated useful lives ranging from three to thirty-nine years. Items that do not extend the useful lives of the property and equipment are charged to expense in the year incurred. Depreciation expense totaled $157,543 for the period from January 1, 2006 to March 31, 2006.

Revenue Recognition

              Sales revenue is recognized upon the shipment of merchandise to customers. Allowances for sales return and discounts are recorded as a component of net sales in the period the allowances are recognized.

Compensated Absences

              Employees of the Company are entitled to paid vacations and short-term sick leave depending on length of service and other factors. Amounts earned but not yet used totaled $142,641 as of March 31, 2006.

Advertising

              The Company charges the costs of advertising to expense as incurred. Advertising expense charged to operations amounted to $405,506 for the period January 1, 2006 to March 31, 2006 and is included in selling, general and administrative expenses.

Freight Costs

              The Company includes freight costs in cost of goods sold. Total freight expense included in cost of goods sold for the period January 1, 2006 to March 31, 2006 was $31,518. Shipping costs included within selling, general and administrative expenses totaled $209,273 for the period January 1, 2006 to March 31, 2006.

Warranties

              The Company offers warranties on the products it sells. Accrued warranty expense is based on management's judgment of anticipated costs. At March 31, 2006, management determined that an accrued warranty expense was not necessary.

F-96

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1: NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

              Effective January 1, 2000 Bushmaster Firearms, Inc. elected to be taxed under Subchapter S of the Internal Revenue Code. This election allows taxable income and related tax credits to pass through to the stockholders. Accordingly, no provision for federal or state income related to Bushmaster Firearms, Inc. taxes has been included in the financial statements.

              The subsidiaries are C-Corporations that account for income taxes under Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS 109 is an asset and liability approach requiring the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the subsidiaries' consolidated financial statements or tax returns. Deferred tax assets and liabilities related primarily to differences for financial and tax reporting purposes between basis of net operating loss carry forwards and depreciation. In estimating future tax consequences, SFAS 109 generally considers all expected future events other than enactments of changes in the tax law or rates.

              The Company's provision for income taxes for the C-Corporation subsidiaries differs from applying the statutory U.S. federal income tax rate to income before income taxes of $24,149. The primary differences result from providing for state income taxes and from deducting certain expenses for financial statement purposes but not for federal income tax purposes.

Cash and Cash Equivalents

              For the purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

NOTE 2: CASH

              The Company maintains its cash accounts with three commercial banks located in Maine, New Hampshire, and Arizona. Accounts at each bank are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. At various times throughout the year, the Company's cash balances exceeded FDIC insured limits.

NOTE 3: LINE OF CREDIT

              The Company maintains a line of credit agreement with Citizens Bank. The maximum borrowings available under the agreement are $9,000,000. The line of credit is secured by a perfected first security interest in all assets of the Company, including a leasehold mortgage relating to the leasehold interests in property located in Windham. Interest is calculated at the 30-day London Interbank Offered Rates (LIBOR) plus 1.5% per annum (6.133% at March 31, 2006). At March 31, 2006, borrowings outstanding under the agreement amounted to $7,160,647.

F-97

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4: NOTES PAYABLE

              Notes payable consisted of the following as of March 31, 2006:

Note payable to Citizens Bank with fixed monthly principal payments as outlined in the loan agreement, plus interest calculated at the 30-day LIBOR plus 2% per annum (6.37% at March 31, 2006). The note will be amortized over a 60-month period. A final payment will be due in December 2009, when all remaining principal and interest shall be payable. The note is secured by a first priority lien and mortgage on and security interest in real property located in Windham, Maine.	$	1,704,467
Note payable to Citizens Bank with a monthly principal payment of $7,292, plus interest calculated at the one year LIBOR plus 2% per annum (6.0944% at March 31, 2006). The note will be amortized over a 48-month period. A final payment will be due in June 2007, when all remaining principal and interest shall be payable. The note is secured by a blanket lien on all business assets of the Company.		109,364
Note payable to Citizens Bank with principal payments of $250,000 due quarterly. Interest is calculated at the 30-day LIBOR plus 2.5% per annum (7.07% at March 31, 2006). However, the interest rate is hedged through an executed interest rate swap contract, resulting in a fixed rate of interest charged the Company of 5.62% per annum. The note will be amortized over an initial 34-month period. A final payment will be due in March 2007, when all remaining principal and interest shall be payable. The note is secured by a blanket lien on all business assets of the Company.		1,000,000
Note payable to GMAC in monthly installments of $1,321. The note will be amortized over a 24-month period at fixed interest rate of 6.5% per annum. The final payment will be due November 2006. The note is collateralized by a security interest in a vehicle.		9,047
Notes Payable Subtotal	$	2,822,878
Notes Payable Carryforward	$	2,822,878
Note payable to GMAC in monthly installments of $1,929. The note will be amortized over a 48-month period at fixed interest rate of 9.25% per annum. The final payment will be due March 2009. The note is collateralized by a security interest in a vehicle.		71,742
Notes payable to Bangor Savings Bank in monthly installments of $5,557. The notes will be amortized over a 36-month period at fixed interest rates ranging from 6.20% to 6.89% per annum. The final payments will be due at various times throughout 2008. The notes are collateralized by a security interest in vehicles.		135,064
Total notes payable	$	3,029,684

              The line of credit and certain notes payable with Citizens Bank are subject to certain financial covenants. At March 31, 2006, the Company was in compliance with all financial covenants.

F-98

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4: NOTES PAYABLE (CONTINUED)

              Interest expense on the line of credit and notes payable totaled $139,648 for the period from January 1, 2006 to March 31, 2006.

NOTE 5: INCOME TAXES

              The income tax accounting reported within these statements is summarized as follows:

Provision for income tax
Current:
	Federal		$	2,577
	State			621
		Total current		3,198
Deferred				4,400
		Total	$	7,598

              Deferred tax assets (liabilities) result from items whose tax accounting differs from financial reporting. The tax effect of the temporary differences that give rise to the deferred tax asset at March 31, 2006 is as follows:

NOL carryforwards	$	76,400
Depreciation		(45,200	)
Valuation allowance		(22,000	)
Net deferred tax asset	$	9,200

              A valuation allowance of $22,000 at March 31, 2006 minimizes the net deferred tax benefit that existed at that time relative to BFI Helicopter of New Hampshire, Inc., as it was uncertain if the tax benefits would be realized. No adjustments to the valuation allowance were recorded in the period January 1, 2006 to March 31, 2006.

              For federal income tax purposes, the Company has a net operating loss (NOL) carryfoward of $254,948, of which $1,956 relates to Windham Excavating Company and $252,992 relates to BFI Helicopter of New Hampshire, Inc. The NOL for BFI Helicopter of New Hampshire expires in 2019.

NOTE 6: LEASE COMMITMENTS

Operating Leases

              The Company entered into a two-year operating lease on May 1, 2005, for a manufacturing facility located in Lake Havasu City, Arizona. This operating lease calls for monthly payments of $4,200. The lease expense on this operating lease was $12,600 for the period from January 1, 2006 to March 31, 2006. Future minimum rental payments total $50,400 for the year ending March 31, 2007 and $4,200 for the year ending March 31, 2008.

              The Company assumed the terms of a three-year operating lease, which commenced on March 1, 2006, for warehouse space located in Lake Havasu City, Arizona. This operating lease calls for monthly payments of $735 per month. The lease expense on this operating lease was $735 for the period from January 1, 2006 to March 31, 2006. Future minimum rental payments total $8,820 per year

F-99

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6: LEASE COMMITMENTS (CONTINUED)

for the years ending March 31, 2007 and 2008 and $735 for the year ending March 31, 2009. The Company has the option to renew the lease for another three-year term with a mutually agreed upon increase in rent to be negotiated at that time.

Capital Leases

              The Company leases equipment under capital leases expiring through 2009. Depreciation of assets under capital leases is included in depreciation expense.

NOTE 7: RENTAL INCOME

              The Company is a lessor of other commercial real estate under non-cancelable operating leases.

NOTE 8: RECENT ACCOUNTING PRONOUNCEMENTS

              In February 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard No. 155, Accounting for Certain Hybrid Financial Instruments, an amendment of SFAS No. 133 and SFAS 140 ("SFAS 155"). SFAS 155 simplifies accounting for certain hybrid instruments under SFAS 133 by permitting fair value remeasurement for financial instruments that otherwise would require bifurcation and eliminating SFAS 133 Implementation Issue No.D1, "Application of Statement 133 to Beneficial Interests in Securitized Financial Assets," which provides that beneficial interests are not subject to the provisions of SFAS 133. SFAS 155 also eliminates the previous restriction under SFAS 140 on passive derivative instruments that a qualifying special-purpose entity may hold. SFAS 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement event occurring after the beginning of an entity's fiscal year that begins after September 15, 2006. The Company will adopt this statement as required, and adoption is not expected to have an impact on the Company.

              In March 2006, the FASB issued Statement of Financial Accounting Standard No. 156, Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140 ("SFAS 156"). SFAS 156 permits entities to choose to either subsequently measure servicing rights at fair value and report changes in fair value in earnings or amortize servicing rights in proportion to and over the estimated net servicing income or loss and assess to rights for impairment or the need for an increased obligation. SFAS 156 also clarifies when a servicer should separately recognize servicing assets and liabilities, requires all separately recognized assets and liabilities to be initially measure at fair value, if practicable, permits a one-time reclassification of available-for-sales securities to trading securities by an entity with recognized servicing rights and requires additional disclosures for all separately recognized servicing assets and liabilities. FAS No. 156 is effective as of the beginning of an entity's fiscal year that begins after September 15, 2006. The Company will adopt this statement as required, and adoption is not expected to have an impact on the Company.

              In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. SFAS No. 157 applies when other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS No. 157 also requires expanded disclosure of the effect on earnings for items measured using unobservable data (data not based on market observable information), establishes a fair value hierarchy that prioritizes the information used

F-100

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 8: RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

to develop those assumptions and requires separate disclosure by level within the fair value hierarchy. The adoption of SFAS 157 is not expected to have an impact on the Company.

              In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements ("SFAS 160"). This standard will improve, simplify, and converge internationally the reporting of noncontrolling interests in consolidated financial statements. SFAS 160 requires all entities to report noncontrolling (minority) interests in subsidiaries in the same way—as equity in the consolidated financial statements. Moreover, SFAS 160 requires that transactions between an entity and noncontrolling interests be treated as equity transactions. SFAS 160 is effective for fiscal years beginning after December 15, 2008. The adoption of SFAS 160 is not expected to have an impact on the Company.

              In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. The new standard is also intended to improve transparency about the location and amounts of derivative instruments in an entity's financial statements; how derivative instruments and related hedged items are accounted for under SFAS 133, Accounting for Derivative Instruments and Hedging Activities; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. SFAS 161 requires disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk-related and requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS 161 is not expected to have a material impact on the Company.

              In April 2008, the FASB issued Final FASB Staff Position (FSP) No. FAS 142-3, Determination of the Useful Life of Intangible Assets ("FSP 142-3"). The guidance is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets, and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), Business Combinations, and other guidance under GAAP. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Early adoption is prohibited. The adoption of FSP 142-3 is not expected to have an impact on the Company.

              In September 2008, the FASB issued FSP 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 ("FSP 133-1"). FSP 133-1 is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. It amends FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, to require disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The FSP also amends FASB Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, to require an additional disclosure about the current status of the

F-101

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 8: RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

payment/performance risk of a guarantee. FSP 133-1 was effective for reporting periods (annual or interim) ending after November 15, 2008. The adoption of FSP 133-1 is not expected to have an impact on the Company.

              In November 2008, the FASB issued EITF Issue 08-6, Equity Method Investment Accounting Considerations ("EITF 08-6"). EITF 08-6 addresses questions about the potential effect of FASB Statement 141R Business Combinations and FASB Statement 160 Noncontrolling Interests in Consolidated Financial Statements on equity-method accounting under Opinion 18. EITF 08-6 would be effective prospectively for fiscal years beginning on or after December 15, 2008. The Company does not expect the adoption of EITF 08-6 to have an impact.

              In December 2008, the FASB issued FSP FAS 132(R)-1, Employers' Disclosures about Postretirement Benefit Plan Assets ("FSP 132R-1"). This FASB Staff Position (FSP) amends FASB Statement No. 132 (revised 2003), Employers' Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employer's disclosures about plan assets of a defined benefit pension or other postretirement plan. The effective date for FSP 132R-1 is for fiscal years ending after December 15, 2009, although early adoption is permitted. Comparative disclosures for earlier periods are not required at initial adoptions, although comparative disclosures are required for periods subsequent to initial adoption. The adoption of FSP 132R-1 is not expected to have an impact on the Company.

NOTE 9: RELATED PARTY TRANSACTIONS

Notes Receivable

              Two notes receivable from stockholders were outstanding at March 31, 2006. The notes are receivable in quarterly installments of $250,000, plus interest calculated at the 30-day LIBOR plus 2.5% per annum (7.07% at March 31, 2006). The notes were issued to finance stock purchases from the Company. The notes are evidenced by promissory notes from the two stockholders who purchased these shares and are secured by the makers' shares in the Company. The balance outstanding on the two notes receivable was $1,000,000 at March 31, 2006. Interest income recognized on these notes equaled $19,147 from January 1, 2006 to March 31, 2006.

Other

              The Company hired one of the stockholders of the Company to perform consulting services. The total amount paid for their services was $240,000 for the period January 1, 2006 to March 31, 2006.

NOTE 10: CONTINGENCIES

              The Company is involved in various lawsuits in the normal course of business, some of which involve material claims. Management does not currently believe the outcome of these lawsuits or incidents will have a material adverse effect on the Company's future financial position, results of operations or cash flows.

F-102

BUSHMASTER FIREARMS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 11: NET INCOME (LOSS) PER SHARE

              Net income (loss) per share is computed under the provisions of SFAS No. 128, Earnings Per Share ("SFAS No. 128"). Basic income (loss) per share is computed using net income (loss) and the weighted average number of common shares outstanding. Diluted earnings per share reflect the weighted average number of common shares outstanding plus any potentially dilutive shares outstanding during the period. Potentially dilutive shares consist of shares issuable upon the exercise of stock options (using the treasury stock method) and restricted shares that are nonvested.

              The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in millions, except share amounts):

		January 1 – March 31 2006
Numerator:
	Net income (loss) available to common stockholders		3.1
Denominator:
	Weighted average common shares outstanding (basic)		15,917,341
	Weighted average common shares outstanding (diluted)		15,917,341
Income (loss) per common share:
	Basic		0.19
	Diluted		0.19

NOTE 12: SUBSEQUENT EVENT—SALE OF BUSINESS ASSETS

              On April 1, 2006, the Company's management sold primarily all of the operating assets and certain operating liabilities, excluding, among other things, litigation liabilities, of Bushmaster Firearms, Inc. to an unrelated third-party.

F-103

Report of Independent Certified Public Accountants

To the Board of Directors of
RACI Holding, Inc.:

              We have audited the accompanying consolidated statements of operations, shareholders' deficit and comprehensive loss, and cash flows of RACI Holding, Inc. (a Delaware corporation) and Subsidiaries for the period from January 1, 2007 to May 31, 2007, and the year ended December 31, 2006. The financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audits.

              We conducted our audits in accordance with auditing standards generally accepted in the United States of America as established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of RACI Holding, Inc.'s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

              In our opinion, the financial statements referred to above present fairly, in all material respects, the results of operations of RACI Holding, Inc. and its subsidiaries, and their cash flows for the period from January 1, 2007 to May 31, 2007, and the year ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

              As discussed in Note 10 to the consolidated financial statements, RACI Holding, Inc. adopted Financial Accounting Standards Board Statement (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes", as of January 1, 2007. Also, as discussed in Note 11 to the consolidated financial statements, RACI Holding, Inc. adopted FASB No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans," as of December 31, 2007.

/s/ Grant Thornton LLP

Charlotte, North Carolina
July 2, 2009

F-104

RACI Holding, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in Millions)

		Period from January 1, 2007 to May 31, 2007			Year ended December 31, 2006
Net Sales		$	167.0		$	446.0
Cost of Goods Sold			117.3			338.4
	Gross Profit		49.7			107.6
Selling, General and Administrative Expenses			30.3			73.7
Research and Development Expenses			2.7			6.4
Impairment Charges			—			0.2
Other Income			(0.4	)		(2.3	)
	Operating Income		17.1			29.6
Interest Expense			13.3			33.4
	Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture		3.8			(3.8	)
Income Tax Provision (Benefit)			1.3			0.9
Equity in Losses from Unconsolidated Joint Venture			—			0.4
	Net Income (Loss) from Continuing Operations	$	2.5		$	(5.1	)

The accompanying notes are an integral part of these consolidated financial statements.

F-105

RACI Holding, Inc. and Subsidiaries

Consolidated Statement of Shareholders' Deficit and Comprehensive Loss

(Dollars in Millions)

				Paid-in Capital		Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)			Total Stockholders' Equity (Deficit)
Balance, January 1, 2006				$	111.0	$	(159.3	)	$	(3.6	)	$	(0.5	)	$	(52.4	)
	Comprehensive Loss:
		Net Loss			—		—			—			(5.1	)		(5.1	)
		Other comprehensive income (loss):
			Minimum pension liability, net of tax effect of ($2.5)		—		—			2.0			—			2.0
			Net derivative gains, net of tax effect of $4.9		—		—			5.8			—			5.8
			Net derivative gains reclassified as earnings, net of tax effect of ($4.6)		—		—			(7.4	)		—			(7.4	)
	Total Comprehensive Loss															(4.7	)
	Option Cancellation and Conversion to Equity				0.2		—			—			(0.2	)		—
Balance, December 31, 2006				$	111.2	$	(159.3	)	$	(3.2	)	$	(5.8	)	$	(57.1	)
	Comprehensive Loss:
		Net Loss			—		—			—			2.5			2.5
		Other comprehensive income:
			Minimum pension liability		—		—			3.0			—			3.0
			Net derivative gains, net of tax effect of $2.3		—		—			3.6			—			3.6
			Net derivative gains reclassified as earnings, net of tax effect of ($2.3)		—		—			(3.8	)		—			(3.8	)
	Total Comprehensive Loss															5.3
	Cumulative Effect of Change in Accounting Principle				—		—			—			0.2			0.2
Balance, May 31, 2007				$	111.2	$	(159.3	)	$	(0.4	)	$	(3.1	)	$	(51.6	)

The accompanying notes are an integral part of these consolidated financial statements.

F-106

RACI Holding, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Dollars in Millions)

				Period from January 1, 2007 to May 31, 2007			Year ended December 31, 2006
				(See Note 2)			(See Note 2)
Operating Activities
Net Income (Loss)				$	2.5		$	(5.1	)
Adjustments to reconcile Net Income (Loss) to Net Cash used in Operating Activities:
		Non-cash Interest Expense			2.4			5.4
		Depreciation and Amortization of Debt Issuance Costs			4.8			11.6
		Equity in Losses from Unconsolidated Joint Venture			—			0.4
		Pension Plan Contributions			(5.9	)		(8.0	)
		Pension Plan Expense			3.7			11.3
		Pension Curtailment			—			(7.4	)
		Provision for Deferred Income Taxes—net			0.3			1.1
		Other Non-cash charges			1.9			1.0
		Changes in Operating Assets and Liabilities:
			Accounts Receivable Trade—net		(1.2	)		(0.6	)
			Inventories—net		(39.5	)		(11.5	)
			Prepaid Expenses and Other Current and Long-Term Assets		(8.1	)		(1.2	)
			Accounts Payable		8.2			5.8
			Income Taxes Payable		(1.4	)		0.1
			Other Accrued and Long-Term Liabilities		(7.0	)		10.3
	Net Cash provided by (used in) Operating Activities				(39.3	)		13.2
Investing Activities
		Purchase of Property, Plant and Equipment			(2.1	)		(7.1	)
		Premiums paid for Company Owned Life Insurance			(0.2	)		(0.6	)
		Seller Related Expenses Paid by Remington			(4.7	)		—
		Transaction Costs Related to the Acquisition			(5.1	)		—
		Cash Contribution to Unconsolidated Joint Venture			—			(0.2	)
	Net Cash used in Investing Activities				(12.1	)		(7.9	)
Financing Activities
		Proceeds from Revolving Credit Facility			103.1			178.3
		Payments on Revolving Credit Facility			(37.3	)		(178.3	)
		Cash Withheld from Sellers Provided by AHA			4.7			—
		Debt Issuance Costs			(5.2	)		(0.8	)
		Principal Payments on Long-Term Debt			(0.1	)		(0.3	)
		Conversion of Remington Stock Liability to Equity			—			0.3
		Change in Book Overdraft			(4.5	)		(4.4	)
	Net Cash (used in) provided by Financing Activities				60.7			(5.2	)
Change in Cash and Cash Equivalents					9.3			0.1
Cash and Cash Equivalents at Beginning of Year					0.7			0.6
Cash and Cash Equivalents at End of Year				$	10.0		$	0.7
Supplemental Cash Flow Information:
		Cash Paid During the Year for:
			Interest	$	11.8		$	26.0
			Income Taxes	$	0.1		$	—
			Previously accrued Capital Expenditures	$	0.6		$	1.3
		Noncash Financing and Investing Activities:
			Financing of insurance policies	$	1.9		$	3.1
			Change in Capital Expenditures Capitalized	$	—		$	(0.7	)
			Capital Lease Obligations Incurred	$	—		$	0.2
			Conversion of Parent Company Stock Liability to Equity	$	0.1		$	0.3

The accompanying notes are an integral part of these consolidated financial statements.

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ IN MILLIONS)

1. Organization

              RACI Holding, Inc. (the "Company") has no operating activities other than activities as a holding company for the stockholders of Remington Arms Company, Inc. and its subsidiaries RA Brands, L.L.C., Remington Steam LLC, and RA Factors, Inc. (which was merged into Remington as of December 31, 2006) (together, "Remington" or "Subsidiary"). Founded in 1816, Remington designs, manufactures and markets a comprehensive line of primarily firearms, ammunition and related products for the global hunting and shooting sports marketplace, primarily under the Remington® brand name. Remington is engaged in the design, manufacture, import and sale of primarily sporting goods products for the hunting/shooting sports and related markets. Remington also designs, manufactures and sells certain products to certain federal agency, law enforcement, and military markets including the firearms, ammunition, and surveillance technology products. In addition, Remington was partnered in a joint venture to sell advanced mobile license plate reading technology products to state and local law enforcement agencies along with certain federal agencies. Remington's product lines consist of firearms, ammunition, hunting/gun care accessories, clay targets, licensed products, powder metal products, and technology and security products sold under the Remington name and other labels. Remington's products are distributed throughout the United States and in over 60 other countries (including Canada, Europe, and Asia). In the United States, Remington products are distributed primarily through a network of wholesalers and retailers who purchase the product directly from Remington for resale to gun dealers and end users, respectively. The end users include sportsmen, hunters, target shooters, gun collectors, and members of law enforcement and other government organizations.

Basis of Presentation

              The accompanying financial statements include only the accounts of the Company on a consolidated basis. All significant related party transactions have been disclosed in the accompanying notes. There are no significant intercompany accounts or transactions to eliminate in consolidation.

2. Subsequent Event—Acquisition of RACI Holding, Inc. by Freedom Group, Inc. (FGI—Formerly American Heritage Arms, LLC)

              The shares of the Company, the sole stockholder of Remington, were purchased by FGI on May 31, 2007 (the "Closing Date"), pursuant to the stock purchase agreement dated as of April 4, 2007 (the "Stock Purchase Agreement"), between the Company, its stockholders and holders of deferred stock (including the ownership interests represented by Bruckmann, Rosser, Sherrill & Co. II, L.P. and the Clayton & Dubilier Private Equity Fund IV Limited Partnership (the "CDR Fund")), as well as the Company's stock option holders (the "FGI Acquisition").

              On the Closing Date of the FGI Acquisition, pursuant to the terms of the Stock Purchase Agreement, FGI acquired all of the capital stock of the Company, consisting of 205,208 shares of issued and outstanding Class A common stock, par value $0.01 per share (the "Common Stock") and 5,851 deferred shares of Common Stock (which were converted into shares of Common Stock on the Closing Date), at a value of $330.47 per share less related selling expenses, taxes and amounts placed in escrow. In addition, among other things, on the Closing Date outstanding options to purchase 10,635 shares of Holding Common Stock (the "Stock Options"), which constituted all of the outstanding Stock Options, immediately vested subject to the applicable change in control provisions in the Company's

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

2. Subsequent Event—Acquisition of RACI Holding, Inc. by Freedom Group, Inc. (FGI—Formerly American Heritage Arms, LLC) (Continued)

1999 Stock Incentive Plan and 2003 Stock Option Plan. Remington made option cancellation payments representing the purchase price of $330.47 per share less the strike price of $220.31 with respect to each Stock Option less related selling expenses, amounts placed in escrow and related withholding taxes. FGI provided the funds to the Company which, in turn, were provided to Remington to make these option cancellation payments. On the Closing Date, FGI also provided the Company with approximately $48.2 to pay and satisfy in full as of the Closing Date the full outstanding amount of principal and interest of Senior Note A due 2011 and Senior Note B due 2012 issued by the Company and held by the CDR Fund (the "Holding Notes"). The payment for the Common Stock and converted deferred shares of Common Stock, the Stock Option cancellation payment and repayment of the Holding Notes was funded by FGI's available cash. In addition, Remington obtained all necessary waivers, amendments and consents so that Remington's Credit Agreement and the indebtedness evidenced by the 10.5% Senior Notes due 2011 (the "Notes") remained outstanding and not in default.

Acquisition-related costs

              During the period from January 1, 2007 to May 31, 2007, the Company expensed $5.2 of costs related to the FGI Acquisition. These costs, which are included in "Selling, General & Administrative Expenses", consist of accounting, legal, insurance and other costs associated with the FGI Acquisition. A compensation charge of approximately $1.5 related to the accelerated vesting and buyout of stock options and the conversion of the deferred shares to equity was recorded as well as a mark-to-market charge of $0.2 related to redeemable shares was also recorded.

3. Significant Accounting Policies

Cash and Cash Equivalents

              Cash and cash equivalents include demand deposits with banks and highly liquid investments with remaining maturities, when purchased, of three months or less.

Inventories

              Inventories are stated at the lower of cost or market. The cost of inventories is determined by the first-in, first-out ("FIFO") method. Inventory costs associated with Semi-Finished Products and Finished Products include material, labor, and overhead; while costs associated with Raw Materials include only material. The Company provides inventory allowances for any excess and obsolete inventories.

Supplies

              The cost of supplies is determined by the average cost method adjusted to the lower of cost or market.

Service and Warranty

              The Company supports service and repair facilities for all of its firearm products, with the exception of its internationally sourced product lines, which are serviced and repaired by the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

3. Significant Accounting Policies (Continued)

Company's third party vendor, in order to meet the service needs of its distributors, customers and consumers worldwide.

              The Company provides consumer warranties against manufacturing defects in all firearm products manufactured in the United States. Estimated future warranty costs are accrued at the time of sale. Product modifications or corrections are voluntary steps taken by the Company to assure proper usage or performance of a product by consumers. The cost associated with product modifications and/or corrections is recognized in accordance with Statement of Financial Accounting Standard No. 5, Accounting for Contingencies ("SFAS 5"), and charged to operations.

Property, Plant and Equipment

              Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated lives of the assets. The estimated useful lives are principally 10 to 40 years for buildings and improvements, and 3 to 15 years for machinery and equipment.

              In accordance with SFAS 144, management assesses property, plant and equipment for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. To analyze recoverability, management projects undiscounted future cash flows resulting from the use of the asset over the remaining life of the asset. If these projected cash flows are less than the carrying amount of the asset, an impairment loss is recognized, resulting in a write-down of property, plant and equipment with a corresponding charge to operating income. Any impairment loss is measured based upon the difference between the carrying amount of the asset and the present value of future cash flows. The Company uses a discount rate equal to its average cost of funds to discount the expected future cash flows. There were no assets deemed impaired as of May 31, 2007. See Note 5 for impairment charges incurred in 2006.

              Maintenance and repairs are charged to operations, replacements and betterments are capitalized. Computer hardware and software costs under capital leases are amortized over the term of the lease. The cost and related accumulated depreciation applicable to assets sold or retired are removed from the accounts and the gain or loss on disposition is recognized in operations, included in the other income, net line item on the consolidated statement of operations.

              Interest is capitalized in connection with the construction of major projects. The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset's useful life. There was no capitalized interest for the period ended May 31, 2007 or the year ended December 31, 2006.

Goodwill, Goodwill Impairment, Intangible Assets and Debt Issuance Costs

              Management assesses goodwill for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. Each year the Company tests for impairment of goodwill according to a two-step approach. In the first step, the Company estimates the fair values of its reporting units using the present value of future cash flows approach, subject to a comparison for reasonableness to its market capitalization at the date of valuation. If the carrying amount exceeds the fair value, the second step of the goodwill impairment test is performed to measure the amount of the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

3. Significant Accounting Policies (Continued)

impairment loss, if any. In the second step the implied fair value of the goodwill is estimated as the fair value of the reporting unit used in the first step less the fair values of all other net tangible and intangible assets of the reporting unit. If the carrying amount of the goodwill exceeds its implied fair market value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. In addition, goodwill of a reporting unit is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. For other intangible assets, the impairment test consists of a comparison of the fair value of the intangible assets to their respective carrying amount. The Company uses a discount rate equal to its average cost of funds to discount the expected future cash flows. There was no goodwill or intangible assets deemed impaired for the period ended May 31, 2007 and the year ended December 31, 2006.

              Debt issuance costs are amortized over the life of the related debt or amendment. Amortization expense for debt issuance costs in the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006 was $0.6 and $1.6, respectively.

Stock Options

              Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123R, Share-Based Payment ("SFAS 123R"). Because Remington Arms Company, Inc. is a debt registrant, it is considered a nonpublic company for purposes of applying SFAS 123R. All stock purchase and option plans outstanding are associated with common shares of the Company. In addition, because the shares underlying management's stock options were accounted for by the Company as liabilities under Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity ("SFAS 150"), the stock options were considered liabilities under SFAS 123R. Since the Company meets the definition of a private company and the stock options were considered liabilities, the Company was permitted to choose its valuation approach as a matter of accounting policy. The Company elected to account for its stock options using the intrinsic value method. SFAS 123R requires the Company to make this valuation at each balance sheet date and record any gain or loss in the Company's consolidated statement of operations.

              The adoption on January 1, 2006 had no impact on the Company's consolidated financial statements because at adoption, all issued options were out-of-the-money, as they all had an exercise price of $220.31 per share compared to a fair value of $160 per share. On January 1, 2006, the Company had two stock-based compensation plans, with 284 vested options and 12,621 unvested options. The 12,621 unvested options had a total weighted average remaining term of 4.2 years.

              At December 31, 2006, the Company had two stock-based compensation plans, with 427 vested options and 10,208 unvested options. The 10,208 unvested options have a total weighted average remaining term of 3.3 years. For the year ended December 31, 2006, there have been no option grants, exercises, conversions or expirations. The decrease of 2,270 issued options since January 1, 2006 is the result of forfeitures of unvested stock options associated with the departure of the Company's former Chief Operating Officer. All of the 10,635 issued options at December 31, 2006, regardless of vesting, have an exercise price of $220.31 per share compared to an estimated fair value of $270 per share. Accordingly, these two plans had total unvested stock-based compensation expense of $0.2, and total

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

3. Significant Accounting Policies (Continued)

stock-based compensation expense, recognized in selling, general and administrative expenses, aggregated $0.3 all of which was recorded in the fourth quarter of 2006.

              As a result of the change in control as described in Note 2, the Company incurred $1.5 of compensation cost related to the remainder of the unvested Stock Options held by employees and directors of Remington and the conversion of deferred shares to equity held by employees of Remington, which was recorded in other income for the period ended May 31, 2007. On the Closing Date, all of the outstanding Stock Options immediately vested subject to the applicable change in control provisions in the Company's 1999 Stock Incentive Plan and 2003 Stock Option Plan. Remington made option cancellation payments in the aggregate of approximately $0.7 on the Closing Date, which represents the purchase price of $330.47 per share less the strike price of $220.31 with respect to each Stock Option less related expenses, amounts placed in escrow and related taxes. In addition, on the Closing Date, the deferred shares were converted to equity and subsequently purchased by FGI.

Product Liability

              The Company provides for estimated defense and settlement costs related to product liabilities when it becomes probable that a liability has been incurred and reasonable estimates of such costs are available in accordance with Statement of Financial Accounting Standards No. 5, Accounting for Contingencies ("SFAS 5"). The Company maintains insurance coverage for product liability claims, subject to certain policy limits and to certain self-insured retentions for personal injury or property damage relating to occurrences arising after December 1, 1993. The current insurance policy extends through November 30, 2008. Product liabilities are recorded at the Company's best estimate of the most probable exposure in accordance with SFAS 5, including consideration of historical payment experience and the self-insured retention limits. For the period ended May 31, 2007 and year ended December 31, 2006, there were no recoveries recorded. Management uses independent advisors in their determination of the accrual. For the period from January 1, 2007 to May 31, 2007 and the year ended December 31, 2006, the Company made total payments of $1.1 and $3.2, respectively (including pre-Acquisition occurrences for which the Company assumed responsibility) related to defense and settlement costs. See Note 15.

Revenue Recognition

              Sales, net of an estimate for discounts, returns, rebates and allowances, and related cost of sales are recorded in income when goods are shipped at which time risk of loss and title transfers to the customer in accordance with Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements ("SAB 101"), as amended by Staff Accounting Bulletin No. 104, Revenue Recognition ("SAB 104"). Sales are presented net of Federal Excise Taxes of $12.1 and $37.4 for the period from January 1, 2007 through May 31, 2007 and year ended December 31, 2006, respectively.

              The Company has historically followed the industry practice of selling firearms in certain sales distribution channels pursuant to a "dating" plan, allowing the customer to purchase these products commencing in December (the start of the Company's dating plan year) and to pay for them on extended terms. Discounts are offered for early payment under this plan. The Company believes that allowing extended payment terms for early orders helps to level out the demand for these otherwise seasonal products throughout the year and accordingly helps facilitate a more efficient manufacturing

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

3. Significant Accounting Policies (Continued)

schedule. Historically, use of the dating plan has had the effect of shifting some firearms sales from the second and third quarters to the first and fourth quarters. As a competitive measure, the Company also offers extended terms on select ammunition purchases. Use of the dating plans, however, also results in deferral of collection of accounts receivable. While we have historically followed the industry practice of selling products pursuant to a "dating" plan, we have commenced to shorten the duration of these terms in order to increase cash flow and working capital. Customers do not have the right to return unsold products.

Shipping and Handling Costs

              Shipping and handling costs are included in Selling, General and Administrative expense and are expensed as incurred. Shipping and handling costs totaled $4.5 and $12.3 for the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006, respectively.

Advertising and Promotions

              Advertising and promotional costs including print ads, commercials, catalogs, brochures and co-op are expensed during the year incurred. Advertising and promotional costs totaled $8.0 and $11.1 for the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006, respectively. The Company licenses certain of its brands and trademarks. The income from such licensing was $1.2 and $3.6 for the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006, respectively, which is reflected in Other Income, net.

Research and Development Costs

              Internal research and development costs including salaries, administrative expenses, building operating costs of our research and development facility, and related project expenses are expensed as incurred. Research and development costs totaled $2.7 and $6.4 for the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006, respectively.

Self-Insurance

              The Company is self-insured for elements of its employee benefit plans including, among others, medical, workers' compensation and elements of its property and liability insurance programs, but limits its liability through stop-loss insurance and annual plan maximum coverage limits. Self-insurance liabilities are based on claims filed and estimates for claims incurred but not yet reported.

Income Taxes

              The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("FAS 109"). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

3. Significant Accounting Policies (Continued)

which those temporary differences are expected to be recovered or settled. A valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be recognized.

              Effective January 2007, the Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. FIN 48 requires a company to evaluate whether the tax position taken by a company will more likely than not be sustained upon examination by the appropriate taxing authority. It also provides guidance on how a company should measure the amount of benefit that the company is to recognize in its financial statements. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company's reassessment of our tax positions in accordance with FIN 48 did not have a material impact on our results of operations, financial condition or liquidity. The Company's continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

              The Company files a consolidated federal tax return with Remington. The Company and Remington have entered into a Tax Sharing Agreement. The agreement provides that consolidated federal and state tax liabilities are allocated among the members with positive taxable income. Therefore, the agreement does not provide for payment to the Company for losses availed of by the profitable members of the affiliated group. Accordingly, the Company is deemed to have contributed the amount of the tax benefits, if any, as a contribution of capital to Remington.

Use of Estimates

              The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reported period. The more significant estimates made by management include values assigned to allowances for uncollectible notes receivable and the carrying value of its investment in Remington. In addition, the Company is subject to management's estimates and assumptions for Remington, the most significant of which include reserves for product liability claims, medical claims, workers compensation claims, warranty claims and employee benefit plans. Actual amounts may differ from those estimates and such differences could be material.

              Management has estimated that the fair value of cash and accrued interest approximates the carrying value due to the relatively short period of time until expected realization. The fair value of the long-term debt and redeemable shares are disclosed in Notes 6 and 10, respectively.

New Accounting Pronouncements

              In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosure requirements regarding fair value measurement. Where applicable, SFAS 157 simplifies and codifies fair value related guidance previously issued within GAAP. Although SFAS 157 does not require any new fair value measurements, its application may, in certain instances, change current practice. SFAS 157 is

F-114

RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

3. Significant Accounting Policies (Continued)

effective for the Company beginning January 1, 2008. As a result of adoption of SFAS 157, there has been minimal, if any, impact on our results of operations, financial condition and liquidity and no impact for the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006.

              In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115 ("SFAS 159"). SFAS 159 permits an entity to elect fair value as the initial and subsequent measurement attribute for many financial assets and liabilities. Entities electing the fair value option would be required to recognize changes in fair value in earnings. Entities electing the fair value option are required to distinguish, on the face of the statement of financial position, the fair value of assets and liabilities for which the fair value option has been elected and similar assets and liabilities measured using another measurement attribute. SFAS 159 is effective for the Company as of January 1, 2008. The adjustment to reflect the difference between the fair value and the carrying amount would be accounted for as a cumulative-effect adjustment to retained earnings as of the date of initial adoption. As a result of adoption of SFAS 159, there has been minimal, if any, impact on our results of operations, financial condition and liquidity and no impact for the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006.

              In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations ("SFAS 141(R)"). SFAS 141(R) retains the fundamental requirements of the original pronouncement requiring that the purchase method be used for all business combinations. SFAS 141(R) defines the acquirer as the entity that obtains control of one or more businesses in the business combination, establishes the acquisition date as the date that the acquirer achieves control and requires the acquirer to recognize the assets acquired, liabilities assumed and any non-controlling interest at their fair values as of the acquisition date. SFAS 141(R) also requires that acquisition-related costs be recognized separately from the acquisition. SFAS 141(R) amends the goodwill impairment test requirements in SFAS 142. For a goodwill impairment test as of a date after the effective date of SFAS 141(R), the value of the reporting unit and the amount of implied goodwill, calculated in the second step of the test, will be determined in accordance with the measurement and recognition guidance on accounting for business combinations under SFAS 141(R). This change could effect the determination of what amount, if any, should be recognized as an impairment loss for goodwill recorded before the effective date of SFAS 141(R). This accounting became effective January 1, 2009 for the Company and applies to goodwill related to acquisitions accounted for originally under SFAS 141 as well as those accounted for under SFAS 141(R). The adoption of SFAS 141(R) is not expected to have a material impact on our results of operations, financial condition and equity.

              In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements ("SFAS 160"). This standard is intended to improve, simplify, and converge internationally the reporting of noncontrolling interests in consolidated financial statements. SFAS 160 requires all entities to report noncontrolling (minority) interests in subsidiaries in the same way as equity in the consolidated financial statements. Moreover, SFAS 160 requires that transactions between an entity and noncontrolling interests be treated as equity transactions. SFAS 160 is effective for fiscal years beginning after December 15, 2008. Consequently, SFAS 160 was implemented by the Company

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

3. Significant Accounting Policies (Continued)

on January 1, 2009. As of January 1, 2009, the Company now accounts for its consolidated joint venture, EOTAC, under the rules of SFAS 160.

              In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. The new standard is also intended to improve transparency about the location and amounts of derivative instruments in an entity's financial statements; how derivative instruments and related hedged items are accounted for under SFAS 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. SFAS 161 requires disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk-related and requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS 161 is not expected to have a material impact on our results of operations, financial condition and equity.

              In April 2008, the FASB issued Final FASB Staff Position ("FSP") No. FAS 142-3, Determination of the Useful Life of Intangible Assets ("FSP 142-3"). The guidance is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets, and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), Business Combinations, and other guidance under U.S. generally accepted accounting principles ("GAAP"). FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Early adoption is prohibited. The adoption of FSP 142-3 is not expected to have an impact on our results of operations, financial condition and equity.

              In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS 162"). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP in the United States (the GAAP hierarchy). SFAS 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles." The adoption of SFAS 162 is not expected to have an impact on our results of operations, financial condition and equity.

              In September 2008, the FASB issued FASB Staff Position (FSP) No. 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 ("FSP 133-1"). FSP 133-1 is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. It amends FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, to require disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The FSP also amends FASB Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

3. Significant Accounting Policies (Continued)

Including Indirect Guarantees of Indebtedness to Others, to require an additional disclosure about the current status of the payment/performance risk of a guarantee. FSP 133-1 was effective for reporting periods (annual or interim) ending after November 15, 2008. The adoption of FSP 133-1 did not have an impact on our results of operations, financial condition and equity.

              In November 2008, the FASB issued Emerging Issues Task Force Issue 08-6 ("EITF 08-6"), Equity Method Investment Accounting Considerations. EITF 08-6 addresses questions about the potential effect of FASB Statement 141R Business Combinations and FASB Statement 160 Noncontrolling Interests in Consolidated Financial Statements on equity-method accounting under Opinion 18. EITF 08-6 would be effective prospectively for fiscal years beginning on or after December 15, 2008. We are currently evaluating the potential impact of adopting EITF 08-6.

              In December 2008, the FASB issued FSP FAS 132(R)-1 ("FSP 132R-1"), Employers' Disclosures about Postretirement Benefit Plan Assets. This FASB Staff Position (FSP) amends FASB Statement No. 132 (revised 2003), Employers' Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employer's disclosures about plan assets of a defined benefit pension or other postretirement plan. The effective date for FSP 132R-1 is for fiscal years ending after December 15, 2009, although early adoption is permitted. Comparative disclosures for earlier periods are not required at initial adoptions, although comparative disclosures are required for periods subsequent to initial adoption. We are currently evaluating the potential impact of adopting FSP 132R-1.

              In April 2009, the FASB issued FSP SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly ("FSP SFAS 157-4"). FSP SFAS 157-4 provides guidelines for making fair value measurements more consistent with the principles presented in SFAS 157, Fair Value Measurements ("SFAS 157"). FSP SFAS 157-4 relates to determining fair values when there is no active market or where the price inputs being used represent distressed sales. It reaffirms what SFAS 157 states is the objective of fair value measurement—to reflect how much an asset would be sold for in an orderly transaction (as opposed to a distressed or forced transaction) at the date of the financial statements under current market conditions. Specifically, it reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. FSP SFAS 157-4 is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP SFAS 157-4 will have a significant impact on its results of operations, financial condition and equity.

              In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments ("FSP SFAS 107-1"). FSP SFAS 107-1 enhances consistency in financial reporting by increasing the frequency of fair value disclosures. FSP SFAS 107-1 relates to fair value disclosures for any financial instruments that are not currently reflected on the balance sheet of companies at fair value. Prior to issuing FSP SFAS 107-1, fair values for these assets and liabilities were only disclosed once a year. FSP SFAS 107-1 now requires these disclosures on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. FSP SFAS 107-1 is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP SFAS 107-1 will have a significant impact on its results of operations, financial condition and equity.

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

3. Significant Accounting Policies (Continued)

              In April 2009, the FASB issued FSP SFAS 115-2 and SFAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments ("FSP SFAS 115-2"), provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. FSP SFAS 115-2 on other-than-temporary impairments is intended to bring greater consistency to the timing of impairment recognition, and provide greater clarity to investors about the credit and noncredit components of impaired debt securities that are not expected to be sold. The measure of impairment in comprehensive income remains fair value. FSP SFAS 115-2 also requires increased and more timely disclosures sought by investors regarding expected cash flows, credit losses, and an aging of securities with unrealized losses. FSP SFAS 115-2 is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP SFAS 115-2 will have a significant impact on its results of operations, financial condition and equity.

4. Impairment Charges

              In accordance with SFAS 144, management assesses property, plant and equipment for impairment whenever facts and circumstances indicate that the carrying value amount may not be fully recoverable. In 2007, management determined that there were no further facts and circumstances to indicate that the carrying value amount may not be fully recoverable. As a result, there were no impairment charges incurred from the period beginning January 1, 2007 through May 31, 2007.

              SFAS 142 indicates that if other types of assets (in addition to goodwill) of a reporting unit are being tested for impairment at the same time as goodwill, then those assets are to be tested for impairment prior to performing the goodwill impairment testing. Since there were no other assets of a reporting unit being tested for impairment in 2007, no SFAS 142 testing was deemed necessary.

              As of year end December 31, 2006, the Company performed an evaluation for impairment in accordance with its policy and SFAS 144 on certain of its fixed assets and recorded an associated impairment charge of $0.2 in the accompanying statement of operations. The evaluation in 2006 was triggered from the Company completing its budget process for the 2007 fiscal year and determining that certain assets would have a decline in the extent and manner in which they are currently being used due to changes in product offerings. Management compared the expected undiscounted cash flows from the fixed assets with the carrying value of these same fixed assets, and concluded that impairment existed. The resulting impairment charge was determined by the difference between the fair value estimated using a discounted cash flow model and the carrying value of the fixed assets.

              At December 31, 2006, the remaining carrying value associated with the Clay Targets reporting unit for trademarks, property and equipment were not determined to be impaired. As of September 30, 2006, the Company performed the required annual evaluation for impairment evaluation for goodwill and trademarks in accordance with the provisions of SFAS 142 and determined that there was no impairment.

5. Debt

              On March 15, 2006, Remington entered into the Amended and Restated Credit Agreement, which replaced the credit agreement, dated as of January 24, 2003, as amended through October 14, 2005, among Remington, RA Factors, Inc., Wachovia Bank, N.A., as Agent, and the lenders from time

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

5. Debt (Continued)

to time party thereto (the "2003 Credit Agreement"). Existing fees of approximately $1.4 that were previously capitalized as debt issuance costs were written off as part of the $5.2 of debt issuance costs written off related to the FGI Acquisition.

6. Concentrations of Credit Risk

              Sales to the Company's largest customer, Wal-Mart, comprised approximately 13% of sales from the period January 1, 2007 through May 31, 2007 and 18% in 2006. No other customer accounted for sales equal to or greater than 10% of sales for the periods or years presented. Bad debt expense, net of any recoveries, was ($0.1) and $0.8 from the period from January 1, 2007 through May 31, 2007 and 2006, respectively.

7. Depreciation Expense

              Depreciation expense for the period from January 1, 2007 through May 31, 2007 was $4.2. Depreciation expense for the year ended December 31, 2006 was $10.0.

8. Warranty Costs

              The Company provides consumer warranties against manufacturing defects on all firearm products manufactured in the United States. Estimated future warranty costs are accrued at the time of sale, using the percentage of actual historical repairs to shipments for the same period, which is included in other accrued liabilities. Product modifications or corrections are voluntary steps taken by the Company to assure proper usage or performance of a product by consumers. The cost associated with product modifications and or corrections are recognized in accordance with SFAS 5, and charged to operations. Expense charged to the statement of operations for modifications and corrections were ($0.1) and zero for the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006, respectively.

              In addition to our warranty, we have a nationwide product safety program under which we offer to clean, inspect and modify certain bolt action centerfire firearms manufactured prior to 1982 to remove the bolt-lock feature. Expense charged for costs of the product safety program was less than $0.1 for the period from January 1, 2007 through May 31, 2007 and the year end December 31, 2006.

9. Stock Compensation Plans

              As a result of the change in control as described in Note 2, Remington incurred $1.5 and $0.3 of compensation cost for the period from January 1, 2007 through May 31, 2007 and 2006, respectively, related to the remainder of the unvested Stock Options held by employees and directors of Remington and the deferred shares held by employees of Remington. On the Closing Date, all of the outstanding Stock Options immediately vested subject to the applicable change in control provisions in the Company's 1999 Stock Incentive Plan and 2003 Stock Option Plan. Remington made option cancellation payments in the aggregate of approximately $0.7 on the Closing Date, which represents the purchase price of $330.47 per share less the strike price of $220.31 with respect to each Stock Option less related expenses, amounts placed in escrow and related taxes. In addition, on the Closing Date the deferred shares were converted to equity and subsequently purchased by FGI.

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

9. Stock Compensation Plans (Continued)

              As of December 31, 2006, the Company had reserved 39,615 shares of the Class A Common Stock, par value $.01 per share ("Common Stock") for issuance in accordance with the terms of the RACI Holding, Inc. Stock Incentive Plan (the "1999 Stock Incentive Plan") and the RACI Holding, Inc. 2003 Stock Option Plan (the "2003 Stock Option Plan").

              As of December 31, 2006, 2,089 redeemable shares of Class A Common Stock, 5,851 redeemable deferred shares of Class A Common Stock and 427 matching options had been issued under the 1999 Stock Incentive Plan. Options to purchase 12,478 shares of Class A Common Stock were been granted under the 2003 Stock Option Plan. Remington's former Chief Operating Officer Ronald H. Bristol II resigned from his employment with Remington effective February 28, 2006, and entered into an agreement whereby his outstanding 2,270 options were cancelled, and his 781 deferred shares and 141 redeemable shares were converted into Class A Common Stock of the Company.

              At December 31, 2006, the board of directors had assessed the fair value of Common Stock to be approximately $270.00 per share utilizing the assistance of a third party valuation consultant.

              The 2,089 redeemable shares and 5,851 redeemable deferred shares represented shares of Common Stock subject to certain future events occurring. The redeemable and redeemable deferred shares met the criteria for liability classification under SFAS 150 since holders of the shares could require the Company to repurchase, under certain conditions, namely death, disability or retirement at a normal retirement age, all of such shares, upon written notification. These shares did not meet the recording criteria of SFAS 150 due to FSP 150-3. At December 31, 2006, the fair value of the redeemable shares and redeemable deferred shares outstanding was $0.5 and $1.3, respectively, based on the shares outstanding and the Company's valuation of Class A Common Stock at the date of the last significant equity refinancing, $220.31 at February 2003. Prospective changes in the Company's valuation of Class A Common Stock had a corresponding proportionate affect on the settlement value of the redeemable and redeemable deferred shares, although these amounts were not be recorded until redemption was deemed probable in accordance with FSP 150-3. Nevertheless, if the Company were required to record the shares at fair value, the Company would have redeemable shares and redeemable deferred shares liabilities outstanding of $0.6 and $1.6 if such redemption had been deemed probable at December 31, 2006, with the corresponding decrease from the current recorded value of $0.4 recorded as income in the period, due to the decline in the share value from $220.31 to $270 per share.

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

9. Stock Compensation Plans (Continued)

              The following is a summary of Redeemable Shares, Redeemable Deferred Shares and Common Stock activity during 2006 and the period ended May 31, 2007:

	Redeemable Shares		Redeemable Deferred Shares		Common Stock
Outstanding at January 1, 2006		2,230		6,637		202,194
Granted		—		—		925
Exercised		—		—		—
Cancelled/Forfeited		141		786		—
Outstanding at December 31, 2006		2,089		5,851		203,119
Granted		—		—		—
Settled in Connection with FGI Acquisition (Note 2)		2,089		5,851		203,119
Outstanding at May 31, 2007		—		—		—

              At December 31, 2006 options to purchase 10,635 shares of Common Stock were outstanding, at a per share exercise price of $220.31, of which 427 options were exercisable. Subject to the continued service of any option-holder, 427 of the options would vest ratably on the first, second and third anniversaries of the options' grant date; 5,104 of the options would vest ratably on the fourth and fifth anniversaries of the options' grant date and 5,104 of the options would vest on the ninth anniversary of the grant date. The vesting of options could be accelerated upon the occurrence of certain events specified in the plans including a change in control as defined therein. Options not exercised would expire on the tenth anniversary of the date of grant. The following is a summary of stock option activity under the 1999 Stock Incentive Plan and the 2003 Stock Option Plan:

	2006
	Shares		Wtd. Avg. Exercise Price
Outstanding at January 1,		12,905	$	220.31
Granted		—		—
Exercised		—		—
Cancelled/Forfeited		2,270		220.31
Outstanding at December 31,		10,635	$	220.31
Exercisable at December 31,		427	$	220.31
Weighted Average Fair Value of Options Granted		NA

              The exercise price of all outstanding options at December 31, 2006, is $220.31, and the weighted average contractual life on the unvested options outstanding at December 31, 2006 was 3.3 years. Included in the 10,635 options above are 1,071 options that were granted in 2003, which are accounted for under FIN 44, "Accounting for Certain Transactions involving Stock Compensation." If the market value of class A common stock were to increase, the Company was required to recognize,

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

9. Stock Compensation Plans (Continued)

as expense, the incremental difference above the grant value. For the remaining 9,564 shares of stock, the Company has adopted the disclosure-only provisions of SFAS No. 123, as amended by SFAS No. 148, "Accounting for Stock-Based Compensation." See Note 4, "Significant Accounting Policies."

              As a result of the change in control as described in Note 2, the Company incurred $1.5 of compensation cost related to the remainder of the unvested Stock Options held by employees and directors of Remington and the conversion of deferred shares to equity held by employees of Remington, which was recorded in other income for the period ended May 31, 2007. On the Closing Date, all of the outstanding Stock Options immediately vested subject to the applicable change in control provisions in Holding's 1999 Stock Incentive Plan and 2003 Stock Option Plan.

10. Income Taxes

              As of May 31, 2007, a valuation allowance of $22.9 is required as compared to a valuation allowance of approximately $27.3 established against deferred tax assets in accordance with the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109") as of December 31, 2006.

              Income tax payments were approximately $0.1 in the period from January 1, 2007 through May 31, 2007 and $0.0 in 2006. In 2006, there was a net tax refund of approximately $2.4. There was no net tax refund in the period from January 1, 2007 through May 31, 2007.

              At December 31, 2006 the Company has various losses, credit and other carry-forwards available to reduce future taxable income and tax thereon. The carry-forwards, as well as the related tax benefits associated with the carry-forwards, will expire as follows:

Expiration		US Federal loss carry-forwards		State loss carry-forwards		Tax credit and other carry-forwards
1 – 5 years		$	—	$	0.2	$	—
6 – 20 years			7.3		2.1		1.1
Beyond 20 years			—		—		2.1
	Total	$	7.3	$	2.3	$	3.2

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

10. Income Taxes (Continued)

              The provision (benefit) for income taxes consists of the following components:

		January 1 – May 31, 2007		2006
Federal:
	Current	$	0.9	$	—
	Deferred		0.3		0.9
State:
	Current		0.1		(0.2	)
	Deferred		—		0.2
		$	1.3	$	0.9

              The following is a reconciliation of the statutory federal income tax rate to the Company's effective income tax rates:

		January 1 – May 31 2007			2006
Federal statutory rate			35.0	%		35.0	%
State income taxes, net of federal benefits			5.2			(60.9	)
Permanent differences			1.8			(8.5	)
State tax credits, net of federal benefits			4.4			(6.1	)
Change in valuation allowance			(35.9	)		175.3
Federal tax credits			—			—
Federal net operating loss			—			(56.4	)
Other			2.1			(3.4	)
	Effective income tax rate		12.6	%		75.0	%

              The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48"), on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no material adjustment in the liability for unrecognized tax benefits.

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

10. Income Taxes (Continued)

A reconciliation of the change in gross unrecognized tax benefits from January 1, 2007 to May 31, 2007 is as follows:

Gross Unrecognized Tax Benefits		Gross Amount
Balance January 1, 2007		$	1.7
	Gross increases/(decreases) in unrecognized benefits taken during prior period (predecessor)		—
	Gross increases/(decreases) in unrecognized benefits taken during current period (successor)		—
	Gross decreases because of settlement (predecessor)		—
	Gross decreases because of lapse in applicable statute of limitations (predecessor)		—
Balance May 31, 2007		$	1.7

              Of the May 31, 2007 balance in unrecognized tax positions, $1.7 would not, if recognized, affect the annual effective tax rate, but would impact goodwill. As of May 31, 2007, changes to our tax positions that are reasonably possible in the next twelve months are not considered material.

              The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company recognized an immaterial amount of expense associated with interest and penalties for the period January 1, 2007 through May 31, 2007.

              We are currently subject to ongoing audits by federal and various state tax authorities. Depending on the outcome of these audits, we may be required to pay additional taxes. However, we do not believe that any additional taxes and related interest or penalties would have a material impact on the Company's financial position, results of operations, or cash flows. The tax years 2004 through 2007 remain open to examination by the major tax jurisdictions to which we are subject.

11. Pension Plans:

Defined Benefit Pension Plans:

Adoption of SFAS No. 158:

              Remington sponsors a defined benefit pension plan (the "Plan") and a supplemental defined benefit pension plan (the "SERP"). For disclosure purposes, the Plan and the SERP have been combined.

Pension Curtailment:

              On October 9, 2006, Remington's Board of Directors approved amendments to the Plan and the SERP for our salaried employees (the "2006 Amendments") to be effective January 1, 2008. As a result of the amendments made to the Plan and SERP, as approved by the Board of Directors since 2006, all future benefits were frozen as of January 1, 2008. For service accrued up to January 1, 2008,

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

11. Pension Plans: (Continued)

the pension calculations did not change. The amendments resulted in Remington recognizing curtailment gains of $7.4 in 2006.

              The following provides a reconciliation of benefit obligations, plan assets and funded status of the Plan and the SERP:

Change in Benefit Obligation:

	January 1 – May 31, 2007			2006
Benefit Obligation at Beginning of Period	$	178.7		$	176.1
Service Cost		2.0			5.1
Interest Cost		4.4			10.0
Plan Amendments/Curtailment		—			(7.4	)
Actuarial Assumption Changes		—			(6.1	)
Actuarial (Gain)/Loss		—			6.9
Benefits Paid		(2.9	)		(5.9	)
Benefit Obligation at End of Period	$	182.2		$	178.7

	January 1 – May 31, 2007			2006
Funded Status	$	(33.6	)	$	(43.6	)
Unamortized Prior Service Cost		—			(0.4	)
Unrecognized Net Actuarial Loss		—			17.5
Net amount recognized in the balance sheet	$	(33.6	)	$	(26.5	)

Change in Plan Assets:

	January 1 – May 31, 2007			2006
Fair Value of Plan Assets at Beginning of Period	$	135.1		$	117.4
Actual Return on Plan Assets		10.5			16.1
Employer Contributions		5.9			8.1
Benefits Paid and Expenses		(2.9	)		(6.5	)
Fair Value of Plan Assets at End of Period	$	148.6		$	135.1

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

11. Pension Plans: (Continued)

              Following is certain information about our pension plans that have accumulated benefit obligations in excess of the fair value of their plan assets as of:

	May 31, 2007		2006
Projected benefit obligation	$	182.2	$	178.7
Accumulated benefit obligation		174.7		171.1
Fair value of plan assets		148.6		135.1

Components of Net Periodic Pension Cost:

	2007			2006
	January 1 – May 31			December 31
Service Cost	$	2.0		$	5.1
Interest Cost		4.4			10.0
Return on Assets		(4.4	)		(9.7	)
Amortization of Prior Service Cost		(0.1	)		(0.9	)
Recognized Net Actuarial Loss		2.0			7.2
Net Periodic Pension Cost		3.9			11.7
Curtailment Gain		—			(7.4	)
Total Cost	$	3.9		$	4.3

	2007			2006
Weighted average assumptions used to determine net periodic benefit cost for period ended May 31 and year ended December 31:
Discount Rate		6.25	%		5.75	%
Expected Long-Term return on plan assets		8.00			8.00
Rate of Compensation Increase		4.00			4.00

	2007			2006
Weighted average assumptions used to determine benefit obligations for the period ended May 31 and year ended December 31:
Discount Rate		6.00	%		6.00	%
Rate of Compensation Increase		4.00			4.00

              Our policy is to review the pension assumptions annually. Pension benefit income or expense is determined using assumptions as of the beginning of the year, while the funded status is determined using assumptions as of the end of the year. The assumptions are determined by management and established at the respective balance sheet date using the following principles: (1) The expected long-term rate of return on plan assets is established based upon historical actual asset returns and the expectations of asset returns over the expected period to fund participant benefits based on the current investment mix of the Plan; (2) The discount rate is set based on the yield of high quality fixed income

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

11. Pension Plans: (Continued)

investments expected to be available in the future when cash flows are paid; and (3) The rate of increase in compensation levels is established based on management's expectations of current and foreseeable future increases in total eligible compensation, while maintaining a consistent inflation component for all economic assumptions. In addition, management considers advice from independent actuaries on each of these three assumptions.

              Our investment strategy for Plan assets is based on the long-term growth of principal while attempting to mitigate overall risk to ensure that funds are available to pay benefit obligations. The Plan has adopted a strategic asset allocation designed to meet the Plan's long-term obligations. The Plan's assets are invested in a variety of investment classes, including domestic and international equities, domestic and international fixed income securities and other investments. Allowable investment structures include mutual funds, separate accounts, commingled funds, and collective trust funds. Prohibited investments are defined as commodities, private placements, and derivative instruments used solely for leverage. In the period from January 1, 2007 through May 31, 2007 and the year ended December 31, 2006, upon recommendation of Remington's investment advisors, Remington's Benefits and Investments Committee elected to invest in certain private investment (hedge) funds that are deemed permitted under Remington's current investment strategy. These private investment funds are not currently subject to any direct regulation by the Securities and Exchange Commission, the National Association of Securities Dealers, or any other federal regulating commissions.

              The Plan weighted average asset allocations at May 31, 2007 and December 31, 2006 by asset category are:

	Target Allocations						Actual Allocations
	2007			2006			2007			2006
Asset Category:
Domestic equity funds		50.0	%		50.0	%		43.0	%		47.0	%
International equity funds		15.0			15.0			16.0			18.0
Domestic fixed income funds		20.0			20.0			19.0			17.0
International fixed income funds		5.0			5.0			5.0			5.0
Private investment (hedge) funds		10.0			10.0			12.0			12.0
Cash and cash equivalents		—			—			5.0			1.0
Total		100.0	%		100.0	%		100.0	%		100.0	%

Savings Plans:

              Prior to January 1, 2006, Remington sponsored a qualified defined contribution plan and matched 50% of a participant's contributions up to a maximum of 6% of a participant's compensation. All employees hired after May 31, 1996 were also eligible for a discretionary contribution. Remington's matching expense and contribution to this plan was approximately $1.0 for the period from January 1, 2007 through May 31, 2007 and approximately $0.5 in 2006.

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

11. Pension Plans: (Continued)

              Effective January 1, 2006, Remington established a second qualified defined contribution plan that matches 100% of the first 4% of a participant's contributions of a participant's compensation (the "401(k) Plan"). All employees hired after May 31, 1996 were also eligible for a discretionary contribution. The 401(k) Plan includes the employees of Remington not covered under the collective bargaining agreement in Ilion, New York. Remington's matching expense and contribution to this plan was approximately $1.9 in the period from January 1, 2007 through May 31, 2007 and $1.7 in 2006. The existing qualified defined contribution plan that matches 50% of a participant's contributions up to a maximum of 6% of a participant's compensation remains for all employees not included in the 401(k) Plan.

              Effective January 1, 1998, Remington adopted a non-qualified defined contribution plan. Remington's matching expense and contribution was $0.0 in the period from January 1, 2007 through May 31, 2007 and $0.1 in 2006. This plan was amended in 2006 to allow participants to make an election to receive a distribution of their full accounts balance. On January 16, 2007, $2.1 was distributed to the participants.

Postretirement Benefit Plan:

              Remington sponsors an unfunded postretirement defined benefit plan which provides certain employees and their covered dependents and beneficiaries with retiree health and welfare benefits.

Change in Benefit Obligation:

	January 1 – May 31,
	2007			2006
Benefit Obligation at Beginning of Year	$	15.6		$	22.6
Service Cost		0.2			0.7
Interest Cost		0.4			1.3
Amendments		—			(6.1	)
Actuarial Loss		(0.4	)		(1.8	)
Benefits Paid		(0.5	)		(1.1	)
Benefit Obligation at End of Year	$	15.3		$	15.6

Accrued Benefit Cost:

	January 1 – May 31,
	2007			2006
Unfunded Status	$	(15.3	)	$	(15.6	)
Unrecognized Net Actuarial Loss (Gain)		0.5			0.9
Unrecognized Prior Service Cost		(10.0	)		(10.5	)
Accrued Postretirement Benefit Obligation	$	(24.8	)	$	(25.2	)

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RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

11. Pension Plans: (Continued)

Components of Net Periodic Benefit Cost for the period ended May 31, 2007 and year ended December 31, 2006:

	2007			2006
	January 1 – May 31			December 31
Service Cost	$	0.2		$	0.7
Interest Cost		0.4			1.3
Net Amortization and Deferral		(0.5	)		0.1
Net Periodic Benefit Cost	$	0.1		$	2.1

Weighted average assumptions used to determine net periodic benefit cost for the period ended May 31, 2007 and year ended December 31, 2006:

	2007			2006
	January 1 – May 31			December 31
Discount Rate		6.00	%		5.75	%
Rate of compensation increase		4.00	%		4.00	%

Assumed Healthcare cost trend rates for period ended May 31, 2007 and year ended December 31, 2006:

	2007			2006
Healthcare cost trend rate assumed for next year		10.00	%		10.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		4.25	%		4.25	%
Year that the rate reaches the ultimate trend rate		2012			2011

Weighted average assumptions used to determine benefit obligations as of May 31, 2007 and December 31, 2006:

	2007			2006
Discount Rate		6.00	%		5.75	%
Rate of compensation increase		4.00	%		4.00	%

F-129

RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

11. Pension Plans: (Continued)

              Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects:

	1-Percentage Point Increase		1-Percentage Point Decrease
Effect on total of service and interest cost	$	—	$	—
Effect on accumulated postretirement benefit obligation		—		—

12. Leases

              Future minimum lease payments under noncancellable operating leases are as follows:

			Operating Leases
Minimum Lease Payments for the Period from June 1, 2007 to December 31, 2007			$	0.6
Minimum Lease Payments for Years Ending December 31:
	2008			1.2
	2009			1.1
	2010			1.0
	2011			—
	2012			—
	Thereafter			—
		Total Minimum Lease Payments	$	3.9

              Rental expenses for operating leases for the five months ended May 31, 2007 was $0.6. Rental expenses for operating leases in 2006 were $1.5. Remington leases a portion of its equipment under operating leases that expire at various dates through 2011.

13. Investment in Unconsolidated Joint Venture

              Remington entered into a joint venture agreement with ELSAG, Inc., an unaffiliated third party, which formed the joint venture Remington ELSAG Law Enforcement Systems, LLC ("RELES") in August 2004. RELES sells and services mobile license plate reading technology products sold to state and local law enforcement agencies along with certain federal agencies. The agreement provided Remington a 50% ownership interest. The agreement called for each member to invest 50% of required capital investments and receive 50% of distributions, with an original maximum contribution amount of $1.5 by each party.

              Since inception, Remington had made a total of $1.5 (no contributions were made in the period from January 1, 2007 through May 31, 2007 or in 2006) in cumulative cash contributions to RELES and, accordingly, Remington had no more contractual commitments to fund RELES.

F-130

RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

13. Investment in Unconsolidated Joint Venture (Continued)

              Management assessed the accounting treatment of RELES under the provisions of FASB Interpretation No. 46R, Consolidation of Variable Interest Entities (revised December 2003)—an interpretation of ARB No. 51 ("FIN 46R"), and APB 18, The Equity Method of Accounting for Investments in Common Stock ("APB 18"), and concluded that RELES was a variable interest entity. However, as Remington was not the primary beneficiary, RELES was accounted for under the equity method of accounting. Accordingly, an investment was recognized on the Company's balance sheet (included in "Other Noncurrent Assets") at the carrying value of Remington's cumulative cash contributions to RELES adjusted for Remington's cumulative equity in losses recorded on Remington's statement of operations, and Remington's 50% share of RELES's operating results was recorded in the Company's statement of operations (included in "Equity in Losses from Unconsolidated Joint Venture") during each period that RELES produced financial results. If Remington's share of cumulative net losses exceeded the investment in RELES, Remington discontinued recognition of net losses in accordance with APB 18 since Remington did not guarantee or was not otherwise committed to fund the obligations of RELES.

              During the second quarter of 2006, Remington reduced its investment in RELES to zero and discontinued the recognition of net losses. Subsequent to the FGI Acquisition, the Company's investment of RELES was sold.

              The following summarizes Remington's investment account balance associated with RELES at:

Account	January 1 – May 31, 2007		December 31, 2006
Investment in Unconsolidated Joint Venture	$	—	$	—
Equity in Losses from Unconsolidated Joint Venture		—		0.4

14. Related Party Transactions

              BRSE, L.L.C., the general partner of the BRS Fund, which owned 61.3% of the outstanding Common Stock of the Company at December 31, 2006, is a private investment fund managed by BRS. The CDR Fund, which owned 13.0% of the outstanding Common Stock of the Company at December 31, 2006 (and through proxy controlled 26.6% of the voting rights), is a private investment fund managed by CD&R. CD&R also held the Holding Notes until the Closing Date of the AHA Acquisition. Both BRS and CD&R received an annual fee for management and financial consulting services provided to Remington and reimbursement of related expenses. Fees and expenses paid to CD&R and BRS for the five months ending May 31, 2007 were $0.3 and $0.3, respectively.

F-131

RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

14. Related Party Transactions (Continued)

              Remington paid fees and expenses of $0.3 to the law firm of Debevoise & Plimpton LLP from the period beginning January 1, 2007 through May 31, 2007 for legal services rendered. Franci J. Blassberg, Esq., a member of Debevoise & Plimpton LLP, is married to Joseph L. Rice, III, who is the Chairman, a director and a stockholder of CD&R and a general partner of Associates IV.

              During January 1 through May 31, 2007, Remington recorded $1.5 of compensation expense relating to the employee stock options and the deferred shares expense in accordance with SFAS 123R. In addition, Remington recorded $0.2 of mark-to-market expense related to the redeemable shares in accordance with SFAS 123R.

              Remington paid fees and expenses of $1.5 to the law firm of Debevoise & Plimpton LLP during 2006 for legal services rendered. Franci J. Blassberg, Esq., a member of Debevoise & Plimpton LLP, is married to Joseph L. Rice, III, who is the Chairman, a director and a stockholder of CD&R and a general partner of Associates IV.

              During 2006, Remington recorded $0.3 of compensation expense relating to the employee stock options in accordance with SFAS 123R.

15. Commitments and Contingencies

Purchase Commitments

              Remington has various purchase commitments, approximating $2.5 for the period from June 1, 2007 to December 31, 2007, $4.4 for 2008, $2.2 for 2009, $1.5 for 2010 and $0.6 for 2011 and $0.4 for 2012, for services incidental to the ordinary conduct of business, including, among other things, a services contract with its third party warehouse provider. Such commitments are not at prices in excess of current market prices. Included in the purchase commitment amount are Remington's purchase contracts with certain raw materials suppliers, for periods ranging from one to seven years, some of which contain firm commitments to purchase minimum specified quantities. Such contracts had no significant impact on the Company's financial condition, results of operations, or cash flows during the reporting periods presented herein.

Product Liability Litigation

              Since December 1, 1993, we have maintained insurance coverage for product liability claims subject to certain self-insured retentions on a per-occurrence basis for personal injury or property damage relating to occurrences arising after the Asset Purchase. We believe that our current product liability insurance coverage for personal injury and property damage is adequate for our needs. Our current product liability insurance policy provides for a self-insured retention of certain self-insured retention amounts per occurrence. It also includes a limited batch clause provision. Applicable to our primary Products policy, this allows that a single retention be assessed when the same defects manufactured in a common lot or batch results in multiple injuries or damages to third parties. The policy excludes from coverage any pollution-related liability. Based in part on the nature of our products, economic conditions, and other events, there can be no assurance that we will be able to obtain adequate product liability insurance coverage upon the expiration of the current policy. Certain of our current excess insurance coverage expressly excludes actions brought by municipalities as described below.

F-132

RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

15. Commitments and Contingencies (Continued)

              As a result of contractual arrangements, we manage the joint defense of product liability litigation involving Remington brand firearms and our ammunition products for both Remington and the 1993 Sellers. As of May 31, 2007, approximately 12 individual bodily injury cases and claims were pending, primarily alleging defective product design, defective manufacture and/or failure to provide adequate warnings; some of these cases seek punitive as well as compensatory damages. We have previously disposed of a number of other cases involving post-Asset Purchase occurrences by settlement. Of the individual cases and claims pending as of May 31, 2007, one involves a matter for which the 1993 Sellers retained liability and are required to indemnify us. The remaining approximately 11 pending cases involve post-Asset Purchase occurrences for which we bear responsibility under the Purchase Agreement.

              The relief sought in individual cases includes compensatory and, sometimes, punitive damages. Not all complaints or demand letters expressly state the amount of damages sought. As a general matter, when specific amounts are provided, compensatory damages sought range from less than $0.1 to more than $10.0, while demands for punitive damages may range from less than $0.5, to as much as $100.0. Of the 12 individual post-Asset Purchase claims pending as of May 31, 2007, where specific initial demands have been made, claimants purport to seek approximately $19.0 in compensatory and no specific amount in punitive damages. In Remington's experience, initial demands do not generally bear a reasonable relationship to the facts and circumstances of a particular matter, and in any event, typically are reduced significantly as a case proceeds. Remington believes that its accruals for product liability cases and claims are a superior quantitative measure of the cost to it of product liability cases and claims.

Municipal Litigation

              In addition to the individual cases, as a manufacturer of shotguns and rifles, Remington was named in only three of the actions brought by approximately 30 municipalities, primarily against manufacturers, distributors and sellers of handguns: (i) City of Boston, et al. v. Smith & Wesson, et al., No. 99-2590 (Suffolk Super Ct.); (ii) City of St. Louis, Missouri v. Henry Cernicek, et al., No. 992-01209 (Cir. Ct. St. Louis) & 00 Civil 1895 (U.S. Dist. Ct E.D. Missouri); and (iii) City of New York, et al. v. B.L. Jennings, Inc., et al., 00 Civil 3641 (JBW) (U.S. Dist. Ct. E.D.N.Y.). Two of these cases (City of Boston and City of St. Louis) have been dismissed against all defendants, while the third has been limited to claims against handgun manufacturers (City of New York). Remington is therefore not a defendant in any pending municipal action.

              As a general matter, these lawsuits named several dozens of firearm industry participants as defendants, and claim that the defendants' distribution practices allegedly permitted their products to enter a secondary market, from which guns can be obtained by unauthorized users; that defendants fail to include adequate safety devices in their firearms to prevent unauthorized use and accidental misuse; and that defendants' conduct has created a public nuisance. Plaintiffs generally seek injunctive relief and money damages (consisting of the cost of providing certain city services and lost tax and other revenues), and in some cases, punitive damages, as well.

              To date, most municipal lawsuits have been dismissed and are no longer subject to appeal, including that involving local California governments. The remaining lawsuits are in various stages of motion practice, discovery, and trial preparation. A majority of states have enacted some limitation on the ability of local governments to file such lawsuits against firearms manufacturers. In addition, similar

F-133

RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

15. Commitments and Contingencies (Continued)

legislation limiting such lawsuits on a federal level has been passed in both houses of Congress, most recently by the House of Representatives on October 20, 2005. President Bush signed the Protection of Lawful Commerce in Arms Act on October 26, 2005. However, the applicability of the law to various types of governmental and private lawsuits has been challenged in both state and federal courts.

              On March 16, 2007, Remington, Holding, Clayton Dubilier & Rice, Inc. and certain affiliates, Bruckmann, Rosser, Sherrill & Co., LLC and certain affiliates, Thomas Millner (Remington's President, Chief Executive Officer and a director), Leon Hendrix (Remington's Chairman), and Michael Babiarz (a Remington director), as defendants, and Robert Haskin (a former Remington director and employee), as plaintiff, entered into an agreement under which Remington agreed to pay Mr. Haskin $0.8 in consideration for dismissal of a non-employment related lawsuit and the granting of mutual releases by the parties. The $0.8 was recorded as an expense in the December 31, 2006, results of operations in accordance with SFAS 5 as the loss contingency became probable and reasonably estimated. In the lawsuit, filed in 2006 in the General Superior Court of Justice, Superior Court Division, Guilford County, North Carolina, Mr. Haskin alleged he was entitled to receive a fee in connection with a transaction completed by the Company. The lawsuit initially sought in excess of $1.0.

              The Company is involved in lawsuits, claims, investigations and proceedings, including commercial, environmental and employment matters, which arise in the ordinary course of business. The Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on its financial position, results of operations or cash flows.

Certain Indemnities

              As of the closing of the Asset Purchase in December 1993 under the Purchase Agreement, we assumed:

•

a number of specified liabilities, including certain trade payables and contractual obligations of the 1993 Sellers;

•

limited financial responsibility for specified product liability claims relating to disclosed occurrences arising prior to the Asset Purchase;

•

limited financial responsibility for environmental claims relating to the operation of the business prior to the Asset Purchase; and

•

liabilities for product liability claims relating to occurrences after the Asset Purchase, except for claims involving products discontinued at time of closing.

              All other liabilities relating to or arising out of the operation of the business prior to the Asset Purchase are excluded liabilities (the "Excluded Liabilities"), which the 1993 Sellers retained. The 1993 Sellers are required to indemnify Remington and its affiliates in respect of the Excluded Liabilities, which include, among other liabilities:

•

liability in excess of our limited financial responsibility for environmental claims and disclosed product liability claims relating to pre-closing occurrences;

•

liability for product liability litigation related to discontinued products; and

•

certain tax liabilities, employee and retiree compensation and benefit liabilities, and intercompany accounts payable which do not represent trade accounts payable.

F-134

RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

15. Commitments and Contingencies (Continued)

              The 1993 Sellers' overall liability in respect of their representations, covenants and the Excluded Liabilities under the Purchase Agreement, excluding environmental liabilities and product liability matters relating to events occurring prior to the purchase but not disclosed, or relating to discontinued products, is limited to $324.8. With a few exceptions, the 1993 Sellers' representations under the Purchase Agreement have expired. We made claims for indemnification involving product liability issues prior to such expiration.

              In addition, the 1993 Sellers agreed in 1996 to indemnify us against a portion of certain product liability costs involving various shotguns manufactured prior to 1995 and arising from occurrences on or prior to November 30, 1999. These indemnification obligations of the 1993 Sellers relating to product liability and environmental matters (subject to a limited exception) are not subject to any survival period limitation, deductible or other dollar threshold or cap. We and the 1993 Sellers are also party to separate agreements setting forth agreed procedures for the management and disposition of environmental and product liability claims and proceedings relating to the operation or ownership of the business prior to the Asset Purchase, and are currently engaged in the joint defense of certain product liability claims and proceedings.

Litigation Outlook

              Because Remington's assumption of financial responsibility for certain product liability cases and claims involving pre-Asset Purchase occurrences was limited to an amount that has now been fully paid, with the 1993 Sellers retaining liability in excess of that amount and indemnifying Remington in respect of such liabilities, and because of Remington's accruals with respect to such cases and claims, Remington believes that product liability cases and claims involving occurrences arising prior to the Asset Purchase are not likely to have a material adverse effect upon the financial condition, results of operations, or cash flows of Remington. Moreover, although it is difficult to forecast the outcome of litigation, Remington does not believe, in light of relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, Remington's accruals for the uninsured costs of such cases and claims and the 1993 Sellers' agreement to be responsible for a portion of certain post-Asset Purchase shotgun-related product liability costs, as well as the type of firearms products made by Remington), that the outcome of all pending post-Asset Purchase product liability cases and claims will be likely to have a material adverse effect upon the financial condition, results of operations, or cash flows of Remington. Nonetheless, in part because the nature and extent of liability based on the manufacture and/or sale of allegedly defective products (particularly as to firearms and ammunition) is uncertain, there can be no assurance that Remington's resources will be adequate to cover pending and future product liability occurrences, cases or claims, in the aggregate, or that a material adverse effect upon our financial condition, results of operations, or cash flows will not result therefrom. Because of the nature of its products, Remington anticipates that it will continue to be involved in product liability litigation in the future.

              The amount of Remington's accrual for product liability cases and claims is based upon estimates developed as follows. We establish reserves for anticipated defense and disposition costs to us of those pending cases and claims for which we are financially responsible. Based on those estimates and an actuarial analysis of actual defense and disposition costs incurred by Remington with respect to product liability cases and claims in recent years, Remington determines estimated defense and

F-135

RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

15. Commitments and Contingencies (Continued)

disposition costs for unasserted product liability cases and claims. Remington combines the estimated defense and disposition costs for both pending and unasserted cases and claims to determine the amount of Remington's accrual for product liability cases and claims. It is reasonably possible additional experience could result in further increases or decreases in the period in which such information is made available. Remington believes that its accruals for losses relating to such cases and claims are adequate. Remington's accruals for losses relating to product liability cases and claims includes accruals for all probable losses the amount of which can be reasonably estimated. Based on the relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, Remington's accruals for the uninsured costs of such cases and claims and the 1993 Sellers' agreement to be responsible for a portion of certain post-Asset Purchase shotgun-related product liability costs, as well as the type of firearms products made by Remington), Remington does not believe with respect to product liability cases and claims that any reasonably possible loss exceeding amounts already recognized through Remington's accruals has been incurred.

              Because our assumption of financial responsibility for certain product liability cases and claims involving pre-Asset Purchase occurrences was limited to an amount that has now been fully paid, with the 1993 Sellers retaining liability in excess of that amount and indemnifying us in respect of such liabilities, and because of our accruals with respect to such cases and claims, we believe that product liability cases and claims involving occurrences arising prior to the Asset Purchase are not likely to have a material adverse effect upon our financial condition, results of operations or cash flows. Moreover, although it is difficult to forecast the outcome of litigation, we do not believe, in light of relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, our accruals for the uninsured costs of such cases and claims and the 1993 Sellers' agreement to be responsible for a portion of certain post-Asset Purchase shotgun-related product liability costs, as well as the type of firearms products that we make), that the outcome of all pending post-Asset Purchase product liability cases and claims will be likely to have a material adverse effect upon our financial condition, results of operations or cash flows. Nonetheless, in part because the nature and extent of liability based on the manufacture and/or sale of allegedly defective products (particularly as to firearms and ammunition) is uncertain, there can be no assurance that our resources will be adequate to cover pending and future product liability occurrences, cases or claims, in the aggregate, or that a material adverse effect upon our financial condition, results of operations or cash flows will not result therefrom. Because of the nature of our products, we anticipate that we will continue to be involved in product liability litigation in the future. Because of the potential nature of injuries relating to firearms and ammunition, certain public perceptions of our products, and recent efforts to expand liability of manufacturers of firearms and ammunition, product liability cases and claims, and insurance costs associated with such cases and claims, may cause us to incur material costs.

Environmental

              The Company does not expect current environmental regulations to have a material adverse effect on the financial condition, results of operations or cash flows. However, Remington's liability for future environmental remediation costs is subject to considerable uncertainty due to the complex, ongoing and evolving process of identifying the necessity for, and generating cost estimates for,

F-136

RACI HOLDING, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

($ IN MILLIONS)

15. Commitments and Contingencies (Continued)

remedial work. Furthermore, there can be no assurance that environmental regulations will not become more restrictive in the future. Remington has not identified any loss contingencies with respect to environmental remediation costs the realization of which Remington believes to be reasonably possible.

16. Financial Instruments

              Remington purchases copper, lead, and zinc options contracts to hedge against price fluctuations of anticipated commodity purchases. The options contracts limit the unfavorable effect that cost increases will have on these metal purchases.

              In accordance with the provisions of Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), as amended by Statement of Financial Accounting Standards No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities—an amendment of FASB Statement No. 133 ("SFAS 138") and by Statement of Financial Accounting Standards No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities ("SFAS 149"), commodity contracts are designated as cash flow hedges, with the fair value of these financial instruments recorded in prepaid expenses and other current assets, changes in fair value recorded in accumulated other comprehensive income, and net gains/losses reclassified to cost of sales based upon inventory turnover, indicating consumption and sale of the underlying commodity in Remington's products.

              At December 31, 2006, the fair value of Remington's outstanding derivatives contracts relating to firm commitments and anticipated consumption (aggregate notional amount of 44.6 million pounds of copper and lead) up to eighteen months from such date was $6.6, as determined with the assistance of a third party.

              The option contracts designated as cash flow hedges that had settled prior to May 31, 2007 and the associated realized gain was deferred and was to be recognized in cost of sales as the inventory was sold.

              At May 31, 2007 the fair value of Remington's outstanding option contracts designated as cash flow hedges relating to firm commitments and anticipated consumption (aggregate notional amount of 30.2 million pounds of copper, lead and zinc) was $9.6, fixing the cost on a like amount of pounds purchased. At May 31, 2007, Remington assessed the hedge effectiveness and determined that there will be no future commodity purchases by the predecessor company (for financial reporting purposes), and therefore Remington has concluded that the unsettled option contracts did not meet the requirements for cash flow hedge accounting. This resulted in a gain of $4.9 being recorded on May 31, 2007 for the unsettled contracts, which was recorded in other income (loss). The successor assumed the outstanding contracts as part of the FGI Acquisition.

              During the five month period ended May 31, 2007, a net gain on a net-of-tax basis of $3.8 on derivative instruments was reclassified to earnings from accumulated other comprehensive income. During the twelve month period ended December 31, 2006, a net gain on a net-of-tax basis of $7.4 on derivative instruments was reclassified to cost of sales from accumulated other comprehensive income, and a net gain on a net-of-tax basis of $5.8 was recorded to accumulated other comprehensive income and to prepaid expenses and other assets.

F-137

Report of Independent Auditors

To the Board of Directors and Stockholder of
The Marlin Firearms Company and Subsidiary

              In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of The Marlin Firearms Company and Subsidiary (collectively, the "Company") at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

              As discussed in Notes 2 and 5 to the consolidated financial statements, the Company changed the manner in which it accounts for its defined benefit pension and other postretirement plans in 2007.

              As discussed in Note 10, on January 28, 2008, all of the issued and outstanding shares of common stock of the Company were acquired by Remington Arms Company, Inc.

/s/  PricewaterhouseCoopers LLP

April 4, 2008
Hartford, CT

F-138

The Marlin Firearms Company and Subsidiary

Consolidated Balance Sheets

December 31, 2007 and 2006

				2007			2006
Assets
Current assets
	Cash and cash equivalents			$	688,433		$	470,418
	Accounts receivable, net of allowance for doubtful accounts of $45,000 and $140,309 in 2007 and 2006, respectively				12,265,593			8,937,490
	Inventories, net				12,025,244			10,422,936
	Other current assets				1,235,374			958,361
	Deferred income taxes				734,795			823,721
			Total current assets		26,949,439			21,612,926
Property, plant and equipment, net					6,318,079			5,475,185
Goodwill					2,983,545			2,983,545
Deferred income taxes					2,453,012			2,570,484
Cash surrender value of life insurance policies, net of advances					5,749,446			5,430,440
Intangible pension asset					—			87,658
Other assets					93,953			482,002
				$	44,547,474		$	38,642,240
Liabilities and Stockholders' Equity
Current liabilities
	Line of credit			$	6,250,000		$	4,000,000
	Accounts payable				4,526,436			2,562,933
	Accrued compensation and related withholdings				1,936,405			1,608,316
	Accrued workers' compensation				682,913			593,735
	Deferred compensation				105,000			127,500
	Pension liability				—			1,616,589
	Accrued postretirement healthcare benefits				390,000			515,000
	Product liabilities				62,500			894,000
	Accrued liabilities				1,924,059			1,786,259
			Total current liabilities		15,877,313			13,704,332
Accrued workers' compensation, net of current portion					390,000			510,000
Deferred compensation, net of current portion					493,253			517,726
Pension liability, net of current portion					1,917,853			1,925,239
Accrued postretirement healthcare benefits, net of current portion					4,293,660			3,210,528
			Total liabilities		22,972,079			19,867,825
Commitments and contingencies (Note 8)
Stockholders' equity
	Common stock
		Class A—voting, $25 par value, 120,000 shares authorized; 104,840 issued; 86,773 shares outstanding			2,169,325			2,169,325
		Class B—nonvoting, $.01 stated value, 1,080,000 shares authorized; 940,851 shares issued; 760,936 shares outstanding			7,610			7,610
	Paid-in capital				139,130			139,130
	Retained earnings				21,779,640			18,842,686
	Accumulated other comprehensive loss				(2,520,310	)		(2,384,336	)
			Total stockholders' equity		21,575,395			18,774,415
				$	44,547,474		$	38,642,240

The accompanying notes are an integral part of these consolidated financial statements.

F-139

The Marlin Firearms Company and Subsidiary

Consolidated Statements of Income

Years Ended December 31, 2007, 2006 and 2005

			2007			2006			2005
Net sales			$	80,505,953		$	71,471,382		$	62,272,164
Cost of sales				66,153,542			59,147,070			53,918,093
		Gross profit		14,352,411			12,324,312			8,354,071
Selling, general and administrative expenses				8,559,758			8,072,492			6,620,139
		Operating income		5,792,653			4,251,820			1,733,932
Other income (expense)
	Interest expense			(417,679	)		(359,410	)		(231,327	)
	Interest income			732			3,315			2,906
	Other income, net			532,869			88,962			75,392
				115,922			(267,133	)		(153,029	)
		Income before provision for income taxes		5,908,575			3,984,687			1,580,903
Provision for income taxes				1,954,372			1,400,000			400,000
		Net income	$	3,954,203		$	2,584,687		$	1,180,903

The accompanying notes are an integral part of these consolidated financial statements.

F-140

The Marlin Firearms Company and Subsidiary

Statements of Changes in Stockholders' Equity and Comprehensive Income

Years Ended December 31, 2007, 2006 and 2005

			Class A Common Stock				Class B Common Stock
																Accumulated Other Comprehensive Loss
											Paid-in Capital		Retained Earnings						Total Stockholders' Equity			Comprehensive Income (Loss)
			Shares		Amount		Shares		Amount
Balance, December 31, 2004				86,773	$	2,169,325		760,936	$	7,610	$	139,130	$	17,086,160		$	(2,461,242	)	$	16,940,983
	Net income			—		—		—		—		—		1,180,903			—			1,180,903		$	1,180,903
	Dividends ($1.17 per Class A and Class B share)			—		—		—		—		—		(991,815	)		—			(991,815	)		—
	Additional minimum pension liability adjustment, net of tax of $169,599			—		—		—		—		—		—			(329,222	)		(329,222	)		(329,222	)
	Net change in unrealized investment gains, net of tax			—		—		—		—		—		—			(11,229	)		(11,229	)		(11,229	)
		Total comprehensive income																				$	840,452
Balance, December 31, 2005				86,773		2,169,325		760,936		7,610		139,130		17,275,248			(2,801,693	)		16,789,620
	Net income			—		—		—		—		—		2,584,687			—			2,584,687		$	2,584,687
	Dividends ($1.20 per Class A and Class B share)			—		—		—		—		—		(1,017,249	)		—			(1,017,249	)
	Additional minimum pension liability adjustment, net of tax of $215,002			—		—		—		—		—		—			417,357			417,357			417,357
		Total comprehensive income																				$	3,002,044
Balance, December 31, 2006				86,773		2,169,325		760,936		7,610		139,130		18,842,686			(2,384,336	)		18,774,415
	Net income			—		—		—		—		—		3,954,203			—			3,954,203		$	3,954,203
	Dividends ($1.20 per Class A and Class B share)			—		—		—		—		—		(1,017,249	)		—			(1,017,249	)		—
	Minimum pension liability adjustment, net of tax of $207,265			—		—		—		—		—		—			489,996			489,996			489,996
	Adoption of SFAS 158, net of tax of $277,313			—		—		—		—		—		—			(625,970	)		(625,970	)		—
		Total comprehensive income																				$	4,444,199
Balance, December 31, 2007				86,773	$	2,169,325		760,936	$	7,610	$	139,130	$	21,779,640		$	(2,520,310	)	$	21,575,395

The accompanying notes are an integral part of these consolidated financial statements.

F-141

The Marlin Firearms Company and Subsidiary

Consolidated Statements of Cash Flows

Years Ended December 31, 2007, 2006 and 2005

					2007			2006			2005
Cash flows from operating activities
	Net income				$	3,954,203		$	2,584,687		$	1,180,903
	Adjustments to reconcile net income to net cash provided by operating activities
		Depreciation				1,065,750			1,124,717			1,400,065
		Loss on disposal of equipment				1,475			—			—
		Bad debt (recoveries) expense				(30,021	)		28,577			47,288
		Deferred compensation expense				36,333			46,083			59,594
		Deferred income taxes				276,446			597,475			131,250
		Change in operating assets and liabilities
			(Increase) decrease in accounts receivable			(3,298,082	)		(67,344	)		827,179
			(Increase) decrease in inventories			(1,602,308	)		(1,218,938	)		2,000,412
			Decrease (increase) in other assets			111,036			(173,611	)		(153,971	)
			Increase in cash surrender value of life insurance (excess of premiums paid)			(214,477	)		(290,704	)		(157,914	)
			Increase in accounts payable			1,963,503			102,202			272,384
			Increase in accrued compensation and related withholdings			328,089			952			256,252
			(Decrease) increase in product liabilities			(831,500	)		176,500			(483,000	)
			(Decrease) increase in accrued pension and postretirement benefits			(784,207	)		(1,257,759	)		762,933
			(Decrease) in accrued workers' compensation			(30,822	)		(391,265	)		(729,931	)
			Increase (decrease) in deferred compensation			(83,306	)		(105,213	)		(385,363	)
			Increase in accrued liabilities			137,800			204,647			384,942
				Net cash provided by operating activities		999,912			1,361,006			5,413,023
Cash flows from investing activities
	Proceeds on sale of property and equipment					6,400			—			—
	Purchases of property and equipment					(1,916,519	)		(1,273,283	)		(677,275	)
	Premiums for, and death benefits from, life insurance policies					(104,529	)		107,270			(102,887	)
				Net cash used in investing activities		(2,014,648	)		(1,166,013	)		(780,162	)
Cash flows from financing activities
	Borrowings on revolving line of credit					7,885,000			12,250,000			4,875,000
	Repayments of revolving line of credit					(5,635,000	)		(11,200,000	)		(8,547,109	)
	Dividends paid					(1,017,249	)		(1,017,249	)		(991,815	)
				Net cash provided by (used in) financing activities		1,232,751			32,751			(4,663,924	)
Net increase (decrease) in cash and cash equivalents						218,015			227,744			(31,063	)
Cash and cash equivalents, beginning of year						470,418			242,674			273,737
Cash and cash equivalents, end of year					$	688,433		$	470,418		$	242,674
Supplemental disclosure of cash flow information
	Cash paid during the year for
		Income taxes			$	1,745,800		$	638,000		$	326,000
		Interest			$	412,119		$	343,962		$	241,739

The accompanying notes are an integral part of these consolidated financial statements.

F-142

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements

1. Line of Business and Consolidation

              The Marlin Firearms Company ("Marlin") is a manufacturer of sporting rifles. Marlin's products are sold to retailers and distributors throughout the United States. In November 2000, Marlin acquired certain assets and liabilities of H&R 1871, Inc. ("H&R"), a manufacturer of sporting shotguns and rifles. Accordingly, the accompanying consolidated financial statements include all of the accounts of Marlin and H&R (collectively, the "Company") and all intercompany balances and transactions have been eliminated in consolidation.

2. Summary of Significant Accounting Policies

              Significant accounting policies followed in the preparation of these financial statements are as follows:

Use of Estimates

              The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Such estimates include reserves for accounts receivable, reserves for inventory, including the LIFO reserve, estimated useful lives of property, plant and equipment, reserves for self-insured workers' compensation, reserves for warranty, environmental liabilities, product liabilities, assumptions used in determining pension and postretirement healthcare costs and liabilities (Note 5) and assumptions used in assessing possible impairment of the Company's goodwill.

Fair Value of Financial Instruments

              The Company holds life insurance policies for certain officers and key employees. Certain of these policies were purchased to fund the deferred compensation agreements with the respective employees. These insurance policies are shown on the consolidated balance sheets at their fair value. The fair value of the life insurance policies is estimated based on the cash surrender values, net of related policy loans.

Revenue Recognition

              The Company recognizes revenue when evidence of an arrangement exists, delivery (based on shipping terms which are FOB shipping point) has occurred, the selling price is fixed and determinable, and collectibility is reasonably assured. The Company provides for an estimate of product returns and cash discounts for early customer payments based on historical experience at the time of revenue recognition. Costs and related expenses to manufacture the Company's products are recorded as costs of sales when the related revenue is recognized.

Concentration of Credit Risk

              Financial instruments which potentially subject the Company to concentration of credit risk consist principally of trade receivables. Three customers represented 42% and 27% of net trade receivables at December 31, 2007 and 2006, respectively. These same customers represent 27%, 33% and 41% of revenue for the years ended December 31, 2007, 2006 and 2005, respectively. If sales to

F-143

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

these customers decline, it could have a materially adverse effect on the Company's financial position, results of operations and cash flows.

Shipping and Handling Costs

              Shipping costs incurred by the Company are classified as selling, general and administrative expenses within the consolidated statement of income. Shipping costs totaled $852,320, $785,038 and $635,000 for the years ended December 31, 2007, 2006 and 2005, respectively.

Advertising Costs

              The Company's policy is to expense advertising costs as incurred. Such costs aggregated $2,331,622, $2,284,639 and $1,865,911 for the years ended December 31, 2007, 2006 and 2005, respectively. The Company also established a co-op advertising program to reimburse distributors for advertising the Company products. Such costs, included in advertising expenses above, aggregated $150,046, $68,631 and $121,916 for years ended December 31, 2007, 2006 and 2005, respectively.

Cash and Cash Equivalents

              The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company periodically maintains cash in bank accounts in excess of the established limit insured by the Federal Deposit Insurance Corporation. All cash is maintained in bank accounts at high quality financial institutions.

Accounts Receivable

              The Company extends credit to its customers and distributors based on their financial condition and offers various discounts for early payment. Balances deemed uncollectible are written off against the allowance for doubtful accounts. The Company estimates its allowance for doubtful accounts through review of past due balances, knowledge of its customers' financial situations, and past payment history.

Inventories

              Inventories include material, labor and overhead and are stated at the lower of cost or market. A last-in, first-out (LIFO) flow assumption is assumed for the Marlin product line (which comprises approximately 63% and 61% of the inventory under a first-in, first-out (FIFO) flow assumption at December 31, 2007 and 2006, respectively) and a FIFO flow assumption is assumed for the H&R product line. The H&R product line is recorded at standard costs which approximate actual costs. (H&R inventory comprises approximately 37% and 39% of total inventory at December 31, 2007 and 2006, respectively.) Had a FIFO assumption been used for the Marlin product line, inventories would have been higher by $8,451,022 and $8,038,068 at December 31, 2007 and 2006, respectively.

F-144

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

              The categories of inventory at December 31 are summarized as follows:

	2007			2006
Raw materials and parts	$	2,423,855		$	3,254,133
Work-in-process		10,321,294			10,122,436
Finished goods		7,731,117			5,084,435
		20,476,266			18,461,004
Less: LIFO reserve		(8,451,022	)		(8,038,068	)
	$	12,025,244		$	10,422,936

Property, Plant and Equipment

              Property, plant and equipment is recorded at cost, less accumulated depreciation, and depreciated using the straight-line method over the following estimated useful lives of the assets:

Description	Useful Lives
Buildings and improvements		10 – 55 years
Machinery and equipment		3 – 10 years

              Upon retirement or sale, the cost of assets disposed and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in current period results, netted on the income statement within selling, general and administrative expenses.

              The categories of property, plant and equipment at December 31 are as follows:

	2007			2006
Land	$	782,135		$	354,846
Buildings and improvements		8,864,620			8,768,765
Machinery and equipment		23,152,088			22,096,277
Construction in progress		970,388			646,823
		33,769,231			31,866,711
Less: Accumulated depreciation		(27,451,152	)		(26,391,526	)
	$	6,318,079		$	5,475,185

              Deprecation expense related to property, plant and equipment was $1,065,750, $1,124,717 and $1,400,065 for the years ended December 31, 2007, 2006 and 2005, respectively.

Long-Lived Assets

              The Company evaluates impairment of its in long-lived assets in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144 ("SFAS No. 144"), Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS 144 requires the Company to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment of long-lived assets has been recorded during the years ended December 31, 2007 and 2006.

F-145

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Goodwill

              The Company accounts for its goodwill under SFAS No. 142, Goodwill and Other Intangible Assets ("SFAS No. 142"). Under SFAS No. 142, goodwill is not amortized, but is tested for impairment at least annually. Each year the Company tests for impairment of goodwill according to a two-step approach. In the first step, the Company tests for impairment of goodwill by estimating the fair values of its reporting units. If the carrying amount exceeds the fair value, the second step of the goodwill impairment test is performed to measure the amount of the impairment loss, if any. In the second step the implied fair value of the goodwill is estimated as the fair value of the reporting unit used in the first step less the fair values of all other net tangible and intangible assets of the reporting unit. If the carrying amount of the goodwill exceeds its implied fair market value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill. In addition, goodwill of a reporting unit is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

              Goodwill represents the excess of the purchase price of H&R over the fair value of the assets acquired and the liabilities assumed. The Company has reviewed the goodwill recorded as of December 31, 2007 and 2006 and has determined that no impairment exists.

Product Warranty

              The Company provides for a five-year warranty for certain of its products and records the estimated cost of such product warranties at the time a sale is recorded. Estimated warranty costs are based upon actual past experience of product repairs and the related estimated cost of labor and material to make the necessary repairs and are recorded in accrued liabilities in the accompanying consolidated balance sheets. The following is a reconciliation of the changes in the Company's product warranty liability for the years ended December 31, 2007 and 2006:

	2007			2006
Product warranty liability, beginning of year	$	440,000		$	400,000
Accruals for warranties issued during the year		497,500			495,000
Settlements made during the year		(455,000	)		(455,000	)
Product warranty liability, end of year	$	482,500		$	440,000

Deferred Compensation

              The Company has deferred compensation agreements with certain officers and key employees. These agreements provide for payment of specified amounts over ten years beginning at the time of retirement or death of the individuals. The Company accrues the future liability over the anticipated remaining years of service of such individuals. Amounts are accrued on a present value discounted basis during the employee's service and retirement periods. Deferred compensation costs charged to expense amounted to $36,333, $46,083 and $60,000 in 2007, 2006 and 2005, respectively.

F-146

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Pension and Postretirement Obligations

              In September 2006, the Financial Accounting Standards Board issued SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statement No. 87, 88, 106, and 132 (R) ("SFAS 158"). This statement requires an employer to recognize in its balance sheet an asset or liability for a plan's overfunded or underfunded status, measure a plan's assets and obligations as of the end of the employer's fiscal year and recognize changes in the funded status in the year in which the changes occur. SFAS No. 158 also enhances the current disclosure requirements for pension and other postretirement plans to include disclosure related to certain effects on net periodic cost. The Company adopted SFAS No. 158 as of December 31, 2007 (Note 5). The requirement to measure plan assets and benefit obligations as of the employer's fiscal year-end is effective for the Company's fiscal year ending after December 15, 2008, however the Company is currently measuring plan assets and benefit obligations as of year-end.

              The Company accounts for postretirement benefits under the provisions of SFAS No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions. SFAS No. 106 requires that the cost of these postretirement benefits be recognized in the consolidated financial statements during the employee's active working career. Accordingly, the Company accrues an actuarially determined amount for postretirement benefits during the period in which active employees become eligible for such future benefits.

Income Taxes

              The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes. SFAS No. 109 requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements of income tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the book and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Although realization of the Company's net deferred tax assets is not assured, management believes it is more likely than not that the deferred tax assets will be realized either through the carryback to prior taxable years, through the generation of future taxable income or through the utilization of certain tax strategies.

Comprehensive Income

              The Company accounts for comprehensive income in accordance with SFAS No. 130, Reporting Comprehensive Income. This statement requires that all items that are required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company has elected to report total comprehensive income within the statements of changes in stockholders' equity.

              Accumulated other comprehensive loss at December 31, 2007 and 2006 primarily relates to the Company's recognition of its pension and postretirement obligations, net of tax. The gross balance of accumulated other comprehensive loss is $3,829,959 and $3,621,930 at December 31, 2007 and 2006, respectively. The cumulative tax effect is $1,307,642 and $1,237,594 at December 31, 2007 and 2006, respectively.

F-147

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies (Continued)

Treasury Stock

              The Company classifies treasury stock as a reduction of common stock in accordance with Connecticut regulations. Treasury stock consists of previously repurchased 18,067 shares of Class A and 179,915 of Class B common stock with a total cost of $3,090,682.

Reclassifications and Revisions

              The consolidated statements of cash flows for the years ended December 31, 2006 and 2005 have been revised to reflect the increase in the cash surrender value of life insurance policies in excess of premiums paid as an operating activity, rather than an investing activity. Additionally, certain prior year amounts have been reclassified to conform with the current year presentation.

3. Recent Accounting Pronouncements

              In June 2006, the Financial Accounting Standards Board issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN No. 48"), which clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with SFAS No. 109, Accounting for Income Taxes. This statement will require the Company to assess and determine all material positions taken in any income tax return as of the date of adoption of FIN No. 48, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. The evaluation of a tax position in accordance with this Interpretation is a two-step process of recognition and measurement that uses a "more-likely-than-not" ("MLTN") threshold. The MLTN threshold means that a benefit related to an uncertain tax position may not be recognized in the financial statements unless it is MLTN that the position will be sustained based on its technical merits, and there must be more than a 50% likelihood that the position would be sustained if challenged and considered by the highest court in the relevant jurisdiction. The Company will be required to classify a liability for unrecognized tax benefits as current to the extent that the enterprise anticipates making a payment within one year and the income tax liability should not be classified as a deferred tax liability unless it results from a taxable temporary difference. The Company is required to adopt this standard of accounting as of January 1, 2008.

              In September 2006, the Financial Accounting Standards Board issued No. 157, Fair Value Measurements ("FASB No. 157"). This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement does not require any new fair value measurements. The Company is required to adopt this standard on January 1, 2008, however the Company does not expect adoption of this standard to materially impact the consolidated financial statements during the year ending December 31, 2008.

4. Debt

              The Company has a $12,000,000 line of credit agreement (the "Line of Credit") with a maturity date of June 2010. The outstanding balance under the Line of Credit bears interest at the prime rate, less 0.5% or LIBOR plus 1.5%, at the borrower's option. At December 31, 2007 and 2006, the rate of interest was 6.10% and 6.82%, respectively. The Company has $6,250,000 and $4,000,000, respectively, outstanding on its Line of Credit, at December 31, 2007 and 2006 which has been classified as a current liability in the Company's consolidated balance sheet. Historically, the Company

F-148

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

4. Debt (Continued)

has classified the Line of Credit as current due to the intent and ability to repay the full amount during the next 12 months. As discussed in Note 10, the Line of Credit was paid in full upon close of the Remington purchase agreement. All assets of the Company are pledged as collateral over the loan agreement.

              On September 26, 2007, the Company obtained a temporary overline facility attached to the existing Line of Credit in the amount of $2,000,000, which expired on December 31, 2007. The interest rate on the overline borrowing was prime rate or LIBOR plus 1.5%, at the borrower's option.

              The Company is required to meet certain financial covenants relating to the Line of Credit. These covenants include, but are not limited to, maintaining a fixed charge ratio, a minimum current ratio and a maximum ratio of debt to tangible net worth, as defined. The Company was in compliance with these financial covenants as of December 31, 2007.

5. Pension Plan and Other Postretirement Benefits

              Marlin has a non-contributory, defined benefit pension plan (the "Pension Plan") covering substantially all of Marlin's employees. Vested employees who retire will receive an annual benefit equal to $14.00 per month per year of credited service, as defined by the Pension Plan.

              The Company's weighted-average asset allocations for the Pension Plan at December 31, 2007 and 2006, by asset category are as follows:

	2007			2006
Equity securities		75	%		78	%
Debt securities		25	%		22	%
		100	%		100	%

              The investment objective for the Pension Plan is to obtain a favorable relative return for the entire fund, consistent with preservation of capital, emphasizing some income generation and long-term growth. While management believes some risk is warranted pursuing long-term growth of capital, the Company seeks consistent annual returns with low volatility in investment performance.

              Marlin also sponsors a defined benefit postretirement healthcare plan (the "Postretirement Plan") that covers Marlin employees who have 17 years of service at retirement. The Postretirement Plan is contributory for all retirees. Marlin's contribution is limited to $90.95 per month per employee.

F-149

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

5. Pension Plan and Other Postretirement Benefits (Continued)

              A summary of key provisions of the Pension Plan and the Postretirement Plan is as follows as of December 31, 2007 and 2006, the measurement date:

		Pension Plan						Postretirement Plan
		2007			2006			2007			2006
Benefit obligation		$	14,806,002		$	15,367,057		$	4,683,660		$	5,009,295
Fair value of plan assets			12,888,149			11,835,798			—			—
Funded status of the plan		$	(1,917,853	)	$	(3,531,259	)	$	4,683,660		$	(5,009,295	)
Accrued benefit cost recognized in the consolidated balance sheets		$	(1,917,853	)	$	(3,531,259	)	$	(4,683,660	)	$	(3,726,000	)
Benefit cost			424,575			505,150			498,000			514,000
Employer contribution			1,341,721			1,839,348			355,803			437,983
Plan participant contributions			—			—			251,487			224,340
Benefits paid			1,136,377			1,085,924			607,290			662,323
Weighted-average assumptions-benefit obligations
	Discount rate		6.25	%		5.75	%		6.25	%		5.75	%
	Expected return on plan assets		8.00	%		8.00	%
Assumed health care cost trend rates
	Initial health care cost trend rate								4.00	%		4.00	%

              The weighted average discount rate utilized in determining benefit cost for the Pension Plan and Postretirement Plan was 5.75% for the years ended December 31, 2007 and 2006 and 6.00% for the year ended December 31, 2005. The weighted average expected return on plan assets utilized in determining benefit cost for the Pension Plan was 8.00% for the years ended December 31, 2007, 2006 and 2005, and the weighted average health care cost trend rate utilized in determining benefit cost for the Postretirement Plan was 4.00% for the years ended December 31, 2007, 2006 and 2005.

              In accounting for benefit obligations and expense, the Company utilized discount rates which are an estimated rate at which the related obligations could be settled, and a long-term rate of return on plan assets which is an estimated rate of earnings generated on the assets of the Plans.

              As discussed in Note 2, the Company adopted SFAS No. 158 as of December 31, 2007. The December 31, 2007 impact of adopting SFAS No. 158 is as follows:

	December 31, 2007 Prior to Adoption of SFAS No. 158		Adjustment to Initially Apply SFAS No. 158			December 31, 2007 After Pension Liability Adjustment and SFAS No. 158 Adjustment
Intangible pension asset	$	87,658	$	(87,658	)	$	—
Deferred tax asset, net of current portion		2,175,699		277,313			2,453,012
Accrued postretirement liability		3,868,035		815,625			4,683,660
Accumulated other comprehensive loss, net of taxes		1,894,340		625,970			2,520,310

F-150

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

5. Pension Plan and Other Postretirement Benefits (Continued)

              Net periodic pension cost included the following components for the years ended December 31:

	Pension Plan						Post Retirement Plan
	2007			2006			2007		2006
Service cost	$	221,181		$	226,400		$	147,824	$	142,918
Interest cost		864,705			855,177			269,507		277,681
Expected return on plan assets		(959,684	)		(820,756	)		—		—
Amortization of prior service cost		9,740			9,740			61,660		61,660
Recognized net (gain) loss		210,715			234,589			19,319		32,163
FAS 88 event recognition		77,918			—			—		—
	$	424,575		$	505,150		$	498,310	$	514,422

              Included in accumulated other comprehensive income at December 31, 2007 is $3,472,929 and $373,076, of net loss and prior service cost, respectively. The Company estimates the amount of amortization of prior service cost and actuarial loss to be $61,660 and $141,791, respectively, for the year ending December 31, 2008.

              Benefit payments, which reflect expected future service, are expected to be paid as follows:

	Pension Benefits		Other Postretirement Benefits
2008	$	1,132,000	$	390,000
2009		1,136,000		381,000
2010		1,128,000		392,000
2011		1,155,000		397,000
2012		1,198,000		424,000
2013 through 2017		6,076,000		2,217,000

              During the year ending December 31, 2008, the Company expects to pay approximately $1,400,000 of contributions to the Pension Plan.

              On November 1, 2007, the Company amended the Pension Plan to cease benefit accruals for future service, as defined by the Pension Plan, after December 31, 2007. Going forward, the Company will make an annual contribution to the 401(k) Plan for all employees who are active participants in the defined benefit plan. The annual contribution will equal 1% of the employee's salary. The annual contribution will be payable in January for the prior service year.

6. Savings Plans

              Marlin has a 401(k) defined contribution plan. Marlin matches 100% of employee contributions for the first 3% of earnings and matches 50% of employee contributions for the next 2% of earnings up to a maximum of 4% of total compensation. Eligible participants are those who have reached age 21 and who have completed at least six months of service, as defined.

F-151

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

6. Savings Plans (Continued)

              H&R has a 401(k) defined contribution plan. H&R matches 100% of employee contributions for the first 3% of earnings. Eligible participants are those who have reached age 18 and who have completed at least one year of service, as defined.

              Participants in both the Marlin and H&R 401(k) plans are fully vested in the Company's contributions after completing 6 years of service. The Company made contributions of $658,617, $531,884 and $479,738 to the plans for each of the years ended December 31, 2007, 2006 and 2005, respectively.

7. Income Taxes

              The provision for income taxes consisted of the following for the years ended December 31:

		2007		2006		2005
Current
	Federal	$	1,675,504	$	774,000	$	222,000
	State		2,422		29,000		47,000
Deferred
	Federal		128,306		567,000		131,000
	State		148,140		30,000		—
		$	1,954,372	$	1,400,000	$	400,000

              The difference between the actual tax provision and the amounts obtained by applying the statutory United States federal income tax rate to income before taxes is primarily attributable to officers' life insurance, qualified production activities deductions, state taxes and limitations on meals and entertainment expenses.

              Deferred tax assets and liabilities consist of the following at December 31:

			2007			2006
Deferred tax assets
	Federal		$	4,603,615		$	4,418,947
	State			14,021			85,000
		Total		4,617,636			4,503,947
Deferred tax liabilities
	Federal			(1,425,421	)		(1,102,742	)
	State			(4,408	)		(7,000	)
				(1,429,829	)		(1,109,742	)
Net deferred tax asset			$	3,187,807		$	3,394,205

              The Company's net deferred tax asset is comprised primarily of differences in book and tax bases of goodwill and property, plant and equipment, pension liability, post retirement healthcare benefits and reserves not currently deductible.

F-152

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

7. Income Taxes (Continued)

              The allocation of deferred tax expense (benefit) related to amounts charged to current year income and amounts charged directly to equity for the years ended December 31 was as follows:

		2007			2006		2005
Deferred tax (benefit) expense allocated to equity
	Federal	$	(70,047	)	$	214,000	$	(170,000	)
	State		—			1,000		—
			(70,047	)		215,000		(170,000	)
Deferred tax expense allocated to income
	Federal		128,306			567,475		131,250
	State		148,140			30,000		—
			276,446			597,475		131,250
		$	206,399		$	812,475	$	(38,750	)

8. Commitments and Contingencies

              The Company is the defendant in certain product liability suits for which it is partially self-insured. The Company provides for these suits based on estimates determined after consultation with legal counsel. Adjustments to product liability reserves, based upon an evaluation of the most currently available information, is charged or credited to selling, general and administrative expenses in the accompanying consolidated financial statements. Included in the accompanying consolidated balance sheets are accrued liabilities of $62,500 and $894,000 at December 31, 2007 and 2006, respectively, which represent the Company's best estimate of the ultimate cost of resolving these matters. Included in the accompanying consolidated statements of income are provisions (reversals) of approximately $(131,500), $185,000 and $(535,110) for the years ended December 31, 2007, 2006 and 2005, respectively. However, the ultimate resolution of these suits, and the timing of such resolution, could result in a loss materially different than the amount accrued.

              In October 2007, the Company settled a product liability suit for $798,000. The combined settlement and legal costs incurred was approximately $1,176,370, which was above the Company's self-insured retention of $1,000,000. A payment of $176,370 was issued to the Company for excess costs incurred.

              During 2006, the Company established approximately $380,000 in additional provisions for new and existing claims, which was offset by $195,000 in reversals for cases dismissed during the year, net of settlements.

              During 2005, the status of numerous pending cases changed, which resulted in a significant modification to the product liability reserve. New evidence was brought into light during the first case, which altered the possible outcome of the lawsuit and resulted in a $100,000 reduction to the reserve. Four cases were dismissed during the year and no settlement was required, which resulted in a reversal of $135,000 to the product liability reserve. On May 17, 2005, the Company settled a lawsuit for $21,500, which resulted in a reversal of $178,500 to the product liability reserve.

F-153

The Marlin Firearms Company and Subsidiary

Notes to Consolidated Financial Statements (Continued)

9. Transactions With Affiliated Companies

              The Company participates in certain transactions with a related company. The related party is a separate entity that was owned by certain shareholders of the Company during 2007, 2006 and 2005. The Company leases space to this related company. Rental income related to this lease was recorded in selling, general and administrative expenses for $142,142, $117,916 and $122,916 for the years ended December 31, 2007, 2006 and 2005, respectively, and is based on the square footage used by the related party. The Company also had an outstanding accounts receivable balance from this related company of $0 and $110,846, at December 31, 2007 and 2006, respectively.

10. Subsequent Event

              On January 28, 2008, Remington Arms Company, Inc. purchased all of the issued and outstanding shares of capital stock of the Company for a purchase price of $41,700,000. In conjunction with the acquisition, all amounts outstanding under the Line of Credit were paid in full.

              On January 24, 2008, the Company paid a dividend of $325,520 to stockholders. The dividend represents the cash proceeds that the Company earned in 2007 from the sale of antique guns which is included in other income on the accompanying consolidated statement of income.

F-154

Report of Independent Certified Public Accountants

To the Shareholders of
Defense Procurement/Manufacturing Services, Inc.:

              We have audited the accompanying statements of operations, shareholders' equity and cash flows of Defense Procurement/Manufacturing Services, Inc. (a Minnesota corporation) for the period from January 1, 2007, through December 13, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

              We conducted our audit in accordance with auditing standards generally accepted in the United States of America as established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

              In our opinion, the financial statements referred to above present fairly, in all material respects, the results of operations and cash flows for Defense Procurement/Manufacturing Services, Inc. for the period from January 1, 2007, through December 13, 2007, in conformity with accounting principles generally accepted in the United States of America.

/s/ Grant Thornton LLP

Greensboro, North Carolina
August 13, 2009

F-155

Defense Procurement / Manufacturing Services, Inc.

Statement of Operations

For the Period January 1, 2007 through December 13, 2007

		2007
NET SALES		$	34,299,009
COST OF GOODS SOLD			23,370,520
GROSS PROFIT			10,928,489
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES			4,061,331
OPERATING INCOME			6,867,158
OTHER INCOME, NET
	Miscellaneous Income, net		121,356
NET INCOME		$	6,988,513

The accompanying notes are an integral part of these consolidated financial statements.

F-156

Defense Procurement / Manufacturing Services, Inc.

Statement of Changes in Shareholders' Equity

For the Period January 1, 2007 through December 13, 2007

	Number of Shares		Par Value $10		APIC		Retained Earnings			Amount
BALANCE, December 31, 2006		200	$	2,000	$	6,043	$	4,665,870		$	4,673,913
Shareholders' Distributions								(1,964,829	)	$	(1,964,829	)
Net Income								6,988,513		$	6,988,513
BALANCE, December 13, 2007		200	$	2,000	$	6,043	$	9,689,553		$	9,697,596

The accompanying notes are an integral part of these consolidated financial statements.

F-157

Defense Procurement / Manufacturing Services, Inc.

Statement of Cash Flows

For the Period January 1, 2007 through December 13, 2007

			2007
Net Income			$	6,988,513
Adjustments to reconcile net income to cash provided by operating activities:
	Depreciation and Amortization			64,940
	Unrealized Gain on Investments			(19,864	)
Changes in operating assets and liabilities:
		Increase in Accounts Receivable		(303,877	)
		Increase in Inventory		(2,049,114	)
		Increase in Other Current Assets		(46,658	)
		Decrease in Accounts Payable		(310,246	)
		Increase in Other Current Liabilities		209,249
Cash provided by operating activities				4,532,943
		Purchases of Common Stock Investments		(103,474	)
		Purchases of Plant & Equipment		(120,685	)
Cash used in investing activities				(224,159	)
		Increase in Bank Overdraft		488,875
		Distributions Paid to Shareholders		(1,964,829	)
Cash used in financing activities				(1,475,954	)
Net increase in cash and cash equivalents			$	2,832,830
Cash and cash equivalents, beginning of period			$	832,770
Cash and cash equivalents, end of period			$	3,665,600

The accompanying notes are an integral part of these consolidated financial statements.

F-158

DEFENSE PROCUREMENT / MANUFACTURING SERVICES, INC.

Notes to Financial Statements

Note 1: Nature of Business and Significant Accounting Policies

Nature of Business

              Defense Procurement / Manufacturing Services, Inc. ("Company" or "DPMS") designs, manufactures, and distributes AR-15 rifles and various components and accessories. The Company is one of the leaders in the tactical rifle market and offers a diverse group of calibers, such as .223, .308, .243, and ..204, which are sold domestically and internationally through a multiple sales channel approach. In addition, the Company also distributes parts and accessories associated with tactical rifles. The Company markets its products primarily to customers in the United States of America. The Company operates out of a leased facility in St. Cloud, Minnesota (See Note 2).

Basis of Presentation

              The Company operates on a calendar year basis ending on December 31 of each year. However, these financial statements have been prepared for the period January 1, 2007 through December 13, 2007 as certain assets and liabilities of the Company were sold on December 13, 2007 (See Note 3).

Estimates

              The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's significant estimates relate to reserves for inventory obsolescence and the allowance for doubtful accounts.

Cash and Cash Equivalents

              For the purpose of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Investments

              Investments are measured at fair market value based on a quoted market price. The Company considers its investment portfolio to be a trading portfolio and accordingly all investment income or loss (including realized and unrealized gains and losses) is included within miscellaneous income, net on the statement of operations.

Accounts Receivable

              The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated credit risk by performing credit checks and actively pursuing past due accounts. Accounts receivable are recorded at net realizable value.

              The Company uses the allowance method to account for uncollectible accounts receivable balances. Under the allowance method, an estimate of uncollectible customer balances is made based on the aging of accounts receivable and factors such as the credit quality of the customer and the economic conditions in the market. Accounts are analyzed on a case-by-case basis when an unpaid balance reaches 75 days past due, unless payment terms are extended. When accounts become past due

F-159

DEFENSE PROCUREMENT / MANUFACTURING SERVICES, INC.

Notes to Financial Statements (Continued)

Note 1: Nature of Business and Significant Accounting Policies (Continued)

and all means to collect are exhausted, then the account is written off. The allowance for doubtful accounts totaled $59,656 at December 13, 2007.

Inventory

              Inventory is valued at the lower of cost or market, with cost determined using the first in first out method. Inventory reserves totaled $103,446 at December 13, 2007.

Property and Equipment

              The Company records its property and equipment at cost and uses the straight line method in computing depreciation based on the estimated remaining useful life of the asset ranging from 5 to 15 years. Expenditures that do not extend the useful lives of the property are charged to expense in the year they are incurred. Depreciation expense totaled $64,940 for the period January 1, 2007 through December 13, 2007.

Revenue Recognition

              Sales are recognized upon the shipment of merchandise to customers which is when title and risk of loss passes to the customer and when collection is reasonably assured. Allowances for sales returns and discounts are recorded as a reduction of net sales in the period the allowance is recognized.

Warranty Reserve

              The Company offers warranties on the products it sells. Warranty expense is based on management's judgment of anticipated costs, which judgment is partially based on historical experience. The accrued warranty expense at December 13, 2007 was estimated to be $45,854. Total warranty expense for the period January 1, 2007 through December 13, 2007 was $36,748.

Compensated Absences

              Employees of the Company are entitled to paid vacations and short-term sick leave depending on length of service and other factors. Amounts earned but not yet used totaled $36,330 as of December 13, 2007. Expense associated with vacation for the period January 1, 2007 through December 13, 2007 was $44,327.

Advertising

              The Company charges the costs of advertising to expense as incurred. Advertising expense charged to operations amounted to $829,778 for the period January 1, 2007 through December 13, 2007 and is included within selling, general and administrative expenses within the accompanying statement of operations. Advertising includes print ads, trade show expenses, giveaway and promotional expenses and cooperative advertising.

F-160

DEFENSE PROCUREMENT / MANUFACTURING SERVICES, INC.

Notes to Financial Statements (Continued)

Note 1: Nature of Business and Significant Accounting Policies (Continued)

Freight Costs

              The Company includes the cost of freight to acquire its inventory and to transfer its inventory to and from various production locations in cost of goods sold. Total freight costs incurred to acquire and transfer inventory for the period January 1, 2007 through December 13, 2007 was $432,488.

              The Company's freight costs to ship product to customers is included in selling, general and administrative expenses and totaled $408,749 for the period January 1, 2007 through December 13, 2007. The Company invoiced customers for freight charges of $377,169 for the period January 1, 2007 through December 13, 2007. Freight billed to customers is included in net sales in the financial statements.

Income Taxes

              There was no provision for income taxes for the period January 1, 2007 through December 13, 2007. The Company has elected by consent of its shareholders to be taxed as a Sub-chapter S Corporation under provisions of the Internal Revenue Code. Under those provisions, DPMS does not pay federal income taxes; rather the income is passed to the shareholders who are responsible for paying taxes on the income.

Recent Accounting Pronouncements

              In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. SFAS No. 157 applies when other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS No. 157 also requires expanded disclosure of the effect on earnings for items measured using unobservable data (data not based on market observable information), establishes a fair value hierarchy that prioritizes the information used to develop those assumptions and requires separate disclosure by level within the fair value hierarchy. The Company adopted SFAS No. 157 as it relates to financial assets and liabilities.

              In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements ("SFAS 160"). This standard will improve, simplify, and converge internationally the reporting of noncontrolling interests in consolidated financial statements. SFAS 160 requires all entities to report noncontrolling (minority) interests in subsidiaries in the same way—as equity in the consolidated financial statements. Moreover, SFAS 160 requires that transactions between an entity and noncontrolling interests be treated as equity transactions. SFAS 160 is effective for fiscal years beginning after December 15, 2008. The adoption of SFAS 160 is not expected to have an impact on the Company.

              In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. The new standard is also intended to improve transparency about the location and amounts of derivative instruments in an entity's financial statements; how derivative instruments and related hedged items are accounted for under SFAS 133, Accounting for Derivative Instruments and Hedging Activities; and how derivative instruments and related hedged items affect its financial position, financial

F-161

DEFENSE PROCUREMENT / MANUFACTURING SERVICES, INC.

Notes to Financial Statements (Continued)

Note 1: Nature of Business and Significant Accounting Policies (Continued)

performance, and cash flows. SFAS 161 requires disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity's liquidity by requiring disclosure of derivative features that are credit risk—related and requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS 161 is not expected to have a material impact on the Company.

              In April 2008, the FASB issued Final FASB Staff Position (FSP) No. FAS 142-3, Determination of the Useful Life of Intangible Assets ("FSP 142-3"). The guidance is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets, and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), Business Combinations, and other guidance under GAAP. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Early adoption is prohibited. The adoption of FSP 142-3 is not expected to have an impact on the Company.

              In September 2008, the FASB issued FSP 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 ("FSP 133-1"). FSP 133-1 is intended to improve disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. It amends FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, to require disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The FSP also amends FASB Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, to require an additional disclosure about the current status of the payment/performance risk of a guarantee. FSP 133-1 was effective for reporting periods (annual or interim) ending after November 15, 2008. The adoption of FSP 133-1 is not expected to have an impact on the Company.

              In November 2008, the FASB issued EITF Issue 08-6, Equity Method Investment Accounting Considerations ("EITF 08-6"). EITF 08-6 addresses questions about the potential effect of FASB Statement 141R Business Combinations and FASB Statement 160 Noncontrolling Interests in Consolidated Financial Statements on equity-method accounting under Opinion 18. EITF 08-6 would be effective prospectively for fiscal years beginning on or after December 15, 2008. The Company does not expect the adoption of EITF 08-6 to have an impact.

              In December 2008, the FASB issued FSP FAS 132(R)-1, Employers' Disclosures about Postretirement Benefit Plan Assets ("FSP 132R-1"). This FASB Staff Position (FSP) amends FASB Statement No. 132 (revised 2003), Employers' Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employer's disclosures about plan assets of a defined benefit pension or other postretirement plan. The effective date for FSP 132R-1 is for fiscal years ending after December 15, 2009, although early adoption is permitted. Comparative disclosures for earlier periods are not required at initial adoptions, although comparative disclosures are required for periods subsequent to initial adoption. The Company is currently evaluating the potential impact of adopting FSP 132R-1.

F-162

DEFENSE PROCUREMENT / MANUFACTURING SERVICES, INC.

Notes to Financial Statements (Continued)

Note 2: Related Party Transactions

              The Company paid Luth Enterprises, LLC $121,063 and Luth Unlimited, LLC $18,000 during the period from January 1, 2007 through December 13, 2007 in connection with building and range leases. The leases were month to month and payments were made monthly. The Company sold $45,169 of products to Luth Unlimited, LLC during the period from January 1, 2007 through December 13, 2007. Randy Luth and Pamela Luth, the shareholders of DPMS are owners of the referenced companies.

Note 3: Subsequent Event

              On December 13, 2007, the Company sold substantially all its assets and transferred substantially all its liabilities to Bushmaster Firearms International,  LLC through DPMS Firearms, LLC.

Note 4: Shareholder Interests

              The Company's operating agreement indicates that 200 units were issued and outstanding as of December 13, 2007.

F-163

              Through and including                          , 2009 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

                        Shares

Common Stock

PROSPECTUS

                        , 2009

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13:    Other Expenses of Issuance and Distribution

              The following table sets forth the expenses (other than the underwriting discount and commissions) expected to be incurred by the registrant while issuing and distributing the securities registered pursuant to this Registration Statement. All amounts (other than the SEC registration fee, FINRA filing fee and             listing fee) are estimates.

Registration fee		$	11,160
FINRA filing fee			20,500
listing fee			*
Legal fees and expenses			*
Accounting fees and expenses			*
Printing and engraving			*
Transfer agent fees			*
Blue Sky fees and expenses			*
Miscellaneous			*
	Total	$	*

*

To be completed by amendment.

Item 14:    Indemnification of Directors and Officers

              Section 145 of the Delaware General Corporation Law permits indemnification of the registrant's officers and directors under certain conditions and subject to certain limitations. Section 145 of the Delaware General Corporation Law also provides that a corporation has the power to purchase and maintain insurance on behalf of its officers and directors against any liability asserted against such person and incurred by him or her in such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of Section 145 of the Delaware General Corporation Law.

              Article        of the registrant's amended and restated bylaws provides that the registrant will indemnify its directors and executive officers to the fullest extent authorized by the Delaware General Corporation Law. The rights to indemnity thereunder continue as to a person who has ceased to be a director, officer, employee or agent and inure to the benefit of the heirs, executors and administrators of the person. In addition, expenses incurred by a director or executive officer in defending any civil, criminal, administrative or investigative action, suit or proceeding by reason of the fact that he or she is or was a director or officer of the registrant (or was serving at the registrant's request as a director or officer of another corporation) will be paid by the registrant in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it will ultimately be determined that he or she is not entitled to be indemnified by the registrant as authorized by the relevant section of the Delaware General Corporation Law.

              As permitted by Section 102(b)(7) of the Delaware General Corporation Law, Article        of the registrant's amended and restated certificate of incorporation provides that a director of the registrant will not be personally liable for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the registrant or its stockholders, (ii) for acts or omissions not in good faith or acts or omissions that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived any improper personal benefit. The

II-1

registrant has purchased directors' and officers' liability insurance. We believe that this insurance is necessary to attract and retain qualified directors and officers.

              The underwriting agreement (Exhibit 1.1 hereto) contains provisions by which the underwriter has agreed to indemnify the registrant, each person, if any, who controls the registrant within the meaning of Section 15 of the Securities Act, each director of the registrant, and each officer of the registrant who signs this registration statement, and each selling stockholder with respect to information furnished in writing by or on behalf of the underwriters for use in the registration statement.

Item 15:    Recent Sales of Unregistered Securities

              Set forth below is information regarding all unregistered securities sold, issued or granted by us within the past three years. The information shown does not give effect to the reverse stock split to be implemented by FGI prior to completion of the offering registered by this registration statement.

Preferred Stock

              In connection with the Remington Acquisition, on May 31, 2007, as American Heritage Arms, LLC, we issued and sold $125,000,000 of our limited liability company preferred membership units ("Preferred Units") as follows: 124,300 Preferred Units to Cerberus and 700 Preferred Units to Thomas Millner, our former Chief Executive Officer.

              On December 11, 2007, when we converted from a limited liability company to a corporation, each outstanding Preferred Unit was converted into 100 shares of Series A Preferred Stock ("Series A Preferred"). As a result, Cerberus received 12,430,000 shares of Series A Preferred and Thomas Millner received 70,000 shares of Series A Preferred.

              In connection with the series of transactions on December 12, 2007 pursuant to which Bushmaster and Remington became subsidiaries of FGI, we issued 3,020,825 shares of Series A Preferred to Cerberus in exchange for Cerberus' preferred membership interest in Bushmaster.

              In connection with the DPMS Acquisition, on December 13, 2007 we issued and sold 783,476 shares of Series A Preferred to Cerberus for $8,250,000.

              On January 3, 2008, we issued and sold 208,926 shares of Series A Preferred to Cerberus for $2,200,000.

              In connection with our acquisition of Marlin on January 28, 2008, we issued and sold 2,184,236.5 shares of Series A Preferred to Cerberus for $23,000,000.

              The issuances and sales of our preferred stock described above were exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof and Regulation D promulgated thereunder because the transactions were by an issuer not involving a public offering.

Common Stock

Securities Act Section 4(2)/Regulation D Issuances:

              In connection with the Remington Acquisition, on May 31, 2007, as American Heritage Arms, LLC, we issued one of our limited liability company common membership units ("Common Units") for each of our Preferred Units issued on that same date as follows: 124,300 Common Units to Cerberus and 700 Common Units to Thomas Millner, our former Chief Executive Officer.

              On December 11, 2007, when we converted from a limited liability company to a corporation, each outstanding Common Unit was converted into 100 shares of common stock. As a result, Cerberus received 12,430,000 shares of common stock and Thomas Millner received 70,000 shares of common stock.

II-2

              In connection with the series of transactions on December 12, 2007 pursuant to which Bushmaster and Remington became subsidiaries of FGI, we issued 3,417,341 shares of common stock to Cerberus in exchange for Cerberus's common membership interest in Bushmaster.

              In connection with the series of transactions on December 12, 2007 pursuant to which Bushmaster and Remington became subsidiaries of FGI, we issued 623,063 shares of restricted common stock to directors and executive officers of Bushmaster in exchange for their respective common membership interests in Bushmaster.

              In connection with his service as a director of FGI, on May 14, 2008, we issued 123,416 shares of our common stock to Walter McLallen.

              The issuances and sales of our common stock described above were exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof and Regulation D promulgated thereunder because the transactions were by an issuer not involving a public offering.

Securities Act Rule 701 Issuances:

              In connection with his employment agreement with a subsidiary of FGI, on December 13, 2007, we issued 10,101 shares of restricted common stock to Randy Luth, President of DPMS.

              Between May 14, 2008 and June 30, 2009, we have granted options to purchase an aggregate of 2,253,480 shares of our common stock under our 2008 Stock Incentive Plan (the "Stock Incentive Plan.") Exercise prices range from $2.55 to $3.32 per share. None of these options to purchase our common stock have been exercised.

              The issuances of our common stock and options to purchase our common stock described above were exempt from the registration requirements of the Securities Act in reliance on Rule 701 thereunder because each such transaction was effected pursuant to either a compensatory benefit plan or a contract relating to compensation, in each case as provided under Rule 701.

Senior Secured Notes

              On July 29, 2009, FGI completed the sale and issuance of $200 million aggregate principal amount of 10.25% Senior Secured Notes due 2015 (the"Notes"), at an issue price of 97.827%. The issuance and sale of the Notes were exempt from the registration requirements of the Securities Act because the Notes were sold to the initial purchasers in a transaction by an issuer not involving a public offering pursuant to Section 4(2) thereof and the Notes were sold by the initial purchasers to qualified institutional investors pursuant to Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S under the Securities Act.

Item 16:    Exhibits and Financial Statements; Schedules

(a)

Exhibits:

NUMBER			DESCRIPTION
	1.1	*	Form of Underwriting Agreement
	3.1	*	Amended and Restated Certificate of Incorporation of Freedom Group, Inc.
	3.2	*	Amended and Restated Bylaws of Freedom Group, Inc.
	4.1		See Exhibits 3.1 and 3.2 for provisions of the Certificate of Incorporation and Bylaws for Freedom Group, Inc. defining the rights of holders of common stock of Freedom Group, Inc.
	4.2	*	Specimen Stock Certificate

II-3

NUMBER			DESCRIPTION
	4.3		Indenture, dated as of July 29, 2009, by and among Freedom Group, Inc., the Guarantors named therein, and Wilmington Trust FSB as Trustee and Collateral Agent (including the forms of Notes)
	4.4	*	Registration Rights Agreement between Freedom Group, Inc. and Cerberus
	4.5		Registration Rights Agreement, dated as of July 29, 2009, by and among Freedom Group, Inc., the Subsidiary Guarantors named therein, and the Initial Purchasers named therein
	5.1	*	Opinion of Milbank, Tweed, Hadley & McCloy LLP with respect to the validity of the securities offered
	8.1	*	Opinion of Milbank, Tweed, Hadley & McCloy LLP with respect to certain U.S. tax matters
	10.1		Loan and Security Agreement, dated July 29, 2009, by and among Freedom Group, Inc., the Subsidiaries named therein, the Lenders and Issuing Banks from time to time party thereto and Wachovia Bank, National Association as Agent
	10.2		Security Agreement, dated as of July 29, 2009, by and among Freedom Group, Inc., the Subsidiary Guarantors named therein, and Wilmington Trust FSB as Agent
	10.3		Intellectual Property Security Agreement, dated as of July 29, 2009, by and among Freedom Group, Inc., the Guarantors named therein, and Wilmington Trust FSB as Agent
	10.4		Intercreditor Agreement, dated as of July 29, 2009, between Wachovia Bank, National Association, as agent for the lenders under the ABL Loan Agreement (as defined therein) and Wilmington Trust FSB, as Collateral Agent
	10.5		Collective Bargaining Agreement, dated October 23, 2007, between Remington Arms Company, Inc., and International Union, United Mine Workers of America
	10.6		Letter Agreement, dated as of June 30, 2009, among Freedom Group, Inc. and Lazard, Freres & Co. LLC
	10.7		Compensation Agreement with Theodore H. Torbeck
	10.8		Compensation Agreement with Stephen P. Jackson, Jr.
	10.9		Compensation Agreement with Scott Blackwell
	10.10		Compensation Agreement with John DeSantis
	10.11		Separation Agreement with Thomas L. Millner
	10.12		Separation Agreement with Paul A. Miller
	10.13	*	2008 Stock Incentive Plan
	21.1		List of subsidiaries of Freedom Group, Inc.
	23.1		Consents of Grant Thornton LLP
	23.2		Consent of PricewaterhouseCoopers LLP
	23.3	*	Consent of Milbank, Tweed, Hadley & McCloy LLP (included in Exhibit 5.1)
	23.4	*	Consent of Milbank, Tweed, Hadley & McCloy LLP (included in Exhibit 8.1)
	24.1		Power of Attorney (included on signature page of Registration Statement hereto)

*

To be filed by amendment

II-4

              (b)         Financial Statement Schedule:

              Below is Schedule II—Valuation and Qualifying Accounts. All other consolidated financial statement schedules are omitted because they are not applicable or the information is included in the consolidated financial statements or related notes.

Schedule II

FREEDOM GROUP, INC.

Valuation and Qualifying Accounts
Years Ended December 31, 2008, 2007, and 2006 (Dollars in Millions)

			Balance at Beginning of Period			Charged to Costs and Expenses*			Deductions to Reserve		Balance at End of Period
Description:
	Deducted from Asset Account:
		Allowance for Doubtful Accounts
Year Ended December 31, 2008			$	(0.8	)	$	0.2		$	0.1	$	(0.5	)
Year Ended December 31, 2007			$	0.0		$	(1.2	)	$	0.4	$	(0.8	)
Year Ended December 31, 2006			$	0.0		$	0.0		$	0.0	$	0.0

*

Includes RACI's allowance account as of May 31, 2007, the FGI acquisition date. On the acquisition date, the allowance for doubtful accounts was $(1.2).

Item 17:    Undertakings

              (a)         The undersigned Registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

              (b)         Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

              (c)          The undersigned Registrant hereby undertakes that:

              (1)         For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act will be deemed to be part of this registration statement as of the time it was declared effective.

II-5

              (2)         For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof.

              (3)         For the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)

any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;



(ii)

any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;



(iii)

the portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and



(iv)

any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

II-6

SIGNATURES

              Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Madison and state of North Carolina, on the 20th day of October, 2009.

FREEDOM GROUP, INC.
By:	/s/ STEPHEN P. JACKSON, JR. Name:    Stephen P. Jackson, Jr. Title:    Chief Financial Officer and Treasurer

POWER OF ATTORNEY

              KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoint Theodore H. Torbeck, Stephen P. Jackson, Jr. and Fredric E. Roth, Jr., his attorneys-in-fact, with full power of substitution for him in any and all capacities, to sign any amendments to this Registration Statement, including any and all pre-effective and post-effective amendments and to file such amendments thereto, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof.

              Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ THEODORE H. TORBECK Theodore H. Torbeck	Chief Executive Officer and Director (Principal Executive Officer)	October 20, 2009
/s/ STEPHEN P. JACKSON, JR. Stephen P. Jackson, Jr.	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	October 20, 2009
/s/ WALTER MCLALLEN Walter McLallen	Chairman of the Board of Directors	October 20, 2009
/s/ JEFF BLEUSTEIN Jeff Bleustein	Director	October 20, 2009
/s/ BOBBY R. BROWN Bobby R. Brown	Director	October 20, 2009

II-7

Signature	Title	Date
/s/ GRANT GREGORY Grant Gregory	Director	October 20, 2009
/s/ GENERAL MICHAEL W. HAGEE (RET.) General Michael W. Hagee (Ret.)	Director	October 20, 2009
/s/ GENERAL GEORGE A. JOULWAN (RET.) General George A. Joulwan (Ret.)	Director	October 20, 2009
/s/ GEORGE KOLLITIDES, II George Kollitides, II	Director	October 20, 2009
/s/ JAMES J. PIKE James J. Pike	Director	October 20, 2009
/s/ EDWARD H. RENSI Edward H. Rensi	Director	October 20, 2009
/s/ FRANK A. SAVAGE Frank A. Savage	Director	October 20, 2009
/s/ GEORGE ZAHRINGER III George Zahringer III	Director	October 20, 2009
/s/ DAVID BELL David Bell	Director	October 20, 2009

II-8

EXHIBIT INDEX

NUMBER			DESCRIPTION
	1.1	*	Form of Underwriting Agreement
	3.1	*	Amended and Restated Certificate of Incorporation of Freedom Group, Inc.
	3.2	*	Amended and Restated Bylaws of Freedom Group, Inc.
	4.1		See Exhibits 3.1 and 3.2 for provisions of the Certificate of Incorporation and Bylaws for Freedom Group, Inc. defining the rights of holders of common stock of Freedom Group, Inc.
	4.2	*	Specimen Stock Certificate
	4.3		Indenture, dated as of July 29, 2009, by and among Freedom Group, Inc., the Guarantors named therein, and Wilmington Trust FSB as Trustee and Collateral Agent (including the forms of Notes)
	4.4	*	Registration Rights Agreement between Freedom Group, Inc. and Cerberus
	4.5		Registration Rights Agreement, dated as of July 29, 2009, by and among Freedom Group, Inc., the Subsidiary Guarantors named therein, and the Initial Purchasers named therein
	5.1	*	Opinion of Milbank, Tweed, Hadley & McCloy LLP with respect to the validity of the securities offered
	8.1	*	Opinion of Milbank, Tweed, Hadley & McCloy LLP with respect to certain U.S. tax matters
	10.1		Loan and Security Agreement, dated July 29, 2009, by and among Freedom Group, Inc., the Subsidiaries named therein, the Lenders and Issuing Banks from time to time party thereto and Wachovia Bank, National Association as Agent
	10.2		Security Agreement, dated as of July 29, 2009, by and among Freedom Group, Inc., the Subsidiary Guarantors named therein, and Wilmington Trust FSB as Agent
	10.3		Intellectual Property Security Agreement, dated as of July 29, 2009, by and among Freedom Group, Inc., the Guarantors named therein, and Wilmington Trust FSB as Agent
	10.4		Intercreditor Agreement, dated as of July 29, 2009, between Wachovia Bank, National Association, as agent for the lenders under the ABL Loan Agreement (as defined therein) and Wilmington Trust FSB, as Collateral Agent
	10.5		Collective Bargaining Agreement, dated October 23, 2007, between Remington Arms Company, Inc., and International Union, United Mine Workers of America
	10.6		Letter Agreement, dated as of June 30, 2009, among Freedom Group, Inc. and Lazard, Freres & Co. LLC
	10.7		Compensation Agreement with Theodore H. Torbeck
	10.8		Compensation Agreement with Stephen P. Jackson, Jr.
	10.9		Compensation Agreement with Scott Blackwell
	10.10		Compensation Agreement with John DeSantis
	10.11		Separation Agreement with Thomas L. Millner
	10.12		Separation Agreement with Paul A. Miller
	10.13	*	2008 Stock Incentive Plan
	21.1		List of subsidiaries of Freedom Group, Inc.

NUMBER			DESCRIPTION
	23.1		Consents of Grant Thornton LLP
	23.2		Consent of PricewaterhouseCoopers LLP
	23.3	*	Consent of Milbank, Tweed, Hadley & McCloy LLP (included in Exhibit 5.1)
	23.4	*	Consent of Milbank, Tweed, Hadley & McCloy LLP (included in Exhibit 8.1)
	24.1		Power of Attorney (included on signature page of Registration Statement hereto)

*

To be filed by amendment

EX-4.3

Exhibit 4.3

EXECUTION COPY

FREEDOM GROUP, INC.,
as Issuer

and the Guarantors named herein

10¼% Senior Secured Notes due 2015

INDENTURE

Dated as of July 29, 2009

WILMINGTON TRUST FSB,

as Trustee and Collateral Agent

CROSS-REFERENCE TABLE

TIA Section	Indenture Section
310(a)(1)	7.10
(a)(2)	7.10
(a)(3)	N/A
(a)(4)	N/A
(b)	7.08; 7.10
(c)	N/A
311(a)	7.11
(b)	7.11
(c)	N/A
312(a)	2.06
(b)	13.03
(c)	13.03
313(a)	7.06
(b)(1)	11.06
(b)(2)	7.06
(c)	7.06
(d)	4.02; 4.09
314(a)	4.02; 4.09
(b)	11.02
(c)(1)	13.04
(c)(2)	13.04
(c)(3)	N/A
(d)	11.06
(e)	13.05
(f)	4.10
315(a)	7.01
(b)	7.05
(c)	7.01
(d)	7.01
(e)	6.11
316(a) (last sentence)	13.06
(a)(1)(A)	6.05
(a)(1)(B)	6.04
(a)(2)	N/A
(b)	6.07
317(a)(1)	6.08
(a)(2)	6.09
(b)	2.05
318(a)	13.01

TABLE OF CONTENTS

		Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01.	Definitions	1
SECTION 1.02.	Other Definitions	34
SECTION 1.03.	Incorporation by Reference of Trust Indenture Act	35
SECTION 1.04.	Rules of Construction	36
ARTICLE 2
THE SECURITIES
SECTION 2.01.	Amount of Securities; Issuable in Series	37
SECTION 2.02.	Form and Dating	38
SECTION 2.03.	Execution and Authentication	38
SECTION 2.04.	Registrar and Paying Agent	39
SECTION 2.05.	Paying Agent to Hold Money in Trust	39
SECTION 2.06.	Holder Lists	40
SECTION 2.07.	Transfer and Exchange	40
SECTION 2.08.	Replacement Securities	41
SECTION 2.09.	Outstanding Securities	41
SECTION 2.10.	Temporary Securities	42
SECTION 2.11.	Cancellation	42
SECTION 2.12.	Defaulted Interest	42
SECTION 2.13.	CUSIP Numbers, ISINs, etc.	42
SECTION 2.14.	Calculation of Specified Percentage of Securities	42
ARTICLE 3
REDEMPTION
SECTION 3.01.	Redemption	43
SECTION 3.02.	Applicability of Article	43
SECTION 3.03.	Notices to Trustee	43
SECTION 3.04.	Selection of Securities to Be Redeemed	43
SECTION 3.05.	Notice of Optional Redemption	44
SECTION 3.06.	Effect of Notice of Redemption	45
SECTION 3.07.	Deposit of Redemption Price	45
SECTION 3.08.	Securities Redeemed in Part	45

ii

ARTICLE 4
COVENANTS
SECTION 4.01.	Payment of Securities	45
SECTION 4.02.	Reports and Other Information	46
SECTION 4.03.	Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock	47
SECTION 4.04.	Limitation on Restricted Payments	53
SECTION 4.05.	Dividend and Other Payment Restrictions Affecting Subsidiaries	59
SECTION 4.06.	Asset Sales	61
SECTION 4.07.	Transactions with Affiliates	65
SECTION 4.08.	Change of Control	68
SECTION 4.09.	Compliance Certificate	69
SECTION 4.10.	Further Assurances, Instruments and Acts	70
SECTION 4.11.	Future Guarantors	70
SECTION 4.12.	Liens	70
SECTION 4.13.	Maintenance of Office or Agency	71
SECTION 4.14.	Discharge and Suspension of Covenants	71
SECTION 4.15.	Event of Loss	72
SECTION 4.16.	Insurance	73
SECTION 4.17.	Maintenance of Properties	75
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01.	When Company May Merge or Transfer Assets	75
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01.	Events of Default	78
SECTION 6.02.	Acceleration	80
SECTION 6.03.	Other Remedies	81
SECTION 6.04.	Waiver of Past Defaults	81
SECTION 6.05.	Control by Majority	81
SECTION 6.06.	Limitation on Suits	81
SECTION 6.07.	Rights of the Holders to Receive Payment	82
SECTION 6.08.	Collection Suit by Trustee	82
SECTION 6.09.	Trustee May File Proofs of Claim	82
SECTION 6.10.	Priorities	82
SECTION 6.11.	Undertaking for Costs	83
SECTION 6.12.	Waiver of Stay or Extension Laws	83

ARTICLE 7
TRUSTEE
SECTION 7.01.	Duties of Trustee	83
SECTION 7.02.	Rights of Trustee	85
SECTION 7.03.	Individual Rights of Trustee	86
SECTION 7.04.	Trustee’s Disclaimer	86
SECTION 7.05.	Notice of Defaults	86
SECTION 7.06.	Reports by Trustee to the Holders	86
SECTION 7.07.	Compensation and Indemnity	86
SECTION 7.08.	Replacement of Trustee	87
SECTION 7.09.	Successor Trustee by Merger	88
SECTION 7.10.	Eligibility; Disqualification	89
SECTION 7.11.	Preferential Collection of Claims Against Company	89
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01.	Discharge of Liability on Securities; Defeasance	89
SECTION 8.02.	Conditions to Defeasance	90
SECTION 8.03.	Application of Trust Money	92
SECTION 8.04.	Repayment to Company	92
SECTION 8.05.	Indemnity for U.S. Government Obligations	92
SECTION 8.06.	Reinstatement	92
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.01.	Without Consent of the Holders	93
SECTION 9.02.	With Consent of the Holders	94
SECTION 9.03.	Compliance with Trust Indenture Act	95
SECTION 9.04.	Revocation and Effect of Consents and Waivers	95
SECTION 9.05.	Notation on or Exchange of Securities	95
SECTION 9.06.	Trustee to Sign Amendments	96
SECTION 9.07.	Payment for Consent	96
SECTION 9.08.	Additional Voting Terms; Calculation of Principal Amount	96
ARTICLE 10
GUARANTEES
SECTION 10.01.	Guarantees	96
SECTION 10.02.	Limitation on Liability	99
SECTION 10.03.	Successors and Assigns	99

SECTION 10.04.	No Waiver	99
SECTION 10.05.	Modification	100
SECTION 10.06.	Execution of Supplemental Indenture for Future Guarantors	100
SECTION 10.07.	Non-Impairment	100
ARTICLE 11
SECURITY
SECTION 11.01.	Security Documents; Additional Collateral; Intercreditor Agreement	100
SECTION 11.02.	Recording, Registration and Opinions	101
SECTION 11.03.	Releases of Collateral	101
SECTION 11.04.	Form and Sufficiency of Release	102
SECTION 11.05.	Possession and Use of Collateral	103
SECTION 11.06.	Reports and Certificates Relating to Collateral	103
SECTION 11.07.	Collateral Agent	103
SECTION 11.08.	Purchaser Protected	107
SECTION 11.09.	Authorization of Actions to be Taken by the Collateral Agent Under the Security Documents	107
SECTION 11.10.	Authorization of Receipt of Funds by the Trustee Under the Security Agreement	107
SECTION 11.11.	Powers Exercisable by Receiver or Collateral Agent	107
SECTION 11.12.	Compensation and Indemnification	107
ARTICLE 12
APPLICATION OF TRUST MONIES
SECTION 12.01.	Collateral Account	107
SECTION 12.02.	Withdrawal of Loss Proceeds	108
SECTION 12.03.	Withdrawal of Net Cash Proceeds to Fund an Asset Sale Offer or Net Loss Proceeds to Fund an Event of Loss Offer	108
SECTION 12.04.	Withdrawal of Trust Monies for Investment in Replacement Assets	109
SECTION 12.05.	Investment of Trust Monies	110
SECTION 12.06.	Use of Trust Monies; Retirement of Securities	110
SECTION 12.07.	Disposition of Securities Retired	111
ARTICLE 13
MISCELLANEOUS
SECTION 13.01.	Trust Indenture Act Controls	111
SECTION 13.02.	Notices	112
SECTION 13.03.	Communication by the Holders with Other Holders	112
SECTION 13.04.	Certificate and Opinion as to Conditions Precedent	112

SECTION 13.05.	Statements Required in Certificate or Opinion	113
SECTION 13.06.	When Securities Disregarded	113
SECTION 13.07.	Rules by Trustee, Paying Agent and Registrar	113
SECTION 13.08.	Legal Holidays	113
SECTION 13.09.	Governing Law	114
SECTION 13.10.	No Recourse Against Others	114
SECTION 13.11.	Successors	114
SECTION 13.12.	Multiple Originals	114
SECTION 13.13.	Table of Contents; Headings	114
SECTION 13.14.	Indenture Controls	114
SECTION 13.15.	Severability	114
SECTION 13.16.	Waiver of Jury Trial	114

Appendix A	–	Provisions Relating to Initial Securities, Additional Securities and Exchange Securities
EXHIBIT INDEX
Exhibit A	–	Initial Security
Exhibit B	–	Exchange Security
Exhibit C	–	Form of Transferee Letter of Representation
Exhibit D	–	Form of Supplemental Indenture

INDENTURE dated as of July 29, 2009 among FREEDOM GROUP, INC., a Delaware corporation (the “Company”), the Guarantors and WILMINGTON TRUST FSB, a federal savings bank, as trustee (in such capacity, the “Trustee”) and collateral agent (in such capacity, the “Collateral Agent”).

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (a) $200,000,000 aggregate principal amount of the Company’s 10¼% Senior Secured Notes due August 1, 2015 (the “Original Securities”) issued on the date hereof, (b) any Additional Securities that may be issued after the date hereof in the form of Exhibit A (all such securities in clauses (a) and (b) being referred to collectively as the “Initial Securities”) and (c) if and when issued as provided in the Registration Rights Agreement or otherwise registered under the Securities Act and issued, the Company’s 10¼% Senior Secured Notes due August 1, 2015 (the “Exchange Securities” and, together with the Initial Securities, the “Securities”) issued in the Registered Exchange Offer in exchange for any Initial Securities or otherwise registered under the Securities Act and issued in the form of Exhibit B.  Subject to the conditions and compliance with the covenants set forth herein, the Company may issue an unlimited aggregate principal amount of Additional Securities.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.Definitions.

“ABL Facility Collateral Agent” means Wachovia Bank, National Association, as administrative agent and collateral agent under the Credit Agreement, its successors and/or assigns in such capacity.

“ABL Obligations” means (i) the Indebtedness and other obligations incurred under Section 4.03(b)(i) which are secured by Permitted Liens on the Collateral, including any interest, fees, expenses or indemnified obligations related thereto and (ii) certain Hedging Obligations and cash management and other “bank product” obligations owed to a lender or an affiliate of a lender under the Credit Agreement and more particularly described in the Intercreditor Agreement.

“ABL Priority Collateral” has the meaning assigned to it in the Intercreditor Agreement.

“Acquired Indebtedness” means, with respect to any specified Person:

(1)Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, and

(2)Indebtedness secured by a Lien encumbering any asset acquired by such specified Person,

in each case, other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by such Person, or such asset was acquired by such Person, as applicable.

“Additional Interest” means all additional interest then owing pursuant to the Registration Rights Agreement.

“Additional Securities” means Securities issued from time to time under this Indenture subsequent to the Issue Date.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

“Appendix” means Appendix A attached hereto.

“Applicable Premium” means, with respect to any Security on any applicable redemption date, the greater of:

(1)1.0% of the then outstanding principal amount of the Security; and

(2)the excess of:

(a)the present value at such redemption date of (i) the redemption price of the Securities, at August 1, 2012 as set forth in Paragraph 5 of the applicable Security plus (ii) all required interest payments due on such Security through August 1, 2012 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

(b)the then outstanding principal amount of the Security.

“Asset Sale” means:

(1)the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) of the Company or any Restricted Subsidiary of the Company (each referred to in this definition as a “disposition”) or

(2)the issuance or sale of Equity Interests (other than directors’ qualifying shares or shares or interests required to be held by foreign nationals or other third parties

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to the extent required by applicable law) of any Restricted Subsidiary (other than to the Company or another Restricted Subsidiary of the Company) (whether in a single transaction or a series of related transactions), in each case other than:

(a)a disposition of Cash Equivalents or Investment Grade Securities or obsolete or worn out equipment in the ordinary course of business;

(b)the disposition of all or substantially all of the assets of the Company in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control;

(c)any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.04;

(d)any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary with an aggregate Fair Market Value of less than $2.5 million;

(e)any disposition of property or assets by a Restricted Subsidiary of the Company to the Company or by the Company or a Restricted Subsidiary of the Company to a Restricted Subsidiary of the Company; provided, that, to the extent such property or assets constitutes Collateral, such disposition is to the Company or a Guarantor;

(f)sales of assets received by the Company or any of its Restricted Subsidiaries upon the foreclosure on a Lien;

(g)any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

(h)sales of inventory in the ordinary course of business;

(i)the lease, assignment or sublease of any real or personal property in the ordinary course of business and consistent with past practice;

(j)a sale of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” to a Receivables Subsidiary in a Qualified Receivables Financing or in factoring or similar transactions;

(k)a transfer of accounts receivable and related assets of the type specified in the definition of “Receivables Financing” (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;

(l)any exchange of assets for assets (including a combination of assets and Cash Equivalents) related to a Similar Business of comparable or greater market value or usefulness to the business of the Company and its Restricted Subsidiaries

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as a whole, as determined in good faith by the Company, which in the event of an exchange of assets with a Fair Market Value in excess of (1) $5 million shall be evidenced by an Officers’ Certificate, and (2) $15 million shall be set forth in a resolution approved in good faith by at least a majority of the Board of Directors of the Company;

(m)the grant in the ordinary course of business of any license of patents, trademarks, know-how and any other intellectual property;

(n)any Event of Loss; provided that the proceeds are applied in accordance with the terms of this Indenture and the Security Documents; and

(o)the sale of any property in a Sale/Leaseback Transaction within six months of the acquisition of such property.

“Board of Directors” means as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

“Borrowing Base” means the sum of (1) 90% of the book value (calculated in accordance with GAAP) of the accounts receivable of the Company and its Restricted Subsidiaries, (2) 65% of the book value (calculated in accordance with GAAP) of the inventory of the Company and its Restricted Subsidiaries and (3) 100% of the Unrestricted Cash of the Company and its Restricted Subsidiaries, in each case as shown on the most recent consolidated balance sheet of the Company and its Restricted Subsidiaries.

“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City.

“Capital Stock” means:

(1)in the case of a corporation, corporate stock;

(2)in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3)in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4)any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

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“Cash Contribution Amount” means the aggregate amount of cash contributions made to the capital of the Company or any Guarantor described in the definition of “Contribution Indebtedness.”

“Cash Equivalents” means:

(1)U.S. Dollars, pounds sterling, euros, the national currency of any participating member state of the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

(2)securities issued or directly and fully guaranteed or insured by the government of the United States or any country that is a member of the European Union or any agency or instrumentality thereof in each case with maturities not exceeding two years from the date of acquisition;

(3)certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year, and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $500 million, or the foreign currency equivalent thereof, and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

(4)repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5)commercial paper issued by a corporation (other than an Affiliate of the Company) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;

(6)readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

(7)Indebtedness issued by Persons (other than the Sponsor or any of its Affiliates) with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s in each case with maturities not exceeding two years from the date of acquisition; and

(8)investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above;

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“Change of Control” means the occurrence of any of the following events:

(i)the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Company and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders, and other than any transaction in compliance with Section 5.01 where the Successor Company is a Wholly Owned Subsidiary of a direct or indirect parent of the Company; or

(ii)the Company becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of the Company or any direct or indirect parent of the Company.

Notwithstanding the foregoing, no Specified Merger/Transfer Transaction shall constitute a Change of Control.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means all the assets and properties subject or purported to be subject to the security interests and liens created by the Security Documents and shall include any Mortgaged Property (as defined in the Security Agreement).

“Collateral Account” means the collateral account established pursuant to this Indenture and the Security Documents in the name and under sole dominion and control of the Collateral Agent.

“Collateral Agent” means the Trustee, in its capacity as Collateral Agent under the Security Documents, together with its successors.

“Company” means the party named as such in the Preamble to this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the Securities.

“consolidated” means, with respect to any Person, such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary shall be accounted for as an Investment.

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“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of:

(1)consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding amortization of deferred financing fees and expensing of any bridge or other financing fees, the non-cash portion of interest expense resulting from the reduction in the carrying value under purchase accounting of the Company’s outstanding Indebtedness and commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Financing); and

(2)consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued;

less interest income for such period;

provided that, for purposes of calculating Consolidated Interest Expense, no effect shall be given to the discount and/or premium resulting from the bifurcation of derivatives under FAS No. 133 and related interpretations as a result of the terms of the Indebtedness to which such Consolidated Interest Expense relates.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided,however, that:

(1)any net after-tax extraordinary, nonrecurring or unusual gains or losses or income or expenses (less all fees and expenses relating thereto), including, without limitation, any expenses related to any reconstruction, recommissioning or reconfiguration of fixed assets for alternate uses, any severance or relocation expenses and fees, restructuring costs, expenses or charges related to any Equity Offering, Permitted Investment, acquisition or Indebtedness permitted to be Incurred by this Indenture (in each case, whether or not successful), shall be excluded;

(2)any increase in amortization or depreciation or any one-time non-cash charges (such as purchased in-process research and development or capitalized manufacturing profit in inventory) resulting from purchase accounting in connection with any acquisition that is consummated after the Issue Date;

(3)the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;

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(4)any net after-tax income or loss from discontinued operations and any net after-tax gains or losses on disposal of discontinued operations shall be excluded;

(5)any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by the Company) shall be excluded;

(6)any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness shall be excluded;

(7)the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;

(8)solely for the purpose of determining the amount available for Restricted Payments under Section 4.04(a)(3)(A), the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided that (x) the net loss of any such Restricted Subsidiary shall be included therein and (y) the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;

(9)an amount equal to the amount of Tax Distributions actually made to the holders of Capital Stock of such Person or any parent company of such Person in respect of such period in accordance with Section 4.04(b)(xii) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;

(10)any non-cash impairment charges or asset write-off resulting from the application of FAS Nos. 142 and 144, and the amortization of intangibles arising pursuant to FAS No. 141, shall be excluded;

(11)any non-cash compensation expense realized from employee benefit plans or post-employment benefit plans, grants of stock appreciation or similar rights, stock options or other rights to officers, directors and employees of such Person or any of its Restricted Subsidiaries shall be excluded;

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(12)(a)(i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by FAS No. 133 shall be excluded;

(13)unrealized gains and losses relating to hedging transactions and mark-to-market of Indebtedness denominated in foreign currencies resulting from the application of FAS No. 52 shall be excluded; and

(14)any (a) severance or relocation costs or expenses, (b) one-time non-cash compensation charges, (c) the costs and expenses after the Issue Date related to employment of terminated employees, or (d) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors and employees, in each case of such Person or any of its Restricted Subsidiaries, shall be excluded.

Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries of the Company or a Restricted Subsidiary of the Company to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under Sections 4.04(a)(3)(E) and (F).

“Consolidated Non-cash Charges” means, with respect to any Person for any period, the aggregate depreciation, amortization, impairment, compensation, rent and other non-cash expenses of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, but excluding (i) any such charge which consists of or requires an accrual of, or cash reserve for, anticipated cash charges for any future period and (ii) the non-cash impact of recording the change in fair value of any embedded derivatives under FAS No. 133 and related interpretations as a result of the terms of any agreement or instrument to which such Consolidated Non-cash Charges relate.

“Consolidated Taxes” means, with respect to any Person and its Restricted Subsidiaries on a consolidated basis for any period, provision for taxes based on income, profits or capital, including, without limitation, state franchise and similar taxes, and including an amount equal to the amount of tax distributions actually made to the holders of Capital Stock of such Person or any direct or indirect parent of such Person in respect of such period in accordance with Section 4.04(b)(xii) which shall be included as though such amounts had been paid as income taxes directly by such Person.

“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (referred to in this definition as the “primary obligation”) of any other Person (referred to in this definition as the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

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(1)to purchase any such primary obligation or any property constituting direct or indirect security therefor,

(2)to advance or supply funds:

(a)for the purchase or payment of any such primary obligation; or

(b)to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

(3)to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

“Contribution Indebtedness” means Indebtedness of the Company or any Guarantor in an aggregate principal amount not greater than the aggregate amount of cash contributions (other than Excluded Contributions) made to the capital of the Company or such Guarantor after the Issue Date, provided that:

(1)such Contribution Indebtedness shall be Indebtedness with a Stated Maturity later than the Stated Maturity of the Securities, and

(2)such Contribution Indebtedness (a) is Incurred within 210 days after the making of such cash contributions and (b) is so designated as Contribution Indebtedness pursuant to an Officers’ Certificate on the Incurrence date thereof.

“Credit Agreement” means (i) the credit agreement entered into on the Issue Date among the Company, certain subsidiaries of the Company, the financial institutions named therein and Wachovia Bank, National Association, as Administrative Agent, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof, and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by the Company to be included in the definition of “Credit Agreement,” one or more (A) debt facilities or commercial paper facilities providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.

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“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Designated Non-cash Consideration” means the Fair Market Value of non-cash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

“Designated Preferred Stock” means Preferred Stock of the Company or any direct or indirect parent company of the Company, as applicable (other than Disqualified Stock), that is issued for cash (other than to the Company or any of its Subsidiaries or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers’ Certificate, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in Section 4.04(a)(3).

“Discharge of ABL Obligations” means (a) the payment in full in cash of all outstanding ABL Obligations excluding contingent indemnity obligations with respect to then unasserted claims but including, with respect to amounts available to be drawn under outstanding letters of credit issued thereunder (or indemnities or other undertakings issued pursuant thereto in respect of outstanding letters of credit), the cancellation of such letters of credit or the delivery or provision of money or backstop letters of credit in respect thereof in compliance with the terms of the Credit Agreement (which shall not exceed an amount equal to 105% of the aggregate undrawn amount of such letters of credit) and (b) the termination of all commitments to extend credit under the Credit Agreement and related loan documents.

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:

(1)matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Securities and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the Securities (including the purchase of any Securities tendered pursuant thereto)),

(2)is convertible or exchangeable for Indebtedness or Disqualified Stock, or

(3)is redeemable at the option of the holder thereof, in whole or in part,

in each case prior to 91 days after the maturity date of the Securities; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date

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shall be deemed to be Disqualified Stock; provided, further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided, further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

“Domestic Subsidiary” means a Restricted Subsidiary that is not a Foreign Subsidiary.

“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:

(1)Consolidated Taxes; plus

(2)Consolidated Interest Expense; plus

(3)Consolidated Non-cash Charges; plus

(4)the amount of management, monitoring, consulting and advisory fees and related expenses paid to the Sponsor and Meritage (or any accruals relating to such fees and related expenses) during such period to the extent otherwise permitted under Section 4.07; plus

(5)any expenses or charges (other than Consolidated Non-cash Charges) related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the Incurrence or repayment of Indebtedness permitted to be incurred by this Indenture (including a refinancing thereof) (whether or not successful), including (i) such fees, expenses or charges related to the offering of the Securities, (ii) any amendment or other modification of the Securities or other Indebtedness, (iii) any additional interest in respect of the Securities and (iv) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Receivables Financing; plus

(6)the amount of loss on sale of receivables and related assets to a Receivables Subsidiary in connection with a Qualified Receivables Financing; plus

(7)any costs or expense incurred pursuant to any management equity plan or stock option plan or other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Company or a Guarantor or the net cash proceeds of an issuance of Equity Interests of the Company (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the

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calculation of the amount available for Restricted Payments under Section 4.04(a)(3)(A); plus

(8)(a) the Net Income of any Person and its Restricted Subsidiaries shall be calculated without deducting the income attributed to, or adding the loses attributed to, the minority equity interests of third parties in any non-wholly owned Restricted Subsidiary except to the extent of the dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties and (b) any ordinary course dividend, distributions or other payment paid in cash and received from any Person in excess of amounts included in clause (7) pursuant to the definition of “Consolidated Net Income” shall be included;

less, without duplication, non-cash items increasing Consolidated Net Income for such period (excluding any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period).

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Equity Offering” means any public or private sale after the Issue Date of common stock or Preferred Stock of the Company or any direct or indirect parent company of the Company, as applicable (other than Disqualified Stock), other than:

(1)public offerings with respect to the Company’s or such direct or indirect parent company’s common stock registered on Form S-8; and

(2)any such public or private sale that constitutes an Excluded Contribution.

“Event of Loss” means, with respect to any property or asset (tangible or intangible, real or personal) constituting Notes Priority Collateral, any of the following:

(i)any loss, destruction or damage of such property or asset;

(ii)any institution of any proceeding for the condemnation or seizure of such property or asset or for the exercise of any right of eminent domain;

(iii)any actual condemnation, seizure or taking by exercise of the power of eminent domain or otherwise of such property or asset, or confiscation of such property or asset or the requisition of the use of such property or asset; or

(iv)any settlement in lieu of clauses (ii) or (iii) above.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

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“Excluded Contributions” means the net cash proceeds, Cash Equivalents and/or Investment Grade Securities received by the Company after the Issue Date from:

(1)contributions to its common equity capital, and

(2)the sale (other than to a Subsidiary of the Company or pursuant to any Company or Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Company,

in each case designated as Excluded Contributions pursuant to an Officers’ Certificate executed by an Officer of the Company, the proceeds of which are excluded from the calculation set forth in Section 4.04(a)(3).

“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

“FAS” means the Statement of Financial Accounting Standards, including any codification or renumbering of such standards or any successor or replacement section or sections promulgated by the Financial Accounting Standards Board.

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period.  In the event that the Company or any of its Restricted Subsidiaries Incurs or redeems any Indebtedness (other than in the case of revolving credit borrowings or revolving advances under any Qualified Receivables Financing, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues or redeems Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (referred to in this definition as the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence or redemption of Indebtedness, or such issuance or redemption of Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and operational changes, that the Company or any of its Restricted Subsidiaries has both determined to make and made after the Issue Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (each referred to in this definition as a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations, discontinued operations and operational changes (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted

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Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period shall have made or effected any Investment, acquisition, disposition, merger, consolidation or discontinued operation, in each case with respect to an operating unit of a business, or operational change that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation, discontinued operation, or operational change had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of the Company as set forth in an Officers’ Certificate, to reflect (1) in the case of any pro forma event, operating expense reductions and other operating improvements or synergies reasonably expected to result within twelve months of the date of such pro forma event and (2) all adjustments of the type and nature used in connection with the calculation of “EBITDA” as set forth in footnote 4 under “Summary—Summary Historical and Pro Forma Consolidated Financial Data” in the Offering Memorandum to the extent such adjustments, without duplication, continue to be applicable to such four quarter period.

“Fixed Charges” means, with respect to any Person for any period, the sum of:

(1)Consolidated Interest Expense of such Person for such period, and

(2)all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.

“Foreign Subsidiary” means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any direct or indirect subsidiary of such Restricted Subsidiary.

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“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date.

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

“Guarantee” means any guarantee of the obligations of the Company under this Indenture and the Securities by any Person in accordance with the provisions of this Indenture.

“Guarantor” means any Person that Incurs a Guarantee; provided that upon the release or discharge of such Person from its Guarantee in accordance with this Indenture, such Person ceases to be a Guarantor.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person under:

(1)currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

(2)other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

“Holder” means the Person in whose name a Security is registered on the Registrar’s books.

“Incur” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

“Indebtedness” means, with respect to any Person:

(1)the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property, except any such balance that constitutes a trade payable or similar obligation to a trade creditor due within six months from the date on which it is Incurred, in each case Incurred in the ordinary course of business, which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations,

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or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2)to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

(3)to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

provided that (a) Contingent Obligations incurred in the ordinary course of business and (b) obligations under or in respect of Receivables Financings shall be deemed not to constitute Indebtedness.

“Indenture” means this Indenture as amended or supplemented from time to time.

“Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant to Persons engaged in a Similar Business, in each case of nationally recognized standing that is, in the good faith determination of the Company, qualified to perform the task for which it has been engaged.

“Intercreditor Agreement” means the Intercreditor Agreement dated the Issue Date by and among the Company, the Guarantors, the ABL Facility Collateral Agent and the Collateral Agent, as the same may be amended, modified, restated, supplemented or replaced from time to time in accordance with its terms.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

“Investment Grade Securities” means:

(1)securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents) and in each case with maturities not exceeding two years from the date of acquisition,

(2)securities that have a rating equal to or higher than Baa3 (or the equivalent) by Moody’s or BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency,

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(3)investments in any fund that invests at least 95% of its assets in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and

(4)corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of the Company in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property.  For purposes of the definition of “Unrestricted Subsidiary” and Section 4.04:

(1)“Investments” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

(a)the Company’s “Investment” in such Subsidiary at the time of such redesignation less

(b)the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

(2)any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Company.

“Issue Date” means July 29, 2009.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided that in no event shall an operating lease be deemed to constitute a Lien.

“Meritage” means Meritage Farms LLC.

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“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

“Mortgage” has the meaning assign to it in the Security Agreement.

“Mortgaged Property” has the meaning assigned to it in the Security Agreement.

“Net Cash Proceeds” means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)) to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Company as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Company after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

“Net Loss Proceeds” means the aggregate cash proceeds received by the Company or any Guarantor in respect of any Event of Loss, including, without limitation, insurance proceeds, condemnation awards or damages awarded by any judgment, net of the direct cost in recovery of such Net Loss Proceeds (including, without limitation, legal, accounting, appraisal and insurance adjuster fees and any relocation expenses incurred as a result thereof), amounts required to be applied to the repayment of Indebtedness secured by any Permitted Lien on the asset or assets that were the subject of such Event of Loss (other than any Lien which does not rank prior to the Note Liens), and any taxes paid or payable as a result thereof.

“Note Liens” means all Liens in favor of the Collateral Agent on Collateral securing the Note Obligations, and any Permitted Additional Pari Passu Obligations.

“Note Obligations” means the Indebtedness Incurred and Obligations under this Indenture and the Securities.

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“Notes Priority Collateral” has the meaning assigned to it in the Intercreditor Agreement.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Securities shall not include fees or indemnifications in favor of the Trustee and other third parties other than the Holders of the Securities.

“Offering Memorandum” means the offering memorandum relating to the offering of the Original Securities dated July 15, 2009.

“Officer” means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer, the Secretary or the Assistant Secretary of the Company, or any direct or indirect parent of the Company, as applicable.

“Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers of the Company or any direct or indirect parent of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company or any direct or indirect parent of the Company, as applicable, that meets the requirements set forth in this Indenture.

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee.  The counsel may be an employee of or counsel to the Company or the Trustee.

“Pari Passu Indebtedness” means:

(1)with respect to the Company, the Securities and any Indebtedness which ranks pari passu in right of payment to the Securities; and

(2)with respect to any Guarantor, its Guarantee and any Indebtedness which ranks pari passu in right of payment to such Guarantor’s Guarantee.

“Permitted Additional Pari Passu Obligations” means obligations under any additional notes (whether Incurred under this Indenture or any other indenture or agreement evidencing or establishing Indebtedness with the same Trustee and Collateral Agent and the same or substantially similar intercreditor arrangements as those set forth in the Intercreditor Agreement) secured by the Note Liens; provided that the amount of such obligations does not exceed an amount such that immediately after giving effect to the Incurrence of such additional notes or other Indebtedness secured by the Note Liens and the receipt and application of the proceeds therefrom, the Company would not be permitted to Incur at least $1.00 of additional Indebtedness pursuant to Section 4.03(a); provided, further, that (i) the representative of such Permitted Additional Pari Passu Obligation executes a joinder agreement to the applicable Security Documents in the form attached thereto agreeing to be bound thereby and (ii) the Company has designated

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such Indebtedness as “Permitted Additional Pari Passu Obligations” under the Security Agreement.

“Permitted Asset Swap” means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between the Company or any of its Restricted Subsidiaries and another Person; provided, that any cash or Cash Equivalents received must be applied in accordance with Section 4.06.

“Permitted Holders” means (i) the Sponsor, (ii) any Person that has no material assets other than the Capital Stock of the Company and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of the Company, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any Permitted Holder specified in clause (i) above, holds more than 50% of the total voting power of the Voting Stock thereof, and (iii) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any Permitted Holder specified in clause (i) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of the Company (referred to in this definition as a “Permitted Holder Group”), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member and (2) no Person or other “group” (other than a Permitted Holder specified in clause (i) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any person or group, together with its Affiliates, whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter constitute an additional Permitted Holder.

“Permitted Investments” means:

(1)any Investment in the Company (including the Securities) or any Restricted Subsidiary;

(2)any Investment in Cash Equivalents or Investment Grade Securities;

(3)any Investment by the Company or any Restricted Subsidiary of the Company in a Person that is primarily engaged in a Similar Business if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Company, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;

(4)any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 4.06 or any other disposition of assets not constituting an Asset Sale;

(5)any Investment (x) existing on the Issue Date, (y) made pursuant to binding commitments in effect on the Issue Date and (z) that replaces, refinances, refunds, renews or extends any Investment described under either of the immediately preceding

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clauses (x) or (y), provided that any such Investment is in an amount that does not exceed the amount replaced, refinanced, refunded, renewed or extended;

(6)advances to employees not in excess of $5 million outstanding at any one time in the aggregate;

(7)any Investment acquired by the Company or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(8)Hedging Obligations permitted under Section 4.03(b)(x);

(9)any Investment by the Company or any of its Restricted Subsidiaries in a Similar Business (other than an Investment in an Unrestricted Subsidiary) having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (9) that are at the time outstanding, not to exceed the greater of (x) $50 million and (y) 6% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value), at any one time outstanding; provided, however, that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary of the Company at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Company after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;

(10)additional Investments by the Company or any of its Restricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (10) that are at the time outstanding, not to exceed the greater of (x) $25 million and (y) 3% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value), at any one time outstanding;

(11)loans and advances to officers, directors and employees for business-related travel expenses, moving and relocation expenses and other similar expenses, in each case Incurred in the ordinary course of business;

(12)Investments the payment for which consists of Equity Interests of the Company (other than Disqualified Stock) or any direct or indirect parent company of the Company, as applicable; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under Section 4.04(a)(3);

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(13)any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with Section 4.07(b) (except transactions described in clauses (ii), (iv), (v) and (viii)(B) of such Section);

(14)Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

(15)guarantees issued in accordance with Sections 4.03 and 4.11;

(16)any Investment by Restricted Subsidiaries of the Company in other Restricted Subsidiaries of the Company and Investments by Subsidiaries that are not Restricted Subsidiaries in other Subsidiaries that are not Restricted Subsidiaries of the Company;

(17)Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;

(18)any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness; provided, however, that any Investment in a Receivables Subsidiary is in the form of a Purchase Money Note, contribution of additional receivables or an equity interest;

(19)Investments resulting from the receipt of non-cash consideration in an Asset Sale received in compliance with Section 4.06;

(20)additional Investments in joint ventures of the Company or any of its Restricted Subsidiaries existing on the Issue Date in an aggregate amount, taken together with all other Investments made pursuant to this clause (20) that are at the time outstanding, not to exceed the greater of (x) $25 million and (y) 3% of Total Assets at the time of such Investment, at any one time outstanding; and

(21) Investments of a Restricted Subsidiary of the Company acquired after the Issue Date or of an entity merged into or consolidated with a Restricted Subsidiary of the Company in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation.

“Permitted Liens” means with respect to any Person:

(1)pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such

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Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(2)Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review (or which, if due and payable, are being contested in good faith by appropriate proceedings and for which adequate reserves are being maintained, to the extent required by GAAP and such proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien);

(3)Liens for taxes, assessments or other governmental charges (i) which are not yet due or payable or (ii) which are being contested in good faith by appropriate proceedings that have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien and for which adequate reserves are being maintained to the extent required by GAAP;

(4)Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5)minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6)(A) Liens incurred to secure Obligations in respect of Indebtedness permitted to be Incurred pursuant to clauses (i), (iv), (xii) or (xx) of Section 4.03(b); provided that (x) in the case of clause (i), such Liens are subject to the provisions of the Intercreditor Agreement (including with respect to the relative priority of the ABL Priority Collateral and Notes Priority Collateral) and (y) in the case of clause (iv) and (xx), such Lien (1) extends only to the assets and/or Capital Stock, the acquisition, lease, construction, repair, replacement or improvement of which is financed thereby and any proceeds or products thereof or (2) does not extend to any assets or property that constitute Collateral and (B) Liens on the Collateral granted under the Security Documents in favor of the Collateral Agent to secure the Securities, the Guarantees and any Permitted Additional Pari Passu Obligations;

(7)Liens existing on the Issue Date;

(8)Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred

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in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by the Company or any Restricted Subsidiary of the Company;

(9)Liens on assets or on property at the time the Company or a Restricted Subsidiary of the Company acquired the assets or property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary of the Company; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens may not extend to any other assets or property owned by the Company or any Restricted Subsidiary of the Company;

(10)Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary of the Company permitted to be Incurred in accordance with Section 4.03;

(11)Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligations;

(12)Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(13)leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

(14)Liens arising from UCC financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;

(15)Liens in favor of the Company or any Guarantor;

(16)Liens on accounts receivable and related assets of the type specified in the definition of “Receivables Financing” Incurred in connection with a Qualified Receivables Financing;

(17)deposits made in the ordinary course of business to secure liability to insurance carriers;

(18)Liens on the Equity Interests of Unrestricted Subsidiaries;

(19)grants of software and other technology licenses in the ordinary course of business;

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(20)judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(21)Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(22)Liens incurred to secure cash management services (and other “bank products” under any ABL Obligations) in the ordinary course of business;

(23)Liens on equipment of the Company or any Restricted Subsidiary granted in the ordinary course of business to the Company’s or such Restricted Subsidiary’s client at which such equipment is located;

(24)Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10), (11) and (15); provided, however, that (x) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and (15) at the time the original Lien became a Permitted Lien under this Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; and

(25)other Liens securing obligations incurred in the ordinary course of business which obligations do not exceed the greater of (x) $25 million and (y) 3% of Total Assets, at any one time outstanding; provided that if such Liens extend to the Collateral, such Lien shall be subject to the Intercreditor Agreement.

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

“Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution or winding up.

“Purchase Money Note” means a promissory note of a Receivables Subsidiary evidencing a line of credit, which may be irrevocable, from the Company or any Subsidiary of the Company to a Receivables Subsidiary in connection with a Qualified Receivables Financing, which note is intended to finance that portion of the purchase price that is not paid by cash or a contribution of equity.

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“Qualified Receivables Financing” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

(1)the Board of Directors of the Company shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Company and the Receivables Subsidiary,

(2)all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by the Company), and

(3)the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Company) and may include Standard Securitization Undertakings.

The grant of a security interest in any accounts receivable of the Company or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) to secure any Credit Agreement shall not be deemed a Qualified Receivables Financing.

“Rating Agencies” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Securities for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company or any parent of the Company as a replacement agency for Moody’s or S&P, as the case may be.

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

“Receivables Financing” means any transaction or series of transactions that may be entered into by the Company or any of its Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by the Company or any of its Subsidiaries), and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Company or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by the Company or any such Subsidiary in connection with such accounts receivable.

“Receivables Repurchase Obligation” means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim

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of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

“Receivables Subsidiary” means a Wholly Owned Restricted Subsidiary of the Company (or another Person formed for the purposes of engaging in a Qualified Receivables Financing with the Company in which the Company or any Subsidiary of the Company makes an Investment and to which the Company or any Subsidiary of the Company transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of the Company and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of the Company (as provided below) as a Receivables Subsidiary and:

(a)no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Company or any other Subsidiary of the Company (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Company or any other Subsidiary of the Company in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of the Company or any other Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings,

(b)with which neither the Company nor any other Subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms which the Company reasonably believes to be no less favorable to the Company or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company, and

(c)to which neither the Company nor any other Subsidiary of the Company has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing conditions.

“Related Business Assets” means assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by the Company or a Restricted Subsidiary in exchange for assets transferred by the Company or a Restricted Subsidiary will not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary.

“Required Secured Parties” has the meaning assigned to it in the Security Agreement.

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“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person.  Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Company.

“Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or such Restricted Subsidiary leases it from such Person, other than leases between the Company and a Restricted Subsidiary of the Company or between Restricted Subsidiaries of the Company.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or any successor to the rating agency business thereof.

“SEC” means the Securities and Exchange Commission.

“Secured Indebtedness” means any Indebtedness secured by a Lien.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“Security Agreement” means the security agreement dated as of the Issue Date between the Collateral Agent, the Company and the Guarantors, as amended, modified, restated, supplemented or replaced from time to time in accordance with its terms.

“Security Documents” means the Security Agreement, any mortgages, the Intercreditor Agreement and all of the security agreements, pledges, collateral assignments, mortgages, deeds of trust, trust deeds or other instruments evidencing or creating or purporting to create any security interests in favor of the Collateral Agent for its benefit and for the benefit of the Trustee and the Holders of the Securities and the holders of any Permitted Additional Pari Passu Obligations, in all or any portion of the assets and properties subject or purported to be subject thereto, as amended, modified, restated, supplemented or replaced from time to time.

“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

“Similar Business” means a business, the majority of whose revenues are derived from the manufacture and sale of firearms, ammunition and accessories related thereto, or the activities of the Company and its Subsidiaries as of the Issue Date, or any business or activity that is reasonably similar thereto, including, but not limited to, hunting, target sports and outdoor recreation, or any business or activity directed toward law enforcement, governments and government agencies, or a reasonable extension, development or expansion thereof or ancillary thereto.

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“Sponsor” means (1) Cerberus Capital Management L.P. and (2) one or more investment funds advised, managed or controlled by Cerberus Capital Management L.P. and, in each case (whether individually or as a group) their Affiliates (not including, however, any of their portfolio companies).

“Standard Securitization Undertakings” means representations, warranties, covenants, indemnities and guarantees of performance entered into by the Company or any Subsidiary of the Company which the Company has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

“Subordinated Indebtedness” means (a) with respect to the Company, any Indebtedness of the Company which is by its terms subordinated in right of payment to the Securities, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to its Guarantee.

“Subsidiary” means, with respect to any Person (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity and (3) any Person that is consolidated in the consolidated financial statements of the specified Person in accordance with GAAP.

“Subsidiary Guarantor” means any Restricted Subsidiary of the Company that is a Guarantor.

“Tax Distributions” means any distributions described in Section 4.04(b)(xii).

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the Issue Date.

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“Total Assets” means the total consolidated assets of the Company and its Restricted Subsidiaries, as shown on the most recent consolidated balance sheet of the Company and its Restricted Subsidiaries.

“Treasury Rate” means, as of the applicable redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two Business Days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to August 1, 2012; provided, however, that if the period from such redemption date to August 1, 2012 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

“Trust Monies” means all cash and Cash Equivalents received by the Trustee or the Collateral Agent:

(1)upon the release of Collateral from the Lien of this Indenture or the Security Documents, including all Net Cash Proceeds and Net Loss Proceeds and all moneys received in respect of the principal of all purchase money, governmental and other obligations;

(2)pursuant to the Security Documents;

(3)as proceeds of any sale or other disposition of all or any part of the Collateral by or on behalf of the Trustee or the Collateral Agent or any collection, recovery, receipt, appropriation or other realization of or from all or any part of the Collateral pursuant to this Indenture or any of the Security Documents or otherwise; or

(4)for application as provided in the relevant provisions of this Indenture or any Security Document or which disposition is not otherwise specifically provided for in this Indenture or in any Security Document;

provided,however, that Trust Monies shall in no event include any property deposited with the Trustee for any repayment, redemption, legal defeasance or covenant defeasance of Securities, for the satisfaction and discharge of this Indenture or to pay the purchase price of Securities pursuant to a Change of Control Offer, an Asset Sale Offer or an Event of Loss Offer in accordance with the terms of this Indenture or pursuant to a tender or exchange offer, open market purchase and/or private sale and shall not include any cash received or applicable by the Trustee in payment of its fees and expenses (or, prior to the Discharge of ABL Obligations, any ABL Priority Collateral).

“Trust Officer” means any officer within the corporate trust administration department of the Trustee, with direct responsibility for performing the Trustee’s duties under this Indenture and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of such person’s knowledge of and familiarity with the particular subject.

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“Trustee” means the party named as such in the Preamble to this Indenture until a successor replaces it and, thereafter, means the successor.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided,however, that, at any time, if by reason of mandatory provisions of law, any or all of the perfection or priority of the Collateral Agent’s security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other that the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions relating to such provisions.

“Unrestricted Cash” means cash or Cash Equivalents of the Company and any of its Restricted Subsidiaries that would not appear as “restricted cash” on a consolidated balance sheet of the Company and its Restricted Subsidiaries.

“Unrestricted Subsidiary” means:

(1)any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and

(2)any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company but excluding the Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any of its Restricted Subsidiaries; provided, further, however, that either:

(a)the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

(b)if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04.

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation:

(x)(1) the Company could Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) or (2) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be greater than such ratio for the Company and its Restricted

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Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

(y)no Event of Default shall have occurred and be continuing.

Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing provisions.

“U.S. Government Obligations” means securities that are:

(1)direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or

(2)obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,

which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

“Wholly Owned Restricted Subsidiary” is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares or interests required to be held by foreign nationals or other third parties to the extent required by applicable law) shall at the time be owned by such Person or by

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one or more Wholly Owned Subsidiaries of such Person and one or more Wholly Owned Subsidiaries of such Person.

SECTION 1.02.Other Definitions.

Term	Defined in Section
“Agent Members”	Appendix A
“Affiliate Transaction”	4.07(a)
“Asset Sale Offer”	4.06(b)
“Bankruptcy Law”	6.01
“Clearstream”	Appendix A
“Change of Control Offer”	4.08(b)
“covenant defeasance option”	8.01
“Covenant Suspension Event”	4.14(a)
“Custodian”	6.01
“Definitive Security”	Appendix A
“Depository”	Appendix A
“Euroclear”	Appendix A
“Event of Default”	6.01
“Event of Loss Offer”	4.15(b)
“Excess Loss Proceeds”	4.15(b)
“Excess Proceeds”	4.06(b)
“Exchange Securities”	Preamble
“Global Securities”	Appendix A
“Global Securities Legend”	Appendix A
“Guaranteed Obligations”	10.01(a)
“IAI”	Appendix A
“incorporated provision”	13.01
“Initial Purchasers”	Appendix A
“Initial Securities”	Preamble
“legal defeasance option”	8.01
“Notice of Default”	6.01
“Offer Period”	4.06(d)
“Original Securities”	Preamble
“Paying Agent”	2.04(a)
“Permitted Debt”	4.03(b)
“protected purchaser”	2.08
“Purchase Agreement”	Appendix A
“QIB”	Appendix A
“Refinancing Indebtedness”	4.03(b)(xiv)
“Refunding Capital Stock	4.04(b)(ii)(A)
“Registration Rights Agreement”	Appendix A
“Registered Exchange Offer”	Appendix A
“Registrar”	2.04(a)

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Term	Defined in Section
“Regulation S”	Appendix A
“Regulation S Global Securities”	Appendix A
“Regulation S Securities”	Appendix A
“Released Trust Monies”	12.04
“Replacement Assets”	12.04
“Restricted Payment”	4.04(a)
“Restricted Period”	Appendix A
“Restricted Securities Legend”	Appendix A
“Retired Capital Stock”	4.04(b)(ii)(A)
“Reversion Date”	4.14(b)
“Rule 501”	Appendix A
“Rule 144A”	Appendix A
“Rule 144A Global Securities”	Appendix A
“Rule 144A Securities”	Appendix A
“Securities”	Preamble
“Securities Custodian”	Appendix A
“Shelf Registration Statement”	Appendix A
“Specified Merger/Transfer Transaction”	5.01(a)
“Subject Property”	4.15(a)
“Successor Company”	5.01(a)(i)
“Successor Guarantor”	5.01(b)(i)
“Suspended Covenants”	4.14(a)
“Suspension Period”	4.14(b)
“Transfer Restricted Definitive Securities”	Appendix A
“Transfer Restricted Global Securities”	Appendix A
“Unrestricted Definitive Security”	Appendix A
“Unrestricted Global Security”	Appendix A

SECTION 1.03.Incorporation by Reference of Trust Indenture Act.  This Indenture incorporates by reference certain provisions of the TIA.  The following TIA terms have the following meanings:

“Commission” means the SEC.

“indenture securities” means the Securities and the Guarantees.

“indenture security holder” means a Holder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Trustee.

“obligor” on the indenture securities means the Company, the Guarantors and any other obligor on the Securities.

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All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

SECTION 1.04.Rules of Construction.  Unless the context otherwise requires:

(a)a term has the meaning assigned to it;

(b)an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(c)“or” is not exclusive;

(d)“including” means including without limitation;

(e)words in the singular include the plural and words in the plural include the singular;

(f)unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;

(g)the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;

(h)the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater;

(i)unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP;

(j)“$” and “U.S. Dollars” each refer to United States dollars, or such other money of the United States of America that at the time of payment is legal tender for payment of public and private debts;

(k)whenever in this Indenture or in any Security there is mentioned, in any context, principal, interest or any other amount payable under or with respect to any Securities, such mention shall be deemed to include mention of the payment of Additional Interest, to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof; and

(l)for any periods or dates which the Company does not have historical financial statements available, it shall be entitled to use and rely on the financial statements of its predecessor or successor (as the case may be).

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ARTICLE 2

THE SECURITIES

SECTION 2.01.Amount of Securities; Issuable in Series.  The aggregate principal amount of Original Securities which may be authenticated and delivered under this Indenture on the Issue Date is $200,000,000.  The Securities may be issued in one or more series.  All Securities of any one series shall be substantially identical except as to denomination.

The Company may from time to time after the Issue Date issue Additional Securities under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Securities is at such time permitted by Section 4.03 and (ii) such Additional Securities are issued in compliance with the other applicable provisions of this Indenture.  With respect to any Additional Securities issued after the Issue Date (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Sections 2.07, 2.08, 2.09, 2.10, 3.06, 4.06(g), 4.08(c) or the Appendix), there shall be (a) established in or pursuant to a resolution of the Board of Directors of the Company and (b) (i) set forth or determined in the manner provided in an Officers’ Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Securities:

(1)whether such Additional Securities shall be issued as part of a new or existing series of Securities and the title of such Additional Securities (which shall distinguish the Additional Securities of the series from Securities of any other series);

(2)the aggregate principal amount of such Additional Securities which may be authenticated and delivered under this Indenture;

(3)the issue price and issuance date of such Additional Securities, including the date from which interest on such Additional Securities shall accrue;

(4)if applicable, that such Additional Securities shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective depositaries for such Global Securities, the form of any legend or legends which shall be borne by such Global Securities in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.2 of the Appendix in which any such Global Security may be exchanged in whole or in part for Additional Securities registered, or any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Security or a nominee thereof; and

(5)if applicable, that such Additional Securities that are not Transfer Restricted Definitive Securities shall not be issued in the form of Initial Securities as set forth in Exhibit A, but shall be issued in the form of Exchange Securities as set forth in Exhibit B.

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If any of the terms of any Additional Securities are established by action taken pursuant to a resolution of the Board of Directors of the Company, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate or the indenture supplemental hereto setting forth the terms of the Additional Securities.

SECTION 2.02.Form and Dating.  Provisions relating to the Initial Securities and the Exchange Securities are set forth in the Appendix, which is hereby incorporated in and expressly made a part of this Indenture. The Initial Securities and the Trustee’s certificate of authentication, and any Additional Securities (if issued as Transfer Restricted Definitive Securities) and the Trustee’s certificate of authentication, shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture.  The Exchange Securities and the Trustee’s certificate of authentication, and any Additional Securities issued other than as Transfer Restricted Definitive Securities and the Trustee’s certificate of authentication, shall each be substantially in the form of Exhibit B hereto, which is hereby incorporated in and expressly made a part of this Indenture.  The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company or any Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  Each Security shall be dated the date of its authentication.  The Securities shall be issuable only in registered form without interest coupons and only in denominations of $2,000 and any integral multiples of $1,000 in excess thereof.

SECTION 2.03.Execution and Authentication.  The Trustee shall authenticate and make available for delivery upon a written order of the Company signed by one Officer (a) Original Securities for original issue on the date hereof in an aggregate principal amount of $200,000,000, (b) subject to the terms of this Indenture, Additional Securities in an aggregate principal amount to be determined at the time of issuance and specified therein and (c) the Exchange Securities for issue in a Registered Exchange Offer pursuant to the Registration Rights Agreement for a like principal amount of Initial Securities exchanged pursuant thereto or otherwise pursuant to an effective registration statement under the Securities Act.  Such order shall specify the amount of the Securities to be authenticated, the date on which the original issue of Securities is to be authenticated and whether the Securities are to be Initial Securities or Exchange Securities.  Notwithstanding anything to the contrary in the Indenture or the Appendix, any issuance of Additional Securities after the Issue Date shall be in a principal amount of at least $2,000 and any integral multiples of $1,000 in excess thereof, whether such Additional Securities are of the same or a different series than the Original Securities.

One Officer shall sign the Securities for the Company by manual or facsimile signature.

If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security.  The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

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The Trustee may appoint one or more authenticating agents reasonably acceptable to the Company to authenticate the Securities.  Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Company.  Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

SECTION 2.04.Registrar and Paying Agent.

(a)The Company shall maintain (i) an office or agency where Securities may be presented for registration of transfer or for exchange (the “Registrar”) and (ii) an office or agency in the United States where Securities may be presented for payment (the “Paying Agent”).  The Registrar shall keep a register of the Securities and of their transfer and exchange.  The Company may have one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any co-registrars.  The term “Paying Agent” includes the Paying Agent and any additional paying agents.  The Company initially appoints the Trustee as (i) Registrar and Paying Agent in connection with the Securities and (ii) the Securities Custodian with respect to the Global Securities.

(b)The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the name and address of any such agent.  If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07.  The Company or any of its domestically organized Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

(c)The Company may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above.  The Registrar or Paying Agent may resign at any time upon written notice to the Company and the Trustee; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.

SECTION 2.05.Paying Agent to Hold Money in Trust.  Prior to 10:00 a.m., New York City time, on each due date of the principal of and interest on any Security, the Company shall deposit with each Paying Agent (or if the Company or a Wholly Owned Subsidiary is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due.  The Company shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Securities, and shall notify the Trustee of any default

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by the Company in making any such payment.  If the Company or a Wholly Owned Subsidiary of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent.  During the continuance of a Default under this Indenture, the Trustee may require a Paying Agent to pay all money held by it to the Trustee.  Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent.  Upon complying with this Section 2.05, a Paying Agent shall have no further liability for the money delivered to the Trustee.

SECTION 2.06.Holder Lists.  The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders.  If the Trustee is not the Registrar, the Company shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.

SECTION 2.07.Transfer and Exchange.  The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer and in compliance with the Appendix.  When a Security is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met.  When Securities are presented to the Registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met.  To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Registrar’s request.  The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.07.  The Company shall not be required to make, and the Registrar need not register, transfers or exchanges of Securities selected for redemption (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed) or of any Securities for a period of 15 days before a selection of Securities to be redeemed.

Prior to the due presentation for registration of transfer of any Security, the Company, the Guarantors, the Trustee, each Paying Agent and the Registrar may deem and treat the Person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest, if any, on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, any Guarantor, the Trustee, a Paying Agent or the Registrar shall be affected by notice to the contrary.

Any Holder of a beneficial interest in a Global Security shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Security may be effected only through a book-entry system maintained by (a) the Holder of such Global Security (or its agent) or (b) any Holder of a beneficial interest in such Global Security, and that ownership of a beneficial interest in such Global Security shall be required to be reflected in a book entry.

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All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.

SECTION 2.08.Replacement Securities.  If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) satisfies the Company or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Company or the Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of the Trustee.  If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of (i) the Trustee to protect the Trustee or (ii) the Company, to protect the Company, the Trustee, a Paying Agent and the Registrar, from any loss that any of them may suffer if a Security is replaced.  The Company and the Trustee may charge the Holder for their expenses in replacing a Security (including, without limitation, attorneys’ fees and disbursements in replacing such Security).  In the event any such mutilated, lost, destroyed or wrongfully taken Security has become or is about to become due and payable, the Company in its discretion may pay such Security instead of issuing a new Security in replacement thereof.

Every replacement Security is an additional obligation of the Company.

The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Securities.

SECTION 2.09.Outstanding Securities.  Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.09 as not outstanding.  Subject to Section 13.06, a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.

If a Security is replaced pursuant to Section 2.08 (other than a mutilated Security surrendered for replacement), it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a protected purchaser.  A mutilated Security ceases to be outstanding upon surrender of such Security and replacement thereof pursuant to Section 2.08.

If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, and no Paying Agent is prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

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SECTION 2.10.Temporary Securities.  In the event that Definitive Securities are to be issued under the terms of this Indenture, until such Definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities.  Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Company considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Securities and make them available for delivery in exchange for temporary Securities upon surrender of such temporary Securities at the office or agency of the Company, without charge to the Holder.  Until such exchange, temporary Securities shall be entitled to the same rights, benefits and privileges as Definitive Securities.

SECTION 2.11.Cancellation.  The Company at any time may deliver Securities to the Trustee for cancellation.  The Registrar and each Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Securities in accordance with its customary procedures or deliver copies of canceled Securities to the Company pursuant to written direction by an Officer of the Company.  The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation.  The Trustee shall not authenticate Securities in place of canceled Securities other than pursuant to the terms of this Indenture.

SECTION 2.12.Defaulted Interest.  If the Company defaults in a payment of interest on the Securities, the Company shall pay the defaulted interest then borne by the Securities (plus interest on such defaulted interest to the extent lawful), in any lawful manner.  The Company may pay the defaulted interest to the Persons who are Holders on a subsequent special record date.  The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail or cause to be mailed to each affected Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

SECTION 2.13.CUSIP Numbers, ISINs, etc.  The Company in issuing the Securities may use CUSIP numbers, ISINs and “Common Code” numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers, ISINs and “Common Code” numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Securities or as contained in any notice of a redemption, that reliance may be placed only on the other identification numbers printed on the Securities and that any such redemption shall not be affected by any defect in or omission of such numbers.  The Company shall advise the Trustee in writing of any change in the CUSIP numbers, ISINs and “Common Code” numbers.

SECTION 2.14.Calculation of Specified Percentage of Securities.  With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Securities, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Securities, the Holders of which have so consented by (b) the aggregate principal

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amount, as of such date of determination, of the Securities then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 13.06 of this Indenture.  Any such calculation made pursuant to this Section 2.14 shall be made by the Company and delivered to the Trustee pursuant to an Officers’ Certificate.

ARTICLE 3

REDEMPTION

SECTION 3.01.Redemption.  The Securities may be redeemed, in whole, or from time to time in part, subject to the conditions and at the redemption prices set forth in Paragraph 5 of the form of Securities set forth in Exhibit A and Exhibit B hereto, which are hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest to the redemption date.

SECTION 3.02.Applicability of Article.  Redemption of Securities at the election of the Company or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article 3.

SECTION 3.03.Notices to Trustee.  If the Company elects to redeem Securities pursuant to the optional redemption provisions of Paragraph 5 of the applicable Security, it shall notify the Trustee in writing of (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Securities to be redeemed and (iv) the redemption price.  The Company shall give notice to the Trustee provided for in this paragraph at least 40 days but not more than 60 days before a redemption date if the redemption is pursuant to Paragraph 5 of the applicable Security, unless a shorter period is acceptable to the Trustee.  Such notice shall be accompanied by an Officers’ Certificate and Opinion of Counsel from the Company to the effect that such redemption will comply with the conditions herein.  If fewer than all the Securities are to be redeemed, the record date relating to such redemption shall be selected by the Company and given in writing to the Trustee, which record date shall be not fewer than 15 days after the date of notice to the Trustee.  Any such notice may be canceled at any time prior to notice of such redemption being sent to any Holder and shall thereby be void and of no effect.

SECTION 3.04.Selection of Securities to Be Redeemed.  In the case of any partial redemption, selection of the Securities for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which such Securities are listed, or if such Securities are not so listed, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements); provided that the Trustee shall not select Securities for redemption which would result in a Holder of Securities with a principal amount of Securities less than the minimum denomination to the extent practicable. The Trustee shall make the selection from outstanding Securities not previously called for redemption.  The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $2,000.  Securities and portions of them the Trustee selects shall be in amounts of $2,000 or a whole multiple of $1,000 in excess thereof.  Provisions of this Indenture that apply to Securities called for redemption also

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apply to portions of Securities called for redemption.  The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed.

SECTION 3.05.Notice of Optional Redemption.

(a)At least 30 days but not more than 60 days before a redemption date pursuant to Paragraph 5 of the applicable Security, the Company shall mail or cause to be mailed by first-class mail a notice of redemption to each Holder whose Securities are to be redeemed to such Holder’s registered address or otherwise in accordance with the procedures of the Depository.

Any such notice shall identify the Securities to be redeemed and shall state:

(i)the redemption date;

(ii)the redemption price and the amount of accrued interest to the redemption date;

(iii)the name and address of a Paying Agent;

(iv)that Securities called for redemption must be surrendered to a Paying Agent to collect the redemption price, plus accrued interest;

(v)if fewer than all the outstanding Securities are to be redeemed, the certificate numbers and principal amounts of the particular Securities to be redeemed, the aggregate principal amount of Securities to be redeemed and the aggregate principal amount of Securities to be outstanding after such partial redemption;

(vi)that, unless the Company defaults in making such redemption payment or any Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date;

(vii)the CUSIP number, ISIN and/or “Common Code” number, if any, printed on the Securities being redeemed; and

(viii)that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN and/or “Common Code” number, if any, listed in such notice or printed on the Securities.

In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice of redemption shall describe each such condition, and if applicable, shall state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the stated redemption date, or by the redemption date as so delayed.

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(b)At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at the Company’s expense; provided, however, that the Company has delivered to the Trustee, at least 45 days (unless a shorter period is acceptable to the Trustee) prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice.  In such event, the Company shall provide the Trustee in writing with the information required by this Section 3.05.

SECTION 3.06.Effect of Notice of Redemption.  Once notice of redemption is mailed in accordance with Section 3.05, Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice (except to the extent such redemption is conditional as set forth in Section 3.05).  Upon surrender to any Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date; provided, however, that if the redemption date is after a regular record date and on or prior to the interest payment date, the accrued interest shall be payable to the Holder of the redeemed Securities registered on the relevant record date.  Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

SECTION 3.07.Deposit of Redemption Price.  Prior to 10:00 a.m., New York City time, on the redemption date, the Company shall deposit with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary is a Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Securities or portions thereof to be redeemed on that date other than Securities or portions of Securities called for redemption that have been delivered by the Company to the Trustee for cancellation.  On and after the redemption date, interest shall cease to accrue on Securities or portions thereof called for redemption so long as the Company has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Securities to be redeemed, unless a Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture.

SECTION 3.08.Securities Redeemed in Part.  Upon surrender of a Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company’s expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered.

ARTICLE 4

COVENANTS

SECTION 4.01.Payment of Securities.  The Company shall promptly pay the principal of and interest, on the Securities on the dates and in the manner provided in the Securities and in this Indenture.  An installment of principal of or interest shall be considered paid on the date due if on such date the Trustee or any Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due and the Trustee or any Paying Agent, as the case may be, are not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.

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The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate borne by the Securities to the extent lawful.

SECTION 4.02.Reports and Other Information.  Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Company shall file with the SEC (and provide the Trustee and Holders with copies thereof, without cost to each Holder, within 15 days after it files them with the SEC),

(a)within 90 days after the end of each fiscal year (or such longer period as may be permitted by the SEC if the Company were then subject to such SEC reporting requirements as a required filer, voluntary filer or otherwise), annual reports (which, if permitted under applicable rules of the SEC, may be the annual report of any direct or indirect parent of the Company so long as such report contains reasonably detailed financial information (including a management’s discussion and analysis of financial information) with respect to the Company and its Subsidiaries on a stand alone basis) on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

(b)within 45 days after the end of each of the first three fiscal quarters of each fiscal year (or such longer period as may be permitted by the SEC if the Company were then subject to such SEC reporting requirements as a required filer, voluntary filer or otherwise), quarterly reports (which, if permitted under applicable rules of the SEC, may be the quarterly report of any direct or indirect parent of the Company so long as such report contains reasonably detailed financial information (including a management’s discussion and analysis of financial information) with respect to the Company and its Subsidiaries on a stand alone basis) on Form 10-Q (or any successor or comparable form),

(c)promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified for filing current reports on Form 8-K by the SEC), such other reports on Form 8-K (or any successor or comparable form), and

(d)any other information, documents and other reports which the Company would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

provided, however, that the Company shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event the Company shall put such information on its website, in addition to providing such information to the Trustee and the Holders, in each case within 15 days after the time the Company would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act. For avoidance of doubt, the obligations of the Company under this Section 4.02 shall commence with respect to the Company’s first fiscal quarter that ends after the Issue Date.

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In addition, to the extent not satisfied by the foregoing, the Company shall, for so long as any Securities are outstanding, furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Notwithstanding the foregoing, the Company will be deemed to have furnished such reports referred to above to the Trustee and the Holders if it or any direct or indirect parent of the Company has filed such reports with the SEC via the IDEA filing system and such reports are publicly available.

Notwithstanding the foregoing, the requirement to provide the information and reports referred to in clauses (a) and (b) above shall be deemed satisfied prior to the commencement of the Registered Exchange Offer or the effectiveness of a Shelf Registration Statement relating to the registration of the Securities under the Securities Act by the filing (within the time periods specified for such filings in the Registration Rights Agreement) with the SEC of a registration statement, and any amendments thereto, with such financial information that satisfies Regulation S-X under the Securities Act.

In the event that:

(i)the rules and regulations of the SEC permit the Company and any direct or indirect parent company of the Company to report at such parent entity’s level on a consolidated basis and such parent entity of the Company is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the capital stock of the Company, or

(ii)any direct or indirect parent of the Company becomes a Guarantor of the Securities,

such consolidated reporting at such parent entity’s level in a manner consistent with that described in this Section 4.02 for the Company will satisfy this Section 4.02; provided that, such financial information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent and any of its Subsidiaries other than the Company and its Subsidiaries, on the one hand, and the information relating to the Company and its Subsidiaries on a stand alone basis, on the other hand.

Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively (subject to Article 7) on Officers’ Certificates).

SECTION 4.03.Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.

(a)(i) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or

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issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Company and any Restricted Subsidiary that is a Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary that is a Guarantor may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.

(b)The limitations set forth in Section 4.03(a) shall not apply to (collectively, “Permitted Debt”):

(i)the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under any Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount not to exceed the greater of (x) $180 million and (y) the Borrowing Base, in each case, outstanding at any one time;

(ii)the Incurrence by the Company and the Guarantors of Indebtedness represented by the Original Securities and the Guarantees, as applicable (and any Exchange Securities and guarantees thereof);

(iii)Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)), including any Indebtedness being repaid with the proceeds of the offering as described in the Offering Memorandum;

(iv)Indebtedness (including Capitalized Lease Obligations) Incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of (x) $25 million and (y) 3% of Total Assets at the time of Incurrence, at any one time outstanding;

(v)Indebtedness Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding

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workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;

(vi)Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

(vii)Indebtedness of the Company to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an Incurrence of such Indebtedness;

(viii)shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;

(ix)Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;

(x)Hedging Obligations that are Incurred in the ordinary course of business (and not for speculative purposes):  (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;

(xi)obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;

(xii)Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company

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in an aggregate principal amount which, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of (x) $30 million and (y) 4% of Total Assets at the time of Incurrence, at any one time outstanding (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred or issued under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.03(a) without reliance upon this clause (xii));

(xiii)any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other obligations by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;

(xiv)the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Indebtedness, Disqualified Stock or Preferred Stock Incurred as permitted under Section 4.03(a) and clauses (ii), (iii), (xiv) and (xv) of this Section 4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums, fees and expenses in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:

(1)has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded or refinanced;

(2)has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded or refinanced;

(3)to the extent such Refinancing Indebtedness refinances (x) Indebtedness junior to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities or the Guarantee of such Restricted Subsidiary, as applicable or (y) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;

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(4)is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing; and

(5)shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor that refinances Indebtedness of the Company or a Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;

(xv)Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided,however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided, further, however, that after giving effect to such acquisition and the Incurrence of such Indebtedness either:

(1)the Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to Section 4.03(a); or

(2)the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;

(xvi)Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence;

(xvii)Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;

(xviii)Contribution Indebtedness;

(xix)Indebtedness of the Company or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business

(xx)Indebtedness of Foreign Subsidiaries of the Company in an amount not to exceed the greater of (x) $10 million or (y) 1.5% of Total Assets of all Foreign Subsidiaries at the time of such Incurrence, at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xx) shall cease to be deemed Incurred or outstanding for purposes of this clause (xx) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Company or the Restricted Subsidiary,

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as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xx)); and

(xxi)Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company in an aggregate principal amount which, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xxi) does not exceed the greater of (x) $20 million and (y) 2.5% of Total Assets at the time of Incurrence, at any one time outstanding.

(c)Notwithstanding the foregoing, neither the Company nor any Guarantor may Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Indebtedness unless such Indebtedness shall be subordinated to the Securities or such Guarantor’s Guarantee, as applicable, to at least the same extent as such Subordinated Indebtedness.  For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt or is entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.03 and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as having been Incurred pursuant to only one of the clauses in Section 4.03(b) or pursuant to Section 4.03(a); provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) of Section 4.03(b) and the Company shall not be permitted to reclassify all or any portion of such Indebtedness.  Accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03.  Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.

(d)For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated

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restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

SECTION 4.04.Limitation on Restricted Payments.

(a)The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

(i)declare or pay any dividend or make any distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests, including any payment made in connection with any merger or consolidation involving the Company (other than (A) dividends or distributions by the Company payable solely in Equity Interests (other than Disqualified Stock) of the Company; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

(ii)purchase or otherwise acquire or retire for value any Equity Interests of the Company or any direct or indirect parent company of the Company;

(iii)make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (vii) and (ix) of Section 4.03(b)); or

(iv)make any Restricted Investment

(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless, at the time of such Restricted Payment:

(1)no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

(2)immediately after giving effect to such transaction on a pro forma basis, the Company could Incur $1.00 of additional Indebtedness under Section 4.03(a); and

(3)such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (i) and (xiii)(B) of Section 4.04(b),

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but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the sum of, without duplication,

(A)50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from July 1, 2009 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

(B)100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by the Company after the Issue Date from the issue or sale of Equity Interests of the Company or any direct or indirect parent company of the Company (excluding (without duplication) Refunding Capital Stock, Designated Preferred Stock, Cash Contribution Amount, Excluded Contributions and Disqualified Stock), including Equity Interests issued upon conversion of Indebtedness or upon exercise of warrants or options (other than an issuance or sale to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries), plus

(C)100% of the aggregate amount of contributions to the capital of the Company received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash after the Issue Date (other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock, Disqualified Stock and the Cash Contribution Amount), plus

(D)the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock, of the Company or any Restricted Subsidiary thereof issued after the Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in the Company or any direct or indirect parent of the Company (other than Disqualified Stock), plus

(E)100% of the aggregate amount received by the Company or any Restricted Subsidiary in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by the Company or any Restricted Subsidiary from:

(I)the sale or other disposition (other than to the Company or a Restricted Subsidiary of the Company) of Restricted Investments or Permitted Investments made by the Company and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments or Permitted Investments from the Company and its Restricted Subsidiaries by any Person (other than the Company or any of its Subsidiaries) and from repayments of loans or advances which constituted Restricted Investments

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(other than in each case to the extent that the Restricted Investment was made pursuant to clause (vii) or (x) of Section 4.04(b)),

(II)the sale (other than to the Company or a Restricted Subsidiary of the Company) of the Capital Stock of an Unrestricted Subsidiary, or

(III)a distribution or dividend from an Unrestricted Subsidiary, plus

(F)in the event any Unrestricted Subsidiary of the Company has been redesignated as a Restricted Subsidiary or has been merged or consolidated with or into, or transfers or conveys its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company, in each case after the Issue Date, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investment of the Company in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable), after deducting any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (vii) or (x) of Section 4.04(b) or constituted a Permitted Investment).

The Fair Market Value of property other than cash covered by clauses (3)(B), (C), (D), (E) and (F) of this Section 4.04(a) shall be determined in good faith by the Company and in the event of property with a Fair Market Value in excess of $15 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of the Company.

(b)The provisions of Section 4.04(a) shall not prohibit:

(i)the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture;

(ii)(A) the repurchase, retirement or other acquisition of any Equity Interests (“Retired Capital Stock”) of the Company or any direct or indirect parent of the Company or any Guarantor or Subordinated Indebtedness of the Company in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of the Company or any direct or indirect parent company of the Company or contributions to the equity capital of the Company (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Company or to an employee stock ownership plan or any trust established by the Company or any of its Subsidiaries) (collectively, including any such contributions, “Refunding Capital Stock”); and (B) the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company or to an employee stock ownership plan

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or any trust established by the Company or any of its Subsidiaries) of Refunding Capital Stock;

(iii)the redemption, repurchase or other acquisition or retirement of Subordinated Indebtedness of the Company or any Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Company or any Guarantor which is Incurred in accordance with Section 4.03 so long as:

(A)the principal amount of such new Indebtedness does not exceed the principal amount of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired plus any fees incurred in connection therewith);

(B)such Indebtedness is subordinated to the Securities or the related Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or retired for value;

(C)such Indebtedness has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired; and

(D)such Indebtedness has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired;

(iv)the repurchase, retirement or other acquisition (or dividends to any direct or indirect parent of the Company to finance any such repurchase, retirement or other acquisition) for value of Equity Interests of the Company or any direct or indirect parent of the Company held by any future, present or former employee, director or consultant of the Company or any direct or indirect parent of the Company or any Subsidiary of the Company pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however, that the aggregate amounts paid under this clause (iv) do not exceed $5 million in any calendar year (with unused amounts in any calendar year being permitted to be carried over for the two succeeding calendar years up to a maximum of $10 million in the aggregate in any calendar year); provided, further, however, that such amount in any calendar year may be increased by an amount not to exceed:

(A)the cash proceeds received by the Company or any of its Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Company or any direct or indirect parent company of the Company (to the extent contributed to the Company) to members of management, directors or consultants of the Company and its Restricted Subsidiaries or any direct or indirect parent of the Company that occurs after the Issue Date (provided that the amount

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of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend shall not increase the amount available for Restricted Payments under Section 4.04(a)(3)); plus

(B)the cash proceeds of key man life insurance policies received by the Company or any direct or indirect parent company of the Company (to the extent contributed to the Company) and its Restricted Subsidiaries after the Issue Date;

(provided that the Company may elect to apply all or any portion of the aggregate increase contemplated by clauses (A) and (B) above in any calendar year);

(v)the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Company or any of its Restricted Subsidiaries issued or incurred in accordance with Section 4.03;

(vi)the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date and the declaration and payment of dividends to any direct or indirect parent company of the Company, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent company of the Company issued after the Issue Date; provided, however, that (A) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Company would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (B) the aggregate amount of dividends declared and paid pursuant to this clause (vi) does not exceed the net cash proceeds actually received by the Company from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

(vii)Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (vii) that are at that time outstanding, not to exceed the greater of (x) $25 million and (y) 3% of Total Assets, at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value), at any one time outstanding;

(viii)the payment of dividends on the Company’s common stock (or the payment of dividends to any direct or indirect parent of the Company to fund the payment by any direct or indirect parent of the Company of dividends on such entity’s common stock) of up to 6.0% per annum of the net proceeds received by the Company from any public offering of common stock or contributed to the Company by any direct or indirect parent of the Company from any public offering of common stock;

(ix)Investments that are made with Excluded Contributions;

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(x)other Restricted Payments in an aggregate amount not to exceed the greater of (x) $25 million and (y) 3% of Total Assets at the time of such Restricted Payment, at any one time outstanding;

(xi)the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary of the Company by, Unrestricted Subsidiaries;

(xii)the payment of dividends or other distributions to any direct or indirect parent company of the Company in amounts required for such parent company to pay federal, state or local income taxes (as the case may be) imposed directly on such parent company to the extent such income taxes are attributable to the income of the Company and its Restricted Subsidiaries by virtue of such parent company being the common parent of a consolidated or combined tax group of which the Company and/or its Restricted Subsidiaries are members; provided, however, that in each case the amount of such payments in respect of any tax year does not exceed the amount that the Company and its Restricted Subsidiaries would have been required to pay in respect of federal, state or local taxes (as the case may be) in respect of such year if the Company and its Restricted Subsidiaries paid such taxes directly as a stand-alone taxpayer (or stand-alone group);

(xiii)the payment of dividends, other distributions or other amounts by the Company to, or the making of loans to, any direct or indirect parent, in the amount required for such parent to, if applicable:

(A)pay amounts equal to the amounts required for any direct or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent of the Company, if applicable, and general corporate overhead expenses of any direct or indirect parent of the Company, if applicable, in each case to the extent such fees, expenses, salaries, bonuses, benefits and indemnities are attributable to the ownership or operation of the Company, if applicable, and its Restricted Subsidiaries; and

(B)pay, if applicable, amounts equal to amounts required for any direct or indirect parent of the Company, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been permanently contributed to the Company or any of its Restricted Subsidiaries and that has been guaranteed by, or is otherwise considered Indebtedness of, the Company or any of its Restricted Subsidiaries Incurred in accordance with Section 4.03;

(xiv)the payment of cash dividends or other distributions on the Company’s Capital Stock used to, or the making of loans to any direct or indirect parent of the Company to, fund the payment of fees and expenses owed by the Company or any direct or indirect parent company of the Company, as the case may be, or Restricted Subsidiaries of the Company to Affiliates, in each case to the extent permitted by Section 4.07;

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(xv)repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

(xvi)purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees; and

(xvii)the payment, purchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness, Disqualified Stock or Preferred Stock of the Company and its Restricted Subsidiaries pursuant to provisions similar to those described under Section 4.06 and Section 4.08; provided that, prior to such payment, purchase, redemption, defeasance or other acquisition or retirement for value, the Company (or a third party to the extent permitted by this Indenture) has made a Change of Control Offer or Asset Sale Offer, as the case may be, with respect to the Securities as a result of such Change of Control or Asset Sale, as the case may be, and has repurchased all Securities validly tendered and not withdrawn in connection with such Change of Control Offer or Asset Sale Offer, as the case may be;

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (vi), (vii), (viii), (x), (xi) and (xvii) of this Section 4.04(b), no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

(c)As of the Issue Date, all of the Company’s Subsidiaries shall be Restricted Subsidiaries.  The Company shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.”  For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments or Permitted Investments in an amount determined as set forth in the last sentence of the definition of “Investments.”  Such designation shall only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

(d)For purposes of this Section 4.04, if any Investment or Restricted Payment would be permitted pursuant to one or more provisions described above and/or one or more of the exceptions contained in the definition of “Permitted Investments,” the Company may classify such Investment or Restricted Payment in any manner that complies with this covenant and may later reclassify any such Investment or Restricted Payment so long as the Investment or Restricted Payment (as so reclassified) would be permitted to be made in reliance on the applicable exception as of the date of such reclassification.

SECTION 4.05.Dividend and Other Payment Restrictions Affecting Subsidiaries.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

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(a)(i) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or by, its profits; or (ii) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;

(b)make loans or advances to the Company or any of its Restricted Subsidiaries; or

(c)sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries;

except in each case for such encumbrances or restrictions existing under or by reason of:

(1)contractual encumbrances or restrictions in effect or entered into on the Issue Date, including pursuant to the Credit Agreement;

(2)this Indenture, the Securities (and any Exchange Securities and guarantees thereof) and the Security Documents;

(3)applicable law or any applicable rule, regulation or order;

(4)any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;

(5)contracts or agreements for the sale of assets, including customary restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary;

(6)Permitted Additional Pari Passu Obligations or any other Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.03 and 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(7)restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(8)customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;

(9)purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired;

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(10)customary provisions contained in leases, licenses, contracts and other similar agreements entered into in the ordinary course of business that impose restrictions of the type described in clause (c) above on the property subject to such lease;

(11)any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided, however, that such restrictions apply only to such Receivables Subsidiary;

(12)other Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary of the Company that is Incurred subsequent to the Issue Date pursuant to Section 4.03; provided that such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Company’s ability to make anticipated principal or interest payment on the Securities (as determined by the Company in good faith);

(13)any Restricted Investment not prohibited by Section 4.04 and any Permitted Investment; and

(14)any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (13) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company, no more restrictive as a whole with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on ordinary shares shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to the Company or a Restricted Subsidiary of the Company to other Indebtedness Incurred by the Company or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

SECTION 4.06.Asset Sales.

(a)The Company shall not, and shall not permit any of its Restricted Subsidiaries to, cause or make an Asset Sale, unless:

(1)the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by the Company) of the assets sold or otherwise disposed of;

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(2)except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of:

(i)any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Company or any Restricted Subsidiary of the Company (other than liabilities that are by their terms subordinated to the Securities) that are assumed by the transferee of any such assets,

(ii)any notes or other obligations or other securities or assets received by the Company or such Restricted Subsidiary of the Company from such transferee that are converted by the Company or such Restricted Subsidiary of the Company into cash within 180 days of the receipt thereof (to the extent of the cash received), and

(iii)any Designated Non-cash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of (x) $25 million and (y) 3% of Total Assets at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value)

shall each be deemed to be Cash Equivalents for the purposes of this Section 4.06(a).

(3)if such Asset Sale involves the disposition of Collateral, the Company or such Restricted Subsidiary has complied with the provisions of this Indenture and the Security Documents; and

(4)if such Asset Sale involves the disposition of Notes Priority Collateral or, after the Discharge of ABL Obligations, the disposition of ABL Priority Collateral, the Net Cash Proceeds thereof shall be paid directly by the purchaser of the Collateral to the Collateral Agent for deposit into the Collateral Account, and, if any property other than cash or Cash Equivalents is included in such Net Cash Proceeds, such property shall be made subject to the Note Liens.

(b)Within 365 days after the Company or any Restricted Subsidiary of the Company’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or such Restricted Subsidiary may apply the Net Cash Proceeds from such Asset Sale, at its option:

(i)to the extent such Net Cash Proceeds constitute proceeds from the sale of ABL Priority Collateral, to permanently repay Indebtedness under the Credit Agreement secured by such ABL Priority Collateral;

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(ii)to the extent such Net Cash Proceeds constitute proceeds from the sale of Notes Priority Collateral, to permanently repay, equally and ratably, the Securities and any Permitted Additional Pari Passu Obligations;

(iii)to permanently reduce Obligations under other Secured Indebtedness (provided that if the Company or any Guarantor shall so reduce such Obligations, the Company shall equally and ratably reduce Obligations under the Securities and any Permitted Additional Pari Passu Obligations if the Securities and Permitted Additional Pari Passu Obligations are then prepayable or, if the Securities may not then be prepaid, by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, the pro rata principal amount of Securities that would otherwise be prepaid) or Indebtedness of a Restricted Subsidiary that is not a Guarantor, in each case other than Indebtedness owed to the Company or an Affiliate of the Company;

(iv)to an Investment in any one or more businesses (provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of the Company), or capital expenditures, in each case used or useful in a Similar Business; and/or

(v)to make an Investment in any one or more businesses (provided that if such investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of the Company), properties or assets that replace the properties and assets that are the subject of such Asset Sale; provided that if such Net Cash Proceeds are received in respect of Notes Priority Collateral, such assets constitute Notes Priority Collateral;

provided that in the case of clauses (iv) and (v) above, a binding commitment shall be treated as a permitted application of the Net Cash Proceeds from the date of such commitment and, in the event such binding commitment is later canceled or terminated for any reason before such Net Cash Proceeds are so applied, the Company or such Restricted Subsidiary enters into another binding commitment within six months of such cancellation or termination of the prior binding commitment.

Pending the final application of any such Net Cash Proceeds, the Company or such Restricted Subsidiary of the Company may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Cash Proceeds in Cash Equivalents or Investment Grade Securities.  Any Net Cash Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this Section 4.06(b) shall be deemed to constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds exceeds $15 million, the Company shall make an offer (an “Asset Sale Offer”) to all Holders of Securities and (x) in the case of Net Cash Proceeds from Notes Priority Collateral, to the holders of any other Permitted Additional Pari Passu Obligations containing provisions similar to those set forth in this Indenture with respect to Asset Sales or (y) in the case of any other Net Cash Proceeds, to all holders of other Pari Passu Indebtedness containing provisions similar to those set forth in this Indenture with respect to Assets Sales, to purchase the maximum principal

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amount of such Securities and Permitted Additional Pari Passu Obligations or Pari Passu Indebtedness, as appropriate, that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price, if any, as may be provided by the terms of such other Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06 and, in the case of Securities, is an integral multiple of $2,000. The Company shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $15 million by mailing the notice required pursuant to the terms of Section 4.06(f), with a copy to the Trustee. To the extent that the aggregate amount of Securities and such other Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes. If the aggregate principal amount of Securities and Permitted Additional Pari Passu Obligations or Pari Passu Indebtedness, as appropriate, surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Securities and such other Indebtedness to be purchased in the manner described in Section 4.06(e). Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

(c)The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Securities pursuant to an Asset Sale Offer.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

(d)Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided above, the Company shall deliver to the Trustee an Officers’ Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation of the Net Cash Proceeds from the Asset Sales pursuant to which such Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(b).  On such date, the Company shall also irrevocably deposit with the Trustee or with a Paying Agent (or, if the Company or a Wholly Owned Restricted Subsidiary is acting as a Paying Agent, segregate and hold in trust) an amount equal to the Excess Proceeds to be invested in Cash Equivalents, as directed in writing by the Company, and to be held for payment in accordance with the provisions of this Section 4.06.  Upon the expiration of the period for which the Asset Sale Offer remains open (the “Offer Period”), the Company shall deliver to the Trustee for cancellation the Securities or portions thereof that have been properly tendered to and are to be accepted by the Company.  The Trustee (or a Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering Holder in the amount of the purchase price.  In the event that the Excess Proceeds delivered by the Company to the Trustee is greater than the purchase price of the Securities tendered, the Trustee shall deliver the excess to the Company immediately after the expiration of the Offer Period for application in accordance with Section 4.06.

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(e)Holders electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Company at the address specified in the notice at least three Business Days prior to the purchase date.  Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later than two Business Days prior to the purchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security which was delivered by the Holder for purchase and a statement that such Holder is withdrawing his election to have such Security purchased.  If at the end of the Offer Period more Securities are tendered pursuant to an Asset Sale Offer than the Company is required to purchase, selection of such Securities for purchase shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which such Securities are listed, or if such Securities are not listed by lot or such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements); provided that the Trustee shall not select Securities for purchase which would result in a Holder with a principal amount of Securities less than the minimum denomination to the extent practicable.

(f)Notices of an Asset Sale Offer shall be mailed by first class mail, postage prepaid, at least 30 but not more than 60 days before the purchase date to each Holder of Securities at such Holder’s registered address.  If any Security is to be purchased in part only, any notice of purchase that relates to such Security shall state the portion of the principal amount thereof that has been or is to be purchased.

(g)A new Security in principal amount equal to the unpurchased portion of any Security purchased in part shall be issued in the name of the Holder thereof upon cancellation of the original Security.  On and after the purchase date, unless the Company defaults in payment of the purchase price, interest shall cease to accrue on Securities or portions thereof purchased.

SECTION 4.07.Transactions with Affiliates.

(a)The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $2.5 million, unless:

(i)such Affiliate Transaction is on terms that are not materially less favorable to the Company or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

(ii)with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10 million, the Company delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Company or any direct or indirect parent of the Company, approving

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such Affiliate Transaction and set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (i) above.

(b)The provisions of Section 4.07(a) shall not apply to the following:

(i)(A) transactions between or among the Company and/or any of its Restricted Subsidiaries and (B) any merger of the Company and any direct parent company of the Company; provided that such parent company shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of the Company and such merger is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

(ii)(x) Restricted Payments permitted by Section 4.04 and (y) Permitted Investments;

(iii)the payment of reasonable and customary fees paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any Restricted Subsidiary or any direct or indirect parent company of the Company;

(iv)transactions in which the Company or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (i) of Section 4.07(a);

(v)payments or loans (or cancellation of loans) to employees or consultants in the ordinary course of business which are approved by a majority of the Board of Directors of the Company in good faith;

(vi)any agreement (other than with the Sponsors) as in effect as of the Issue Date or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the Holders of the Securities in any material respect than the original agreement as in effect on the Issue Date) or any transaction contemplated thereby;

(vii)the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any amendment thereto or similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (vii) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or new agreement are not otherwise more disadvantageous to the Holders of the Securities in any material respect than the original agreement as in effect on the Issue Date;

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(viii)(A) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to the Company and its Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of the Company, and are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries entered into in the ordinary course of business;

(ix)any transaction effected as part of a Qualified Receivables Financing;

(x)the issuance of Equity Interests (other than Disqualified Stock) of the Company to any Permitted Holder or any direct or indirect parent company of the Company or to any director, officer, employee or consultant thereof;

(xi)the entering into of any agreement (and any amendment or modification of any such agreement) to pay, and the payment of, annual management, consulting, monitoring and advisory fees to the Sponsor in an aggregate amount in any fiscal year not to exceed the greater of (x) $3 million and (y) 3% of EBITDA, plus all out-of-pocket reasonable expenses incurred by the Sponsor or any of its Affiliates in connection with the performance of management, consulting, monitoring, advisory or other services with respect to the Company and its Restricted Subsidiaries;

(xii)payments by the Company or any of its Restricted Subsidiaries to the Sponsor or Meritage made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are approved by a majority of the Board of Directors of the Company or any direct or indirect parent of the Company in good faith;

(xiii)any contribution to the capital of the Company;

(xiv)transactions permitted by, and complying with, the provisions of Section 5.01;

(xv)transactions between the Company or any of its Restricted Subsidiaries and any Person, a director of which is also a director of the Company or any direct or indirect parent of the Company; provided, however, that such director abstains from voting as a director of the Company or such direct or indirect parent of the Company, as the case may be, on any matter involving such other Person;

(xvi)pledges of Equity Interests of Unrestricted Subsidiaries;

(xvii)any employment agreements entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(xviii)the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option

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and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Company or any direct or indirect parent of the Company or of a Restricted Subsidiary of the Company, as appropriate, in good faith; and

(xix)the entering into of any tax sharing agreement or arrangement and any payments permitted by Section 4.04(b)(xii).

SECTION 4.08.Change of Control.

(a)Upon a Change of Control, each Holder shall have the right to require the Company to repurchase all or any part of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the terms contemplated in this Section 4.08; provided, however, that notwithstanding the occurrence of a Change of Control, the Company shall not be obligated to purchase any Securities pursuant to this Section 4.08 in the event that it has exercised its right to redeem such Securities in accordance with Article 3 of this Indenture.

In the event that at the time of such Change of Control the terms of the Credit Agreement restrict or prohibit the repurchase of Securities pursuant to this Section 4.08, then prior to the mailing of the notice to the Holders provided for in Section 4.08(b) but in any event within 30 days following any Change of Control, the Company shall (i) repay in full the Credit Agreement, or (ii) obtain the requisite consent, if required, under the Credit Agreement to permit the repurchase of the Securities as provided for in Section 4.08(b).

(b)Within 30 days following any Change of Control, except to the extent that the Company has exercised its right to redeem the Securities in accordance with Article 3 of this Indenture, the Company shall mail a notice (a “Change of Control Offer”) to each Holder with a copy to the Trustee stating:

(i)that a Change of Control has occurred and that such Holder has the right to require the Company to purchase all or a portion of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of the Holders of record on a record date to receive interest on the relevant interest payment date);

(ii)the circumstances and relevant facts and financial information regarding such Change of Control;

(iii)the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

(iv)the instructions determined by the Company, consistent with this Section 4.08, that a Holder must follow in order to have its Securities purchased.

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(c)Holders electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Company at the address specified in the notice at least three Business Days prior to the purchase date.  The Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later than two Business Days prior to the purchase date a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Security purchased.  Holders whose Securities are purchased only in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered.

(d)On the purchase date, all Securities purchased by the Company under this Section shall be delivered to the Trustee for cancellation, and the Company shall pay the purchase price plus accrued and unpaid interest to the Holders entitled thereto.

(e)Notwithstanding the foregoing provisions of this Section 4.08, the Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in Section 4.08(b) applicable to a Change of Control Offer made by the Company and purchases all Securities validly tendered and not withdrawn under such Change of Control Offer.

(f)At the time the Company delivers Securities to the Trustee which are to be accepted for purchase, the Company shall also deliver an Officers’ Certificate stating that such Securities are to be accepted by the Company pursuant to and in accordance with the terms of this Section 4.08.  A Security shall be deemed to have been accepted for purchase at the time the Trustee or the Paying Agent, directly or through an agent, mails or delivers payment therefor to the surrendering Holder.

(g)Prior to any Change of Control Offer, the Company shall deliver to the Trustee an Officers’ Certificate stating that all conditions precedent contained herein to the right of the Company to make such offer have been complied with.

(h)The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Section 4.08.  To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.08 by virtue thereof.

(i)A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making the Change of Control Offer.

SECTION 4.09.Compliance Certificate.  The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers’ Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default and whether or not the signers

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know of any Default that occurred during such period.  If they do, the certificate shall describe the Default, its status and what action the Company is taking or proposes to take with respect thereto.  From the date on which this Indenture is qualified under the TIA, the Company also shall comply with Section 314(a)(4) of the TIA.

SECTION 4.10.Further Assurances, Instruments and Acts.

(a)Upon request of the Trustee, the Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

(b)The Company shall, and shall cause each of its existing and future Restricted Subsidiaries to, execute and deliver such additional instruments, certificates or documents, and take all such actions as may be reasonably required from time to time in order to:

(1)carry out more effectively the purposes of the Security Documents;

(2)create, grant, perfect and maintain the validity, effectiveness and priority of any of the Security Documents and the Liens created, or intended to be created, by the Security Documents; and

(3)ensure the protection and enforcement of any of the rights granted or intended to be granted to the Trustee under any other instrument executed in connection therewith.

SECTION 4.11.Future Guarantors.  The Company shall cause each Restricted Subsidiary that is a wholly owned Domestic Subsidiary (unless such Subsidiary is a Receivables Subsidiary or is already a Guarantor) that:

(a)guarantees any Indebtedness of the Company or any of its Restricted Subsidiaries; or

(b)Incurs any Indebtedness or issues any shares of Disqualified Stock,

in each case, other than any Permitted Debt referred to in Section 4.03(b), to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary shall guarantee payment of the Securities and to comply with the provisions of Section 4.10(b) to the extent any such compliance is required by the terms of the Security Documents.

SECTION 4.12.Liens.

(a)The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, Incur or suffer to exist any Lien (other than Permitted Liens) on any asset or property of the Company or such Restricted Subsidiary, or any income or profits therefrom, or assign or convey any right to receive income therefrom, that secures any Obligations of the Company or such Restricted Subsidiary, other than Liens securing Indebtedness that are junior in priority to the Liens on such property or assets securing the Securities, without effectively

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providing that the Securities or the applicable Guarantee, as the case may be, shall be equally and ratably secured with (or on a senior basis to, in the case such Lien secures any Subordinated Indebtedness) the Obligations secured by such Lien.

(b)Section 4.12(a) shall not require the Company or any Restricted Subsidiary of the Company to secure the Securities if the relevant Lien consists of a Permitted Lien. Any Lien which is granted to secure the Securities or such Guarantee under Section 4.12(a) shall be automatically released and discharged at the same time as the release of the Lien that gave rise to the obligation to secure the Securities or such Guarantee under Section 4.12(a)

SECTION 4.13.Maintenance of Office or Agency.

(a)The Company shall maintain in the United States, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Securities may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served.  The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the corporate trust office of the Trustee as set forth in Section 13.02.

(b)The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations.  The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

(c)The Company hereby designates the corporate trust office of the Trustee or its agent, as such office or agency of the Company in accordance with Section 2.04.

SECTION 4.14.Discharge and Suspension of Covenants.

(a)If on any date following the Issue Date (i) the Securities have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing under this Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “Covenant Suspension Event”), Section 4.03, Section 4.04, Section 4.05, Section 4.07, and clause (iv) of Section 5.01(a) (collectively, the “Suspended Covenants”) shall no longer be applicable to such Securities.

(b)In the event that the Company and the Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time pursuant to Section 4.14(a) (any such period, a “Suspension Period”), and on any subsequent date (the “Reversion Date”) one or both of the Rating Agencies (1) withdraw their Investment Grade Rating or downgrade the rating assigned to the Securities below an Investment Grade Rating and/or (2) the Company or any of its Affiliates enters into an agreement to effect a transaction and one or more of the Rating Agencies indicate that if consummated, such transaction (alone or together with

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any related recapitalization or refinancing transactions) would cause such Rating Agency to withdraw its Investment Grade Rating or downgrade the ratings assigned to the Securities below an Investment Grade Rating, then the Company and the Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events, including, without limitation, a proposed transaction described in clause (2) above.

(c)Upon the occurrence of a Covenant Suspension Event, the amount of Excess Proceeds from Net Cash Proceeds shall be reset at zero.

(d)In the event of any reinstatement of the Suspended Covenants pursuant to Section 4.14(b), no action taken or omitted to be taken by the Company or any of its Restricted Subsidiaries prior to such reinstatement will give rise to a Default or Event of Default under this Indenture with respect to any Securities; provided that (1) with respect to Restricted Payments made after any such reinstatement, the amount of Restricted Payments made shall be calculated as though Section 4.04 had been in effect prior to, but not during the Suspension Period, provided that any Subsidiaries designated as Unrestricted Subsidiaries during the Suspension Period shall automatically become Restricted Subsidiaries on the Reversion Date (subject to the Company’s right to subsequently designate them as Unrestricted Subsidiaries in compliance with Section 4.04 and the definition of “Unrestricted Subsidiary” hereunder) and (2) all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period shall be classified to have been Incurred or issued pursuant to clause (iii) of Section 4.03(b).

(e)The Company shall deliver promptly to the Trustee an Officers’ Certificate notifying it of any Covenant Suspension Event or facts or events that would require the reinstatement of Suspended Covenants under this Section 4.14.

SECTION 4.15.Event of Loss.

(a)In the event of an Event of Loss, the Company or the affected Restricted Subsidiary of the Company, as the case may be, may apply the Net Loss Proceeds from such Event of Loss to the rebuilding, repair, replacement or construction of improvements to the property affected by such Event of Loss (the “Subject Property”), with no concurrent obligation to offer to purchase any of the Securities; provided,however, that the Company delivers to the Trustee within 90 days of such Event of Loss:

(i)a written opinion from a reputable contractor that the Subject Property can be rebuilt, repaired, replaced or constructed in, and operated in, substantially the same condition as it existed prior to the Event of Loss within 365 days of the Event of Loss; and

(ii)an Officers’ Certificate certifying that the Company has available from Net Loss Proceeds or other sources sufficient funds to complete the rebuilding, repair, replacement of construction described in clause (i) above.

(b)Any Net Loss Proceeds that are not applied or reinvested or not permitted to be applied or reinvested as provided in Section 4.15(a) shall be deemed “Excess Loss Proceeds.” When the aggregate amount of Excess Loss Proceeds exceeds $15 million, the Company

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shall make an offer (an “Event of Loss Offer”) to all Holders and to the holders of any other Permitted Additional Pari Passu Obligations containing provisions similar to those set forth in this Indenture with respect to events of loss to purchase or repurchase the Securities and such other Permitted Additional Pari Passu Obligations with the proceeds from the Event of Loss in an amount equal to the maximum principal amount of Securities and such other Permitted Additional Pari Passu Obligations that may be purchased out of the Excess Loss Proceeds. The offer price in any Event of Loss Offer shall be equal to 100% of the principal amount plus accrued and unpaid interest if any, to the date of purchase, and shall be payable in cash. If any Excess Loss Proceeds remain after consummation of an Event of Loss Offer, the Company may use such Excess Loss Proceeds for any purpose not otherwise prohibited by this Indenture and the Security Documents and such remaining amount shall not be added to any subsequent Excess Loss Proceeds for any purpose under this Indenture; provided that any remaining Excess Loss Proceeds shall remain subject to the Lien of the Security Documents. If the aggregate principal amount of Securities and other Permitted Additional Pari Passu Obligations tendered pursuant to an Event of Loss Offer exceeds the Excess Loss Proceeds, the Trustee shall select the Securities and such other Permitted Additional Pari Passu Obligations to be purchased, by lot or by such other method as the Trustee shall deem to be fair and appropriate (and in such manner as complies with applicable legal requirements); provided, that the Trustee shall not select Securities or such other Permitted Additional Pari Passu Obligations for purchase which would result in a Holder with a principal amount of Securities or such other Permitted Additional Pari Passu Obligations less than the applicable minimum denomination to the extent practicable.

(c)The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Securities pursuant to an Event of Loss Offer. To the extent that the provisions of any securities laws or regulations conflict with the Event of Loss provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

SECTION 4.16.Insurance.

(a)The Company will at all times keep all of its and its Subsidiaries’ properties which are of an insurable nature insured with insurers, believed by the Company to be responsible (including, to the extent consistent with past practice, self-insurance), against loss or damage to the extent that property of similar character is usually so insured by corporations similarly situated and owning like properties.

(b)The Company and Guarantors

(i)will cause any property and casualty insurance policies with respect to the Mortgaged Property to be endorsed or otherwise amended to include a “standard” or “New York” lender’s loss payable endorsement and cause all property policies and casualty insurance policies to be in a standard form and substance, naming the Trustee as loss payee; cause all such policies to provide that neither the Company, the Trustee nor any other party shall be a coinsurer thereunder and to contain a “Replacement Cost Endorsement,” or in the case of a policy insuring equipment, to contain an “Actual Cost Endorsement,”

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or similar endorsement without any deduction for depreciation, and such other provisions as may be customary with companies in the same or similar businesses to protect their interests; deliver original or certified copies of all such policies or a certificate of an insurance broker to the Trustee; cause each such policy to provide that it shall not be canceled or not renewed upon less than 30 days’ prior written notice thereof by the insurer to the Trustee; deliver to the Trustee, prior to the cancellation or nonrenewal of any such policy of insurance, a copy of a renewal or replacement policy (or other evidence of renewal of a policy previously delivered to the Trustee), or insurance certificate with respect thereto, together with evidence of payment of the premium therefor;

(ii)obtain flood insurance in such amounts as necessary to ensure compliance with applicable law, and without limiting the generality of the foregoing, if at any time the area in which the Premises (as defined in the Mortgages) are located is designated as an area having “special flood hazards” and in which flood insurance has been made available under the National Flood Insurance Act of 1968, obtain flood insurance in such amounts as necessary to ensure compliance with the National Flood Insurance Reform Act of 1994, as it may be amended from time to time;

(iii)with respect to all Mortgaged Property, carry and maintain comprehensive liability insurance and coverage on a claims made basis against claims made for personal injury (including bodily injury, death and property damage) and umbrella liability insurance against any and all claims, in each case in amounts and against such risks as are customarily maintained by companies engaged in the same or similar industry operating in the same or similar locations naming the Trustee as an additional insured; and

(iv)notify the Trustee promptly whenever any separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 4.16 is taken out by Company or any of the Guarantors; and promptly deliver to the Trustee a duplicate original copy of such policy or policies, or an insurance certificate with respect thereto.

(c)In connection with the covenants set forth in this Section 4.16, it is understood and agreed that:

(i)none of the Trustee nor its respective agents or employees shall be liable for any loss or damage insured by the insurance policies required to be maintained under this Section 4.16, it being understood that (A) the Company and Guarantors shall look solely to their insurance companies or any other parties other than the aforesaid parties for the recovery of such loss or damage and (B) such insurance companies shall have no rights of subrogation against the Trustee, or its agents or employees.  If, however, the insurance policies do not provide waiver of subrogation rights against such parties, as required above, then each of Company, and the Guarantors hereby agree, to the extent permitted by law, to waive, its right of recovery, if any, against the Trustee and the Holder and its agents and employees; and

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(ii)the acceptance of any form, type or amount of insurance coverage by the Trustee under this Section 4.16 shall in no event be deemed a representation, warranty or advice by the Trustee that such insurance is adequate for the purposes of the business of Company and the Guarantors or the protection of their properties.

SECTION 4.17.Maintenance of Properties.  Subject to, and in compliance with, the provisions of Article 11 and the provisions of the applicable Security Documents, the Company shall cause all material properties used or useful in the conduct of its business or the business of any of the Subsidiary Guarantors to be maintained and kept in good operating condition, repair and working order (ordinary wear and tear and casualty loss excepted) and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereto; provided, that the Company shall not be obligated to make such repairs, renewals, replacements, betterments and improvements if the failure to do so would not result in a material adverse effect on the ability of the Company and the Subsidiary Guarantors to satisfy their obligations under the Securities, the Guarantees, this Indenture and the Security Documents.

ARTICLE 5

SUCCESSOR COMPANY

SECTION 5.01.When Company May Merge or Transfer Assets.

(a)The Company shall not consolidate or merge with or into or wind up into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(i)the Company is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Company or such Person, as the case may be, being herein called the “Successor Company”);

(ii)the Successor Company (if other than the Company) expressly assumes all the obligations of the Company under this Indenture and the Securities pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(iii)immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction) no Default or Event of Default shall have occurred and be continuing;

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(iv)immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period, either

(A)the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to Section 4.03(a); or

(B)the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would be greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such transaction;

(v)if the Successor Company is other than the Company, each Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under this Indenture and the Securities;

(vi)the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures (if any) comply with this Indenture;

(vii)the Successor Company causes such amendments, supplements or other instruments to be executed, delivered, filed and recorded, as applicable, in such jurisdictions as may be required by applicable law to preserve and protect the Lien of the Security Documents on the Collateral owned by or transferred to the Successor Company;

(viii)the Collateral owned by or transferred to the Successor Company shall (x) continue to constitute Collateral under this Indenture and the Security Documents, (y) be subject to the Lien in favor of the Collateral Agent for the benefit of the Trustee and the Holders of the Securities, and (z) not be subject to any Lien other than Permitted Liens; and

(ix)the property and assets of the Person which is merged or consolidated with or into the Successor Company, to the extent that they are property or assets of the types which would constitute Collateral under the Security Documents, shall be treated as after-acquired property and the Successor Company shall take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required in this Indenture.

The Successor Company (if other than the Company) shall succeed to, and be substituted for, the Company under this Indenture and the Securities, and the Company shall automatically be released and discharged from its obligations under this Indenture and the Securities.  Notwithstanding the foregoing clauses (iii) and (iv) of this Section 5.01, (a) the Company or any Restricted Subsidiary may consolidate with, merge into or sell, assign, transfer, lease, convey or otherwise dispose of all or part of its properties and assets to the Company or to another Restricted Subsidiary, and (b) the Company may merge or consolidate with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing the Company in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased

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thereby (any transaction described in this sentence, a “Specified Merger/Transfer Transaction”).

(b)Subject to the provisions of Section 10.02(b) (which govern the release of a Guarantee upon the sale or disposition of a Restricted Subsidiary of the Company that is a Guarantor), each Guarantor shall not, and the Company shall not permit any Guarantor to, consolidate or merge with or into or wind up into (whether or not such Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(i)either (x) such Guarantor is the surviving Person or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the “Successor Guarantor”) and the Successor Guarantor (if other than such Guarantor) expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantor’s Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee or (y) such sale or disposition or consolidation or merger is not in violation of Section 4.06;

(ii)immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any of its Subsidiaries as a result of such transaction as having been Incurred by the Successor Guarantor or such Subsidiary at the time of such transaction) no Default or Event of Default shall have occurred and be continuing;

(iii)the Successor Guarantor (if other than such Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture;

(iv)the Successor Guarantor causes such amendments, supplements or other instruments to be executed, delivered, filed and recorded, as applicable, in such jurisdictions as may be required by applicable law to preserve and protect the Lien of the Security Documents on the Collateral owned by or transferred to the Successor Guarantor;

(v)the Collateral owned by or transferred to the Successor Guarantor shall (a) continue to constitute Collateral under this Indenture and the Security Documents, (b) be subject to the Lien in favor of the Collateral Agent for the benefit of the Trustee and the Holders of the Securities, and (c) not be subject to any Lien other than Permitted Liens; and

(vi)the property and assets of the Person which is merged or consolidated with or into the Successor Guarantor, to the extent that they are property or assets of the types which would constitute Collateral under the Security Documents, shall be treated as after-

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acquired property and the Successor Guarantor shall take such action as may be reasonably necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required in this Indenture.

The Successor Guarantor shall succeed to, and be substituted for, such Guarantor under this Indenture and such Guarantor’s Guarantee, and such Guarantor will automatically be released and discharged from its obligations under this Indenture and such Guarantor’s Guarantee.  Notwithstanding the foregoing, (1) a Guarantor may merge or consolidate with an Affiliate incorporated or organized solely for the purpose of reincorporating or reorganizing such Guarantor in another state of the United States, the District of Columbia or any territory of the United States, so long as the amount of Indebtedness of the Guarantor is not increased thereby, (2) a Guarantor may merge or consolidate with another Guarantor or the Company, and (3) a Guarantor may convert into a corporation, partnership, limited partnership, limited liability corporation or trust organized or existing under the laws of the jurisdiction of organization of such Guarantor.

ARTICLE 6

DEFAULTS AND REMEDIES

SECTION 6.01.Events of Default.  An “Event of Default” occurs if:

(a)the Company defaults in any payment of interest on any Security when the same becomes due and payable, and such default continues for a period of 30 days,

(b)the Company defaults in the payment of principal or premium, if any, of any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,

(c)the Company fails to comply with its obligations under Section 5.01,

(d)the Company or any of its Restricted Subsidiaries fails to comply with any of its obligations under the covenants set forth in Sections 4.08 (other than a failure to purchase Securities when required under Section 4.08) and such failure continues for 30 days after receipt of a related Notice of Default as specified below,

(e)the Company or any of its Restricted Subsidiaries fails to comply with any of its agreements in the Securities or this Indenture (other than those referred to in (a), (b), (c), or (d) above) and such failure continues for 60 days after receipt of a related Notice of Default as specified below,

(f)the Company or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Company or a Restricted Subsidiary of the Company) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $20 million or its foreign currency equivalent,

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(g)the Company or any Significant Subsidiary of the Company pursuant to or within the meaning of any Bankruptcy Law:

(i)commences a voluntary case;

(ii)consents to the entry of an order for relief against it in an involuntary case;

(iii)consents to the appointment of a Custodian of it or for any substantial part of its property; or

(iv)makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency,

(h)a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i)is for relief against the Company or any Significant Subsidiary of the Company in an involuntary case;

(ii)appoints a Custodian of the Company or any Significant Subsidiary of the Company or for any substantial part of its property; or

(iii)orders the winding up or liquidation of the Company or any Significant Subsidiary of the Company;

or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 90 days,

(i)the Company or any Significant Subsidiary fails to pay final and non-appealable judgments aggregating in excess of $20 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof,

(j)the Guarantee of a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof) or any Guarantor that qualifies as a Significant Subsidiary denies or disaffirms its obligations under this Indenture or any Guarantee and such Default continues for 10 days after receipt of a related Notice of Default as specified below, or

(k)unless all of the Collateral has been released from the Note Liens in accordance with the provisions of the Security Documents, the Company or any Subsidiary defaults in the performance of the Security Documents which adversely affects in any material respect the enforceability, validity, perfection or priority of the Note Liens on a material portion of the Collateral, the repudiation or disaffirmation by the Company or any Subsidiary of its material obligations under the Security Documents or the determination

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in a judicial proceeding that the Security Documents are unenforceable or invalid against the Company or any Subsidiary party thereto for any reason with respect to a material portion of the Collateral, which default, repudiation, disaffirmation or determination is not rescinded, stayed, or waived by the Persons having such authority pursuant to the Security Documents or otherwise cured within 60 days after receipt of a related Notice of Default as specified below.

The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

The term “Bankruptcy Law” means Title 11, United States Code, or any similar Federal or state law for the relief of debtors.  The term “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

A Default under clause (c), (d), (e) or (k) above shall not constitute an Event of Default until the Trustee notifies the Company in writing or the Holders of at least 25% in principal amount of the outstanding Securities notify the Company and the Trustee in writing of the Default and the Company does not cure such Default within the time specified in clauses (c), (d), (e) or (k) above after receipt of such notice.  Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”  The Company shall deliver to the Trustee, within thirty (30) days after the occurrence thereof, written notice of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Company is taking or proposes to take with respect thereto.

SECTION 6.02.Acceleration.  If an Event of Default (other than an Event of Default specified in Section 6.01(g) or (h) with respect to the Company) occurs and is continuing, the Trustee by written notice to the Company or the Holders of at least 25% in principal amount of outstanding Securities by written notice to the Company and the Trustee, may declare the principal of, premium, if any, and accrued but unpaid interest on all the Securities to be due and payable.  Upon such a declaration, such principal and interest shall be due and payable immediately.  If an Event of Default specified in Section 6.01(g) or (h) with respect to the Company occurs, the principal of, premium, if any, and interest on all the Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.  The Holders of a majority in principal amount of the Securities by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration.  No such rescission shall affect any subsequent Default or impair any right consequent thereto.

In the event of any Event of Default specified in Section 6.01(f), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders of the Securities, if within 20 days after such Event of Default arose the Company delivers an Officers’ Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the

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basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Securities as described above be annulled, waived or rescinded upon the happening of any such events.

SECTION 6.03.Other Remedies.  If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities, this Indenture or the Security Documents.

The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative to the extent permitted by law.

SECTION 6.04.Waiver of Past Defaults.  Provided the Securities are not then due and payable by reason of a declaration of acceleration, the Holders of a majority in principal amount of the Securities by notice to the Trustee may waive an existing Default or Event of Default and its consequences except (a) a Default or Event of Default in the payment of the principal of or interest on a Security or (b) a Default or Event of Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected.  When a Default is waived, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.

SECTION 6.05.Control by Majority.  Subject to the terms of the Security Documents, the Holders of a majority in principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.  Prior to taking any action under this Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

SECTION 6.06.Limitation on Suits.

(a)Except to enforce the right to receive payment of principal, premium, if any, or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Securities unless:

(i)the Holder gives to the Trustee written notice stating that an Event of Default is continuing;

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(ii)the Holders of at least 25% in principal amount of the Securities then outstanding make a written request to the Trustee to pursue the remedy;

(iii)such Holder or Holders offer to the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;

(iv)the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and

(v)the Holders of a majority in principal amount of the Securities do not give the Trustee a direction inconsistent with the request during such 60-day period.

(b)A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

SECTION 6.07.Rights of the Holders to Receive Payment.  Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Securities held by such Holder, on or after the respective due dates expressed or provided for in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

SECTION 6.08.Collection Suit by Trustee.  If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company or any other obligor on the Securities for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Securities) and the amounts provided for in Section 7.07.

SECTION 6.09.Trustee May File Proofs of Claim.  The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems reasonably necessary, advisable or appropriate)) and the Holders allowed in any judicial proceedings relative to the Company or any Guarantor, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07.

SECTION 6.10.Priorities.  Subject to the terms of the Security Documents, if the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order:

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FIRST:  to the Trustee for amounts due under Section 7.07;

SECOND:  to Holders for amounts due and unpaid on the Securities for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and

THIRD:  to the Company or, to the extent the Trustee collects any amount for any Subsidiary Guarantor, to such Subsidiary Guarantor.

The Trustee, upon prior written notice to the Company and the Subsidiary Guarantors, may fix a record date and payment date for any payment to the Holders pursuant to this Section 6.10.  At least 15 days before such record date, the Trustee shall send to each Holder and the Company a notice that states the record date, the payment date and amount to be paid.

SECTION 6.11.Undertaking for Costs.  In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Securities then outstanding.

SECTION 6.12.Waiver of Stay or Extension Laws.  Neither the Company nor any Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and each Guarantor (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

ARTICLE 7

TRUSTEE

SECTION 7.01.Duties of Trustee.

(a)If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

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(b)Except during the continuance of an Event of Default:

(i)the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii)in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.  However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

(c)The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i)this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

(ii)the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;

(iii)the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05; and

(iv)no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.

(d)Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e)The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

(f)Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g)Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and, from the date on which this Indenture is qualified under the TIA, to the provisions of the TIA.

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SECTION 7.02.Rights of Trustee.

(a)The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person.  The Trustee need not investigate any fact or matter stated in the document.

(b)Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.

(c)The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

(d)The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers; provided, however, that the Trustee’s conduct does not constitute willful misconduct or negligence.

(e)The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f)The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Securities at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney, at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation.

(g)The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

(h)The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(i)In the event the Company is required to pay Additional Interest, the Company will provide written notice to the Trustee of the Company’s obligation to pay Additional Interest no later than 15 days prior to the next interest payment date, which notice shall set forth

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the amount of the Additional Interest to be paid by the Company.  The Trustee shall not at any time be under any duty or responsibility to any Holders to determine whether the Additional Interest is payable and the amount thereof.

SECTION 7.03.Individual Rights of Trustee.  The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.  Any Paying Agent or Registrar may do the same with like rights.  However, the Trustee must comply with Sections 7.10 and 7.11.

SECTION 7.04.Trustee’s Disclaimer.  The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, any Guarantee or the Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company or any Guarantor in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.  The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (i), (j) or (k) or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received notice thereof in accordance with Section 13.02 from the Company, any Guarantor or any Holder.

SECTION 7.05.Notice of Defaults.  If a Default occurs and is continuing and if it is actually known to a Trust Officer, the Trustee shall send to each Holder notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee.  Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders.

SECTION 7.06.Reports by Trustee to the Holders.  From the date on which this Indenture is qualified under the TIA, as promptly as practicable after each June 30 beginning with the June 30 following the date of this Indenture, and in any event within 12 months of the last such report, the Trustee shall send to each Holder a brief report dated as of such June 30 that complies with Section 313(a) of the TIA if and to the extent required thereby.  From the date on which this Indenture is qualified under the TIA, the Trustee shall also comply with Section 313(b)(2) of the TIA.

A copy of each report at the time of its delivery to the Holders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed.  The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof.

SECTION 7.07.Compensation and Indemnity.  The Company shall pay to the Trustee from time to time reasonable compensation for its services (it being understood all amounts set forth in the fee letter dated June 5, 2009 between the Company and the Trustee shall be deemed reasonable).  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee upon request for

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all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts.  The Company and each Guarantor, jointly and severally shall indemnify the Trustee against any and all loss, liability, claim, damage or expense (including reasonable attorneys’ fees and expenses) incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or Guarantee against the Company or a Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by the Company, any Guarantor, any Holder or any other Person).  The Trustee shall notify the Company of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Company shall not relieve the Company or any Guarantor of its indemnity obligations hereunder.  The Company shall defend the claim and the indemnified party shall provide reasonable cooperation at the Company’s expense in the defense.  Such indemnified parties may have separate counsel and the Company and the Guarantors, as applicable shall pay the fees and expenses of such counsel; provided, however, that the Company shall not be required to pay such fees and expenses if it assumes such indemnified parties’ defense and, in such indemnified parties’ reasonable judgment, there is no conflict of interest between the Company and the Guarantors, as applicable, and such parties in connection with such defense.  The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such party’s own willful misconduct, negligence or bad faith.

To secure the Company’s and the Guarantors’ payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Securities.

The Company’s and the Guarantors’ payment obligations pursuant to this Section 7.07 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee.  Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(g) or (h) with respect to the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.

SECTION 7.08.Replacement of Trustee.

(a)The Trustee may resign at any time by so notifying the Company.  The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee.  The Company may remove the Trustee if:

(i)the Trustee fails to comply with Section 7.10;

(ii)the Trustee is adjudged bankrupt or insolvent;

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(iii)a receiver or other public officer takes charge of the Trustee or its property; or

(iv)the Trustee otherwise becomes incapable of acting.

If the Trustee has or shall acquire a conflicting interest within the meaning of the TIA, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the TIA and this Indenture.

(b)If the Trustee resigns, is removed by the Company or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.

(c)A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of its succession to the Holders.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07.

(d)If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Securities may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee.

(e)If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in Section 310(b) of the TIA, any Holder who has been a bona fide holder of a Security for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(f)Notwithstanding the replacement of the Trustee pursuant to this Section, the Company’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

SECTION 7.09.Successor Trustee by Merger.  If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder

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or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.

SECTION 7.10.Eligibility; Disqualification.  The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA.  The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition.  The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the TIA any series of securities issued under this Indenture and any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met.

SECTION 7.11.Preferential Collection of Claims Against Company.  The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA.  A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.

ARTICLE 8

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01.Discharge of Liability on Securities; Defeasance.  This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights of registration or transfer or exchange of Securities, as expressly provided for in this Indenture) as to all outstanding Securities:

(a)when (i) all the Securities theretofore authenticated and delivered (other than Securities pursuant to Section 2.08 which have been replaced or paid and Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation or (ii) all of the Securities (a) have become due and payable, (b) will become due and payable at their stated maturity within one year or (c) if redeemable at the option of the Company, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the Trustee funds in cash in U.S. Dollars, U.S. Government Obligations or a combination thereof in an amount sufficient in the written opinion of a firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited) to pay and discharge the entire Indebtedness on the Securities not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Securities to the date of deposit together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

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(b)the Company and/or the Guarantors have paid all other sums payable under this Indenture; and

(c)the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.

Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate (i) all of its obligations under the Securities and this Indenture (with respect to such Securities) (“legal defeasance option”) or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.10, 4.11, 4.12, 4.15, 4.16 and 4.17 and the operation of Section 5.01 and Sections 6.01(c), 6.01(d), 6.01(e) (with respect to any Default under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.10, 4.11, 4.12, 4.15, 4.16 and 4.17), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries of the Company only), 6.01(h) (with respect to Significant Subsidiaries of the Company only), 6.01(i), 6.01(j) and 6.01(k) (“covenant defeasance option”).  The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.  In the event that the Company terminates all of its obligations under the Securities and this Indenture (with respect to such Securities) by exercising its legal defeasance option or its covenant defeasance option, the obligations of each Guarantor under its Guarantee of such Securities shall be terminated simultaneously with the termination of such obligations.

If the Company exercises its legal defeasance option, payment of the Securities so defeased may not be accelerated because of an Event of Default.  If the Company exercises its covenant defeasance option, payment of the Securities so defeased may not be accelerated because of an Event of Default specified in Section 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries of the Company only), 6.01(h) (with respect to Significant Subsidiaries of the Company only), 6.01(i) (with respect to Significant Subsidiaries of the Company only), 6.01(j) or 6.01(k) or because of the failure of the Company to comply with Section 5.01.

Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates.

(d)Notwithstanding clauses (a) and (b) above, the Company’s obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08, 11.07(e), 11.12 and in this Article 8 shall survive until the Securities have been paid in full.  Thereafter, the Company’s obligations in Sections 7.07, 8.05, 8.06 and 11.12 shall survive such satisfaction and discharge.

SECTION 8.02.Conditions to Defeasance.

(a)The Company may exercise its legal defeasance option or its covenant defeasance option only if:

(i)the Company irrevocably deposits in trust with the Trustee cash in U.S. Dollars, U.S. Government Obligations or a combination thereof in an amount sufficient or U.S. Government Obligations, the principal of and the interest on which will be sufficient,

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or a combination thereof sufficient, to pay the principal of, and premium (if any) and interest on the applicable Securities when due at maturity or redemption, as the case may be, including interest thereon to maturity or such redemption date;

(ii)the Company delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal, premium, if any, and interest when due on all the Securities to maturity or redemption, as the case may be;

(iii)91 days pass after the deposit is made and during the 91-day period no Default specified in Section 6.01(g) or (h) with respect to the Company occurs which is continuing at the end of the period;

(iv)the deposit does not constitute a default under any other agreement binding on the Company;

(v)the Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940;

(vi)in the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred;

(vii)in the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and

(viii)the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Securities to be so defeased and discharged as contemplated by this Article 8 have been complied with.

Notwithstanding the foregoing, the Opinion of Counsel required by the clause (vi) above need not be delivered if all Securities not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one

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year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

(b)Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of such Securities at a future date in accordance with Article 3.

SECTION 8.03.Application of Trust Money.  The Trustee shall hold in trust money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article 8.  It shall apply the deposited money and the money from U.S. Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities so discharged or defeased.

SECTION 8.04.Repayment to Company.  Each of the Trustee and each Paying Agent shall promptly turn over to the Company upon request any money or U.S. Government Obligations held by it as provided in this Article 8 which, in the written opinion of a nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article 8.

Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies.

SECTION 8.05.Indemnity for U.S. Government Obligations.  The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

SECTION 8.06.Reinstatement.  If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under this Indenture and the Securities so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or any Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided, however, that, if the Company has made any payment of principal of or interest on, any such Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or any Paying Agent.

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ARTICLE 9

AMENDMENTS AND WAIVERS

SECTION 9.01.Without Consent of the Holders.  The Company and the Trustee may amend this Indenture, the Securities or the Security Documents without notice to or consent of any Holder:

(i)to cure any ambiguity, omission, defect or inconsistency;

(ii)to comply with Article 5;

(iii)to provide for uncertificated Securities in addition to or in place of certificated Securities; provided, however, that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code;

(iv)to add additional Guarantees with respect to the Securities or to secure the Securities;

(v)to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company;

(vi)to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of, this Indenture under the TIA;

(vii)to effect any provision of this Indenture or the Security Documents (including to release any Guarantee in accordance with the terms of this Indenture);

(viii)to make any change that does not adversely affect the rights of any Holder;

(ix)to provide for the issuance of the Exchange Securities or Additional Securities, which shall have terms substantially identical in all material respects to the Initial Securities, and which shall be treated, together with any outstanding Initial Securities, as a single issue of securities;

(x)to provide for the release of Collateral from the Liens of this Indenture and the Security Documents when permitted or required by the Security Documents, the Intercreditor Agreement or this Indenture; or

(xi)to secure any Permitted Additional Pari Passu Obligations under the Security Documents and to appropriately include the same in the Intercreditor Agreement.

Upon the request of the Company and the Guarantors accompanied by a resolution of the Board of Directors of each of the Company and the Guarantors authorizing the execution of any supplemental indenture entered into to effect any such amendment, supplement or waiver, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee

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shall join with the Company and the Guarantors in the execution of such supplemental indenture.  After an amendment under this Section 9.01 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment.  The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01.

SECTION 9.02.With Consent of the Holders.

(a)The Company and the Trustee may amend this Indenture or the Securities with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Securities).  However, without the consent of each Holder of an outstanding Security affected, an amendment may not:

(i)reduce the amount of Securities whose Holders must consent to an amendment;

(ii)reduce the rate of or extend the time for payment of interest on any Security;

(iii)reduce the principal of or change the Stated Maturity of any Security;

(iv)reduce the premium payable upon the redemption of any Security or change the time at which any Security may be redeemed in accordance with Article 3;

(v)make any Security payable in money other than that stated in such Security;

(vi)impair the right of any Holder to receive payment of, principal of, premium, if any, and interest on such Holder’s Securities on or after the date due or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities;

(vii)make any change in Section 6.04 or 6.07 or the second sentence of this Section 9.02(a);

(viii)expressly subordinate the Securities or any Guarantee or otherwise modify the ranking thereof to any other Indebtedness of the Company or any Guarantor;

(ix)modify the Guarantees in any manner adverse to the Holders; or

(x)make any change in the provisions in the Intercreditor Agreement or this Indenture dealing with the application of proceeds of Collateral that would adversely affect the Holder of the Securities.

It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.

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(b)Notwithstanding the requirements of Section 9.02(a), any amendment to, or waiver of, the provisions of this Indenture, any Security Document or any other indenture governing Permitted Additional Pari Passu Obligations that has the effect of releasing all or substantially all of the Collateral from the Liens securing the Securities or otherwise modifies the Intercreditor Agreement or other Security Documents in any manner adverse in any material respect to the Holders of the Securities will require the consent of the Holders of at least 662/3% in aggregate principal amount of the Securities and any Permitted Additional Pari Passu Obligations then outstanding.

(c)After an amendment under this Section 9.02 becomes effective, the Company shall mail to the Holders a notice briefly describing such amendment.  The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.

SECTION 9.03.Compliance with Trust Indenture Act.  From the date on which this Indenture is qualified under the TIA, every amendment, waiver or supplement to this Indenture or the Securities shall comply with the TIA as then in effect.

SECTION 9.04.Revocation and Effect of Consents and Waivers.

(a)A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security.  However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers’ Certificate from the Company certifying that the requisite principal amount of Securities have consented.  After an amendment or waiver becomes effective, it shall bind every Holder.  An amendment or waiver becomes effective upon the (i) receipt by the Company or the Trustee of consents by the Holders of the requisite principal amount of securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Company and the Trustee.

(b)The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture.  If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date.  No such consent shall be valid or effective for more than 120 days after such record date.

SECTION 9.05.Notation on or Exchange of Securities.  If an amendment, supplement or waiver changes the terms of a Security, the Company may require the Holder of the Security to deliver it to the Trustee.  The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder.  Alternatively, if the Company

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or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms.  Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment, supplement or waiver.

SECTION 9.06.Trustee to Sign Amendments.  The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may but need not sign it.  In signing such amendment, the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and the Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).

SECTION 9.07.Payment for Consent.  Neither the Company nor any Affiliate of the Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

SECTION 9.08.Additional Voting Terms; Calculation of Principal Amount.  Except as provided in the proviso to the first sentence of Section 9.02(a), all Securities issued under this Indenture shall vote and consent together on all matters (as to which any of such Securities may vote) as one class and no series of Securities will have the right to vote or consent as a separate class on any matter.  Determinations as to whether Holders of the requisite aggregate principal amount of Securities have concurred in any direction, waiver or consent shall be made in accordance with this Article 9 and Section 2.14.

ARTICLE 10

GUARANTEES

SECTION 10.01.Guarantees.

(a)Each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns (i) the full and punctual payment when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of the Company under this Indenture (including obligations to the Trustee) and the Securities, whether for payment of principal of, premium, if any, or interest on in respect of the Securities and all other monetary obligations of the Company under this Indenture and the Securities and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Company whether for fees, expenses, indemnification or otherwise under this Indenture and the Securities (all the foregoing

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being hereinafter collectively called the “Guaranteed Obligations”).  Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Guarantor, and that each such Guarantor shall remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation.

(b)Each Guarantor waives presentation to, demand of payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment.  Each Guarantor waives notice of any default under the Securities or the Guaranteed Obligations.  The obligations of each Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Securities or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Securities or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities or any other agreement; (iv) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any Guarantor; (v) the failure of any Holder or Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of such Guarantor, except as provided in Section 10.02(b).

(c)Each Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Guarantors, such that such Guarantor’s obligations would be less than the full amount claimed.  Each Guarantor hereby waives any right to which it may be entitled to have the assets of the Company first be used and depleted as payment of the Company’s or such Guarantor’s obligations hereunder prior to any amounts being claimed from or paid by such Guarantor hereunder.  Each Guarantor hereby waives any right to which it may be entitled to require that the Company be sued prior to an action being initiated against such Guarantor.

(d)Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.

(e)Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Securities or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or

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might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity.

(f)Except as set forth in Sections 8.01 and 10.02, each Guarantor agrees that its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations.  Except as set forth in Sections 8.01 and 10.02, each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise.

(g)In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Company to the Holders and the Trustee in respect of the Guaranteed Obligations.

(h)Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations.  Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of any Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 10.01.

(i)Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.

(j)Upon request of the Trustee, each Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

(k)Any Guarantee given by any direct or indirect parent of the Company may be released and discharged from all obligations under this Article 10 at any time upon written notice to the Trustee from such direct or indirect parent of the Company.

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SECTION 10.02.Limitation on Liability.

(a)Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture or the Guarantee, as each relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

(b)A Guarantee as to any Subsidiary Guarantor shall automatically terminate and be of no further force or effect and such Subsidiary Guarantor shall be deemed to be released and discharged from all obligations under this Article 10 upon:

(i)the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), or all or substantially all the assets, of the applicable Subsidiary Guarantor if such sale, disposition or other transfer is made in compliance with this Indenture,

(ii)the Company designating such Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.04 and the definition of “Unrestricted Subsidiary,”

(iii)in the case of any Restricted Subsidiary which after the Issue Date is required to guarantee the Securities pursuant to Section 4.11, the release or discharge of the guarantee by such Restricted Subsidiary of Indebtedness of the Company or any Restricted Subsidiary of the Company or such Restricted Subsidiary or the repayment of the Indebtedness or Disqualified Stock, in each case, which resulted in the obligation to guarantee the Securities, or

(iv)the Company’s exercise of its legal defeasance option or covenant defeasance option as described under Section 8.01 or if the Company’s obligations under this Indenture are discharged in accordance with the terms of this Indenture.

(c)A Guarantee also shall be automatically released upon the applicable Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest securing Credit Agreement or other exercise of remedies in respect thereof.

SECTION 10.03.Successors and Assigns.  This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.

SECTION 10.04.No Waiver.  Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall

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operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege.  The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise.

SECTION 10.05.Modification.  No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances.

SECTION 10.06.Execution of Supplemental Indenture for Future Guarantors.  Each Subsidiary and other Person which is required to become a Guarantor pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit D hereto pursuant to which such Subsidiary or other Person shall become a Guarantor under this Article 10 and shall guarantee the Guaranteed Obligations.  Concurrently with the execution and delivery of such supplemental indenture, the Company shall deliver to the Trustee an Opinion of Counsel and an Officers’ Certificate to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary or other Person and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors’ rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Guarantee of such Guarantor is a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms and/or to such other matters as the Trustee may reasonably request.

SECTION 10.07.Non-Impairment.  The failure to endorse a Guarantee on any Security shall not affect or impair the validity thereof.

ARTICLE 11

SECURITY

SECTION 11.01.Security Documents; Additional Collateral; Intercreditor Agreement.

(a)Security Documents.  In order to secure the due and punctual payment of the Note Obligations and any Permitted Additional Pari Passu Obligations, the Company, the Subsidiary Guarantors, the Collateral Agent and the other parties thereto have simultaneously with the execution of this Indenture entered or, in accordance with the provisions of Section 4.10, Section 4.11 and this Article 11, will enter into the Security Documents.  In the event of a conflict between the terms of this Indenture and the Security Documents, the Security Documents shall control.

The Company shall, and shall cause each Restricted Subsidiary to, and each Restricted Subsidiaries shall, make all filings (including filings of continuation statements and

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amendments to UCC financing statements that may be necessary to continue the effectiveness of such UCC financing statements) and take all other actions as are reasonably necessary or required by the Security Documents to maintain (at the sole cost and expense of the Company and its Restricted Subsidiaries) the security interest created by the Security Documents in the Collateral (other than with respect to any Collateral the security interest in which is not required to be perfected under the Security Documents) as a perfected first priority security interest subject only to Permitted Liens.

(b)Additional Collateral.  With respect to assets acquired after the Issue Date, the applicable Company or Guarantor will take the actions required by the Security Agreement.

(c)Intercreditor Agreement. The Security Documents, the Trustee, the Collateral Agent and the Holders are bound by the terms of the Intercreditor Agreement and each Holder of a Security, by accepting such Security, agrees to all the terms and provisions of the Intercreditor Agreement and the other Security Documents.

SECTION 11.02.Recording, Registration and Opinions.  The Company and the Guarantors shall furnish to the Trustee at least thirty (30) days prior to the anniversary of the Issue Date in each year an Opinion of Counsel, dated as of such date, either (i) stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording, and refiling of this Indenture or the Security Documents, as applicable, as are necessary to maintain the perfected Liens of the applicable Security Documents securing the Note Obligations under applicable law to the extent required by the Security Documents other than any action as described therein to be taken and such opinion may refer to prior Opinions of Counsel and contain customary assumptions, qualifications and exceptions and may rely on an Officers’ Certificate of the Company or (ii) stating that, in the opinion of such counsel, no such action is necessary to maintain such Liens or security interests.

SECTION 11.03.Releases of Collateral.  The Liens securing the Securities and the Guarantees will, automatically and without the need for any further action by any Person be released:

(1)in whole or in part, as applicable, as to all or any portion of property subject to such Liens which has been taken by eminent domain, condemnation or other similar circumstances in accordance with the terms of Section 4.06 and Section 4.15;

(2)in whole upon:

(a)payment in full of the principal of, together with accrued and unpaid interest on, the Securities and all other Obligations under this Indenture, the Guarantees and the Security Documents that are due and payable at or prior to the time such principal, together with accrued and unpaid interest, are paid;

(b)satisfaction and discharge of this Indenture as set forth under Article 8; or

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(c)a legal defeasance or covenant defeasance of this Indenture as set forth under Article 8;

(3)in part, as to any property that (a) is sold, transferred or otherwise disposed of by the Company or any Subsidiary Guarantor (other than to the Company or another Subsidiary Guarantor) in a transaction not prohibited by this Indenture at the time of such transfer or disposition, including, without limitation, as a result of a transaction of the type permitted under Sections 4.06 and 5.01 or (b) is owned or at any time acquired by a Guarantor that has been released from its Guarantee, concurrently with the release of such Guarantee;

(4)as to property that constitutes all or substantially all of the Collateral securing the Securities, with the consent of each Holder of the Securities and each holder of any Permitted Additional Pari Passu Obligations outstanding;

(5)as to property that constitutes less than all or substantially all of the Collateral securing the Securities, with the consent of the Holders of at least 662/3% of the aggregate principal amount of Securities and any Permitted Additional Pari Passu Obligations outstanding;

(6)in part, in accordance with the applicable provisions of the Security Documents and the Intercreditor Agreement; and

(7)upon a release of any ABL Priority Collateral that is disposed of in accordance with the terms of the Credit Agreement and the related security documents.

In addition, to the extent necessary and for so long as required for such Subsidiary Guarantor not to be subject to any requirement pursuant to Rule 3-16 of Regulation S-X under the Securities Act to file separate financial statements with the SEC (or any other governmental agency), the Capital Stock and other securities of any Subsidiary Guarantor shall not be included in the Collateral with respect to the Securities (or any Permitted Additional Pari Passu Obligations outstanding) so affected and shall not be subject to the Liens securing such Securities and any Permitted Additional Pari Passu Obligations.

SECTION 11.04.Form and Sufficiency of Release.  In the event that either the Company or any Guarantor has sold, exchanged, or otherwise disposed of or proposes to sell, exchange or otherwise dispose of any portion of the Collateral that, under the terms of this Indenture may be sold, exchanged or otherwise disposed of by the Company or any Guarantor, and the Company or such Guarantor requests the Trustee to furnish a written disclaimer, release or quitclaim of any interest in such property under this Indenture, the applicable Guarantee and the Security Documents, upon receipt of an Officers’ Certificate and Opinion of Counsel to the effect that such release complies with Section 11.03 and specifying the provision in Section 11.03 pursuant to which such release is being made (upon which the Trustee may exclusively and conclusively rely), the Trustee shall execute, acknowledge and deliver to the Company or such Guarantor (or instruct the Collateral Agent to do the same) such an instrument in the form provided by the Company, and providing for release without recourse and shall take such other action

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as the Company or such Guarantor may reasonably request and as necessary to effect such release.

SECTION 11.05.Possession and Use of Collateral.  Subject to the provisions of the Security Documents, the Company and the Guarantors shall have the right to remain in possession and retain exclusive control of and to exercise all rights with respect to the Collateral (other than Trust Monies held by the Collateral Agent, other monies or U.S. Government Obligations deposited pursuant to Article 8, and other than as set forth in the Security Documents and this Indenture), to freely operate, manage, develop, lease, use, consume and enjoy the Collateral (other than Trust Monies held by the Collateral Agent, other monies and U.S. Government Obligations deposited pursuant to Article 8 and other than as set forth in the Security Documents and this Indenture), to alter or repair any Collateral so long as such alterations and repairs do not impair the Lien of the Security Documents thereon, and to collect, receive, use, invest and dispose of the reversions, remainders, interest, rents, lease payments, issues, profits, revenues, proceeds and other income thereof and to effect transactions permitted under Sections 4.06 and 5.01.

SECTION 11.06.Reports and Certificates Relating to Collateral.

(a)From the date on which this Indenture is qualified under the TIA, to the extent applicable, the Company shall cause Section 313(b)(1) of the TIA, relating to reports, and Section 314(d) of the TIA, relating to the release of property or securities subject to the Lien of the Security Documents, to be complied with.

(b)Any release of Collateral permitted by Section 11.03 shall be deemed not to impair the Liens under this Indenture and the Security Agreement and the other Security Documents in contravention thereof.  From the date on which this Indenture is qualified under the TIA, any certificate or opinion required under Section 314(d) of the TIA may be made by an officer or legal counsel, as applicable, of the Company except in cases where Section 314(d) of the TIA requires that such certificate or opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected by the Company.

(c)From the date on which this Indenture is qualified under the TIA, notwithstanding anything to the contrary in this Section 11.06, the Company and the Subsidiary Guarantors shall not be required to comply with all or any portion of Section 314(d) of the TIA if they reasonably determine that under the terms of Section 314(d) of the TIA or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including “no action” letters or exemptive orders, all or any portion of Section 314(d) of the TIA is inapplicable to any release or series of releases of Collateral.

SECTION 11.07.Collateral Agent.

(a)The Trustee and each of the Holders by acceptance of the Securities hereby designates and appoints the Collateral Agent as its collateral agent under this Indenture and the Security Documents and the Trustee and each of the Holders by acceptance of the Securities hereby irrevocably authorizes the Collateral Agent to take such action on its behalf under the provisions of this Indenture and the Security Documents and to exercise such powers and perform such duties as are expressly delegated to the Collateral Agent by the terms of this Indenture

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and the Security Documents, together with such powers as are reasonably incidental thereto.  The Collateral Agent agrees to act as such on the express conditions contained in this Section 11.07.  The provisions of this Section 11.07 are solely for the benefit of the Collateral Agent and none of the Trustee, any of the Holders nor the Company or any of the Guarantors shall have any rights as a third party beneficiary of any of the provisions contained herein other than as expressly provided in Section 11.03.  Notwithstanding any provision to the contrary contained elsewhere in this Indenture and the Security Documents, the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Collateral Agent have or be deemed to have any fiduciary relationship with the Trustee, any Holder or the Company or any Guarantor, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture and the Security Documents or otherwise exist against the Collateral Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Indenture with reference to the Collateral Agent shall not be construed to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.  Except as expressly otherwise provided in this Indenture, the Collateral Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions which the Collateral Agent is expressly entitled to take or assert under this Indenture and the Security Documents, including the exercise of remedies pursuant to Article Six, and any action so taken or not taken shall be deemed consented to by the Trustee and the Holders.

(b)The Collateral Agent may execute any of its duties under this Indenture and the Security Documents by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Collateral Agent shall not be responsible for the negligence or misconduct of any agent, employee or attorney-in-fact that it selects as long as such selection was made without negligence or willful misconduct.

(c)None of the Collateral Agent or any of its agents or employees shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Indenture or the transactions contemplated hereby (except for its own negligence or willful misconduct) or under or in connection with any Security Document or the transactions contemplated thereby (except for its own negligence or willful misconduct), or (ii) be responsible in any manner to the Trustee or any Holder for any recital, statement, representation, warranty, covenant or agreement made by the Company or any Guarantor, contained in this Indenture or any indenture, or in any certificate, report, statement or other document referred to or provided for in, or received by the Collateral Agent under or in connection with, this Indenture or any other indenture, the Security Documents, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Indenture or any other indenture or the Security Documents, or for any failure of the Company or any Guarantor or any other party to this Indenture or the Security Documents to perform its obligations hereunder or thereunder.  None of the Collateral Agent or any of its agents or employees shall be under any obligation to the Trustee or any Holder to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Indenture

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or any other indenture or the Security Documents or to inspect the properties, books or records of the Company or any Guarantor.

(d)The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, unless the Collateral Agent shall have received written notice from the Trustee or the Company referring to this Indenture, describing such Default or Event of Default and stating that such notice is a “notice of default.”  The Collateral Agent shall take such action with respect to such Default or Event of Default as may be requested by the Trustee in accordance with Article Six (subject to this Section 11.07); provided, however, that unless and until the Collateral Agent has received any such request, the Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

(e)A resignation or removal of the Collateral Agent and appointment of a successor Collateral Agent shall become effective only upon the successor Collateral Agent’s acceptance of appointment as provided in this Section 11.07(e).  The Collateral Agent may resign in writing at any time by so notifying the Company, the Trustee and each trustee, agent or representative of holders of Permitted Additional Pari Passu Obligations at least 30 days prior to the proposed date of resignation.  The Company may remove the Collateral Agent if: (i) the Collateral Agent is removed as Trustee under the Indenture; (ii) the Collateral Agent (x) fails to meet the requirements for being a Trustee under Section 7.10 (prior to the discharge or defeasance of this Indenture) and (y) following the discharge or defeasance of this Indenture, fails to meet the requirements for being the trustee, agent or representative of holders of any extant Permitted Additional Pari Passu Obligations; (iii) the Collateral Agent is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Collateral Agent under any Bankruptcy Law; (iv) a custodian or public officer takes charge of the Collateral Agent or its property; or (v) the Collateral Agent becomes incapable of acting. If the Collateral Agent resigns or is removed or if a vacancy exists in the office of Collateral Agent for any reason, the Company shall promptly appoint a successor Collateral Agent which complies with the eligibility requirements contained in this Indenture and each indenture, credit agreement or other agreements which any Permitted Additional Pari Passu Obligations (other than Additional Securities) are incurred.  If a successor Collateral Agent does not take office within 10 days after the retiring Collateral Agent resigns or is removed, the retiring Collateral Agent, the Company or the holders of at least 10% in principal amount of the then outstanding principal amount of (x) the Securities (other than any Additional Securities except to the extent constituting Permitted Additional Pari Passu Obligations) and (y) Permitted Additional Pari Passu Obligations (to the extent the trustee, agent or representative of holders of such Permitted Additional Pari Passu Obligations executed a joinder to the Security Agreement) may petition any court of competent jurisdiction for the appointment of a successor Collateral Agent. A successor Collateral Agent shall deliver a written acceptance of its appointment to the retiring Collateral Agent and to the Company.  Thereupon, the resignation or removal of the retiring Collateral Agent shall become effective, and the successor Collateral Agent shall have all the rights, powers and the duties of the Collateral Agent under this Indenture and the Security Documents.  The successor Collateral Agent shall mail a notice of its succession to the Trustee and each trustee, agent or representative of holders of Permitted Additional Pari Passu Obligations.  The retiring Collateral Agent shall promptly transfer all property held by it as Collateral Agent to the successor Collateral Agent, provided that all sums owing to the Collateral

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Agent hereunder have been paid.  Notwithstanding replacement of the Collateral Agent pursuant to this Section 11.07(e), the Company’s obligations under this Section 11.07 and Section 11.12 shall continue for the benefit of the retiring Collateral Agent.

(f)The Trustee shall initially act as Collateral Agent and shall be authorized to appoint co-Collateral Agents as necessary in its sole discretion.  Except as otherwise explicitly provided herein or in the Security Documents, neither the Collateral Agent nor any of its officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof.  The Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Collateral Agent nor any of its officers, directors, employees or agents shall be responsible for any act or failure to act hereunder, except for its own willful misconduct, gross negligence or bad faith.

(g)The Trustee, as such and as Collateral Agent, is authorized and directed by the Holders and the Holders by acquiring the Securities and deemed to have authorized the Trustee and Collateral Agent to (i) enter into the Security Documents, (ii) bind the Holders on the terms as set forth in the Security Documents and (iii) perform and observe its obligations under the Security Documents.

(h)The Collateral Agent shall have no obligation whatsoever to the Trustee or any of the Holders to assure that the Collateral exists or is owned by the Company and the Guarantors or is cared for, protected or insured or has been encumbered, or that the Collateral Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, maintained or enforced or are entitled to any particular priority, or to determine whether all of the Grantor’s property constituting collateral intended to be subject to the Lien and security interest of the Security Documents has been properly and completely listed or delivered, as the case may be, or the genuineness, validity, marketability or sufficiency thereof or title thereto, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Collateral Agent pursuant to this Indenture or any Security Document, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion given the Collateral Agent’s own interest in the Collateral, and that the Collateral Agent shall have no other duty or liability whatsoever to the Trustee or any Holder as to any of the foregoing.

(i)The Collateral Agent (i) shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers, or for any error of judgment made in good faith by an authorized officer, unless it is proved that the Collateral Agent was negligent in ascertaining the pertinent facts, (ii) shall not be liable for interest on any money received by it except as the Collateral Agent may agree in writing with the Company (and money held in trust by the Collateral Agent need not be segregated from other funds except to the extent required by law), and (iii) may consult with counsel of its selection and the advice or opinion of such counsel as to matters of law shall be full and complete authorization

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and protection from liability in respect of any action taken, omitted or suffered by it in good faith and in accordance with the advice or opinion of such counsel.  The grant of permissive rights or powers to the Collateral Agent shall not be construed to impose duties to act.

SECTION 11.08.Purchaser Protected.  No purchaser or grantee of any property or rights purporting to be released shall be bound to ascertain the authority of the Collateral Agent or Trustee to execute the release or to inquire as to the existence of any conditions herein prescribed for the exercise of such authority so long as the conditions set forth in Section 11.04 have been satisfied.

SECTION 11.09.Authorization of Actions to be Taken by the Collateral Agent Under the Security Documents.  The Holders of Securities agree that the Collateral Agent shall be entitled to the rights, privileges, protections, immunities, indemnities and benefits provided to the Collateral Agent by the Security Documents.  Furthermore, each holder of a Security, by accepting such Security, consents to the terms of and authorizes and directs the Trustee (in each of its capacities) and the Collateral Agent to enter into and perform the Security Documents in each of its capacities thereunder.

SECTION 11.10.Authorization of Receipt of Funds by the Trustee Under the Security Agreement.  The Trustee is authorized to receive any funds for the benefit of Holders distributed under the Security Documents to the Trustee, to apply such funds as provided in Section 6.10.

SECTION 11.11.Powers Exercisable by Receiver or Collateral Agent.  In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 11 upon the Company or any Guarantor, as applicable, with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Company or any Guarantor, as applicable, or of any officer or officers thereof required by the provisions of this Article 11.

SECTION 11.12.Compensation and Indemnification.  The Collateral Agent shall be entitled to the compensation and indemnification set forth in Section 7.07 (with the references to the Trustee therein being deemed to refer to the Collateral Agent).

ARTICLE 12

APPLICATION OF TRUST MONIES

SECTION 12.01.Collateral Account.  In the event that the Company or any Guarantor receives any cash and Cash Equivalents that, if such cash and Cash Equivalents had been received by the Trustee or the Collateral Agent would have constituted Trust Monies, then no later than 30 days following the first date on which the Company or any Guarantor receives any such cash and Cash Equivalents there shall be established and, at all times thereafter until this Indenture shall have terminated, there shall be maintained with the Collateral Agent the Collateral Account.  The Collateral Account shall be established and maintained by the Collateral Agent at the office of the Collateral Agent or as a deposit account or securities account subject to

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a control agreement in favor of the Collateral Agent.  The Company shall cause all cash and Cash Equivalents that would have constituted Trust Monies had such cash and Cash Equivalents been received by the Trustee or the Collateral Agent to be deposited in the Collateral Account and thereafter shall be held by and under the sole dominion and control of the Collateral Agent for its benefit and for the benefit of the Secured Parties (as defined in the Security Agreement) as a part of the Collateral until released in accordance with this Article 12.

SECTION 12.02.Withdrawal of Loss Proceeds.  To the extent that any Trust Monies consist of Net Loss Proceeds, such Trust Monies may be withdrawn by the Company and shall be paid by the Collateral Agent (upon the direction of the Trustee) upon a written request by the Company delivered to the Trustee and the Collateral Agent to reimburse the Company or Guarantor for expenditures made, or to pay costs incurred, by the Company or such Guarantor in connection with the repair, rebuilding or replacement of the Collateral destroyed, damaged or taken, upon receipt by the Trustee and the Collateral Agent of an Officers’ Certificate, dated not more then 30 days prior to the date of the application for the withdrawal and payment of such Trust Monies setting forth:

(1)that expenditures have been made, or costs incurred by the Company or such Guarantor, as the case may be, in a specified amount in connection with certain repairs, rebuildings and replacements of the Collateral, which shall be briefly described;

(2)that no part of such expenditures or costs has been or is being made the basis for the withdrawal of any Trust Monies in any previous or then pending application pursuant to this Section 12.02;

(3)that no part of such expenditures or costs has been paid out of the proceeds of insurance upon any part of the Collateral not required to be paid to the Collateral Agent under the Security Documents;

(4)that no Event of Default shall have occurred and be continuing; and

(5)that such application or reinvestment complies with Section 4.15 and all conditions precedent herein provided for relating to such withdrawal and payment have been complied with.

Upon compliance with the foregoing provisions of this Section 12.02 and Section 12.01, the Collateral Agent shall, upon receipt of a written request by the Company, pay an amount of Net Loss Proceeds constituting Trust Monies equal to the amount of the expenditures or costs stated in the Officers’ Certificate required by this Section 12.02.

SECTION 12.03.Withdrawal of Net Cash Proceeds to Fund an Asset Sale Offer or Net Loss Proceeds to Fund an Event of Loss Offer.  To the extent that any Trust Monies consist of Net Cash Proceeds received by the Collateral Agent pursuant to the provisions of Section 4.06 or Net Loss Proceeds received by the Collateral Agent pursuant to the provisions of Section 4.15 and an Asset Sale Offer or Event of Loss Offer, as applicable, has been made in accordance

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therewith, such Trust Monies may be withdrawn by the Company and shall be paid by the Trustee to the Paying Agent for application in accordance with Section 4.06 or 4.15 upon written notice by the Company to the Trustee and upon receipt by the Trustee and the Collateral Agent of an Officers’ Certificate, dated not more than 10 days prior to the date of purchase, stating:

(1)that no Event of Default shall have occurred and be continuing;

(2)(x) that such Trust Monies constitute Net Cash Proceeds or Net Loss Proceeds, as applicable, (y) that pursuant to and in accordance with Section 4.06 or 4.15, the Company has made an Asset Sale Offer or Event of Loss Offer and (z) the amount of Excess Proceeds or Excess Loss Proceeds, as applicable, to be applied to the repurchase of the Securities and Permitted Additional Pari Passu Obligations pursuant to the Asset Sale Offer or Event of Loss Offer;

(3)the date of purchase; and

(4)that all conditions precedent and covenants herein provided for relating to such application of Trust Monies have been complied with.

Upon compliance with the foregoing provisions of this Section 12.03, the Trustee shall apply the Trust Monies as directed and specified by the Company.

SECTION 12.04.Withdrawal of Trust Monies for Investment in Replacement Assets.  In the event the Company intends to reinvest Net Cash Proceeds of an Asset Sale in assets in compliance with Section 4.06 (“Replacement Assets”), such Net Cash Proceeds constituting Trust Monies (the “Released Trust Monies”) may be withdrawn by the Company and shall be paid by the Collateral Agent to the Company upon receipt by the Trustee and the Collateral Agent of the following:

(a)A notice from the Company (i) referring to this Section 12.04, (ii) containing all documents referred to below, (iii) describing with particularity the Released Trust Monies, (iv) describing with particularity the Replacement Assets to be invested in with respect to the Released Trust Monies and (v) accompanied by a counterpart of the instruments proposed to give effect to the release fully executed and acknowledged (if applicable) by all parties thereto other than the Collateral Agent; and

(b)An Officers’ Certificate certifying that (i) such Trust Monies constitute Net Cash Proceeds and are being reinvested in compliance with Section 4.06, (ii) the release of the Released Trust Monies complies with the terms and conditions of this Indenture, (iii) there is no Event of Default (both before and after investing in the Replacement Assets) in effect or continuing on the date thereof, (iv) the release of the Released Trust Monies shall not result in a Event of Default hereunder and (v) all conditions precedent herein to such release have been complied with.

Upon compliance with the foregoing provisions, the Trustee shall apply the Released Trust Monies as directed and specified by the Company.

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SECTION 12.05.Investment of Trust Monies.  So long as no Event of Default shall have occurred and be continuing, all or any part of any Trust Monies held by (or held in account subject to the sole control of) the Collateral Agent shall from time to time be invested or reinvested by the Collateral Agent in any Cash Equivalents pursuant to a written request by the Company in the form of an Officers’ Certificate, which shall specify the Cash Equivalents in which such Trust Monies shall be invested and shall certify that such investments constitute Cash Equivalents; and the Collateral Agent shall sell any such Cash Equivalent only upon receipt of such a written request by the Company specifying the particular Cash Equivalent to be sold.  So long as no Event of Default occurs and is continuing, any interest or dividends accrued, earned or paid on such Cash Equivalents (in excess of any accrued interest or dividends paid at the time of purchase) that may be received by the Collateral Agent shall be forthwith paid to the Company.  Such Cash Equivalents shall be held by the Collateral Agent as a part of the Collateral, subject to the same provisions hereof as the cash used by it to purchase such Cash Equivalents.

The Trustee and Collateral Agent shall not be liable or responsible for any loss resulting from such investments or sales except only for its own negligent action, its own negligent failure to act or its own willful misconduct in complying with this Section 12.05.

SECTION 12.06.Use of Trust Monies; Retirement of Securities.  The Collateral Agent shall apply Trust Monies not required to be applied to fund an Asset Sale Offer or Event of Loss Offer or required to be held pending application to the acquisition of Replacement Assets from time to time to the payment of the principal of, premium, and interest on, any Securities and any Permitted Additional Pari Passu Obligations by lot or by such other method as the Trustee shall deem to be fair and appropriate (in such manner as complies with applicable legal requirements and provided that the Trustee shall not select Securities or such other Permitted Additional Pari Passu Obligations for purchase which would result in a Holder with a principal amount of Securities or such other Permitted Additional Pari Passu Obligations less than the applicable minimum denomination to the extent practicable), on any redemption date or the maturity date or to the redemption thereof or the purchase thereof upon tender or in the open market or at private sale or upon any exchange or in any one or more of such ways, including, without limitation, pursuant to a Change of Control Offer, an Asset Sale Offer or an Event of Loss Offer, as the Company shall request in writing, upon receipt by the Trustee and the Collateral Agent of the following:

(a)resolutions of the Board of Directors of the Company directing the application pursuant to this Section 12.06 of a specified amount of Trust Monies and, in case any such monies are to be applied to payment, designating the Securities and Permitted Additional Pari Passu Obligations so to be paid and, in case any such monies are to be applied to the purchase of Securities and Permitted Additional Pari Passu Obligations, prescribing the method of purchase, the price or prices to be paid and the maximum aggregate principal amount of Securities and Permitted Additional Pari Passu Obligations to be purchased and any other provisions of this Indenture governing such purchase;

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(b)an Officers’ Certificate, dated not more than 10 days prior to the date of the relevant application, stating:

(1)that no Event of Default exists unless such Event of Default would be cured thereby; and

(2)that all conditions precedent and covenants herein provided for relating to such application of Trust Monies have been complied with; and

(c)an Opinion of Counsel stating that, subject to customary assumptions, qualifications and exceptions, the documents and the cash or Cash Equivalents, if any, which have been or are therewith delivered to and deposited with the Collateral Agent conform to the requirements of this Indenture and all conditions precedent herein provided for relating to such application of Trust Monies have been complied with.

Such Opinion of Counsel may rely on an Officers’ Certificate of the Company.

Upon compliance with the foregoing provisions of this Section 12.06, the Collateral Agent shall apply Trust Monies as directed and specified by such resolution of the Board of Directors of the Company.

A resolution of the Board of Directors of the Company expressed to be irrevocable directing the application of Trust Monies under this Section 12.06 to the payment of the principal of, premium and interest on the Securities and any Permitted Additional Pari Passu Obligations shall for all purposes of this Indenture be deemed the equivalent of the deposit of money with the Collateral Agent in trust for such purpose.  Such Trust Monies and any cash deposited with the Collateral Agent pursuant to clause (c) of this Section 12.06 for the payment of accrued interest shall not, after compliance with the foregoing provisions of this Section 12.06, be deemed to be part of the Collateral or Trust Monies.

SECTION 12.07.Disposition of Securities Retired.  All Securities received by the Trustee and for whose purchase Trust Monies are applied under Section 12.06, if not otherwise cancelled, shall be promptly delivered to the Trustee for cancellation and destruction in accordance with the Trustee’s customary procedures.

ARTICLE 13

MISCELLANEOUS

SECTION 13.01.Trust Indenture Act Controls.  From the date on which this Indenture is qualified under the TIA, if and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an “incorporated provision”) included in this Indenture by operation of, Sections 310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision shall control.

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SECTION 13.02.Notices.

(a)Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile or mailed by first-class mail addressed as follows:

if to the Company or a Guarantor:

Freedom Group, Inc.
870 Remington Drive
Madison, NC  27025
Attention of:  Fredric E. Roth, Jr.
Facsimile:  (336) 548-8810

if to the Trustee:

Wilmington Trust FSB
246 Goose Lane, Suite 105
Guilford, CT  06437
Attention of:  Joseph P. O’Donnell
Facsimile:  (203) 453-1183

The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

(b)Any notice or communication mailed to a Holder shall be mailed, first class mail, to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

(c)Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.  If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received.

Notwithstanding any other provision of this Indenture or any Security, where this Indenture or any Security provides for notice of any event (including any notice of redemption) to a Holder of a Global Security (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depository for such Security (or its designee), pursuant to the customary procedures of such Depository.

SECTION 13.03.Communication by the Holders with Other Holders.  The Holders may communicate pursuant to Section 312(b) of the TIA with other Holders with respect to their rights under this Indenture or the Securities.  The Company, the Trustee, the Registrar and other Persons shall have the protection of Section 312(c) of the TIA.

SECTION 13.04.Certificate and Opinion as to Conditions Precedent.  Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee at the request of the Trustee:

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(a)an Officers’ Certificate in form reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(b)an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

SECTION 13.05.Statements Required in Certificate or Opinion.  Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include:

(a)a statement that the individual making such certificate or opinion has read such covenant or condition;

(b)a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c)a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d)a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials.

SECTION 13.06.When Securities Disregarded.  In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company, any Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded.  Subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.

SECTION 13.07.Rules by Trustee, Paying Agent and Registrar.  The Trustee may make reasonable rules for action by or a meeting of the Holders.  The Registrar and a Paying Agent may make reasonable rules for their functions.

SECTION 13.08.Legal Holidays.  If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period.  If a regular record date is not a Business Day, the record date shall not be affected.

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SECTION 13.09.Governing Law.  THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 13.10.No Recourse Against Others.  No director, officer, employee, incorporator or holder of any equity interests in the Company or of any Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Company or the Guarantors under the Securities or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Securities by accepting a Security waives and releases all such liability.

SECTION 13.11.Successors.  All agreements of the Company and each Guarantor in this Indenture and the Securities shall bind its successors.  All agreements of the Trustee in this Indenture shall bind its successors.

SECTION 13.12.Multiple Originals.  The parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Indenture.

SECTION 13.13.Table of Contents; Headings.  The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

SECTION 13.14.Indenture Controls.  If and to the extent that any provision of the Securities limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control.

SECTION 13.15.Severability.  In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

SECTION 13.16.Waiver of Jury Trial.  EACH OF THE COMPANY, THE GUARANTORS, THE TRUSTEE, THE PAYING AGENT, THE REGISTRAR, THE TRANSFER AGENT AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

FREEDOM GROUP, INC.
By:
	Name:
	Title:

S-1

GUARANTORS:
RACI HOLDING, INC.
By:
	Name:
	Title:
REMINGTON ARMS COMPANY, INC.
By:
	Name:
	Title:
REMINGTON STEAM, LLC
By:
	Name:
	Title:
RA BRANDS, L.L.C.
By:
	Name:
	Title:
THE MARLIN FIREARMS COMPANY
By:
	Name:
	Title:
H&R 1871, LLC
By:
	Name:
	Title:

S-2

DA ACQUISITIONS, LLC
By:
	Name:
	Title:
BUSHMASTER HOLDINGS, LLC
By:
	Name:
	Title:
BUSHMASTER FIREARMS INTERNATIONAL, LLC
By:
	Name:
	Title:
DPMS FIREARMS, LLC
By:
	Name:
	Title:
E-RPC, LLC
By:
	Name:
	Title:

S-3

WILMINGTON TRUST FSB, as Trustee
By:
	Name:
	Title:

S-4

WILMINGTON TRUST FSB, as Collateral Agent
By:
	Name:
	Title:

S-5

APPENDIX A

PROVISIONS RELATING TO INITIAL SECURITIES, ADDITIONAL SECURITIES AND EXCHANGE SECURITIES

1.Definitions.

1.1Definitions.

For the purposes of this Appendix A the following terms shall have the meanings indicated below:

“Clearstream” means Clearstream Banking, société anonyme, or any successor securities clearing agency.

“Definitive Security” means a certificated Initial Security or Exchange Security (bearing the Restricted Securities Legend if the transfer of such Security is restricted by applicable law) that does not include the Global Securities Legend.

“Depository” means, with respect to the Securities, The Depository Trust Company, its nominees and their respective successors.

“Euroclear” means the Euroclear Clearance System or any successor securities clearing agency.

“Global Securities Legend” means the legend set forth under that caption in the applicable Exhibit to this Indenture.

“IAI” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

“Initial Purchasers” means Banc of America Securities LLC, Deutsche Bank Securities Inc., Wells Fargo Securities, LLC, Barclays Capital Inc., Jefferies & Company, Inc. and such other initial purchasers party to the purchase agreement or future purchase agreements entered into in connection with an offer and sale of Securities.

“Purchase Agreement” means (a) the Purchase Agreement dated July 15, 2009, among the Company, the Guarantors and the Initial Purchasers and (b) any other similar Purchase Agreement relating to Additional Securities.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Registration Rights Agreement” means (a) the Registration Rights Agreement dated as of July 29, 2009 among the Company, the Guarantors and the Initial Purchasers relating to the Securities and (b) any other similar Registration Rights Agreement relating to Additional Securities.

“Registered Exchange Offer” means the offer by the Company, pursuant to the Registration Rights Agreement, to certain Holders of Initial Securities, to issue and deliver to such Holders, in exchange for their Initial Securities, a like aggregate principal amount of Exchange Securities registered under the Securities Act.

“Regulation S” means Regulation S under the Securities Act.

“Regulation S Securities” means all Initial Securities offered and sold outside the United States in reliance on Regulation S.

“Restricted Period,” with respect to any Securities, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Securities are first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Company to the Trustee, and (b) the Issue Date, and with respect to any Additional Securities that are Transfer Restricted Definitive Securities, it means the comparable period of 40 consecutive days.

“Restricted Securities Legend” means the legend set forth in Section 2.2(f)(i) herein.

“Rule 501” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

“Rule 144A” means Rule 144A under the Securities Act.

“Rule 144A Securities” means all Initial Securities offered and sold to QIBs in reliance on Rule 144A.

“Securities Custodian” means the custodian with respect to a Global Security (as appointed by the Depository) or any successor person thereto, who shall initially be the Trustee.

“Shelf Registration Statement” means a registration statement filed by the Company in connection with the offer and sale of Initial Securities pursuant to the Registration Rights Agreement.

“Transfer Restricted Definitive Securities” means Definitive Securities and any other Securities that bear or are required to bear or are subject to the Restricted Securities Legend.

“Transfer Restricted Global Securities” means Global Securities bearing the Restricted Securities Legend.

“Unrestricted Definitive Security” means Definitive Securities and any other Securities that are not required to bear, or are not subject to, the Restricted Securities Legend.

“Unrestricted Global Security” means a Global Security that does not bear the Restricted Securities Legend.

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1.2Other Definitions.

Term:	Defined in Section:
“Agent Members”	2.1(b)
“Global Securities”	2.1(b)
“Regulation S Global Securities”	2.1(b)
“Rule 144A Global Securities”	2.1(b)

2.The Securities.

2.1Form and Dating; Global Securities.

(a)The Initial Securities issued on the date hereof will be (i) offered and sold by the Company pursuant to the Purchase Agreement and (ii) resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S.  Such Initial Securities may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, IAIs in accordance with Rule 501.  Additional Securities offered after the date hereof may be offered and sold by the Company from time to time pursuant to one or more Purchase Agreements in accordance with applicable law.

(b)Global Securities.  (i)  Rule 144A Securities initially shall be represented by one or more Securities in fully registered, global form without interest coupons (collectively, the “Rule 144A Global Securities”).  Regulation S Securities initially shall be represented by one or more Securities in fully registered, global form without interest coupons (collectively, the “Regulation S Global Securities”).  The term “Global Securities” means, collectively, the Rule 144A Global Securities and the Regulation S Global Securities.  The Global Securities shall bear the Global Security Legend.  The Global Securities initially shall (i) be registered in the name of the Depository or the nominee of such Depository, in each case for credit to an account of an Agent Member, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear the Restricted Securities Legend.

Members of, or direct or indirect participants in, the Depository, Euroclear or Clearstream (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository or under the Global Securities.  The Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Securities for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository, Euroclear or Clearstream, as the case may be, and their respective Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security.

(ii)Transfers of Global Securities shall be limited to transfer in whole, but not in part, to the Depository, its successors or their respective nominees.  Interests of beneficial

3

owners in the Global Securities may be transferred or exchanged for Definitive Securities only in accordance with the applicable rules and procedures of the Depository, Euroclear or Clearstream, as the case may be, and the provisions of Section 2.2.  In addition, a Global Security shall be exchangeable for Definitive Securities if (i) the Depository (x) notifies the Company that it is unwilling or unable to continue as depository for such Global Security and the Company thereupon fails to appoint a successor depository or (y) has ceased to be a clearing agency registered under the Exchange Act, or (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Security.  In all cases, Definitive Securities delivered in exchange for any Global Security or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested in writing by or on behalf of the Depository, in accordance with its customary procedures.

(iii)In connection with the transfer of a Global Security as an entirety to beneficial owners pursuant to subsection (i) of this Section 2.1(b), such Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations.

(iv)Any Transfer Restricted Definitive Security delivered in exchange for an interest in a Global Security pursuant to Section 2.2 shall, except as otherwise provided in Section 2.2, bear the Restricted Securities Legend.

(v)Notwithstanding the foregoing, through the Restricted Period, a beneficial interest in such Regulation S Global Security may be held only through Euroclear or Clearstream unless delivery is made in accordance with the applicable provisions of Section 2.2.

(vi)The Holder of any Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

2.2Transfer and Exchange.

(a)Transfer and Exchange of Global Securities.  A Global Security may not be transferred as a whole except as set forth in Section 2.1(b).  Global Securities will not be exchanged by the Company for Definitive Securities except under the circumstances described in Section 2.1(b)(ii).  Global Securities also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.10 of this Indenture.  Beneficial interests in a Global Security may be transferred and exchanged as provided in Section 2.2(b) or 2.2(g).

(b)Transfer and Exchange of Beneficial Interests in Global Securities.  The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depository, in accordance with the provisions of this Indenture and the applicable rules and procedures of the Depository.  Beneficial interests in Transfer Restricted Global Securities shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act.  Transfers and exchanges of beneficial interests in the Global Securities also

4

shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(i)Transfer of Beneficial Interests in the Same Global Security.  Beneficial interests in any Transfer Restricted Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Transfer Restricted Global Security in accordance with the transfer restrictions set forth in the Restricted Securities Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in a Regulation S Global Security may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser).  A beneficial interest in an Unrestricted Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security.  No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.2(b)(i).

(ii)All Other Transfers and Exchanges of Beneficial Interests in Global Securities.  In connection with all transfers and exchanges of beneficial interests in any Global Security that is not subject to Section 2.2(b)(i), the transferor of such beneficial interest must deliver to the Registrar (1) a written order from an Agent Member given to the Depository in accordance with the applicable rules and procedures of the Depository directing the Depository to credit or cause to be credited a beneficial interest in another Global Security in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the applicable rules and procedures of the Depository containing information regarding the Agent Member account to be credited with such increase; provided that in no event shall a beneficial interest in a Global Security be credited, or an Unrestricted Definitive Security be issued, to a Person who is an affiliate (as defined in Rule 144) of the Company.  Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Securities contained in this Indenture and the Securities or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Security pursuant to Section 2.2(g).

(iii)Transfer of Beneficial Interests to Another Transfer Restricted Global Security.  A beneficial interest in a Transfer Restricted Global Security may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Transfer Restricted Global Security if the transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:

(A)if the transferee will take delivery in the form of a beneficial interest in a Rule 144A Global Security, then the transferor must deliver a certificate in the form attached to the applicable Security; and

(B)if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Security, then the transferor must deliver a certificate in the form attached to the applicable Security.

(iv)Transfer and Exchange of Beneficial Interests in a Transfer Restricted Global Security for Beneficial Interests in an Unrestricted Global Security.  A beneficial

5

interest in a Transfer Restricted Global Security may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Security or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security if the exchange or transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:

(A)if the holder of such beneficial interest in a Transfer Restricted Global Security proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Security, a certificate from such holder in the form attached to the applicable Security; or

(B)if the holder of such beneficial interest in a Transfer Restricted Global Security proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security, a certificate from such holder in the form attached to the applicable Security,

and, in each such case, if the Registrar so requests or if the applicable rules and procedures of the Depository, Euroclear or Clearstream, as applicable, so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Securities Legend are no longer required in order to maintain compliance with the Securities Act.  If any such transfer or exchange is effected pursuant to this subparagraph (iv) at a time when an Unrestricted Global Security has not yet been issued, the Company shall issue and, upon receipt of an written order of the Company in the form of an Officers’ Certificate in accordance with Section 2.01, the Trustee shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred or exchanged pursuant to this subparagraph (iv).

(v)Transfer and Exchange of Beneficial Interests in an Unrestricted Global Security for Beneficial Interests in a Transfer Restricted Global Security.  Beneficial interests in an Unrestricted Global Security cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Security.

(c)Transfer and Exchange of Beneficial Interests in Global Securities for Definitive Securities.  A beneficial interest in a Global Security may not be exchanged for a Definitive Security except under the circumstances described in Section 2.1(b)(ii).  A beneficial interest in a Global Security may not be transferred to a Person who takes delivery thereof in the form of a Definitive Security except under the circumstances described in Section 2.1(b)(ii).

(d)Transfer and Exchange of Definitive Securities for Beneficial Interests in Global Securities.  Transfers and exchanges of beneficial interests in the Global Securities shall require compliance with either subparagraph (i), (ii) or (iii) below, as applicable:

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(i)Transfer Restricted Definitive Securities to Beneficial Interests in Transfer Restricted Global Securities.  If any Holder of a Transfer Restricted Definitive Security proposes to exchange such Transfer Restricted Definitive Security for a beneficial interest in a Transfer Restricted Global Security or to transfer such Transfer Restricted Definitive Security to a Person who takes delivery thereof in the form of a beneficial interest in a Transfer Restricted Global Security, then, upon receipt by the Registrar of the following documentation:

(A)if the Holder of such Transfer Restricted Definitive Security proposes to exchange such Transfer Restricted Definitive Security for a beneficial interest in a Transfer Restricted Global Security, a certificate from such Holder in the form attached to the applicable Security;

(B)if such Transfer Restricted Definitive Security is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate from such Holder in the form attached to the applicable Security;

(C)if such Transfer Restricted Definitive Security is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate from such Holder in the form attached to the applicable Security;

(D)if such Transfer Restricted Definitive Security is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate from such Holder in the form attached to the applicable Security;

(E)if such Transfer Restricted Definitive Security is being transferred to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate from such Holder in the form attached to the applicable Security, including the certifications, certificates and Opinion of Counsel, if applicable; or

(F)if such Transfer Restricted Definitive Security is being transferred to the Company or a Subsidiary thereof, a certificate from such Holder in the form attached to the applicable Security;

the Trustee shall cancel the Transfer Restricted Definitive Security, and increase or cause to be increased the aggregate principal amount of  the appropriate Transfer Restricted Global Security.

(ii)Transfer Restricted Definitive Securities to Beneficial Interests in Unrestricted Global Securities.  A Holder of a Transfer Restricted Definitive Security may exchange such Transfer Restricted Definitive Security for a beneficial interest in an Unrestricted Global Security or transfer such Transfer Restricted Definitive Security to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security only if the Registrar receives the following:

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(A)if the Holder of such Transfer Restricted Definitive Security proposes to exchange such Transfer Restricted Definitive Security for a beneficial interest in an Unrestricted Global Security, a certificate from such Holder in the form attached to the applicable Security; or

(B)if the Holder of such Transfer Restricted Definitive Securities proposes to transfer such Transfer Restricted Definitive Security to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Security, a certificate from such Holder in the form attached to the applicable Security,

and, in each such case, if the Registrar so requests or if the applicable rules and procedures of the Depository, Euroclear or Clearstream, as applicable, so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Securities Legend are no longer required in order to maintain compliance with the Securities Act.  Upon satisfaction of the conditions of this subparagraph (ii), the Trustee shall cancel the Transfer Restricted Definitive Securities and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Security.  If any such transfer or exchange is effected pursuant to this subparagraph (ii) at a time when an Unrestricted Global Security has not yet been issued, the Company shall issue and, upon receipt of an written order of the Company in the form of an Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the aggregate principal amount of Transfer Restricted Definitive Securities transferred or exchanged pursuant to this subparagraph (ii).

(iii)Unrestricted Definitive Securities to Beneficial Interests in Unrestricted Global Securities.  A Holder of an Unrestricted Definitive Security may exchange such Unrestricted Definitive Security for a beneficial interest in an Unrestricted Global Security or transfer such Unrestricted Definitive Security to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Security at any time.  Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Security and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Securities.  If any such transfer or exchange is effected pursuant to this subparagraph (iii) at a time when an Unrestricted Global Security has not yet been issued, the Company shall issue and, upon receipt of an written order of the Company in the form of an Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted Global Securities in an aggregate principal amount equal to the aggregate principal amount of Unrestricted Definitive Securities transferred or exchanged pursuant to this subparagraph (iii).

(iv)Unrestricted Definitive Securities to Beneficial Interests in Transfer Restricted Global Securities.  An Unrestricted Definitive Security cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Security.

8

(e)Transfer and Exchange of Definitive Securities for Definitive Securities.  Upon request by a Holder of Definitive Securities and such Holder’s compliance with the provisions of this Section 2.2(e), the Registrar shall register the transfer or exchange of Definitive Securities.  Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Securities duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing.  In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.2(e).

(i)Transfer Restricted Definitive Securities to Transfer Restricted Definitive Securities.  A Transfer Restricted Definitive Security may be transferred to and registered in the name of a Person who takes delivery thereof in the form of a Transfer Restricted Definitive Security if the Registrar receives the following:

(A)if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Security;

(B)if the transfer will be made pursuant to Rule 903 or Rule 904 under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Security;

(C)if the transfer will be made pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate in the form attached to the applicable Security;

(D)if the transfer will be made to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (D) above, a certificate in the form attached to the applicable Security; and

(E)if such transfer will be made to the Company or a Subsidiary thereof, a certificate in the form attached to the applicable Security.

(ii)Transfer Restricted Definitive Securities to Unrestricted Definitive Securities.  Any Transfer Restricted Definitive Security may be exchanged by the Holder thereof for an Unrestricted Definitive Security or transferred to a Person who takes delivery thereof in the form of an Unrestricted Definitive Security if the Registrar receives the following:

(1)if the Holder of such Transfer Restricted Definitive Security proposes to exchange such Transfer Restricted Definitive Security for an Unrestricted Definitive Security, a certificate from such Holder in the form attached to the applicable Security; or

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(2)if the Holder of such Transfer Restricted Definitive Security proposes to transfer such Securities to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Security, a certificate from such Holder in the form attached to the applicable Security,

and, in each such case, if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Securities Legend are no longer required in order to maintain compliance with the Securities Act.

(iii)Unrestricted Definitive Securities to Unrestricted Definitive Securities.  A Holder of an Unrestricted Definitive Security may transfer such Unrestricted Definitive Securities to a Person who takes delivery thereof in the form of an Unrestricted Definitive Security at any time.  Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Securities pursuant to the instructions from the Holder thereof.

(iv)Unrestricted Definitive Securities to Transfer Restricted Definitive Securities.  An Unrestricted Definitive Security cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a Transfer Restricted Definitive Security.

At such time as all beneficial interests in a particular Global Security have been exchanged for Definitive Securities or a particular Global Security has been redeemed, repurchased or canceled in whole and not in part, each such Global Security shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11.  At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security or for Definitive Securities, the principal amount of Securities represented by such Global Security shall be reduced accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depository, at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security shall be increased accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depository, at the direction of the Trustee to reflect such increase.

(f)Legend.

(i)Except as permitted by the following paragraphs (ii), (iii) or (iv), each Security certificate evidencing the Global Securities and the Definitive Securities (and all Securities issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY

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NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1)REPRESENTS THAT IT, AND ANY ACCOUNT FOR WHICH IT IS ACTING, IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(2)AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED IN THE NEXT PARAGRAPH), EXCEPT:

(A)TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

(B)PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(C)TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

(D)PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

THE RESALE RESTRICTION TERMINATION DATE WILL BE THE DATE (1) THAT IS AT LEAST ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF AND (2) ON WHICH THE COMPANY INSTRUCTS THE TRUSTEE THAT THIS LEGEND SHALL BE DEEMED REMOVED FROM THIS SECURITY, IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE RELATING TO THIS SECURITY.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS

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MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”

Each Regulation S Security that is a Temporary Security issued pursuant to Section 2.10 shall bear a legend in substantially in the following form:

“THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL SECURITY THAT IS A TEMPORARY SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE SECURITY, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).”

Each Definitive Security shall bear the following additional legends:

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

Each Security issued hereunder that has more than a de minimis amount of original issue discount for U.S. Federal Income Tax purposes shall bear a legend in substantially the following form:

“THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE.  TO OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH SECURITIES, A HOLDER MAY SUBMIT WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUER AT THE FOLLOWING ADDRESS:  FREEDOM GROUP, INC., 870 REMINGTON DRIVE, MADISON, NC 27025, ATTENTION:  GENERAL COUNSEL.”

(ii)Upon any sale or transfer of a Transfer Restricted Definitive Security that is a Definitive Security, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Definitive Security for a Definitive Security that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Definitive Security if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Security).

(iii)After a transfer of any Initial Securities during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial  Securities, all requirements pertaining to the Restricted Securities Legend on such Initial Securities shall cease to apply and the requirements that any such Initial Securities be issued in global form shall continue to apply.

(iv)Upon the consummation of a Registered Exchange Offer with respect to the Initial Securities pursuant to which Holders of such Initial Securities are offered Exchange

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Securities in exchange for their Initial Securities, all requirements pertaining to Initial Securities that Initial Securities be issued in global form shall continue to apply, and Exchange Securities in global form  without the Restricted Securities Legend shall be available to Holders that exchange such Initial Securities in such Registered Exchange Offer.

(v)Upon a sale or transfer after the expiration of the Restricted Period of any Initial Security acquired pursuant to Regulation S, all requirements that such Initial Security bear the Restricted Securities Legend shall cease to apply and the requirements requiring any such Initial Security be issued in global form shall continue to apply.

(vi)Any Additional Securities sold in a registered offering shall not be required to bear the Restricted Securities Legend.

(g)Cancellation or Adjustment of Global Security.  At such time as all beneficial interests in a particular Global Security have been exchanged for Definitive Securities or a particular Global Security has been redeemed, repurchased or canceled in whole and not in part, each such Global Security shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 of this Indenture.  At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security or for Definitive Securities, the principal amount of Securities represented by such Global Security shall be reduced accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depository, at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security shall be increased accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depository, at the direction of the Trustee to reflect such increase.

(h)Obligations with Respect to Transfers and Exchanges of Securities.

(i)To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate, Definitive Securities and Global Securities at the Registrar’s request.

(ii)No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this Indenture).

(iii)Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, a Paying Agent or the Registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the Trustee, a Paying Agent or the Registrar  shall be affected by notice to the contrary.

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(iv)All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.

(i)No Obligation of the Trustee.

(i)The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depository or any other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Securities.  All notices and communications to be given to the Holders and all payments to be made to the Holders under the Securities shall be given or made only to the registered Holders (which shall be the Depository or its nominee in the case of a Global Security).  The rights of beneficial owners in any Global Security shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository.  The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.

(ii)The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depository participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(j)[INTENTIONALLY OMITTED].

(k)Transfers of Securities Held by Affiliates.  Notwithstanding anything to the contrary in this Section 2.2 any certificate (i) evidencing a Security that has been transferred to an affiliate (as defined in Rule 405 of the Securities Act) of the Company, as evidenced by a notation on the certificate of transfer or certificate of exchange for such transfer or in the representation letter delivered in respect thereof, or (ii) evidencing a Security that has been acquired from an affiliate (other than by an affiliate) in a transaction or a chain of transactions not involving any public offering, as evidenced by a notation on the certificate of transfer or certificate of exchange for such transfer or in the representation letter delivered in respect thereof, shall, until one year after the last date on which either the Company or any affiliate of the Company was an owner of such Security, in each case, be in the form of a permanent Definitive Security and bear the Restricted Securities Legend subject to the restrictions in this Section 2.2.  The Registrar shall retain copies of all letters, notices and other written communications received pursuant to this Section 2.2(k).  The Company, at its sole cost and expense, shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable advance written notice to the Trustee.

14

EXHIBIT A

[FORM OF FACE OF INITIAL SECURITY]

[Global Securities Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[Restricted Securities Legend]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1)REPRESENTS THAT IT, AND ANY ACCOUNT FOR WHICH IT IS ACTING, IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(2)AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED IN THE NEXT PARAGRAPH), EXCEPT:

(A)TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

(B)PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(C)TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

(D)PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

THE RESALE RESTRICTION TERMINATION DATE WILL BE THE DATE (1) THAT IS AT LEAST ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF AND (2) ON WHICH THE COMPANY INSTRUCTS THE TRUSTEE THAT THIS LEGEND SHALL BE DEEMED REMOVED FROM THIS SECURITY, IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE RELATING TO THIS SECURITY.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

[Temporary Regulation S Security Legend]

THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL SECURITY THAT IS A TEMPORARY SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE SECURITY, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).

[OID Legend]

THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE.  TO OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH SECURITIES, A HOLDER MAY SUBMIT WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUER AT THE FOLLOWING ADDRESS:  FREEDOM GROUP, INC., 870 REMINGTON DRIVE, MADISON, NC 27025, ATTENTION:  GENERAL COUNSEL.

Each Definitive Security shall bear the following additional legend:

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES

2

AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

3

[FORM OF INITIAL SECURITY]

No. $                    

10¼% Senior Secured Note due 2015

CUSIP No. [144A: 35638P AA8 / Reg S: U31331 AA6]
ISIN No. [144A: US35638PAA84 / Reg S: USU31331AA63]

FREEDOM GROUP, INC., a Delaware corporation, promises to pay to [                   ], or registered assigns, the principal sum of                 Dollars [or such greater or lesser amount as is indicated on the Schedule of Increases or Decreases in Global Security attached hereto]* on August 1, 2015.

Interest Payment Dates:  February 1 and August 1.

Record Dates:  January 15 and July 15.

Additional provisions of this Security are set forth on the other side of this Security.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

		FREEDOM GROUP, INC.
		By:
			Name:
			Title:
Dated:
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST FSB, as Trustee, certifies that this is one of the Securities referred to in the Indenture.
By:
	Authorized Signatory

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*/If the Security is to be issued in global form, add the Global Securities Legend and the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY.”

5

[FORM OF REVERSE SIDE OF INITIAL SECURITY]

10¼% Senior Secured Note due 2015

1.Interest

(a)FREEDOM GROUP, INC., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at the rate per annum shown above.  The Company shall pay interest semiannually on February 1 and August 1 of each year, commencing February 1, 2010.(a)  Interest on the Securities shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from July 29, 2009(a) until the principal hereof is due.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.  The Company shall pay interest on overdue principal at the rate borne by the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

(b)Registration Rights Agreement.  The Holder of this Security is entitled to the benefits of a Registration Rights Agreement, dated as of July 29, 2009, among the Company, the Guarantors and the Initial Purchasers.

2.Method of Payment

The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders at the close of business on the January 15 or July 15 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date (whether or not a Business Day).  The Holders must surrender Securities to a Paying Agent to collect principal payments.  The Company shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  Payments in respect of the Securities represented by a Global Security (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depositary.  The Company will make all payments in respect of a certificated Security (including principal, premium, if any, and interest), at the office of each Paying Agent, except that, at the option of the Company, payment of interest may be made by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Securities may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or a Paying Agent to such effect designating such account no

(a)With respect to Securities issued on the Issue Date.

6

later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3.Paying Agent and Registrar

Initially, Wilmington Trust FSB (the “Trustee”) will act as Paying Agent and Registrar.  The Company may appoint and change any Paying Agent or Registrar without notice.  The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

4.Indenture

The Company issued the Securities under an Indenture dated as of July 29, 2009 (the “Indenture”), among the Company, the Guarantors and the Trustee.  The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all terms and provisions of the Indenture, and the Holders are referred to the Indenture and the TIA for a statement of such terms and provisions.  To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

The Securities are senior secured obligations of the Company.  This Security is one of the Initial Securities referred to in the Indenture.  The Securities include the Initial Securities and any Exchange Securities issued in exchange for Initial Securities pursuant to the Indenture.  The Initial Securities and any Exchange Securities are treated as a single class of securities under the Indenture.  The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stock of the Company and such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or incur Liens and make asset sales.  The Indenture also imposes limitations on the ability of the Company and each Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property.

To guarantee the due and punctual payment of the principal and interest, on the Securities and all other amounts payable by the Company under the Indenture and the Securities when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Securities and the Indenture, the Guarantors have, jointly and severally, unconditionally guaranteed the Guaranteed Obligations on a senior secured basis pursuant to the terms of the Indenture.

5.Optional Redemption

Except as set forth in the following two paragraphs, the Securities shall not be redeemable at the option of the Company prior to August 1, 2012.  Thereafter, the Securities shall

7

be redeemable at the option of the Company, in whole at any time or in part from time to time, upon on not less than 30 nor more than 60 days’ prior notice, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, to the redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on August 1 of the years set forth below:

Year	Redemption Price
2012	105.125	%
2013	102.563	%
2014 and thereafter	100.000	%

In addition, at any time prior to August 1, 2012, the Company may redeem the Securities at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount of the Securities redeemed plus the Applicable Premium as of, and accrued and unpaid interest, to, the applicable redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

In addition, at any time and from time to time prior to August 1, 2012, but not more than once in any twelve-month period, the Company may redeem up to 10% of the original aggregate principal amount of the Securities at a redemption price (expressed as a percentage of principal amount thereof) of 103%, plus accrued and unpaid interest, if any, to the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Notwithstanding the foregoing, at any time and from time to time on or prior to August 1, 2012, the Company may redeem in the aggregate up to 35% of the original aggregate principal amount of the Securities (calculated after giving effect to any issuance of Additional Securities) with the net cash proceeds of one or more Equity Offerings (1) by the Company or (2) by any direct or indirect parent of the Company, in each case, to the extent the net cash proceeds thereof are contributed to the common equity capital of the Company or used to purchase Capital Stock (other than Disqualified Stock) of the Company from it, at a redemption price (expressed as a percentage of the principal amount thereof) equal to 110.25% plus, accrued and unpaid interest, if any, to the redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of the original aggregate principal amount of the Securities (calculated after giving effect to any issuance of Additional Securities) must remain outstanding after each such redemption; and provided, further, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed to each Holder of Securities being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice of redemption shall describe each such condition, and if applicable, shall

8

state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the stated redemption date, or by the redemption date as so delayed.

6.Sinking Fund

The Securities are not subject to any sinking fund.

7.Notice of Redemption

Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his, her or its registered address or otherwise in accordance with the procedures of The Depository Trust Company.  Securities in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 to the extent practicable.  If money sufficient to pay the redemption price of and accrued and unpaid interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date, interest ceases to accrue on such Securities (or such portions thereof) called for redemption.

8.Repurchase of Securities at the Option of Holders upon Change of Control, Asset Sales and Event of Loss

Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), as provided in, and subject to the terms of, the Indenture.

In accordance with Sections 4.06 and 4.15 of the Indenture, the Company will be required to offer to purchase Securities upon the occurrence of certain events.

9.Denominations; Transfer; Exchange

The Securities are in registered form, without coupons, in denominations of $2,000 and any integral multiple of $1,000 in excess thereof.  A Holder shall register the transfer of or exchange of Securities in accordance with the Indenture.  Upon any registration of transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture.  The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or to transfer or exchange any Securities for a period of 15 days prior to a selection of Securities to be redeemed.

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10.Persons Deemed Owners

The registered Holder of this Security shall be treated as the owner of it for all purposes.

11.Unclaimed Money

If money for the payment of principal or interest remains unclaimed for two years, the Trustee and a Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person.  After any such payment, the Holders entitled to the money must look to the Company for payment as general creditors and the Trustee and a Paying Agent shall have no further liability with respect to such monies.

12.Discharge and Defeasance

Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal of, and interest on the Securities to redemption, or maturity, as the case may be.

13.Amendment, Waiver

Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities (voting as a single class) and (ii) any past default or compliance with any provisions may be waived with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities.  Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company and the Trustee may amend the Indenture or the Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to provide for uncertificated Securities in addition to or in place of certificated Securities; (iv) to add additional Guarantees with respect to the Securities or to secure the Securities; (v) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power conferred in the Indenture upon the Company; (vi) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; (vii) to make any change that does not adversely affect the rights of any Holder; (viii)  to provide for the issuance of the Exchange Securities or Additional Securities; (ix) to provide for the release of Collateral from the Liens of the Indenture and the Security Documents when permitted or required by the Security Documents, the Intercreditor Agreement or the Indenture; or (x) to secure any Permitted Additional Pari Passu Obligations under the Security Documents and to appropriately include the same in the Intercreditor Agreement.

14.Defaults and Remedies

If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities, in each case,

10

by notice to the Company, may declare the principal of, premium, if any, and accrued but unpaid interest on all the Securities to be due and payable.  If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of, premium, if any, and interest on all the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.  Under certain circumstances, the Holders of a majority in principal amount of the outstanding Securities may rescind any such acceleration with respect to the Securities and its consequences.

If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense and certain other conditions are complied with.  Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Securities unless (i) such Holder has previously given the Trustee notice that an Event of Default is continuing, (ii) the Holders of at least 25% in principal amount of the outstanding Securities have requested the Trustee in writing to pursue the remedy, (iii) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity and (v) the Holders of a majority in principal amount of the outstanding Securities have not given the Trustee a direction inconsistent with such request within such 60-day period.  Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding Securities are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.  The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.  Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

15.Trustee Dealings with the Company

Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

16.No Recourse Against Others

No director, officer, employee, incorporator or holder of any equity interests in the Company or of any Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Company or the Guarantors under the Securities, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Securities by accepting a Security waives and releases all such liability.

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17.Authentication

This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.

18.Abbreviations

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

19.Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

20.CUSIP Numbers, ISINs and Common Codes

The Company has caused CUSIP numbers and ISINs to be printed on the Securities and has directed the Trustee to use CUSIP numbers and ISINs.  No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Company will furnish to any Holder of Securities upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security.

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ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to:

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                           agent to transfer this Security on the books of the Company.  The agent may substitute another to act for him.

Date: Your Signature:

Sign exactly as your name appears on the other side of this Security.

Signature Guarantee:

Date:
	Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee	Signature of Signature Guarantee

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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER RESTRICTED SECURITIES

This certificate relates to $                   principal amount of Securities held in (check applicable space)          book-entry or            definitive form by the undersigned.

The undersigned:

o	has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Security held by the Depository a Security or Securities in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Security (or the portion thereof indicated above); and
		check the following, if applicable:
		o	is an affiliate of the Company as contemplated in Section 2.2(k) of Appendix A to the Indenture; or
		o	is exchanging this Security in connection with an expected transfer to an affiliate of the Company as contemplated in Section 2.2(k) of Appendix A to the Indenture.
o	has requested the Trustee by written order to exchange or register the transfer of a Security or Securities; and
		check the following, if applicable:
		o	is an affiliate of the Company as contemplated in Section 2.2(k) of Appendix A to the Indenture; or
		o	the transferee is an affiliate of the Company as contemplated in Section 2.2(k) of Appendix A to the Indenture.

In connection with any transfer of any of the Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 under the Securities Act, the undersigned confirms that such Securities are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

(1)	o	to the Company; or
(2)	o	to the Registrar for registration in the name of the Holder, without transfer; or
(3)	o	pursuant to an effective registration statement under the Securities Act of 1933; or

14

(4)	o	inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
(5)	o	outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933 and such Security shall be held immediately after the transfer through Euroclear or Clearstream until the expiration of the Restricted Period (as defined in the Indenture); or
(6)	o	to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or
(7)	o	pursuant to another available exemption from registration provided by Rule 144 under the Securities Act of 1933.

Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Trustee may require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.

Date:
		Your Signature
Signature Guarantee:
Date:
	Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee	Signature of Signature Guarantee

TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that

15

it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated:
	NOTICE: To be executed by an executive officer

16

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The initial principal amount of this Global Security is set forth on the face hereof.  The following increases or decreases in this Global Security have been made:

Date of
Exchange Amount of decrease
in Principal Amount
of this Global
Security Amount of increase in
Principal Amount of 
this Global Security Principal amount of this
Global Security following
such decrease or increase Signature of authorized
signatory of Trustee or
Securities Custodian

17

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Security purchased by the Company pursuant to Section 4.06 (Asset Sale), 4.08 (Change of Control) or 4.15 (Event of Loss) of the Indenture, check the box:

Asset Sale  oChange of Control  oEvent of Loss  o

If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.06 (Asset Sale), 4.08 (Change of Control) or 4.15 (Event of Loss) of the Indenture, state the amount ($1,000 or an integral multiple thereof):

$

Date:	Your Signature:
		(Sign exactly as your name appears on the other side of this Security)

Signature Guarantee:

Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee

18

EXHIBIT B

[FORM OF FACE OF EXCHANGE SECURITY]
[Global Securities Legend]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

No. $                    

10¼% Senior Secured Note due 2015

CUSIP No.
ISIN No.

FREEDOM GROUP, INC., a Delaware corporation, promises to pay to [                              ], or registered assigns, the principal sum of                 Dollars [or such greater or lesser amount as is indicated on the Schedule of Increases or Decreases in Global Security attached hereto]* on August 1, 2015.

Interest Payment Dates:  February 1 and August 1.

Record Dates:  January 15 and July 15.

Additional provisions of this Security are set forth on the other side of this Security.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

		FREEDOM GROUP, INC.
		By:
			Name:
			Title:
Dated:
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST FSB,
as Trustee, certifies that this is one of the Securities referred to in the Indenture.
By:
	Authorized Signatory

2

*/If the Security is to be issued in global form, add the Global Securities Legend and the attachment from Exhibit A captioned “TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY.”

3

[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]

10¼% Senior Secured Note due 2015

1.Interest

FREEDOM GROUP, INC., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at the rate per annum shown above.  The Company shall pay interest semiannually on February 1 and August 1 of each year, commencing February 1, 2010.(a)  Interest on the Securities shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from July 29, 2009[a] until the principal hereof is due.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.  The Company shall pay interest on overdue principal at the rate borne by the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

2.Method of Payment

The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders at the close of business on the January 15 or July 15 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date (whether or not a Business Day).  The Holders must surrender Securities to a Paying Agent to collect principal payments.  The Company shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depositary.  The Company will make all payments in respect of a certificated Security (including principal, premium, if any, and interest), at the office of a Paying Agent, except that, at the option of the Company, payment of interest may be made by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Securities may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or a Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

(a)With respect to the Securities issued on the Issue Date.

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3.Paying Agent and Registrar

Initially, Wilmington Trust FSB (the “Trustee”) will act as Paying Agent and Registrar.  The Company may appoint and change any Paying Agent or Registrar without notice.  The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

4.Indenture

The Company issued the Securities under an Indenture dated as of July 29, 2009 (the “Indenture”), among the Company, the Guarantors and the Trustee.  The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all terms and provisions of the Indenture, and the Holders are referred to the Indenture and the TIA for a statement of such terms and provisions.  To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

The Securities are senior secured obligations of the Company.  This Security is one of the Exchange Securities referred to in the Indenture.  The Securities include the Initial Securities, the Additional Securities and any Exchange Securities issued in exchange for the Initial Securities pursuant to the Indenture.  The Initial Securities and Exchange Securities are treated as a single class of securities under the Indenture.  The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stock of the Company and such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or incur Liens and make Asset Sales.  The Indenture also imposes limitations on the ability of the Company and each Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property.

To guarantee the due and punctual payment of the principal and interest, if any, on the Securities and all other amounts payable by the Company under the Indenture and the Securities when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Securities and the Indenture, the Guarantors have, jointly and severally, unconditionally guaranteed the Guaranteed Obligations on a senior secured basis pursuant to the terms of the Indenture.

5.Optional Redemption

Except as set forth in the following three paragraphs, the Securities shall not be redeemable at the option of the Company prior to August 1, 2012.  Thereafter, the Securities shall be redeemable at the option of the Company, in whole at any time or in part from time to time, upon on not less than 30 nor more than 60 days’ prior notice, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any,

5

to the redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on August 1 of the years set forth below:

Year	Redemption Price
2012	105.125	%
2013	102.563	%
2014 and thereafter	100.000	%

In addition, prior to August 1, 2012, the Company may redeem the Securities at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days’ prior notice, at a redemption price equal to 100% of the principal amount of the Securities redeemed plus the Applicable Premium as of, and accrued and unpaid interest to, the applicable redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

In addition, at any time and from time to time prior to August 1, 2012, but not more than once in any twelve-month period, the Company may redeem up to 10% of the original aggregate principal amount of the Securities at a redemption price (expressed as a percentage of principal amount thereof) of 103%, plus accrued and unpaid interest, if any, to the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

Notwithstanding the foregoing, at any time and from time to time on or prior to August 1, 2012, the Company may redeem in the aggregate up to 35% of the original aggregate principal amount of the Securities (calculated after giving effect to any issuance of Additional Securities), with the net cash proceeds of one or more Equity Offerings (1) by the Company or (2) by any direct or indirect parent of the Company, in each case, to the extent the net cash proceeds thereof are contributed to the common equity capital of the Company or used to purchase Capital Stock (other than Disqualified Stock) of the Company from it, at a redemption price (expressed as a percentage of the principal amount thereof) equal to 110.25% plus accrued and unpaid interest, if any, to the redemption date (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of the original aggregate principal amount of the Securities (calculated after giving effect to any issuance of Additional Securities) must remain outstanding after each such redemption; and provided, further, that such redemption shall occur within 90 days after the date on which any such Equity Offering is consummated upon not less than 30 nor more than 60 days’ notice mailed to each Holder of Securities being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice of redemption shall describe each such condition, and if applicable, shall state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice

6

may be rescinded in the event that any or all such conditions shall not have been satisfied by the stated redemption date, or by the redemption date as so delayed.

6.Sinking Fund

The Securities are not subject to any sinking fund.

7.Notice of Redemption

Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his, her or its registered address or otherwise in accordance with the procedures of The Depository Trust Company.  Securities in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 to the extent practicable.  If money sufficient to pay the redemption price of and accrued and unpaid interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption.

8.Repurchase of Securities at the Option of the Holders upon Change of Control, Asset Sales and Event of Loss

Upon the occurrence of a Change of Control, each Holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of the Holders of record on the relevant record date to receive interest due on the relevant interest payment date), as provided in, and subject to the terms of, the Indenture.

In accordance with Sections 4.06 and 4.15 of the Indenture, the Company will be required to offer to purchase Securities upon the occurrence of certain events.

9.Denominations; Transfer; Exchange

The Securities are in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess thereof.  A Holder shall register the transfer of or exchange of Securities in accordance with the Indenture.  Upon any registration of transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture.  The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or to transfer or exchange any Securities for a period of 15 days prior to a selection of Securities to be redeemed.

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10.Persons Deemed Owners

The registered Holder of this Security shall be treated as the owner of it for all purposes.

11.Unclaimed Money

If money for the payment of principal or interest remains unclaimed for two years, the Trustee and a Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person.  After any such payment, the Holders entitled to the money must look to the Company for payment as general creditors and the Trustee and a Paying Agent shall have no further liability with respect to such monies.

12.Discharge and Defeasance

Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption, or maturity, as the case may be.

13.Amendment, Waiver

Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities (voting as a single class) and (ii) any past default or compliance with any provisions may be waived with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities.  Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company and the Trustee may amend the Indenture or the Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to provide for uncertificated Securities in addition to or in place of certificated Securities; (iv) to add additional Guarantees with respect to the Securities or to secure the Securities; (v) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power conferred in the Indenture upon the Company; (vi) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; (vii) to make any change that does not adversely affect the rights of any Holder; (viii)  to provide for the issuance of the Exchange Securities or Additional Securities; (ix) to provide for the release of Collateral from the Liens of the Indenture and the Security Documents when permitted or required by the Security Documents, the Intercreditor Agreement or the Indenture; or (x) to secure any Permitted Additional Pari Passu Obligations under the Security Documents and to appropriately include the same in the Intercreditor Agreement.

14.Defaults and Remedies

If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities, in each case,

8

by notice to the Company, may declare the principal of, premium, if any, and accrued but unpaid interest on all the Securities to be due and payable.  If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of, premium, if any, and interest on all the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.  Under certain circumstances, the Holders of a majority in principal amount of the outstanding Securities may rescind any such acceleration with respect to the Securities and its consequences.

If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense and certain other conditions are complied with.  Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Securities unless (i) such Holder has previously given the Trustee notice that an Event of Default is continuing, (ii) the Holders of at least 25% in principal amount of the outstanding Securities have requested the Trustee in writing to pursue the remedy, (iii) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity and (v) the Holders of a majority in principal amount of the outstanding Securities have not given the Trustee a direction inconsistent with such request within such 60-day period.  Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding Securities are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.  The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.  Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

15.Trustee Dealings with the Company

Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

16.No Recourse Against Others

No director, officer, employee, incorporator or holder of any equity interests in the Company or of any Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of the Company or the Guarantors under the Securities, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Securities by accepting a Security waives and releases all such liability.

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17.Authentication

This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.

18.Abbreviations

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

19.Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

20.CUSIP Numbers, ISINs and Common Codes

The Company has caused CUSIP numbers and ISINs to be printed on the Securities and has directed the Trustee to use CUSIP numbers and ISINs.  No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Company will furnish to any Holder of Securities upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security.

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ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to:

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                           agent to transfer this Security on the books of the Company.  The agent may substitute another to act for him.

Date:	Your Signature:
		Sign exactly as your name appears on the other side of this Security.

Signature Guarantee:
Date:
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee	Signature of Signature Guarantee

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Security purchased by the Company pursuant to Section 4.06 (Asset Sale), 4.08 (Change of Control) or 4.15 (Event of Loss) of the Indenture, check the box:

Asset Sale o Change of Control o Event of Loss o

If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.06 (Asset Sale), 4.08 (Change of Control) or 4.15 (Event of Loss) of the Indenture, state the amount ($1,000 or an integral multiple thereof):

$
Date:		Your Signature:
			(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:
	Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably acceptable to the Trustee.

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[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The initial principal amount of this Global Security is set forth on the face hereof.  The following increases or decreases in this Global Security have been made:

Date of
Exchange Amount of decrease
in Principal Amount
of this Global
Security Amount of increase in
Principal Amount of
this Global Security Principal amount of this
Global Security following
such decrease or increase Signature of authorized
signatory of Trustee or
Securities Custodian

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EXHIBIT C

Form of
Transferee Letter of Representation

Freedom Group, Inc.

c/o Wilmington Trust FSB
246 Goose Lane, Suit 105
Guilford, CT 06437

Ladies and Gentlemen:

This certificate is delivered to request a transfer of $[          ] principal amount of the 10¼% Senior Secured Notes due 2015 (the “Securities”) of FREEDOM GROUP, INC. (the “Company”).

Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:

Name:

Address:

Taxpayer ID Number:

The undersigned represents and warrants to you that:

1.We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act.  We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business.  We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.

2.We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence.  We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is one year after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) to the Company, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act (“Rule 144A”), to a person we

reasonably believe is a qualified institutional buyer under Rule 144A (a “QIB”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Securities of $250,000, or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws.  The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date.  If any resale or other transfer of the Securities is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act.  Each purchaser acknowledges that the Company and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Securities pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Company and the Trustee.

Dated:	TRANSFEREE:	,
	by

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EXHIBIT D

[FORM OF SUPPLEMENTAL INDENTURE]

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of [            ], among [GUARANTOR] (the “New Guarantor”), a subsidiary of FREEDOM GROUP, INC. (or its successor), a Delaware corporation (the “Company”), and WILMINGTON TRUST FSB,  as trustee under the indenture referred to below (the “Trustee”).

W I T N E S S E T H :

WHEREAS the Company and the existing Guarantors have heretofore executed and delivered to the Trustee an Indenture (as amended, supplemented or otherwise modified, the “Indenture”) dated as of July 29, 2009, providing for the issuance of the Company’s 10¼% Senior Secured Notes due 2015 (the “Securities”), initially in the aggregate principal amount of $200,000,000;

WHEREAS Section 4.11 of the Indenture provides that under certain circumstances the Company is required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all the Company’s obligations under the Securities pursuant to a Guarantee on the terms and conditions set forth herein; and

WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the Company and the existing Guarantors are authorized to execute and deliver this Supplemental Indenture;

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Company, and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Securities as follows:

1.Defined Terms.  As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “Holders” in this Guarantee shall refer to the term “Holders” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such Holders.  The words “herein,” “hereof” and hereby and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

2.Agreement to Guarantee.  The New Guarantor hereby agrees, jointly and severally with all existing Guarantors (if any), to unconditionally guarantee the Company’s obligations under the Securities on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture and the Securities and to perform all of the obligations and agreements of a Guarantor under the Indenture.

3.Ratification of Indenture; Supplemental Indentures Part of Indenture.  Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all

the terms, conditions and provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby.

4.Notices.  All notices or other communications to the New Guarantor shall be given as provided in Section 13.02 of the Indenture.

5.Governing Law.  THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

6.Trustee Makes No Representation.  The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.

7.Counterparts.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.

8.Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction thereof.

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

[NEW GUARANTOR]
By:
	Name:
	Title:
FREEDOM GROUP, INC.
By:
	Name:
	Title:
WILMINGTON TRUST FSB, AS TRUSTEE
By:
	Name:
	Title:

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EX-4.5

Exhibit 4.5

EXECUTION VERSION

Registration Rights Agreement

Dated as of July 29, 2009

by and among

FREEDOM GROUP, INC.

and

the Subsidiary Guarantors listed on the Signature pages hereof,

on the one hand,

and

Banc of America Securities LLC,
Deutsche Bank Securities Inc.,
Wells Fargo Securities, LLC

and

the other Initial Purchasers,

on the other hand

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made and entered into on July 29, 2009 (the “Closing Date”), by and among FREEDOM GROUP, INC., a Delaware corporation (the “Company”), and the subsidiary guarantors listed on the signature page of this Agreement (the “Subsidiary Guarantors”), on the one hand, and Banc of America Securities LLC, Deutsche Bank Securities Inc. and Wells Fargo Securities, LLC, on behalf of themselves and as representatives of each of the other Initial Purchasers named in Schedule A hereto (collectively, the “Initial Purchasers”), on the other hand.

This Agreement is made pursuant to that certain Purchase Agreement, dated July 15, 2009 by and among the Company, the Subsidiary Guarantors and the Initial Purchasers (the “Purchase Agreement”), which provides for the sale by the Company to the Initial Purchasers of an aggregate of $200,000,000 in principal amount of the Company’s 101/4% Senior Secured Notes due 2015 (the “Notes”), which are guaranteed by the Subsidiary Guarantors.  In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company and the Subsidiary Guarantors have agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement.  The execution of this Agreement is a condition to the closing under the Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties hereto covenant and agree as follows:

1.Definitions.

As used in this Agreement, the following capitalized defined terms shall have the following meanings:

“1933 Act” shall mean the Securities Act of 1933, as amended from time to time.

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

“Additional Guarantor” shall mean any subsidiary of the Company that executes a Subsidiary Guarantee under the Indenture after the date of this Agreement.

“Additional Interest” shall have the meaning set forth in Section 2.5(a) hereof.

“Automatic Shelf Registration Statement” shall mean an “automatic shelf registration statement” as that term is defined in Rule 405, as amended, under the 1933 Act.

“Business Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.

“Closing” shall mean the Closing Date as defined in the Purchase Agreement.

“Company” shall have the meaning set forth in the preamble and shall also include the Company’s successors.

“Depositary” shall mean The Depository Trust Company, or any other depositary appointed by the Company, provided, however, that such depositary must have an address in the Borough of Manhattan, in the City of New York.

“Effectiveness Period” shall have the meaning set forth in Section 2.2(b).

“Event Date” shall have the meaning set forth in Section 2.5(b).

“Exchange Dates” shall have the meaning set forth in Section 2.1.

“Exchange Notes” shall mean the new notes to be exchanged for Transfer Restricted Notes, not subject to restrictions on transfer in the United States.

“Exchange Offer” shall mean the exchange offer by the Company and the Subsidiary Guarantors of Exchange Notes for Transfer Restricted Notes pursuant to Section 2.1 hereof.

“Exchange Offer Registration” shall mean a registration under the 1933 Act effected pursuant to Section 2.1 hereof.

“Exchange Offer Registration Statement” shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form), and all amendments and supplements to such registration statement, including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein.

“Free Writing Prospectus” means each free writing prospectus (as defined in Rule 405 under the 1933 Act) prepared by or on behalf of the Company or used or referred to by the Company in connection with the sale of the Notes or the Exchange Notes.

“Freely Tradable” shall mean, with respect to a Note, a Note that at any time of determination (i) may be resold to the public in accordance with Rule 144 under the 1933 Act or any successor provision thereof (“Rule 144”) without regard to volume, manner of sale or any other restrictions contained in Rule 144 (other than the holding period requirement in paragraph (d)(1)(ii) of Rule 144 so long as such holding period requirement is satisfied at such time of determination), (ii) does not bear any restrictive legends relating to the 1933 Act and (iii) does not bear a restricted CUSIP number.

“Holder” shall mean an Initial Purchaser, for so long as it owns any Transfer Restricted Notes, and each of its successors, assigns and direct and indirect transferees who become registered owners of Transfer Restricted Notes under the Indenture and each Participating Broker-Dealer that holds Exchange Notes for so long as such Participating Broker-Dealer is required to deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Notes.

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“Indenture” shall mean the Indenture relating to the Notes, dated as of July 29, 2009, among the Company, the Subsidiary Guarantors, and Wilmington Trust, FSB, as trustee and collateral agent, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof.

“Initial Purchaser” or “Initial Purchasers” shall have the meaning set forth in the preamble.

“Issuer Information” shall have the meaning set forth in Section 4(a)(i).

“Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of outstanding Transfer Restricted Notes; provided that whenever the consent or approval of Holders of a specified percentage of Transfer Restricted Notes is required hereunder, Transfer Restricted Notes held by the Company and other obligors on the Notes or any Affiliate (as defined in the Indenture) of the Company or any Subsidiary Guarantor shall be disregarded in determining whether such consent or approval was given by the Holders of such required percentage amount; provided, further, that if the Company shall issue any additional Notes under the Indenture prior to consummation of the Exchange Offer, or if applicable, prior to the effectiveness of any Shelf Registration Statement or prior to the Transfer Restricted Notes otherwise becoming Freely Tradable, such additional Notes and the Transfer Restricted Notes to which this Agreement relates shall be treated together as one class for purposes of determining whether the consent or approval of Holders of a specified percentage of Transfer Restricted Notes has been obtained.

“Notes” shall have the meaning set forth in the preamble hereof.

“Participating Broker-Dealer” shall mean any of the Initial Purchasers and any other broker-dealer which makes a market in the Notes and exchanges Transfer Restricted Notes in the Exchange Offer for Exchange Notes.

“Person” shall mean an individual, partnership (general or limited), corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof.

“Prospectus” shall mean the prospectus included in, or, pursuant to the rules and regulations of the 1933 Act, deemed a part of, a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any portion of the Transfer Restricted Notes covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.

“Purchase Agreement” shall have the meaning set forth in the preamble.

“Registration Default” shall have the meaning set forth in Section 2.5(a).

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“Registration Expenses” shall mean any and all expenses incident to performance of or compliance by the Company and the Subsidiary Guarantors with this Agreement, including without limitation: (i) all SEC, stock exchange or Financial Industry Regulatory Authority (“FINRA”) registration and filing fees, including, if applicable, the fees and expenses of any “qualified independent underwriter” that is required to be retained by any holder of Transfer Restricted Notes in accordance with the rules and regulations of FINRA, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws and compliance with the rules of FINRA (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with blue sky qualification of any of the Exchange Notes or Transfer Restricted Notes and any filings with FINRA), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Transfer Restricted Notes on any securities exchange or exchanges, (v) all rating agency fees, (vi) the fees and disbursements of counsel for the Company and the Subsidiary Guarantors and of the independent public accountants of the Company and the Subsidiary Guarantors, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance, and in the case of a Shelf Registration Statement, the reasonable fees and disbursements of one counsel for the Holders as a group (which counsel shall be selected by the Majority Holders and which counsel may also be counsel for the Initial Purchasers), (vii) the fees and expenses of the Trustee (including the reasonable fees and disbursements of its counsel), and any escrow agent or custodian, (viii) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, and (ix) any fees and disbursements of the underwriters customarily required to be paid by issuers or sellers of securities and the fees and expenses of any special experts retained by the Company and the Subsidiary Guarantors in connection with any Registration Statement, but excluding underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Transfer Restricted Notes by a Holder.  Notwithstanding the foregoing, except as specifically provided above, the Company and the Subsidiary Guarantors shall not be responsible for the fees and expenses of the Initial Purchasers in connection with the Exchange Offer, or the fees and expenses of counsel to the Initial Purchasers in connection therewith.

“Registration Statement” shall mean any registration statement of the Company and the Subsidiary Guarantors which covers any of the Exchange Notes or Transfer Restricted Notes pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and all material incorporated by reference therein.

“Registration Trigger Date” means the fifth Business Day following the one year anniversary of the date hereof.

“SEC” shall mean the Securities and Exchange Commission or any successor agency or government body performing the functions currently performed by the United States Securities and Exchange Commission.

4

“Shelf Registration” shall mean a registration effected pursuant to Section 2.2.

“Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and the Subsidiary Guarantors pursuant to the provisions of Section 2.2, including an Automatic Shelf Registration Statement, if applicable, which covers all or a portion of the Transfer Restricted Notes on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and all material incorporated by reference therein.

“Shelf Request” shall have the meaning set forth in Section 2.2(a)(ii).

“Subsidiary Guarantees” shall mean the guarantees of the Notes and the Exchange Notes by the Subsidiary Guarantors under the Indenture.

“Subsidiary Guarantors” shall have the meaning set forth in the preamble and shall also include any Subsidiary Guarantor’s successors and any Additional Guarantors.

“TIA” shall have the meaning set forth in Section 2.1(d) hereof.

“Transfer Restricted Notes” shall mean the Notes; provided, however, that the Notes shall cease to be Transfer Restricted Notes on the earliest to occur of (i) the date on which a Registration Statement with respect to such Notes has become effective under the 1933 Act and such Notes have been exchanged or disposed of pursuant to such Registration Statement, (ii) the date on which such Notes cease to be outstanding under the Indenture or (iii) the date on which such Notes are Freely Tradable.

“Trustee” shall mean the trustee with respect to the Notes under the Indenture.

“Underwriter” shall have the meaning set forth in Section 4(a).

“WKSI” shall mean a “well-known seasoned issuer” as that term is defined in Rule 405, as amended, under the 1933 Act.

2.Registration Under the 1933 Act.

2.1Exchange Offer.

(a)To the extent not prohibited by any applicable law or applicable interpretations of the staff of the SEC, with respect to any Notes, if any, that on the Registration Trigger Date are Transfer Restricted Notes, the Company and the Subsidiary Guarantors shall use commercially reasonable efforts to (X) cause to be filed and to become effective an Exchange Offer Registration Statement covering an offer to the Holders to exchange all the Transfer Restricted Notes for Exchange Notes and (Y) have such Registration Statement remain effective until 90 days after the last Exchange Date for use by one or more Participating Broker Dealers if one or more broker dealers notify the Company in writing that they anticipate that they will be Participating Broker

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Dealers.  The Company and the Subsidiary Guarantors shall commence the Exchange Offer promptly after the Exchange Offer Registration Statement is declared effective by the SEC and use commercially reasonable efforts to complete the Exchange Offer not later than 45 days after such effective date.

(b)The Company and the Subsidiary Guarantors shall, for the benefit of the Holders, at the Company’s and Subsidiary Guarantors’ cost, commence the Exchange Offer, if any, by mailing the related Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law, substantially the following:

(i)that the Exchange Offer is being made pursuant to this Agreement and that all Transfer Restricted Notes validly tendered and not properly withdrawn will be accepted for exchange;

(ii)the dates of acceptance for exchange (which shall be a period of at least 20 Business Days from the date such notice is mailed) (the “Exchange Dates”);

(iii)that any Transfer Restricted Notes not tendered will remain outstanding and continue to accrue interest but will not retain any rights under this Agreement, except as otherwise specified herein;

(iv)that any Holder electing to have a Transfer Restricted Note exchanged pursuant to the Exchange Offer will be required to (A) surrender such Transfer Restricted Note, together with the appropriate letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) and in the manner specified in the notice, or (B) effect such exchange otherwise in compliance with the applicable procedures of the Depositary, in each case prior to the close of business on the last Exchange Date; and

(v)that any Holder will be entitled to withdraw its election, not later than the close of business on the last Exchange Date, by (A) sending to the institution and at the address specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Transfer Restricted Notes delivered for exchange and a statement that such Holder is withdrawing its election to have such Transfer Restricted Notes exchanged or (B) effecting such withdrawal in compliance with the applicable procedures of the Depositary.

(c)Upon the effectiveness of the Exchange Offer Registration Statement, if any, the Company and the Subsidiary Guarantors shall promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder eligible and electing to exchange Transfer Restricted Notes for Exchange Notes (assuming that such Holder makes representations and warranties to the Company that (a) it is not an affiliate of the Company within the meaning of Rule 405 under the 1933 Act or, if an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the 1933 Act and will provide information to be included in a Shelf Registration Statement in order to have its Exchange Notes included in such Shelf Registration Statement, (b) any Exchange Notes to be received by it will be acquired in the

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ordinary course of its business, (c) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Notes, (d) if such Holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Transfer Restricted Notes acquired as a result of market-making or other trading activities, then such broker-dealer will deliver a prospectus (or, to the extent permitted by law, make available a Prospectus) in connection with any resale of such Exchange Notes, and (e) it has no arrangements or understandings with any Person to participate in the distribution of the Transfer Restricted Notes or the Exchange Notes) to transfer such Exchange Notes from and after their receipt without any limitations or restrictions under the 1933 Act and under state securities or blue sky laws.

(d)The Exchange Notes, if any, shall be issued under (i) the Indenture or (ii) an indenture identical in all material respects to the Indenture and which, in either case, has been qualified under the Trust Indenture Act of 1939, as amended (the “TIA”), or is exempt from such qualification and shall provide that the Exchange Notes shall not be subject to the transfer restrictions set forth in the Indenture.  The Exchange Notes and the Notes shall vote and consent together on all matters as one class and none of the Exchange Notes or the Notes will have the right to vote or consent as a separate class on any matter.

(e)As soon as practicable after the close of the Exchange Offer, the Company and the Subsidiary Guarantors shall:

(i)accept for exchange all Transfer Restricted Notes duly tendered and not validly withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer Registration Statement and the letter of transmittal which shall be an exhibit thereto;

(ii)deliver to the Trustee for cancellation all Transfer Restricted Notes so accepted for exchange; and

(iii)cause the Trustee promptly to authenticate and deliver Exchange Notes to each Holder of Transfer Restricted Notes so accepted for exchange in a principal amount equal to the principal amount of the Transfer Restricted Notes of such Holder so accepted for exchange.

(f)Interest on each Exchange Note, including Additional Interest, will accrue (a) from the later of (i) the last date on which interest was paid on the Transfer Restricted Notes surrendered in exchange therefor or (ii) if the Transfer Restricted Notes are surrendered for exchange on a date in a period which includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (b) if no interest has been paid on the Transfer Restricted Notes, from the date of issuance.  If requested in writing theCompany shall inform the Initial Purchasers of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right, but not the obligation, to contact such Holders and otherwise facilitate the tender of Transfer Restricted Notes in the Exchange Offer.

(g)The Company and the Subsidiary Guarantorsshall use commercially reasonable efforts to complete the Exchange Offer as provided above and shall comply with the applicable

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requirements of the 1933 Act, the 1934 Act and other applicable laws and regulations in connection with the Exchange Offer.  The Offer shall not be subject to any conditions, other than (1) the Exchange Offer does not violate any applicable law or applicable interpretations of the staff of the SEC, (2) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency with respect to the Exchange Offer and (3) all governmental approvals shall have been obtained that the Company deems necessary for the consummation of the Exchange Offer.

2.2Shelf Registration.

(a)If,

(i)the Company and the Subsidiary Guarantors would otherwise be required to consummate an Exchange Offer Registration pursuant to Section 2.1 but determine that such Exchange Offer Registration is not available or the Exchange Offer may not be completed as soon as practicable after the last Exchange Date because it would violate any applicable law, SEC rules and regulations or any interpretation of the staff of the SEC,

(ii)the Exchange Offer is not for any other reason completed by the 45th day following the date the Exchange Offer Registration Statement is declared effective, or

(iii)any Initial Purchaser notifies the Company that it holds Transfer Restricted Notes that, in the opinion of counsel for such Holder, are not Freely Tradable on the Registration Trigger Date (a “Shelf Request”),

the Company and the Subsidiary Guarantors shall promptly deliver to the Holders and the Trustee written notice thereof and shall use commercially reasonable efforts to cause to be filed as soon as practicable after such determination, date or Shelf Request, as the case may be, a Shelf Registration Statement providing for the sale of all the Transfer Restricted Notes by the Holders thereof and to have such Shelf Registration Statement become effective by the 90th day following such determination, date or Shelf Request.

(b)In the event that the Company and the Subsidiary Guarantors are required to file a Shelf Registration Statement pursuant to a Shelf Request, the Company and the Subsidiary Guarantors shall use commercially reasonable efforts to file and have become effective a Shelf Registration Statement with respect to offers and sales of Transfer Restricted Notes after the completion of the Exchange Offer and an Exchange Offer Registration Statement if otherwise required pursuant to this Agreement.  In the event that the Company and the Subsidiary Guarantors are required to file a Shelf Registration Statement, the Company and the Subsidiary Guarantors agree to use commercially reasonable efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended (including through post-effective amendments on Form S-3 if the Company is eligible to use such Form) until the date that is one year from the date the Shelf Registration Statement is declared effective or such shorter period ending when no Notes covered by such Shelf Registration Statement constitute Transfer Restricted Notes (the “Effectiveness Period”).

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(c)Notwithstanding any other provisions hereof, the Company and the Subsidiary Guarantors shall use commercially reasonable efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming a part thereof and any supplement thereto complies in all material respects with the 1933 Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any supplement to such Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading.

(d)The Company and the Subsidiary Guarantors shall not permit any securities other than Transfer Restricted Notes to be included in the Shelf Registration Statement; provided, however, that if the offer and sale of the Transfer Restricted Notes is registered pursuant to an Automatic Shelf Registration Statement, the foregoing prohibition shall apply only to the supplement or amendment covering such registration.  The Company and the Subsidiary Guarantors agree, if necessary, to supplement or amend the Shelf Registration Statement, as required by Section 3(b) below.

(e)If the Company is obligated to file a Shelf Registration Statement pursuant to this Section 2.2, and at the time such obligation arises, the Company is a WKSI, then, in lieu of filing such Shelf Registration Statement, the Company shall file an Automatic Shelf Registration Statement or supplement or amend an existing Automatic Shelf Registration Statement, as appropriate, to include the offer and sale of the Transfer Restricted Notes by the Holders from time to time in accordance with the methods of distribution elected by the Holders of a majority in aggregate principal amount of Transfer Restricted Notes participating in such registration and set forth in such Automatic Shelf Registration Statement (or supplement or amendment thereto), within the time frame specified in this Section 2.2.

2.3Expenses.  The Company and the Subsidiary Guarantors shall pay all Registration Expenses in connection with the registration pursuant to Sections 2.1 and 2.2.  Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Transfer Restricted Notes pursuant to the Shelf Registration Statement.

2.4Effectiveness.

(a)The Company and the Subsidiary Guarantors will be deemed not to have used commercially reasonable efforts to cause the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite period if either the Company or any Subsidiary Guarantor voluntarily takes any action that would, or omits to take any action which omission would, result in any such Registration Statement not being declared effective, or in the Holders of Transfer Restricted Notes covered thereby not being able to exchange or offer and sell such Transfer Restricted Notes during that period as and to the extent contemplated hereby, unless such action is required by applicable law, in each case other than under the circumstances described in Sections 3(e)(iii), (iv), (v) or (vi) below.

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(b)Neither an Exchange Offer Registration Statement pursuant to Section 2.1 hereof nor a Shelf Registration Statement pursuant to Section 2.2 hereof, if not otherwise effective upon filing with the SEC as provided by Rule 462, will be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it becomes effective, the offering of Transfer Restricted Notes pursuant to an Exchange Offer Registration Statement or a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will not be effective during the period of such interference, until the offering of Transfer Restricted Notes pursuant to such Registration Statement may legally resume.

2.5Additional Interest.

(a)In the event that (i) an Exchange Offer Registration Statement is required pursuant to Section 2.1 and (x) such Exchange Offer Registration Statement does not become effective on or prior to the two year anniversary of the date hereof or (y) the Exchange Offer is not completed within 45 days after the date on which the Exchange Offer Registration Statement becomes effective, or (ii) a Shelf Registration Statement is required in accordance with Section 2.2 and such Shelf Registration Statement (x) does not become effective on or prior to the 90th day following (A) the date of such determination, in the case of a Shelf Registration Statement required pursuant to Section 2.2(a)(i), (B) such date, in the case of a Shelf Registration Statement required pursuant to Section 2.2(a)(ii) (which in no event shall be earlier than the date the Exchange Offer Registration Statement is required to be declared effective pursuant to clause 2.5(a)(i)(x) above) or (C) the date of such Shelf Request, in the case of a Shelf Registration Statement required pursuant to Section 2.2(a)(iii), or (y) becomes effective but ceases to be effective or the corresponding Prospectus ceases to be usable at any time during the Effectiveness Period, and such failure to remain effective or usable exists for more than 60 days (whether or not consecutive) in any 12-month period (any event referred to in the foregoing clauses (i) or (ii) a “Registration Default”), then, in each case, the interest rate on the Transfer Restricted Notes will be increased by (i) 0.25% per annum for the first 90-day period immediately following such Registration Default and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, up to a maximum of 1.00% per annum, in each case until the earlier of the date such Registration Default is cured or the date on which no Notes constitute Transfer Restricted Notes.  Any amounts payable under this paragraph shall also be deemed “Additional Interest” for purposes of this Agreement.

(b)The Company shall notify the Trustee within three business days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an “Event Date”).  Any Additional Interest due shall be payable on each interest payment date to the Holder of Notes with respect to which Additional Interest is due and owing.  Each obligation to pay Additional Interest shall be deemed to accrue from and including the day following the applicable Event Date.

3.Registration Procedures.

In connection with the obligations of the Company and the Subsidiary Guarantors with respect to Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Company and the Subsidiary Guarantors shall:

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(a)prepare and file with the SEC a Registration Statement, within the relevant time periods specified in Section 2, on the appropriate form under the 1933 Act and the rules promulgated thereunder, which form (i) shall be selected by the Company, (ii) shall, in the case of a Shelf Registration, be available for the sale of the Transfer Restricted Notes by the selling Holders thereof, (iii) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein and (iv) shall comply in all respects with the requirements of Regulation S-T under the 1933 Act, and use commercially reasonable efforts to cause such Registration Statement to become effective and remain effective for the applicable period in accordance with Section 2 hereof,

(b)prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period; and cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the 1933 Act and comply with the provisions of the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable to them with respect to the disposition of all securities covered by each Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the selling Holders thereof (including sales by any Participating Broker-Dealer); and keep each Prospectus current during the period described in Section 4(3) of and Rule 174 under the 1933 Act that is applicable to transactions by brokers or dealers with respect to the Transfer Restricted Notes or Exchange Notes;

(c)in the case of a Shelf Registration, (i) notify each Holder of Transfer Restricted Notes to be covered thereby, at least five business days prior to filing, that a Shelf Registration Statement (except in the case of an Automatic Shelf Registration Statement, in which case at least five business days prior to the inclusion of information regarding selling security holders in the Prospectus forming a part of such Automatic Shelf Registration Statement) with respect to such Transfer Restricted Notes is being filed and advising such Holders that the distribution of such Transfer Restricted Notes will be made in accordance with the method selected by a majority in aggregate principal amount of the Holders of Transfer Restricted Notes participating in the Shelf Registration; (ii) furnish to each Holder of Transfer Restricted Notes to be covered thereby and to each underwriter of an underwritten offering of Transfer Restricted Notes, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, including financial statements and schedules and, if the Holder so requests, all exhibits in order to facilitate the public sale or other disposition of the Transfer Restricted Notes; and (iii) do hereby consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Transfer Restricted Notes in connection with the offering and sale of the Transfer Restricted Notes covered by the Prospectus or any amendment or supplement thereto;

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(d)use commercially reasonable efforts to register or qualify the Transfer Restricted Notes under all applicable state securities or “blue sky” laws of such jurisdictions as any Holder of Transfer Restricted Notes covered by a Registration Statement and each underwriter of an underwritten offering of Transfer Restricted Notes shall reasonably request by the time the applicable Registration Statement is declared effective by the SEC, cooperate with such Holders in connection with any filings required to be made with FINRA, and do any and all other acts and things which may be reasonably necessary or advisable to enable each such Holder and underwriter to consummate the disposition in each such jurisdiction of such Transfer Restricted Notes owned by such Holder; provided, however, that the Company and the Subsidiary Guarantors shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where they would not otherwise be required to qualify but for this Section 3(d), or (ii) take any action which would subject them to general service of process or taxation in any such jurisdiction where they are not then so subject;

(e)notify promptly each Holder of Transfer Restricted Notes under a Shelf Registration or any Participating Broker-Dealer who has notified the Company that it is utilizing the Exchange Offer Registration Statement as provided in clause (f) below and, if requested by such Holder or Participating Broker-Dealer, confirm such advice in writing promptly (i) when a Registration Statement has become effective and when any post-effective amendments and supplements to a Registration Statement have become effective, (ii) of any request by the SEC or any state securities authority for post-effective amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, including the receipt by the Company of any notice of objection of the SEC to the use of a Shelf Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act, (iv) in the case of a Shelf Registration, if, between the effective date of a Registration Statement and the closing of any sale of Transfer Restricted Notes covered thereby, the representations and warranties of the Company and the Subsidiary Guarantors contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects, (v) of the happening of any event or the discovery of any facts during the period a Shelf Registration Statement is effective which makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading, (vi) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Transfer Restricted Notes or the Exchange Notes, as the case may be, for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (vii) of any determination by the Company that a post-effective amendment to such Registration Statement would be appropriate;

(f)in the case of the Exchange Offer Registration Statement (i) include in the Exchange Offer Registration Statement a section entitled “Plan of Distribution” which

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section shall be in customary form, and which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential “underwriter” status of any broker-dealer that holds Transfer Restricted Notes acquired for its own account as a result of market-making activities or other trading activities and that will be the beneficial owner (as defined in Rule 13d-3 under the 1934 Act) of Exchange Notes to be received by such broker-dealer in the Exchange Offer, whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies, represent the prevailing views of the staff of the SEC, including a statement that any such broker dealer who receives Exchange Notes for Transfer Restricted Notes pursuant to the Exchange Offer may be deemed a statutory underwriter and must deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Notes, (ii) furnish to each Participating Broker-Dealer who has delivered to the Company the notice referred to in Section 3(e), without charge, as many copies of each Prospectus included in the Exchange Offer Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, as such Participating Broker Dealer may reasonably request, (iii) do hereby consent to the use of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment or supplement thereto, by any Person subject to the prospectus delivery requirements of the SEC, including all Participating Broker-Dealers, in connection with the sale or transfer of the Exchange Notes covered by the Prospectus or any amendment or supplement thereto, and (iv) include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer (x) the following provision:

“If the exchange offeree is a broker-dealer holding Transfer Restricted Notes acquired for its own account as a result of market-making activities or other trading activities, it will deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of Exchange Notes received in respect of such Transfer Restricted Notes pursuant to the Exchange Offer;” and

(y) a statement to the effect that by a broker-dealer’s making the acknowledgment described in clause (x) and by delivering a Prospectus in connection with the exchange of Transfer Restricted Notes, the broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the 1933 Act;

(g)use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest practicable moment, and, in the case of a Shelf Registration, the resolution of any objection of the SEC pursuant to Rule 401(g)(2), including by filing an amendment to such Shelf Registration Statement on the proper form, at the earliest possible moment and provide immediate notice to each Holder of the withdrawal of any such order or such resolution;

(h)in the case of a Shelf Registration, if requested in writing, furnish to each Holder of Transfer Restricted Notes, and each underwriter, if any, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment

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thereto, including financial statements and schedules (without documents incorporated therein by reference and all exhibits thereto, unless requested);

(i)in the case of a Shelf Registration, cooperate with the selling Holders of Transfer Restricted Notes to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Notes to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Notes to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as the selling Holders or the underwriters, if any, may reasonably request at least three business days prior to the closing of any sale of Transfer Restricted Notes;

(j)in the case of a Shelf Registration, upon the occurrence of any event or the discovery of any facts, each as contemplated by Sections 3(e)(v) and 3(e)(vi) hereof, as promptly as practicable after the occurrence of such an event, use commercially reasonable efforts to prepare and file with the SEC a supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Transfer Restricted Notes or Participating Broker-Dealers, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or will remain so qualified;

(k)in the case of a Shelf Registration Statement, a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or of any document that is to be incorporated by reference into a Registration Statement or a Prospectus after the initial filing of a Registration Statement, provide copies of such document to the Initial Purchasers on behalf of such Holders; and make representatives of the Company and the Subsidiary Guarantors as shall be reasonably requested by the Holders of Transfer Restricted Notes, or the Initial Purchasers on behalf of such Holders, available for discussion of such document; and the Company and the Subsidiary Guarantors shall not, at any time after initial filing of a Registration Statement, use or file any Prospectus, any amendment of or supplement to a Registration Statement, or any document that is to be incorporated by reference into a Registration Statement or a Prospectus, of which the Initial Purchasers shall not have previously been advised and furnished a copy or to which the Initial Purchasers shall object;

(l)obtain a CUSIP number for all Exchange Notes or Transfer Restricted Notes, as the case may be, not later than the effective date of a Registration Statement, and provide the Trustee with certificates for the Exchange Notes or the Transfer Restricted Notes, as the case may be, in a form eligible for deposit with the Depositary;

(m)(i) in the case of a Shelf Registration, cause the indenture to be qualified under the TIA in connection with the registration of the Transfer Restricted Notes, and, in the case of an Exchange Offer Registration, cause or maintain, as the case may be, the Indenture to be qualified under the TIA in connection with the registration of the Exchange

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Notes, (ii) cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be, or continue to be, so qualified in accordance with the terms of the TIA and (iii) execute, and use commercially reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner;

(n)in the case of a Shelf Registration, enter into agreements (including underwriting agreements) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Transfer Restricted Notes and if so requested by the holders of such Transfer Restricted Notes and in such connection whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration:

(i)make such representations and warranties to the Holders of such Transfer Restricted Notes and the underwriters, if any, as the Company and the Subsidiary Guarantors are able to make, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings as may be reasonably requested by them;

(ii)in connection with an underwritten registration, obtain opinions of counsel to the Company and the Subsidiary Guarantors and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and the holders of a majority in principal amount of the Transfer Restricted Notes being sold) addressed to each selling Holder and the underwriters, if any, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters;

(iii)in connection with an underwritten registration, obtain “cold comfort” letters and updates thereof from the Company’s and the Subsidiary Guarantor’s independent certified public accountants (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in the Registration Statement) addressed to the underwriters, if any, and use commercially reasonable efforts to have such letter addressed to the selling Holders of Transfer Restricted Notes (to the extent consistent with Statement on Auditing Standards No.  72 of the American Institute of Certified Public Accountants), such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters to underwriters in connection with similar underwritten offerings;

(iv)enter into a securities sales agreement with the Holders and an agent of the Holders providing for, among other things, the appointment of such agent for the selling Holders for the purpose of soliciting purchases of Transfer Restricted Notes, which agreement shall be in form, substance and scope customary for similar offerings;

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(v)if an underwriting agreement is entered into, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Section 4 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said Section or, at the request of any underwriters, in the form customarily provided to such underwriters in similar types of transactions; and

(vi)deliver such documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings to the Holders of a majority in principal amount of the Transfer Restricted Notes being sold and the managing underwriters, if any.

The above shall be done at (i) the effectiveness of such Shelf Registration Statement (and each post-effective amendment thereto) and (ii) each closing under any underwriting or similar agreement as and to the extent required thereunder;

(o)in the case of a Shelf Registration or if a Prospectus is required to be delivered by any Participating Broker-Dealer in the case of an Exchange Offer, make available for inspection by representatives of the Holders of the Transfer Restricted Notes, any underwriters participating in any disposition pursuant to a Shelf Registration Statement, any Participating Broker-Dealer and any counsel or accountant retained by any of the foregoing, all non-confidential financial and other records, pertinent corporate documents and properties of the Company or any Subsidiary Guarantor reasonably requested by any such persons, and cause the respective officers, directors, employees, and any other agents of the Company and the Subsidiary Guarantors to supply all information reasonably requested by any such representative, underwriter, special counsel or accountant in connection with a Registration Statement, and make such representatives of the Company and the Subsidiary Guarantors available for discussion of such documents as shall be reasonably requested by such persons;

(p)if so requested by the Initial Purchasers, in the case of an Exchange Offer Registration Statement, a reasonable time prior to filing of any Exchange Offer Registration Statement, any Prospectus forming a part thereof, any amendment to an Exchange Offer Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Initial Purchasers and to counsel to the Holders of Transfer Restricted Notes; and

(q)in the case of a Shelf Registration, a reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf Registration Statement or amendment or supplement to such Prospectus, provide copies of such documents to the Initial Purchasers, if so requested, to the Holders of Transfer Restricted Notes to be covered thereby, to counsel for such Holders designated by them and to the underwriter or underwriters of an underwritten offering of such Transfer Restricted Notes, if any, make such changes in any such document prior to the filing thereof relating to such Holders or such Transfer Restricted Notes as the counsel to the Holders or the underwriter or underwriters reasonably request and not file any such document in a form to which the holders of a majority in aggregate principal amount of

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Transfer Restricted Notes covered by such Shelf Registration Statement, counsel for such Holders of the Transfer Restricted Notes covered by such Shelf Registration Statement, or any underwriter shall not have previously been advised and furnished a copy of or to which the Majority Holders of Transfer Restricted Notes covered by such Shelf Registration Statement, counsel to such Holders of Transfer Restricted Notes or any underwriter shall reasonably object, and make the representatives of the Company and the Subsidiary Guarantors available for discussion of such document as shall be reasonably requested by such Holders of Transfer Restricted Notes, the counsel for such Holders of Transfer Restricted Notes or any underwriter;

(r)in the case of a Shelf Registration, use commercially reasonable efforts to cause all Transfer Restricted Notes to be listed on any securities exchange on which similar debt securities issued by the Company and the Subsidiary Guarantors are then listed if requested by the Holders of a majority in aggregate principal amount of such Transfer Restricted Notes covered by such Shelf Registration Statement, or if requested by the underwriter or underwriters of an underwritten offering of Transfer Restricted Notes, if any;

(s)in the case of a Shelf Registration, use commercially reasonable efforts to cause the Transfer Restricted Notes to be rated by the appropriate rating agencies, if so requested by the Holders of a majority in aggregate principal amount of the Transfer Restricted Notes covered by such Shelf Registration Statement, or if requested by the underwriter or underwriters of an underwritten offering of Transfer Restricted Notes, if any;

(t)otherwise comply with all applicable rules and regulations of the SEC and make available to their security holders, as soon as reasonably practicable after the effective date of the applicable Registration Statement, an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;

(u)cooperate and assist in any filings required to be made with FINRA and, in the case of a Shelf Registration, in the performance of any due diligence investigation by any underwriter and its counsel (including any “qualified independent underwriter” that is required to be retained in accordance with the rules and regulations of FINRA);

(v)if reasonably requested by any Holder of Transfer Restricted Notes covered by a Shelf Registration Statement, promptly include in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and make all required filings of such Prospectus supplement or such post-effective amendment as soon as the Company has received notification of the matters to be so included in such filing;

(w)so long as any Transfer Restricted Notes remain outstanding, cause each Additional Guarantor upon such Person becoming an Additional Guarantor, to execute a joinder to this Agreement; and

(x)amend or supplement the Prospectus contained in the Exchange Offer Registration Statement for a period of up to 90 days after the last Exchange Date (as such

17

period may be extended pursuant to this Agreement), in order to expedite or facilitate the disposition of any Exchange Notes by Participating Broker-Dealers consistent with the positions of the staff of the SEC.  The Company and the Subsidiary Guarantors agree that Participating Broker-Dealers shall be authorized to deliver such Prospectus (or, to the extent permitted by law, make available) during such period in connection with the resales contemplated by this clause (x).

In the case of a Shelf Registration Statement, the Company and the Subsidiary Guarantors may (as a condition to such Holder’s participation in the Shelf Registration) require each Holder of Transfer Restricted Notes to furnish to the Company and Subsidiary Guarantors such information regarding the Holder and the proposed distribution by such Holder of such Transfer Restricted Notes as the Company and Subsidiary Guarantors may from time to time reasonably request in writing.

In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any notice from the Company or any Subsidiary Guarantor of the happening of any event or the discovery of any facts, each of the kind described in Section 3(e)(iii) or (vi) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Notes pursuant to a Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(k) hereof, and, if so directed by the Company and Subsidiary Guarantors, such Holder will deliver to the Company and Subsidiary Guarantors (at its expense) all copies in such Holder’s possession, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Transfer Restricted Notes current at the time of receipt of such notice.

If any of the Transfer Restricted Notes covered by any Shelf Registration Statement are to be sold in an underwritten offering, the underwriter or underwriters and manager or managers that will manage such offering will be selected by the Majority Holders of such Transfer Restricted Notes to be included in such offering and shall be acceptable to the Company and Subsidiary Guarantors.  No Holder of Transfer Restricted Notes may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Transfer Restricted Notes on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

If the Company and the Subsidiary Guarantors shall give any notice to suspend the disposition of Transfer Restricted Notes pursuant to a Registration Statement, the Company and the Subsidiary Guarantors shall extend the period during which such Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders of such Transfer Restricted Notes shall have received copies of the supplemented or amended Prospectus necessary to resume such dispositions.  The Company and the Subsidiary Guarantors may suspend the disposition of Transfers Restricted Notes no more than an aggregate of 90 days in any 365-day period.

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4.Indemnification; Contribution.

(a)The Company and the Subsidiary Guarantors agree to indemnify, jointly and severally, and hold harmless the Initial Purchasers and each of their affiliates and any other Person under common control with the Initial Purchasers, each Holder, each Participating Broker-Dealer, each Person who participates as an underwriter (any such Person being an “Underwriter”) and each Person, if any, who controls any Holder or Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act (collectively the “Company Indemnitees”) as follows:

(i)against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto) pursuant to which Exchange Notes or Transfer Restricted Notes were registered under the 1933 Act, including all documents incorporated therein by reference, any Free Writing Prospectus used in violation of this Agreement or any “issuer information” (“Issuer Information”) filed or required to be filed pursuant to Rule 433(d) under the 1933 Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii)against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 4(d) below) any such settlement is effected with the written consent of the Company and the Subsidiary Guarantors; and

(iii)against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by any indemnified party), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph for (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information concerning any Company Indemnitee furnished to the Company by any Company Indemnitee expressly for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto); and provided, further, that the indemnity agreement contained in this subsection shall not inure to the benefit of any Company Indemnitee from whom

19

the person asserting any such losses, claims, damages or liabilities purchased the Notes concerned, to the extent that a prospectus relating to such Notes was required to be delivered by such Company Indemnitee in connection with such purchase and any such loss, claim, damage or liability of such Company Indemnitee results from the fact that there was not sent or given to such person, at or prior to the sale of such Notes to such person, a copy of such prospectus if the Company had previously furnished copies thereof to such Company Indemnitee.

(b)Each Company Indemnitee, severally, but not jointly, agrees to indemnify and hold harmless the Company, the Subsidiary Guarantors, each Underwriter and the other selling Holders, and each of their respective directors and officers, and each Person, if any, who controls the Company, any Subsidiary Guarantor, any Underwriter or any other selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 4(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Shelf Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto) in reliance upon and in conformity with written information with respect to such Company Indemnitee furnished to the Company and the Subsidiary Guarantors by such Company Indemnitee expressly for use in the Shelf Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto); provided, however, that no such Company Indemnitee shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Company Indemnitee from the sale of Transfer Restricted Notes pursuant to such Shelf Registration Statement.

(c)Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure so to notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement.  An indemnifying party may participate at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.  In no event shall the indemnifying party or parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.  No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 4 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

20

(d)If the indemnification provided for in this Section 4, is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of the Company and the Subsidiary Guarantors, on the one hand, and the Company Indemnitees, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

The relative fault of the Company and the Subsidiary Guarantors on the one hand and the Company Indemnitees on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company, the Subsidiary Guarantors or the Company Indemnitees and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company, the Subsidiary Guarantors and the Company Indemnitees agree that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4.  The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 4 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 4, each Person, if any, who controls an Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Initial Purchaser or Holder, and each director of the Company or any Subsidiary Guarantor, and each Person, if any, who controls the Company or any Subsidiary Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company and the Subsidiary Guarantors.  The Initial Purchasers’ respective obligations to contribute pursuant to this Section 4 are several in proportion to the principal amount of Notes set forth opposite their respective names in Schedule A to the Purchase Agreement and not joint.  Notwithstanding the provisions of this Section 4, in no event shall a Holder be required to contribute any amount in excess of the amount by which the total price at which all of the Notes sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay under Section 4(b) hereof.

The remedies provided for in this Section 4 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any indemnified party at law or in equity.

21

The indemnity and contribution provisions contained in this Section 4 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Company Indemnitees or any Person controlling any Company Indemnitee, or by or on behalf of the Company or the Subsidiary Guarantors or the officers or directors of or any Person controlling the Company or the Subsidiary Guarantors, (iii) acceptance of any of the Exchange Notes and (iv) any sale of Transfer Restricted Notes pursuant to a Shelf Registration Statement; provided, however, that the indemnity and contribution rights provided for, in this Section 4 shall not extend to any losses, liabilities or other damages arising out of actions occurring after the termination of this Agreement.

5.Miscellaneous.

5.1Rule 144 and Rule 144A.  For so long as the Company and the Subsidiary Guarantors are subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the Company and the Subsidiary Guarantors covenant that they will file and furnish the reports required to be filed by them under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC thereunder.  If the Company and the Subsidiary Guarantors cease to be so required to file and furnish such reports, the Company and Subsidiary Guarantors covenant that they will upon the request of any Holder of Transfer Restricted Notes (a) make publicly available such information as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933 Act and take such further action as any Holder of Transfer Restricted Notes may reasonably request, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Transfer Restricted Notes without registration under the 1933 Act within the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or (iii) any similar rules or regulations hereafter adopted by the SEC.  Upon the request of any Holder of Transfer Restricted Notes, the Company and the Subsidiary Guarantors will deliver to such Holder a written statement as to whether they have complied with such requirements.

5.2No Inconsistent Agreements.  The Company and the Subsidiary Guarantors have not entered into, and the Company and the Subsidiary Guarantors will not after the date of this Agreement enter into, any agreement which is inconsistent with the rights granted to the Holders of Transfer Restricted Notes in this Agreement or otherwise conflicts with the provisions hereof.  The rights granted to the Holders hereunder do not and will not for the term of this Agreement in any way conflict with the rights granted to the holders of the Company’s or Subsidiary Guarantors’ other issued and outstanding securities under any such agreements.

5.3Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company and the Subsidiary Guarantors have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Transfer Restricted Notes affected by such amendment, modification, supplement, waiver or departure.

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5.4Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 5.4, which address initially, and until so changed, is the address set forth in the Purchase Agreement with respect to the Initial Purchasers; and (b) if to the Company and the Subsidiary Guarantors, initially at the Company’s address set forth in the Purchase Agreement, and thereafter at such other address of which notice is given in accordance with the provisions of this Section 5.4.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands, or other communications shall be concurrently delivered by the person giving the same to the Trustee under the Indenture at the address specified therein.

5.5Successor and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Transfer Restricted Notes in violation of the terms of the Purchase Agreement or the Indenture.  If any transferee of any Holder shall acquire Transfer Restricted Notes, in any manner, whether by operation of law or otherwise, such Transfer Restricted Notes shall be held subject to all of the terms of this Agreement, and by taking and holding such Transfer Restricted Notes such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such person shall be entitled to receive the benefits hereof.  The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Company of the Subsidiary Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement

5.6Third Party Beneficiaries.  The Initial Purchasers (even if the Initial Purchasers are not Holders of Transfer Restricted Notes) shall be third party beneficiaries to the agreements made hereunder between the Company and the Subsidiary Guarantors, on the one hand, and the Holders, on the other hand, and shall have the right to enforce such agreements directly to the extent they deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder.  Each Holder of Transfer Restricted Notes shall be a third party beneficiary to the agreements made hereunder between the Company and the Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights hereunder.

23

5.7Remedies.  Each of the Company and the Subsidiary Guarantors hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

5.8Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  This Agreement may be executed by facsimile signature.

5.9Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

5.10Governing Law.  This Agreement shall be governed by and construed in accordance with the law of the state of New York without regard to the principles of conflict of laws thereof.

5.11Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

[signature page follows]

24

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

FREEDOM GROUP, INC.,
a Delaware corporation
By:
	Name:
	Title:

GUARANTORS:
RACI HOLDING, INC.
By:
	Name:
	Title:
REMINGTON ARMS COMPANY, INC.
By:
	Name:
	Title:
REMINGTON STEAM, LLC
By:
	Name:
	Title:
RA BRANDS, L.L.C.
By:
	Name:
	Title:
THE MARLIN FIREARMS COMPANY
By:
	Name:
	Title:
H&R 1871, LLC
By:
	Name:
	Title:

2

DA ACQUISITIONS, LLC
By:
	Name:
	Title:
BUSHMASTER HOLDINGS, LLC
By:
	Name:
	Title:
BUSHMASTER FIREARMS INTERNATIONAL, LLC
By:
	Name:
	Title:
DPMS FIREARMS, LLC
By:
	Name:
	Title:
E-RPC, LLC
By:
	Name:
	Title:

3

CONFIRMED AND ACCEPTED,
as of the date first above written:
BANC OF AMERICA SECURITIES LLC
By:
	Name:
	Title:	Managing Director
DEUTSCHE BANK SECURITIES INC.
By:
	Name:
	Title:	Managing Director
DEUTSCHE BANK SECURITIES INC.
By:
	Name:
	Title:	Managing Director
WELLS FARGO SECURITIES, LLC
By:
	Name:
	Title:	Managing Director

For themselves and as representatives of the other Initial Purchasers

4

Schedule A

Initial Purchaser

Banc of America Securities LLC

Deutsche Bank Securities Inc.

Wells Fargo Securities LLC

Barclays Capital Inc.

Jefferies & Company, Inc.

5

EX-10.1

Exhibit 10.1

EXECUTION VERSION

LOAN AND SECURITY AGREEMENT

by and among

FREEDOM GROUP, INC.

and certain of its Subsidiaries

as Borrowers

THE LENDERS AND ISSUING BANKS FROM TIME TO TIME PARTY HERETO

WACHOVIA BANK, NATIONAL ASSOCIATION

as Agent

and

BANK OF AMERICA, N.A.,

as Syndication Agent

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Co-Documentation Agent

and

BARCLAYS BANK PLC,

as Co-Documentation Agent

WELLS FARGO SECURITIES, LLC	WELLS FARGO SECURITIES, LLC
BANC OF AMERICA SECURITIES LLC	BANC OF AMERICA SECURITIES LLC
and	and
DEUTSCHE BANK SECURITIES INC.	DEUTSCHE BANK SECURITIES INC.
as Joint Arrangers	as Joint Bookrunners

Dated: July 29, 2009

TABLE OF CONTENTS

SECTION  1.	DEFINITIONS	1
SECTION  2.	CREDIT FACILITIES	34
2.1	Loans	34
2.2	Letters of Credit	37
2.3	Increase in Maximum Credit	39
2.4	Commitments	41
2.5	Nature and Extent of Each Borrower’s Liability	41
2.6	Voluntary Reduction of Commitments	42
SECTION  3.	INTEREST AND FEES	43
3.1	Interest	43
3.2	Fees	43
3.3	Changes in Laws and Increased Costs of Loans	45
SECTION  4.	CONDITIONS PRECEDENT	46
4.1	Conditions Precedent to Initial Loans and Letters of Credit	46
4.2	Conditions Precedent to All Loans and Letters of Credit	48
SECTION  5.	GRANT AND PERFECTION OF SECURITY INTEREST	49
5.1	Grant of Security Interest	49
5.2	Perfection of Security Interests	51
SECTION  6.	COLLECTION AND ADMINISTRATION	54
6.1	Borrowers’ Loan Accounts	54
6.2	Statements	55
6.3	Collection of Accounts	55
6.4	Payments	56
6.5	Taxes	57
6.6	Authorization to Make Loans	59
6.7	Use of Proceeds	59
6.8	Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of Loans and Statements	60
6.9	Pro Rata Treatment	60
6.10	Sharing of Payments, Etc.	60
6.11	Settlement Procedures	61
6.12	Obligations Several; Independent Nature of Lenders’ Rights	63
6.13	Bank Products	63
SECTION  7.	COLLATERAL REPORTING AND COVENANTS	64
7.1	Collateral Reporting	64
7.2	Accounts Covenants	64
7.3	Inventory Covenants	65
7.4	Equipment Covenants	65
7.5	Power of Attorney	65
7.6	Right to Cure	66

i

7.7	Access to Premises	66
7.8	Trademark Appraisals	67
SECTION  8.	REPRESENTATIONS AND WARRANTIES	67
8.1	Corporate Existence, Power and Authority	67
8.2	Name; State of Organization; Chief Executive Office; Collateral Locations	67
8.3	Financial Statements	68
8.4	Priority of Liens; Title to Properties	68
8.5	Tax Returns	68
8.6	Litigation	68
8.7	Compliance with Other Agreements and Applicable Laws	69
8.8	Environmental Compliance	69
8.9	Employee Benefits	70
8.10	Bank Accounts	70
8.11	Intellectual Property	70
8.12	Subsidiaries; Affiliates; Capitalization; Solvency	71
8.13	Labor Disputes	72
8.14	Reserved	72
8.15	Material Contracts	72
8.16	Payable Practices	72
8.17	Investment Company Act	72
8.18	Accuracy and Completeness of Information	72
8.19	Survival of Warranties; Cumulative	72
SECTION  9.	AFFIRMATIVE AND NEGATIVE COVENANTS	73
9.1	Maintenance of Existence	73
9.2	New Collateral Locations	73
9.3	Compliance with Laws, Regulations, Etc.	73
9.4	Payment of Taxes and Claims	74
9.5	Insurance	74
9.6	Financial Statements and Other Information	74
9.7	Sale of Assets, Consolidation, Merger, Dissolution, Etc.	76
9.8	Encumbrances	77
9.9	Indebtedness	79
9.10	Loans and Investments; Repayment of Indebtedness	82
9.11	Dividends and Redemptions of Capital Stock	82
9.12	Transactions with Affiliates	83
9.13	Reserved	84
9.14	End of Fiscal Years; Fiscal Quarters	84
9.15	Change in Business	84
9.16	Redemption of Existing Remington Notes	84
9.17	Fixed Charge Coverage Ratios	85
9.18	Minimum Excess Availability	85
9.19	License Agreements	85
9.20	Foreign Assets Control Regulations, Etc.	86
9.21	Costs and Expenses	86
9.22	Further Assurances	87

ii

SECTION  10.	EVENTS OF DEFAULT AND REMEDIES	87
10.1	Events of Default	87
10.2	Remedies	89
SECTION  11.	JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW	92
11.1	Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver	92
11.2	Waiver of Notices	93
11.3	Amendments and Waivers	93
11.4	Waiver of Counterclaims	96
11.5	Indemnification	96
SECTION  12.	THE AGENT	97
12.1	Appointment, Powers and Immunities	97
12.2	Reliance by Agent	97
12.3	Events of Default	97
12.4	Wachovia in its Individual Capacity	98
12.5	Indemnification	98
12.6	Non-Reliance on Agent and Other Lenders	98
12.7	Failure to Act	99
12.8	Additional Loans	99
12.9	Concerning the Collateral and the Related Financing Agreements	99
12.10	Field Audit, Examination Reports and other Information; Disclaimer by Lenders	99
12.11	Collateral Matters	100
12.12	Agency for Perfection	102
12.13	Successor Agent	102
12.14	Other Agent Designations	103
12.15	Agent May File Proofs of Claim	103
SECTION  13.	TERM OF AGREEMENT; MISCELLANEOUS	104
13.1	Term	104
13.2	Interpretative Provisions	104
13.3	Notices	106
13.4	Partial Invalidity	107
13.5	Confidentiality	107
13.6	Successors	108
13.7	Assignments; Participations	108
13.8	Entire Agreement	110
13.9	USA PATRIOT Act	110
13.10	Counterparts, Etc.	110
13.11	Guarantee	110

iii

INDEX

TO

EXHIBITS AND SCHEDULES

Exhibit A	Form of Assignment and Acceptance
Exhibit B	Form of Compliance Certificate
Exhibit C	Form of Borrowing Base Certificate
Schedule 1.37	Existing Lenders
Schedule 1.38	Existing Letters of Credit
Schedule 5.2	Collateral Matters
Schedule 8.2	Name; State of Organization; Chief Executive Office; Collateral Locations
Schedule 8.4	Priority of Liens; Title to Properties; Mortgaged Properties
Schedule 8.6	Litigation
Schedule 8.11	Intellectual Property
Schedule 8.12	Subsidiaries; Affiliates; Capitalization; Solvency
Schedule 8.13	Labor Disputes
Schedule 8.15	Material Contracts
Schedule 9.10	Loans and Investments

iv

LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement dated July 29, 2009 is entered into by and among FREEDOM GROUP, INC., a Delaware corporation (“FGI”), REMINGTON ARMS COMPANY, INC., a Delaware corporation (“Remington”), THE MARLIN FIREARMS COMPANY, a Connecticut corporation (“Marlin”), H&R 1871, LLC, a Connecticut limited liability company (“H&R”), BUSHMASTER FIREARMS INTERNATIONAL, LLC, a Delaware limited liability company (“Bushmaster”), DPMS FIREARMS, LLC, a Delaware limited liability company (“DPMS”), E-RPC, LLC, a Delaware limited liability company (“E-RPC”), DA ACQUISITIONS, LLC, a Delaware limited liability company (“Dakota Arms”), and RA BRANDS, L.L.C., a Delaware limited liability company (“Brands,” and together with FGI, Remington, Marlin, H&R, Bushmaster, DPMS, E-RPC and Dakota Arms, each individually a “Borrower” and collectively, “Borrowers” as hereinafter further defined), RACI HOLDING, INC., a Delaware corporation (“RACI” ), REMINGTON STEAM, LLC, a New York limited liability company (“Remington Steam”), and BUSHMASTER HOLDINGS, LLC, a Delaware limited liability company (“Bushmaster Holdings” and together with RACI and Remington Steam,  each individually a “Guarantor” and collectively, “Guarantors” as hereinafter further defined), the parties hereto from time to time as lenders, whether by execution of this Agreement or an Assignment and Acceptance (each individually, a “Lender” and collectively, “Lenders” as hereinafter further defined) and WACHOVIA BANK, NATIONAL ASSOCIATION , a national banking association, in its capacity as agent for Lenders (in such capacity, “Agent” as hereinafter further defined).

W I TN E S S E T H:

WHEREAS, Borrowers and Guarantors have requested that Agent and Lenders enter into financing arrangements with Borrowers pursuant to which Lenders may make loans and provide other financial accommodations to Borrowers; and

WHEREAS, each Lender is willing to agree (severally and not jointly) to make such loans and provide such financial accommodations to Borrowers on a pro rata basis according to its Commitment (as defined below) on the terms and conditions set forth herein and Agent is willing to act as agent for Lenders on the terms and conditions set forth herein and the other Financing Agreements;

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

SECTION  1.DEFINITIONS

For purposes of this Agreement, the following terms shall have the respective meanings given to them below:

“Accommodation Payment” shall have the meaning set forth in Section 2.5(d).

“Accounts” shall, as to each Borrower and each Guarantor, have the meaning ascribed to the term “account” in the UCC and shall include all present and future rights of such Borrower or Guarantor to payment of a monetary obligation, whether or not earned by performance, which is not evidenced by chattel paper or an instrument, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a secondary obligation incurred or to be incurred, or (d) arising out of the use of a credit or charge card or information contained on or for use with the card.

“Additional Interests” shall means all shares of capital stock, membership interests, partnership interests and all other equity interests of any corporation, limited liability company, limited partnership or other legal entity owned by each Borrower or Guarantor, other than any shares or interests that constitute Pledged Shares.

“Adjusted Eurodollar Rate” shall mean, with respect to each Interest Period for any Eurodollar Rate Loan comprising part of the same borrowing (including conversions, extensions and renewals), the rate per annum determined by dividing (a) the London Interbank Offered Rate for such Interest Period by (b) percentage equal to: (i) one (1) minus (ii) the Reserve Percentage.  For purposes hereof, “Reserve Percentage” shall mean for any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D of the Board of Governors of the Federal Reserve System (or any successor), as such regulation may be amended from time to time or any successor regulation, as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of Eurodollar Rate Loans is determined), whether or not any Lender has any Eurocurrency liabilities subject to such reserve requirement at that time.  Eurodollar Rate Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credits for proration, exceptions or offsets that may be available from time to time to a Lender.  The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Percentage.

“Administrative Borrower” shall mean FGI, in its capacity as Administrative Borrower on behalf of itself and the other Borrowers pursuant to Section 6.8 hereof and its successors and assigns in such capacity.

“Affiliate” shall mean a Person (other than a Subsidiary):  (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, a Person; (ii) which beneficially owns or holds ten percent (10%) or more of any class of the Voting Stock or other Capital Stock of a Person; or (iii) ten percent (10%) or more of the Voting Stock or other Capital Stock of which is beneficially owned or held by a Person or a Subsidiary of a Person.  For purposes hereof, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of any Voting Stock or other Capital Stock, by contract or otherwise.  No portfolio company of Sponsor (other than FGI and its direct and indirect Subsidiaries or any other Person that controls FGI or an Obligor) shall be deemed an Affiliate of an Obligor for purposes of this Agreement.

“Agent” shall mean Wachovia Bank, National Association, in its capacity as agent on behalf of Lenders pursuant to the terms hereof and any replacement or successor agent hereunder.

“Agent Payment Account” shall mean account no. **82789126 of Agent at Wachovia, or such other account of Agent as Agent may from time to time designate to Administrative Borrower as the Agent Payment Account for purposes of this Agreement and the other Financing Agreements.

“Applicable Margin” shall mean, with respect to Base Rate Loans and Eurodollar Rate Loans, subject to the provisions below, the applicable percentage (on a per annum basis) set forth below based on the Quarterly Average Excess Availability for the immediately preceding three (3) month period beginning on the first day of the month of such period.

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Tier	Quarterly Average Excess Availability	Applicable Eurodollar Rate Margin		Applicable Base Rate Margin
1	Greater than $70,000,000	3.25	%	2.25	%
2	Less than or equal to $70,000,000 and greater than $30,000,000	3.50	%	2.50	%
3	Less than or equal to $30,000,000	3.75	%	2.75	%

Provided, that, the Applicable Margin shall be calculated on the first day of each calendar quarter based on the Quarterly Average Excess Availability for the preceding calendar quarter and shall remain in effect until so calculated on the first day of the succeeding calendar quarter, provided that, notwithstanding anything to the contrary contained herein, the Applicable Margin through December 31, 2009, shall be the amount for Tier 2 set forth above and (iv) in the event that Borrowers fail to provide any Borrowing Base Certificate or other information with respect thereto for any period on the date required hereunder, effective as of the date on which such Borrowing Base Certificate or other information was otherwise required, at Agent’s option (or at the direction of the Required Lenders if Agent has not exercised such option for five (5) Business Days following such date), the Applicable Margin shall be based on the highest rate above until the next Business Day after the Borrowing Base Certificate or other information is provided for the applicable period at which time the Applicable Margin shall be adjusted as otherwise provided herein.  In the event that at any time after the end of any three (3) month period the Quarterly Average Excess Availability for such three (3) month period used for the determination of the Applicable Margin is determined to have been more or been less than the actual amount of the Quarterly Average Excess Availability for such period as a result of the inaccuracy of information provided by or on behalf of Borrowers to Agent for the calculation of Excess Availability, the Applicable Margin for such prior period shall be adjusted to the applicable percentage based on such actual Quarterly Average Excess Availability and either (i) if any additional interest shall be payable for the applicable period as a result of such recalculation, such additional interest shall be promptly paid to Agent or (ii) if any excess interest was paid for the applicable period as a result of such recalculation, such excess interest shall be promptly paid to Administrative Borrower.  The foregoing shall not be construed to limit the rights of Agent and Lenders with respect to the amount of interest payable after a Default or Event of Default whether based on such recalculated percentage or otherwise.

“Arrangers” shall mean, collectively, Wells Fargo Securities, LLC, Banc of America Securities LLC and Deutsche Bank Securities, Inc.

“Assignment and Acceptance” shall mean an Assignment and Acceptance substantially in the form of Exhibit A attached hereto (with blanks appropriately completed) delivered to Agent in connection with an assignment of a Lender’s interest hereunder in accordance with the provisions of Section 13.7 hereof.

“Average Excess Availability” shall mean, for any period, the daily average of the Excess Availability for such period.

“Bank Product Provider” shall mean any Lender or any Affiliate of a Lender.

“Bank Products” shall mean any one or more of the following types or services or facilities provided to a Borrower or a Guarantor by a Bank Product Provider: (a) credit cards, debit cards or stored value cards or the processing of credit card, debit card or stored value card sales or receipts, (b) cash

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management or related services, including (i) operating, collections, payroll, trust or other depository or disbursement accounts, (ii) the automated clearinghouse transfer of funds for the account of a Borrower or Guarantor pursuant to agreement or overdraft for any accounts of Borrowers or Guarantors maintained at Agent or any Bank Product Provider that are subject to the control of Agent pursuant to any Deposit Account Control Agreement to which Agent or such Bank Product Provider is a party, as applicable, and (iii) controlled disbursement services and (c) Hedge Agreements consisting of rate swap agreements, basis swaps, forward rate swaps, interest rate options, rate cap agreements, rate floor agreements, rate collar agreements or any other similar interest rate protection agreement (including any option to enter into any of the foregoing or a master agreement for any the foregoing together with all supplements thereto) for the purpose of protecting against or managing exposure to fluctuations in interest rates), if and to the extent permitted hereunder.

“Base Rate” shall mean the higher of (i) the rate of interest publicly announced by Wachovia as its “prime rate,” subject to each increase or decrease in such prime rate, effective as of the day any such change occurs, or (ii) the Federal Funds Effective Rate from time to time plus 0.50%.  All Swing Line Loans shall be Base Rate Loans.

“Base Rate Loans” shall mean any Loans or portion thereof on which interest is payable based on the Base Rate in accordance with the terms thereof.

“Blocked Accounts” shall have the meaning set forth in Section 6.3(a) hereof.

“Blocked Person” shall have the meaning set forth in Section 9.20 hereof.

“BofA” shall mean Bank of America, N.A., a national banking association.

“Borrower Allocable Percentage” shall have the meaning set forth in Section 2.5(d).

“Borrowers” shall mean, collectively, the following (together with their respective successors and assigns): Freedom Group, Inc., a Delaware corporation, Remington Arms Company, Inc., a Delaware corporation, The Marlin Firearms Company, a Connecticut corporation, H&R 1871, LLC, a Connecticut limited liability company, Bushmaster Firearms International, LLC, a Delaware limited liability company, DPMS Firearms, LLC, a Delaware limited liability company, E-RPC, LLC, a Delaware limited liability company, DA Acquisitions, LLC, a Delaware limited liability company (“Dakota Arms”), and RA Brands, L.L.C., a Delaware limited liability company, and any other direct or indirect domestic Subsidiary of FGI that at any time after the date hereof becomes a Borrower, pursuant to a joinder agreement in form and substance reasonably satisfactory to Agent and approved by FGI, in connection with an acquisition or investment otherwise permitted under this Agreement.

“Borrowing Base” shall mean, at any time, the amount equal to:

(a)the sum of:

(i)eighty-five percent (85%) of the Eligible Accounts, plus

(ii)the lesser of:

(A)the Inventory Loan Limit, or

(B)the sum of:

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(1)the lesser of:

(y)seventy-five percent (75%) multiplied by the Value of the Eligible Inventory consisting of finished goods, or

(z)eighty-five percent (85%) of the Net Recovery Percentage multiplied by the Value of such Eligible Inventory consisting of finished goods,

plus

(2)the lesser of:

(y)fifty percent (50%) multiplied by the Value of the Eligible Inventory consisting of raw materials, or

(z)eighty-five percent (85%) of the Net Recovery Percentage multiplied by the Value of Eligible Inventory consisting of raw materials,

plus

(3)the lesser of:

(y)the sum of:  (I) eight percent (8%) multiplied by the Value of Eligible Inventory of Remington, Marlin, H&R, E-RPC and Dakota consisting of Parts, plus (II) thirty-five percent (35%) multiplied by the Value of Eligible Inventory of Bushmaster consisting of Parts, plus (III) thirty percent (30%) multiplied by the Value of Eligible Inventory of DPMS consisting of Parts, or

(z)eighty-five percent  (85%) of the Net Recovery Percentage multiplied by the Value of such Eligible Inventory consisting of Parts,

minus

(b)Reserves;

provided, that not more than $1,500,000 of availability under the Borrowing Base at any time shall be attributable to Eligible Inventory of DPMS until such time as DPMS has established a perpetual inventory system that is satisfactory to Agent.

“Borrowing Base Certificate” shall mean a certificate, in the form requested by Agent (a form of which as required as of the date hereof being attached hereto as Exhibit C), by which Borrowers shall certify to Agent and Lenders the amount of the Borrowing Base as of the date of the certificate and the calculation of such amount.

“Business Day” shall mean any day other than a Saturday, Sunday, or other day on which commercial banks are authorized or required to close under the laws of the State of New York or the State

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of North Carolina, except that if a determination of a Business Day shall relate to any Eurodollar Rate Loans, the term Business Day shall also exclude any day on which banks are closed for dealings in dollar deposits in the London interbank market or other applicable Eurodollar Rate market.

“Capital Expenditures” shall mean with respect to any Borrower or Guarantor for any period the aggregate of all expenditures by such Person made during such period that in accordance with GAAP are or should be included in “property, plant and equipment” or in similar items reflected in the cash flow statement, whether such expenditures are paid in cash or financed and including all obligations under Capital Leases paid or payable during such period.

“Capital Leases” shall mean, as applied to any Person, any lease of (or any agreement conveying the right to use) any property (whether real, personal or mixed) by such Person as lessee which in accordance with GAAP, is required to be reflected as a liability on the balance sheet of such Person.

“Capital Stock” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person’s capital stock or partnership, limited liability company or other equity interests at any time outstanding, and any and all rights, warrants or options exchangeable for or convertible into such capital stock or other interests (but excluding any debt security that is exchangeable for or convertible into such capital stock).

“Cash Equivalents” shall mean (a) marketable direct obligations issued or unconditionally guaranteed by the government of the United States and backed by the full faith and credit of the government of the United States maturities of not more than 12 months from the date of acquisition; (b) domestic certificates of deposit and time deposits having maturities of not more than 12 months from the date of acquisition, bankers’ acceptances having maturities of not more than 12 months from the date of acquisition and overnight bank deposits, in each case issued by any commercial bank organized under the laws of Canada or of the United States, any state thereof or the District of Columbia, which at the time of acquisition are rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and (unless issued by a Lender) not subject to offset rights in favor of such bank arising from any banking relationship with such bank; (c) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clauses (a) and (b) entered into with any financial institution meeting the qualifications specified in clause (b) above; and (d) commercial paper having at the time of investment therein or a contractual commitment to invest therein a rating of A-1 (or better) by S&P or P-1 (or better) by Moody’s, and having a maturity within 9 months after the date of acquisition thereof.

“Cash Management Event” shall mean the occurrence or existence of any of the following events or conditions: (a) on any date Excess Availability shall be less than $20,000,000 (whether or not Excess Availability shall thereafter equal or exceed such amount) or (b) an Event of Default shall exist and Agent or the Required Lenders shall have, in its or their sole discretion, elected to enforce, collect and receive all amounts owing with respect to the Accounts or other Collateral.

“Cash Management Reinstatement Event” mean the occurrence or existence of each of the following events or conditions after a Cash Management Event has occurred: (a)  no Event of Default exists (b) Excess Availability shall have been (i) not less than $20,000,000 for a period of ninety (90) consecutive days after the occurrence of a Cash Management Event, or (ii) not less than $30,000,000 for a period of sixty (60) consecutive days after the occurrence of a Cash Management Event and (c) during such 90-day or 60-day period, no event or condition shall exist which would constitute a Cash Management Event.

“Change of Control” shall mean the occurrence of any of the following events: (i) the Sponsor shall cease to own directly (or through an entity wholly-owned by the Sponsor), of record and

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beneficially, in the aggregate, shares of Voting Stock having more than fifty percent (50%) of the total voting power of all outstanding shares of Voting Stock of FGI; (ii) a “change of control” under and as defined in the Senior Notes Indenture shall occur; (iii) FGI shall cease to own and control directly, of record and beneficially, one hundred percent (100%) of each class of outstanding Capital Stock of Remington, Brands or Bushmaster free and clear of all Liens (other than Permitted Liens); or (iv) FGI shall cease to own directly (or through an entity wholly-owned by FGI), of record and beneficially, in the aggregate, shares of Voting Stock having more than fifty percent (50%) of the total voting power of all outstanding shares of Voting Stock of each other Borrower provided, that, the sale of the Capital Stock of any Obligor, the assets of which do not constitute at least twenty percent (20%) of the Borrowing Base on the date of such sale, shall not constitute a Change of Control hereunder if consented to by Agent.

“Code” shall mean the Internal Revenue Code of 1986, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all rules, regulations and interpretations thereunder or related thereto.

“Collateral” shall have the meaning set forth in Section 5 hereof.

“Collateral Access Agreement” shall mean an agreement in writing, in form and substance satisfactory to Agent, from any lessor of premises to any Borrower or Guarantor, or any other person to whom any Collateral is consigned or who (other than another Obligor) has custody, control or possession of any such Collateral or is otherwise the owner or operator of any premises on which any of such Collateral is located, in favor of Agent with respect to the Collateral at such premises or otherwise in the custody, control or possession of such lessor, consignee or other person, by which such person agrees to waive or subordinate any security interest or Lien it may have with respect to such Collateral in favor of Agent’s security interest and Lien and to permit Agent to enter upon such premises and remove such Collateral or to use such Premises to store or dispose of such Collateral.

“Commitment” shall mean, at any time, as to each Lender, the principal amount set forth below such Lender’s signature on the signatures pages hereto designated as the Commitment or on Schedule 1 to the Assignment and Acceptance Agreement pursuant to which such Lender became a Lender hereunder in accordance with the provisions of Section 13.7 hereof, as the same may be adjusted from time to time in accordance with the terms hereof.

“Consolidated Net Income” shall mean, with respect to any period, the aggregate of the net income (loss) of Borrowers and Guarantors, on a consolidated basis (but excluding any Subsidiary of any Borrower or Guarantor if such Subsidiary is not itself a Borrower or Guarantor), for such period, but

(a)excluding (to the extent included therein):

(i)any extraordinary, one-time or non-recurring gains,

(ii)any extraordinary, one-time or non-recurring non-cash losses,

(iii)any non-cash impairment charges pursuant to the write-down of goodwill or intellectual property,

(iv)any gain or non-cash loss realized upon the sale, write-down  or other disposition of (A) any assets that are not sold in the ordinary course of business or (B) any Capital Stock of such Person or a Subsidiary of such Person that is a Borrower or Guarantor,

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(v)any non-cash stock compensation,

(vi)any non-cash rent,

(vii)any non-cash gain or non-cash loss realized as a result of (A) purchase accounting adjustment or (B) the extinguishment of debt,

(viii)any non-capitalized cash expenses incurred pursuant to raising debt or equity capital in the public markets, and

(ix)any cash expenses or charges pursuant to (A) Permitted Acquisitions and (B) corporate restructuring and integration, provided, that, such cash expenses or charges incurred under this clause (ix) shall not exceed in the aggregate $4,000,000 during the period applicable thereto;

and (b) including (to the extent not included therein):

(i)cash rent expense,

(ii)cash stock compensation, and

(iii)the amount of any cash expenditures for charges previously added back to the calculation of Consolidated Net Income in prior periods; and after deducting the Provision for Taxes for such period;

all as determined in accordance with GAAP; provided, that,

(a)the net income of any Borrower or Guarantor that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid or payable to such Person or to a Borrower or Guarantor that is a Subsidiary of such Person;

(b)except to the extent included pursuant to the foregoing clause (a), the net income of any Person (the “target”) accrued prior to the date on which (i) the target becomes a Borrower or Guarantor, or (ii) the target is merged into or consolidated with a Borrower or Guarantor, or (ii) the target’s assets are acquired by a Borrower or Guarantor, shall be excluded;

(c)the net income (if positive) of any Borrower or Guarantor that is a wholly-owned Subsidiary of a Borrower or Guarantor, to the extent that the declaration or payment of dividends or similar distributions by such wholly-owned Subsidiary to such Borrower or Guarantor, or to any other wholly-owned Subsidiary of such Borrower or Guarantor, is not at the time permitted by operation of the terms of such wholly-owned Subsidiary’s organizational documentation or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such wholly-owned Subsidiary, shall be excluded.

“Contributing Borrower” shall have the meaning set forth in Section 2.5(d).

“Covenant Recalibration Period” shall mean the period commencing on the date on which Agent receives a Trademark Appraisal that reports a Trademark Value of less than $65,000,000 and ends on the date on which Agent receives another Trademark Appraisal that reports a Trademark Value of $65,000,000 or more.

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“Credit Facility” shall mean the Loans and Letters of Credit provided to or for the benefit of any Borrower pursuant to Sections 2.1, 2.2 and 2.3 hereof.

“Default” shall mean an act, condition or event which with notice or passage of time or both would constitute an Event of Default.

“Defaulting Lender” shall have the meaning set forth in Section 6.11(d) hereof.

“Deposit Account Control Agreement” shall mean an agreement in writing, in form and substance satisfactory to Agent, by and among Agent, the Borrower or Guarantor with a deposit account at any bank and the bank at which such deposit account is at any time maintained which provides that such bank will comply with instructions originated by Agent directing disposition of the funds in the deposit account without further consent by such Borrower or Guarantor and has such other terms and conditions as Agent may require.

“Deutsche Bank” shall mean Deutsche Bank Trust Company Americas, a New York banking corporation.

“EBITDA” shall mean, as to any Person, with respect to any period, an amount equal to (a) the Consolidated Net Income of such Person for such period, plus (b) each of the following, in each case to the extent deducted in the calculation of such Consolidated Net Income for such period: (i) depreciation and amortization (including, but not limited to, imputed interest and deferred compensation) of such Person for such period, all in accordance with GAAP, plus (ii) the Interest Expense of such Person for such period, plus (iii) provision for income taxes of such Person determined in accordance with GAAP for such period.

“Eligible Accounts” shall mean an Account which arises in the ordinary course of business from the sale of Inventory by a Borrower, is payable in U.S. Dollars, is owned by a Borrower free and clear of all Liens except for Permitted Liens, is subject at all times to Agent’s duly perfected, first priority Lien, and is deemed by Agent, in the exercise of its credit judgment, to be an Eligible Account.  Without limiting the generality of the foregoing, no Account shall be an Eligible Account if:

(a)it arises out of a sale made to a Subsidiary or an Affiliate of such Borrower or to a Person controlled by an Affiliate of such Borrower or to a Blocked Person;

(b)except with respect to an Account subject to clause (c) of this definition below, it is unpaid for more than 60 days after the original due date shown on the invoice or is either due or unpaid more than 120 days after the original invoice date;

(c)(i) it has dated terms of more than 270 days, or (ii) with respect to any Account which does not have dated terms of more than 270 days, (A) the aggregate amount of all Accounts with dated terms of 121 days to 270 days after invoice date that are not past due in excess of $40,000,000 of availability under the Borrowing Base and, (B) within such $40,000,000 limit, the aggregate amount of all Accounts with dated terms of 181 and 270 days after invoice date that are not past due in excess of $10,000,000 of availability under the Borrowing Base, in the case of each of (A) and (B) shall be ineligible to the extent of such excess;

(d)fifty percent (50%) or more of the Accounts from the Account Debtor are not deemed Eligible Accounts hereunder;

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(e)           the aggregate amount of such Accounts owing by a single account debtor (other than Wal-Mart Stores, Inc., Dick’s Sporting Goods, Inc. and Sports South, LLC) do not constitute more than ten percent (10%) of the aggregate amount of all otherwise Eligible Accounts and such Accounts owing by Wal-Mart Stores, Inc., Dick’s Sporting Goods, Inc. and Sports South, LLC do not constitute more than forty percent (40%), thirty percent (30%) and twenty percent (20%) (or with respect to Accounts owing by Sports South such higher percentage as may be acceptable to Agent from time to time, up to thirty percent (30%)), respectively, of the aggregate amount of all otherwise Eligible Accounts (but the portion of the Accounts not in excess of the applicable percentages may be deemed Eligible Accounts); provided that there will be no overall concentration limit with respect to Eligible U.S. Federal Government Accounts or Eligible Foreign Government Accounts;

(f)            any covenant, representation or warranty contained in this Agreement with respect to such Account has been breached;

(g)           the Account Debtor is also such Borrower’s creditor or supplier, or the Account Debtor has disputed liability with respect to such Account or has made any claim with respect to any other Account due from such Account Debtor to such Borrower, or the Account otherwise is or may become subject to any right of setoff, counterclaim, recoupment, reserve or chargeback (including advertising allowances and earned volume rebates), provided that the Accounts of such Account Debtor shall be ineligible only to the extent of such offset, counterclaim, disputed amount, reserve or chargeback (including advertising allowances and earned volume rebates) as calculated by the Agent;

(h)           an Insolvency Proceeding has been commenced by or against the Account Debtor or the Account Debtor has suspended business or ceased to be Solvent;

(i)            it arises from a sale to an Account Debtor with its principal office, assets or place of business outside the United States or Canada, other than (a) any such Account that arises from a sale that is backed by an irrevocable letter of credit that is issued or confirmed by a bank acceptable to Agent that is in form and substance acceptable to Agent and payable in the full amount of the Account in freely convertible U.S. Dollars at a place of payment within the United States, and, if requested by Agent, such letter of credit, or amounts payable thereunder, is collaterally assigned to Agent;

(j)            it arises from a sale to the Account Debtor on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval, consignment or any other repurchase or return basis;

(k)           the Account Debtor is a Governmental Authority unless such Account is an Eligible Government Account;

(l)            the Account Debtor is located in any state imposing conditions on the right of a creditor to collect accounts receivable unless such Borrower has either qualified to transact business in such state as a foreign entity or filed a Notice of Business Activities Report or other required report with the appropriate officials in such state for the then current year;

(m)          the Account Debtor is located in a state or other jurisdiction in which such Borrower is deemed to be doing business under the laws of such state or other jurisdiction and which denies creditors access to its courts in the absence of qualification to transact business in such state or of the filing of any reports with such state, unless such Borrower has qualified as a foreign entity authorized to transact business in such state or has filed all required reports;

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(n)           the Account is subject to a Lien other than a Permitted Lien;

(o)           the goods giving rise to such Account have not been delivered to and accepted by the Account Debtor or the Account otherwise does not represent a final sale;

(p)           the Account is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment;

(q)           such Borrower has made any agreement with the Account Debtor for any deduction therefrom, except for discounts or allowances which are made in the ordinary course of business of a Borrower for prompt payment and which discounts or allowances are reflected in the calculation of the face value of each invoice related to such Account;

(r)            such Borrower has made an agreement with the Account Debtor to extend the time of payment thereof unless otherwise approved by Agent in writing;

(s)           the Account Debtor’s payment history, credit rating or creditworthiness is not deemed to be acceptable to Agent, in the exercise of its credit judgment (provided, that, Agent shall have given Borrowers at least ten (10) Business Days advance written notice of any such determination of ineligibility (or three (3) Business Days advance written notice if the Fixed Charge Coverage Testing Period is then in effect or would be in effect after Agent’s determination that such Account are ineligible));

(t)            the Account Debtor has made a partial payment with respect to such Account;

(u)           it represents, in whole or in part, a billing for interest, fees or late charges, provided that such Account shall be ineligible only to the extent of the amount of such billing;

(v)           it arises from the sale of any Inventory held by such Borrower on consignment from, or subject to any guaranteed sale, sale-or-return, sale-on-approval or repurchase agreement with, any supplier;

(w)          it arises from a retail sale of Inventory to a Person who is purchasing the same primarily for personal, family or household purposes; or

(x)            neither the account debtor nor any officer or employee of the account debtor with respect to such Accounts is an officer, employee, agent or other Affiliate of any Borrower or Guarantor.

The criteria for Eligible Accounts set forth above may only be changed and any new criteria for Eligible Accounts may only be established by Agent in good faith based on either: (i) an event, condition or other circumstance arising after the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to the extent Agent has no written notice thereof from a Borrower prior to the date hereof, in either case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Accounts in the good faith determination of Agent.  Any Accounts that are not Eligible Accounts shall nevertheless be part of the Collateral.

“Eligible Foreign Government Accounts” shall mean Accounts owing by any Governmental Authority to which the applicable Borrower has been specifically licensed to export firearms by the United States government, such accounts satisfying each of the following conditions: (i) such Accounts are not unpaid more than 60 days after the original due date or more than 180 days after the original

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invoice date, (ii) the original due date of such Accounts is not more than 180 days after the original invoice date, (iii) the applicable Borrower is not prohibited from assigning and the applicable Borrower does assign its right to payment of such Accounts to Agent, in a manner satisfactory to Agent, and (iv) such Accounts are supported by one or more irrevocable letters of credit  in form and substance acceptable to Agent, issued or confirmed by a bank acceptable to Agent, and payable in Dollars at a place of payment within the United States that is acceptable to Agent, which letters of credit are assigned to Agent (with such assignment acknowledged by the issuing or confirming bank) or, if so requested by Agent, duly transferred to Agent (together with sufficient documentation to permit direct draws under any such letter of credit by Agent).

“Eligible Government Accounts” shall mean Accounts that would constitute Eligible Accounts but for the fact that the account debtors with respect to such Accounts are any Governmental Authority, and that are Eligible U.S. Federal Government Accounts, Eligible U.S. Local Government Accounts or Eligible Foreign Government Accounts.

“Eligible Inventory” shall mean Inventory (other than labels, supplies, packaging, paint, gunpowder, chemicals) which is owned by a Borrower and which Agent, in the exercise of its credit judgment, deems to be Eligible Inventory.  Without limiting the generality of the foregoing, no Inventory shall be Eligible Inventory unless:

(a)           it is Raw Materials, Parts or Finished Goods;

(b)           it is not work-in-process (other than Parts);

(c)           it is not held by such Borrower on consignment from or subject to any guaranteed sale, sale-or-return, sale-on-approval or repurchase agreement with any supplier, and it is not the subject of a negotiable warehouse receipt or other negotiable Document;

(d)           it is in a condition that is suitable for sale without discount in the ordinary course of business of such Borrower;

(e)           it is not Slow-Moving Goods, obsolete or unmerchantable and is not goods returned to such Borrower by or repossessed from an Account Debtor;

(f)            it meets all standards imposed by any Governmental Authority;

(g)           it conforms in all respects to the warranties and representations set forth in this Agreement;

(h)           it is at all times subject to Agent’s duly perfected, first priority Lien and no other Lien except a Permitted Lien;

(i)            it is in such Borrower’s possession and control is situated at a location in compliance with this Agreement and is not in transit or outside the continental United States and is not consigned to any Person;

(j)            if such Inventory is located at premises that are not owned by such Borrower, such Borrower has procured from the owner or operator of such premises and delivered to Agent a Collateral Access Agreement; and

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(k)           it is not subject to any License Agreement or other agreement that limits, conditions or restricts such Borrower’s or Agent’s right to sell or otherwise dispose of such Inventory unless the Licensor has entered into a Licensor/Lender Agreement with Agent.

The criteria for Eligible Inventory set forth above may only be changed and any new criteria for Eligible Inventory may only be established by Agent in good faith based on either: (i) an event, condition or other circumstance arising after the date hereof, or (ii) an event, condition or other circumstance existing on the date hereof to the extent Agent has no written notice thereof from a Borrower prior to the date hereof, in either case under clause (i) or (ii) which adversely affects or could reasonably be expected to adversely affect the Inventory in the good faith determination of Agent.  Any Inventory that is not Eligible Inventory shall nevertheless be part of the Collateral.

“Eligible Transferee” shall mean (a) a Person that is a Lender or a U.S. based Affiliate of a Lender; (b) a commercial bank, finance company, insurance company or other financial institution, in each case that is organized under the laws of the United States or any state, has total assets in excess of $5 billion, extends credit of the type contemplated herein in the ordinary course of business and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of ERISA or any other applicable law and is reasonably acceptable to Agent (such approval not to be unreasonably withheld), unless an Event of Default exists, is reasonably acceptable to Administrative Borrower (such approval by Administrative Borrower, when required, not to be unreasonably withheld or delayed and to be deemed given by Administrative Borrower if no objection is received by the assigning Lender and Agent from Administrative Borrower within the earlier to occur of (i) three (3) Business Days after notice of such proposed assignment has been provided by the assigning Lender as set forth in Section 13.7 of this Agreement and acknowledged by an Administrative Borrower or (ii) seven (7) Business Days after such notice has been sent to Administrative Borrower); (c) at any time that an Event of Default exists, any Person acceptable to Agent in its sole discretion; provided that no Person shall be an Eligible Transferee pursuant to this clause (c) if such Person is a direct competitor of any Borrower or Guarantor unless at the time of assignment there is in process a liquidation of all or substantially all of the assets of a Borrower, whether conducted by a Borrower, Agent, a trustee for a Borrower or a representative of creditors of a Borrower, or is a Person identified as an ineligible transferee on a written list of such Persons that is delivered by Administrative Borrower to Agent prior to the closing date of the Credit Facility and that is acceptable to Agent; and (d) Sponsor, provided that the Sponsor Permitted Holder Conditions are satisfied.  No natural person, Borrower or Guarantor shall be an Eligible Transferee, and no Lender that holds any Indebtedness of a Borrower or a Guarantor that is subordinated in right of payment to the Obligations shall be an Eligible Transferee unless such assignment is approved by Agent and, unless an Event of Default exists, is reasonably acceptable to Administrative Borrower (such approval by Administrative Borrower, when required, not to be unreasonably withheld or delayed and to be deemed given by Administrative Borrower if no objection is received by the assigning Lender and Agent from Administrative Borrower within the earlier to occur of (i) three (3) Business Days after notice of such proposed assignment has been provided by the assigning Lender as set forth in Section 13.7 of this Agreement and acknowledged by an Administrative Borrower or (ii) seven (7) Business Days after such notice has been sent to Administrative Borrower).

“Eligible U.S. Federal Government Accounts” shall mean Accounts owing by the United States government or any department, agency or instrumentality of the United States government, which  Accounts satisfy each of the following conditions: (i) such Accounts are not unpaid more than 60 days after the original due date or more than 120 days after the original invoice date, (ii) the original due date of such Accounts is not more than 120 days after the original invoice date, and (iii) the applicable Borrower is not prohibited from assigning and, to the extent required for such Accounts to constitute Eligible Government Accounts, the applicable Borrower does assign its right to payment of such Accounts to Agent, in a manner satisfactory to Agent, so as to comply with the requirements of  the

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Federal Assignment of Claims Act; provided, that, compliance with such assignment of claims act shall not be required with respect to (A) U.S. federal government Accounts in an aggregate amount of less than $5,000,000, or (B) any individual U.S. federal government account debtor with less than $1,000,000 of Accounts then outstanding; provided, however, that during the Fixed Charge Coverage Testing Period, compliance with the applicable assignment of claims act will be required for all U.S. federal government Accounts.

“Eligible U.S. Local Government Accounts” shall mean Accounts owing by any Governmental Authority of any state, municipal, local or other political subdivision located in the United States which  Accounts satisfy each of the following conditions: (i) such Accounts are not unpaid more than 60 days after the original due date or more than 120 days after the original invoice date, (ii) the original due date of such Accounts is not more than 120 days after the original invoice date, and (iii) the applicable Borrower is not prohibited from assigning and, to the extent required for such Accounts to constitute Eligible Government Accounts, the applicable Borrower does assign its right to payment of such Accounts to Agent, in a manner satisfactory to Agent, so as to comply with the requirements of all applicable assignment of claims acts; provided, that, compliance with such assignment of claims act shall not be required with respect to (A) U.S. local government Accounts in an aggregate amount of less than $5,000,000, or (B) any individual U.S. local government account debtor with less than $1,000,000 of Accounts then outstanding; provided, however, that during the Fixed Charge Coverage Testing Period, compliance with the applicable assignment of claims act will be required for all U.S. local government Accounts.

“Environmental Laws” shall mean all foreign, Federal, State and local laws, legislation, rules and  codes, and all judicial or administrative decisions, injunctions or agreements between any Borrower or Guarantor and any Governmental Authority, (a) relating to pollution and the protection, preservation or restoration of the environment (including air, water vapor, surface water, ground water, drinking water, drinking water supply, surface land and subsurface land, (b) relating to the exposure to, or the use, storage, recycling, treatment, generation, manufacture, processing, distribution, transportation, handling, labeling, production, release or disposal, of Hazardous Materials, or (c) relating to all laws with regard to recordkeeping, notification, disclosure and reporting requirements respecting Hazardous Materials.  The term “Environmental Laws” includes (i) the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act, the Federal Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water Act of 1974, and (ii) applicable state counterparts to such laws.

“Equipment” shall, as to each Borrower and Guarantor, have the meaning ascribed to the term “equipment” in the UCC and shall include all of such Borrower’s and Guarantor’s now owned and hereafter acquired equipment, wherever located, including machinery, data processing and computer equipment (whether owned or licensed and including embedded software), vehicles, tools, furniture, fixtures, all attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, together with all rules, regulations and interpretations thereunder or related thereto.

“ERISA Affiliate” shall mean any person required to be aggregated with any Borrower, or any Guarantor under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.

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“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Pension Plan, other than events as to which the requirement of notice has been waived in regulations by the Pension Benefit Guaranty Corporation; (b) the adoption of any amendment to a Pension Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) a complete or partial withdrawal by any Borrower, Guarantor or any ERISA Affiliate from a Multiemployer Plan or a cessation of operations which is treated as such a withdrawal under ERISA or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the Pension Benefit Guaranty Corporation to terminate a Pension Plan; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the imposition of any liability under Title IV of ERISA, other than the Pension Benefit Guaranty Corporation premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower, Guarantor or any ERISA Affiliate in excess of $3,000,000 and (g) any other event or condition with respect to a Plan that could reasonably be expected to have a Material Adverse Effect.

“Eurodollar Rate Loans” shall mean any Loans or portion thereof on which interest is payable based on the Adjusted Eurodollar Rate in accordance with the terms hereof.

“Event of Default” shall mean the occurrence or existence of any event or condition described in Section 10.1 hereof.

“Excess Availability” shall mean, the amount, as determined by Agent, calculated at any date, equal to: (a) the lesser of:  (i) the Borrowing Base and (ii) the Maximum Credit (in each case under (i) or (ii) after giving effect to any Reserves other than any Reserves in respect of Letter of Credit Obligations), plus (b) Qualified Cash, minus (c) the sum of:  (i) the amount of all then outstanding and unpaid Loans, plus (ii) the amount of all Reserves then established in respect of Letter of Credit Obligations.

“Excluded Assets” shall have the meaning set forth in Section 5.1.

“Exchange Act” shall mean the Securities Exchange Act of 1934, together with all rules, regulations and interpretations thereunder or related thereto.

“Executive Order” shall have the meaning set forth in Section 9.20.

“Existing Lenders” shall mean the lenders to Borrowers listed on Schedule 1.37 hereto (and including Wachovia Bank, National Association, in its capacity as agent acting for such lenders) and their respective predecessors, successors and assigns.

“Existing Letters of Credit” shall mean, collectively, the letters of credit issued by a Lender for the account of a Borrower or Guarantor, or for which such Borrower or Guarantor is otherwise liable, listed on Schedule 1.38 hereto, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

“Existing Remington Notes” shall mean Remington’s 10 1/2% Senior Notes in the aggregate principal amount of $200,000,000, due 2011.

“Existing Remington Notes Indenture” shall mean the Indenture dated as of January 24, 2003, pursuant to which, among other things, U. S. Bank and Trust, National Association is appointed and serves as Indenture Trustee for the holders of the Existing Remington Notes.

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“Existing Remington Notes Redemption Account” shall have the meaning set forth in Section 9.16(a).

“Existing Remington Notes Redemption Amount” shall have the meaning set forth in Section 9.16(a).

“Federal Funds Effective Rate” shall mean on any day, the rate per annum (rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided, that (i) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next succeeding Business Day, and (ii) if such rate is not so published for any day, the Federal Funds Effective Rate for such day shall be the average rate charged to Wachovia on such day on such transactions, as determined in good faith by Wachovia.

“Fee Letter” shall mean the Fee Letter agreement, dated July 8, 2009, by and among Borrowers, Guarantors, Agent, BofA, Deutsche Bank and the Arrangers.

“Financing Agreements” shall mean, collectively, this Agreement, the Intercreditor Agreement, and all notes, guarantees, security agreements, deposit account control agreements, investment property control agreements, other intercreditor agreements and all other agreements, documents and instruments now or at any time hereafter executed and/or delivered by any Borrower or Guarantor in connection with this Agreement; provided, that Financing Agreements shall not include documentation required by a Bank Product Provider and delivered by a Borrower or Guarantor in relation solely to Bank Products.

“Finished Goods” shall mean Inventory of a Borrower that is held for sale in the ordinary course of business, including hunting/shooting sports products, ammunition, firearm-related accessories, clay targets and powdered metal products.

“First Priority Collateral” shall mean all Accounts, Inventory and Intellectual Property of any Obligor, and all other assets required to realize upon such collateral, including, without limitation, chattel paper, documents, instruments (including any promissory notes), general intangibles, supporting obligations, letters of credit, letter-of-credit rights, and deposit accounts, and the products and proceeds thereof.

“Fixed Charge Coverage Ratio” shall mean, with respect to Borrowers and Guarantors for any period, the ratio of (i) EBITDA minus the sum of (A) Unfinanced Maintenance Capital Expenditures, plus (B) all income taxes paid in cash, plus (C) actual cash pension funding payments made with respect to pension funding obligations, and any other pension funding obligations outside the ordinary course of business of Borrowers, minus (D) the profit and loss statement charge (or benefit) with respect to such pension funding obligations, to (ii) Fixed Charges, for such period.

“Fixed Charge Coverage Ratio-Recalibrated” shall mean, with respect to Borrowers and Guarantors for any period, the ratio of (i) EBITDA minus the sum of (A) Unfinanced Capital Expenditures, plus (B) all income taxes paid in cash, plus (C) dividends or share repurchases with respect to Capital Stock, plus (D) distributions or redemptions (excluding any one-time distribution to shareholders of a Borrower or any one-time redemption of any Senior Notes that, in either case, is paid with proceeds of any issuance of Capital Stock in an initial public offering or a registered secondary offering by a Borrower), plus (E) actual cash pension funding payments made with respect to pension funding obligations, and any other pension funding obligations outside the ordinary course of business of

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Borrowers, minus (F) the profit and loss statement charge (or benefit) with respect to such pension funding obligations, to (ii) Fixed Charges, in each case for such period.

“Fixed Charge Coverage Testing Period” shall mean any period during which the Fixed Charge Coverage Ratio or the Fixed Charge Coverage Ratio-Recalibrated is being tested.

“Fixed Charges” shall mean, with respect to Borrowers and Guarantors for any period, the sum of, without duplication, (a) all Interest Expense, plus (b) all scheduled principal payments of Indebtedness for borrowed money  and Capital Leases (and without duplication of items (a) and (b) of this definition, the interest component with respect to Indebtedness under Capital Leases).

“Foreign Assets Control Regulations” shall have the meaning set forth in Section 9.20.

“Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which a Borrower is resident for tax purposes.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Funding Bank” shall have the meaning set forth in Section 3.3 hereof.

“GAAP” shall mean generally accepted accounting principles in the United States of America as in effect from time to time as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board which are applicable to the circumstances as of the date of determination consistently applied, provided, that, in the event of any change in GAAP after the date hereof that affects the covenant in Section 9.17 or Section 9.18 hereof, Administrative Borrower may by notice to Agent, or Agent may, and at the request of Required Lenders shall, by notice to Administrative Borrower require that such covenants be calculated in accordance with GAAP as in effect, and as applied to Borrowers and Guarantors, immediately before the applicable change in GAAP became effective, until either the notice from the applicable party is withdrawn or such covenant is amended in a manner satisfactory to Administrative Borrower, Agent and the Required Lenders.  Administrative Borrower shall deliver to Agent and upon Agent’s request, to each Lender at the same time as the delivery of any financial statements given in accordance with the provisions of Section 9.6 hereof (i) a description in reasonable detail of any material change in the application of accounting principles employed in the preparation of such financial statements from those applied in the most recently preceding monthly, quarterly or annual financial statements and (ii) a reasonable estimate of the effect on the financial statements on account of such changes in application.

“Governmental Authority” shall mean any nation or government, any state, provincial, municipal, local or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, and any agency, authority or instrumentality (including any bilateral or multilateral agency authority or instrumentality formed by treaty) exercising executive, legislative, judicial, regulatory, administrative, military, peacekeeping or police powers or functions of or pertaining to government.

“Guarantor Allocable Percentage” shall have the meaning set forth in Section 13.11(c) hereof.

“Guarantors” shall mean, collectively, the following (together with their respective successors and assigns): RACI Holding, Inc., a Delaware corporation, Remington Steam, LLC, a New York limited liability company, and Bushmaster Holdings, LLC, a Delaware limited liability company, and any other direct or indirect domestic wholly owned Subsidiary of FGI that at any time after the date hereof (i) becomes party to a guarantee in favor of Agent or any Lender pursuant to a joinder agreement in form

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and substance reasonably satisfactory to Agent and approved by FGI, in connection with an acquisition or investment otherwise permitted under this Agreement, or (ii) otherwise becomes liable on or with respect to the Obligations or who is the owner of any property which is security for the Obligations (other than Borrowers).

“Guaranteed Obligations” shall have the meaning set forth in Section 13.11(a) hereof.

“Gun Control Laws” shall mean all present and future federal, state, local and foreign laws, rules, regulations, judgments, orders and ordinances, including the Gun Control Act, that in any manner regulate the production, sale, distribution or possession of any firearms, ammunition or related products manufactured, held for sale or sold by a Borrower or Guarantor.

“Hazardous Materials” shall mean any hazardous, toxic or dangerous substances, materials and wastes, including hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons), in each case to the extent such substances, materials or wastes are prohibited by or regulated under any Environmental Law as hazardous or toxic under any Environmental Law.

“Hedge Agreement” shall mean any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Indebtedness” shall mean, with respect to any Person, any liability, whether or not contingent, (a) in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof) or evidenced by bonds, notes, debentures or similar instruments; (b) representing the balance deferred and unpaid of the purchase price of any property or services (other than earn outs or an account payable to a trade creditor (whether or not an Affiliate) incurred in the ordinary course of business of such Person and payable in accordance with customary trade practices); (c) all obligations as lessee under leases which have been, or should be, in accordance with GAAP recorded as Capital Leases; (d) any contractual obligation, contingent or otherwise, of such Person to pay or be liable for the payment of any indebtedness described in this definition of another Person, including, without limitation, any such indebtedness, directly or indirectly guaranteed, or any agreement to purchase, repurchase, or otherwise acquire such indebtedness, obligation or liability or any security therefor, or to provide funds for the payment or discharge thereof, or to maintain solvency, assets, level of income, or other financial condition; (e) all obligations with respect to redeemable stock and redemption or repurchase obligations under any Capital Stock or other equity securities issued by such Person; (f) all reimbursement obligations and other liabilities of such Person with respect to surety bonds (whether bid, performance or otherwise), letters of credit, banker’s acceptances, drafts or similar documents or instruments issued for such Person’s account; (g) all indebtedness of such Person in respect of indebtedness of another Person for borrowed money or indebtedness of another Person otherwise described in this definition which is secured by any consensual lien, security interest, collateral assignment, conditional sale, mortgage, deed of trust, deed to secure debt, or other encumbrance on any asset of such Person, whether or not such obligations, liabilities or indebtedness are assumed by or are a personal liability of such Person, all as of such time; (h) all obligations, liabilities and indebtedness of such Person (marked to market) arising under Hedge Agreements; (i) all obligations owed by such Person under License Agreements with respect to non-refundable, advance or minimum guarantee royalty payments; (j) indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer to the extent such Person is liable therefor as a result of such Person’s ownership interest in such entity, except to the extent that the terms of such indebtedness expressly provide that such Person is not liable therefor or such Person has no liability therefor as a matter of law and (k) the principal and interest portions of all rental obligations of such Person under any synthetic lease or similar off-balance

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sheet financing where such transaction is considered to be borrowed money for tax purposes but is classified as an operating lease in accordance with GAAP.

“Indemnitee” shall have the meaning set forth in Section 11.5 hereof.

“Intellectual Property” shall mean, as to each Borrower and Guarantor, such Borrower’s and Guarantor’s now owned and hereafter arising or acquired:  patents, patent rights, patent applications, copyrights, works which are the subject matter of copyrights, copyright applications, copyright registrations, trademarks, servicemarks, trade names, trade styles, trademark and service mark applications, and licenses and rights to use any of the foregoing and all applications, registrations and recordings relating to any of the foregoing as may be filed in the United States Copyright Office, the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof, any political subdivision thereof or in any other country or jurisdiction, together with all rights and privileges arising under applicable law with respect to any Borrower’s or Guarantor’s use of any of the foregoing; all extensions, renewals, reissues, divisions, continuations, and continuations-in-part of any of the foregoing; all rights to sue for past, present and future infringement of any of the foregoing; inventions, trade secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys, reports, manuals, and operating standards; goodwill (including any goodwill associated with any trademark or servicemark, or the license of any trademark or servicemark); customer and other lists in whatever form maintained; trade secret rights, copyright rights, rights in works of authorship, domain names and domain name registration; software and contract rights relating to computer software programs, in whatever form created or maintained.

“Intercreditor Agreement” shall mean an Intercreditor Agreement among Agent, the collateral agent for the noteholders under the Senior Notes Indenture, Borrowers and Guarantors, in form and substance satisfactory to Agent.

“Interest Expense” shall mean, for any period, as to Borrowers and Guarantors, as determined in accordance with GAAP, (i) the amount equal to total cash interest expense of Borrowers and Guarantors on a consolidated basis for such period (including the interest component of any Capital Lease for such period),  less (ii) any cash interest income for such period.

“Interest Period” shall mean for any Eurodollar Rate Loan, a period of approximately one (1), two (2), or three (3) months duration as any Borrower (or Administrative Borrower on behalf of such Borrower) may elect, the exact duration to be determined in accordance with the customary practice in the applicable Eurodollar Rate market; provided, that, such Borrower (or Administrative Borrower on behalf of such Borrower) may not elect an Interest Period which will end after the last day of the then-current term of this Agreement.

“Interest Rate” shall mean,

(a)           Subject to clause (b) of this definition below:

(i)            as to Base Rate Loans and Swing Line Loans, a rate equal to the then Applicable Margin for Base Rate Loans on a per annum basis plus the Base Rate, and

(ii)           as to Eurodollar Rate Loans, a rate equal to the then Applicable Margin for Eurodollar Rate Loans on a per annum basis plus the Adjusted Eurodollar Rate.

(b)           Notwithstanding anything to the contrary contained herein, Agent may, at its option, and Agent shall, at the direction of the Required Lenders, increase the Applicable Margin

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otherwise used to calculate the Interest Rate for Base Rate Loans and Eurodollar Rate Loans, by two percent (2%) per annum, (i) with respect to any portion of the Revolving Loans, Letters of Credit and other Obligations outstanding that is not paid on the due date thereof (whether due at stated maturity, on demand, upon acceleration or otherwise) until such amount due is paid in full; (ii) with respect to the principal amount of all of the Revolving Loans, Letters of Credit and other Obligations outstanding upon the earlier to occur of (x) a Borrower’s receipt of notice from Agent of Agent’s or the Required Lenders’ election to charge such default rate based upon the existence of any Event of Default, whether or not acceleration or demand for payment has been made, or (y) the commencement by or against a Borrower or Guarantor of an insolvency proceeding; and (iii) with respect to the principal amount of any Revolving Loans and Letters of Credit outstanding in excess of the Borrowing Base, whether or not such excess(es) are permitted by Agent or any Lender at any time, and whether or not demand for payment has been made by Agent, and in each case including, to the extent permitted by applicable law, all past due interest.

“Inventory” shall, as to each Borrower and Guarantor, have the meaning ascribed to the term “inventory” in the UCC and shall include all of such Borrower’s and Guarantor’s now owned and hereafter existing or acquired goods, wherever located, which (a) are leased by such Borrower or Guarantor as lessor; (b) are held by such Borrower or Guarantor for sale or lease or to be furnished under a contract of service; (c) are furnished by such Borrower or Guarantor under a contract of service; or (d) consist of raw materials, work in process, finished goods or materials used or consumed in its business.

“Inventory Loan Limit” shall mean, at any time, the amount equal to fifty percent (50%) of the Maximum Credit.

“Investment” shall have the meaning set forth in Section 9.10 hereof.

“Investment Property Control Agreement” shall mean an agreement in writing, in form and substance reasonably satisfactory to Agent, by and among Agent, any Borrower or Guarantor (as the case may be) and any securities intermediary, commodity intermediary or other person who has custody, control or possession of any investment property of such Borrower or Guarantor acknowledging that such securities intermediary, commodity intermediary or other person has custody, control or possession of such investment property on behalf of Agent, that it will comply with entitlement orders originated by Agent with respect to such investment property, or other instructions of Agent, and has such other terms and conditions as Agent may require.

“Issuing Bank” shall mean Wachovia or any Lender that shall issue a Letter of Credit for the account of a Borrower and that shall have agreed in a manner reasonably satisfactory to Agent to be subject to the terms hereof as an Issuing Bank.

“Lender Group Indemnitees” shall have the meaning set forth in Section 12.5 hereof.

“Lenders” shall mean the financial institutions who are signatories hereto as Lenders (including Swing Line Lender) and other persons made a party to this Agreement as a Lender in accordance with Section 13.7 hereof, and their respective successors and assigns.

“Letter of Credit Documents” shall mean, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk or (b) any collateral security for such obligations.

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“Letter of Credit Government Sublimit” shall mean $50,000,000.

“Letter of Credit Limit” shall mean $80,000,000.

“Letter of Credit Non-Government Sublimit” shall mean $30,000,000.

“Letter of Credit Obligations” shall mean, at any time, the sum (in U.S. Dollars) of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time, plus (b) the aggregate amount of all drawings under Letters of Credit for which Issuing Bank has not at such time been reimbursed, plus (c) without duplication, the aggregate amount of all payments made by each Lender to Issuing Bank with respect to such Lender’s participation in Letters of Credit as provided in Section 2.2 for which Borrowers have not at such time reimbursed the Lenders, whether by way of a Revolving Loan or otherwise.

“Letter of Credit Reserve” shall mean, at any date, the aggregate of all Letter of Credit Obligations outstanding on such date, other than Letter of Credit Obligations that are fully secured by cash collateral pledged to Agent.

“Letters of Credit” shall mean all letters of credit (whether documentary or stand-by and whether for the purchase of inventory, equipment or otherwise) issued by an Issuing Bank for the account of any Borrower pursuant to this Agreement, and all amendments, renewals, extensions or replacements thereof and including, but not limited to, the Existing Letters of Credit.

“License Agreements” shall have the meaning set forth in Section 8.11 hereof.

“Licensor” shall mean any Person from whom a Borrower obtains the right to use (whether on an exclusive or non-exclusive basis) any Intellectual Property in connection with such Borrower’s manufacture, marketing, sale or other distribution of any Inventory.

“Licensor/Lender Agreement” shall mean an agreement between Agent and a Licensor by which Agent is given the unqualified right, vis-a-vis such Licensor, to enforce Agent’s Liens with respect to, and to dispose of, a Borrower’s Inventory with the benefit of any Intellectual Property applicable thereto, irrespective of a Borrower’s default under any License Agreement with such Licensor, and which is otherwise in form and substance satisfactory to Agent.

“Lien” shall mean any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on common law, statute or contract.  The term “Lien” shall also include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting property.  For the purpose of this Agreement, each Person shall be deemed to be the owner of any property that it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the property has been retained by or vested in some other Person for security purposes.  In no event shall the term “Lien” be deemed to include any license of intellectual property unless such license contains a grant of a security interest in such intellectual property.

“Loans” shall mean, collectively, the Revolving Loans and the Swing Line Loans.

“London Interbank Offered Rate” shall mean, with respect to any Eurodollar Rate Loan for the Interest Period applicable thereto, the rate (rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by Agent from time to time for purposes of

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providing quotations of interest rates applicable to eurodollar deposits in dollars in the London interbank market) at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, that, if more than one rate is specified on such Page for such comparable period, the applicable rate shall be the arithmetic mean of all such rates.  In the event that such rate is not available at such time for any reason, then the term “London Interbank Offered Rate” shall mean, with respect to any Eurodollar Rate Loan for the Interest Period applicable thereto, the rate of interest per annum at which dollar deposits of $5,000,000 and for a term comparable to such Interest Period are offered by the principal London office of Agent in immediately available funds in the London interbank market at approximately 11:00 a.m. (London time) two (2) Business Days prior to the commencement of such Interest Period.

“Losses” shall have the meaning set forth in Section 9.3(c).

“Material Adverse Effect” shall mean the effect of any event or condition which, alone or when taken together with other events or conditions occurring or existing concurrently therewith, (i) has a material adverse effect upon the business, properties, results of operations or financial condition of Borrowers (taken together) or of all Borrowers or Guarantors (taken as a whole); (ii) has or may be reasonably expected to have any material adverse effect whatsoever upon the validity or enforceability of this Agreement or any of the other Financing Agreements; (iii) has any material adverse effect upon the value of the whole or any material part of the Collateral, the Liens of Agent with respect to the Collateral or the priority of any such Liens; (iv) materially impairs the ability of any Borrower or Guarantor to perform its obligations under any of the Financing Agreements, including repayment of any of the Obligations when due; or (v) materially impairs the ability of Agent or any Lender to enforce or collect the Obligations or realize upon any of the Collateral in accordance with the Financing Agreements and applicable law.

“Material Contract” shall mean an agreement to which a Borrower or a Guarantor is a party (other than the Financing Agreements) (i) which is deemed to be a material contract as provided in Regulation S-K promulgated by the Securities and Exchange Commission under the Securities Act of 1933 or (ii) for which breach, termination, cancellation, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect.

“Maturity Date” shall have the meaning set forth in Section 13.1 hereof.

“Maximum Credit” shall mean the amount of $180,000,000, as adjusted in accordance with Section 2.3 and Section 2.6 hereof.

“Meritage” means Meritage Farms, LLC, a New York limited liability company.

“Moody’s” shall mean Moody’s Investors Services, Inc.

“Multiemployer Plan” shall mean a “multi-employer plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding six (6) years contributed to by any Borrower, Guarantor or any ERISA Affiliate or with respect to which any Borrower, Guarantor or any ERISA Affiliate may incur any liability.

“Net Recovery Percentage” shall mean the fraction, expressed as a percentage, (a) the numerator of which is the amount equal to the amount of the recovery in respect of the Inventory at such time on a “net orderly liquidation value” basis as set forth in the most recent acceptable appraisal of Inventory received by Agent in accordance with Section 7.3, and (b) the denominator of which is the aggregate Value of the Eligible Inventory subject to such appraisal.

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“Non-Consenting Lender” shall have the meaning set forth in Section 11.3(c).

“Notes Priority Collateral” shall have the meaning ascribed to such term in the Intercreditor Agreement.

“Notice of Default or Failure of Condition” shall have the meaning set forth in Section 12.3(a).

“Obligations” shall mean (a) any and all Loans, Swing Line Loans, Letter of Credit Obligations and all other obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of Borrowers to Agent or any Lender or any Issuing Bank, including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, arising under this Agreement or any of the other Financing Agreements or on account of any Letter of Credit and all other Letter of Credit Obligations, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of this Agreement or after the commencement of any case with respect to such Borrower under the United States Bankruptcy Code or any similar statute (including the payment of interest and other amounts which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, or secured or unsecured and (b) for purposes only of Section 5.1 hereof and subject to the priority in right of payment set forth in Section 6.4 hereof, all obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of Borrowers or Guarantors to Agent or any Bank Product Provider arising under or pursuant to any Bank Products, whether now existing or hereafter arising, provided, that, (i) as to any such obligations, liabilities and indebtedness arising under or pursuant to a Hedge Agreement constituting a Bank Product, the same shall only be included within the Obligations if, upon Agent’s request, Agent shall have entered into an agreement, in form and substance reasonably satisfactory to Agent, with the Bank Product Provider that is a counterparty to such Hedge Agreement, as acknowledged and agreed to by Borrowers and Guarantors, providing for the delivery to Agent by such counterparty of information with respect to the amount of such obligations and providing for the other rights of Agent and such Bank Product Provider in connection with such arrangements, (ii) as to any such obligations, liabilities and indebtedness arising under or pursuant to a Bank Product (other than a Hedge Agreement if Agent has requested the agreement referred to in clause (i) above), the same shall only be included within the Obligations if the Bank Product Provider with respect thereto shall have delivered written notice to Agent that (A) such Bank Product Provider has entered into a transaction to provide Bank Products to a Borrower and Guarantor and (B) the obligations arising pursuant to such Bank Products provided to Borrowers and Guarantors constitute Obligations entitled to the benefits of the security interest of Agent granted hereunder, and Agent shall have accepted such notice in writing (provided, that, no such notice or acceptance shall be required as to such obligations, liabilities and indebtedness arising under or pursuant to a Bank Product provided by or owing to Wachovia or any of its Affiliates), and (iii) in no event shall any Bank Product Provider acting in such capacity to whom such obligations, liabilities or indebtedness are owing be deemed a Lender for purposes hereof to the extent of and as to such obligations, liabilities or indebtedness except that each reference to the term “Lender” in Sections 12.1, 12.2, 12.3(b), 12.6, 12.7, 12.9, 12.12 and 13.6 hereof shall be deemed to include such Bank Product Provider and in no event shall the approval of any such person in its capacity as Bank Product Provider be required in connection with the release or termination of any security interest or Lien of Agent.

“Obligor” shall mean each Borrower, each Guarantor and any other Person that is at any time liable for the payment of the whole or any part of the Obligations.

“Other Taxes” shall have the meaning set forth in Section 6.5(c) hereof.

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“Participant” shall mean any financial institution that acquires and holds a participation in the interest of any Lender in any of the Loans and Letters of Credit in conformity with the provisions of Section 13.7 of this Agreement governing participations.

“Parts” shall mean work-in-process consisting of parts that Agent determines in its reasonable judgment are readily saleable in their current state of manufacturing.

“Paying Borrower” shall have the meaning set forth in Section 2.5(d).

“Paying Guarantor” shall have the meaning set forth in Section 13.11(c).

“Pension Plan” shall mean a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which any Borrower or Guarantor sponsors, maintains, or to which any Borrower, Guarantor or ERISA Affiliate makes, is making, or is obligated to make contributions, other than a Multiemployer Plan.

“Permit” shall have the meaning set forth in Section 8.7(b).

“Permitted Acquisition/Merger” shall mean any transaction, or any series of transactions, by which a Borrower or a Guarantor, directly or indirectly acquires any assets or Capital Stock of a Person or merges with a Subsidiary that is not an Obligor; provided that, in each case, each of the following conditions is satisfied:

(a)immediately before and after giving effect to such acquisition or merger, as applicable, no Default or Event of Default shall have occurred and be continuing or would result therefrom;

(b)at the time of, and after giving pro forma effect to the consummation of such acquisition or merger, as applicable, Borrowers shall maintain Excess Availability of not less than $30,000,000 or 16.7% of the Maximum Credit, whichever is greater, and Borrowers shall have delivered to Agent written notice of such acquisition or merger not fewer than five (5) Business Days prior to the acquisition or merger, as applicable, which notice shall include a certificate from the chief financial officer of Administrative Borrower certifying satisfaction of this condition;

(c)the acquisition or merger, as applicable, shall not be hostile:

(d)the business of the Person that is the subject of the projected acquisition or merger, as applicable, shall be related or substantially similar to the business of Borrowers;

(e)contemporaneously with the closing of (A) any asset acquisition by a Borrower or Guarantor, Agent shall have received such documents and instruments as may be necessary to grant or confirm to Agent a first priority perfected Lien on and security interest in all of the assets so acquired which constitute First Priority Collateral (and a perfected Lien on and security interest in all other Collateral having the priority for such Collateral required hereunder), and (B) any acquisition of Capital Stock by a Borrower or Guarantor, or any merger, as applicable, such Person (I) in the case of an acquisition, becomes a Subsidiary of a Borrower or Guarantor and Administrative Borrower requests that such acquired Person be joined to this Agreement as a Borrower or Guarantor, pursuant to a joinder agreement in form and substance reasonably satisfactory to Agent whereby such Person shall become a Borrower or a guaranty of the Obligations and a security agreement (together in each case with applicable UCC financing

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statements), as applicable, in each case executed by such Person, together with such other collateral documents and opinions of counsel relating to the validity, legality and enforceability of the legal documentation described in this clause (B) and the creation of a perfected Lien on such assets or Capital Stock as may be reasonably requested by Agent; or (II) such Person shall be merged with and into an existing Borrower or Guarantor, with such existing Borrower or Guarantor being the surviving entity of such merger); and

(f)with respect to any acquisition or any merger, as applicable, with a purchase price, or in the case of a merger, the value of other consideration payable by the acquiring Obligor, including any proceeds of Revolving Loans used to repay Indebtedness of the acquired or merged Person (any such purchase price or other consideration, as applicable, collectively, referred to as the “Consideration”)), equals or exceeds $15,000,000, Agent shall have received copies of (A) the definitive documents, (B) lien search reports, if any, obtained by or provided to Borrowers, (C) historical financial statements of the Person to be acquired or merged, as applicable, and other financial information, and (D) such other documents and information as Agent may reasonably request; and

(g)with respect to any acquisition or merger, as applicable, during any Covenant Recalibration Period, if the Consideration for any such individual acquisition or merger is $15,000,000 or more, or if the aggregate Consideration for all such acquisitions and mergers during any consecutive 12-month period is $25,000,000 or more, then Borrowers shall (A) have maintained Average Excess Availability for the 12-month period immediately preceding the closing date of such acquisition or merger of not less than $25,000,000, (B) project Average Excess Availability on a pro forma basis for the 12-month period immediately following the closing date of such acquisition or merger of not less than $25,000,000, (C) have maintained a Fixed Charge Coverage Ratio-Recalibrated for the 12-month period immediately preceding the closing date of such acquisition or merger of not less than 1.10 to 1.0, and (D) project a Fixed Charge Coverage Ratio-Recalibrated on a pro forma basis for the 12-month period immediately following the closing date of such acquisition or merger of not less than1.10 to 1.0; provided that, if Borrowers propose an acquisition or merger the Consideration with respect to which would cause the aggregate Consideration for all such acquisitions and mergers in the 12-month period through the closing of the proposed acquisition or merger to exceed $25,000,000 when the aggregate Consideration payable by the acquiring Obligor for acquisitions and mergers by Borrowers in the immediately preceding 12-month period did not otherwise equal or exceed $15,000,000 individually or $25,000,000 in the aggregate, then the period for which the Average Excess Availability the Fixed Charge Coverage Ratio-Recalibrated and of the Person acquired or merged will be measured will be only from the date of acquisition or merger of such Person while the period for such measurements of the Borrowers will remain the trailing 12-month period; provided, that in connection with any of the foregoing acquisitions or mergers permitted under this clause (g), Borrowers shall deliver to Agent Excess Availability projections that demonstrate satisfaction with the applicable Excess Availability requirement.

Until a field exam and audit of the Person to be acquired or merged, in scope and with results reasonably acceptable to Agent, are conducted by Agent’s examiners, no Accounts or Inventory of such Person to be acquired or merged shall be included in the Borrowing Base, and no such Accounts or Inventory will be included in any event unless and until such Person becomes a Borrower hereunder.

“Permitted Indebtedness” shall have the meaning set forth in Section 9.9 hereof.

“Permitted Investments” shall mean each of the following:

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(i)the endorsement of instruments for collection or deposit in the ordinary course of business;

(ii)investments in cash or Cash Equivalents; provided, that, (A) at any time that a Cash Management Event has occurred or exists (or would occur or exist after giving effect to such investments), no Loans are then outstanding; except that notwithstanding that any Loans are outstanding at any time such Cash Management Event exists, Borrowers and Guarantors may from time to time in the ordinary course of business consistent with their current practices as of the date hereof make deposits of cash or other immediately available funds in operating accounts used for disbursements to the extent required to provide funds for amounts drawn or anticipated to be drawn shortly on such accounts and such funds may be held in Cash Equivalents consisting of overnight investments until so drawn (so long as such funds and Cash Equivalents are not held more than three (3) Business Days from the date of the initial deposit thereof) and (B) the terms and conditions of Section 5.2 hereof shall have been satisfied with respect to the deposit account, investment account or other account in which such cash or Cash Equivalents are held;

(iii)the existing equity investments of each Borrower and Guarantor as of the date hereof in its Subsidiaries; provided, that, at any time that a Default or Event of Default shall exist or have occurred and be continuing, or Excess Availability is less than (or would be less than, after giving effect to such investments) the greater of $30,000,000 or 16.7% of the Maximum Credit, no Borrower or Guarantor shall make any capital contributions or other additional investments or other payments to or in or for the benefit of any of such Subsidiaries;

(iv)loans and advances by any Borrower or Guarantor to employees of any Borrower or Guarantor not in excess of $5,000,000 outstanding at any one time in the aggregate;

(v)stock or obligations issued to any Borrower or Guarantor by any Person (or the representative of such Person) in respect of Indebtedness of such Person owing to such Borrower or Guarantor in connection with the insolvency, bankruptcy, receivership or reorganization of such Person or a composition or readjustment of the debts of such Person; provided, that, the original of any such stock or instrument evidencing such obligations shall be promptly delivered to Agent, upon Agent’s request, together with such stock power, assignment or endorsement by such Borrower or Guarantor as Agent may request;

(vi)obligations of account debtors to any Borrower or Guarantor arising from Accounts which are past due evidenced by a promissory note made by such account debtor payable to such Borrower or Guarantor; provided, that, promptly upon the receipt of the original of any such promissory note by such Borrower or Guarantor, such promissory note shall be endorsed to the order of Agent by such Borrower or Guarantor and promptly delivered to Agent as so endorsed;

(vii)the loans and advances set forth on Schedule 9.10 to this Agreement; provided, that, as to such loans and advances, at any time that Excess Availability is less than (or would be less than, after giving effect to such loans and advances) the greater of $30,000,000 or 16.7% of the Maximum Credit, Borrowers and Guarantors shall not, directly or indirectly, amend, modify, alter or change the terms of such loans and advances or any agreement, document or instrument related thereto and Borrowers and Guarantors shall furnish to Agent all notices or demands in connection with such loans and advances either received by any Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be;

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(viii)loans by a Borrower or Guarantor to another Borrower or Guarantor after the date hereof, provided, that, at any time that a Default or Event of Default shall exist or have occurred and be continuing, or Excess Availability is less than (or would be less than, after giving effect to such investments) the greater of $30,000,000 or 16.7% of the Maximum Credit, (A) within thirty (30) days after the end of each fiscal month, Borrowers shall provide to Agent a report in form and substance satisfactory to Agent of the outstanding amount of such loans as of the last day of the immediately preceding month and indicating any loans made and payments received during the immediately preceding month, (B) the Indebtedness arising pursuant to any such loan shall not be evidenced by a promissory note or other instrument, unless the single original of such note or other instrument is promptly delivered to Agent upon its request to hold as part of the Collateral, with such endorsement and/or assignment by the payee of such note or other instrument as Agent may require, and (C) no Borrower may make any further loans to any Guarantor; and

(ix)Investments by a Borrower or a Guarantor to or in a Subsidiary of FGI that is not a Borrower or a Guarantor after the date hereof; provided, that:

(a)no Event of Default shall exist as of the date, or after giving effect to, such investment;

(b)at any time that Excess Availability is less than (or would be less than, after giving effect to such Investment) the greater of $30,000,000 or 16.7% of the Maximum Credit, no Borrower or Guarantor shall make any such Investment to or in any such Subsidiary; and

(c)at any time during a Covenant Recalibration Period, no Borrower or Guarantor shall make any such Investment if such Investment is made in connection with or to facilitate such Subsidiary’s acquisition of assets or Capital Stock of another Person, unless each of the following conditions is satisfied: (1) if the amount of such Investment in any such  Subsidiary for any individual acquisition is $15,000,000 or more, or if the sum of the aggregate amount of such Investments for all such acquisitions by all such Subsidiaries under this clause (ix)(b) plus all other acquisitions by Borrowers and Guarantors during any consecutive 12-month period is $25,000,000 or more, then Borrowers shall (A) have maintained Average Excess Availability for the 12-month period immediately preceding the closing date of such acquisition of not less than $25,000,000, (B) project Average Excess Availability on a pro forma basis for the 12-month period immediately following the closing date of such acquisition of not less than $25,000,000, (C) have maintained a Fixed Charge Coverage Ratio-Recalibrated for the 12-month period immediately preceding the closing date of such acquisition of not less than 1.10 to 1.0, and (D) project a Fixed Charge Coverage Ratio-Recalibrated on a pro forma basis for the 12-month period immediately following the closing date of such acquisition of not less than 1.10 to 1.0.

(x)Investments (other than the Investments described in the foregoing clauses of this definition) after the date hereof by any Borrower or Guarantor in or to any Person; provided, that, as to any such Investment, each of the following conditions is satisfied:

(i)no Event of Default shall exist as of the date of, or after giving effect to, such Investment;

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(ii)if, as of the date of such Investment and after giving effect thereto Excess Availability shall be less than the greater of $30,000,000 or 16.7% of the Maximum Credit, each of the following additional conditions is satisfied:

(A)the sum of the aggregate amount of such Investments pursuant to this clause (x), plus the aggregate amount of payments made pursuant to Section 9.12(b)(ii) hereof shall not exceed $4,000,000 at any time outstanding;

(B)in the case of any Investment in an amount in excess of $500,000, Agent shall have received not less than five (5) Business Days’ prior written notice of the proposed Investment and such information with respect thereto as Agent may reasonably request, in each case with such information to include (A) parties to such Investment, (B) the proposed date and amount of the Investment, and (C) the total amount of the Investment; and

(C)promptly upon Agent’s request, Agent shall have received true, correct and complete copies of all material agreements, documents and instruments relating to such Investment.

“Permitted Liens” shall have the meaning set forth in Section 9.8 hereof.

“Permitted Indebtedness” shall have the meaning set forth in Section 9.9.

“Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation (including any corporation which elects subchapter S status under the Code), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof.

“Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) which any Borrower or Guarantor sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, other than a Multiemployer Plan.

“Pledged Shares” means all shares of capital stock, membership interests, partnership interests and all other equity interests of any corporation, limited liability company, limited partnership or other legal entity that is a Borrower or Guarantor.

“Pro Rata Share” shall mean as to any Lender, the fraction (expressed as a percentage) the numerator of which is such Lender’s Commitment and the denominator of which is the aggregate amount of all of the Commitments of Lenders, as adjusted from time to time in accordance with the provisions of Section 13.7 hereof; provided, that, if the Commitments have been terminated, the numerator shall be the unpaid amount of such Lender’s Loans and its interest in the Swing Line Loans, Special Agent Advances and Letter of Credit Obligations and the denominator shall be the aggregate amount of all unpaid Loans, including Swing Line Loans, Special Agent Advances and Letter of Credit Obligations

“Provision for Taxes” shall mean an amount equal to all taxes imposed on or measured by net income, whether Federal, State, Provincial, county or local, and whether foreign or domestic, that are paid or payable by any Person in respect of any period in accordance with GAAP.

“Qualified Cash” shall mean shall mean cash and Cash Equivalents of Borrowers and Guarantors that (a) are maintained in one or more deposit accounts or investment accounts with one or more financial

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institutions that are subject to the valid, enforceable and first priority perfected security interest of Agent pursuant to a Deposit Account Control Agreement or an Investment Property Control Agreement, as the case may be, in form and substance reasonably satisfactory to Agent (which will not prohibit withdrawal of such funds by such Borrower or Guarantor in the absence of a Default or an Event of Default and subject to such other terms as the Agent and the Administrative Borrower may agree), and (b) are free and clear of any pledge, security interest, lien, claim or other encumbrance (other than in favor of Agent); provided, that, if at any time (and or so long as) Excess Availability (excluding Qualified Cash) is less than $30,000,000, then only cash that is maintained in a deposit account with Agent (and not at any other financial institution) and that is otherwise in compliance with the terms set forth in the foregoing portion of this definition sentence shall constitute Qualified Cash for purposes of determining Excess Availability; and provided, further, that (i) cash or Cash Equivalents held as cash collateral for any other purpose under any of the Financing Agreements and (ii) the cash representing the Existing Remington Notes Redemption Amount shall not constitute Qualified Cash.

“Quarterly Average Excess Availability” shall mean, for any three (3) month period commencing on the first day of the month of such period, the daily average of the Excess Availability for such period.

“Raw Materials” shall mean materials owned and used by a Borrower in the ordinary course of business in the production of Parts and Finished Goods, including steel, lead, brass, powder, plastics and wood.

“Real Property” shall mean all now owned and hereafter acquired real property of each Borrower and Guarantor, including leasehold interests, together with all buildings, structures, and other improvements located thereon and all licenses, easements and appurtenances relating thereto, wherever located.

“Receivables” shall mean all of the following now owned or hereafter arising or acquired property of each Borrower and Guarantor: (a) all Accounts; (b) all interest, fees, late charges, penalties, collection fees and other amounts due or to become due or otherwise payable in connection with any Account; (c) all payment intangibles of such Borrower or Guarantor; (d) letters of credit, indemnities, guarantees, security or other deposits and proceeds thereof issued payable to any Borrower or Guarantor or otherwise in favor of or delivered to any Borrower or Guarantor in connection with any Account; and (e) all other accounts, contract rights, chattel paper, instruments, notes, general intangibles and other forms of obligations owing to any Borrower or Guarantor, whether from the sale and lease of goods or other property, licensing of any property (including Intellectual Property or other general intangibles), rendition of services or from loans or advances by any Borrower or Guarantor or to or for the benefit of any third person (including loans or advances to any Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated with any Accounts, Inventory or general intangibles of any Borrower or Guarantor (including, without limitation, choses in action, causes of action, tax refunds, tax refund claims, any funds which may become payable to any Borrower or Guarantor in connection with the termination of any Plan or other employee benefit plan and any other amounts payable to any Borrower or Guarantor from any Plan or other employee benefit plan, rights and claims against carriers and shippers, rights to indemnification, business interruption insurance and proceeds thereof, casualty or any similar types of insurance and any proceeds thereof and proceeds of insurance covering the lives of employees on which any Borrower or Guarantor is a beneficiary).

“Records” shall mean, as to each Borrower and Guarantor, all of such Borrower’s and Guarantor’s present and future books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files and other data relating to the Collateral or any account debtor, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets or containers in or on which

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the foregoing are stored (including any rights of any Borrower or Guarantor with respect to the foregoing maintained with or by any other person).

“Refinancing Indebtedness” shall mean Indebtedness of a Borrower or Guarantor which serves to refund, refinance or defease any Permitted Indebtedness incurred as permitted under clauses (f), (g), and (n) of Section 9.9 or any Indebtedness incurred to so refund or refinance such Indebtedness, including any Indebtedness incurred to pay premiums, fees and expenses in connection therewith prior to its respective maturity; provided, however, that such Refinancing Indebtedness:

(a)has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded or refinanced;

(b)has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded or refinanced;

(c)to the extent such Refinancing Indebtedness refinances (x) Indebtedness junior to the Obligations or (y) the Senior Notes or the guaranties by such Guarantor, as applicable, such Refinancing Indebtedness is junior to the Senior Notes and the Obligations or such guaranties, as applicable;

(d)is incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees incurred in connection with such refinancing; and

(e)shall not include (x) Indebtedness of a Borrower or Guarantor that refinances Indebtedness of another Borrower or Guarantor, or (y) Indebtedness of a Borrower or Guarantor that refinances Indebtedness of a Person that is not a Borrower or Guarantor.

“Register” shall have the meaning set forth in Section 13.7 hereof.

“Report” shall have the meaning set forth in Section 12.10.

“Required Lenders” shall mean, at any time, those Lenders whose Pro Rata Shares aggregate more than fifty percent (50%) of the aggregate of the Commitments of all Lenders, or if the Commitments shall have been terminated, Lenders to whom at least fifty percent (50%) of the then outstanding Obligations are owing; provided, that, at any time that there are three (3) or fewer Lenders, then Required Lenders shall include Agent.

“Reserves” shall mean as of any date of determination, such amounts as Agent may from time to time establish and revise in good faith reducing the amount of Loans and Letters of Credit that would otherwise be available to any Borrower under the lending formulas provided for herein: (a) to reflect events, conditions, contingencies or risks which, as determined by Agent in good faith, adversely affect, or would have a reasonable likelihood of adversely affecting, either (i) the Collateral or any other property which is security for the Obligations or its value or (ii) the security interests and other rights of Agent or any Lender in the Collateral (including the enforceability, perfection and priority thereof) or (b) to reflect Agent’s good faith belief that any collateral report or financial information furnished by or on behalf of any Borrower or Guarantor to Agent is or may have been incomplete, inaccurate or misleading in any material respect.  Without limiting the generality of the foregoing, Reserves may, at

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Agent’s option, be established to reflect:  on any date of determination thereof, an amount equal to the sum of the following (without duplication) (i) any amounts which any Borrower or Guarantor is obligated to pay pursuant to the provisions of any of the Financing Agreements that Agent or any Lender elects to pay for the account of such Borrower or Guarantor in accordance with authority contained in any of the Financing Agreements; (ii) the Letter of Credit Reserve; (iii) such reserves as may be established from time to time by Agent in the exercise of its credit judgment to reflect changes in the saleability of any Inventory or such other factors as may negatively affect the value of any Inventory; (iv) with respect to any premises for which Agent has not received a Collateral Access Agreement acceptable to Agent, a sum equal to 3 months rent and for the aggregate amount of all other charges that are past due and payable by any Borrower or Guarantor to the landlord, warehouseman or other Person with respect to such premises (but only to the extent such premises are in a jurisdiction in which applicable law provides such Person with a Lien on any of the First Priority Collateral)); provided that Agent will not establish such a reserve for Borrowers’ Memphis, Tennessee location or Windham, Maine location unless Agent has not received a Collateral Access Agreement acceptable to Agent for such location on or before September 15, 2009; and (v) such additional reserves as Agent, in its sole and absolute discretion, may elect to impose from time to time as a result of changes that Agent becomes aware of that have resulted or could reasonably be expected to result in a diminution in the quantity, quality or value of any Collateral or a dilution with respect to any of the Accounts.  The amount of any Reserve established by Agent shall have a reasonable relationship to the event, condition or other matter which is the basis for such reserve as determined by Agent in good faith and to the extent that such Reserve is in respect of amounts that may be payable to third parties Agent may, at its option, deduct such Reserve from the Maximum Credit, at any time that such limit is less than the amount of the Borrowing Base.

“Restricted Payment Event” shall have the meaning set forth in Section 9.12(b).

“Restricted Subsidiaries” shall have the meaning set forth in the Senior Notes Indenture as in effect on the date hereof.

“Revolving Loans” shall mean the loans now or hereafter made by or on behalf of any Lender or by Agent for the account of any Lender on a revolving basis pursuant to the Credit Facility (involving advances, repayments and readvances) as set forth in Section 2.1 hereof.

“S&P” shall mean Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc.

“SEC” shall mean the Securities and Exchange Commission, or any Governmental Authority which may be substituted therefor.

“Secured Parties” shall mean, collectively, (a) Agent, (b) Lenders, (c) the Issuing Bank and (d) any Bank Product Provider; provided, that, as to any Bank Product Provider, only to the extent of the Obligations owing to such Bank Product Provider.

“Securities Act” shall mean the Securities Act of 1933, together with all rules, regulations and interpretations thereunder or related thereto.

“Senior Notes” shall mean FGI’s 10¼ % Senior Secured Notes due 2015 in the aggregate principal amount of $200,000,000.

“Senior Notes Indenture” shall mean the Indenture dated as of July 29, 2009, pursuant to which the Senior Notes have been issued.

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“Settlement Period” shall have the meaning set forth in Section 6.11(b).

“Slow-Moving Goods” shall mean, on any date of determination, (i) the amount of finished goods Inventory of Borrowers in excess of the amount of such finished goods of the same type that were sold by Borrowers during the immediately preceding 12 consecutive month period ending on the last day of the month completed prior to such date or (ii) the amount of finished goods Inventory of the Borrowers which has not been sold during the immediately preceding 12 consecutive months ending on the last day of the month completed prior to such date (except for goods consisting of a new product line introduced within such 12 consecutive month period).

“Solvent” shall mean, at any time with respect to any Person, that at such time such Person (a) is able to pay its debts as they mature and has (and has a reasonable basis to believe it will continue to have) sufficient capital (and not unreasonably small capital) to carry on its business consistent with its practices as of the date hereof, and (b) the assets and properties of such Person at a fair valuation (and including as assets for this purpose at a fair valuation all rights of subrogation, contribution or indemnification arising pursuant to any guarantees given by such Person) are greater than the Indebtedness of such Person, and including subordinated and contingent liabilities computed at the amount which, such person has a reasonable basis to believe, represents an amount which can reasonably be expected to become an actual or matured liability (and including as to contingent liabilities arising pursuant to any guarantee the face amount of such liability as reduced to reflect the probability of it becoming a matured liability).

“Solvency Certificate” shall mean a certificate in form and scope reasonably acceptable to Agent, that (i) is executed by the chief financial officer of Borrowers and (ii) sets forth, as of the date of such certificate, a pro forma GAAP consolidated balance sheet, and projections showing Borrowers’ projected Availability and working capital for the 12-month period following the date of the certificate, and giving pro forma effect to the initial Loans hereunder, the issuance of the Senior Notes and the consummation of the other transaction contemplated hereunder as of the closing date of the Credit Facility.

“Special Agent Advances” shall have the meaning set forth in Section 12.11 hereof.

“Sponsor” shall mean Cerberus Capital Management, L.P., a Delaware limited partnership (“Cerberus”), and any of its affiliates (other than FGI and its Subsidiaries) that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with Cerberus.

“Sponsor Permitted Holder Conditions” shall mean each of the following, all of which must be satisfied as a condition to permit any assignment of Revolving Loans or Commitments to Sponsor: (a) an Event of Default shall exist; (b) the Loans and Commitments proposed to be assigned to Sponsor shall have been previously offered to all Lenders and all Lenders shall have declined in writing to purchase any of such Loans or Commitments: (c) the aggregate amount of all Commitments held by Sponsor after giving effect to such assignment shall be no more than thirty-five percent (35%) of the total Commitments; (d) Sponsor shall have executed and delivered, in form satisfactory to Agent in its sole and absolute discretion, an agreement with Agent for the benefit of Agent and the Secured Parties in which Sponsor shall have agreed that: (i) Sponsor will have no right to: (A) consent to any amendment, waiver or consent with respect to any Financing Agreement; (B) otherwise vote on any matter related to any Financing Agreement (and Sponsor’s Commitments shall not be included in the determination of whether Required Lenders have agreed to any such amendment, waiver, consent or vote); (C) require Agent or Lenders to take, or refrain from taking, any action with respect to any Financing Agreement; (D) attend any meeting or participate in any conference calls with Agent or any Lender or receive any information from Agent or any Lender; and (E) benefit from any advice of counsel to Agent or any Lender or challenge the attorney-client privilege with respect to any communications between counsel and Agent or any Lender; provided that, notwithstanding the foregoing clauses (A) and (B), Sponsor’s consent shall be

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required (and Sponsor’s Commitment shall be included in the determination of Required Lenders) for any amendment, waiver or consent that would increase the Commitment of Sponsor, reduce the amount of any principal, interest or fees payable to Sponsor, extend the time for the payment of principal, interest or fees payable to Sponsor, or modify any of the terms and conditions of the Financing Agreements (other than provisions pertaining to voting) in a manner that would deprive Sponsor of its pro rata share of any payments to which Lenders as a group would be entitled or otherwise single out or intentionally discriminate against Sponsor or deprive Sponsor of its protections provided by this proviso; and (ii) Sponsor shall not contest, protest or object to the exercise Agent of any of its rights or remedies with respect to the Collateral or under the Financing Agreements, including any rights, remedies and motions of Agent or any Lender during any insolvency proceeding of any of Borrower or Guarantor, and will not propose or provide in any insolvency proceeding of any Borrower or Guarantor debtor-in-possession financing that is not consented to by the Required Lenders; and (e) Sponsor and the assigning Lender shall have agreed in writing within three (3) Business Days after the assigning Lender offers the assignment to Sponsor that Sponsor accepts the assignment.

“Stated Maturity” shall mean, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

“Subsidiary” or “subsidiary” shall mean, with respect to any Person, any corporation, limited liability company, limited liability partnership or other limited or general partnership, trust, association or other business entity of which an aggregate of at least a majority of the outstanding Capital Stock or other interests entitled to vote in the election of the board of directors of such corporation (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency), managers, trustees or other controlling persons, or an equivalent controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such Person and/or one or more subsidiaries of such Person.

“Swing Line Lender” shall mean Wachovia Bank, National Association, in its capacity as the lender of Swing Line Loans, and its successors and assigns.

“Swing Line Loan Limit” shall mean $25,000,000.

“Swing Line Loans” shall have the meaning set forth in Section 2.1 hereof.

“Taxes” shall have the meaning set forth in Section 6.5(a) hereof.

“Total Assets” shall mean the total consolidated assets of FGI and its Restricted Subsidiaries, as shown on the most recent financial statements of FGI that Agent has received in accordance with Section 9.6 hereof.

“Trademark Appraisal” shall mean a written appraisal of the net orderly liquidation value of the “Remington” trademarks owned by Brands in form, scope and methodology reasonably acceptable to Agent and by an appraiser selected and engaged by Agent, addressed to Agent and upon which Agent is expressly permitted to rely.

“Trademark Value” shall mean the aggregate net orderly liquidation value of the “Remington” trademarks owned by Brands as reported in a Trademark Appraisal.

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“Trading with the Enemy Act” shall have the meaning set forth in Section 9.20.

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York, and any successor statute, as in effect from time to time (except that terms used herein which are defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute except as Agent may otherwise determine); provided, however, that at any time, if by reason of mandatory provisions of law, any or all of the perfections or priority of Agent’s security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdictions and any successor statute, as in effect from time to time, for purposes of the provisions hereof relating to such perfection or priority or for purposes of definitions relating to such provisions.

“Unfinanced Capital Expenditures” shall mean Capital Expenditures made and not financed with the proceeds of money borrowed (other than Revolving Loans) and not financed under a capital lease or seller financing.

“Unfinanced Maintenance Capital Expenditures” shall mean, on any date of determination with respect to any period, an amount equal to the greater of (i) Unfinanced Capital Expenditures for maintenance purposes as reported by Administrative Borrower to Agent or (ii) $7,000,000.

“Value” shall mean, as determined by Agent in good faith, with respect to Inventory, the lower of (a) cost computed on a first-in first-out basis in accordance with GAAP or (b) market value, provided, that, for purposes of the calculation of the Borrowing Base, (i) the Value of the Inventory shall not include:  (A) the portion of the value of Inventory equal to the profit earned by any Affiliate on the sale thereof to any Borrower or (B) write-ups or write-downs in value with respect to currency exchange rates and (ii) notwithstanding anything to the contrary contained herein, the cost of the Inventory shall be computed in the same manner and consistent with the most recent appraisal of the Inventory received and accepted by Agent prior to the date hereof, if any.

“Voting Stock” shall mean with respect to any Person, (a) one (1) or more classes of Capital Stock of such Person having general voting powers to elect at least a majority of the board of directors, managers or trustees of such Person, irrespective of whether at the time Capital Stock of any other class or classes have or might have voting power by reason of the happening of any contingency, and (b) any Capital Stock of such Person convertible or exchangeable without restriction at the option of the holder thereof into Capital Stock of such Person described in clause (a) of this definition.

“Wachovia” shall mean Wachovia Bank, National Association, in its individual capacity, and its successors and assigns.

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at any date, the quotient obtained by dividing (i) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness multiplied by the amount of such payment, by (ii) the sum of all such payments.

SECTION  2.CREDIT FACILITIES

2.1Loans.

(a)Subject to and upon the terms and conditions contained herein:

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(i)each Lender severally (and not jointly) agrees to make its Pro Rata Share of Revolving Loans to Borrowers from time to time in amounts requested by any Borrower (or Administrative Borrower on behalf of Borrowers), provided, that, after giving effect to any such Revolving Loan, the principal amount of the Revolving Loans, Swing Line Loans and Letter of Credit Obligations outstanding with respect to all Borrowers shall not exceed the lesser of (A) the Borrowing Base at such time or (B) the Maximum Credit at such time; and

(ii)the Swing Line Lender agrees that it will make loans (“Swing Line Loans”) to Borrowers from time to time in amounts requested by any Borrower (or Administrative Borrower on behalf of Borrowers) up to the aggregate amount outstanding equal to the Swing Line Loan Limit, provided, that, after giving effect to any such Swing Line Loan the aggregate principal amount of the Revolving Loans, Swing Line Loans and Letter of Credit Obligations outstanding with respect to all Borrowers shall not exceed the lesser of  (A) the Borrowing Base at such time, or (B) the Maximum Credit at such time.

(b)On the terms and subject to the conditions hereof, each Borrower (or Administrative Borrower on behalf of Borrowers) may from time to time borrow, prepay and reborrow Revolving Loans and Swing Line Loans.  No Lender shall be required to make any Revolving Loan, if, after giving effect thereto the aggregate outstanding principal amount of all Revolving Loans of such Lender, together with such Lender’s Pro Rata Share of the aggregate amount of all Swing Line Loans and Letter of Credit Obligations, would exceed such Lender’s Commitment.  Swing Line Lender shall not be required to make Swing Line Loans, if, after giving effect thereto, the aggregate outstanding principal amount of all Swing Line Loans would exceed the then existing Swing Line Loan Limit.  Each Swing Line Loan shall be subject to all of the terms and conditions applicable to other Base Rate Loans funded by the Lenders constituting Revolving Loans, except that all payments thereon shall be payable to the Swing Line Lender solely for its own account.  All Revolving Loans and Swing Line Loans shall be subject to the settlement among Lenders provided for in Section 6.11 hereof.

(c)Upon the making of a Swing Line Loan or any Revolving Loan by Agent as provided in Section 6.11, without further action by any party hereto, each Lender shall be deemed to have irrevocably and unconditionally purchased and received from the Swing Line Lender or Agent, without recourse or warranty, an undivided interest and participation to the extent of such Lender’s Pro Rata Share in such Swing Line Loan or Revolving Loan.  To the extent that there is no settlement in accordance with Section 6.11 below, the Swing Line Lender or Agent, as the case may be, may at any time, require the Lenders to fund their participations.  From and after the date, if any, on which any Lender has funded its participation in any Swing Line Loan, Special Agent Advance or Revolving Loan, Agent shall promptly distribute to such Lender, such Lender’s Pro Rata Share of all payments of principal and interest received by Agent in respect of such Swing Line Loan, Special Agent Advance or Revolving Loan.

(d)The aggregate amount of the Revolving Loans, the Swing Line Loans and the Letter of Credit Obligations outstanding at any time shall not exceed the least of (i) the Maximum Credit, (ii) except in Agent’s discretion pursuant to Section 12.8, the Borrowing Base or (iii) the amount that constitutes “Permitted Debt” under clause (i) of the definition of that term in the Senior Notes Indenture as in effect on the date hereof.

(e)In the event that (i) the aggregate amount of the Revolving Loans, the Swing Line Loans and the Letter of Credit Obligations outstanding at any time exceed the Maximum Credit, or (ii) except as otherwise provided herein, the aggregate principal amount of the Revolving Loans, the Swing Line Loans and Letter of Credit Obligations outstanding exceed the Borrowing Base, such event shall not limit, waive or otherwise affect any rights of Agent or Lenders in such circumstances or on any future occasions and Borrowers shall, upon demand by Agent, which may be made at any time or from

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time to time, immediately repay to Agent the entire amount of any such excess(es) for which payment is demanded.

(f)Any Borrower (or Administrative Borrower on behalf of such Borrower) may request a Revolving Loan borrowing by written notice (or telephone notice promptly confirmed in writing which confirmation may be by fax) to Agent not later than 12:00 p.m. on the Business Day of the requested borrowing in the case of Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of Eurodollar Rate Loans.  Each such request for borrowing shall be irrevocable, and shall specify (i) that a Revolving Loan is requested, (ii) the date of the requested borrowing (which shall be a Business Day), (iii) the aggregate principal amount to be borrowed, (iv) whether the borrowing shall be comprised of Base Rate Loans, Eurodollar Rate Loans or a combination thereof, and if Eurodollar Rate Loans are requested, the Interest Period(s) therefor.  If such Borrower shall fail to specify in any such notice of borrowing (A) an applicable Interest Period in the case of a Eurodollar Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (B) the type of Revolving Loan requested, then such notice shall be deemed to be a request for a Base Rate Loan hereunder.  Agent shall give notice to each Lender promptly after receipt of such notice by the Agent, of each notice of borrowing, the contents thereof and each such Lender’s share thereof.

(g)Each Borrower (or Administrative Borrower on behalf of such Borrower) may from time to time request Eurodollar Rate Loans or may request that Base Rate Loans be converted to Eurodollar Rate Loans or that any existing Eurodollar Rate Loans continue for an additional Interest Period.  Such request from a Borrower (or Administrative Borrower on behalf of such Borrower) shall specify the amount of the Eurodollar Rate Loans or the amount of the Base Rate Loans to be converted to Eurodollar Rate Loans or the amount of the Eurodollar Rate Loans to be continued (subject to the limits set forth below) and the Interest Period to be applicable to such Eurodollar Rate Loans (and if it does not specify such Interest Period shall be deemed to be a one (1) month period).  Subject to the terms and conditions contained herein, three (3) Business Days after receipt by Agent of such a request from a Borrower (or Administrative Borrower on behalf of such Borrower), which may be telephonic (and followed by a confirmation in writing if requested by Agent) such Eurodollar Rate Loans shall be made or Base Rate Loans shall be converted to Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue, as the case may be; provided, that, (i) no Default or Event of Default shall exist or have occurred and be continuing, (ii) no Borrower or Administrative Borrower shall have sent any notice of termination of this Agreement, (iii) such Borrower (or Administrative Borrower on behalf of such Borrower) shall have complied with such customary procedures as are established by Agent and specified by Agent to Administrative Borrower from time to time for requests by Borrowers for Eurodollar Rate Loans, (iv) no more than ten (10) Interest Periods may be in effect at any one time, (v) the aggregate amount of the Eurodollar Rate Loans must be in an amount not less than $1,000,000 or in integral multiples of $100,000 in excess thereof, and (vi) Agent and each Lender shall have determined that the Interest Period or Adjusted Eurodollar Rate is available to Agent and such Lender and can be readily determined as of the date of the request for such Eurodollar Rate Loan by such Borrower.  Any request by or on behalf of a Borrower for Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans or to continue any existing Eurodollar Rate Loans shall be irrevocable.  All Swing Line Loans shall be Base Rate Loans and shall not be entitled to be converted to Eurodollar Rate Loans.

(h)Any Eurodollar Rate Loans shall automatically convert to Base Rate Loans upon the last day of the applicable Interest Period, unless Agent has received a request to continue such Eurodollar Rate Loan at least three (3) Business Days prior to such last day for an Interest Period specified in such notice in accordance with the terms hereof and Borrowers are entitled to such Eurodollar Rate Loan under the terms hereof.  Any Eurodollar Rate Loans shall, at Agent’s option, upon notice by Agent to Administrative Borrower, be subsequently converted to Base Rate Loans in the event that this Agreement shall terminate or shall not be renewed.  Borrowers shall pay to Agent, for the benefit of

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Lenders, upon demand by Agent (or Agent may, at its option, charge any loan account of any Borrower) any amounts required to compensate any Lender or Participant for any loss (excluding loss of anticipated profits), cost or expense incurred by such person, as a result of the conversion of Eurodollar Rate Loans to Base Rate Loans pursuant to any of the foregoing.

2.2Letters of Credit.

(a)Subject to and upon the terms and conditions contained herein and in the Letter of Credit Documents, at the request of a Borrower (or Administrative Borrower on behalf of such Borrower), Agent agrees to cause Issuing Bank to issue, and Issuing Bank agrees to issue, for the account of such Borrower one or more Letters of Credit, for the ratable risk of each Lender according to its Pro Rata Share, containing terms and conditions reasonably acceptable to Borrower Agent and Issuing Bank.

(b)The Borrower requesting such Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall give Agent and Issuing Bank not less than three (3) Business Days’ prior written notice of such Borrower’s request for the issuance of a Letter of Credit.  Such notice shall be irrevocable and shall specify the original face amount of the Letter of Credit requested, the effective date (which date shall be a Business Day and in no event shall be a date less than ten (10) days prior to the end of the then current term of this Agreement) of issuance of such requested Letter of Credit, whether such Letter of Credit may be drawn in a single or in partial draws, the date on which such requested Letter of Credit is to expire (which date shall be a Business Day and shall not be more than one year from the date of issuance), the purpose for which such Letter of Credit is to be issued, and the beneficiary of the requested Letter of Credit.  The Borrower requesting the Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall attach to such notice the proposed terms of the Letter of Credit.  The renewal or extension of any Letter of Credit shall, for purposes hereof be treated in all respects the same as the issuance of a new Letter of Credit hereunder.

(c)In addition to being subject to the satisfaction of the applicable conditions precedent contained in Section 4 hereof and the other terms and conditions contained herein, no Letter of Credit shall be available unless each of the following conditions precedent have been satisfied in a manner reasonably satisfactory to Agent:  (i) the Borrower requesting such Letter of Credit (or Administrative Borrower on behalf of such Borrower) shall have delivered to Issuing Bank at such times and in such manner as Issuing Bank may require, an application, in form and substance reasonably satisfactory to such Borrower, Issuing Bank and Agent, for the issuance of the Letter of Credit and such other Letter of Credit Documents as may be required pursuant to the terms thereof, and the form and terms of the proposed Letter of Credit shall be reasonably satisfactory to Agent and Issuing Bank, (ii) as of the date of issuance, no order of any court, arbitrator or other Governmental Authority shall purport by its terms to enjoin or restrain money center banks generally from issuing letters of credit of the type and in the amount of the proposed Letter of Credit, and no law, rule or regulation applicable to money center banks generally and no request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over money center banks generally shall prohibit, or request that Issuing Bank refrain from, the issuance of letters of credit generally or the issuance of such Letter of Credit, (iii) after giving effect to the issuance of such Letter of Credit, the Letter of Credit Obligations shall not exceed the Letter of Credit Limit, the Letter of Credit Obligations with respect to Letters of Credit issued to Governmental Authorities shall not exceed the Letter of Credit Government Sublimit, and the Letter of Credit Obligations with respect to Letters of Credit issued to beneficiaries other than Governmental Authorities shall not exceed the Letter of Credit Non-Government Sublimit, and (iv) the Excess Availability, prior to giving effect to any Reserves with respect to such Letter of Credit, on the date of the proposed issuance of any Letter of Credit shall be equal to or greater than an amount equal to one hundred (100%) percent of the Letter of Credit Obligations with respect thereto.  If there is a conflict between any Letter of Credit Document (other than the Letter of Credit) and this Agreement, this

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Agreement shall prevail.  Effective on the issuance of each Letter of Credit, a Reserve shall be established in the applicable amount set forth in Section 2.2(c)(iv).

(d)Except in Agent’s discretion, with the consent of Required Lenders, the amount of all outstanding Letter of Credit Obligations shall not at any time exceed the Letter of Credit Limit.

(e)Each Borrower shall reimburse immediately Issuing Bank for any draw under any Letter of Credit issued for the account of such Borrower and pay Issuing Bank the amount of all other charges and fees payable to Issuing Bank in connection with any Letter of Credit issued for the account of such Borrower immediately when due, irrespective of any claim, setoff, defense or other right which such Borrower may have at any time against Issuing Bank or any other Person.  Each drawing under any Letter of Credit or other amount payable in connection therewith when due shall constitute a request by the Borrower for whose account such Letter of Credit was issued to Agent for a Base Rate Loan in the amount of such drawing or other amount then due, and shall be made by Agent on behalf of Lenders as a Revolving Loan (or Special Agent Advance, as the case may be). The date of such Loan shall be the date of the drawing or as to other amounts, the due date therefor.  Any payments made by or on behalf of Agent or any Lender to Issuing Bank and/or related parties in connection with any Letter of Credit shall constitute additional Revolving Loans to such Borrower pursuant to this Section 2 (or Special Agent Advances as the case may be).

(f)Borrowers and Guarantors shall indemnify and hold Agent and Lenders harmless from and against any and all losses, claims, damages, liabilities, costs and expenses which Agent or any Lender may suffer or incur in connection with any Letter of Credit and any documents, drafts or acceptances relating thereto, including any losses, claims, damages, liabilities, costs and expenses due to any action taken by Issuing Bank or correspondent with respect to any Letter of Credit, except for such losses, claims, damages, liabilities, costs or expenses that are a direct result of the gross negligence or willful misconduct of Agent or any Lender as determined pursuant to a final non-appealable order of a court of competent jurisdiction.  Each Borrower and Guarantor assumes all risks with respect to the acts or omissions of the drawer under or beneficiary of any Letter of Credit.  Each Borrower and Guarantor hereby releases and holds Agent and Lenders harmless from and against any acts, waivers, errors, delays or omissions with respect to or relating to any Letter of Credit and any and  all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit or any documents, drafts or acceptances thereunder, except for the gross negligence or willful misconduct of Agent or any Lender as determined pursuant to a final, non-appealable order of a court of competent jurisdiction (but without limiting the obligations of Borrowers or Guarantors to any other Indemnitee).  The provisions of this Section 2.2(f) shall survive the payment of Obligations and the termination of this Agreement.

(g)In connection with Inventory purchased pursuant to any Letter of Credit, Borrowers and Guarantors shall, at Agent’s request, instruct all suppliers, carriers, forwarders, customs brokers, warehouses or others receiving or holding cash, checks, Inventory, documents or instruments in which Agent holds a security interest that upon Agent’s request, such items are to be delivered to Agent and/or subject to Agent’s order, and if they shall come into such Borrower’s or Guarantor’s possession, to deliver them, upon Agent’s request, to Agent in their original form.  At the request of Agent, Borrowers and Guarantors shall designate Issuing Bank as the consignee on all bills of lading and other negotiable and non-negotiable documents.  Except as otherwise provided herein, Agent shall not exercise such right to request such items described in this clause (g) so long as no Default or Event of Default shall exist or have occurred and be continuing.

(h)Each Borrower and Guarantor hereby irrevocably authorizes and directs Issuing Bank to name such Borrower or Guarantor as the account party therein and to deliver to Agent all instruments, documents and other writings and property received by Issuing Bank pursuant to the Letter

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of Credit and to accept and rely upon Agent’s instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the Letter of Credit Documents with respect thereto.  Issuing Bank shall not be required to deliver such instruments, documents and other writings and property unless requested by Agent and so long as no Default or Event of Default shall exist or have occurred and be continuing.  Nothing contained herein shall be deemed or construed to grant any Borrower or Guarantor any right or authority to pledge the credit of Agent or any Lender in any manner.  Borrowers and Guarantors shall be bound by any reasonable interpretation made in good faith by Agent, or Issuing Bank under or in connection with any Letter of Credit or any documents, drafts or acceptances thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of any Borrower or Guarantor.

(i)Immediately upon the issuance or amendment of any Letter of Credit, each Lender shall be deemed to have irrevocably and unconditionally purchased and received, without recourse or warranty, an undivided interest and participation to the extent of such Lender’s Pro Rata Share of the liability with respect to such Letter of Credit and the obligations of Borrowers with respect thereto (including all Letter of Credit Obligations with respect thereto).  Each Lender shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to Issuing Bank therefor and discharge when due, its Pro Rata Share of all of such obligations arising under such Letter of Credit.  Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that Issuing Bank has not been reimbursed or otherwise paid as required hereunder or under any such Letter of Credit, each such Lender shall pay to Issuing Bank its Pro Rata Share of such unreimbursed drawing or other amounts then due to Issuing Bank in connection therewith.

(j)The obligations of Borrowers to reimburse Issuing Bank for drawings under Letters of Credit and the obligations of Lenders to make payments to Agent for the account of Issuing Bank with respect to Letters of Credit shall be absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances, whatsoever, notwithstanding the occurrence or continuance of any Default, Event of Default, the failure to satisfy any other condition set forth in Section 4 or any other event or circumstance. If such amount is not made available by a Lender when due, Agent shall be entitled to recover such amount on demand from such Lender with interest thereon, for each day from the date such amount was due until the date such amount is paid to Agent at the interest rate then payable by any Borrower in respect of Loans that are Base Rate Loans.  Any such reimbursement shall not relieve or otherwise impair the obligation of Borrowers to reimburse Issuing Bank under any Letter of Credit or make any other payment in connection therewith.

(k)The parties hereto acknowledge and agree that, concurrently with the making of the initial Loans hereunder, the Existing Letters of Credit shall constitute Letters of Credit hereunder for all purposes as fully as if such Existing Letters of Credit had been issued as Letters of Credit hereunder.

2.3Increase in Maximum Credit.

(a)Administrative Borrower may, at any time, deliver a written request to Agent to increase the Maximum Credit. Any such written request shall specify the amount of the requested increase in the Maximum Credit that Administrative Borrower is requesting, provided, that, (i)  in no event shall the aggregate amount of any increase in the Maximum Credit cause the Maximum Credit to exceed $255,000,000, (ii) any such request for an increase shall be for an increase of not less than $25,000,000, (iii) any such request shall be irrevocable, and (iv) in no event shall there be more than two (2) such increases during the term of this Agreement.

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(b)Upon the receipt by Agent of a written request to increase the Maximum Credit, Agent shall notify each of the Lenders of such request and each Lender shall have the option (but not the obligation) to increase the amount of its Commitment by an amount up to its Pro Rata Share of the amount of the increase in the Maximum Credit requested by Administrative Borrower as set forth in the notice from Agent to such Lender. Each Lender shall notify Agent within fifteen (15) days after the receipt of such notice of a request for such increase from Agent whether it is willing to so increase its Commitment, and if so, the amount of such increase; provided, that, no Lender shall be obligated to provide such increase in its Commitment and the determination to increase the Commitment of a Lender shall be within the sole and absolute discretion of such Lender.  If the aggregate amount of the increases in the Commitments received from the Lenders does not equal or exceed the amount of the increase in the Maximum Credit requested by Administrative Borrower, Agent may seek additional increases from Lenders or Commitments from such Eligible Transferees as it may determine, after consultation with Administrative Borrower.  In the event Lenders (or Lenders and any such Eligible Transferees, as the case may be) have committed in writing to provide increases in their Commitments or new Commitments in an aggregate amount in excess of the increase in the Maximum Credit requested by Borrowers or permitted hereunder, Agent shall then have the right to allocate such Commitments, first to Lenders and then to Eligible Transferees, in such amounts (not to exceed the aggregate increase in Commitments requested by Borrowers) and in such manner as Agent may determine, after consultation with Administrative Borrower.

(c)In the event of a request to increase the Maximum Credit, the Maximum Credit shall be increased by the amount of the increase in Commitments from Lenders or new Commitments from Eligible Transferees, in each case selected in accordance with Section 2.3(b), for which Agent has received Assignment and Acceptances (or other agreements acceptable to Agent) thirty (30) days after the date of the request by Administrative Borrower for the increase or such earlier date as Agent and Administrative Borrower may agree (but subject to the satisfaction of the conditions set forth below), whether or not the aggregate amount of the increase in Commitments and new Commitments, as the case may be, equal the amount of the increase in the Maximum Credit requested by Administrative Borrower in accordance with the terms hereof, effective on the date that each of the following conditions has been satisfied:

(i)Agent shall have received from each Lender or Eligible Transferee that is providing an additional Commitment as part of the increase in the Maximum Credit, an Assignment and Acceptance (or another agreement acceptable to Agent) duly executed by such Lender or Eligible Transferee and Administrative Borrower;

(ii)the conditions precedent to the making of Revolving Loans set forth in Section 4.2 hereof shall be satisfied as of the date of the increase in the Maximum Credit, both before and after giving effect to such increase;

(iii)Agent shall have received (A) a duly executed amendment to this Agreement reflecting the applicable increase in the Commitments, the addition of any new Lenders and any new Commitments, (B) resolutions and certificates from each Obligor authorizing the same, (C) legal opinions from Obligors’ counsel regarding the non-violation of the Indenture and other Material Contracts as a result of such increase in the Maximum Credit and the Indebtedness incurred in connection therewith, and (D) such other agreements, documents and instruments as Agent may reasonably request, in each case in form and substance reasonably satisfactory to Agent;

(iv)there shall have been paid to each Lender and Eligible Transferee providing an additional Commitment in connection with such increase in the Maximum Credit all

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fees (including any additional commitment fees) due and payable to such Person on or before the effectiveness of such increase; and

(v)there shall have been paid to Agent all costs and expenses (including reasonable fees and expenses of counsel) due and payable to Agent pursuant to any of the Financing Agreements on or before the effectiveness of such increase.

(d)As of the effective date of any such increase in the Maximum Credit, each reference to the term Maximum Credit and Commitments herein and in any of the other Financing Agreements shall be deemed amended to mean the amount of the Maximum Credit and Commitments specified in the most recent written notice from Agent to Administrative Borrower of the increase in the Maximum Credit and Commitments.

2.4Commitments.  The aggregate amount of each Lender’s Pro Rata Share of the Loans and Letter of Credit Obligations shall not exceed the amount of such Lender’s Commitment, as the same may from time to time be amended in accordance with the provisions hereof.

2.5Nature and Extent of Each Borrower’s Liability.

(a)Each Borrower shall be liable for, on a joint and several basis, and hereby guarantees the timely payment by the other Borrower of, all of the Loans and other Obligations, regardless of which Borrower actually may have received the proceeds of any Loans or other extensions of credit hereunder or the amount of such Loans received or the manner in which Agent or any Lender accounts for such Loans or other extensions of credit on its books and records, it being acknowledged and agreed that Loans to one Borrower inure to the mutual benefit of all Borrowers and that Agent and Lenders are relying on the joint and several liability of Borrowers in extending the Loans and other financial accommodations hereunder.  Each Borrower hereby unconditionally and irrevocably agrees that upon default in the payment when due (whether at stated maturity, by acceleration or otherwise) of any principal of, or interest owed on, any of the Loans or other Obligations, such Borrower shall forthwith pay the same, without notice or demand.

(b)Each Borrower’s joint and several liability hereunder with respect to, and guaranty of, the Loans and other Obligations shall, to the fullest extent permitted by applicable law, be unconditional irrespective of (i) the validity, enforceability, avoidance or subordination of any of the Obligations or of any promissory note or other document evidencing all or any part of the Obligations, (ii) the absence of any attempt to collect any of the Obligations from any other Obligor or any Collateral or other security therefor, or the absence of any other action to enforce the same, (iii) the waiver, consent, extension, forbearance or granting of any indulgence by Agent or any Lender with respect to any provision of any instrument evidencing or securing the payment of any of the Obligations, or any other agreement now or hereafter executed by the other Borrower and delivered to Agent or any Lender, (iv) the failure by Agent to take any steps to perfect or maintain the perfected status of its security interest in or Lien upon, or to preserve its rights to, any of the Collateral or other security for the payment or performance of any of the Obligations or Agent’s release of any Collateral or of its Liens upon any Collateral, (v) Agent’s or Lenders’ election, in any proceeding instituted under the United States Bankruptcy Code, for the application of Section 1111(b)(2) of the United States Bankruptcy Code, (vi) any borrowing or grant of a security interest by any other Borrower, as debtor-in-possession under Section 364 of the United States Bankruptcy Code, (vii) the release or compromise, in whole or in part, of the liability of any Obligor for the payment of any of the Obligations, (viii) any amendment or modification of any of the Financing Agreements or waiver of any Default or Event of Default thereunder, (ix) any increase in the amount of the Obligations beyond any limits imposed herein or in the amount of any interest, fees or other charges payable in connection therewith, or any decrease in the

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same, (x) the disallowance of all or any portion of Agent’s or any Lender’s claims for the repayment of any of the Obligations under Section 502 of the United States Bankruptcy Code, or (xi) any other circumstance that might constitute a legal or equitable discharge or defense of a Borrower.  After the occurrence and during the continuance of any Event of Default, Agent may proceed directly and at once, without notice to any Obligor, against any or all of Obligors to collect and recover all or any part of the Obligations, without first proceeding against any other Obligor or against any Collateral or other security for the payment or performance of any of the Obligations, and each Borrower, to the fullest extent permitted by applicable law, waives any provision that might otherwise require Agent under applicable law to pursue or exhaust its remedies against any Collateral or any other Obligor before pursuing such Borrower.  Each Borrower and each Guarantor consents and agrees that Agent shall be under no obligation to marshal any assets in favor of any such Borrower or Guarantor or against or in payment of any or all of the Obligations.

(c)No payment or payments made by an Obligor or received or collected by Agent from an Obligor or any other Person by virtue of any action or proceeding or any setoff or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Borrower under this Agreement, each of which shall remain jointly and severally liable for the payment and performance of all Loans and other Obligations until the Obligations are paid in full and this Agreement is terminated.

(d)Each Borrower is unconditionally obligated to repay the Obligations as a joint and several obligor under this Agreement.  If, as of any date, the aggregate amount of payments made by a Borrower on account of the Obligations and proceeds of such Borrower’s Collateral that are applied to the Obligations exceeds the aggregate amount of Loan proceeds actually used by such Borrower in its business (such excess amount being referred to as an “Accommodation Payment”), then each other Borrower (each, a “Contributing Borrower”) shall be obligated to make contribution to such Borrower (the “Paying Borrower”) in an amount equal to (i) the product derived by multiplying the sum of each Accommodation Payment of the Paying Borrower by the Borrower Allocable Percentage of such Contributing Borrower less (ii) the amount, if any, of the then outstanding Accommodation Payment of such Contributing Borrower (such last mentioned amount which is to be subtracted from the aforesaid product to be increased by any amounts theretofore paid by such Contributing Borrower by way of contribution hereunder, and to be decreased by any amounts theretofore received by such Contributing Borrower by way of contribution hereunder); provided, however, that a Paying Borrower’s recovery of contribution hereunder from the other Borrowers shall be limited to that amount paid by the Paying Borrower in excess of its Borrower Allocable Percentage of all Accommodation Payments then outstanding of all Borrowers.  As used herein, the term “Borrower Allocable Percentage” shall mean, on any date of determination thereof, a fraction the denominator of which shall be the number of Borrowers hereunder and the numerator of which shall be 1; provided, however, that such percentages shall be modified in the event that contribution from a Borrower is not possible by reason of insolvency, bankruptcy or otherwise by reducing such Borrower Allocable Percentage equitably and by adjusting the Borrower Allocable Percentage of the other Borrowers proportionately so that the Borrower Allocable Percentages of all Borrowers at all times equal 100%.

(e)Each Borrower hereby subordinates any claims, including any right of payment, subrogation, contribution and indemnity, that it may have from or against any other Obligor, and any successor or assign of any other Obligor, including any trustee, receiver or debtor-in-possession, with respect to payment of the Obligations of any Obligor, to the payment in full of all of the Obligations.

2.6Voluntary Reduction of Commitments.  Borrowers shall have the right to permanently reduce the amount of the Commitments, on a pro rata basis for each Lender, at any time and from time to time upon written notice to Agent of such reduction, which notice shall specify the amount of such

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reduction, shall be irrevocable once given, shall be given at least five (5) Business Days prior to the end of a month and shall be effective only upon Agent’s receipt thereof.  Agent shall promptly transmit such notice to each Lender.  The effective date of any voluntary reduction of the Commitments shall be the first day of the month following the month in which such notice is timely received by Agent.  If, on the effective date of any such reduction in the Commitments and after giving effect thereto, the aggregate principal amount of all Revolving Loans, Swing Line Loans and Letter of Credit Obligations outstanding with respect to all Borrowers would exceed the lesser of (A) the Borrowing Base, or (B) the Maximum Credit at such time, then Borrowers shall jointly and severally pay the amount of such excess to Agent for the pro rata benefit of Lenders immediately upon such effective date without further notice to or demand upon Borrowers.  If the Commitments are reduced to zero, then such reduction shall be deemed a termination of the Commitments by Borrowers pursuant to Section 13.1.  Notwithstanding anything to the contrary set forth above, pursuant to this Section 2.6, (i) the Commitments may only be reduced by Borrowers twice during the term of this Agreement, (ii) no single reduction of the Commitments shall be in an amount less than $25,000,000, and (iii) the Commitments, once reduced, may not be increased except pursuant to Section 2.3 or with the consent of the requisite Lenders set forth in Section 11.3(a)(ii) hereof.  Upon reduction of the Commitments pursuant to this Section 2.6, the Maximum Credit shall be reduced pro tanto.

SECTION  3.INTEREST AND FEES

3.1Interest.

(a)Borrowers shall pay to Agent, for the benefit of Lenders, interest on the outstanding principal amount of the Loans at the Interest Rate.  All interest accruing hereunder shall be payable on demand: (i) on and after the date of any Event of Default, following the Agent’s election to increase the Interest Rate pursuant to clause (b) of the definition thereof and from time to time thereafter, and (ii) on and after the date of termination hereof.

(b)Interest shall be payable by Borrowers to Agent, for the account of Lenders, with respect to Base Rate Loans monthly in arrears not later than the first day of each calendar month and shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed, other than for Base Rate Loans which shall be calculated on the basis of three hundred sixty-five (365) or three hundred sixty-six (366) day year, as applicable, and actual days elapsed.  Interest shall be payable by Borrowers to Agent, for the account of Lenders, with respect to any Eurodollar Rate Loans on the last day of each applicable Interest Period with respect to such Loans.  The interest rate on non-contingent Obligations (other than Eurodollar Rate Loans) shall increase or decrease by an amount equal to each increase or decrease in the Base Rate effective on the date any change in such Base Rate is effective.  In no event shall charges constituting interest payable by Borrowers to Agent and Lenders exceed the maximum amount or the rate permitted under any applicable law or regulation, and if any such part or provision of this Agreement is in contravention of any such law or regulation, such part or provision shall be deemed amended to conform thereto.

3.2Fees.

(a)Borrowers shall pay to Agent, for the account of Lenders, monthly an unused line fee at a rate equal to the applicable rate (on a per annum basis) determined as provided below calculated upon the amount by which the Maximum Credit exceeds the average daily principal balance of the outstanding Revolving Loans and Letter of Credit Obligations during the immediately preceding month (or part thereof) so long as any Obligations are outstanding and this Agreement has not been terminated.  Such fees shall be payable on the first Business Day of each month in arrears and calculated based on a three hundred sixty (360) day year and actual days elapsed.

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Tier	Quarterly Average Excess Availability	Unused Line Fee
1	Greater than $70,000,000	0.75	%
2	Less than or equal to $70,000,000 and greater than $30,000,000	0.75	%
3	Less than or equal to $30,000,000	0.50	%

The applicable rate shall be calculated on the first day of each calendar quarter based upon the Quarterly Average Excess Availability for the preceding calendar quarter based upon the Quarterly Average Excess Availability for the preceding calendar quarter and shall remain in effect until so calculated on the first day of the succeeding calendar quarter, provided, that, in the event that Borrowers fail to provide any Borrowing Base Certificate or other information with respect thereto for any period on the date required hereunder, effective as of the date on which such Borrowing Base Certificate or other information was otherwise required, at Agent’s option (or at the direction of the Required Lenders if Agent has not exercised such option for five (5) Business Days following such date), the unused line fee shall be based on the highest rate above until the next Business Day after the Borrowing Base Certificate or other information is provided for the applicable period at which time the unused line fee shall be adjusted as otherwise provided herein; provided, further, that notwithstanding anything to the contrary contained herein, the applicable rate through December 31, 2009 shall be the rate for Tier 2 set forth above.

(b)Borrowers shall pay to Agent, for the benefit of Lenders, monthly a fee at the LC Fee Rate determined as provided below (on a per annum basis), on the average daily outstanding balance of the Letters of Credit for the immediately preceding month (or part thereof), payable in arrears as of the first day of each month, computed for each day from the date of issuance to the date of expiration or cancellation.

Tier	Quarterly Average Excess Availability	LC Fee Rate
1	Greater than $70,000,000	3.25	%
2	Less than or equal to $70,000,000 and greater than $30,000,000	3.50	%
3	Less than or equal to $30,000,000	3.75	%

The applicable rate shall be calculated on the first day of each calendar quarter based upon the Quarterly Average Excess Availability for the preceding calendar quarter based upon the Quarterly Average Excess Availability for the preceding calendar quarter and shall remain in effect until so calculated on the first day of the succeeding calendar quarter, provided that in the event that Borrowers fail to provide any Borrowing Base Certificate or other information with respect thereto for any period on the date required hereunder, effective as of the date on which such Borrowing Base Certificate or other information was otherwise required, at Agent’s option (or at the direction of the Required Lenders if Agent has not exercised such option for five (5) Business Days following such date), such fees shall be based on the highest rate above until the next Business Day after the Borrowing Base Certificate or other information is provided for the applicable period at which time such fees shall be adjusted as otherwise provided herein; provided, further, that notwithstanding anything to the contrary contained herein, the applicable rate through December 31, 2009 shall be the rate for Tier 2 set forth above.  In addition, the Borrowers

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shall, at Agent’s option or at the written direction of the Required Lenders, pay such fees at a rate two percent (2%) greater than the applicable percentage rate for the period from and after the date of the occurrence of an Event of Default for so long as such Event of Default is continuing.  Such letter of credit fees shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed and the obligation of Borrowers to pay such fee shall survive the termination or non-renewal of this Agreement.  In addition to the letter of credit fees provided above, Borrowers shall pay to the Issuing Bank for its own account (without sharing with Lenders) the letter of credit fronting fee of one-eighth (0.125%) percent  per annum and the other customary charges from time to time of Issuing Bank with respect to the issuance, amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit.

(c)Borrowers shall pay to Agent and Wachovia the other fees and amounts set forth in the Fee Letter in the amounts and at the times specified therein or as has otherwise been agreed by or on behalf of Borrowers.  To the extent payment in full of the applicable fee is received by Agent from Borrowers on or about the date hereof, Agent shall pay to each Lender its share of such fees in accordance with the terms of the arrangements of Agent with such Lender.

3.3Changes in Laws and Increased Costs of Loans.

(a)If after the date hereof, either (i) with respect to Eurodollar Loans, any change in, or in the interpretation of, any law or regulation is introduced, including, without limitation, with respect to reserve requirements, applicable to any Lender or any banking or financial institution from whom any Lender borrows funds or obtains credit (a “Funding Bank”), or (ii) with respect to Eurodollar Loans, a Funding Bank or any Lender complies with any future guideline or request from any central bank or other Governmental Authority or (iii) a Funding Bank, any Lender or Issuing Bank determines that the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof has or would have the effect described below, or a Funding Bank, any Lender or Issuing Bank complies with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, and in the case of any event set forth in this clause (iii), such adoption, change or compliance has or would have the direct or indirect effect of reducing the rate of return on any Lender’s or Issuing Bank’s capital as a consequence of its obligations hereunder to a level below that which such Lender or Issuing Bank could have achieved but for such adoption, change or compliance (taking into consideration the Funding Bank’s or Lender’s or Issuing Bank’s policies with respect to capital adequacy) by an amount deemed by such Lender or Issuing Bank to be material, and the result of any of the foregoing events described in clauses (i), (ii) or (iii) is an increase in the cost to any Lender or Issuing Bank of funding or maintaining the Loans, the Letters of Credit or its Commitment, then Borrowers and Guarantors shall from time to time upon demand by Agent pay to Agent additional amounts sufficient to indemnify such Lender or Issuing Bank, as the case may be, against such increased cost on an after-tax basis (after taking into account applicable deductions and credits in respect of the amount indemnified).  A certificate as to the amount of such increased cost shall be submitted to Administrative Borrower by Agent or the applicable Lender and shall be conclusive, absent manifest error.

(b)If prior to the first day of any Interest Period, (i) Agent shall have determined in good faith (which determination shall be conclusive and binding upon Borrowers and Guarantors) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Adjusted Eurodollar Rate for such Interest Period, or (ii) Agent has received notice from the Required Lenders that the Adjusted Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to Lenders of making or maintaining Eurodollar Rate Loans during such Interest Period, Agent shall give telecopy or telephonic notice thereof to

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Administrative Borrower as soon as practicable thereafter, and will also give prompt written notice to Administrative Borrower when such conditions no longer exist.  If such notice is given (A) any Eurodollar Rate Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (B) any Loans that were to have been converted on the first day of such Interest Period to or continued as Eurodollar Rate Loans shall be converted to or continued as Base Rate Loans and (C) each outstanding Eurodollar Rate Loan shall be converted, on the last day of the then-current Interest Period thereof, to Base Rate Loans.  Until such notice has been withdrawn by Agent, no further Eurodollar Rate Loans shall be made or continued as such, nor shall any Borrower (or Administrative Borrower on behalf of any Borrower) have the right to convert Base Rate Loans to Eurodollar Rate Loans.

(c)Notwithstanding any other provision herein, if the adoption of or any change in any law, treaty, rule or regulation or final, non-appealable determination of an arbitrator or a court or other Governmental Authority or in the interpretation or application thereof occurring after the date hereof shall make it unlawful for Agent or any Lender to make or maintain Eurodollar Rate Loans as contemplated by this Agreement, (i) Agent or such Lender shall promptly give written notice of such circumstances to Administrative Borrower (which notice shall be withdrawn whenever such circumstances no longer exist), (ii) the commitment of such Lender hereunder to make Eurodollar Rate Loans, continue Eurodollar Rate Loans as such and convert Base Rate Loans to Eurodollar Rate Loans shall forthwith be canceled and, until such time as it shall no longer be unlawful for such Lender to make or maintain Eurodollar Rate Loans, such Lender shall then have a commitment only to make a Base Rate Loan when a Eurodollar Rate Loan is requested and (iii) such Lender’s Loans then outstanding as Eurodollar Rate Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law.  If any such conversion of a Eurodollar Rate Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, Borrowers and Guarantors shall pay to such Lender such amounts, if any, as may be required pursuant to Section 3.3(d) below.

(d)Borrowers and Guarantors shall indemnify Agent and each Lender and hold Agent and each Lender harmless from any loss or expense which Agent or such Lender may sustain or incur as a consequence of (i) default by any Borrower in making a borrowing of, conversion into or extension of Eurodollar Rate Loans after such Borrower (or Administrative Borrower on behalf of such Borrower) has given a notice requesting the same in accordance with the provisions of this Agreement, (ii) default by any Borrower in making any prepayment of a Eurodollar Rate Loan after such Borrower has given a notice thereof in accordance with the provisions of this Agreement, and (iii) the making of a prepayment of Eurodollar Rate Loans on a day which is not the last day of an Interest Period with respect thereto.  With respect to Eurodollar Rate Loans, such indemnification may include an amount equal to the excess, if any, of (A) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or extended, for the period from the date of such prepayment or of such failure to borrow, convert or extend to the last day of the applicable Interest Period (or, in the case of a failure to borrow, convert or extend, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Eurodollar Rate Loans provided for herein (excluding the Applicable Margin) over (B) the amount of interest (as determined by such Agent or such Lender) which would have accrued to Agent or such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank Eurodollar market.  This covenant shall survive the termination or non-renewal of this Agreement and the payment of the Obligations.

SECTION  4.CONDITIONS PRECEDENT

4.1Conditions Precedent to Initial Loans and Letters of Credit.  The obligation of Lenders to make the initial Loans or of Issuing Bank to issue the initial Letters of Credit hereunder is subject to the

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satisfaction of, or waiver of, immediately prior to or concurrently with the making of such Loan or the issuance of such Letter of Credit of each of the following conditions precedent:

(a)Agent shall have received, in form and substance reasonably satisfactory to Agent, all releases, terminations and such other documents as Agent may request to evidence and effectuate the termination by the Existing Lenders of their respective financing arrangements with Borrowers and Guarantors and the termination and release by it or them, as the case may be, of any interest in and to any assets and properties of each Borrower and Guarantor securing such financing arrangements, duly authorized, executed and delivered by it or each of them, including, but not limited to, (i) UCC termination statements for all UCC financing statements relating to such interests previously filed by it or any of them or their predecessors, as secured party and any Borrower or Guarantor, as debtor; and (ii) satisfactions and discharges of any mortgages, deeds of trust or deeds securing such financing arrangements by any Borrower or Guarantor in favor of it or any of them, in form acceptable for recording with the appropriate Governmental Authority;

(b)all requisite entity action and proceedings in connection with this Agreement and the other Financing Agreements shall be reasonably satisfactory in form and substance to Agent, and Agent shall have received all information and copies of all documents, including records of requisite entity action and proceedings which Agent may have requested in connection therewith, such documents where reasonably requested by Agent or its counsel to be certified by appropriate entity officers or Governmental Authority (and including a copy of the certificate of incorporation of each Borrower and Guarantor certified by the Secretary of State (or equivalent Governmental Authority) which shall set forth the same complete corporate name of such Borrower or Guarantor as is set forth herein and such document as shall set forth the organizational identification number of each Borrower or Guarantor, if one is issued in its jurisdiction of incorporation);

(c)no material adverse change shall have occurred in the business, properties, results of operations or financial condition of Borrowers and Guarantors (taken as a whole), since the date of Agent’s latest field examination (not including for this purpose the field review referred to in clause (d) below) or since December 31, 2008 (the date of the most recent audited financial statements);

(d)Agent shall have received, in form and substance satisfactory to Agent, all consents, waivers, acknowledgments and other agreements from third persons which Agent may deem necessary or desirable in order to permit, protect and perfect its security interests in and Liens upon the Collateral or to effectuate the provisions or purposes of this Agreement and the other Financing Agreements, including, without limitation, Collateral Access Agreements;

(e)the Excess Availability as determined by Agent, as of the date hereof, shall be not less than $40,000,000 after giving effect to the initial Loans made or to be made and Letters of Credit issued or to be issued in connection with the initial transactions hereunder;

(f)Agent shall have received, in form and substance reasonably satisfactory to Agent, Deposit Account Control Agreements by and among Agent, each Borrower and Guarantor, as the case may be and each bank where such Borrower (or Guarantor) has a deposit account, in each case, duly authorized, executed and delivered by such bank and Borrower or Guarantor, as the case may be (or Agent shall be the bank’s customer with respect to such deposit account as Agent may specify); provided, that, with respect to Deposit Account Control Agreements from depository banks where accounts are maintained as of the closing date of the Credit Facility, the failure to deliver such Deposit Account Control Agreements, other than as to the principal concentration accounts, shall not be a condition of closing so long as Borrowers shall have used commercially reasonable efforts to obtain such agreements prior to closing and to the extent not delivered prior to the closing date of the Credit Facility, Agent shall

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receive the same within thirty (30) days after the date of the closing of the Credit Facility (or such later date as Agent may thereafter agree).

(g)Agent shall have received evidence, in form and substance satisfactory to Agent, that Agent has a valid perfected first priority security interest in all of the First Priority Collateral (and a perfected security interest in all other Collateral having the priority for such Collateral required hereunder) in each case subject only to Permitted Liens permitted to have priority hereunder;

(h)Agent shall have received and reviewed Lien and judgment search results for the jurisdiction of organization of each Borrower and Guarantor, the jurisdiction of the chief executive office of each Borrower and Guarantor and all jurisdictions in which assets of Borrowers and Guarantors are located, which search results shall be in form and substance satisfactory to Agent;

(i)Agent shall have received evidence of insurance and loss payee endorsements required hereunder and under the other Financing Agreements, in form and substance satisfactory to Agent, and certificates of insurance policies and/or endorsements naming Agent as loss payee;

(j)Agent shall have received (i) an opinion of Milbank, Tweed, Hadley & McCloy LLP, (ii) an opinion of Fredric E. Roth, Jr., General Counsel of FGI, and (iii) an opinion from Butler, Norris & Gold, Connecticut local counsel to FGI, each in form and substance satisfactory to Agent;

(k)Agent shall have received the Solvency Certificate and all financial statements attached thereto as exhibits;

(l)Agent shall have received, in form and substance reasonably satisfactory to Agent, (i) copies of documentation for the Senior Notes, which documentation shall include the Senior Notes Indenture and all exhibits and schedules thereto, and (ii) evidence of all consents and approvals (if any) required pursuant to the terms of the Senior Notes Indenture.

(m)the Senior Notes will have been issued in accordance with the terms and conditions of the Senior Notes Indenture without any waiver, modification or consent thereunder that is materially adverse to Lenders (as reasonably determined by Agent) unless approved by Agent, and FGI shall have received the net proceeds from the Senior Notes on the date of closing of the Credit Facility substantially contemporaneously with the initial borrowing of Revolving Loans; and

(n)the Intercreditor Agreement, and the other Financing Agreements and all instruments and documents hereunder and thereunder shall have been duly executed and delivered to Agent, in their respective forms heretofore furnished to Agent or otherwise in form and substance reasonably satisfactory to Agent.

4.2Conditions Precedent to All Loans and Letters of Credit.  The obligation of Lenders to make the Loans, including the initial Loans, or of Issuing Bank to issue any Letter of Credit, including the initial Letters of Credit, is subject to the further satisfaction of, or waiver of, immediately prior to or concurrently with the making of each such Loan or the issuance of such Letter of Credit of each of the following conditions precedent:

(a)all representations and warranties contained herein and in the other Financing Agreements shall be true and correct in all material respects (except where qualified by materiality, in which case such representations and warranties that are qualified by materiality shall be true and correct all respects) with the same effect as though such representations and warranties had been made on and as

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of the date of the making of each such Loan or providing each such Letter of Credit and after giving effect thereto, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate on and as of such earlier date);

(b)No event shall have occurred and no condition shall exist that has or may be reasonably be likely to have a Material Adverse Effect; and

(c)no Default or Event of Default shall exist or have occurred and be continuing on and as of the date of the making of such Loan or providing each such Letter of Credit and after giving effect thereto.

SECTION  5.GRANT AND PERFECTION OF SECURITY INTEREST

5.1Grant of Security Interest.  To secure payment and performance of all Obligations (and in the case of each Guarantor, all Guaranteed Obligations), each Borrower and Guarantor hereby grants to Agent, for itself and the benefit of Secured Parties, as security, all personal property, and interests in property, of each Borrower and Guarantor, whether now owned or hereafter acquired or existing, and wherever located (together with all other collateral security for the Obligations at any time granted to or held or acquired by Agent or any Lender, collectively, the “Collateral”), including all of each Borrower’s and Guarantor’s right, title and interest in and to the following:

(a)all Accounts and other Receivables;

(b)all Additional Interests and Pledged Shares;

(c)all chattel paper, including, without limitation, all tangible and electronic chattel paper;

(d)all commercial tort claims, including, without limitation, those identified on Schedule 5.2 to this Agreement;

(e)all deposit accounts;

(f)all documents;

(g)all general intangibles, including, without limitation, all Intellectual Property;

(h)all goods, including, without limitation, Inventory, Equipment and fixtures;

(i)all instruments, including, without limitation, all promissory notes;

(j)all investment property (including securities, whether certificated or uncertificated, securities accounts, security entitlements, commodity contracts or commodity accounts);

(k)all letters of credit, banker’s acceptances and similar instruments and including all letter-of-credit rights;

(l)all supporting obligations and all present and future Liens, security interests, rights, remedies, title and interest in, to and in respect of Receivables and other Collateral, including (i) rights and remedies under or relating to guaranties, contracts of suretyship, letters of credit and credit and other insurance related to the Collateral, (ii) rights of stoppage in transit, replevin, repossession,

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reclamation and other rights and remedies of an unpaid vendor, lienor or secured party, (iii) goods described in invoices, documents, contracts or instruments with respect to, or otherwise representing or evidencing, Receivables or other Collateral, including returned, repossessed and reclaimed goods, and (iv) deposits by and property of account debtors or other persons securing the obligations of account debtors;

(m)monies, credit balances, deposits and other property of any Borrower or Guarantor now or hereafter held or received by or in transit to Agent, any Lender or its Affiliates or at any other depository or other institution from or for the account of any Borrower or Guarantor, whether for safekeeping, pledge, custody, transmission, collection or otherwise;

(n)all accessions to substitutions for, and all replacements, products and cash and non-cash proceeds of the foregoing, in any form, including proceeds of and unearned premiums with respect to insurance policies and all claims against third parties for loss or damage to or destruction of or other involuntary conversion of any kind or nature of any or all of the other Collateral; and

(o)all Records, including, without limitation, customer lists, files, correspondence, tapes, computer programs, printouts and computer records.

Notwithstanding anything to the contrary in this Agreement, and except for so long as a security interest in such Collateral is then in effect to secure the Senior Notes, the Collateral shall not include (collectively, the “Excluded Assets”): (i) any of the outstanding voting Capital Stock of a “controlled foreign corporation” (as defined in Section 957 of the Code) in excess of 65% of the voting power of all classes of Capital Stock of such controlled foreign corporation entitled to vote; (ii) any interest of a Borrower or Guarantor in any contract, lease, license or other agreement if the granting of a security interest therein is prohibited by, or would cause a termination of all or any material rights of a Borrower or Guarantor under applicable law or would cause a breach, default or invalidation of, or create a right to terminate, the terms of the written agreement creating such contract, lease, license or other agreement, to the extent such prohibition, termination, breach, default or right to terminate is not rendered unenforceable or ineffective under sections 9-406 through 9-409 of the UCC or other applicable law, it being understood that, notwithstanding anything set forth in this clause (ii) to the contrary, to the extent not prohibited by applicable law, the Agent, for the benefit of the Secured Parties, shall at all times have a security interest in all rights of such Borrower or Guarantor to payments of money due or to become due under any such contract, lease, license or other agreement, and all proceeds thereof, and if and when the prohibition or event which prevents the granting of a security interest in such property (or would cause such termination, breach or default) is removed, terminated or otherwise becomes unenforceable as a matter of applicable law, the Agent, for the benefit of the Secured Parties, will be deemed to have, and at all times to have had, a security interest in such property and Collateral, to the fullest extent permitted under applicable law, will be deemed to include, and at all times to have included, such property; (iii) Capital Stock of any Person which is not a Subsidiary to the extent and for so long as the certificate of incorporation, bylaws, any shareholder agreement or similar agreement governing the ownership of such Capital Stock by the applicable Grantor prohibits the granting of a security interest therein; (iv) the Capital Stock and other securities of any Person that is not required to be a Guarantor (other than any Capital Stock or securities held in a securities account); and (v) proceeds and products of any and all of the foregoing excluded assets described in clause (i) through (iv) above only to the extent such proceeds and products would constitute property or assets of the type described in clause (i) through (iv) above.

In addition, notwithstanding anything herein to the contrary, in the event that Rule 3-16 of Regulation S-X under the Securities Act requires (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Borrower or Guarantor due to the fact that

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such Borrower’s or Guarantor’s Capital Stock or other securities of such Borrower or Guarantor secure the Obligations affected thereby, then the Capital Stock and such other securities of such Borrower or Guarantor will automatically be deemed not to be part of the Collateral securing the Obligations affected thereby but only to the extent necessary to not be subject to such requirement, only for so long as required to not be subject to such requirement and only with respect to Obligations affected thereby.

In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Borrower’s or Guarantor’s Capital Stock and other securities to secure the Obligations in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Borrower or Guarantor, then the Capital Stock and other securities of such Borrower or Guarantor will automatically be deemed to be a part of the Collateral for the Obligations but only to the extent necessary to not be subject to any such financial statement requirement.

5.2Perfection of Security Interests.  The following provisions, to the extent applicable to the delivery of tangible items of Collateral that constitute Notes Priority Collateral under the Senior Notes Indenture, are subject to the terms of the Intercreditor Agreement:

(a)Each Borrower and Guarantor irrevocably and unconditionally authorizes Agent (or its agent) to file at any time and from time to time such financing statements with respect to the Collateral naming Agent or its designee as the secured party and such Borrower or Guarantor as debtor, as Agent may require, and including any other information with respect to such Borrower or Guarantor or otherwise required by part 5 of Article 9 of the Uniform Commercial Code of such jurisdiction as Agent may determine, together with any amendment and continuations with respect thereto, which authorization shall apply to all financing statements filed on, prior to or after the date hereof.  Each Borrower and Guarantor hereby ratifies and approves all financing statements naming Agent or its designee as secured party and such Borrower or Guarantor, as the case may be, as debtor with respect to the Collateral (and any amendments with respect to such financing statements) filed by or on behalf of Agent prior to the date hereof and ratifies and confirms the authorization of Agent to file such financing statements (and amendments, if any).  Each Borrower and Guarantor hereby authorizes Agent to adopt on behalf of such Borrower and Guarantor any symbol required for authenticating any electronic filing.  In the event that the description of the collateral in any financing statement naming Agent or its designee as the secured party and any Borrower or Guarantor as debtor includes assets and properties of such Borrower or Guarantor that do not at any time constitute Collateral, whether hereunder, under any of the other Financing Agreements or otherwise, the filing of such financing statement shall not create a security interest in such assets or properties not constituting Collateral, but shall nonetheless be deemed authorized by such Borrower or Guarantor to the extent of the Collateral included in such description and it shall not render the financing statement ineffective as to any of the Collateral or otherwise affect the financing statement as it applies to any of the Collateral.  In no event shall any Borrower or Guarantor at any time file, or permit or cause to be filed, any correction statement or termination statement with respect to any financing statement (or amendment or continuation with respect thereto) naming Agent or its designee as secured party and such Borrower or Guarantor as debtor except as permitted under Section 9-509(d)(2) of the UCC.

(b)Each Borrower and Guarantor does not have any chattel paper (whether tangible or electronic) or instruments (including, without limitation, promissory notes) as of the date hereof (in each case with a fair market value in excess of $1,000,000 in the aggregate), except as set forth on Schedule 5.2 to this Agreement.  In the event that any Borrower or Guarantor shall receive any chattel paper or instrument after the date hereof (in each case with a fair market value in excess of $1,000,000 in the aggregate), Borrowers and Guarantors shall promptly notify Agent thereof in writing.  Promptly upon

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the receipt thereof by or on behalf of any Borrower or Guarantor (including by any agent or representative), such Borrower or Guarantor shall deliver, or cause to be delivered to Agent, all tangible chattel paper and instruments that such Borrower or Guarantor has or may at any time acquire, accompanied by such instruments of transfer or assignment duly executed in blank as Agent may from time to time specify, in each case except as Agent may otherwise agree.  At Agent’s option, each Borrower and Guarantor shall, or Agent may at any time on behalf of any Borrower or Guarantor, cause the original of any such instrument or chattel paper to be conspicuously marked in a form and manner acceptable to Agent with the following legend referring to chattel paper or instruments as applicable: “This [chattel paper][instrument] is subject to the security interest of Wachovia Bank, National Association and any sale, transfer, assignment or encumbrance of this [chattel paper][instrument] violates the rights of such secured party.”

(c)In the event that any Borrower or Guarantor shall at any time hold or acquire an interest in any electronic chattel paper or any “transferable record” (as such term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction), such Borrower or Guarantor shall promptly notify Agent thereof in writing.  Promptly upon Agent’s request, such Borrower or Guarantor shall take, or cause to be taken, such actions as Agent may request to give Agent control of such electronic chattel paper under Section 9-105 of the UCC and control of such transferable record under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as in effect in such jurisdiction.

(d)Each Borrower and Guarantor does not have any deposit accounts as of the date hereof, except as set forth on Schedule 5.2 to this Agreement.  Borrowers and Guarantors shall not, directly or indirectly, after the date hereof open, establish or maintain any deposit account unless each of the following conditions is satisfied:  (i) Agent shall have received not less than five (5) Business Days prior written notice of the intention of any Borrower or Guarantor to open or establish such account which notice shall specify in reasonable detail and specificity acceptable to Agent the name of the account, the owner of the account, the name and address of the bank at which such account is to be opened or established, the individual at such bank with whom such Borrower or Guarantor is dealing and the purpose of the account, (ii) the bank where such account is opened or maintained shall be acceptable to Agent, and (iii) on or before the opening of such deposit account, such Borrower or Guarantor shall deliver to Agent a Deposit Account Control Agreement with respect to such deposit account duly authorized, executed and delivered by such Borrower or Guarantor and the bank at which such deposit account is opened and maintained on terms and conditions reasonably acceptable to Agent.  The terms of this subsection (d) shall not apply to deposit accounts specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Borrower’s or Guarantor’s salaried employees.

(e)(i)In the event that any Borrower or Guarantor shall be entitled to or shall at any time after the date hereof hold or acquire any certificated securities, such Borrower or Guarantor shall promptly endorse, assign and deliver the same to Agent, accompanied by such instruments of transfer or assignment duly executed in blank as Agent may from time to time specify.  If any securities, now or hereafter acquired by any Borrower or Guarantor are uncertificated and are issued to such Borrower or Guarantor or its nominee directly by the issuer thereof, such Borrower or Guarantor shall immediately notify Agent thereof and shall as Agent may specify, either (A) cause the issuer to agree to comply with instructions from Agent as to such securities, without further consent of any Borrower or Guarantor or such nominee, or (B) arrange for Agent to become the registered owner of the securities.

(ii)Each Borrower and Guarantor does not have any investment account, securities account, commodity account or any other similar account as of the date hereof, except as set

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forth on Schedule 5.2 to this Agreement.  Borrowers and Guarantors shall not, directly or indirectly, after the date hereof open, establish or maintain any investment account, securities account, commodity account or any other similar account (other than a deposit account) with any securities intermediary or commodity intermediary unless each of the following conditions is satisfied: (A) Agent shall have received not less than five (5) Business Days prior written notice of the intention of such Borrower or Guarantor to open or establish such account which notice shall specify in reasonable detail and specificity acceptable to Agent the name of the account, the owner of the account, the name and address of the securities intermediary or commodity intermediary at which such account is to be opened or established, the individual at such intermediary with whom such Borrower or Guarantor is dealing and the purpose of the account, (B) the securities intermediary or commodity intermediary (as the case may be) where such account is opened or maintained shall be acceptable to Agent, and (C) on or before the opening of such investment account, securities account or other similar account with a securities intermediary or commodity intermediary, such Borrower or Guarantor shall execute and deliver, and cause to be executed and delivered to Agent, an Investment Property Control Agreement with respect thereto duly authorized, executed and delivered by such Borrower or Guarantor and such securities intermediary or commodity intermediary on terms and conditions reasonably acceptable to Agent.

(f)Borrowers and Guarantors are not the beneficiary or otherwise entitled to any right to payment under any letter of credit, banker’s acceptance or similar instrument as of the date hereof, in each case, with a face amount in excess of $1,000,000 in the aggregate except as set forth on Schedule 5.2 to this Agreement.  In the event that any Borrower or Guarantor shall be entitled to or shall receive any right to payment under any letter of credit, banker’s acceptance or any similar instrument, whether as beneficiary thereof or otherwise after the date hereof in each case, with a face amount in excess of $1,000,000 in the aggregate, such Borrower or Guarantor shall promptly notify Agent thereof in writing.  Such Borrower or Guarantor shall immediately, as Agent may specify, either (i) use its commercially reasonable efforts to deliver, or cause to be delivered to Agent, with respect to any such letter of credit, banker’s acceptance or similar instrument, the written agreement of the issuer and any other nominated person obligated to make any payment in respect thereof (including any confirming or negotiating bank), in form and substance satisfactory to Agent, consenting to the assignment of the proceeds of the letter of credit to Agent by such Borrower or Guarantor and agreeing to make all payments thereon directly to Agent or as Agent may otherwise direct or (ii) cause Agent to become, at Borrowers’ expense, the transferee beneficiary of the letter of credit, banker’s acceptance or similar instrument (as the case may be).

(g)Borrowers and Guarantors do not have any commercial tort claims as of the date hereof in excess of $1,000,000, except as set forth on Schedule 5.2 to this Agreement.  In the event that any Borrower or Guarantor shall at any time after the date hereof have any commercial tort claims (other than, so long as no Default or Event of Default exists, commercial tort claims for less than $1,000,000), such Borrower or Guarantor shall promptly notify Agent thereof in writing, which notice shall (i) set forth in reasonable detail the basis for and nature of such commercial tort claim and (ii) include the express grant by such Borrower or Guarantor to Agent of a security interest in such commercial tort claim (and the proceeds thereof).  In the event that such notice does not include such grant of a security interest, the sending thereof by such Borrower or Guarantor to Agent shall be deemed to constitute such grant to Agent. Upon the sending of such notice, any commercial tort claim described therein shall constitute part of the Collateral and shall be deemed included therein.  Without limiting the authorization of Agent provided in Section 5.2(a) hereof or otherwise arising by the execution by such Borrower or Guarantor of this Agreement or any of the other Financing Agreements, Agent is hereby irrevocably authorized from time to time and at any time to file such financing statements naming Agent or its designee as secured party and such Borrower or Guarantor as debtor, or any amendments to any financing statements, covering any such commercial tort claim as Collateral. In addition, each Borrower and Guarantor shall promptly upon Agent’s request, execute and deliver, or cause to be executed and delivered, to Agent such

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other agreements, documents and instruments as Agent may require in connection with such commercial tort claim.

(h)Borrowers and Guarantors do not have any goods, documents of title or other Collateral in the custody, control or possession of a third party as of the date hereof, except as set forth on Schedule 5.2 to this Agreement and except for goods located in the United States in transit to a location of a Borrower or Guarantor permitted herein in the ordinary course of business of such Borrower or Guarantor in the possession of the carrier transporting such goods.  In the event that any goods, documents of title or other Collateral are at any time after the date hereof in the custody, control or possession of any other person not referred to on Schedule 5.2 to this Agreement or such carriers, Borrowers and Guarantors shall promptly notify Agent thereof in writing.  Promptly upon Agent’s request, Borrowers and Guarantors shall deliver to Agent a Collateral Access Agreement duly authorized, executed and delivered by such person and the Borrower or Guarantor that is the owner of such Collateral.

(i)Borrowers and Guarantors shall take any other actions reasonably requested by Agent from time to time to cause the attachment, perfection and priority required under this Agreement of, and the ability of Agent to enforce, the security interest of Agent in any and all of the Collateral, including, without limitation, (i) executing, delivering and, where appropriate, filing financing statements and amendments relating thereto under the UCC or other applicable law, to the extent, if any, that any Borrower’s or Guarantor’s signature thereon is required therefor, (ii) causing Agent’s name to be noted as secured party on any certificate of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of Agent to enforce, the security interest of Agent in such Collateral, (iii) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of Agent to enforce, the security interest of Agent in such Collateral, (iv) obtaining the consents and approvals of any Governmental Authority or third party, including, without limitation, any consent of any licensor, lessor or other person obligated on Collateral, and (v) taking all actions required by any earlier versions of the UCC or by other law, as applicable in any relevant jurisdiction.

(j)Notwithstanding anything in this Agreement to the contrary, Borrowers and Guarantors shall not be required to take any action to perfect the security interest of Agent, other than the filing of UCC-1 financing statements, in any of the following assets: (i) any vehicles or equipment subject to certificate of title statutes, (ii) any Real Property, (iii) assets located in any country other than the United States of America, except Accounts owing by foreign account debtors and, following the occurrence of an Event of Default, Intellectual Property registered under foreign laws, (iv) Excluded Assets and (v) except as set forth in clause (iii) above, Intellectual Property that is not registered with the United States Copyright Office or the United States Patent and Trademark Office, or any successor office thereto.

(k)The Liens on Collateral granted hereunder are given as security only and shall not subject Agent or any other Secured Party to, or in any way modify, any obligations or liability of any Borrower or Guarantor relating to any Collateral.

SECTION  6.COLLECTION AND ADMINISTRATION

6.1Borrowers’ Loan Accounts.  Agent shall maintain one or more loan account(s) on its books in which shall be recorded (a) all Loans, Letters of Credit and other Obligations and the Collateral, (b) all payments made by or on behalf of any Borrower or Guarantor and (c) all other appropriate debits and credits as provided in this Agreement, including fees, charges, costs, expenses and interest.  All

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entries in the loan account(s) shall be made in accordance with Agent’s customary practices as in effect from time to time.

6.2Statements.  Agent shall render to Administrative Borrower each month a statement setting forth the balance in the Borrowers’ loan account(s) maintained by Agent for Borrowers pursuant to the provisions of this Agreement, including principal, interest, fees, costs and expenses.  Each such statement shall be subject to subsequent adjustment by Agent but shall, absent manifest errors or omissions, be considered correct and deemed accepted by Borrowers and Guarantors and conclusively binding upon Borrowers and Guarantors as an account stated except to the extent that Agent receives a written notice from Administrative Borrower of any specific exceptions of Administrative Borrower thereto within thirty (30) days after the date such statement has been received by Administrative Borrower.  Until such time as Agent shall have rendered to Administrative Borrower a written statement as provided above, the balance in any Borrower’s loan account(s) shall be presumptive evidence of the amounts due and owing to Agent and Lenders by Borrowers and Guarantors.

6.3Collection of Accounts.

(a)Borrowers shall establish and maintain, at their expense, blocked accounts or lockboxes and related blocked accounts (in either case, “Blocked Accounts”), with such banks as are reasonably acceptable to Agent into which, Borrowers shall promptly deposit and direct their respective account debtors to directly remit all payments on Receivables and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner.  Borrowers shall deliver, or cause to be delivered to Agent a Deposit Account Control Agreement duly authorized, executed and delivered by each bank where a Blocked Account is maintained as provided in Section 5.2 hereof.  Prior to the occurrence of a Cash Management Event, Borrowers shall be permitted to transfer cash from the Blocked Accounts and to use funds therein for working capital and general corporate purposes to the extent permitted herein. Upon the occurrence of a Cash Management Event, (i) each Borrower and Guarantor agrees that all payments made to such Blocked Accounts or other funds received and collected by Agent or any Lender, whether in respect of the Receivables, as proceeds of Inventory or other Collateral or otherwise shall be treated as payments to Agent and Lenders in respect of the outstanding Obligations and therefore shall constitute the property of Agent and Lenders to the extent of the then outstanding Obligations, and (ii) Agent may disregard Borrowers’ instructions with respect to the Blocked Accounts and exercise exclusive dominion and control over the Blocked Accounts and apply funds deposited therein as provided herein.  Agent’s right to exercise exclusive dominion and control over the Blocked Accounts shall continue in effect only until the occurrence of a Cash Management Reinstatement Event, unless a subsequent Cash Management Event shall occur, whereupon Agent shall have the rights of exclusive dominion and control as described herein.

(b)For purposes of calculating the amount of the Loans available to each Borrower, such payments will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Agent of immediately available funds in the Agent Payment Account provided such payments and notice thereof are received in accordance with Agent’s usual and customary practices as in effect from time to time and within sufficient time to credit such Borrower’s loan account on such day, and if not, then on the next Business Day.  For the purposes of calculating interest on the Obligations, such payments or other funds received will be applied (conditional upon final collection) to the Obligations on the date of receipt of immediately available funds by Agent in the Agent Payment Account provided such payments or other funds and notice thereof are received in accordance with Agent’s usual and customary practices as in effect from time to time and within sufficient time to credit such Borrower’s loan account on such day, and if not, then on the next Business Day.

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(c)Each Borrower and Guarantor and their respective employees and agents shall, acting as trustee for Agent, receive, as the property of Agent, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts or other Collateral which come into their possession or under their control and immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Agent.  Borrowers agree to reimburse Agent on demand for any amounts owed or paid to any bank or other financial institution at which a Blocked Account or any other deposit account or investment account is established or any other bank, financial institution or other person involved in the transfer of funds to or from the Blocked Accounts arising out of Agent’s payments to or indemnification of such bank, financial institution or other person.  The obligations of Borrowers to reimburse Agent for such amounts pursuant to this Section 6.3 shall survive the termination of this Agreement.

6.4Payments.

(a)All Obligations shall be payable to the Agent Payment Account as provided in Section 6.3 or such other place as Agent (in its capacity as such) may designate from time to time.  Subject to the other terms and conditions contained herein, Agent shall apply payments received or collected from any Borrower or Guarantor or for the account of any Borrower or Guarantor (including following an Event of Default, or (in the case of cash) a Cash Management Event, the monetary proceeds of collections or of realization upon any Collateral) as follows: first, to the payment in full of any fees, indemnities or expense reimbursements then due to Agent from any Borrower or Guarantor; second, to the payment in full of any fees, indemnities or expense reimbursements then due to Lenders and Issuing Bank from any Borrower or Guarantor; third, to the payment in full of interest then due in respect of any Loans (and including any Special Agent Advances) or Letter of Credit Obligations; fourth, to the payment in full of principal then due in respect of Special Agent Advances; fifth, to the payment in full of principal then due in respect of any Swing Line Loans; sixth, to the payment in full of principal due in respect of the Loans; seventh, to pay or prepay any other Obligations (but not including for this purpose any Obligations arising under or pursuant to any Bank Products) whether or not then due, in such order and manner as Agent determines and, at any time an Event of Default exists or has occurred and is continuing, to provide cash collateral for any Letter of Credit Obligations or other contingent Obligations (but not including for this purpose any Obligations arising under or pursuant to any Bank Products); and eighth, to pay or prepay any Obligations arising under or pursuant to any Bank Products owed to any Bank Product Provider and secured by the Collateral, on a pro rata basis.  Notwithstanding anything to the contrary contained in this Agreement, (i) unless so directed by Administrative Borrower, or unless a Default or an Event of Default shall exist or have occurred and be continuing, Agent shall not apply any payments which it receives to any Eurodollar Rate Loans, except (A) on the expiration date of the Interest Period applicable to any such Eurodollar Rate Loans or (B) in the event that there are no outstanding Base Rate Loans and (ii) to the extent any Borrower uses any proceeds of the Loans or Letters of Credit to acquire rights in or the use of any Collateral or to repay any Indebtedness used to acquire rights in or the use of any Collateral, payments in respect of the Obligations shall be deemed applied first to the Obligations arising from Loans and Letters of Credit that were not used for such purposes and second to the Obligations arising from Loans and Letters of Credit the proceeds of which were used to acquire rights in or the use of any Collateral in the chronological order in which such Borrower acquired such rights in or the use of such Collateral.

(b)At Agent’s option, all principal, interest, fees, costs, expenses and other charges provided for in this Agreement or the other Financing Agreements may be charged directly to the loan account(s) of any Borrower maintained by Agent.  If after receipt of any payment of, or proceeds of Collateral applied to the payment of, any of the Obligations, Agent, any Lender or Issuing Bank is required to surrender or return such payment or proceeds to any Person for any reason, then the Obligations intended to be satisfied by such payment or proceeds shall be reinstated and continue and this

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Agreement shall continue in full force and effect as if such payment or proceeds had not been received by Agent or such Lender.  Borrowers and Guarantors shall be liable to pay to Agent, and do hereby indemnify and hold Agent and Lenders harmless for the amount of any payments or proceeds surrendered or returned.  This Section 6.4(b) shall remain effective notwithstanding any contrary action which may be taken by Agent or any Lender in reliance upon such payment or proceeds.  This Section 6.4 shall survive the payment of the Obligations and the termination of this Agreement.

(c)In addition to Borrowers’ obligation to pay the entire amount of the Obligations upon the Maturity Date or any other effective date of termination of the Financing Agreements to the extent required under Section 13.1, Borrowers shall also be required to repay Revolving Loans, in amounts equal to (i) 100% of the net proceeds of insurance and condemnation recoveries with respect to the First Priority Collateral, or, at any time prior to the occurrence of a Cash Management Event, if less, the amount of the Borrowing Base attributable to the affected First Priority Collateral; (ii) 100% of the net proceeds from asset sales of First Priority Collateral, or, at any time prior to the occurrence of a Cash Management Event, if less, the amount of the Borrowing Base attributable to the affected First Priority Collateral, other than Inventory sold in the ordinary course of business; (iii) following the occurrence of a Cash Management Event, the net proceeds remaining from asset sales of Notes Priority Collateral following application thereof in accordance with the Indenture; (iv) following the occurrence of a Cash Management Event, 100% of the net proceeds of any issuance of equity securities or from any capital contribution; and (v) following the occurrence of a Cash Management Event, 100% of the net proceeds of the issuance or incurrence of debt; provided that mandatory prepayments under clauses (iv) and (v) shall be subject to the terms of the Intercreditor Agreement.

6.5Taxes.

(a)Any and all payments by or on account of any of the Obligations shall be made free and clear of and without deduction or withholding for or on account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions, charges, withholdings, liabilities, restrictions or conditions of any kind, excluding, in the case of each Lender, Issuing Bank and Agent (A) taxes imposed on or measured by its net income or overall gross income, and franchise taxes imposed on it, in each case by the jurisdiction (or any political subdivision thereof) under the laws of which such Lender, Issuing Bank or Agent (as the case may be) is organized, in which it is resident for tax purposes or with which it has a present or former connection (other than a connection arising solely as a result of the transactions contemplated by the Financing Agreements) and (B) any United States withholding taxes payable with respect to payments under the Financing Agreements under laws (including any statute, treaty or regulation) in effect on the date hereof (or, in the case of an Eligible Transferee, the date of the Assignment and Acceptance) applicable to such Lender, Issuing Bank or Agent, as the case may be, but not excluding any United States withholding taxes payable as a result of any change in such laws occurring after the date hereof (or, in the case of an Eligible Transferee, after the date of such Assignment and Acceptance) (all such non-excluded taxes, levies, imposts, fees, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”).

(b)If any Taxes shall be required by law to be deducted from or in respect of any sum payable in respect of the Obligations to any Lender, Issuing Bank or Agent (i) the sum payable shall be increased as may be necessary so that after making all required deductions for Taxes (including deductions applicable to additional sums payable under this Section 6.5), such Lender, Issuing Bank or Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions of Taxes been made, (ii) the relevant Borrower or Guarantor shall make such deductions, (iii) the relevant Borrower or Guarantor shall pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable law and (iv) the relevant Borrower or Guarantor shall deliver to Agent evidence of such payment.

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(c)In addition, each Borrower and Guarantor agrees to pay any present or future stamp or documentary taxes or any other excise taxes, charges or similar levies of the United States or any political subdivision thereof or any applicable foreign jurisdiction, and all liabilities with respect thereto, in each case arising from any payment made hereunder or under any of the other Financing Agreements or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any of the other Financing Agreements (collectively, “Other Taxes”).

(d)Each Borrower and Guarantor shall indemnify each Lender, Issuing Bank and Agent for the full amount of Taxes and Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this Section 6.5) paid by such Lender, Issuing Bank or Agent (as the case may be) and any liability (including for penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be made within thirty (30) days from the date such Lender, Issuing Bank or Agent (as the case may be) makes written demand therefor.  A certificate as to the amount of such payment or liability delivered to Administrative Borrower by a Lender, Issuing Bank (with a copy to Agent) or by Agent on its own behalf or on behalf of a Lender or Issuing Bank, shall be conclusive absent manifest error.  Each Lender agrees that upon request of the Borrower, it will reasonably cooperate with the Borrower (at the Borrower’s sole expense) in seeking a refund of Taxes as to which it has received an indemnity payment hereunder if in such Lender’s sole discretion it can do so without prejudice to its commercial or legal position, provided that nothing in this section shall be construed to require a Lender to provide access to its tax returns or other information considered to be confidential or to rearrange its tax affairs other than as it sees fit.

(e)As soon as practicable after any payment of Taxes or Other Taxes by any Borrower or Guarantor, such Borrower or Guarantor shall furnish to Agent, at its address referred to herein, the original or a certified copy of a receipt evidencing payment thereof.

(f)Without prejudice to the survival of any other agreements of any Borrower or Guarantor hereunder or under any of the other Financing Agreements, the agreements and obligations of such Borrower or Guarantor contained in this Section 6.5 shall survive the termination of this Agreement and the payment in full of the Obligations.

(g)Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the applicable Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any of the other Financing Agreements shall deliver to Administrative Borrower (with a copy to Agent), at the time or times prescribed by applicable law or reasonably requested by Administrative Borrower or Agent (in such number of copies as is reasonably requested by the recipient), whichever of the following is applicable (but only if such Foreign Lender is legally entitled to do so):  (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming exemption from, or a reduction to, withholding tax under an income tax treaty, or any successor form, (ii) duly completed copies of Internal Revenue Service Form W-8ECI claiming exemption from withholding because the income is effectively connection with a U.S. trade or business or any successor form, (iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Sections 871(h) or 881(c) of the Code, (A) a certificate of the Lender to the effect that such Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the Code or a “controlled foreign corporation” described and Section 881(c)(3)(C) of the Code and (B) duly completed copies of Internal Revenue Service Form W-8BEN claiming exemption from withholding under the portfolio interest exemption or any successor form or (iv) any other applicable form, certificate or document prescribed by applicable law as a basis for claiming exemption from or a reduction in United States withholding tax duly completed together with such supplementary documentation as may be

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prescribed by applicable law to permit a Borrower to determine the withholding or deduction required to be made.  Unless Administrative Borrower and Agent have received forms or other documents satisfactory to them indicating that a payment hereunder or under any of the other Financing Agreements to or for a Foreign Lender are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, Borrowers or Agent shall withhold amounts required to be withheld by applicable requirements of law from such payments at the applicable statutory rate.

(h)Any Lender claiming any additional amounts payable pursuant to this Section 6.5 shall use its reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its applicable lending office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that would be payable or may thereafter accrue and would not, in the sole determination of such Lender, be otherwise disadvantageous to such Lender.

(i)If the Lender, Issuing Bank or Agent determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 6.5, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 6.5 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Lender, Issuing Bank or Agent and without interest (other than any interest paid by the relevant Government Authority with respect to such refund); provided that the Borrower, upon the request of the Lender, Issuing Bank or Agent, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Government Authority) to the Lender, Issuing Bank or Agent in the event the Lender, Issuing Bank or Agent is required to repay such refund to such Government Authority.  This Section 6.5 shall not be construed to require the Lender, Issuing Bank or Agent to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

6.6Authorization to Make Loans.  Agent and Lenders are authorized to make the Loans based upon telephonic or other instructions received from anyone purporting to be an officer of Administrative Borrower or any Borrower or other authorized person or, at the discretion of Agent, if such Loans are necessary to satisfy any Obligations.  All requests for Loans or Letters of Credit hereunder shall specify the date on which the requested advance is to be made (which day shall be a Business Day) and the amount of the requested Loan.  Requests received after 11:00 a.m. (Charlotte, North Carolina time) on any day shall be deemed to have been made as of the opening of business on the immediately following Business Day.  All Loans and Letters of Credit under this Agreement shall be conclusively presumed to have been made to, and at the request of and for the benefit of, any Borrower or Guarantor when deposited to the credit of any Borrower or Guarantor or otherwise disbursed or established in accordance with the instructions of any Borrower or Guarantor or in accordance with the terms and conditions of this Agreement.

6.7Use of Proceeds.  Borrowers shall use the initial proceeds of the Loans and Letters of Credit hereunder only for: (a) payments to each of the persons listed in the disbursement direction letter furnished by Borrowers to Agent on or about the date hereof, and (b) costs, expenses and fees in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Financing Agreements.  All other Loans made or Letters of Credit provided to or for the benefit of any Borrower pursuant to the provisions hereof shall be used by such Borrower only for general operating, working capital and other proper corporate purposes of such Borrower including, without limitation, acquisitions and investments, dividends and other restricted payments not otherwise prohibited by the terms hereof.  None of the proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security or for the purposes of reducing or retiring any indebtedness which was

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originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Loans to be considered a “purpose credit” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended.

6.8Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of Loans and Statements.

(a)Each Borrower hereby irrevocably appoints and constitutes Administrative Borrower as its agent and attorney-in-fact to request and receive Loans and Letters of Credit pursuant to this Agreement and the other Financing Agreements from Agent or any Lender in the name or on behalf of such Borrower.  Agent and Lenders may disburse the Loans to such bank account of Administrative Borrower or a Borrower or otherwise make such Loans to a Borrower and provide such Letters of Credit to a Borrower as Administrative Borrower may designate or direct, without notice to any other Borrower or Guarantor.  Notwithstanding anything to the contrary contained herein, Agent may at any time and from time to time require that Loans to or for the account of any Borrower be disbursed directly to an operating account of such Borrower.

(b)Administrative Borrower hereby accepts the appointment by Borrowers to act as the agent and attorney-in-fact of Borrowers pursuant to this Section 6.8. Administrative Borrower shall ensure that the disbursement of any Loans to each Borrower requested by or paid to or for the account of Administrative Borrower, or the issuance of any Letter of Credit for a Borrower hereunder, shall be paid to or for the account of such Borrower.

(c)Each Borrower and other Guarantor hereby irrevocably appoints and constitutes Administrative Borrower as its agent to receive statements on account and all other notices from Agent and Lenders with respect to the Obligations or otherwise under or in connection with this Agreement and the other Financing Agreements.

(d)Any notice, election, representation, warranty, agreement or undertaking by or on behalf of any other Borrower or any Guarantor by Administrative Borrower shall be deemed for all purposes to have been made by such Borrower or Guarantor, as the case may be, and shall be binding upon and enforceable against such Borrower or Guarantor to the same extent as if made directly by such Borrower or Guarantor.

(e)No purported termination of the appointment of Administrative Borrower as agent as aforesaid shall be effective, except after ten (10) days’ prior written notice to Agent.

6.9Pro Rata Treatment.  Except to the extent otherwise provided in this Agreement or as otherwise agreed by Lenders:  (a) the making and conversion of Loans shall be made among the Lenders based on their respective Pro Rata Shares as to the Loans and (b) each payment on account of any Obligations to or for the account of one or more of Lenders in respect of any Obligations due on a particular day shall be allocated among the Lenders entitled to such payments based on their respective Pro Rata Shares and shall be distributed accordingly.

6.10Sharing of Payments, Etc.

(a)Each Borrower and Guarantor agrees that, in addition to (and without limitation of) any right of setoff, banker’s Lien or counterclaim Agent or any Lender may otherwise have, each Lender shall be entitled, at its option (but subject, as among Agent and Lenders, to the provisions of Section 12.3(b) hereof), to offset balances held by it for the account of such Borrower or Guarantor at any of its offices, in dollars or in any other currency, against any principal of or interest on any Loans owed to

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such Lender or any other amount payable to such Lender hereunder, that is not paid when due (regardless of whether such balances are then due to such Borrower or Guarantor), in which case it shall promptly notify Administrative Borrower and Agent thereof; provided, that, such Lender’s failure to give such notice shall not affect the validity thereof.

(b)If any Lender (including Agent) shall obtain from any Borrower or Guarantor payment of any principal of or interest on any Loan owing to it or payment of any other amount under this Agreement or any of the other Financing Agreements through the exercise of any right of setoff, banker’s Lien or counterclaim or similar right or otherwise (other than from Agent as provided herein), and, as a result of such payment, such Lender shall have received more than its Pro Rata Share of the principal of the Loans or more than its share of such other amounts then due hereunder or thereunder by any Borrower or Guarantor to such Lender than the percentage thereof received by any other Lender, it shall promptly pay to Agent, for the benefit of Lenders, the amount of such excess and simultaneously purchase from such other Lenders a participation in the Loans or such other amounts, respectively, owing to such other Lenders (or such interest due thereon, as the case may be) in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all Lenders shall share the benefit of such excess payment (net of any expenses that may be incurred by such Lender in obtaining or preserving such excess payment) in accordance with their respective Pro Rata Shares or as otherwise agreed by Lenders.  To such end all Lenders shall make appropriate adjustments among themselves (by the resale of participation sold or otherwise) if such payment is rescinded or must otherwise be restored.

(c)Each Borrower and Guarantor agrees that any Lender purchasing a participation (or direct interest) as provided in this Section may exercise, in a manner consistent with this Section, all rights of setoff, banker’s lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Lender in the amount of such participation.

(d)Nothing contained herein shall require any Lender to exercise any right of setoff, banker’s lien, counterclaims or similar rights or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or obligation of any Borrower or Guarantor.  If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section applies, such Lender shall, to the extent practicable, assign such rights to Agent for the benefit of Lenders and, in any event, exercise its rights in respect of such secured claim in a manner consistent with the rights of Lenders entitled under this Section to share in the benefits of any recovery on such secured claim.

6.11Settlement Procedures.

(a)In order to administer the Credit Facility in an efficient manner and to minimize the transfer of funds between Agent and Lenders, Agent may, at its option, subject to the terms of this Section, make available, on behalf of Lenders, including the Swing Line Lender, the full amount of the Loans requested or charged to any Borrower’s loan account(s) or otherwise to be advanced by Lenders pursuant to the terms hereof, without requirement of prior notice to Lenders of the proposed Loans.

(b)With respect to all Revolving Loans made by Agent on behalf of Lenders as provided in this Section, or any Swing Line Loans made by Swing Line Lender or Agent on behalf of Swing Line Lender, the amount of each Lender’s Pro Rata Share of the outstanding Loans shall be computed weekly, and shall be adjusted upward or downward on the basis of the amount of the outstanding Loans as of 5:00 p.m. (Charlotte, North Carolina time) on the Business Day immediately preceding the date of each settlement computation; provided, that, Agent retains the absolute right at any time or from time to time to make the above described adjustments at intervals more frequent than

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weekly, but in no event more than twice in any week.  Agent shall deliver to each of the Lenders after the end of each week, or at such lesser period or periods as Agent shall determine, a summary statement of the amount of outstanding Loans for such period (such week or lesser period or periods being hereinafter referred to as a “Settlement Period”).  If the summary statement is sent by Agent and received by a Lender prior to 12:00 p.m. (Charlotte, North Carolina time), then such Lender shall make the settlement transfer described in this Section by no later than 3:00 p.m. (Charlotte, North Carolina time), on the same Business Day and if received by a Lender after 12:00 p.m. (Charlotte, North Carolina time), then such Lender shall make the settlement transfer by not later than 3:00 p.m. (Charlotte, North Carolina time) on the next Business Day following the date of receipt.  If, as of the end of any Settlement Period, the amount of a Lender’s Pro Rata Share of the outstanding Loans is more than such Lender’s Pro Rata Share of the outstanding Loans as of the end of the previous Settlement Period, then such Lender shall forthwith (but in no event later than the time set forth in the preceding sentence) transfer to Agent by wire transfer in immediately available funds the amount of the increase.  Alternatively, if the amount of a Lender’s Pro Rata Share of the outstanding Loans in any Settlement Period is less than the amount of such Lender’s Pro Rata Share of the outstanding Loans for the previous Settlement Period, Agent shall forthwith transfer to such Lender by wire transfer in immediately available funds the amount of the decrease.  The obligation of each of the Lenders to transfer such funds and effect such settlement shall be irrevocable and unconditional and without recourse to or warranty by Agent.  Agent and each Lender agrees to mark its books and records at the end of each Settlement Period to show at all times the dollar amount of its Pro Rata Share of the outstanding Loans and Letters of Credit.  Each Lender shall only be entitled to receive interest on its Pro Rata Share of the Loans to the extent such Loans have been funded by such Lender.  Because the Agent on behalf of Lenders may be advancing and/or may be repaid Loans prior to the time when Lenders will actually advance and/or be repaid such Loans, interest with respect to Loans shall be allocated by Agent in accordance with the amount of Loans actually advanced by and repaid to each Lender and the Agent and shall accrue from and including the date such Loans are so advanced to but excluding the date such Loans are either repaid by Borrowers or actually settled with the applicable Lender as described in this Section.

(c)To the extent that Agent has made any such amounts available and the settlement described above shall not yet have occurred, upon repayment of any Loans by a Borrower, Agent may apply such amounts repaid directly to any amounts made available by Agent pursuant to this Section.  In lieu of weekly or more frequent settlements, Agent may, at its option, at any time require each Lender to provide Agent with immediately available funds representing its Pro Rata Share of each Loan, prior to Agent’s disbursement of such Loan to Borrower.  In such event, all Loans under this Agreement shall be made by the Lenders simultaneously and proportionately to their Pro Rata Shares.  No Lender shall be responsible for any default by any other Lender in the other Lender’s obligation to make a Loan requested hereunder nor shall the Commitment of any Lender be increased or decreased as a result of the default by any other Lender in the other Lender’s obligation to make a Loan hereunder.

(d)If Agent is not funding a particular Loan to a Borrower (or Administrative Borrower for the benefit of such Borrower) pursuant to Sections 6.11(a) and 6.11(b) above on any day, but is requiring each Lender to provide Agent with immediately available funds on the date of such Loan as provided in Section 6.11(c) above, Agent may assume that each Lender will make available to Agent such Lender’s Pro Rata Share of the Loan requested or otherwise made on such day and Agent may, in its discretion, but shall not be obligated to, cause a corresponding amount to be made available to or for the benefit of such Borrower on such day.  If Agent makes such corresponding amount available to a Borrower and such corresponding amount is not in fact made available to Agent by such Lender, Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon for each day from the date such payment was due until the date such amount is paid to Agent at the Federal Funds Rate for each day during such period (as published by the Federal Reserve Bank of New York or at Agent’s option based on the arithmetic mean determined by Agent of the rates for

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the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (Charlotte, North Carolina time) on that day by each of the three leading brokers of Federal funds transactions in New York City selected by Agent) and if such amounts are not paid within three (3) days of Agent’s demand, at the highest Interest Rate provided for in Section 3.1 hereof applicable to Base Rate Loans.  During the period in which such Lender has not paid such corresponding amount to Agent, notwithstanding anything to the contrary contained in this Agreement or any of the other Financing Agreements, the amount so advanced by Agent to or for the benefit of any Borrower shall, for all purposes hereof, be a Loan made by Agent for its own account.  Upon any such failure by a Lender to pay Agent, Agent shall promptly thereafter notify Administrative Borrower of such failure and Borrowers shall pay such corresponding amount to Agent for its own account within five (5) Business Days of Administrative Borrower’s receipt of such notice.  A Lender who fails to pay Agent its Pro Rata Share of any Loans made available by the Agent on such Lender’s behalf, or any Lender who fails to pay any other amount owing by it to Agent, Swing Line Lender or Issuing Bank is a “Defaulting Lender”.  Agent shall not be obligated to transfer to a Defaulting Lender any payments received by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled to the sharing of any payments hereunder (including any principal, interest or fees).  Amounts payable to a Defaulting Lender shall instead be paid to or retained by Agent with the exception of any fees paid by Borrowers to Agent for the account of the Defaulting Lender pursuant to Section 3.2(a), which fees shall be credited to Borrowers.  Agent may hold and, in its discretion, relend to a Borrowers the amount of all such payments received or retained by it for the account of such Defaulting Lender.  For purposes of voting or consenting to matters with respect to this Agreement and the other Financing Agreements (except as provided in Section 11.3(f)(ii)) and determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be zero (0).  This Section shall remain effective with respect to a Defaulting Lender until such default is cured.  The operation of this Section shall not be construed to increase or otherwise affect the Commitment of any Lender, or relieve or excuse the performance by any Borrower or Guarantor of their duties and obligations hereunder.

(e)Nothing in this Section or elsewhere in this Agreement or the other Financing Agreements shall be deemed to require Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitment hereunder or to prejudice any rights that any Borrower may have against any Lender as a result of any default by any Lender hereunder in fulfilling its Commitment.

6.12Obligations Several; Independent Nature of Lenders’ Rights.  The obligation of each Lender hereunder is several, and no Lender shall be responsible for the obligation or commitment of any other Lender hereunder.  Nothing contained in this Agreement or any of the other Financing Agreements and no action taken by the Lenders pursuant hereto or thereto shall be deemed to constitute the Lenders to be a partnership, an association, a joint venture or any other kind of entity.  The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and subject to Section 12.3 hereof, each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.

6.13Bank Products.  Borrowers and Guarantors may (but no such Person is required to) request that the Bank Product Providers provide or arrange for such Person to obtain Bank Products from Bank Product Providers, and each Bank Product Provider may, in its sole discretion, provide or arrange for such Person to obtain the requested Bank Products.  Borrowers and Guarantors that obtain Bank Products shall indemnify and hold Agent, each Lender and their respective Affiliates harmless from any and all obligations now or hereafter owing to any other Person by any Bank Product Provider in connection with any Bank Products other than for gross negligence or willful misconduct on the part of any such indemnified Person.  This Section 6.13 shall survive the payment of the Obligations and the

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termination of this Agreement.  Borrowers and Guarantors acknowledge and agree that the obtaining of Bank Products from Bank Product Providers (a) is in the sole discretion of such Bank Product Provider, and (b) is subject to all rules and regulations of such Bank Product Provider.

SECTION  7.COLLATERAL REPORTING AND COVENANTS

7.1Collateral Reporting.  Borrowers shall provide Agent with the following documents in a form satisfactory to Agent:

(a)on a regular basis as required by Agent, schedules of sales made, credits issued and cash received, and on or before the 15th day of each month (or if a Default or an Event of Default exists or if Excess Availability is at any time less than the greater of $30,000,000 or 16.7% of the Maximum Credit, weekly), a Borrowing Base Certificate including a report of Qualified Cash and evidence thereof as reasonably requested by Agent (which may include current bank account or investment account statements) and, in the event the outstanding Obligations at any time exceed $180,000,000, a certification of the calculation of the “Borrowing Base” under (and as defined in) the Senior Notes Indenture;

(b)on the day of delivery of the Borrowing Base Certificate referred to in Section 7.1(a), (A) perpetual inventory reports (together with a reconciliation to the general ledger and financial statements for each Borrower), (B) inventory reports by location and category (and including the amounts of Inventory and the value thereof at any leased locations and at premises of warehouses, processors or other third parties and identifying by Borrower Inventory that is in excess of a 12-month supply, wherever located), (C) detailed aged trial balance by Borrower of its Accounts, specifying the names, country, face value, dates of invoices and due dates for each Account Debtor obligated on an Account so listed, agings of accounts receivable (together with a reconciliation to the previous month’s aging and general ledger), (D) detailed listing of unbilled accounts receivable, if any, for each Borrower, (E) listing of Eligible U.S. Government Accounts, Eligible U.S. Local Government Accounts and Eligible Foreign Government Accounts for each Borrower, and (F) a detailed general ledger trial balance by Borrower; and

(iii)such other statements, orders, invoices, memos, advices, reports and other documents as to the Collateral as Agent shall reasonably request from time to time.

7.2Accounts Covenants.

(a)Records and Schedules of Accounts.  Each Borrower shall keep accurate and complete records of its Accounts and all payments and collections thereon.  In addition, if Accounts of a Borrower in an aggregate face amount in excess of $1,000,000 cease to be Eligible Accounts, in whole or in part, Borrowers shall notify Agent of such occurrence promptly (and in any event within 2 Business Days) after a Borrower’s having obtained knowledge of such occurrence and the Borrowing Base shall thereupon be adjusted to reflect such occurrence.

(b)Discounts, Disputes and Returns.  If a Borrower grants any discounts, allowances or credits (including co-operative advertising and volume rebates) that are not shown on the face of the invoice for the Account involved, Borrowers shall report such discounts, allowances or credits, as the case may be to Agent as part of the next required schedule of accounts.  If any amounts due and owing in excess of $1,000,000 are in dispute between a Borrower and any account debtor, or if any returns are made in excess of $1,000,000 with respect to any Accounts owing from an account debtor, such Borrower shall provide Agent with written notice thereof at the time of submission of the next schedule of accounts, explaining in detail the reason for the dispute or return, all claims related thereto and the amount in

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controversy.  Upon and after the occurrence of an Event of Default, Agent shall have the right to settle or adjust all disputes and claims directly with the account debtor and to compromise the amount or extend the time for payment of any Accounts of a Borrower upon such terms and conditions as Agent may deem advisable, and to charge the deficiencies, costs and expenses thereof, including attorney’s fees, to Borrowers.

7.3Inventory Covenants.

(a)Records and Reports of Inventory.  Each Borrower shall keep accurate and complete records of its Inventory.

(b)Returns of Inventory.  No Borrower shall return any of its Inventory to a supplier or vendor thereof, or any other Person, whether for cash, credit against future purchases or then existing payables, or otherwise, unless (i) such return is in the ordinary course of business of such Borrower; (ii) no Default or Event of Default exists at the time of such return or would result therefrom; and (iv) any payments received by a Borrower in connection with any such return are promptly turned over to Agent for application to the Obligations.

7.4Equipment Covenants.  With respect to the Equipment: (a) Borrowers and Guarantors shall keep the Equipment in good order, repair, running and marketable condition (ordinary wear and tear excepted); (b) Borrowers and Guarantors shall use the Equipment with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable laws; (c) the Equipment is and shall be used in the business of Borrowers and Guarantors and not for personal, family, household or farming use; and (d) the Equipment is now and shall remain personal property and Borrowers and Guarantors shall not permit any of the Equipment to be or become a part of or affixed to real property.

7.5Power of Attorney.  Each Borrower and Guarantor hereby irrevocably designates and appoints Agent (and all persons designated by Agent) as such Borrower’s and Guarantor’s true and lawful attorney-in-fact, and authorizes Agent, in such Borrower’s, Guarantor’s or Agent’s name, to: (a) at any time an Event of Default exists or has occurred and is continuing (i) demand payment on Receivables or other Collateral, (ii) enforce payment of Receivables by legal proceedings or otherwise, (iii) exercise all of such Borrower’s or Guarantor’s rights and remedies to collect any Receivable or other Collateral, (iv) sell or assign any Receivable upon such terms, for such amount and at such time or times as the Agent deems advisable, (v) settle, adjust, compromise, extend or renew an Account, (vi) discharge and release any Receivable, (vii) prepare, file and sign such Borrower’s or Guarantor’s name on any proof of claim in bankruptcy or other similar document against an account debtor or other obligor in respect of any Receivables or other Collateral, (viii) notify the post office authorities to change the address for delivery of remittances from account debtors or other obligors in respect of Receivables or other proceeds of Collateral to an address designated by Agent, and open and dispose of all mail addressed to such Borrower or Guarantor and handle and store all mail relating to the Collateral; and (ix) do all acts and things which are necessary, in Agent’s determination, to fulfill such Borrower’s or Guarantor’s obligations under this Agreement and the other Financing Agreements, and (b) at any time following a Cash Management Event to (i) take control in any manner of any item of payment in respect of Receivables or constituting Collateral or otherwise received in or for deposit in the Blocked Accounts or otherwise received by Agent or any Lender, (ii) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of Receivables or other proceeds of Collateral are sent or received, (iii) endorse such Borrower’s or Guarantor’s name upon any items of payment in respect of Receivables or constituting Collateral or otherwise (including proceeds of insurance) received by Agent and any Lender and deposit the same in Agent’s account for application to the Obligations, (iv) endorse such Borrower’s or Guarantor’s name upon any chattel paper, document, instrument, invoice, or similar

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document or agreement relating to any Receivable or any goods pertaining thereto or any other Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, (v) clear Inventory the purchase of which was financed with a Letter of Credit through U.S. Customs or foreign export control authorities in such Borrower’s or Guarantor’s name, Agent’s name or the name of Agent’s designee, and to sign and deliver to customs officials powers of attorney in such Borrower’s or Guarantor’s name for such purpose, and to complete in such Borrower’s or Guarantor’s or Agent’s name, any order, sale or transaction, obtain the necessary documents in connection therewith and collect the proceeds thereof, and (vi) sign such Borrower’s or Guarantor’s name on any verification of Receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof.  Each Borrower and Guarantor hereby releases Agent and Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of Agent’s or any Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

7.6Right to Cure.  Agent may, at its option, upon notice to (and, so long as no Default or Event of Default exists, consultation with) Administrative Borrower, (a) cure any default by any Borrower or Guarantor under any material agreement with a third party that affects the Collateral, its value or the ability of Agent to collect, sell or otherwise dispose of the Collateral or the rights and remedies of Agent or any Lender therein or the ability of any Borrower or Guarantor to perform its obligations hereunder or under any of the other Financing Agreements, (b) pay or bond on appeal any judgment entered against any Borrower or Guarantor, (c) discharge taxes, Liens, security interests or other encumbrances at any time levied on or existing with respect to the Collateral and (d) pay any amount, incur any expense or perform any act which, in Agent’s judgment, is necessary or appropriate to preserve, protect, insure or maintain the Collateral and the rights of Agent and Lenders with respect thereto.  Agent may add any amounts so expended to the Obligations and charge any Borrower’s account therefor, such amounts to be repayable by Borrowers on demand.  Agent and Lenders shall be under no obligation to effect such cure, payment or bonding and shall not, by doing so, be deemed to have assumed any obligation or liability of any Borrower or Guarantor.  Any payment made or other action taken by Agent or any Lender under this Section shall be without prejudice to any right to assert an Event of Default hereunder and to proceed accordingly.

7.7Access to Premises.  From time to time as requested by Agent, at the cost and expense of Borrowers, (a) Agent or its designee shall have reasonable access to all of each Borrower’s and Guarantor’s premises during normal business hours and after reasonable prior notice to Administrative Borrower, or at any time and without notice to Administrative Borrower if an Event of Default exists or has occurred and is continuing, for the purposes of inspecting, verifying and auditing the Collateral and all of each Borrower’s and Guarantor’s books and records, including the Records, and (b) each Borrower and Guarantor shall promptly furnish to Agent such copies of such books and records or extracts therefrom as Agent may request, and Agent or any Lender or Agent’s designee may use during normal business hours such of any Borrower’s and Guarantor’s personnel, equipment, supplies and premises as may be reasonably necessary for the foregoing and if an Event of Default exists or has occurred and is continuing for the collection of Receivables and realization of other Collateral.  Without limiting the number of occasions on which Agent and Lenders shall be authorized to conduct inspections and audits of any Borrower’s or Guarantor’s books and records or any of Collateral, Borrowers shall not be obligated to reimburse Agent and Lenders for costs and expenses incurred associated with more than four (4) field examinations or more than two (2) Inventory appraisals in any calendar year, unless in each case an Event of Default then exists, in which case there shall be no limit on the number of field examinations and appraisals for which Borrowers shall be obligated to reimburse Agent and Lenders.

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7.8Trademark Appraisals.  Upon Agent’s request, Borrowers shall, at their expense, no more than two (2) times during the term of this Agreement, and no more than one (1) time in any 12 month period (but at any time or times as Agent may request on or after an Event of Default) deliver or cause to be delivered to Agent a Trademark Appraisal.

SECTION  8.REPRESENTATIONS AND WARRANTIES

Each Borrower and Guarantor hereby represents and warrants to Agent, Lenders and Issuing Bank the following (which shall survive the execution and delivery of this Agreement):

8.1Corporate Existence, Power and Authority.  Each Borrower and Guarantor is a corporation or limited liability company duly organized and in good standing under the laws of its jurisdiction of organization and is duly qualified as a foreign corporation or limited liability company and in good standing in all states or other jurisdictions where the nature and extent of the business transacted by it or the ownership of assets makes such qualification necessary, except for those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect.  The execution, delivery and performance of this Agreement, the other Financing Agreements and the transactions contemplated hereunder and thereunder (a) are all within each Borrower’s and Guarantor’s corporate or limited liability company powers, (b) have been duly authorized, (c) are not in contravention of law or the terms of any Borrower’s or Guarantor’s certificate of incorporation, by laws, certificate of organization, operating agreement or other organizational documentation, (d) will not result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which any Borrower or Guarantor is a party or by which such Borrower or Guarantor or its properties may be bound or affected (other than a default under the Existing Remington Notes Indenture (which shall not constitute an Event of Default under (and as defined in) the Existing Remington Notes Indenture before the passage of 30 days after Remington’s receipt of a notice of default thereunder without a cure by Remington) that will occur as a result of Remington’s incurrence of Indebtedness evidenced by the Senior Notes and the incurrence of the Indebtedness under this Agreement prior to payment or redemption of the Existing Remington Notes); and (e) will not result in the creation or imposition of, or require or give rise to any obligation to grant, any lien, security interest, charge or other encumbrance upon any property of any Borrower or Guarantor (other than Permitted Liens).  This Agreement and the other Financing Agreements to which any Borrower or Guarantor is a party constitute legal, valid and binding obligations of such Borrower and Guarantor enforceable in accordance with their respective terms.

8.2Name; State of Organization; Chief Executive Office; Collateral Locations.

(a)The exact legal name of each Borrower and Guarantor is on the date hereof as set forth on the signature page of this Agreement and on Schedule 8.2 to this Agreement.  No Borrower or Guarantor has, during the five years prior to the date of this Agreement, been known by or used any other entity or fictitious name or been a party to any merger or consolidation, or acquired all or substantially all of the assets of any Person, or acquired any of its property or assets out of the ordinary course of business, except as set forth on Schedule 8.2 to this Agreement.

(b)Each Borrower and Guarantor is an organization of the type and organized in the jurisdiction set forth on Schedule 8.2 to this Agreement.  Schedule 8.2 to this Agreement accurately sets forth on the date hereof the organizational identification number of each Borrower and Guarantor or accurately states that such Borrower or Guarantor has none and accurately sets forth the federal employer identification number of each Borrower and Guarantor.

(c)The chief executive office and mailing address of each Borrower and Guarantor and each Borrower’s and Guarantor’s Records concerning Accounts are, on the date hereof, located only at

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the address identified as such on Schedule 8.2 to this Agreement and its only other places of business and the only other locations of Collateral, if any, on the date hereof are the addresses set forth on Schedule 8.2 to this Agreement, subject to the rights of any Borrower or Guarantor to establish new locations in accordance with Section 9.2 below.  Schedule 8.2 to this Agreement correctly identifies any of such locations which on the date hereof are not owned by a Borrower or Guarantor and sets forth the owners and/or operators thereof.

8.3Financial Statements.  All financial statements relating to any Borrower or Guarantor which have been or may hereafter be delivered by any Borrower or Guarantor to Agent and Lenders have been prepared in accordance with GAAP (except as to any interim financial statements, to the extent such statements are subject to normal year-end adjustments and do not include any notes) and fairly present in all material respects the financial condition and the results of operations of such Borrower and Guarantor as at the dates and for the periods set forth therein.  The projections dated July 1, 2009 for the fiscal years ending 2009 through 2013 that have been delivered to Agent or any projections hereafter delivered to Agent have been prepared in light of the past operations of the businesses of Borrowers and Guarantors and are based upon estimates and assumptions stated therein, all of which Borrowers and Guarantors have determined to be reasonable and fair in light of the then current conditions and current facts and reflect the good faith and reasonable estimates of Borrowers and Guarantors of the future financial performance of Borrowers and Guarantors and of the other information projected therein for the periods set forth therein.

8.4Priority of Liens; Title to Properties.  The security interests and Liens granted to Agent under this Agreement and the other Financing Agreements constitute valid and, except to the extent perfection is expressly not required pursuant to Section 5.2(j), perfected first priority Liens and security interests in and upon the First Priority Collateral (and valid and, except to the extent perfection is expressly not required pursuant to Section 5.2(j), perfected Liens and security interests in and upon all other Collateral) subject only to the Liens indicated on Schedule 8.4 to this Agreement and the other Liens permitted under Section 9.8 hereof to have priority over Agent’s Liens.  Each Borrower and Guarantor has good and marketable fee simple title to or valid leasehold interests in all of its Real Property and good, valid and merchantable title to all of its other properties and assets subject to no Liens, mortgages, pledges, security interests, encumbrances or charges of any kind, except those granted to Agent and such others as are specifically listed on Schedule 8.4 to this Agreement or permitted under Section 9.8 hereof.

8.5Tax Returns.  Each Borrower and Guarantor has filed, or caused to be filed, in a timely manner all tax returns, reports and declarations which are required to be filed by it.  All information in such tax returns, reports and declarations is complete and accurate in all material respects.  Each Borrower and Guarantor has paid or caused to be paid all taxes due and payable or claimed due and payable in any assessment received by it, except taxes the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower or Guarantor and with respect to which adequate reserves have been set aside on its books.  Adequate provision has been made for the payment of all accrued and unpaid Federal, State, county, local, foreign and other taxes whether or not yet due and payable and whether or not disputed.

8.6Litigation.  Except as set forth on Schedule 8.6 to this Agreement, as of the date hereof, (a) there is no investigation by any Governmental Authority pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened, against or affecting any Borrower or Guarantor, its or their assets or business and (b) there is no action, suit, proceeding or claim by any Person pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened, against any Borrower or Guarantor or its or their assets or goodwill, or against or affecting any transactions contemplated by this Agreement, in each case, which

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if adversely determined against such Borrower or Guarantor has or would reasonably be expected to have a Material Adverse Effect.

8.7Compliance with Other Agreements and Applicable Laws.

(a)Borrowers and Guarantors are in compliance with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority relating to their respective businesses, including, without limitation, those set forth in or promulgated pursuant to the Occupational Safety and Health Act of 1970 and the Code except where non-compliance therewith could not reasonably be expected to have a Material Adverse Effect.  No Inventory has been produced, stored, distributed or sold in violation of the Fair Labor Standards Act of 1938, or any Gun Control Laws.

(b)Borrowers and Guarantors have obtained all material permits, licenses, approvals, consents, certificates, orders or authorizations of any Governmental Authority required for the lawful conduct of its business (the “Permits”) except where failure to obtain such Permits would not reasonably be expected to have a Material Adverse Effect.  All of the Permits are valid and subsisting and in full force and effect.  There are no actions, claims or proceedings pending or to the best of any Borrower’s or Guarantor’s knowledge, threatened that seek the revocation, cancellation, suspension or modification of any of the Permits.

8.8Environmental Compliance.

(a)Except as could not reasonably be expected to have a Material Adverse Effect (i) no Borrower or Guarantor has generated, used, stored, treated, transported, manufactured, handled, produced or disposed of any Hazardous Materials, on or off its premises (whether or not owned by it) in any manner which at any time violates any applicable Environmental Law or Permit, and (ii) the operations of Borrowers and Guarantors comply in all material respects with all Environmental Laws and all Permits required under any Environmental Laws.

(b)Except as could not reasonably be expected to have a Material Adverse Effect, there has been no investigation by any Governmental Authority or any proceeding, complaint, order, directive, claim, citation or notice by any Governmental Authority or any other person nor is any pending or to the best of any Borrower’s or Guarantor’s knowledge threatened, with respect to any noncompliance with or violation of the requirements of any Environmental Law by any Borrower or Guarantor or the release, spill or discharge, threatened or actual, of any Hazardous Material or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials or any other environmental, health or safety matter.

(c)Except as could not reasonably be expected to have a Material Adverse Effect, Borrowers and Guarantors have no material liability (contingent or otherwise) in connection with a release, spill or discharge, threatened or actual, of any Hazardous Materials or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials.

(d)Borrowers and Guarantors have all Permits required to be obtained or filed in connection with the operations of Borrowers and Guarantors under any Environmental Law and all of such Permits are valid and in full force and effect except for any failure to obtain, file or maintain as valid and in full force and effect that could not reasonably be expected to have a Material Adverse Effect.

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8.9Employee Benefits.

(a)Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or State law.  Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service and to the best of any Borrower’s or Guarantor’s knowledge, nothing has occurred which would cause the loss of such qualification.  Except as could not reasonably be expected to have a Material Adverse Effect, each Borrower and its ERISA Affiliates have made all required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

(b)Except as could not reasonably be expected to have a Material Adverse Effect (i) there are no pending, or to the best of any Borrower’s or Guarantor’s knowledge, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan and (ii) there has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan.

(c)(i) Except as could not reasonably be expected to have a Material Adverse Effect, no ERISA Event has occurred or is reasonably expected to occur; (ii) based on the latest valuation of each Pension Plan and on the actuarial methods and assumptions employed for such valuation (determined in accordance with the assumptions used for funding such Pension Plan pursuant to Section 412 of the Code), the aggregate current value of accumulated benefit liabilities of such Pension Plan did not, as of the most recent actuarial valuations, exceed the aggregate current value of the assets of such Pension Plan by more than $48,000,000; (iii) each Borrower and Guarantor, and their ERISA Affiliates, have not incurred and do not reasonably expect to incur, any liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) each Borrower and Guarantor, and their ERISA Affiliates, have not incurred and do not reasonably expect to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) each Borrower and Guarantor, and their ERISA Affiliates, have not engaged in a transaction that would be subject to Section 4069 or 4212(c) of ERISA.

8.10Bank Accounts.  All of the deposit accounts, investment accounts or other accounts in the name of or used by any Borrower or Guarantor maintained at any bank or other financial institution are set forth on Schedule 5.2 to this Agreement, or are such other deposit accounts which each Borrower and Guarantor has established pursuant to Section 5.2 hereof.

8.11Intellectual Property.  Each Borrower and Guarantor owns or licenses or otherwise has the right to use all Intellectual Property necessary for the operation of its business as presently conducted, except as would not reasonably be expected to have a Material Adverse Effect.  As of the date hereof, Borrowers and Guarantors do not have any Intellectual Property registered, or subject to pending applications, in the United States Patent and Trademark Office or any similar office or agency in the United States, any State thereof, any political subdivision thereof or in any other country, other than those described on Schedule 8.11 to this Agreement and has not granted any material licenses with respect thereto other than in the ordinary course of its business.  To the best of any Borrower’s and Guarantor’s knowledge, no slogan or other advertising device, product, process, method, substance or other Intellectual Property or goods bearing or using any Intellectual Property presently contemplated to be sold by or employed by any Borrower or Guarantor infringes any patent, trademark, servicemark, tradename, copyright or other Intellectual Property owned by any other Person in a manner that would reasonably be expected to have a Material Adverse Effect.  To the best of any Borrower’s or Guarantor’s knowledge, no claim or litigation is pending or threatened against or affecting any Borrower or Guarantor contesting its right to sell or use any such Intellectual Property that would reasonably be expected to have a Material Adverse Effect.  Except for any agreement or other arrangement entered into in the ordinary course of business, Schedule 8.11 to this Agreement sets forth all of the material agreements or other material

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arrangements of each Borrower and Guarantor pursuant to which such Borrower or Guarantor has a license or other right to use any trademarks, logos, designs, representations or other Intellectual Property owned by another person as in effect on the date hereof and the dates of the expiration of such agreements or other arrangements of such Borrower or Guarantor as in effect on the date hereof (collectively, together with such agreements or other arrangements as may be entered into by any Borrower or Guarantor after the date hereof, collectively, the “License Agreements” and individually, a “License Agreement”).  No trademark, servicemark, copyright or other Intellectual Property at any time used by any Borrower or Guarantor which is owned by another person, or owned by such Borrower or Guarantor subject to any security interest, lien, collateral assignment, pledge or other encumbrance in favor of any person other than Agent, is affixed to any Eligible Inventory, except (a) to the extent permitted under the term of the license agreements listed on Schedule 8.11 to this Agreement (b) to the extent the sale of Inventory to which such Intellectual Property is affixed is permitted to be sold by such Borrower or Guarantor under applicable law (including the United States Copyright Act of 1976) and (c) Permitted Liens.

8.12Subsidiaries; Affiliates; Capitalization; Solvency.

(a)As of the date hereof, each Borrower and Guarantor does not have any direct or indirect Subsidiaries or Affiliates and is not engaged in any joint venture or partnership except as set forth on Schedule 8.12 to this Agreement.

(b)As of the date hereof, each Borrower and Guarantor is the record and beneficial owner of all of the issued and outstanding shares of Capital Stock of each of the Subsidiaries listed on Schedule 8.12 to this Agreement as being owned by such Borrower or Guarantor and there are no proxies, irrevocable or otherwise, with respect to such Capital Stock and no Capital Stock of any of the Subsidiaries are or may become required to be issued by reason of any options, warrants, rights to subscribe to, calls or commitments of any kind or nature and there are no contracts, commitments, understandings or arrangements by which any Subsidiary is or may become bound to issue additional shares of its Capital Stock or securities convertible into or exchangeable for such Capital Stock.

(c)The issued and outstanding shares of Capital Stock of each Borrower and Guarantor are directly and beneficially owned and held by the persons indicated on Schedule 8.2 to this Agreement, and in each case all of such Capital Stock has been duly authorized and is fully paid and non-assessable, free and clear of all claims, Liens, pledges and encumbrances of any kind, other than Permitted Liens and except as disclosed in writing to Agent prior to the date hereof.

(d)Each Borrower and Guarantor is Solvent and will continue to be Solvent after the creation of the Obligations, the Liens of Agent and the other transactions contemplated hereunder.

(e)Except as set forth on Schedule 8.12 to this Agreement, as of the date hereof, no Borrower or Guarantor is a party to or bound by any agreement or arrangement (whether oral or written) to which any Affiliate of such Borrower or Guarantor is a party except (a) the transactions contemplated by the Financing Agreements; (b) payment of customary directors’ fees and indemnities; (c) transactions with Affiliates that were consummated prior to the date hereof and have been disclosed to Agent in writing prior to the date of this Agreement; (d) loans and other advances to Affiliates and officers and directors of Affiliates that are expressly permitted hereunder; (e) the Senior Notes Indenture and related documents, and (f) in the ordinary course of business and upon fair and reasonable terms and are no less favorable to such Borrower or Guarantor than would obtain in a comparable arm’s length transaction with a Person not an Affiliate of such Borrower.

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8.13Labor Disputes.

(a)Set forth on Schedule 8.13 to this Agreement is a list (including dates of termination) of all collective bargaining or similar agreements between or applicable to each Borrower and Guarantor and any union, labor organization or other bargaining agent in respect of the employees of any Borrower or Guarantor on the date hereof.

(b)There is (i) no unfair labor practice complaint pending against any Borrower or Guarantor or, to the best of any Borrower’s or Guarantor’s knowledge, threatened against it, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is pending on the date hereof against any Borrower or Guarantor or, to best of any Borrower’s or Guarantor’s knowledge, threatened against it, and (ii) no strike, labor dispute, slowdown or stoppage is pending against any Borrower or Guarantor or, to the best of any Borrower’s or Guarantor’s knowledge, threatened against any Borrower or Guarantor, in each case, except where such grievance, arbitration proceeding, or strike, labor dispute or slowdown or stoppage would not reasonably be expected to have a Material Adverse Effect.

8.14Reserved.

8.15Material Contracts.  Schedule 8.15 to this Agreement sets forth all Material Contracts to which any Borrower or Guarantor is a party or is bound as of the date hereof.  Borrowers and Guarantors have delivered true, correct and complete copies of such Material Contracts to Agent on or before the date hereof.  Borrowers and Guarantors are not in breach or in default in any material respect of or under any Material Contract and have not received any notice of the intention of any other party thereto to terminate any Material Contract.

8.16Payable Practices.  Each Borrower and Guarantor have not made any material change in the historical accounts payable practices from those in effect immediately prior to the date hereof.

8.17Investment Company Act.  No Borrower or Guarantor is an “investment company” within the meaning of the Investment Company Act of 1940.

8.18Accuracy and Completeness of Information.  All information, other than financial projections, pro forma information and forward looking statements, which has been or is hereafter made available to Agent or any of Lenders by or on behalf of any Borrower or any of their representatives in connection with this Agreement, when taken as a whole with Borrowers’ public filings with the SEC, is and will be complete and correct in all material respects as of the date made available to Agent or any Lender and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not materially misleading and (ii) all financial projections, estimates, pro forma information and forward looking statements concerning Borrowers and Guarantors that have been or are hereafter made available to Agent or any Lender have been or will be prepared in good faith based upon reasonable assumptions.

8.19Survival of Warranties; Cumulative.  All representations and warranties contained in this Agreement or any of the other Financing Agreements shall survive the execution and delivery of this Agreement and shall be deemed to have been made again to Agent and Lenders on the date of each additional borrowing or other credit accommodation hereunder and shall be conclusively presumed to have been relied on by Agent and Lenders regardless of any investigation made or information possessed by Agent or any Lender.  The representations and warranties set forth herein shall be cumulative and in addition to any other representations or warranties which any Borrower or Guarantor shall now or hereafter give, or cause to be given, to Agent or any Lender.

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SECTION  9.AFFIRMATIVE AND NEGATIVE COVENANTS

For so long as there are any Commitments outstanding and thereafter until payment in full of the Obligations (except for contingent obligations of Obligors under indemnifications that survive terminations of the Commitments), each Borrower and Guarantor covenants and agrees that:

9.1Maintenance of Existence.

(a)Each Borrower and Guarantor shall at all times preserve, renew and keep in full force and effect its entity existence and rights and franchises with respect thereto and maintain in full force and effect all licenses, trademarks, tradenames, approvals, authorizations, leases, contracts and Permits necessary to carry on the business as presently or proposed to be conducted, except as to any Guarantor as permitted in Section 9.7 hereto.

(b)No Borrower or Guarantor shall change its name unless each of the following conditions is satisfied: (i) Agent shall have received not less than fifteen (15) days prior written notice from Administrative Borrower of such proposed change in such Borrower’s or Guarantor’s corporate name, which notice shall accurately set forth the new name; and (ii) Agent shall have received a copy of the amendment to the Certificate of Incorporation of such Borrower or Guarantor providing for the name change certified by the Secretary of State of the jurisdiction of incorporation or organization of such Borrower or Guarantor as soon as it is available.

(c)No Borrower or Guarantor shall change its chief executive office or its mailing address or organizational identification number (or if it does not have one, shall not acquire one) unless Agent shall have received not less than fifteen (15) days’ prior written notice from Administrative Borrower of such proposed change, which notice shall set forth such information with respect thereto as Agent may reasonably require and Agent shall have received such agreements as Agent may reasonably require in connection therewith.  No Borrower or Guarantor shall change its type of organization, jurisdiction of organization or other legal structure.

9.2New Collateral Locations.  Each Borrower and Guarantor may only open any new location within the continental United States provided such Borrower or Guarantor (a) gives Agent fifteen (15) days prior written notice of the intended opening of any such new location and (b) executes and delivers, or causes to be executed and delivered, to Agent such agreements, documents, and instruments as Agent may deem reasonably necessary or desirable to protect its interests in the Collateral at such location.

9.3Compliance with Laws, Regulations, Etc.

(a)Each Borrower and Guarantor shall at all times, (i) comply in all material respects with all Gun Control Laws and the Fair Labor Standards Act, and (ii) except for any such failure to comply or observe that would not reasonably be expected to have a Material Adverse Effect, comply with all other laws, rules, regulations, licenses, approvals, orders and other Permits applicable to it, and duly observe all requirements of any foreign, federal, state or local Governmental Authority.

(b)Borrowers and Guarantors shall give written notice to Agent promptly upon any Borrower’s or Guarantor’s receipt of any notice of, or any Borrower’s or Guarantor’s otherwise obtaining actual knowledge of, any investigation, proceeding, complaint, order, claims, citation or notice with respect to: (A) any non-compliance with or violation of any Environmental Law by any Borrower or Guarantor or (B) the release, spill or discharge, of any Hazardous Material other than in the ordinary course of business and other than as permitted under any applicable Environmental Law.  Each Borrower

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and Guarantor shall take prompt action to respond to any material non-compliance with any of the Environmental Laws and shall regularly report to Agent on such response.

(c)Each Borrower and Guarantor shall indemnify and hold harmless the Indemnitees, from and against any and all losses, claims, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) directly or indirectly arising out of or attributable to the use, generation, manufacture, reproduction, storage, release, threatened release, spill, discharge, disposal or presence of a Hazardous Material, including the costs of any required or necessary repair, cleanup or other remedial work with respect to any property of any Borrower or Guarantor and the preparation and implementation of any closure, remedial or other required plans except, as to each Indemnitee, to the extent any such Losses arise from the gross negligence or willful misconduct of such Indemnitee.  All indemnifications in this Section 9.3 shall survive the payment of the Obligations and the termination of this Agreement.

9.4Payment of Taxes and Claims.  Each Borrower and Guarantor shall duly pay and discharge all taxes, assessments, contributions and governmental charges upon or against it or its properties or assets, except for taxes the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, Guarantor or Subsidiary, as the case may be, and with respect to which adequate reserves have been set aside on its books to the extent required by GAAP.

9.5Insurance.  Each Borrower and Guarantor shall at all times, maintain with financially sound and reputable insurers insurance with respect to the Collateral against loss or damage and all other insurance of the kinds and in the amounts customarily insured against or carried by corporations of established reputation engaged in the same or similar businesses and similarly situated.  Said policies of insurance shall be reasonably satisfactory to Agent as to form, amount and insurer.  Borrowers and Guarantors shall furnish certificates, and certified copies of policies or endorsements to Agent as Agent shall reasonably require as proof of such insurance, and, if any Borrower or Guarantor fails to do so, Agent is authorized, but not required, to obtain such insurance at the expense of Borrowers.  All policies shall provide for at least thirty (30) days prior written notice to Agent of any cancellation or reduction of coverage and that Agent may act as attorney for each Borrower and Guarantor in obtaining, and at any time an Event of Default exists or has occurred and is continuing, adjusting, settling, amending and canceling such insurance.  Borrowers and Guarantors shall cause Agent to be named as a loss payee and an additional insured (but without any liability for any premiums) under such insurance policies and Borrowers and Guarantors shall obtain non-contributory lender’s loss payable endorsements to all insurance policies in form and substance satisfactory to Agent.  Such lender’s loss payable endorsements shall specify that the proceeds of such insurance shall be, subject to the provisions of the Intercreditor Agreement, payable to Agent as its interests may appear and further specify that Agent and Lenders shall be paid regardless of any act or omission by any Borrower, Guarantor or any of its or their Affiliates.

9.6Financial Statements and Other Information.

(a)Each Borrower and Guarantor shall keep proper books and records in which true and complete entries shall be made of all dealings or transactions of or in relation to the Collateral and the business of such Borrower or Guarantor in accordance with GAAP.  Borrowers and Guarantors shall promptly furnish to Agent and Lenders all such financial and other information as Agent shall reasonably request relating to the Collateral and the assets, business and operations of Borrowers and Guarantors , and Borrowers shall notify the auditors and accountants of Borrowers and Guarantors that Agent is authorized to obtain such information directly from them after Agent has requested such direct information from such Borrower or Guarantor and such Borrower or Guarantor has not provided the same to Agent within a reasonable period of time after such request.  Without limiting the foregoing, Borrowers

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shall furnish or cause to be furnished to Agent (and Agent shall promptly furnish or otherwise make available to each Lender), the following:

(i)within thirty (30) days after the end of each fiscal month, monthly unaudited consolidated financial statements and unaudited consolidating financial statements (including in each case balance sheets, statements of income and loss, and statements of cash flow), all in reasonable detail, fairly presenting in all material respects the financial position and the results of the operations of FGI and its Subsidiaries (and, if any Subsidiaries of FGI are not Obligors, of Borrowers and Guarantors) in each case as of the end of and through such fiscal month, certified to be correct by the chief financial officer of FGI, subject to normal year-end adjustments and accompanied by a compliance certificate substantially in the form of Exhibit B hereto, along with a schedule in form reasonably satisfactory to Agent of the calculations used in determining, as of the end of such month, whether Borrowers and Guarantors were in compliance with the covenants set forth in Sections 9.17 and 9.18 of this Agreement for such month, and

(ii)within one hundred twenty (120) days after the end of each fiscal year, audited consolidated financial statements and unaudited consolidating financial statements of FGI and its Subsidiaries, and of Borrowers and Guarantors (including in each case balance sheets, statements of income and loss, and statements of cash flow), and the accompanying notes thereto, all in reasonable detail, fairly presenting in all material respects the financial position and the results of the operations of FGI and its Subsidiaries (and, if any Subsidiaries of FGI are not Obligors, of Borrowers and Guarantors (unaudited) and without footnotes) in each case as of the end of and for such fiscal year, together with the unqualified opinion of independent certified public accountants with respect to the audited consolidated and consolidating financial statements, which accountants shall be an independent accounting firm selected by Administrative Borrower and acceptable to Agent, that such audited consolidated and consolidating financial statements have been prepared in accordance with GAAP, and present fairly in all material respects the results of operations and financial condition of FGI and its Subsidiaries, and of Borrowers and Guarantors, in each case as of the end of and for the fiscal year then ended, and

(iii)at such time as available, but in no event later than sixty (60) days after the first day of each fiscal year (commencing with the fiscal year of Borrowers ending December 31, 2009), projected consolidated financial statements (including in each case, forecasted balance sheets and statements of income and loss, and statements of cash flow) of FGI and its Subsidiaries (and, if any Subsidiaries of FGI are not Obligors, of Borrowers and Guarantors) in each case for the next fiscal year, all in reasonable detail, in a format reasonably acceptable to Agent, together with such supporting information as Agent may reasonably request.  Such projected financial statements shall be prepared on a monthly basis for the next succeeding year. Such projections shall represent the reasonable best estimate by Borrowers and Guarantors of the future financial performance of FGI and its Subsidiaries, and of Borrowers and Guarantors, in each case for the periods set forth therein and shall have been prepared on the basis of the assumptions set forth therein which Borrowers and Guarantors believe are fair and reasonable as of the date of preparation in light of current and reasonably foreseeable business conditions (it being understood that actual results may differ from those set forth in such projected financial statements).  Borrowers shall provide to Agent, at its request, periodic updates with respect to such projections at any time a Default or Event of Default exists or has occurred and is continuing.

(b)Borrowers and Guarantors shall promptly notify Agent in writing of the details of (i) any loss, damage, investigation, action, suit, proceeding or claim relating to Collateral having a value

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of more than $2,500,000 or which if adversely determined could reasonably be expected to have a Material Adverse Effect, (ii) any material default under any Material Contract or any note, indenture, credit agreement, mortgage, lease, deed, guaranty or similar agreement relating to any Indebtedness payable by a Borrower or Guarantor in an amount exceeding $2,500,000, or any Material Contract being terminated or amended or any new Material Contract entered into (in which event Borrowers and Guarantors shall provide Agent with a copy of such Material Contract), (iii) any order, judgment or decree in excess of $2,500,000 shall have been entered against any Borrower or Guarantor any of its or their properties or assets, (iv) any notification of a material violation of laws or regulations received by any Borrower or Guarantor, (v) any ERISA Event, and (vi) the occurrence of any Default or Event of Default.

(c)Promptly, and in any event within fifteen (15) days after the sending or filing thereof, as the case may be, Borrowers shall send to Agent copies of (i) any regular, periodic and special reports or registration statements which FGI or any of the other Borrowers or Guarantors files with the SEC, or any national securities exchange.

(d)Agent is hereby authorized to deliver a copy of any financial statement or any other information relating to the business of Borrowers and Guarantors to any court or other Governmental Authority or to any Lender or Participant or prospective Lender or Participant or any Affiliate of any Lender or Participant.  Any documents, schedules, invoices or other papers delivered to Agent or any Lender may be destroyed or otherwise disposed of by Agent or such Lender one (1) year after the same are delivered to Agent or such Lender, except as otherwise designated by Administrative Borrower to Agent or such Lender in writing.

9.7Sale of Assets, Consolidation, Merger, Dissolution, Etc.  Each Borrower and Guarantor shall not directly or indirectly,

(a)merge into or with or consolidate with any other Person or permit any other Person to merge into or with or consolidate with it except that

(i)any Borrower or Guarantor may merge with and into or consolidate with any other Borrower or Guarantor, provided, that each of the following conditions is satisfied as determined by Agent in good faith:  (A) Agent shall have received not less than ten (10) Business Days’ prior written notice of the intention of such Persons to so merge or consolidate, which notice shall set forth in reasonable detail satisfactory to Agent, the Persons that are merging or consolidating, which person will be the surviving entity, the locations of the assets of the persons that are merging or consolidating, and the material agreements and documents relating to such merger or consolidation, (B) Agent shall have received such other information with respect to such merger or consolidation as Agent may reasonably request, (C) as of the effective date of the merger or consolidation and after giving effect thereto, no Default or Event of Default shall exist or have occurred, (D) Agent shall have received, true, correct and complete copies of all agreements, documents and instruments relating to such merger or consolidation, including, but not limited to, the certificate or certificates of merger to be filed with each appropriate Secretary of State (with a copy as filed promptly after such filing), (E) the surviving legal entity shall expressly confirm, ratify and assume the Obligations and the Financing Agreements to which it is a party in writing, in form and substance reasonably satisfactory to Agent, and (F) Borrowers and Guarantors shall execute and deliver such other agreements, documents and instruments as Agent may request in connection therewith;

(ii)any Borrower or Guarantor may merge with any Subsidiary that is not an Obligor, provided, that such merger constitutes a Permitted Acquisition/Merger;

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(b)sell, issue, assign, lease, license, transfer, abandon or otherwise dispose of any Capital Stock or Indebtedness to any other Person or any of its assets to any other Person, except for

(i)sales of Inventory in the ordinary course of business,

(ii)other than during any Covenant Recalibration Period, the sale or other disposition of assets (other than First Priority Collateral or Capital Stock of any of its Subsidiaries to the extent such sale or disposition would result in a Change of Control) if at the time of and after giving effect to such sale or disposition, Excess Availability shall be not less than $30,000,000 (or 16.7% of the Maximum Amount);

(iii)during any Covenant Recalibration Period, the sale or other disposition of assets (other than First Priority Collateral or Capital Stock of any of its Subsidiaries to the extent such sale or disposition would result in a Change of Control) in an aggregate book value in excess of $70,000,000; provided, that, at the time of and after giving effect to such sale or disposition:

(A)Excess Availability shall be not less than $30,000,000 (or 16.7% of the Maximum Credit); and

(B)the Borrowers shall (1) have maintained Average Excess Availability for the 12-month period immediately preceding the closing date of such sale of not less than $30,000,000, (2) project Average Excess Availability on a pro forma basis for the 12-month period immediately following the closing date of such sale of not less than $30,000,000, (3) have maintained a Fixed Charge Coverage Ratio-Recalibrated for the 12-month period immediately preceding the closing date of such sale of not less than 1.10 to 1.0, and (4) project a Fixed Charge Coverage Ratio-Recalibrated on a pro forma basis for the 12-month period immediately following the closing date of such sale of not less than1.10 to 1.0;

(iv)the issuance and sale by any Borrower or Guarantor of Capital Stock of such Borrower or Guarantor after the date hereof; provided, that, (A) except as Agent may otherwise agree in writing, all of the proceeds of the sale and issuance of such Capital Stock shall be paid to Agent for application to the Obligations, whether pursuant to Section 6.4(c) or otherwise, in such order and manner as Agent may determine or at Agent’s option, to be held as cash collateral for the Obligations and (B) as of the date of such issuance and sale and after giving effect thereto, no Default or Event of Default shall exist or have occurred;

(c)wind up, liquidate or dissolve; or

(d)agree to do any of the foregoing.

9.8Encumbrances.  Each Borrower and Guarantor shall not create, incur, assume or suffer to exist any security interest, mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on any of the Collateral, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any security interest or Lien with respect to any Collateral, except the following (“Permitted Liens”):

(a)the security interests and Liens granted to Agent for itself and the benefit of the Secured Parties and the rights of setoff of Secured Parties provided for herein or under applicable law;

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(b)Liens securing the payment of taxes, assessments or other governmental charges or levies either not yet overdue or the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, or Guarantor, as the case may be, and with respect to which adequate reserves have been set aside on its books;

(c)non-consensual statutory Liens (other than Liens securing the payment of taxes) arising in the ordinary course of such Borrower’s, Guarantor’s business to the extent: (i) such Liens secure Indebtedness which is not overdue or (ii) such Liens secure Indebtedness relating to claims or liabilities which are fully insured and being defended at the sole cost and expense and at the sole risk of the insurer or being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower or Guarantor in each case prior to the commencement of foreclosure or other similar proceedings and with respect to which adequate reserves have been set aside on its books;

(d)zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of Real Property which do not interfere in any material respect with the use of such Real Property or ordinary conduct of the business of such Borrower or Guarantor as presently conducted thereon or materially impair the value of the Real Property which may be subject thereto;

(e)purchase money security interests in Equipment (including Capital Leases) to secure Indebtedness permitted under Section 9.9(b) hereof;

(f)pledges and deposits of cash by any Borrower or Guarantor after the date hereof in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security benefits consistent with the current practices of such Borrower or Guarantor as of the date hereof;

(g)pledges and deposits of cash by any Borrower or Guarantor after the date hereof to secure the performance of tenders, bids, leases, trade contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations in each case in the ordinary course of business consistent with the current practices of such Borrower or Guarantor as of the date hereof; provided, that, in connection with any performance bonds issued by a surety or other person, the issuer of such bond shall have waived in writing any rights in or to, or other interest in, any of the Collateral in an agreement or shall have entered into an intercreditor agreement with Agent, in either case, in form and substance satisfactory to Agent;

(h)Liens arising from (i) operating leases and the precautionary UCC financing statement filings in respect thereof and (ii) equipment or other materials which are not owned by any Borrower or Guarantor located on the premises of such Borrower or Guarantor (but not in connection with, or as part of, the financing thereof) from time to time in the ordinary course of business and consistent with current practices of such Borrower or Guarantor and the precautionary UCC financing statement filings in respect thereof;

(i)judgments and other similar Liens arising in connection with court proceedings that do not constitute an Event of Default, provided, that, (i) such Liens are being contested in good faith and by appropriate proceedings diligently pursued, (ii) adequate reserves or other appropriate provision, if any, as are required by GAAP have been made therefor, (iii) a stay of enforcement of any such Liens is in effect and (iv) Agent may establish a Reserve with respect thereto; and

(j)Liens securing the Senior Notes in the Notes Priority Collateral, and in the First Priority Collateral (subject to Agent’s prior Lien therein), in each case subject to the provisions of the Intercreditor Agreement; and

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(k)the security interests and Liens set forth on Schedule 8.4 to this Agreement.

9.9Indebtedness.  Each Borrower and Guarantor shall not on or after the date hereof (i) incur, create or assume any Indebtedness, or (ii) guarantee, assume, endorse, or otherwise become responsible for (directly or indirectly), the Indebtedness, performance, obligations or dividends of any other Person, except (the following, being referred to as “Permitted Indebtedness”):

(a)the Obligations;

(b)guarantees by any Borrower or Guarantor of the Obligations of the other Borrowers or Guarantors in favor of Agent for the benefit of Lenders and the other Secured Parties;

(c)the Indebtedness of any Borrower or Guarantor to any other Borrower or Guarantor arising after the date hereof pursuant to loans by any Borrower or Guarantor permitted under clause (viii) of the definition of Permitted Investments;

(d)Indebtedness of any Borrower or Guarantor entered into in the ordinary course of business pursuant to a Hedge Agreement; provided, that, (i) such arrangements are not for speculative purposes, and (ii) such Indebtedness shall be unsecured, except to the extent such Indebtedness constitutes part of the Obligations arising under or pursuant to Hedge Agreements with a Bank Product Provider that are secured under the terms hereof or are secured by assets of such Borrower or Guarantor that are not part of the Collateral;

(e)unsecured subordinated Indebtedness of any Borrower or Guarantor arising after the date hereof to any third person (but not to any other Borrower or Guarantor), that qualifies as Permitted Indebtedness under any other clause of this Section 9.9; provided, that, each of the following conditions is satisfied as reasonably determined by Agent: (i) such Indebtedness shall be on terms and conditions acceptable to Agent and shall be subject and subordinate in right of payment to the right of Agent and Lenders to receive the prior indefeasible payment and satisfaction in full payment of all of the Obligations pursuant to the terms of an intercreditor agreement between Agent and such third party, in form and substance satisfactory to Agent, (ii) Agent shall have received not less than ten (10) days prior written notice of the intention of such Borrower or Guarantor to incur such Indebtedness, which notice shall set forth in reasonable detail satisfactory to Agent the amount of such Indebtedness, the person or persons to whom such Indebtedness will be owed, the interest rate, the schedule of repayments and maturity date with respect thereto and such other information as Agent may request with respect thereto, (iii) Agent shall have received true, correct and complete copies of all agreements, documents and instruments evidencing or otherwise related to such Indebtedness, (iv) except as Agent may otherwise agree in writing, all of the proceeds of the loans or other accommodations giving rise to such Indebtedness shall be paid to Agent for application to the Obligations, to the extent and in the manner provided in Section 6.4(c), (v) as of the date of incurring such Indebtedness and after giving effect thereto, no Default or Event of Default shall exist or have occurred, (vi) such Borrower and Guarantor shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such Indebtedness or any agreement, document or instrument related thereto, except, that, such Borrower or Guarantor may, after prior written notice to Agent, amend, modify, alter or change the terms thereof so as to extend the maturity thereof, or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such Indebtedness (other than pursuant to payments thereof), or to reduce the interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or otherwise acquire such Indebtedness (except pursuant to regularly scheduled payments permitted herein), or set aside or otherwise deposit or invest any sums for such purpose, and (vii) Borrowers and Guarantors shall furnish to Agent all notices or demands in connection with such Indebtedness either received by any Borrower or

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Guarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf concurrently with the sending thereof, as the case may be;

(f)Indebtedness represented by the Senior Notes (not including any additional notes) and any guarantee of the obligations of FGI as “the Issuer” under (and as defined in) the Senior Notes Indenture and the Senior Notes by any Borrower or Guarantor in accordance with the provisions of the Senior Notes Indenture as in effect on the date hereof, as applicable (and any exchange notes and guarantees thereof);

(g)Indebtedness (including obligations under Capital Leases) incurred by any Borrower or Guarantor to finance the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding that was incurred pursuant to this clause (h), does not exceed the greater of (x) $25,000,000 and (y) 3% of Total Assets, at the time of incurrence;

(h)Indebtedness incurred by any Borrower or Guarantor constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within thirty (30) days following such drawing;

(i)Indebtedness arising from agreements of any Borrower or Guarantor providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or a Subsidiary of FGI in accordance with the terms of the Senior Notes Indenture, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

(j)obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by a Borrower or Guarantor in the ordinary course of business;

(k)any guarantee by a Borrower or Guarantor of Indebtedness or other obligations of any other Borrower or Guarantor so long as the incurrence of such Indebtedness or other obligations by such Borrower or Guarantor is permitted under the terms of this Agreement and the Senior Notes Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Obligations hereunder or to the Senior Notes or the guarantee of such Borrower or Guarantor, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s guarantee with respect to the Obligations hereunder or the Senior Notes substantially to the same extent as such Indebtedness is subordinated to the Obligations hereunder or the Senior Notes or the guarantee of such Borrower or Guarantor, as applicable;

(l)Refinancing Indebtedness;

(m)Indebtedness of Persons that are acquired by a Borrower or Guarantor or merged into a Borrower or Guarantor in accordance with the terms of this Agreement or the Senior Notes Indenture; provided, however, that such Indebtedness  is not incurred in contemplation of such acquisition

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or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided, further, however, that after giving effect to such acquisition and the incurrence of such Indebtedness either:

(1)FGI would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in clause (r) of this Section 9.9; or

(2)the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;

(n)Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five (5) Business Days of its incurrence;

(o)Contribution Indebtedness (as defined in the Senior Notes Indenture as in effect on the date hereof);

(p)Indebtedness of a Borrower or Guarantor consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

(q)other Indebtedness in an aggregate principal amount which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (s) does not exceed the greater of (x) $20,000,000 and (y) 2.5% of Total Assets at the time of such incurrence, at any one time outstanding; and

(r)Indebtedness not described in the foregoing subparagraphs of this Section 9.9 if the Fixed Charge Coverage Ratio, or the Fixed Charge Coverage Ratio-Recalibrated, as applicable, for the most recently ended four (4) full fiscal quarters for which  financial statements are available immediately preceding the date on which such additional Indebtedness is incurred would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.

Notwithstanding the foregoing, no Borrower or Guarantor may incur any Indebtedness pursuant to clause (r) if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Indebtedness that is subordinated to the Obligations or the Senior Notes unless such Indebtedness will be subordinated to the Senior Notes or such Guarantor’s guaranty of the Obligations or the Senior Notes, as applicable, to at least the same extent as such subordinated Indebtedness.

For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness or is entitled to be incurred pursuant to Section 9.9(r), the Administrative Borrower shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness in any manner that complies with this covenant and in a manner consistent with the classification of such Indebtedness under the Senior Notes Indenture and such item of Indebtedness will be treated as having been incurred pursuant to only one of the clauses of this Section 9.9.

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For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed or first incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

9.10Loans and Investments; Repayment of Indebtedness.  Each Borrower and Guarantor shall not directly or indirectly make any loans or advance money or property to any person, or invest in (by capital contribution, dividend or otherwise) or purchase or repurchase the Capital Stock or Indebtedness or all or a substantial part of the assets or property of any person, or acquire any Subsidiaries, or agree to do any of the foregoing (each of the foregoing, an “Investment”), except:

(a)Permitted Investments;

(b)Permitted Acquisitions;

(c)Borrowers may purchase, repurchase or prepay Indebtedness (other than the Existing Remington Notes) at any time that Excess Availability is more than (and would be more than, after giving effect to such purchase,  repurchase or prepayment) the greater of $30,000,000 or 16.7% of the Maximum Credit; provided, that, during any Covenant Recalibration Period, Borrowers may purchase, repurchase or prepay Indebtedness only at any time that Excess Availability is more than (and would be more than after giving effect thereto) the greater of $30,000,000 or 16.7% of the Maximum Credit, and to the extent that the aggregate amount of all such purchases, repurchases and prepayments by Borrowers and Guarantors does not exceed $100,000,000 during any 24 consecutive month period, and provided that no Event of Default exists at the time of, or after giving effect to, such purchase, repurchase or prepayment, and

(d)Borrowers may redeem the Existing Remington Notes subject to the terms and conditions of Section 9.16.

9.11Dividends and Redemptions of Capital Stock.  Each Borrower and Guarantor shall not, directly or indirectly, declare or pay any dividends on account of any Capital Stock of such Borrower or Guarantor now or hereafter outstanding, or set aside or otherwise deposit or invest any sums for such purpose, or redeem, retire, defease, purchase or otherwise acquire any Capital Stock (or set aside or otherwise deposit or invest any sums for such purpose) for any consideration or apply or set apart any sum, or make any other distribution (by reduction of capital or otherwise) in respect of any such Capital Stock or agree to do any of the foregoing, except that:

(a)any Borrower or Guarantor may declare and pay such dividends or redeem, retire, defease, purchase or otherwise acquire any shares of any class of Capital Stock for consideration in the form of shares of common stock (so long as after giving effect thereto no Change of Control or other Default or Event of Default shall exist or occur);

(b)Borrowers and Guarantors may declare, make and pay dividends, distributions, redemptions and repurchases of Capital Stock of a Borrower or Guarantor at any time that no Default or Event of Default exists or has occurred and is continuing and that Borrowers shall (i) have (and, after

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giving effect to such dividend, distribution, redemption or repurchase, would have) Excess Availability of more than  $30,000,000, or 16.7% of the Maximum Credit, whichever is greater, and (ii) have maintained a Fixed Charge Coverage Ratio of greater than 1.10 to 1.0 for the 12-month period immediately preceding the date of the applicable dividend, distribution, redemption or repurchase; provided, that, the payment of dividends on FGI’s common stock of up to 6.0% per annum of the net proceeds received by FGI from any public offering of common stock will be permitted so long as Excess Availability is not less than $30,000,000 or 16.7% of the Maximum Credit, whichever is greater, or would be at least $30,000,000 or 16.7% of the Maximum Credit, whichever is greater, after giving effect thereto, without requiring compliance with the Fixed Charge Coverage Ratio set forth in clause (ii) of this Section 9.11(b); provided that, in all cases, such dividend, distribution, redemption or repurchase is not violative of any applicable law relating to such  dividend, distribution, redemption or repurchase generally and the dividend, distribution, redemption or repurchase, either individually or when added to the aggregate amount of all other such dividends, distributions, redemptions or repurchases, is permitted under the Senior Notes Indenture by its terms or by requisite consent or waiver thereunder;

(c)any Subsidiary of a Borrower or Guarantor may pay dividends to a Borrower; and

(d)Borrowers and Guarantors may repurchase Capital Stock consisting of common stock held by employees pursuant to any employee stock ownership plan thereof upon the termination, retirement or death of any such employee in accordance with the provisions of such plan, provided, that, as to any such repurchase, each of the following conditions is satisfied: (i) as of the date of the payment for such repurchase and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, (ii) such repurchase shall be paid with funds legally available therefor, (iii) such repurchase shall not violate any law or regulation or the terms of any indenture, agreement or undertaking to which such Borrower or Guarantor is a party or by which such Borrower or Guarantor or its or their property are bound, and (iv) if Excess Availability is less than $30,000,000 or 16.7% of the Maximum Credit, whichever is greater, the aggregate amount of all payments for such repurchases in any calendar year shall not exceed $2,000,000.

9.12Transactions with Affiliates.  Each Borrower and Guarantor shall not, directly or indirectly:

(a)purchase, acquire or lease any property from, or sell, transfer or lease any property to, any officer, director or other Affiliate of such Borrower or Guarantor, except in the ordinary course of and pursuant to the reasonable requirements of such Borrower’s or Guarantor’s business (as the case may be) and upon fair and reasonable terms no less favorable to such Borrower or Guarantor than such Borrower or Guarantor would obtain in a comparable arm’s length transaction with an unaffiliated person; or

(b)make any payments (whether by dividend, loan or otherwise) of management, consulting or other fees for management or similar services, or of any Indebtedness owing to any officer, employee, shareholder, director or any other Affiliate of such Borrower or Guarantor, except (i) payments by any such Borrower or Guarantor to FGI for the payment of cash taxes by or on behalf of FGI, or to any other Obligor for the payment of cash taxes (other than federal taxes) by or on behalf such Obligor, and (ii) the following payments described in each of clauses (A), (B), (C), and (D) below, provided, that at any time that an Event of Default exists or Excess Availability is less than $30,000,000 or 16.7% of the Maximum Credit, whichever is greater (each, a “Restricted Payment Event”), then the sum of the aggregate amount of such payments made pursuant to such clauses (A), (B), (C) and (D) in any fiscal year plus the aggregate amount of Investments made pursuant to clause (x) of the definition of “Permitted Investments” shall not exceed $4,000,000 in the aggregate:

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(A)the payment of reasonable and customary fees paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Borrowers or Guarantors or any direct or indirect parent company of the Borrowers or Guarantors; or

(B)payments or loans (or cancellation of loans) to employees or consultants in the ordinary course of business which are approved by a majority of the board of directors of FGI in good faith; or

(C)the entering into of any agreement (and any amendment or modification of any such agreement) to pay, and the payment of, annual management, consulting, monitoring and advisory fees to the Sponsor in an aggregate amount in any fiscal year, not to exceed the greater of (x) $3,000,000 and (y) 3% of EBITDA, plus all out-of-pocket reasonable expenses incurred by the Sponsor in connection with the performance of management, consulting, monitoring, advisory or other services with respect to the Borrowers and Guarantors; or

(D)payments by the Borrowers or Guarantors to the Sponsor or Meritage made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are approved by a majority of the board of directors of FGI or any direct or indirect parent of FGI in good faith;

provided, further, that such payment limitations arising out of the occurrence of a Restricted Payment Event shall continue in effect only until a period of forty-five (45) consecutive days has elapsed after the Restricted Payment Event during which period (i) Excess Availability shall have been not less than $30,000,000 or 16.7% of the Maximum Credit, whichever is greater, and (ii) no Event of Default or Restricted Payment Event shall have occurred;

(c)make, declare or pay dividends, distributions, redemptions or repurchases of Capital Stock except as permitted in Section 9.11.

9.13Reserved

9.14End of Fiscal Years; Fiscal Quarters.  From and after March 31, 2010, each Borrower and Guarantor shall, for financial reporting purposes, cause its (a) fiscal years to end on December 31 of each year and (b) fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year.   Prior to March 31, 2010, no Borrower or Guarantor shall change its fiscal year or fiscal quarter from those in effect on the date of this Agreement.

9.15Change in Business.  Each Borrower and Guarantor shall not engage in any business other than the business of such Borrower or Guarantor on the date hereof and any business reasonably related, ancillary or complimentary to the business in which such Borrower or Guarantor is engaged on the date hereof.

9.16Redemption of Existing Remington Notes.  Borrowers hereby covenant and agree with Agent and Lenders as follows with respect to the redemption of the Existing Remington Notes:

(a)Upon Borrowers’ receipt of the proceeds of the issuance of the New Senior Notes on the closing date of the Credit Facility, Borrowers shall deposit on such closing date all such proceeds, together with other monies from Borrowers’ cash on hand (and not from proceeds of Loans) so that the total amount deposited shall not be in an amount less than $195,000,000 (the “Deposit Amount”) in a deposit account or investment account at Wachovia in the name of Agent for the benefit of Remington

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and subject to Agent’s exclusive dominion and control (such account, the “Existing Remington Notes Redemption Account”), and shall provide Agent with evidence in form and substance satisfactory to Agent of such deposit;

(b)Borrowers shall maintain the full amount of the Deposit Amount in such Existing Remington Notes Redemption Account, and such funds shall not be withdrawn therefrom, until August 5, 2009, at which time the Deposit Amount shall be transferred to a deposit account subject to a Deposit Account Control Agreement in favor of Agent and Borrowers shall provide Agent with evidence in form and substance satisfactory to Agent of such deposit.  If any Cash Management Event shall occur or exist on or before August 6, 2009, Agent shall be authorized (but not obligated) to exercise exclusive dominion and control over such deposit account and shall be authorized (but not obligated) to cause the payment of the Deposit Amount to the trustee under the Existing Remington Notes Indenture on or before August 7, 2009; and

(c)On August 6, 2009, Borrowers shall cause the Deposit Amount to be paid to the trustee under the Existing Remington Notes Indenture, together with other monies of Borrowers in an amount sufficient to redeem the Existing Remington Notes thereunder in accordance with the terms of the Existing Notes Indenture on August 7, 2009, and Borrowers shall provide Agent with evidence in form and substance satisfactory to Agent of the trustee’s receipt of such funds and of the trustee’s acknowledgment of the redemption of the Existing Remington Notes in accordance with the Existing Remington Notes Indenture.

9.17Fixed Charge Coverage Ratios.

(a)At any time that Excess Availability is less than $30,000,000 or 16.7% of the Maximum Credit, whichever is greater, the Fixed Charge Coverage Ratio of Borrowers and Guarantors (on a consolidated basis) determined as of the end of the fiscal quarter most recently ended for which Agent has received financial statements in accordance with Section 9.6 hereof, shall be not less than 1.10 to 1.00 for the period of the immediately preceding four (4) consecutive fiscal quarters ending on the last day of such fiscal quarter (or such lesser number of fiscal quarters as shall have elapsed since the date of closing of the Credit Facility until four (4) full fiscal quarters shall have elapsed); and

(b)           As measured during a Covenant Recalibration Period, the Fixed Charge Coverage Ratio-Recalibrated of Borrowers and Guarantors (on a consolidated basis) determined as of the end of the fiscal month most recently ended for which Agent has received financial statements in accordance with Section 9.6 hereof, shall be not less than 1.10 to 1.00 for the period of the immediately preceding 12 consecutive fiscal months ending on the last day of such fiscal month (or such lesser number of fiscal months as shall have elapsed since the end of the fiscal month most recently ended for which Agent has received financial statements in accordance with Section 9.6 hereof, until 12 fiscal months shall have elapsed).

9.18Minimum Excess Availability.  At all times during a Covenant Recalibration Period, Borrowers and Guarantors shall maintain Excess Availability of not less than $15,000,000.

9.19License Agreements.  Each Borrower and Guarantor shall (i) observe and perform all of the material terms, covenants, conditions and provisions of those License Agreements requiring royalty payments in an aggregate annual amount in excess of $2,500,000 to which it is a party to be observed and performed by it, at the times set forth therein, if any, (ii) not do, permit, suffer or refrain from doing anything that could reasonably be expected to result in a default under or breach of any of the terms of any such License Agreement, (iii) not cancel, surrender, modify, amend, waive or release any such License Agreement in any material respect or any term, provision or right of the licensee thereunder in

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any material respect, or consent to or permit to occur any of the foregoing, except, that, so long as no Default or Event of Default exists and such cancellation, surrender, modification, amendment or release would not reasonably be expected to have a Material Adverse Effect; such Borrower or Guarantor may cancel, surrender, modify, amend, waive or release any such License Agreement in the ordinary course of the business of such Borrower or Guarantor; and (iv) furnish to Agent, promptly upon the request of Agent, such information and evidence as Agent may reasonably require from time to time concerning the observance, performance and compliance by such Borrower or Guarantor or the other party or parties thereto with the material terms, covenants or provisions of any such License Agreement.

9.20Foreign Assets Control Regulations, Etc.  None of the requesting or borrowing of the Loans or the requesting or issuance, extension or renewal of any Letter of Credit or the use of the proceeds of any thereof will violate the Trading With the Enemy Act (50 USC §1 et seq., as amended) (the “Trading With the Enemy Act”) or any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign Assets Control Regulations”) or any enabling legislation or executive order relating thereto (including, but not limited to (a) Executive order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the “PATRIOT Act”).  None of Borrowers or any of their Subsidiaries or other Affiliates is or will become a “blocked person” as described in the Executive Order, the Trading with the Enemy Act or the Foreign Assets Control Regulations (a “Blocked Person”) or  engages or will engage in any dealings or transactions, or be otherwise associated, with any such “blocked person”.

9.21Costs and Expenses.  Borrowers and Guarantors shall pay to Agent (and with respect to costs and expenses incurred prior to the date hereof, Lenders) on demand all the reasonable out-of-pocket expenses and customary administrative charges incurred by Agent (and with respect to costs and expenses incurred prior to the date hereof, Lenders) including, without limitation, legal costs and expenses, filing and search charges, recording taxes and field examination charges and expenses for the examiners of Agent in the field and in the office, plus other out-of-pocket expenses (including due diligence and audit and appraisal expenses and legal fees) paid or payable in connection with the preparation, negotiation, execution, delivery, recording, syndication, administration, collection, liquidation, enforcement and defense of the Obligations, Agent’s rights in the Collateral, this Agreement, the other Financing Agreements and all other documents related hereto or thereto, including any amendments, supplements or consents which may hereafter be contemplated (whether or not executed) or entered into in respect hereof and thereof, including:  (a) all costs and expenses of filing or recording (including Uniform Commercial Code financing statement filing taxes and fees, documentary taxes, intangibles taxes and mortgage recording taxes and fees, if applicable); (b)  costs and expenses and fees for insurance premiums, appraisal fees (subject to the limitations set forth in this Agreement) and search fees, background checks, costs and expenses of remitting loan proceeds, collecting checks and other items of payment, and establishing and maintaining the Blocked Accounts, together with Agent’s customary charges and fees with respect thereto; (c) charges, fees or expenses charged by any Issuing Bank in connection with any Letter of Credit; (d) costs and expenses of preserving and protecting the Collateral; (e) costs and expenses paid or incurred in connection with obtaining payment of the Obligations, enforcing the security interests and Liens of Agent, selling or otherwise realizing upon the Collateral, and otherwise enforcing the provisions of this Agreement and the other Financing Agreements or defending any claims made or threatened against Agent or any Lender arising out of the transactions contemplated hereby and thereby (including preparations for and consultations concerning any such matters); (f) all reasonable out-of-pocket expenses and costs heretofore and from time to time hereafter incurred by Agent during the course of periodic field examinations of the Collateral and such Borrower’s or Guarantor’s operations subject to Section 7.7 hereof, plus a per diem charge at Agent’s then standard rate for Agent’s examiners in the field

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and office (which rate as of the date hereof is $1,000 per person per day); and (g) the fees and disbursements of counsel (including legal assistants) to Agent in connection with any of the foregoing, provided that, the aggregate amount of such reimbursement payable by Obligors to Agent and its counsel for their fees and expenses incurred prior to the closing date of the Credit Facility shall be limited to the sum of (i) $400,000 plus (ii) the amount of all legal fees and expenses.

9.22Further Assurances.  At the request of Agent at any time and from time to time, Borrowers and Guarantors shall, at their expense, duly execute and deliver, or cause to be duly executed and delivered, such further agreements, documents and instruments, and do or cause to be done such further acts as may be necessary or proper to evidence, perfect, maintain and enforce the security interests and the priority thereof in the Collateral and to otherwise effectuate the provisions or purposes of this Agreement or any of the other Financing Agreements.  Without limiting the generality of the foregoing, in connection with the joinder of any Person as a Borrower or a Guarantor hereunder, whether pursuant to a Permitted Acquisition, a Permitted Investment, or otherwise, such Borrower or Guarantor, together with the other Obligors, shall deliver to Agent a joinder agreement providing for the joinder of the such Person as a Borrower or Guarantor, as applicable, in each case conforming to the requirements of this Agreement, along with a security agreement, and such other Financing Agreements (including, without limitation, any intellectual property security agreements or supplements), opinion letters, certificates and other documents as may be required by Agent, each executed by a duly authorized officer of each Obligor, and pursuant to which such Person shall become a Borrower or Guarantor hereunder, and such new Borrower or Guarantor shall grant a security interest in all or substantially all of its Collateral to secure the Obligations (or Guaranteed Obligations, as applicable) of such Person hereunder as a Borrower or Guarantor.

SECTION  10.EVENTS OF DEFAULT AND REMEDIES

10.1Events of Default.  The occurrence or existence of any one or more of the following events are referred to herein individually as an “Event of Default”, and collectively as “Events of Default”:

(a)(i) any Borrower fails to pay any of the Obligations when due or (ii) any Borrower or Guarantor fails to perform any of the covenants contained in Sections 9.3, 9.4, 9.14 and 9.15 of this Agreement and such failure shall continue for twenty (20) days; provided, that, such twenty (20) day period shall not apply in the case of: (A) any failure to observe any such covenant which is not capable of being cured at all or within such twenty (20) day period or which has been the subject of a prior failure within a six (6) month period or (B) an intentional breach by any Borrower or Guarantor of any such covenant or (iii) any Borrower or Guarantor fails to perform any of the terms, covenants, conditions or provisions contained in this Agreement or any of the other Financing Agreements other than those described in Sections 10.1(a)(i) and 10.1(a)(ii) above;

(b)any representation, warranty or statement of fact made by any Borrower or Guarantor to Agent in this Agreement, the other Financing Agreements or any other written agreement, schedule, confirmatory assignment or otherwise shall when made or deemed made be false or misleading in any material respect;

(c)any Guarantor revokes or terminates or purports to revoke or terminate or fails to perform any of the terms, covenants, conditions or provisions of any guarantee, endorsement or other agreement of such party in favor of Agent or any Lender;

(d)any judgment for the payment of money is rendered against any Borrower or Guarantor in excess of $2,500,000 in the aggregate (to the extent not covered by insurance where the

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insurer has assumed responsibility in writing for such judgment) and shall remain undischarged or unvacated for a period in excess of thirty (30) days or execution shall at any time not be effectively stayed, or any judgment other than for the payment of money, or injunction, attachment, garnishment or execution is rendered against any Borrower or Guarantor or any of the Collateral having a value in excess of $2,500,000 (to the extent not covered by insurance where the insurer has assumed responsibility in writing for such judgment);

(e)(i) any Guarantor (being a natural person or a general partner of an Guarantor which is a partnership) dies, or (ii) any Borrower or Guarantor which is a partnership, limited liability company, limited liability partnership or a corporation, dissolves or there is a cessation of any substantial part of any Obligor’s business for a period of time which would reasonably be expected to have a Material Adverse Effect;

(f)any Borrower or Guarantor makes an assignment for the benefit of creditors, makes or sends notice of a bulk transfer or calls a meeting of its creditors or principal creditors in connection with a moratorium or adjustment of the Indebtedness due to them;

(g)a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether at law or in equity) is filed against any Borrower or Guarantor or all or any part of its properties and such petition or application is not dismissed within sixty (60) days after the date of its filing or any Borrower or Guarantor shall file any answer admitting or not contesting such petition or application or indicates its consent to, acquiescence in or approval of, any such action or proceeding or the relief requested is granted sooner;

(h)a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether at a law or equity) is filed by any Borrower or Guarantor or for all or any part of its property;

(i)any default in respect of any Indebtedness of any Borrower or Guarantor (other than Indebtedness owing to Agent and Lenders hereunder), or any default under any Material Contract, in either case in an amount in excess of $2,500,000 (including any required mandatory prepayment or “put” of such Indebtedness to such Borrower or Guarantor), which default continues for more than the applicable cure period, if any, with respect thereto and/or is not waived in writing by the other parties thereto, or any acceleration or demand for payment with respect to any Indebtedness or payment owing under any Material Contract in an amount less than or equal to $2,500,000 provided; that, this clause (i) shall not apply to any default of any indebtedness under clause (o);

(j)any material provision hereof or of any of the other Financing Agreements shall for any reason cease to be valid, binding and enforceable with respect to any party hereto or thereto (other than Agent) in accordance with its terms, or any such party shall challenge the enforceability hereof or thereof, or shall assert in writing, or take any action or fail to take any action based on the assertion that any provision hereof or of any of the other Financing Agreements has ceased to be or is otherwise not valid, binding or enforceable in accordance with its terms, or any security interest provided for herein or in any of the other Financing Agreements shall cease to be a valid and perfected first priority security interest in any of the First Priority Collateral (or a valid and perfected security interest in any other Collateral having the priority for such Collateral required hereunder) purported to be subject thereto (except as otherwise permitted herein or therein);

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(k)an ERISA Event shall occur which results in or could reasonably be expected to result in liability of any Borrower in an aggregate amount in excess of $3,000,000;

(l)any Change of Control;

(m)the indictment by any Governmental Authority as to which there is a reasonable possibility of an adverse determination, in the good faith determination of Agent, under any criminal statute, or commencement of criminal or civil proceedings against such Borrower or Guarantor, pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture of any of the Collateral or any other property of any Borrower or Guarantor which is necessary or material to the conduct of its business; or

(n)any loss, theft, damage or destruction of any of the Collateral not fully covered (subject to such deductibles as Agent shall have permitted) by insurance if the amount not covered by insurance exceeds $2,500,000.

(o)any Borrower or Guarantor shall be in default of any of its obligations under the Senior Notes or the Senior Notes Indenture or with respect to any Permitted Pari Passu Obligations permitted under (and as defined in) the Senior Notes Indenture and, as a consequence of which the payment or maturity of the Senior Notes or such Permitted Pari Passu Obligations could be accelerated or demand for payment thereof made or other rights or remedies exercised by or on behalf of the holders of the Senior Notes or such Permitted Pari Passu Obligations.

10.2Remedies.

(a)At any time an Event of Default exists or has occurred and is continuing, Agent and Lenders shall have all rights and remedies provided in this Agreement, the other Financing Agreements, the UCC and other applicable law, all of which rights and remedies may be exercised without notice to or consent by any Borrower or Guarantor, except as such notice or consent is expressly provided for hereunder or required by applicable law.  All rights, remedies and powers granted to Agent and Lenders hereunder, under any of the other Financing Agreements, the UCC or other applicable law, are cumulative, not exclusive and enforceable, in Agent’s discretion, alternatively, successively, or concurrently on any one or more occasions, and shall include, without limitation, the right to apply to a court of equity for an injunction to restrain a breach or threatened breach by any Borrower or Guarantor of this Agreement or any of the other Financing Agreements.  Subject to Section 12 hereof, Agent may, and at the direction of the Required Lenders shall, at any time or times, proceed directly against any Borrower or Guarantor to collect the Obligations without prior recourse to the Collateral.

(b)Without limiting the generality of the foregoing, at any time an Event of Default exists or has occurred and is continuing, Agent may, at its option and shall upon the direction of the Required Lenders, (i) upon notice to Administrative Borrower, accelerate the payment of all Obligations and demand immediate payment thereof to Agent for itself and the benefit of Lenders (provided, that, upon the occurrence of any Event of Default described in Sections 10.1(g) and 10.1(h), all Obligations shall automatically become immediately due and payable), and (ii) terminate the Commitments whereupon the obligation of each Lender to make any Loan and Issuing Bank to issue any Letter of Credit shall immediately terminate (provided, that, upon the occurrence of any Event of Default described in Sections 10.1(g) and 10.1(h), the Commitments and any other obligation of the Agent or a Lender hereunder shall automatically terminate).

(c)Without limiting the foregoing, at any time an Event of Default exists or has occurred and is continuing, Agent may, in its discretion (i) with or without judicial process or the aid or

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assistance of others, enter upon any premises on or in which any of the Collateral may be located and take possession of the Collateral or complete processing, manufacturing and repair of all or any portion of the Collateral, (ii) require any Borrower or Guarantor, at Borrowers’ expense, to assemble and make available to Agent any part or all of the Collateral at any place and time designated by Agent, (iii) collect, foreclose, receive, appropriate, setoff and realize upon any and all Collateral, (iv) enter upon, and store or remove any or all of the Collateral from any premises on or in which the same may be located for the purpose of effecting the sale, foreclosure or other disposition thereof or for any other purpose, (v) sell, lease, transfer, assign, deliver or otherwise dispose of any and all Collateral in its then condition, or after any further manufacturing or processing thereof (including entering into contracts with respect thereto, public or private sales at any exchange, broker’s board, at any office of Agent or elsewhere) at such prices or terms as Agent may deem reasonable, for cash, upon credit or for future delivery, with Agent having the right to purchase the whole or any part of the Collateral at any such public sale, all of the foregoing being free from any right or equity of redemption of any Borrower or Guarantor, which right or equity of redemption is hereby expressly waived and released by Borrowers and Guarantors and/or (vi) terminate this Agreement.  If any of the Collateral is sold or leased by Agent upon credit terms or for future delivery, the Obligations shall not be reduced as a result thereof until payment therefor is finally collected by Agent.  If notice of disposition of Collateral is required by law, ten (10) days prior notice by Agent to Administrative Borrower designating the time and place of any public sale or the time after which any private sale or other intended disposition of Collateral is to be made, shall be deemed to be reasonable notice thereof and Borrowers and Guarantors waive any other notice.  Agent shall have the right to (but shall be under no obligation to any Secured Party or any Borrower or Guarantor to) conduct such sales on any Borrower’s or Guarantor’s premises, without charge, and such sales may be adjourned from time to time in accordance with applicable law.  Agent shall have the right to (but shall be under no obligation to any Secured Party or any Borrower or Guarantor to) sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Agent may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase price, may set off the amount of such price against the Obligations.  In the event Agent institutes an action to recover any Collateral or seeks recovery of any Collateral by way of prejudgment remedy, each Borrower and Guarantor waives the posting of any bond which might otherwise be required. At any time an Event of Default exists or has occurred and is continuing, upon Agent’s request, Borrowers will either, as Agent shall specify, furnish cash collateral to Issuing Bank to be used to secure and fund the reimbursement obligations to Issuing Bank in connection with any Letter of Credit Obligations or furnish cash collateral to Agent for the Letter of Credit Obligations.  Such cash collateral shall be in the amount equal to one hundred five (105%) percent of the amount of the Letter of Credit Obligations.

(d)At any time or times that an Event of Default exists or has occurred and is continuing, Agent may, in its discretion, enforce the rights of any Borrower or Guarantor against any account debtor, secondary obligor or other obligor in respect of any of the Accounts or other Receivables.  Without limiting the generality of the foregoing, Agent may, in its discretion, at such time or times (i) notify any or all account debtors, secondary obligors or other obligors in respect thereof that the Receivables have been assigned to Agent and that Agent has a security interest therein and Agent may direct any or all account debtors, secondary obligors and other obligors to make payment of Receivables directly to Agent, (ii) extend the time of payment of, compromise, settle or adjust for cash, credit, return of merchandise or otherwise, and upon any terms or conditions, any and all Receivables or other obligations included in the Collateral and thereby discharge or release the account debtor or any secondary obligors or other obligors in respect thereof without affecting any of the Obligations, (iii) demand, collect or enforce payment of any Receivables or such other obligations, but without any duty to do so, and Agent and Lenders shall not be liable for any failure to collect or enforce the payment thereof nor for the negligence of its agents or attorneys with respect thereto and (iv) take whatever other action Agent may deem necessary or desirable for the protection of its interests and the interests of Lenders.  At any time that an Event of Default exists or has occurred and is continuing, at Agent’s request,

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all invoices and statements sent to any account debtor shall state that the Accounts and such other obligations have been assigned to Agent and are payable directly and only to Agent and Borrowers and Guarantors shall deliver to Agent such originals of documents evidencing the sale and delivery of goods or the performance of services giving rise to any Accounts as Agent may require.  In the event any account debtor returns Inventory when an Event of Default exists or has occurred and is continuing, Borrowers shall, upon Agent’s request, hold the returned Inventory in trust for Agent, segregate all returned Inventory from all of its other property, dispose of the returned Inventory solely according to Agent’s instructions, and not issue any credits, discounts or allowances with respect thereto without Agent’s prior written consent.

(e)To the extent that applicable law imposes duties on Agent or any Lender to exercise remedies in a commercially reasonable manner (which duties cannot be waived under such law), each Borrower and Guarantor acknowledges and agrees that it is not commercially unreasonable for Agent or any Lender (i) to fail to incur expenses reasonably deemed significant by Agent or any Lender to prepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain consents of any Governmental Authority or other third party for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against account debtors, secondary obligors or other persons obligated on Collateral or to remove Liens or encumbrances on or any adverse claims against Collateral, (iv) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other persons, whether or not in the same business as any Borrower or Guarantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, (xi) to purchase insurance or credit enhancements to insure Agent or Lenders against risks of loss, collection or disposition of Collateral or to provide to Agent or Lenders a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist Agent in the collection or disposition of any of the Collateral. Each Borrower and Guarantor acknowledges that the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by Agent or any Lender would not be commercially unreasonable in the exercise by Agent or any Lender of remedies against the Collateral and that other actions or omissions by Agent or any Lender shall not be deemed commercially unreasonable solely on account of not being indicated in this Section. Without limitation of the foregoing, nothing contained in this Section shall be construed to grant any rights to any Borrower or Guarantor or to impose any duties on Agent or Lenders that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section.

(f)For the purpose of enabling Agent to exercise the rights and remedies hereunder, each Borrower and Guarantor hereby grants to Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable at any time an Event of Default shall exist or have occurred and for so long as the same is continuing) without payment of royalty or other compensation to any Borrower or Guarantor, to use, assign, license or sublicense any of the trademarks, service-marks, trade names, business names, trade styles, designs, logos and other source of business identifiers and other Intellectual Property and general intangibles now owned or hereafter acquired by any Borrower or Guarantor, wherever the same maybe located, together with computer hardware and software, trade secrets,

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brochures, customer lists, promotional and advertising materials, labels, packaging materials and other property, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof.

(g)At any time an Event of Default exists or has occurred and is continuing, Agent may apply the cash proceeds of Collateral actually received by Agent from any sale, lease, foreclosure or other disposition of the Collateral to payment of the Obligations, in whole or in part and in accordance with the terms hereof, whether or not then due or may hold such proceeds as cash collateral for the Obligations.  Borrowers and Guarantors shall remain liable to Agent and Lenders for the payment of any deficiency with interest at the highest rate provided for herein and all costs and expenses of collection or enforcement, including attorneys’ fees and expenses.

(h)Without limiting the foregoing, upon the occurrence of a Default or an Event of Default, (i) Agent and Lenders may, at Agent’s option, and upon the occurrence of an Event of Default at the direction of the Required Lenders, Agent and Lenders shall, without notice, (A) cease making Loans or arranging for Letters of Credit or reduce the lending formulas or amounts of Loans and Letters of Credit available to Borrowers and/or (B) terminate any provision of this Agreement providing for any future Loans to be made by Agent and Lenders or Letters of Credit to be issued by Issuing Bank and (ii) Agent may, at its option, establish such Reserves as Agent determines, without limitation or restriction, notwithstanding anything to the contrary contained herein.

SECTION  11.JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

11.1Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

(a)The validity, interpretation and enforcement of this Agreement and the other Financing Agreements (except as otherwise provided therein) and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

(b)Borrowers, Guarantors, Agent, Lenders and Issuing Bank irrevocably consent and submit to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court for the Southern District of New York, whichever Agent may elect, and waive any objection based on venue or forum non conveniens with respect to any action instituted therein arising under this Agreement or any of the other Financing Agreements or in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement or any of the other Financing Agreements or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity or otherwise, and agree that any dispute with respect to any such matters shall be heard only in the courts described above (except that Agent and Lenders shall have the right to bring any action or proceeding against any Borrower or Guarantor or its or their property in the courts of any other jurisdiction which Agent deems necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights against any Borrower or Guarantor or its or their property).

(c)Each Borrower and Guarantor hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt

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requested) directed to its address set forth herein and service so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the U.S. mails, or, at Agent’s option, by service upon any Borrower or Guarantor (or Administrative Borrower on behalf of such Borrower or Guarantor) in any other manner provided under the rules of any such courts.

(d)BORROWERS, GUARANTORS, AGENT, LENDERS AND ISSUING BANK EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.  BORROWERS, GUARANTORS, AGENT, LENDERS AND ISSUING BANK EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY BORROWER, ANY GUARANTOR, AGENT, ANY LENDER OR ISSUING BANK MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(e)Agent and Secured Parties shall not have any liability to any Borrower or Guarantor (whether in tort, contract, equity or otherwise) for losses suffered by such Borrower or Guarantor in connection with, arising out of, or in any way related to the transactions or relationships contemplated by this Agreement, or any act, omission or event occurring in connection herewith, unless it is determined by a final and non-appealable judgment or court order of competent jurisdiction binding on Agent, or such Secured Party or Secured Parties, that the losses were the result of acts or omissions constituting gross negligence or willful misconduct.  Each Borrower and Guarantor:  (i) certifies that neither Agent, any Lender, any Issuing Bank nor any representative, agent or attorney acting for or on behalf of Agent, any Lender or Issuing Bank has represented, expressly or otherwise, that Agent, Lenders and each Issuing Bank would not, in the event of litigation, seek to enforce any of the waivers provided for in this Agreement or any of the other Financing Agreements and (ii) acknowledges that in entering into this Agreement and the other Financing Agreements, Agent, Lenders and each Issuing Bank are relying upon, among other things, the waivers and certifications set forth in this Section 11.1 and elsewhere herein and therein.

11.2Waiver of Notices.  Each Borrower and Guarantor hereby expressly waives demand, presentment, protest and notice of protest and notice of dishonor with respect to any and all instruments and chattel paper, included in or evidencing any of the Obligations or the Collateral, and any and all other demands and notices of any kind or nature whatsoever with respect to the Obligations, the Collateral and this Agreement, except such as are expressly provided for herein.  No notice to or demand on any Borrower or Guarantor which Agent or any Lender may elect to give shall entitle such Borrower or Guarantor to any other or further notice or demand in the same, similar or other circumstances.

11.3Amendments and Waivers.

(a)Neither this Agreement nor any other Financing Agreement nor any terms hereof or thereof may be amended, waived, discharged or terminated unless such amendment, waiver, discharge or termination is in writing signed by (x) the Required Lenders and Agent (acting at the direction of the Required Lenders), (y) at Agent’s option, by Agent with the authorization or consent of the Required Lenders, or (z) pursuant to Section 2.3 in order to give effect to an increase in the Commitments, by

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Agent and each Lender making a new Commitment or increasing its existing Commitment and as to amendments to any of the Financing Agreements (other than with respect to any provision of Section 12 hereof), by Administrative Borrower and such amendment, waiver, discharge or termination shall be effective and binding as to all Lenders and Issuing Bank only in the specific instance and for the specific purpose for which given; except, that, no such amendment, waiver, discharge or termination shall:

(i)reduce the interest rate or any fees or extend the time of payment of principal, interest or any fees or reduce the principal amount of any Loan or Letters of Credit, in each case without the consent of each Lender directly affected thereby,

(ii)increase the Commitment of any Lender over the amount thereof then in effect or provided hereunder, in each case without the consent of the Lender directly affected thereby,

(iii)amend, modify or waive any terms of Section 13.9 hereof, in each case without the consent of each Lender directly affected thereby,

(iv)release any First Priority Collateral (except as expressly required hereunder or under any of the other Financing Agreements or applicable law and except as permitted under Section 12.11(b) hereof), without the consent of all Lenders,

(v)amend the definitions of “Pro Rata Share,” “Required Lenders,” “Reserve” or “Borrowing Base” (and the other defined terms used in such definitions), if the effect would be to increase the amount available for borrowing by Borrowers hereunder or the amount of Excess Availability, or any provision of this Agreement obligating Agent to take certain actions at the direction of the Required Lenders, or any provision of any of the Financing Agreements regarding the pro rata treatment or obligations of Lenders, without the consent of all Lenders,

(vi)consent to the assignment or transfer by any Borrower or Guarantor of any of their rights and obligations under this Agreement, or release any Borrower or Guarantor from liability for any of the Obligations, without the consent of all Lenders,

(vii)amend, modify or waive any terms of this Section 11.3, without the consent of all Lenders,

(viii)amend, modify or waive any terms of Sections 3.3, 6.4, 11.5 or 12 hereof, in each case without the consent of all Lenders,

(ix)increase the advance rates constituting part of the Borrowing Base or increase the Inventory Loan Limit, the Letter of Credit Limit, the Letter of Credit Government Sublimit or the Letter of Credit Non-Government Sublimit without the consent of all Lenders,

(x)amend, modify or waive any terms of Section 2.1(d) hereof without the consent of all Lenders, or

(xi)subordinate the priority of any Liens granted to Agent under any of the Financing Agreements with respect to any material part of the Collateral to Liens granted to any other Person, except as currently provided in or contemplated by the Financing Agreements and except for Liens granted by a Borrower or Guarantor to financial institutions with respect to amounts on deposit with such financial institutions to cover returned items, processing and

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analysis charges and other charges in the ordinary course of business that relate to deposit accounts with such financial institutions, in each case without the consent of all Lenders.

(b)Agent, Lenders and Issuing Bank shall not, by any act, delay, omission or otherwise be deemed to have expressly or impliedly waived any of its or their rights, powers and/or remedies unless such waiver shall be in writing and signed as provided herein.  Any such waiver shall be enforceable only to the extent specifically set forth therein.  A waiver by Agent, any Lender or Issuing Bank of any right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power and/or remedy which Agent, any Lender or Issuing Bank would otherwise have on any future occasion, whether similar in kind or otherwise.

(c)Notwithstanding anything to the contrary contained in Section 11.3(a) above, in connection with any amendment, waiver, discharge or termination for which the consent of all Lenders was required, in the event that any Lender shall fail to consent or fail to consent in a timely manner (each such Lender being referred to herein as a “Non-Consenting Lender”), but the consent of the Required Lenders to such amendment, waiver, discharge or termination is obtained, then Agent or Administrative Borrower shall have the right, but not the obligation, at any time thereafter, and upon the exercise by Agent or Administrative Borrower of such right to require each such Non-Consenting Lender, and each such Non-Consenting Lender shall have the obligation, to sell, assign and transfer to Agent or such Eligible Transferee as Agent or Administrative Borrower may specify, all of such Non-Consenting Lender’s Commitments and all rights and interests of such Non-Consenting Lender pursuant thereto.  Agent or Administrative Borrower shall provide each such Non-Consenting Lender with prior written notice of its intent to exercise its right under this Section, which notice shall specify on the date on which such purchase and sale shall occur, which date shall be within thirty (30) days after such notice.  Each such purchase and sale shall be pursuant to the terms of an Assignment and Acceptance (whether or not executed by the Non-Consenting Lender), except that on the date of such purchase and sale, Agent, or such Eligible Transferee specified by Agent or Administrative Borrower, shall pay to the Non-Consenting Lender (except as Agent or Administrative Borrower and such Non-Consenting Lender(s) may otherwise agree) the amount equal to: (i) the principal balance of the Loans held by the Non-Consenting Lender outstanding as of the close of business on the business day immediately preceding the effective date of such purchase and sale, plus (ii) amounts accrued and unpaid in respect of interest and fees payable to the Non-Consenting Lender to the effective date of the purchase (including amounts payable under Section 3.3(c) as if the Eurodollar Rate Loans of such Non-Consenting Lender were being prepaid on the purchase date but in no event shall the Non-Consenting Lender be deemed entitled to any early termination fee).  Such purchase and sale shall be effective on the date of the payment of such amount to the Non-Consenting Lender and the Commitment of the Non-Consenting Lender shall terminate on such date.

(d)The consent of Agent shall be required for any amendment, waiver or consent affecting the rights or duties of Agent hereunder or under any of the other Financing Agreements, in addition to the consent of the Lenders otherwise required by this Section and the exercise by Agent of any of its rights hereunder with respect to Reserves or Eligible Accounts or Eligible Inventory shall not be deemed an amendment to the advance rates provided for in this Section 11.3.  The consent of Issuing Bank shall be required for any amendment, waiver or consent affecting the rights or duties of Issuing Bank hereunder or under any of the other Financing Agreements, in addition to the consent of the Lenders otherwise required by this Section, provided, that, the consent of Issuing Bank shall not be required for any other amendments, waivers or consents.  The consent of Swing Line Lender shall be required for any amendment, waiver or consent affecting the rights or duties of Swing Line Lender hereunder or under any of the other Financing Agreements, in addition to the consent of the Lenders otherwise required by this Section.  Notwithstanding anything to the contrary contained in Section 11.3(a) above, (i) in the event that Agent shall agree that any items otherwise required to be delivered to Agent as a condition of the initial

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Loans and Letters of Credit hereunder may be delivered after the date hereof, Agent may, in its discretion, agree to extend the date for delivery of such items or take such other action as Agent may deem appropriate as a result of the failure to receive such items as Agent may determine or may waive any Event of Default as a result of the failure to receive such items, in each case without the consent of any Lender and (ii) Agent may consent to any change in the type of organization, jurisdiction of organization or other legal structure of any Borrower or Guarantor and amend the terms hereof or of any of the other Financing Agreements as may be necessary or desirable to reflect any such change, in each case without the approval of any Lender.

(e)The consent of Agent and a Bank Product Provider that is providing Bank Products and has outstanding any such Bank Products at such time that are secured hereunder shall be required for any amendment to the priority of payment of Obligations arising under or pursuant to any Bank Products of a Borrower or Guarantor as set forth in Section 6.4(a) hereof.

(f)Notwithstanding anything to the contrary herein, (i) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, and (ii) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

11.4Waiver of Counterclaims.  Each Borrower and Guarantor waives all rights to interpose any claims, deductions, setoffs or counterclaims of any nature (other then compulsory counterclaims) in any action or proceeding with respect to this Agreement, the Obligations, the Collateral or any matter arising therefrom or relating hereto or thereto.

11.5Indemnification.  Each Borrower and Guarantor shall, jointly and severally, indemnify and hold Agent, each Lender and Issuing Bank, and their respective officers, directors, agents, employees, advisors and counsel and their respective Affiliates (each such person being an “Indemnitee”), harmless from and against any and all losses, claims, damages, liabilities, costs or expenses (including attorneys’ fees and expenses) imposed on, incurred by or asserted against any of them in connection with any litigation, investigation, claim or proceeding commenced or threatened related to the negotiation, preparation, execution, delivery, enforcement, performance or administration of this Agreement, any other Financing Agreements, or any undertaking or proceeding related to any of the transactions contemplated hereby or any act, omission, event or transaction related or attendant thereto, including amounts paid in settlement, court costs, and the fees and expenses of counsel except that Borrowers and Guarantors shall not have any obligation under this Section 11.5 to indemnify an Indemnitee with respect to a matter covered hereby resulting from the gross negligence or willful misconduct of such Indemnitee as determined pursuant to a final, non-appealable order of a court of competent jurisdiction (but without limiting the obligations of Borrowers or Guarantors as to any other Indemnitee).   To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section may be unenforceable because it violates any law or public policy, Borrowers and Guarantors shall pay the maximum portion which it is permitted to pay under applicable law to Agent and Lenders in satisfaction of indemnified matters under this Section.  To the extent permitted by applicable law, no Borrower or Guarantor shall assert, and each Borrower and Guarantor hereby waives, any claim against any Indemnitee, on any theory of liability for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any of the other Financing Agreements or any undertaking or transaction contemplated hereby.  No Indemnitee referred to above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or any of the other Financing Agreements or the transaction contemplated hereby or

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thereby.  All amounts due under this Section shall be payable upon demand. The foregoing indemnity shall survive the payment of the Obligations and the termination or non-renewal of this Agreement.

SECTION  12.THE AGENT

12.1Appointment, Powers and Immunities.  Each Secured Party and Issuing Bank irrevocably designates, appoints and authorizes Wachovia to act as Agent hereunder and under the other Financing Agreements with such powers as are specifically delegated to Agent by the terms of this Agreement and of the other Financing Agreements, together with such other powers as are reasonably incidental thereto.  Agent (a) shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Financing Agreements, and shall not by reason of this Agreement or any other Financing Agreement be a trustee or fiduciary for any Secured Party; (b) shall not be responsible to Secured Parties for any recitals, statements, representations or warranties contained in this Agreement or in any of the other Financing Agreements, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Financing Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Financing Agreement or any other document referred to or provided for herein or therein or for any failure by any Borrower or any Guarantor or any other Person to perform any of its obligations hereunder or thereunder; and (c) shall not be responsible to Secured Parties for any action taken or omitted to be taken by it hereunder or under any other Financing Agreement or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction.  Agent may employ agents and attorneys in fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys in fact selected by it in good faith.  Agent may deem and treat the payee of any note as the holder thereof for all purposes hereof unless and until the assignment thereof pursuant to an agreement (if and to the extent permitted herein) in form and substance satisfactory to Agent shall have been delivered to and acknowledged by Agent.

12.2Reliance by Agent.  Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telecopy, telex, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by Agent.  As to any matters not expressly provided for by this Agreement or any other Financing Agreement, Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions given by the Required Lenders or all of Lenders as is required in such circumstance, and such instructions of such Agents and any action taken or failure to act pursuant thereto shall be binding on all Lenders.

12.3Events of Default.

(a)Agent shall not be deemed to have knowledge or notice of the occurrence of a Default or an Event of Default or other failure of a condition precedent to the Loans and Letters of Credit hereunder, unless and until Agent has received written notice from a Lender, or Borrower specifying such Event of Default or any unfulfilled condition precedent, and stating that such notice is a “Notice of Default or Failure of Condition”.  In the event that Agent receives such a Notice of Default or Failure of Condition, Agent shall give prompt notice thereof to the Lenders.  Agent shall (subject to Section 12.7) take such action with respect to any such Event of Default or failure of condition precedent as shall be directed by the Required Lenders to the extent provided for herein; provided, that, unless and until Agent shall have received such directions, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to or by reason of such Event of Default or failure of condition precedent, as it shall deem advisable in the best interest of Lenders.  Without limiting the foregoing, and

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notwithstanding the existence or occurrence and continuance of an Event of Default or any other failure to satisfy any of the conditions precedent set forth in Section 4 of this Agreement to the contrary, unless and until otherwise directed by the Required Lenders, Agent may, but shall have no obligation to, continue to make Loans and Issuing Bank may, but shall have no obligation to, issue or cause to be issued any Letter of Credit for the ratable account and risk of Lenders from time to time if Agent believes making such Loans or issuing or causing to be issued such Letter of Credit is in the best interests of Lenders.

(b)Except with the prior written consent of Agent, no Lender or Issuing Bank may assert or exercise any enforcement right or remedy in respect of the Loans, Letter of Credit Obligations or other Obligations, as against any Borrower or Guarantor or any of the Collateral or other property of any Borrower or Guarantor.

12.4Wachovia in its Individual Capacity.  With respect to its Commitment and the Loans made and Letters of Credit issued or caused to be issued by it (and any successor acting as Agent), so long as Wachovia shall be a Lender hereunder, it shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include Wachovia in its individual capacity as Lender hereunder.  Wachovia (and any successor acting as Agent) and its Affiliates may (without having to account therefor to any Lender) lend money to, make investments in and generally engage in any kind of business with Borrowers (and any of its Subsidiaries or Affiliates) as if it were not acting as Agent, and Wachovia and its Affiliates may accept fees and other consideration from any Borrower or Guarantor and any of its Subsidiaries and Affiliates for services in connection with this Agreement or otherwise without having to account for the same to Lenders.

12.5Indemnification.  Lenders agree to indemnify Agent, Arrangers, Syndication Agent, Documentation Agent and each Issuing Bank and to their respective present and future officers, directors and agents (collectively, the “Lender Group Indemnitees”) (to the extent not reimbursed by Borrowers hereunder and without limiting any obligations of Borrowers hereunder) ratably, in accordance with their Pro Rata Shares, for any and all claims of any kind and nature whatsoever that may be imposed on, incurred by or asserted against Agent (including by any Lender) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any other Financing Agreement or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including the costs and expenses that Agent is obligated to pay hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, provided, that, no Lender shall be liable for any of the foregoing to the extent it arises from the gross negligence or willful misconduct of the party to be indemnified as determined by a final non-appealable judgment of a court of competent jurisdiction.  The foregoing indemnity shall survive the payment of the Obligations and the termination or non-renewal of this Agreement.

12.6Non-Reliance on Agent and Other Lenders.  Each Lender agrees that it has, independently and without reliance on Agent or other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of Borrowers and Guarantors and has made its own decision to enter into this Agreement and that it will, independently and without reliance upon Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or any of the other Financing Agreements.  Agent shall not be required to keep itself informed as to the performance or observance by any Borrower or Guarantor of any term or provision of this Agreement or any of the other Financing Agreements or any other document referred to or provided for herein or therein or to inspect the properties or books of any Borrower or Guarantor.  Agent will use reasonable efforts to provide Lenders with any information received by Agent from any Borrower or Guarantor which is required to be provided to Lenders or deemed to be requested by Lenders

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hereunder and with a copy of any Notice of Default or Failure of Condition received by Agent from any Borrower or any Lender; provided, that, Agent shall not be liable to any Lender for any failure to do so, except to the extent that such failure is attributable to Agent’s own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction.  Except for notices, reports and other documents expressly required to be furnished to Lenders by Agent or deemed requested by Lenders hereunder, Agent shall not have any duty or responsibility to provide any Lender with any other credit or other information concerning the affairs, financial condition or business of any Borrower or Guarantor that may come into the possession of Agent.

12.7Failure to Act.  Except for action expressly required of Agent hereunder and under the other Financing Agreements, Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from Lenders of their indemnification obligations under Section 12.5 hereof against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.

12.8Additional Loans.  Agent and Swing Line Lender (or Agent on behalf of Swing Line Lender) shall not make any Loans or Issuing Bank provide any Letter of Credit on behalf of Lenders intentionally and with actual knowledge that such Loans or Letter of Credit would cause the aggregate amount of the total outstanding Loans and Letters of Credit to exceed the Borrowing Base, without the prior consent of all Lenders, except, that, Agent may make such additional Revolving Loans or Issuing Bank may provide such additional Letter of Credit on behalf of Lenders, intentionally and with actual knowledge that such Loans or Letter of Credit will cause the total outstanding Loans and Letters of Credit to exceed the Borrowing Base, as Agent may deem necessary or advisable in its discretion, provided, that: (a) the total principal amount of the additional Loans or additional Letters of Credit which Agent may make or provide after obtaining such actual knowledge that the aggregate principal amount of the Loans equal or exceed the Borrowing Bases, plus the amount of Special Agent Advances made pursuant to Section 12.11(a)(ii) hereof then outstanding, shall not exceed the aggregate amount equal to five percent (5%) of the Maximum Credit and shall not cause the total principal amount of the Loans and Letters of Credit to exceed the Maximum Credit and (b) no such additional Loan or Letter of Credit shall be outstanding more than sixty (60) days after the date such additional Loan or Letter of Credit is made or issued (as the case may be), except as the Required Lenders may otherwise agree.  Each Lender shall be obligated to pay Agent the amount of its Pro Rata Share of any such additional Loans or Letters of Credit.

12.9Concerning the Collateral and the Related Financing Agreements.  Each Secured Party authorizes and directs Agent to enter into this Agreement and the other Financing Agreements.  Each Secured Party agrees that any action taken by Agent or Required Lenders (or such greater percentage as may be required hereunder) in accordance with the terms of this Agreement or the other Financing Agreements and the exercise by Agent or Required Lenders (or such greater percentage as may be required hereunder) of their respective powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all Secured Parties.  Without limiting the generality of the foregoing, Agent shall have the sole and exclusive right and authority to (a) act as the disbursing and collecting agent for Secured Parties with respect to all payments and collections arising in connection with this Agreement and the other Financing Agreements; (b) execute and deliver as Agent each Financing Agreement (including the Intercreditor Agreement, each Deposit Account Control Agreement, and each Collateral Access Agreement) and accept delivery of each such agreement by any Obligor or any other Person; and (c) bind each Secured Party to the terms of the Intercreditor Agreement as if such Secured Party was a direct signatory thereto (including the terms of the Intercreditor Agreement relating to the priority, enforcement and release of Agent’s Liens described therein).

12.10Field Audit, Examination Reports and other Information; Disclaimer by Lenders.  By signing this Agreement, each Lender:

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(a)is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report and report with respect to the Borrowing Base prepared or received by Agent (each field audit or examination report and report with respect to the Borrowing Base being referred to herein as a “Report” and collectively, “Reports”), appraisals with respect to the Collateral and financial statements with respect to Borrowers and their Subsidiaries received by Agent;

(b)expressly agrees and acknowledges that Agent (i) does not make any representation or warranty as to the accuracy of any Report, appraisal or financial statement or (ii) shall not be liable for any information contained in any Report, appraisal or financial statement;

(c)expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or any other party performing any audit or examination will inspect only specific information regarding Borrowers and Guarantors and will rely significantly upon Borrowers’ and Guarantors’ books and records, as well as on representations of Borrowers’ and Guarantors’ personnel; and

(d)agrees to keep all Reports confidential and strictly for its internal use in accordance with the terms of Section 13.5 hereof, and not to distribute or use any Report in any other manner.

12.11Collateral Matters.

(a)Agent may, at its option, from time to time, at any time on or after an Event of Default and for so long as the same is continuing or upon any other failure of a condition precedent to the Loans and Letters of Credit hereunder, make such disbursements and advances (“Special Agent Advances”) which Agent, in its sole discretion, (i) deems necessary or desirable either to preserve or protect the Collateral or any portion thereof or (ii) to enhance the likelihood or maximize the amount of repayment by Borrowers and Guarantors of the Loans and other Obligations, provided, that, (A) the aggregate principal amount of the Special Agent Advances pursuant to this clause (ii) outstanding at any time, plus the then outstanding principal amount of the additional Loans and Letters of Credit which Agent may make or provide as set forth in Section 12.8 hereof, shall not exceed the amount equal to five percent (5%) of the Maximum Credit and (B) the aggregate principal amount of the Special Agent Advances pursuant to this clause (ii) outstanding at any time, plus the then outstanding principal amount of the Loans and Letters of Credit, shall not exceed the Maximum Credit, except at Agent’s option, provided, that, to the extent that the aggregate principal amount of Special Agent Advances plus the then outstanding principal amount of the Loans and Letters of Credit exceed the Maximum Credit the Special Agent Advances that are in excess of the Maximum Credit shall be for the sole account and risk of Agent and notwithstanding anything to the contrary set forth below, no Lender shall have any obligation to provide its share of such Special Agent Advances in excess of the Maximum Credit, or (iii) to pay any other amount chargeable to any Borrower or Guarantor pursuant to the terms of this Agreement or any of the other Financing Agreements consisting of (A) costs, fees and expenses and (B) payments to Issuing Bank in respect of any Letter of Credit Obligations.  The Special Agent Advances shall be repayable on demand and together with all interest thereon shall constitute Obligations secured by the Collateral.  Special Agent Advances shall not constitute Loans but shall otherwise constitute Obligations hereunder.  Interest on Special Agent Advances shall be payable at the Interest Rate then applicable to Base Rate Loans and shall be payable on demand.  Without limitation of its obligations pursuant to Section 6.11, each Lender agrees that it shall make available to Agent, upon Agent’s demand, in immediately available funds, the amount equal to such Lender’s Pro Rata Share of each such Special Agent Advance.  If such funds are not made available to Agent by such Lender, such Lender shall be deemed a Defaulting Lender and Agent shall be entitled to recover such funds, on demand from such Lender together with interest thereon for each day from the date such payment was due until the date such amount is paid to Agent at

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the Federal Funds Rate for each day during such period (as published by the Federal Reserve Bank of New York or at Agent’s option based on the arithmetic mean determined by Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (Charlotte, North Carolina time) on that day by each of the three leading brokers of Federal funds transactions in New York City selected by Agent) and if such amounts are not paid within three (3) days of Agent’s demand, at the highest Interest Rate provided for in Section 3.1 hereof applicable to Base Rate Loans.  Required Lenders may at any time revoke Agent’s authority to make any further Special Agent Advances by written notice to Agent.  Absent such revocation, Agent’s determination that funding of a Special Agent Advance is appropriate shall be conclusive.

(b)Lenders hereby irrevocably authorize Agent, at its option and in its discretion to release any security interest in, mortgage or Lien upon, any of the First Priority Collateral (i) upon termination of the Commitments and payment and satisfaction of all of the Obligations and delivery of cash collateral to the extent required under Section 13.1 below, or (ii) constituting property being sold or disposed of if Administrative Borrower or any Borrower or Guarantor certifies to Agent that the sale or disposition is made in compliance with Section 9.7 hereof (and Agent may rely conclusively on any such certificate, without further inquiry), or (iii) constituting property in which any Borrower or Guarantor did not own an interest at the time the security interest, mortgage or Lien was granted or at any time thereafter, or (iv) having a value in the aggregate in any twelve (12) month period of less than $8,000,000, and to the extent Agent may release its security interest in and Lien upon any such First Priority Collateral pursuant to the sale or other disposition thereof, such sale or other disposition shall be deemed consented to by Lenders, or (v) if required or permitted under the terms of any of the other Financing Agreements, including the Intercreditor Agreement, or any other intercreditor agreement, or (vi) approved, authorized or ratified in writing by all of Lenders.  Except as provided above, Agent will not release any security interest in, mortgage or Lien upon, any of the First Priority Collateral without the prior written authorization of all of Lenders. Upon request by Agent at any time, Lenders will promptly confirm in writing Agent’s authority to release particular types or items of Collateral pursuant to this Section.  In no event shall the consent or approval of Issuing Bank to any release of Collateral be required. Further, Lenders hereby irrevocably authorize Agent to release any security interest or Lien upon any of the Notes Priority Collateral to the extent required or permitted under the terms of the Intercreditor Agreement.

(c)Without any manner limiting Agent’s authority to act without any specific or further authorization or consent by the Required Lenders, each Lender agrees to confirm in writing, upon request by Agent, the authority to release Collateral conferred upon Agent under this Section.  Agent shall (and is hereby irrevocably authorized by Lenders to) execute such documents as may be necessary to evidence the release of the security interest, mortgage or Liens granted to Agent upon any Collateral to the extent set forth above; provided, that, (i) Agent shall not be required to execute any such document on terms which, in Agent’s opinion, would expose Agent to liability or create any obligations or entail any consequence other than the release of such security interest, mortgage or Liens without recourse or warranty and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any security interest, mortgage or Lien upon (or obligations of any Borrower or Guarantor in respect of) the Collateral retained by such Borrower or Guarantor.

(d)Agent shall have no obligation whatsoever to any Lender, Issuing Bank or any other Person to investigate, confirm or assure that the Collateral exists or is owned by any Borrower or Guarantor or is cared for, protected or insured or has been encumbered, or that any particular items of Collateral meet the eligibility criteria applicable in respect of the Loans or Letters of Credit hereunder, or whether any particular reserves are appropriate, or that the Liens and security interests granted to Agent pursuant hereto or any of the Financing Agreements or otherwise have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising,

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any of the rights, authorities and powers granted or available to Agent in this Agreement or in any of the other Financing Agreements, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, subject to the other terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its discretion, given Agent’s own interest in the Collateral as a Lender and that Agent shall have no duty or liability whatsoever to any other Secured Party.

12.12Agency for Perfection.  Each Lender and Issuing Bank hereby appoints Agent and each other Lender and Issuing Bank as agent and bailee for the purpose of perfecting the security interests in and Liens upon the Collateral of Agent in assets which, in accordance with Article 9 of the UCC can be perfected only by possession (or where the security interest of a secured party with possession has priority over the security interest of another secured party) and Agent and each Lender and Issuing Bank hereby acknowledges that it holds possession of any such Collateral for the benefit of Agent as secured party.  Should any Lender or Issuing Bank obtain possession of any such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver such Collateral to Agent or in accordance with Agent’s instructions.

12.13Successor Agent.  Agent may resign as Agent upon thirty (30) days’ prior written notice to Lenders and Administrative Borrower.  If Agent resigns under this Agreement, the Required Lenders, (without giving effect to the Pro Rata Share of Agent in its capacity as a Lender and without requiring Agent’s consent) shall appoint from among the Lenders a successor agent for Lenders which successor agent shall be subject to the approval of Administrative Borrower if no Default or Event of Default shall exist or have occurred and be continuing, provided, that, (a) such approval shall not be unreasonably withheld, conditioned or delayed and (b) unless Agent shall have received written notice from Administrative Borrower that Administrative Borrower does not approve such successor agent within five (5) Business Days after receipt by Administrative Borrower of the notice from Agent that it is resigning, Administrative Borrower shall be deemed to have given such approval.  If no successor agent is appointed prior to the effective date of the resignation of Agent (whether as a result of the failure of Administrative Borrower to approve a successor agent or otherwise), Agent may appoint, after consulting with Lenders and Administrative Borrower, a successor agent from among Lenders (and the approval of Administrative Borrower shall not be requested for such successor agent).  Upon the acceptance by the Lender so selected of its appointment as successor agent hereunder, such successor agent shall succeed to all of the rights, powers and duties of the retiring Agent and the term “Agent” as used herein and in the other Financing Agreements shall mean such successor agent and the retiring Agent’s appointment, powers and duties as Agent shall be terminated.  If Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from among the Lenders with (so long as no Event of Default has occurred and is continuing) the consent of the Administrative Borrower (such consent not to be unreasonably withheld, delayed or conditioned).  In such event, upon acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all rights, powers and duties of the retiring Agent and the term “Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers and duties as Agent shall be terminated.  After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 12 shall inure to its benefit as to any actions taken or omitted by it while it was Agent under this Agreement.  If no successor agent has accepted appointment as Agent by the date which is thirty (30) days after the date of a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nonetheless thereupon become effective and Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.  Any resignation of Agent pursuant to this Section shall also constitute the resignation of Agent or its successor as Swing Line Lender, and any successor agent that is appointed pursuant to this Section shall, upon its acceptance of such appointment, become the successor Swing Line Lender for all purposes thereunder.  At the time any such resignation or replacement shall become

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effective, Borrowers shall pay the full outstanding principal amount of all Swing Line Loans and all accrued and unpaid fees and expenses of the retiring Swing Line Lender.

12.14Other Agent Designations.  Agent may at any time and from time to time determine that a Lender may, in addition, be a “Co-Agent”, “Syndication Agent”, “Documentation Agent” or similar designation hereunder and enter into an agreement with such Lender to have it so identified for purposes of this Agreement.  Any such designation shall be effective upon written notice by Agent to Administrative Borrower of any such designation.  Any Lender that is so designated as a Co-Agent, Syndication Agent, Documentation Agent or such similar designation by Agent shall have no right, power, obligation, liability, responsibility or duty under this Agreement or any of the other Financing Agreements other than those applicable to all Lenders as such.  Without limiting the foregoing, the Lenders so identified shall not have or be deemed to have any fiduciary relationship with any Lender and no Lender shall be deemed to have relied, nor shall any Lender  rely, on a Lender so identified as a Co-Agent, Syndication Agent, Documentation Agent or such similar designation in deciding to enter into this Agreement or in taking or not taking action hereunder.

12.15Agent May File Proofs of Claim.

(a)In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Borrower or Guarantor, Agent (irrespective of whether the principal of any Loan or Letter of Credit Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Agent shall have made any demand on Borrowers) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(i)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Letter of Credit Obligations and all other Obligations (other than obligations under Bank Products to which Agent is not a party) that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders, Issuing Bank and Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of Lenders, Issuing Bank and Agent and their respective agents and counsel and all other amounts due Lenders, Issuing Bank and Agent allowed in such judicial proceeding); and

(ii)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Bank to make such payments to Agent and, in the event that Agent shall consent to the making of such payments directly to Lenders and Issuing Bank, to pay to Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Agent and its agents and counsel, and any other amounts due Agent.

(b)Nothing contained herein shall be deemed to authorize Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize Agent to vote in respect of the claim of any Lender in any such proceeding.  In any insolvency proceeding of any Obligor, no Lender shall be required to make or participate in any credit bid without such Lender’s consent.

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SECTION  13.TERM OF AGREEMENT; MISCELLANEOUS

13.1Term.

(a)This Agreement and the other Financing Agreements shall become effective as of the date set forth on the first page hereof and shall continue in full force and effect for a term ending on the date four (4) years from the date hereof (the “Maturity Date”), unless sooner terminated pursuant to the terms hereof.  In addition, Borrowers may terminate this Agreement at any time upon ten (10) days prior written notice to Agent subject to clause (b) below, (which notice shall be irrevocable) and Agent may, at its option, and shall at the direction of Required Lenders, terminate this Agreement at any time on or after an Event of Default.  Upon the Maturity Date or any other effective date of termination of the Financing Agreements, Borrowers shall pay to Agent all outstanding and unpaid Obligations and shall furnish cash collateral to Agent (or at Agent’s option, a letter of credit issued for the account of Borrowers and at Borrowers’ expense, in form and substance reasonably satisfactory to Agent, by an issuer acceptable to Agent and payable to Agent as beneficiary) in such amounts as Agent determines are reasonably necessary to secure Agent, Lenders and Issuing Bank from loss, cost, damage or expense, including attorneys’ fees and expenses, in connection with any contingent Obligations, including issued and outstanding Letter of Credit Obligations and checks or other payments provisionally credited to the Obligations and/or as to which Agent or any Lender has not yet received final and indefeasible payment and any continuing obligations of Agent or any Lender pursuant to any Deposit Account Control Agreement and for any of the Obligations arising under or in connection with any Bank Products in such amounts as the Bank Product Provider providing such Bank Products may require (unless such Obligations arising under or in connection with any Bank Products are paid in full in cash and terminated in a manner satisfactory to such Bank Product Provider).  The amount of such cash collateral (or letter of credit, as Agent may determine) as to any Letter of Credit Obligations shall be in the amount equal to one hundred five (105%) percent of the amount of the Letter of Credit Obligations.  Such payments in respect of the Obligations and cash collateral shall be remitted by wire transfer in Federal funds to the Agent Payment Account or such other bank account of Agent, as Agent may, in its discretion, designate in writing to Administrative Borrower for such purpose.  Interest shall be due until and including the next Business Day, if the amounts so paid by Borrowers to the Agent Payment Account or other bank account designated by Agent are received in such bank account later than 12:00 noon (Charlotte, North Carolina time).

(b)No termination of the Commitments, this Agreement or any of the other Financing Agreements shall relieve or discharge any Borrower or Guarantor of its respective duties, obligations and covenants under this Agreement or any of the other Financing Agreements until all Obligations have been fully and finally discharged and paid, and Agent’s continuing security interest in the Collateral and the rights and remedies of Agent and Lenders hereunder, under the other Financing Agreements and applicable law, shall remain in effect until all such Obligations have been fully and finally discharged and paid.  Accordingly, each Borrower and Guarantor waives any rights it may have under the UCC to demand the filing of termination statements with respect to the Collateral and Agent shall not be required to send such termination statements to Borrowers or Guarantors, or to file them with any filing office, unless and until this Agreement shall have been terminated in accordance with its terms and all Obligations paid and satisfied in full in immediately available funds.

13.2Interpretative Provisions.

(a)All terms used herein which are defined in Article 1, Article 8 or Article 9 of the UCC shall have the meanings given therein unless otherwise defined in this Agreement.

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(b)All references to the plural herein shall also mean the singular and to the singular shall also mean the plural unless the context otherwise requires.

(c)All references to any Borrower, Guarantor, Agent and Lenders pursuant to the definitions set forth in the recitals hereto, or to any other person herein, shall include their respective successors and permitted assigns.  All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations.  All references to any of the Financing Agreements shall include any and all amendment or modifications thereto and any and all restatements, extensions or renewals thereof.

(d)The words “hereof”, “herein”, “hereunder”, “this Agreement” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not any particular provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

(e)The word “including” when used in this Agreement shall mean “including, without limitation” and the word “will” when used in this Agreement shall be construed to have the same meaning and effect as the word “shall”.

(f)All references to the term “good faith” used herein when applicable to Agent or any Lender shall mean, notwithstanding anything to the contrary contained herein or in the UCC, honesty in fact in the conduct or transaction concerned.  Borrowers and Guarantors shall have the burden of proving any lack of good faith on the part of Agent or any Lender alleged by any Borrower or Guarantor at any time.

(g)Any accounting term used in this Agreement shall have, unless otherwise specifically provided herein, the meaning customarily given in accordance with GAAP, and all financial computations hereunder shall be computed, unless otherwise specifically provided herein, in accordance with GAAP as consistently applied and using the same method for inventory valuation as used in the preparation of the financial statements of Borrowers and Guarantors most recently received by Agent prior to the date hereof.  Notwithstanding anything to the contrary contained in GAAP or any interpretations or other pronouncements by the Financial Accounting Standards Board or otherwise, the term “unqualified opinion” as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is unqualified as to going concern or the scope of the audit.

(h)In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including”.

(i)Unless otherwise expressly provided herein, (i) references herein to any agreement, document or instrument shall be deemed to include all subsequent amendments, modifications, supplements, extensions, renewals, restatements or replacements with respect thereto, but only to the extent the same are not prohibited by the terms hereof or of any other Financing Agreement, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, recodifying, supplementing or interpreting the statute or regulation.

(j)The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

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(k)This Agreement and other Financing Agreements may use several different limitations, tests or measurements to regulate the same or similar matters.  All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms.

(l)This Agreement and the other Financing Agreements are the result of negotiations among and have been reviewed by counsel to Agent and the other parties, and are the products of all parties.  Accordingly, this Agreement and the other Financing Agreements shall not be construed against Agent or Lenders merely because of Agent’s or any Lender’s involvement in their preparation.

13.3Notices.

(a)All notices, requests and demands hereunder shall be in writing and deemed to have been given or made:  if delivered in person, immediately upon delivery; if by telex, telegram or facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally recognized overnight courier service with instructions to deliver the next Business Day, one (1) Business Day after sending; and if by certified mail, return receipt requested, five (5) days after mailing.  Notices delivered through electronic communications shall be effective to the extent set forth in Section 13.3(b) below.  All notices, requests and demands upon the parties are to be given to the following addresses (or to such other address as any party may designate by notice in accordance with this Section):

If to any Borrower or Guarantor:	Freedom Group, Inc. 870 Remington Drive Madison, North Carolina 27025 Attention: President Telephone No.: (336) 548-8700 Telecopy No.: (336) 548-7801
If to Agent:	Wachovia Bank, National Association 301 South College Street 6th Floor Charlotte, North Carolina 28288 Attention: Bruce K. Rhodes Telephone No.: (704) 715-8596 Telecopy No.: (704) 374-2703

(b)Notices and other communications to Lenders and Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by Agent or as otherwise determined by Agent (and shall be considered to be in writing for such purposes), provided, that, the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to Section 2 hereof if such Lender or Issuing Bank, as applicable, has notified Agent that it is incapable of receiving notices under such Section by electronic communication.  Unless Agent otherwise requires, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided, that, if such notice or other communication is not given during the normal business hours of the recipient, such notice shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communications is available and identifying the website address therefor.

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13.4Partial Invalidity.  If any provision of this Agreement is held to be invalid or unenforceable, such invalidity or unenforceability shall not invalidate this Agreement as a whole, but this Agreement shall be construed as though it did not contain the particular provision held to be invalid or unenforceable and the rights and obligations of the parties shall be construed and enforced only to such extent as shall be permitted by applicable law.

13.5Confidentiality.

(a)Agent, each Lender and Issuing Bank shall use all reasonable efforts to keep confidential, in accordance with its customary procedures for handling confidential information and safe and sound lending practices, any non-public information supplied to it by any Borrower or Guarantor pursuant to this Agreement which is clearly and conspicuously marked as confidential at the time such information is furnished by such Borrower or Guarantor to Agent, such Lender or Issuing Bank, provided, that, nothing contained herein shall limit the disclosure of any such information: (i) to the extent required by statute, rule, regulation, subpoena or court order, (ii) to bank examiners and other regulators, auditors and/or accountants, in connection with any litigation to which Agent, such Lender or Issuing Bank is a party, (iii) to any Lender or Participant (or prospective Lender or Participant) or Issuing Bank or to any Affiliate of any Lender so long as such Lender, Participant (or prospective Lender or Participant), Issuing Bank or Affiliate shall have been instructed to treat such information as confidential in accordance with this Section 13.5, or (iv) to counsel for Agent, any Lender, Participant (or prospective Lender or Participant) or Issuing Bank.

(b)In the event that Agent, any Lender or Issuing Bank receives a request or demand to disclose any confidential information pursuant to any subpoena or court order, Agent or such Lender or Issuing Bank, as the case may be, agrees (i) to the extent permitted by applicable law or if permitted by applicable law, to the extent Agent or such Lender or Issuing Bank determines in good faith that it will not create any risk of liability to Agent or such Lender or Issuing Bank, Agent or such Lender or Issuing Bank will promptly notify Administrative Borrower of such request so that Administrative Borrower may seek a protective order or other appropriate relief or remedy and (ii) if disclosure of such information is required, disclose such information and, subject to reimbursement by Borrowers of Agent’s or such Lender’s or Issuing Bank’s expenses, cooperate with Administrative Borrower in the reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such portion of the disclosed information which Administrative Borrower so designates, to the extent permitted by applicable law or if permitted by applicable law, to the extent Agent or such Lender or Issuing Bank determines in good faith that it will not create any risk of liability to Agent or such Lender or Issuing Bank.  In no event shall this Section 13.5 or any other provision of this Agreement, any of the other Financing Agreements or applicable law be deemed: (iii) to apply to or restrict disclosure of information that has been or is made public by any Borrower, Guarantor or any third party or otherwise becomes generally available to the public other than as a result of a disclosure in violation hereof, (iv) to apply to or restrict disclosure of information that was or becomes available to Agent, any Lender (or any Affiliate of any Lender) or Issuing Bank on a non-confidential basis from a person other than a Borrower or Guarantor, (v) to require Agent, any Lender or Issuing Bank to return any materials furnished by a Borrower or Guarantor to Agent, a Lender or Issuing Bank or  prevent Agent, a Lender or Issuing Bank from responding to routine informational requests  in accordance with the Code of Ethics for the Exchange of Credit Information promulgated by The Robert Morris Associates or other applicable industry standards relating to the exchange of credit information.  The obligations of Agent, Lenders and Issuing Bank under this Section 13.5 shall supersede and replace the obligations of Agent, Lenders and Issuing Bank under any confidentiality letter signed prior to the date hereof or any other arrangements concerning the confidentiality of information provided by any Borrower or Guarantor to Agent or any Lender.  Each of the Obligors acknowledges and agrees to the disclosure by Agent and Lenders of information relating to the Credit Facility to Gold Sheets and other publications or for its marketing

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materials, with such information to consist of deal terms and other information customarily found in such publications or marketing materials and that Agent and Lenders may use the corporate name and logo of FGI and its Subsidiaries in “tombstones” or other advertisements, marketing materials or public statements, provided that all uses of the corporate name or logo of the FGI or any of its Subsidiaries in information disclosed to Gold Sheets or other publications in “tombstones” or public statements (other than Agent’s or any Lender’s advertising or marketing materials) shall require the prior review and approval by FGI.

13.6Successors.  This Agreement, the other Financing Agreements and any other document referred to herein or therein shall be binding upon and inure to the benefit of and be enforceable by Agent, Lenders, Issuing Bank, Borrowers, Guarantors and their respective successors and assigns, except that Borrower may not assign its rights under this Agreement, the other Financing Agreements and any other document referred to herein or therein without the prior written consent of Agent and Lenders.  Any such purported assignment without such express prior written consent shall be void.  No Lender may assign its rights and obligations under this Agreement without the prior written consent of Agent, except as provided in Section 13.7 below. The terms and provisions of this Agreement and the other Financing Agreements are for the purpose of defining the relative rights and obligations of Borrowers, Guarantors, Agent, Lenders and Issuing Bank with respect to the transactions contemplated hereby and there shall be no third party beneficiaries of any of the terms and provisions of this Agreement or any of the other Financing Agreements.

13.7Assignments; Participations.

(a)Each Lender may, with the prior written consent of Agent (which consent shall not be unreasonably withheld or delayed), assign all or, if less than all, a portion equal to at least $5,000,000 in the aggregate at any one time for the assigning Lender, of such rights and obligations under this Agreement to one or more Eligible Transferees (but not including for this purpose any assignments in the form of a participation), each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignment and Acceptance; provided, that, (i) such transfer or assignment will not be effective until recorded by Agent on the Register and (ii) Agent shall have received for its sole account payment of a processing fee from the assigning Lender or the assignee in the amount of $5,000.

(b)Agent shall maintain a register of the names and addresses of Lenders, their Commitments and the principal amount of their Loans (the “Register”).  Agent shall also maintain a copy of each Assignment and Acceptance delivered to and accepted by it and shall modify the Register to give effect to each Assignment and Acceptance.  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and any Borrowers, Guarantors, Agent and Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by Administrative Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(c)Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance,  the assignee thereunder shall be a party hereto and to the other Financing Agreements and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations (including, without limitation, the obligation to participate in Letter of Credit Obligations) of a Lender hereunder and thereunder and  the assigning Lender shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement.

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(d)By execution and delivery of an Assignment and Acceptance, the assignor and assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any of the other Financing Agreements or the execution, legality, enforceability, genuineness, sufficiency or value of this Agreement or any of the other Financing Agreements furnished pursuant hereto, (ii) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or Guarantor or the performance or observance by any Borrower or Guarantor of any of the Obligations; (iii) such assignee confirms that it has received a copy of this Agreement and the other Financing Agreements, together with such other documents and information it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such assignee will, independently and without reliance upon the assigning Lender, Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Financing Agreements, (v) such assignee appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Financing Agreements as are delegated to Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the other Financing Agreements are required to be performed by it as a Lender.  Agent and Lenders may furnish any information concerning any Borrower or Guarantor in the possession of Agent or any Lender from time to time to assignees (subject to such assignee executing and delivering a confidentiality agreement in form and substance reasonably acceptable to Agent and Administrative Borrower).

(e)Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement and the other Financing Agreements (including, without limitation, all or a portion of its Commitments and the Loans owing to it and its participation in the Letter of Credit Obligations, without the consent of Agent or the other Lenders); provided, that, (i) such Lender’s obligations under this Agreement (including, without limitation, its Commitment hereunder) and the other Financing Agreements shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and Borrowers, Guarantors, the other Lenders and Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Financing Agreements, and (iii) the Participant shall not have any rights under this Agreement or any of the other Financing Agreements (the Participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the Participant relating thereto) and all amounts payable by any Borrower or Guarantor hereunder shall be determined as if such Lender had not sold such participation.

(f)Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans hereunder to a Federal Reserve Bank in support of borrowings made by such Lenders from such Federal Reserve Bank; provided, that, no such pledge shall release such Lender from any of its obligations hereunder or substitute any such pledgee for such Lender as a party hereto.

(g)Borrowers and Guarantors shall assist Agent or any Lender permitted to sell assignments or participations under this Section 13.7 in whatever manner reasonably necessary in order to enable or effect any such assignment or participation, including (but not limited to) the execution and delivery of any and all agreements, notes and other documents and instruments as shall be requested and the delivery of informational materials, appraisals or other documents for, and the participation of relevant management in meetings and conference calls with, potential Lenders or Participants. Borrowers shall certify the correctness, completeness and accuracy, in all material respects, of all descriptions of

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Borrowers and Guarantors and their affairs provided, prepared or reviewed by any Borrower or Guarantor that are contained in any selling materials and all other information provided by it and included in such materials.

(h)Any Lender that is an Issuing Bank may at any time assign all of its Commitments pursuant to this Section 13.7.  If such Issuing Bank ceases to be a Lender, it shall resign as Issuing Bank and such Issuing Bank’s obligations to issue Letters of Credit shall terminate but it shall retain all of the rights and obligations of Issuing Bank hereunder with respect to Letters of Credit outstanding as of the effective date of its resignation and all Letter of Credit Obligations with respect thereto (including the right to require Lenders to make Revolving Loans or fund risk participations in outstanding Letter of Credit Obligations), shall continue.

13.8Entire Agreement.  This Agreement, the other Financing Agreements, any supplements hereto or thereto, and any instruments or documents delivered or to be delivered in connection herewith or therewith represents the entire agreement and understanding concerning the subject matter hereof and thereof between the parties hereto, and supersede all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.  In the event of any inconsistency between the terms of this Agreement and any schedule or exhibit hereto, the terms of this Agreement shall govern.

13.9USA PATRIOT Act.  Each Lender subject to the PATRIOT Act hereby notifies Borrowers and Guarantors that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies each person or corporation who opens an account and/or enters into a business relationship with it, which information includes the name and address of Borrowers and Guarantors and other information that will allow such Lender to identify such person in accordance with the Act and any other applicable law.  Borrowers and Guarantors are hereby advised that any Loans or Letters of Credit hereunder are subject to satisfactory results of such verification.

13.10Counterparts, Etc.  This Agreement or any of the other Financing Agreements may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement or any of the other Financing Agreements by telefacsimile or other electronic method of transmission shall have the same force and effect as the delivery of an original executed counterpart of this Agreement or any of such other Financing Agreements.  Any party delivering an executed counterpart of any such agreement by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

13.11Guarantee.

(a)Guarantors hereby jointly and severally, and unconditionally and absolutely, guarantee to Secured Parties the due and punctual payment, performance and discharge (whether upon stated maturity, demand, acceleration or otherwise in accordance with the terms thereof) of all of the Obligations whether created directly to, or acquired by assignment or otherwise by, any Secured Party, and whether Borrowers may be liable individually or jointly with others, regardless of whether recovery upon any of such Obligations becomes barred by any statute of limitations, is void or voidable under any law, is or becomes invalid or unenforceable for any other reason (collectively as to each Guarantor, the “Guaranteed Obligations”).  Without limiting the generality of the foregoing, the term “Guaranteed Obligations” as used herein shall include interest, fees or other charges constituting Obligations accrued in any such bankruptcy, whether or not any such interest, fees or other charges are recoverable from such Borrower or its estate under 11 U.S.C. § 506.  Each Guarantor agrees that its guarantee is a primary,

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immediate and original obligation of such Guarantor and is an absolute, unconditional, continuing and irrevocable guarantee of payment and not of collectability only, and is not contingent upon the exercise or enforcement by Agent or any Lender of any rights or remedies against any Borrower or others, or the enforcement of any Lien or realization upon any Collateral or other security.

(b)Each Guarantor agrees that its guarantee shall continue in full force and effect until the Guaranteed Obligations have been fully paid and discharged (or, in the case of contingent obligations, such as those arising from Letters of Credit, cash collateralized as required by this Agreement) and all Commitments have been terminated.  Each Guarantor acknowledges that there may be future advances by Agent or any Lender to Borrowers hereunder (although Secured Parties may be under no obligation to make such advances) and that the number and amount of the Guaranteed Obligations are unlimited and may fluctuate from time to time hereafter, and its guarantee shall remain in force at all times hereafter, whether there are any Guaranteed Obligations outstanding from time to time or not.  Guarantors’ obligations under this Agreement shall remain in full force and effect without regard to future changes in conditions, including any change of law or any invalidity or unenforceability of any Guaranteed Obligations or agreements evidencing same.  Each Guarantor agrees that its guarantee shall be in addition to any other present or future guaranty or other security for any of the Guaranteed Obligations, shall not be prejudiced or unenforceable by the invalidity of any such other guaranty or security, and is not conditioned upon or subject to the execution by any other Person of any other guaranty or suretyship agreement.

(c)(i)If a Guarantor shall make a payment under a guarantee (a “Paying Guarantor”), then such Paying Guarantor shall have the right to obtain contribution, in an amount determined as set forth below, from each of the other Guarantors that have not made payments under their respective guaranties at least proportionately equal (on the basis of their respective Guarantor Allocable Percentages, as such term is hereinafter defined) in amount to the payments made by the Paying Guarantor seeking contribution.  The liability of Guarantors hereunder to make contribution to any Paying Guarantor as aforesaid shall be absolute and shall not be affected or impaired by (A) any defense, counterclaim or setoff that any Borrower or any Guarantor may have or assert against any Secured Party, (B) any failure, neglect or omission on the part of any Secured Party to realize upon any Collateral or to enforce payment of any of the Guaranteed Obligations from any Person, (C) the release or discharge of any Collateral, (D) the release or discharge of any Borrower from its obligations, or (E) the release or discharge of any Guarantor from its obligations under its guarantee (whether, in any such event, such release is agreed to by any Secured Party or occurs by operation of applicable law).  Any proceeds received by any Secured Party from any enforcement action with respect to any assets of a Guarantor securing payment of the Guaranteed Obligations shall be deemed to be a payment by such Guarantor for purposes hereof.

(ii)Any Paying Guarantor entitled to contribution hereunder shall be entitled to receive from each of the other Guarantors an amount equal to (A) the product derived by multiplying the sum of all payments made by all Guarantors to Agent or any other Secured Party under the guaranties by the Guarantor Allocable Percentage of the Guarantor from whom contribution is sought, less (B) the amount, if any, actually paid to Agent or any other Secured Party by the Guarantor from whom contribution is sought (said last mentioned amount which is to be subtracted from the aforesaid product shall be decreased by any amount theretofore paid by such Guarantor by way of contribution hereunder, and shall be decreased by any amounts theretofore received by such Guarantor by way of contribution); provided, however, that a Paying Guarantor’s recovery of contribution from the other Guarantors hereunder shall be limited, exclusive of interest, to that amount paid by the Paying Guarantor in excess of the Guarantor Allocable Percentage of such Paying Guarantor of all payments made by all Guarantors to Agent or any other Secured Party under the guaranties.  Amounts due by way of contribution hereunder

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shall bear interest, until paid, at a variable rate of interest equal to the Base Rate in effect from time to time.  As used herein, the term “Guarantor Allocable Percentage” shall mean, on any date of determination thereof, a fraction, the denominator of which shall be equal to the number of Guarantors who are parties to this Agreement on such date and the numerator of which shall be one; provided further, however, that such percentages shall be modified in the event that contribution from a Guarantor is not possible by reason of any insolvency proceeding involving such Guarantor or otherwise by reducing the Guarantor Allocable Percentage of such Guarantor to zero and by increasing the Guarantor Allocable Percentages of all remaining Guarantors proportionately so that the Guarantor Allocable Percentages of all remaining Guarantors at all times equals 100%.  Each Guarantor liable to a Paying Guarantor for contribution, whether pursuant to the provisions of this guarantee or under applicable law, hereby assigns in favor of each Paying Guarantor any claim that such Guarantor liable to make contribution has or hereafter may have against any Borrower, and authorizes any payments that may be due on any such claim to be made to the Paying Guarantor that is entitled to receive contribution for application to the satisfaction of amounts due by way of contribution.

(iii)          Guarantors agree, jointly and severally, absolutely and unconditionally, that each shall at all times indemnify each of the other Guarantors and hold and save each of them harmless from and against any and all actions and causes of actions, claims, demands, liabilities, losses, damages or expenses of whatever kind and nature, including attorneys’ fees, which any Guarantor may at any time sustain or incur in any action, suit or other proceeding instituted to enforce the obligations of such Guarantor under its guarantee in excess of the amount equal to the Guarantor Allocable Percentage of such Guarantor of personal liability under the terms hereof.

(iv)Each Guarantor acknowledges that the right to contribution and indemnification hereunder shall each constitute an asset in favor of the Guarantor to which such contribution or indemnification is at any time owing.

(d)(i)If for any reason any Borrower has no legal existence or is under no legal obligation to discharge any of the Guaranteed Obligations, or if any of the Guaranteed Obligations become unrecoverable from any Borrower by reason of such Borrower’s insolvency, bankruptcy or reorganization or by other operation of law or for any other reason, each Guarantor shall nevertheless be bound to the same extent as if such Guarantor had at all times been the principal obligor on all such Guaranteed Obligations.  If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy, dissolution or reorganization of debt or for any other reason, all such amounts otherwise subject to acceleration under the terms of any Financing Agreements or other instrument or agreement evidencing or securing the payment of the Guaranteed Obligations shall nevertheless be immediately due and payable by each Guarantor.

(ii)If a Guarantor should dissolve or become insolvent (within the meaning of the UCC), or if a petition for an order for relief with respect to a Guarantor should be filed by or against such Guarantor under any chapter of the United States Bankruptcy Code, or if a receiver, trustee, conservator or other custodian should be appointed for a Guarantor or any property of a Guarantor, or if any Event of Default shall occur and be continuing, then, in any such event and whether or not any of the Guaranteed Obligations are then due and payable or the maturity thereof has been accelerated or demand for payment thereof has been made, Agent, on behalf of Secured Parties, may, without notice to any Guarantor, make the Guaranteed Obligations immediately due and payable hereunder as to any Guarantor and Agent and Lenders shall be entitled to enforce the obligations of each Guarantor hereunder as if the Guaranteed Obligations were then due and payable in full.  If any of the Guaranteed Obligations are collected by or through an attorney at law, Guarantors agree to jointly and severally pay Secured Parties’ reasonable attorneys’ fees and court costs.  Guarantors shall be obligated to make multiple

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payments under their guarantees to the extent necessary to cause full payment of the Guaranteed Obligations.

(iii)If and to the extent Agent or any Lender receives any payment on account of any of the Guaranteed Obligations (whether from Borrowers, Guarantor or a third party obligor or from the sale or other disposition of any Collateral) and such payment or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other Person under any state, federal or foreign bankruptcy or other insolvency law, common law or equitable cause, then the part of the Guaranteed Obligations intended to be satisfied shall be revived and continued in full force and effect as if said payment had not been made.  The foregoing provisions of this paragraph shall survive payment in full of the Obligations and the termination of this Agreement.

(iv)Agent and Lenders shall have the right to seek recourse against each Guarantor to the full extent provided for herein and against Borrowers to the full extent provided for herein or in any of the Financing Agreements.  No election to proceed in one form of action or proceeding, or against any Person, or on any obligation, shall constitute a waiver of Agent’s or any Lender’s right to proceed in any other form of action or proceeding or against any other Person.  Specifically, but without limiting the generality of the foregoing, no action or proceeding by Agent or any Lender against Borrowers under the Financing Agreements or any other instrument or agreement evidencing or securing Guaranteed Obligations shall serve to diminish the liability of any Guarantor for the balance of the Guaranteed Obligations.

(v)Each Guarantor acknowledges that Agent is authorized and empowered to enforce such Guarantor’s guarantee for the benefit of Secured Parties and to collect from such Guarantor the amount of the Guaranteed Obligations from time to time, in Agent’s own name and without the necessity of joining any other Secured Party in any action, suit or other proceeding to enforce its guarantee.

(e)To the fullest extent permitted by applicable law, each Guarantor hereby waives and renounces (for itself and its successors):

(i)notice of each Secured Party’s acceptance hereof and reliance hereon; notice of the extension of credit from time to time by Secured Parties to any Borrower and the creation, existence or acquisition of any Guaranteed Obligations; notice of the amount of Guaranteed Obligations of Borrowers to Secured Parties from time to time (subject, however, to Guarantor’s right to make inquiry of Agent to ascertain the amount of Guaranteed Obligations at any reasonable time); notice of any adverse change in any Borrower’s financial condition or of any other fact that might increase such Guarantor’s risk; notice of presentment for payment, demand, protest and notice thereof as to any instrument; notice of default or acceleration; all other notices and demands to which such Guarantor might otherwise be entitled; any right such Guarantor may have, by statute or otherwise, to require Secured Parties to institute suit against any Borrower after notice or demand from such Guarantor or to seek recourse first against Borrowers or otherwise, or to realize upon any security for the Guaranteed Obligations, as a condition to enforcing such Guarantor’s liability and obligations hereunder; any defense that any Borrower may at any time have or assert based upon the statute of limitations, the statute of frauds, failure of consideration, fraud, bankruptcy, lack of legal capacity, usury, or accord and satisfaction; any defense that other indemnity, guaranty, or security was to be obtained; any defense or claim that any Person purporting to bind any Borrower to the payment of any of the Guaranteed Obligations did not have actual or apparent authority to do so; any right to contest the commercial reasonableness of the disposition of any Collateral; any defense or claim that any

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other act or failure to act by any Secured Party had the effect of increasing such Guarantor’s risk of payment; and any other legal or equitable defense to payment under this guarantee.

(ii)any and all rights or defenses arising by reason of any “one action” or “anti-deficiency” law which would otherwise prevent Secured Parties from bringing any action, including any claim for a deficiency, or exercising any other right or remedy (including any right of setoff) against such Guarantor before or after any Secured Party’s commencement or completion of any foreclosure action, whether by judicial action, by exercise of power of sale or otherwise, or any other law which in any other manner would otherwise require any election of remedies by any Secured Party; and any right that such Guarantor may have to claim or recover in any litigation arising out of this guarantee or any of the other Financing Agreements, any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages.

(iii)any right that such Guarantor may have to terminate or revoke its guarantee hereunder.  If, notwithstanding the foregoing waiver, any Guarantor shall nevertheless have any right under applicable law to terminate or revoke its guarantee hereunder, which right cannot be waived by such Guarantor, such termination or revocation shall not be effective until a written notice of such termination or revocation, specifically referring to this guarantee and signed by such Guarantor, is actually received by an officer of Agent who is familiar with Borrowers’ account and this guarantee; but any such termination or revocation shall not affect the obligation of such Guarantor or such Guarantor’s successors or assigns with respect to any of the Guaranteed Obligations and existing at the time of the receipt by Agent of such revocation or to arise out of or in connection with any transactions theretofore entered into by Secured Parties with or for the account of Borrowers.  If Agent or any Lender grants loans or other extensions of credit to or for the benefit of any Borrower or takes other action after the termination or revocation by any Guarantor but prior to Agent’s receipt of such written notice of termination or revocation, then the rights of such Secured Party hereunder with respect thereto shall be the same as if such termination or revocation had not occurred.

(f)(i)Each Guarantor consents and agrees that, without notice to or by such Guarantor and without reducing, releasing, diminishing, impairing or otherwise affecting the liability or obligations of such Guarantor under its guarantee, Secured Parties may (with or without consideration) compromise or settle any of the Guaranteed Obligations; accelerate the time for payment of any of the Guaranteed Obligations; extend the period of duration or the time for the payment, discharge or performance of any of the Guaranteed Obligations; increase the amount of the Guaranteed Obligations; refuse to enforce, or release all or any Persons liable for the payment of, any of the Guaranteed Obligations; increase, decrease or otherwise alter the rate of interest payable with respect to the principal amount of any of the Guaranteed Obligations or grant other indulgences to Borrowers in respect thereof; amend, modify, terminate, release, or waive any Financing Agreements or any other documents or agreements evidencing, securing or otherwise relating to the Guaranteed Obligations (other than this Agreement); release, surrender, exchange, modify or impair, or consent to the sale, transfer or other disposition of, any Collateral or other property at any time securing (directly or indirectly) any of the Guaranteed Obligations or on which Secured Parties may at any time have a Lien; fail or refuse to perfect (or to continue the perfection of) any Lien granted or conveyed to any Secured Party with respect to any Collateral, or to preserve rights to any Collateral, or to exercise care with respect to any Collateral in any Secured Party’s possession; extend the time of payment of any Collateral consisting of accounts, notes, chattel paper, payment intangibles or other rights to the payment of money; refuse to enforce or forbear from enforcing its rights or remedies with respect to any Collateral or any Person liable for any of the Guaranteed Obligations or make any compromise or settlement or

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agreement therefor in respect of any Collateral or with any party to the Guaranteed Obligations; release or substitute any one or more of the endorsers or guarantors of the Guaranteed Obligations, whether parties to this Agreement or not; subordinate payment of any of the Guaranteed Obligations to the payment of any other liability of any Borrower; or apply any payments or proceeds of Collateral received to the liabilities of any Borrower to any Secured Party regardless of whether such liabilities consist of Guaranteed Obligations and regardless of the manner order or of any such application.

(ii)Each Guarantor is fully aware of the financial condition of each Borrower.  Each Guarantor delivers the guarantee set forth in this Agreement based solely upon Guarantor’s own independent investigation and in no part upon any representation or statement of any Secured Party with respect thereto.  Each Guarantor is in a position to and hereby assumes full responsibility for obtaining any additional information concerning each Borrower’s financial condition as such Guarantor may deem material to such Guarantor’s obligations hereunder and such Guarantor is not relying upon, nor expecting any Secured Party to furnish such Guarantor, any information in any Secured Party’s possession concerning any Borrower’s financial condition.  If any Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any information to any Guarantor regarding Borrowers, any of the Collateral or any transaction or occurrence in respect of any of the Financing Agreements, such Secured Party shall be under no obligation to update any such information or to provide any such information to any Guarantor on any subsequent occasion.  Each Guarantor hereby knowingly accepts the full range of risks encompassed within a contract of “guaranty,” which risks include, without limitation, the possibility that Borrowers will contract additional Guaranteed Obligations for which such Guarantor may be liable hereunder after Borrowers’ financial condition or ability to pay their lawful debts when they fall due has deteriorated.

(g)(i)Notwithstanding any provision of this guarantee to the contrary, (a) all rights of each Guarantor under clause (c) of this guarantee and all other rights of indemnity, contribution, subrogation or exoneration with respect to the Obligations shall be fully subordinated to the full payment of the Obligations and (b) no such right shall be exercised until full payment of the Guaranteed Obligations.  If any amount shall be paid to any Paying Guarantor on account of any such indemnity, contribution, exoneration or subrogation rights at any time that full payment of the Guaranteed Obligation has not occurred, such amount shall be held in trust for the benefit of Secured Parties and shall be forthwith paid to Agent to be credited and applied to the Guaranteed Obligations (whether matured or unmatured).  No failure on the part of any Borrower or any Guarantor to make payments required pursuant to clause (c) (or any other payments required under applicable law) shall in any respect limit or otherwise affect the obligations or liabilities of any Guarantor under this guarantee, and each Guarantor shall remain fully liable to Secured Parties for all of the obligations of such Guarantor hereunder.

(iii)The provisions of this Agreement shall be supplemental to and not in derogation of any rights and remedies of any Secured Party or any affiliate of any Secured Party under any separate subordination agreement that such Secured Party or such affiliate may at any time or from time to time enter into with any Guarantor.

(h)The execution and delivery to any Secured Party and such Secured Party’s acceptance of any guaranty in addition to each Guarantor’s guarantee hereunder shall not be deemed in lieu of or to supersede, terminate or diminish any guarantee hereunder, but shall be construed as an additional or supplementary guaranty unless otherwise expressly provided in such additional or supplementary guaranty; and if, prior to the date hereof, any Guarantor or any other Person has given to any Secured Party a previous guaranty or guaranties, each Guarantor’s guarantee hereunder shall be

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construed to be an additional or supplementary guaranty and not  to be in lieu thereof or to supersede, terminate or diminish such previous guaranty or guaranties.

(i)Unless otherwise required by applicable law or a specific agreement to the contrary, all payments received by Secured Parties from Borrowers, Guarantors or any other Person with respect to the Guaranteed Obligations or from proceeds of the Collateral may be applied (or reversed and reapplied) by Secured Parties to the Guaranteed Obligations in accordance with this Agreement, without affecting in any manner any Guarantor’s liability hereunder.

(j)To the extent any performance of this guarantee would violate any applicable usury statute or other applicable law, the obligation to be fulfilled shall be reduced to the limit legally permitted, so that this guarantee shall not require any performance in excess of the limit legally permitted, but such obligations shall be fulfilled to the limit of legal validity.  Nothing in this guarantee shall be construed to authorize Secured Parties to collect from Guarantors any interest that has not yet accrued, is unearned or subject to rebate or is otherwise not entitled to be collected by Secured Parties under applicable law.  The provisions of this paragraph shall control every other provision of this guarantee.

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IN WITNESS WHEREOF, Agent, Lenders, Borrowers and Guarantors have caused these presents to be duly executed as of the day and year first above written.

BORROWERS

FREEDOM GROUP, INC.

By:

Title:

REMINGTON ARMS COMPANY, INC.

By:

Title:

THE MARLIN FIREARMS COMPANY

By:

Title:

H&R 1871, LLC

By:

Title:

Signature Page to Loan and Security Agreement

BUSHMASTER FIREARMS INTERNATIONAL, LLC

By:

Title:

DPMS FIREARMS, LLC

By:

Title:

E-RPC, LLC

By:

Title:

DA ACQUISITIONS, LLC

By:

Title:

RA BRANDS, L.L.C.

By:

Title:

GUARANTORS

RACI HOLDING, INC.

By:

Title:

REMINGTON STEAM, LLC

By:

Title:

[Signatures continue on following page.]

Signature Page to Loan and Security Agreement

BUSHMASTER HOLDINGS, LLC

By:

Title:

Signature Page to Loan and Security Agreement

AGENT

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent and Issuing Bank

By:

Title:

LENDERS

WACHOVIA BANK, NATIONAL ASSOCIATION

By:

Title:

Commitment: $55,000,000.00

[Signatures continue on following page.]

Signature Page to Loan and Security Agreement

BANK OF AMERICA, N.A.

By:

Title:

Commitment: $40,000,000.00

[Signatures continue on following page.]

Signature Page to Loan and Security Agreement

DEUTSCHE BANK TRUST COMPANY AMERICAS

By:

Title:

Commitment: $20,000,000.00

[Signatures continue on following page.]

Signature Page to Loan and Security Agreement

NATIONAL CITY BUSINESS CREDIT, INC.

By:

Title:

Commitment: $17,500,000.00

[Signatures continue on following page.]

Signature Page to Loan and Security Agreement

RBS CITIZENS, NATIONAL ASSOCIATION

By:

Title:

Commitment: $17,500,000.00

[Signatures continue on following page.]

Signature Page to Loan and Security Agreement

REGIONS BANK

By:

Title:

Commitment: $15,000,000.00

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Signature Page to Loan and Security Agreement

BARCLAYS BANK PLC

By:

Title:

Commitment: $15,000,000.00

Signature Page to Loan and Security Agreement

EXHIBIT A

to

LOAN AND SECURITY AGREEMENT

ASSIGNMENT AND ACCEPTANCE AGREEMENT

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Assignment and Acceptance”) dated as of                           , 20   is made between                                                  (the “Assignor”) and                                          (the “Assignee”).

W I T N E S S E T H:

WHEREAS, Wachovia Bank, National Association, in its capacity as agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are parties thereto as lenders (in such capacity, “Agent”), and the financial institutions which are parties to the Loan Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”) have entered or are about to enter into financing arrangements pursuant to which Agent and Lenders may make loans and advances and provide other financial accommodations to Freedom Group, Inc. and the other Borrowers under (and as defined in) and (collectively, “Borrowers”) in the Loan and Security Agreement, dated July 29,  2009, by and among Borrowers, certain of their affiliates, Agent and Lenders (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the “Loan Agreement”), as set forth in the Loan Agreement and the other agreements, documents and instruments referred to therein or at any time executed and/or delivered in connection therewith or related thereto (all of the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the “Financing Agreements”);

WHEREAS, as provided under the Loan Agreement, Assignor committed to making Loans (the “Committed Loans”) to Borrowers in an aggregate amount not to exceed $                       (the “Commitment”);

WHEREAS, Assignor wishes to assign to Assignee [part of the] [all] rights and obligations of Assignor under the Loan Agreement in respect of its Commitment in an amount equal to $                             (the “Assigned Commitment Amount”) on the terms and subject to the conditions set forth herein and Assignee wishes to accept assignment of such rights and to assume such obligations from Assignor on such terms and subject to such conditions;

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows:

1.Assignment and Acceptance.

(a)Subject to the terms and conditions of this Assignment and Acceptance,  Assignor hereby sells, transfers and assigns to Assignee, and  Assignee hereby purchases, assumes and undertakes from Assignor, without recourse and without representation or warranty (except as provided in this Assignment and Acceptance) an interest in (i) the Commitment and each of the Committed Loans of Assignor and (ii) all related rights, benefits, obligations, liabilities and indemnities of the Assignor under and in connection with the Loan Agreement and the other Financing Agreements, so that after giving effect thereto, the Commitment of Assignee shall be as set forth below and the Pro Rata Share of Assignee shall be                (    %) percent.

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(b)With effect on and after the Effective Date (as defined in Section 5 hereof), Assignee shall be a party to the Loan Agreement and succeed to all of the rights and be obligated to perform all of the obligations of a Lender under the Loan Agreement, including the requirements concerning confidentiality and the payment of indemnification, with a Commitment in an amount equal to the Assigned Commitment Amount.  Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Agreement are required to be performed by it as a Lender.  It is the intent of the parties hereto that the Commitment of Assignor shall, as of the Effective Date, be reduced by an amount equal to the Assigned Commitment Amount and Assignor shall relinquish its rights and be released from its obligations under the Loan Agreement to the extent such obligations have been assumed by Assignee; provided, that, Assignor shall not relinquish its rights under Sections 2.2, 6.4, 6.9, 11.5 and 12.5 of the Loan Agreement to the extent such rights relate to the time prior to the Effective Date.

(c)After giving effect to the assignment and assumption set forth herein, on the Effective Date Assignee’s Commitment will be $                          .

(d)After giving effect to the assignment and assumption set forth herein, on the Effective Date Assignor’s Commitment will be $                             (as such amount may be further reduced by any other assignments by Assignor on or after the date hereof).

2.Payments.

(a)As consideration for the sale, assignment and transfer contemplated in Section 1 hereof, Assignee shall pay to Assignor on the Effective Date in immediately available funds an amount equal to $                        , representing Assignee’s Pro Rata Share of the principal amount of all Committed Loans.

(b)Assignee shall pay to Agent the processing fee in the amount specified in Section 13.7(a) of the Loan Agreement.

3.Reallocation of Payments.  Any interest, fees and other payments accrued to the Effective Date with respect to the Commitment, Committed Loans and outstanding Letters of Credit shall be for the account of Assignor.  Any interest, fees and other payments accrued on and after the Effective Date with respect to the Assigned Commitment Amount shall be for the account of Assignee.  Each of Assignor and Assignee agrees that it will hold in trust for the other party any interest, fees and other amounts which it may receive to which the other party is entitled pursuant to the preceding sentence and pay to the other party any such amounts which it may receive promptly upon receipt.

4.Independent Credit Decision.  Assignee  acknowledges that it has received a copy of the Loan Agreement and the Schedules and Exhibits thereto, together with copies of the most recent financial statements of                            and its Subsidiaries, and such other documents and information as it has deemed appropriate to make its own credit and legal analysis and decision to enter into this Assignment and Acceptance and  agrees that it will, independently and without reliance upon Assignor, Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit and legal decisions in taking or not taking action under the Loan Agreement.

5.Effective Date; Notices.

(a)As between Assignor and Assignee, the effective date for this Assignment and Acceptance shall be                               , 20    (the “Effective Date”); provided, that, the following conditions precedent have been satisfied on or before the Effective Date:

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(i)this Assignment and Acceptance shall be executed and delivered by Assignor and Assignee;

(ii)the consent of Agent as required for an effective assignment of the Assigned Commitment Amount by Assignor to Assignee shall have been duly obtained and shall be in full force and effect as of the Effective Date;

(iii)written notice of such assignment, together with payment instructions, addresses and related information with respect to Assignee, shall have been given to Administrative Borrower and Agent;

(iv)Assignee shall pay to Assignor all amounts due to Assignor under this Assignment and Acceptance; and

(v)the processing fee referred to in Section 2(b) hereof shall have been paid to Agent.

(b)Promptly following the execution of this Assignment and Acceptance, Assignor shall deliver to Administrative Borrower and Agent for acknowledgment by Agent, a Notice of Assignment in the form attached hereto as Schedule 1.

6.Agent.  [INCLUDE ONLY IF ASSIGNOR IS AN AGENT]

(a)Assignee hereby appoints and authorizes Assignor in its capacity as Agent to take such action as agent on its behalf to exercise such powers under the Loan Agreement as are delegated to Agent by Lenders pursuant to the terms of the Loan Agreement.

(b)Assignee shall assume no duties or obligations held by Assignor in its capacity as Agent under the Loan Agreement.

7.Withholding Tax.  Assignee (a) represents and warrants to Assignor, Agent and Borrowers that under applicable law and treaties no tax will be required to be withheld by Assignee, Agent or Borrowers with respect to any payments to be made to Assignee hereunder or under any of the Financing Agreements, (b) agrees to furnish (if it is organized under the laws of any jurisdiction other than the United States or any State thereof) to Agent and Borrowers prior to the time that Agent or Borrowers are required to make any payment of principal, interest or fees hereunder, duplicate executed originals of either U.S. Internal Revenue Service Form W-8BEN or W-8ECI, as applicable (wherein Assignee claims entitlement to the benefits of a tax treaty that provides for a complete exemption from U.S. federal income withholding tax on all payments hereunder) and agrees to provide new such forms upon the expiration of any previously delivered form or comparable statements in accordance with applicable U.S. law and regulations and amendments thereto, duly executed and completed by Assignee, and (c) agrees to comply with all applicable U.S. laws and regulations with regard to such withholding tax exemption.

8.Representations and Warranties.

(a)Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any security interest, lien, encumbrance or other adverse claim, (ii) it is duly organized and existing and it has the full power and authority to take, and has taken, all action necessary to execute and deliver this Assignment and Acceptance and any other documents required or permitted to be executed or delivered by it in connection

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with this Assignment and Acceptance and to fulfill its obligations hereunder, (iii) no notices to, or consents, authorizations or approvals of, any Person are required (other than any already given or obtained) for its due execution, delivery and performance of this Assignment and Acceptance, and apart from any agreements or undertakings or filings required by the Loan Agreement, no further action by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance, and (iv) this Assignment and Acceptance has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of Assignor, enforceable against Assignor in accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and other laws of general application relating to or affecting creditors’ rights and to general equitable principles.

(b)Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Agreement or any of the other Financing Agreements or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other instrument or document furnished pursuant thereto.  Assignor makes no representation or warranty in connection with, and assumes no responsibility with respect to, the solvency, financial condition or statements of Borrowers, Guarantors or any of their respective Affiliates, or the performance or observance by Borrowers, Guarantors or any other Person, of any of its respective obligations under the Loan Agreement or any other instrument or document furnished in connection therewith.

(c)Assignee represents and warrants that (i) it is duly organized and existing and it has full power and authority to take, and has taken, all action necessary to execute and deliver this Assignment and Acceptance and any other documents required or permitted to be executed or delivered by it in connection with this Assignment and Acceptance, and to fulfill its obligations hereunder, (ii) no notices to, or consents, authorizations or approvals of, any Person are required (other than any already given or obtained) for its due execution, delivery and performance of this Assignment and Acceptance, and apart from any agreements or undertakings or filings required by the Loan Agreement, no further action by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance; and (iii) this Assignment and Acceptance has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of Assignee, enforceable against Assignee in accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and other laws of general application relating to or affecting creditors’ rights to general equitable principles.

9.Further Assurances.  Assignor and Assignee each hereby agree to execute and deliver such other instruments, and take such other action, as either party may reasonably request in connection with the transactions contemplated by this Assignment and Acceptance, including the delivery of any notices or other documents or instruments to Borrowers or Agent, which may be required in connection with the assignment and assumption contemplated hereby.

10.Miscellaneous.

(a)Any amendment or waiver of any provision of this Assignment and Acceptance shall be in writing and signed by the parties hereto.  No failure or delay by either party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof and any waiver of any breach of the provisions of this Assignment and Acceptance shall be without prejudice to any rights with respect to any other for further breach thereof.

(b)All payments made hereunder shall be made without any set-off or counterclaim.

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(c)Assignor and Assignee shall each pay its own costs and expenses incurred in connection with the negotiation, preparation, execution and performance of this Assignment and Acceptance.

(d)This Assignment and Acceptance may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

(e)THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF                           .  Assignor and Assignee each irrevocably submits to the non-exclusive jurisdiction of any State or Federal court sitting in the borough of Manhattan, New York County, New York over any suit, action or proceeding arising out of or relating to this Assignment and Acceptance and irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State or Federal court.  Each party to this Assignment and Acceptance hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding.

(f)ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER FINANCING AGREEMENTS OR ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).

IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and Acceptance to be executed and delivered by their duly authorized officers as of the date first above written.

[ASSIGNOR]

By:

Title:

[ASSIGNEE]

By:

Title:

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EX-10.2

Exhibit 10.2

EXECUTION VERSION

Notwithstanding anything herein to the contrary, the liens and security interests granted to the Agent pursuant to this Agreement and the exercise of any right or remedy by the Agent hereunder are subject to the provisions of the Intercreditor Agreement (as defined in the Indenture referred to below).  Any requirement to grant “control” to the Agent over ABL Priority Collateral (as defined in the Intercreditor Agreement) contained herein prior to the Discharge of the ABL Obligations (as defined in the Intercreditor Agreement) shall be satisfied by granting control over such ABL Priority Collateral to the ABL Agent (as defined in the Intercreditor Agreement).  In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall govern and control.

SECURITY AGREEMENT

THIS SECURITY AGREEMENT dated as of July 29, 2009 (as amended, modified, supplemented or restated from time to time, this “Agreement”), is made by and among FREEDOM GROUP, INC., a Delaware corporation (the “Company”), each of the subsidiaries of the Company listed on Schedule 1 hereto or that becomes a party hereto (the “Subsidiary Grantors”; the Subsidiary Grantors and the Company are referred to collectively as the “Grantors”) and Wilmington Trust FSB, as Collateral Agent under the Indenture (as defined below) (together with its successors in such capacity, the “Agent”).

W I T N E S S E T H:

WHEREAS, the Grantors have entered into that certain Indenture, dated as of July 29, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), by and among the Grantors and Wilmington Trust FSB, as trustee (together with its successors in such capacity, the “Trustee”), on behalf of the holders (the “Noteholders”) of the Notes (as defined below) pursuant to which the Company is issuing $200,000,000 aggregate principal amount of its 10¼% Senior Secured Notes due 2015 (together with any Additional Notes and Exchange Securities, the “Notes”), which are guaranteed by each of the Grantors;

WHEREAS, the Trustee has been appointed to serve as Collateral Agent under the Indenture and in such capacity, to enter into this Agreement;

WHEREAS, following the date hereof, the Grantors may incur Permitted Additional Pari Passu Obligations (as defined in the Indenture) which are secured equally and ratably with the Grantors’ obligations in respect of the Notes in accordance with Section 8.9 of this Agreement;

WHEREAS, each Grantor will receive substantial benefits from the execution, delivery and performance of the obligations under the Indenture, the Notes and any Additional Pari Passu Agreement and each is, therefore, willing to enter into this Agreement;

WHEREAS, the Grantors are executing and delivering this Agreement pursuant to the terms of the Indenture to induce the Trustee to enter into the Indenture and induce the Noteholders to purchase the Notes; and

WHEREAS, this Agreement is made by the Grantors in favor of the Agent for the benefit of the Secured Parties to secure the payment and performance in full when due of the Obligations;

NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor and the Agent hereby agree as follows:

SECTION 1.DEFINITIONS

1.1          Definitions

Capitalized terms used and not otherwise defined herein shall have the respective meanings provided for in the Indenture.  Additionally, the following terms shall have the meanings set forth below:

“Additional Interests” means all shares of capital stock, membership interests, partnership interests and all other equity interests of any corporation, limited liability company, limited partnership or other legal entity owned by each Grantor, other than any shares or interests that constitute Pledged Shares.

“Additional Notes” has the meaning assigned to the term “Additional Securities” in the Indenture.

“Additional Pari Passu Agent” means the Person appointed to act as trustee, agent or representative for the holders of Permitted Additional Pari Passu Obligations pursuant to any Additional Pari Passu Agreement.

“Additional Pari Passu Agreement” means the indenture, credit agreement or other agreement under which any Permitted Additional Pari Passu Obligations (other than Additional Notes) are incurred and any notes or other instruments representing such Permitted Additional Pari Passu Obligations.

“Additional Pari Passu Joinder Agreement” means an agreement substantially in the form of Annex I.

“Default” or “Event of Default” means a “default” or “event of default” under the Indenture or under any Additional Pari Passu Agreement.

“Discharge of Obligations” means, both (i) in the case of the Indenture, the discharge or defeasance of the Indenture in accordance with Section 8.01 thereof and (ii) in the case of each Additional Pari Passu Agreement, the repayment of the Permitted Additional Pari Passu Obligations under such agreement which entitles the Grantors to obtain a release of the Liens securing such Permitted Additional Pari Passu Obligations under the Security Documents.

“Excluded Assets” shall have the meaning assigned to it in the second paragraph of Section 2.1.

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“Indemnitees” means Agent (as such as in its individual capacity) and its officers, directors, employees, stockholders, affiliates, agents and attorneys.

“Intellectual Property” means the collective reference to all rights, priorities and privileges relating to all intellectual property, whether arising under United States, multinational or foreign laws, including, without limitation, copyrights, copyright licenses, patents, patent licenses, trademarks and trademark licenses, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“Mortgage” means an agreement, including, but not limited to, a mortgage, deed of trust or any other document creating and evidencing a Lien on a Mortgaged Property in favor of the Agent, which shall be in form which, in the opinion of counsel to the Company, is effective to grant a Lien in a favor of the Agent enforceable against the applicable Grantor and third parties and creates rights in favor of the Agent in respect of the applicable Mortgaged Property to substantially the same extent as the mortgages of the Grantors in favor of the Agent provided on the Issue Date, in each case, with such schedules and including such provisions as shall, in the opinion of such counsel, be necessary or desirable to conform such document to applicable local law or as shall be customary under applicable local law.

“Mortgaged Property” means (a) each Real Property identified as a Mortgaged Property on Schedule 2.2 and (b) each Real Property, if any, which shall be subject to a Mortgage delivered after the Issue Date pursuant to Section 2.2.

“Obligations” means any principal, premium, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under any of (i) the Indenture, the Notes (other than any Additional Notes except to the extent constituting Permitted Additional Pari Passu Obligations) and the Security Documents and (ii) any Additional Pari Passu Agreement and other documentation relating to any other Permitted Additional Pari Passu Obligations; provided that no obligations in respect of Permitted Additional Pari Passu Obligations (other than Additional Notes) shall constitute “Obligations” unless the Additional Pari Passu Agent for the holders of such Permitted Additional Pari Passu Obligations has executed an Additional Pari Passu Joinder Agreement in the form of Annex I hereto.

“Perfection Certificate” shall mean that certain perfection certificate dated as of July 29, 2009, executed and delivered by each Grantor in favor of the Agent for the benefit of the Secured Parties, and each Perfection Certificate executed and delivered by the applicable Grantor in favor of the Agent for the benefit of the Secured Parties in accordance with Section 8.10 hereof.

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“Pledged Shares” means all shares of capital stock, membership interests, partnership interests and all other equity interests of any corporation, limited liability company, limited partnership or other legal entity that is a Subsidiary Guarantor.

“Real Property” means, collectively, all right, title and interest (including any leasehold, mineral or other estate) in and to any and all parcels of or interests in real property owned, leased or operated by any person, whether by lease, license or other means, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all general intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.

“Required Secured Parties” means the holders of a majority in aggregate principal amount of (i) the Notes plus (ii) any Indebtedness constituting Permitted Additional Pari Passu Obligations, in each case, excluding any holder of such Indebtedness whose vote is required to be disregarded under the Indenture or the applicable Additional Pari Passu Agreement.

“Secured Parties” means, collectively, the Agent, the Trustee, each Additional Pari Passu Agent, the Noteholders and any other holders of Obligations.

“Senior Secured Note Documents” means the Indenture, the Notes and the Security Documents.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that, at any time, if by reason of mandatory provisions of law, any or all of the perfection or priority of the Agent’s security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions relating to such provisions.

1.2          Uniform Commercial Code

As used herein, the following terms are defined in accordance with the UCC:  “Accounts,” “Bank,” “Certificated Security,” “Chattel Paper,” “Commercial Tort Claim,” “Deposit Account,” “Document,” “Equipment,” “Fixtures,” “General Intangibles,” “Goods,” “Instrument,” “Inventory,” “Investment Property,” “Letter-of-Credit Right,” “Proceeds,” “Promissory Notes,” “Supporting Obligation” and “Uncertificated Security.”

1.3          Certain Matters of Construction

This Agreement shall be subject to the rules of construction contained in Section 1.04 of the Indenture, mutatis mutandis.

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SECTION 2.COLLATERAL

2.1          Grant of Security Interest

To secure the prompt payment and performance of all Obligations each Grantor hereby grants to the Agent, for the benefit of the Secured Parties, a continuing security interest in and Lien upon all property of such Grantor, including all of the following property, whether now owned or hereafter acquired, and wherever located (all being collectively referred to herein as the “Collateral”):

(a)           all Accounts;

(b)           all Additional Interests and Pledged Shares;

(c)           all Chattel Paper, including electronic chattel paper;

(d)           the Collateral Account;

(e)           all Commercial Tort Claims listed in Schedule 2.3.1;

(f)            all Deposit Accounts and all Trust Monies;

(g)           all Documents;

(h)           all General Intangibles, including Intellectual Property;

(i)            all Goods, Inventory, Equipment and Fixtures;

(j)            all Instruments (including, without limitation, Promissory Notes);

(k)           all Investment Property;

(l)            all Letter-of-Credit Rights;

(m)          all Supporting Obligations;

(n)           all monies, whether or not in the possession or under the control of Agent;

(o)           all accessions to, substitutions for, and all replacements, products, and cash and non-cash Proceeds of the foregoing, including Proceeds of and unearned premiums with respect to insurance policies, and claims against any Person for loss, damage or destruction of any Collateral; and

(p)           all books and records (including customer lists, files, correspondence, tapes, computer programs, printouts and computer records) pertaining to the foregoing.

Notwithstanding anything to the contrary in this Agreement, and except for so long as a security interest in such Collateral is then in effect to secure the ABL Obligations, the

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Collateral shall not include (collectively, the “Excluded Assets”): (i) any of the outstanding voting Capital Stock of a “controlled foreign corporation” (as defined in Section 957 of the Code) in excess of 65% of the voting power of all classes of Capital Stock of such controlled foreign corporation entitled to vote; (ii) any interest of a Grantor in any contract, lease, license or other agreement if the granting of a security interest therein is prohibited by, or would cause a termination of all or any material rights of a Grantor under applicable law or would cause a breach, default or invalidation of, or create a right to terminate, the terms of the written agreement creating such contract, lease, license or other agreement, to the extent such prohibition, termination, breach, default or right to terminate is not rendered unenforceable or ineffective under sections 9-406 through 9-409 of the UCC or other applicable law, it being understood that, notwithstanding anything set forth in this clause (ii) to the contrary, to the extent not prohibited by applicable law, the Agent, for the benefit of the Secured Parties, shall at all times have a security interest in all rights of such Grantor to payments of money due or to become due under any such contract, lease, license or other agreement, and all proceeds thereof, and if and when the prohibition or event which prevents the granting of a security interest in such property (or would cause such termination, breach or default) is removed, terminated or otherwise becomes unenforceable as a matter of applicable law, the Agent, for the benefit of the Secured Parties, will be deemed to have, and at all times to have had, a security interest in such property and Collateral, to the fullest extent permitted under applicable law, will be deemed to include, and at all times to have included, such property; (iii) Capital Stock of any Person which is not a Subsidiary to the extent and for so long as the certificate of incorporation, bylaws, any shareholder agreement or similar agreement governing the ownership of such Capital Stock by the applicable Grantor prohibits the granting of a security interest therein; (iv) assets and proceeds thereof securing Indebtedness permitted to be incurred pursuant to Sections  4.03(b)(iv), (xii) and (xx) of the Indenture to the extent such Indebtedness prohibits the granting of a security interest in such assets and proceeds thereof, and assets and proceeds thereof subject to Liens pursuant to clauses (8) and (9) of the definition of “Permitted Liens” to the extent and for so long as the agreements relating to such Liens prohibit such assets and proceeds thereof from being Collateral; (v) the Capital Stock and other securities of any Person that is not required to be a Guarantor (other than any Capital Stock or securities held in a securities account); (vi) any property or assets owned by a Foreign Subsidiary or a Subsidiary that is not required to be a Guarantor under Section 4.11 of the Indenture; (vii) assets of any Grantor located outside the United States to the extent a lien on such assets cannot be perfected by the filing of UCC financing statements in the jurisdictions of organization of such Grantor; (viii) any leasehold interest of any Grantor, as tenant, in real property; (ix) motor vehicles and other assets subject to certificates of title to the extent that a lien therein cannot be perfected by the filing of UCC financing statements in the jurisdictions of organization of the applicable Grantor; and (x) proceeds and products of any and all of the foregoing excluded assets described in clause (i) through (ix) above only to the extent such proceeds and products would constitute property or assets of the type described in clause (i) through (ix) above.

In addition, notwithstanding anything herein to the contrary, in the event that Rule 3-16 of Regulation S-X under the Securities Act requires (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary Grantor of the Company due to the fact that such Subsidiary Grantor’s Capital Stock or other

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securities of such Grantor secure the Notes and/or Permitted Additional Pari Passu Obligations affected thereby, then the Capital Stock and such other securities of such Subsidiary Grantor will automatically be deemed not to be part of the Collateral securing the Notes and/or Permitted Additional Pari Passu Obligations affected thereby but only to the extent necessary to not be subject to such requirement, only for so long as required to not be subject to such requirement and only with respect to Obligations affected thereby.

In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Subsidiary Grantor’s Capital Stock and other securities to secure the Notes and/or Permitted Additional Pari Passu Obligations in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary Grantor, then the Capital Stock and other securities of such Subsidiary Grantor will automatically be deemed to be a part of the Collateral for the relevant Notes and/or Permitted Additional Pari Passu Obligations but only to the extent necessary to not be subject to any such financial statement requirement.

2.2          Real Estate Collateral

The Obligations shall also be secured by (i) Mortgages and fixture filings upon all Mortgaged Property and Fixtures owned by each Grantor and listed on Schedule 2.2 and (ii) to the extent not excluded from “Collateral” pursuant to clause (i) of Section 2.1, all Real Property acquired in fee simple following the Issue Date with a book value of $2.0 million or more as of the date of acquisition (or, if later, upon the date of acquisition or completion of construction of any improvements thereon) (a “Specified Real Property”) and the Grantors shall provide a Mortgage in favor of the Agent in any Specified Real Property within 90 days following the date of acquisition thereof (or, if later, upon the date such Real Property becomes a Specified Real Property) subject only to those encumbrances and such other similar items which Grantors determine in good faith are consistent with those permitted to exist on the Mortgaged Property on the Issue Date.  The amount of Obligations secured by any Real Property which becomes a Mortgaged Property following the Issue Date may be limited to an amount equal to at least 100% of the Fair Market Value of such Mortgaged Property in the event that securing a greater principal amount of Obligations would require the payment of recording or similar taxes in excess of $5,000.  In the event that any Permitted Additional Pari Passu Obligations are incurred following the Issue Date, the Grantors shall notify the Agent thereof in writing and take all such action as may be reasonably required to amend each then existing Mortgage in order to appropriately ensure that such Permitted Additional Pari Passu Obligations are secured equally and ratably with the Note Obligations.  In connection with the provision of any Mortgage or any amendment to any Mortgage pursuant this Section 2.2, the related Grantors will provide (i) an opinion of counsel which the Grantors determine in good faith to be consistent with those provided on the Issue Date, (ii) a title insurance policy (or amendments to existing title insurance policy) providing title insurance in an amount determined in good faith by the Company to be consistent with the manner in which the amounts were determined on the Issue Date and including such endorsements, exceptions and other similar items which the Grantors determine in good faith are consistent with those provided on the Issue Date, (iii) evidence of flood insurance, if such property is located in a special flood hazard area, (iv) survey (or an existing

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survey together with an “affidavit of no change” to the extent necessary for the title insurance company to issue the title insurance policy without the so called standard “survey” exception and with all survey related endorsements consistent with those provided on the Issue Date), and (v) such other items which the Grantors determine in good faith are consistent with those provided on the Issue Date.

2.3          Representations, Warranties and Covenants

Each Grantor represents, warrants and covenants, as of the date hereof, as follows:

2.3.1.             Commercial Tort Claims

Schedule 2.3.1 contains a true and correct list of all Commercial Tort Claims held by each Grantor, including a brief description thereof in excess of $1,000,000.  Each Grantor shall promptly notify the Agent in writing if such Grantor has a Commercial Tort Claim (other than, as long as no Event of Default exists, a Commercial Tort Claim for less than $1,000,000) and shall promptly take such actions as counsel to such Grantor deems appropriate to confer upon the Agent (for the benefit of Secured Parties) a duly perfected, first priority Lien upon such claim, subject to Permitted Liens.

2.3.2.             Chattel Paper, Instruments and Letter-of-Credit Rights

Schedule 2.3.2 contains a true and correct list of all Chattel Paper and Instruments (including, without limitation, Promissory Notes), in each case with a Fair Market Value in excess of $1,000,000 in the aggregate.  Each Grantor shall promptly (a) notify the Agent in writing if, after the Issue Date, such Grantor obtains any interest in any Collateral consisting of Chattel Paper, Instruments or Letter-of-Credit Rights (except to the extent constituting Supporting Obligations for any Collateral), in each case with a Fair Market Value in excess of $1,000,000 in the aggregate, and (b) deliver such Chattel Paper and Instruments to the Agent,  and with respect to the Letter-of-Credit Rights, use its commercially reasonable efforts to take such actions as such Grantor deems appropriate to effect Agent’s “control” (within the meaning of the UCC) over such Letter-of-Credit Rights.  All instruments (if any) representing or evidencing any Collateral shall be delivered to the Agent (or its bailee) and held by or on behalf of the Agent pursuant hereto and shall either be in suitable form for transfer by delivery, and shall be accompanied by duly executed undated instruments of transfer or assignments in blank.

2.3.3.             Pledged Shares

All Pledged Shares represented by Certificated Securities that are pledged hereunder on the date hereof have been delivered to the Agent.  Each Grantor shall promptly (a) notify the Agent in writing if, after the Issue Date, such Grantor obtains any interest in any Pledged Shares, and (b) within 30 days of their acquisition, deliver any Certificated Securities evidencing such Pledged Shares to the Agent, and with respect to the Uncertificated Securities, take all actions to effect Agent’s “control” (within the meaning of the UCC) over such Uncertificated Securities, in each case, to the extent such Pledged Shares are Collateral hereunder.  All certificates (if any) representing or evidencing any Pledged Shares shall be

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delivered to the Agent (or its bailee) and held by or on behalf of the Agent pursuant hereto and shall either be in suitable form for transfer by delivery, and shall be accompanied by duly executed undated instruments of transfer or assignments in blank, all in form sufficient to grant “control” (as defined in Article 9 of the UCC) to the Agent over such certificates.

2.3.4.             Deposit Accounts.

As of the date hereof, no Grantor has any Deposit Accounts other than the accounts listed in Schedule 13 to the Perfection Certificate.  No Grantor shall maintain any Deposit Account unless the Bank where such Deposit Account is maintained and such Grantor shall have duly executed and delivered to the ABL Agent prior to the Discharge of ABL Obligations and thereafter to the Agent, a control agreement with respect to such Deposit Account granting “control” (within the meaning of the UCC) over such Deposit Account to the Agent. Prior to the Discharge of ABL Obligations, the requirements of this Section 2.3.4 shall be deemed satisfied with respect to a Deposit Account so long as the ABL Agent (as such term is defined in the Intercreditor Agreement) is a party to a control agreement granting “control” (within the meaning of the UCC) with respect to such Deposit Account to the ABL Agent; provided that upon the Discharge of ABL Obligations each Grantor shall cooperate with the ABL Agent, Agent and each Bank to have each control agreement assigned to the Agent.

2.3.5.             After-Acquired Intellectual Property

At the time of delivery of any quarterly or annual financial statements pursuant to Section 4.02 of the Indenture following the date any Grantor (i) obtains any rights to any additional Intellectual Property constituting Collateral which is registered with the United States Copyright Office or the United States Patent & Trademark Office or (ii) becomes entitled to the benefit of any additional Intellectual Property constituting Collateral or any renewal or extension thereof, including any reissue, division, continuation, or continuation-in-part of any Intellectual Property constituting Collateral which is registered with the United States Copyright Office or the United States Patent & Trademark Office, or any improvement on any Intellectual Property constituting Collateral which is registered with the United States Copyright Office or the United States Patent & Trademark Office, such Grantor shall notify the Agent thereof in writing and cause a short form security agreement in favor of the Agent to be filed in the United States Copyright Office or the Unites States Patent & Trademark Office, as the case may be, with respect to such Intellectual Property.

2.4          No Assumption of Liability

The Lien on Collateral granted hereunder is given as security only and shall not subject Agent or any other Secured Party to, or in any way modify, any obligation or liability of any Grantor relating to any Collateral.

2.5          Further Assurances

Each Grantor shall deliver such instruments, assignments, title certificates, or other documents or agreements, and shall take such actions, as such Grantor deems appropriate under applicable law to evidence or perfect the Agent’s Lien on any Collateral, or otherwise to

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give effect to the intent of this Agreement; provided that notwithstanding anything in this Agreement to the contrary, the Grantors shall not be required to take any action to perfect the security interest of the Agent, other than the filing of UCC-1 financing statements, in any of the following assets: (i) any vehicles or equipment subject to certificate of title statutes, (ii) any Real Property except as provided in Section 2.2, (iii) assets located in any country other than the United States of America, (iv) Excluded Assets and (v) Intellectual Property that is not registered with the United States Copyright Office or the United States Patent & Trademark Office, or any successor office thereto.  Each Grantor authorizes Agent to file any financing statement that indicates the Collateral as “all assets” or “all personal property” of such Grantor, or words to similar effect, and ratifies any action taken by Agent before the Issue Date to effect or perfect the Agent’s Lien on any Collateral.  The rights and powers conferred on the Agent hereunder are solely to protect its interest (on behalf of the Secured Parties) in the Collateral and shall not impose any duty on it to exercise any such powers. Except for the reasonable care of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Agent shall have no duty as to any Collateral or responsibility for ascertaining or taking any necessary steps to preserve rights against other parties or any other rights pertaining to any Collateral (including, without limitation, the filing of UCC financing or continuation statements).

SECTION 3.COLLATERAL ADMINISTRATION

3.1          Records and Schedules of Collateral

Each Grantor shall keep accurate and complete records of its Accounts, Inventory, Equipment, Mortgaged Property and all other material Collateral.

3.2          Taxes

If an Account of any Grantor includes a charge for any taxes, Agent is authorized (but shall be under no obligation to any Secured Party or to any Grantor) to pay the amount thereof to the proper taxing authority for the account of such Grantor and to charge such Grantor therefor; provided, however, that neither Agent nor Secured Parties shall be liable for any taxes that may be due from any Grantor or with respect to any Collateral.

3.3          Account Verification

While any Event of Default exists, Agent shall have the right at any time, in the name of Agent, any designee of Agent or any Grantor, to verify the validity, amount or any other matter relating to any Accounts of such Grantor by mail, telephone or otherwise.  Each Grantor shall cooperate fully with Agent in an effort to facilitate and promptly conclude any such verification process.

3.4          Voting Rights; Dividends; Etc.

(a)           So long as no Event of Default has occurred and is then continuing in respect of which the Agent has provided the Grantors with notice of its election to exercise the rights and remedies set forth in Section 3.4(b) below:

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(i)The Grantors shall be entitled to exercise any and all voting and other consensual rights pertaining to the Pledged Shares, or any part thereof, for any purpose not inconsistent with the terms of this Agreement or the Indenture; and

(ii)To the extent permitted under the Indenture, the Grantors shall be entitled to receive all distributions, dividends (in the form of cash, securities or otherwise), cash, instruments, chattel paper and other rights, property or proceeds and products from time to time received, receivable or otherwise distributed in respect of the Pledged Shares.

(b)At any time that an Event of Default has occurred and is then continuing in respect of which the Agent has provided the Grantors with notice of its election to exercise the rights and remedies set forth in this Section 3.4(b):

(i)All rights of the Grantors to exercise voting and other consensual rights in respect of the Pledged Shares shall immediately cease to be effective upon their receipt of notice from the Agent of the Agent’s intent to exercise its rights hereunder, and upon the delivery of such notice all such voting and other consensual rights shall become vested in the Agent and the Agent shall thereupon have the sole right to exercise such voting and other consensual rights (including, without limitation, the right to vote in favor of, and to exchange any or all of the Pledged Shares upon, the consolidation, recapitalization, merger or other reorganization with respect to an issuer of such Pledged Shares).  In order to effect the foregoing, each Grantor hereby grants to the Agent an irrevocable proxy to vote the Pledged Shares and, any time that an Event of Default exists in respect of which the Agent has provided the Grantors with notice of its election to exercise the rights and remedies set forth in this Section 3.4(b), each Grantor agrees to execute such other proxies as Agent may request; and

(ii)All rights of the Grantors to receive and retain any distributions, dividends (in the form of cash, securities or otherwise), instruments, chattel paper or other property paid or payable with respect to any of the Pledged Shares shall immediately cease and any such distributions, dividends (in the form of cash, securities or otherwise), instruments, chattel paper or other property paid or payable with respect to any of the Pledged Shares shall be paid to the Agent (for application to the Obligations as set forth in Annex III hereto, with respect to any cash or cash equivalents, or to be held by the Agent as additional security for the Obligations, with respect to any other type of property).  Any distributions, dividends (in the form of cash, securities or otherwise), instruments, chattel paper or other property paid or payable with respect to any of the Pledged Shares and received by the Grantors contrary to the provisions of this Agreement shall be received in trust for the benefit of the Agent, shall be segregated from other assets (including, in the case of cash or cash equivalents, other funds) of the Grantors and shall be forthwith paid to the Agent (for application to the Obligations as set forth in Annex III hereto, with respect to any cash or cash equivalents, or to be held by the Agent as additional security for the Obligations, with respect to any other type of property).

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3.5Insurance of Collateral and Mortgaged Property; Condemnation Proceeds

Each Grantor shall maintain insurance with respect to the Collateral and Mortgaged Property, covering casualty, hazard, public liability, theft, malicious mischief, flood and other risks, in amounts, with endorsements and with insurers (including, if the Company determines it is prudent, through self-insurance) providing protection in amounts and against risks substantially consistent with that in effect on the Issue Date.  All proceeds under each policy in respect of Collateral and Mortgaged Property constituting Net Loss Proceeds shall, subject to the Intercreditor Agreement, be payable to the Agent as Trust Monies.  Each Grantor shall deliver certified copies of all insurance policies or a certificate of an insurance broker to the Agent; cause each such policy to provide that it shall not be canceled or not renewed upon less than 30 days’ prior written notice thereof by the insurer to the Agent; deliver to the Agent, prior to the cancellation or nonrenewal of any such policy of insurance, a copy of a renewal or replacement policy (or other evidence of renewal of a policy previously delivered to the Agent), or insurance certificate with respect thereto, together with evidence of payment of the premium therefor. The Grantors shall use commercially reasonable efforts (consistent with industry practice) to cause each such policy to include satisfactory endorsements (i) showing the Agent as loss payee or additional insured, as appropriate; and (ii) specifying that the interest of the Agent shall not be impaired or invalidated by any act or neglect of any Grantor or the owner of the property, nor by the occupation of the premises for purposes more hazardous than are permitted by the policy.  If any Grantor fails to provide and pay for any insurance, the Agent may, at its option (but shall not be under any obligation to any Secured Party or any Grantor to), procure the insurance and charge such Grantor therefor.  While no Event of Default exists, each Grantor may, but the Agent may not, settle, adjust or compromise any insurance claim, as long as the proceeds are delivered to the Agent.  If an Event of Default exists, the Agent may (but shall not be under any obligation to any Secured Party or any Grantor to) reasonably settle, adjust and compromise such claims.

3.6Protection of Collateral

All reasonable expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral, all taxes payable with respect to any Collateral (including any sale thereof), and all other payments required to be made by the Agent to any Person to realize upon any Collateral, shall be borne and paid by the Grantors.  The Agent shall not be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its custody while Collateral is in the Agent’s actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at each Grantor’s sole risk.

3.7Defense of Title to Collateral

Each Grantor shall at all times defend its title to Collateral and Mortgaged Property and Agent’s Liens therein against all Persons, claims and demands whatsoever, except Permitted Liens.

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3.8Power of Attorney

Upon the occurrence and during the continuance of an Event of Default or an event of default under any Additional Pari Passu Agreement, each Grantor hereby irrevocably constitutes and appoints the Agent (and all Persons designated by the Agent) as such Grantor’s true and lawful attorney (and agent-in-fact) for the purposes provided in this Section 3.8.  The Agent, or the Agent’s designee, may, following the occurrence or and during the continuance of an Event of Default, without notice and in either its or the applicable Grantor’s name, but at the cost and expense of such Grantor:

(a)Endorse such Grantor’s name on any payment item or other proceeds of Collateral or Mortgaged Property (including proceeds of insurance) that come into the Agent’s possession or control; and

(b)(i)  settle, adjust, modify, compromise, discharge or release any Accounts or other Collateral or Mortgaged Property, or any legal proceedings brought to collect Accounts or other Collateral or Mortgaged Property; (ii) sell or assign any Accounts and other Collateral or Mortgaged Property upon such terms, for such amounts and at such times as Agent deems advisable; (iii) take control, in any manner, of any proceeds of Collateral or Mortgaged Property; (iv) prepare, file and sign such Grantor’s name to any notice, assignment or satisfaction of Lien or similar document; (v) receive, open and dispose of mail addressed to such Grantor, and notify postal authorities to change the address for delivery thereof to such address as the Agent may designate; (vi) endorse any Chattel Paper, Document, Instrument, invoice, freight bill, bill of lading, or similar document or agreement relating to any Accounts, Inventory or other Collateral or Mortgaged Property; (vii) use the information recorded on or contained in any data processing equipment and computer hardware and software relating to any Collateral or Mortgaged Property; (viii) make and adjust claims under policies of insurance; (ix) take any action as may be necessary or appropriate to obtain payment under any letter of credit or banker’s acceptance for which such Grantor is a beneficiary; and (x) take all other actions as the Agent deems appropriate.

SECTION 4.REPRESENTATIONS AND WARRANTIES

Each Grantor represents and warrants that:

4.1Organization and Qualification

Such Grantor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.  Such Grantor is duly qualified to transact business and in good standing as a foreign corporation in each jurisdiction where failure to be so qualified could reasonably be expected to have a material adverse effect on the business, financial condition or results of operations of the Grantors (taken as a whole) (a “Material Adverse Effect”).

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4.2Power and Authority

Such Grantor is duly authorized to enter into and perform its obligations under this Agreement.  The execution, delivery and performance of this Agreement have been duly authorized by all necessary action, and do not (a) require any consent or approval of any holders of Capital Stock of such Grantor, other than those already obtained; (b) contravene the organizational documents of such Grantor; (c) violate or cause a default under any applicable law or any material contract to which such Grantor is a party; or (d) result in or require the imposition of any Lien (other than Permitted Liens) on any property of such Grantor.

4.3Enforceability and Validity and Perfection of Liens

This Agreement is a legal, valid and binding obligation of such Grantor, enforceable in accordance with its terms, except (i) as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and (ii) equitable limitations upon the enforcement (whether by an action for specific performance, injunctive relief or otherwise) of remedies or obligations enforceable in a court of equity and the discretion of courts in granting or withholding equitable relief with respect to such enforcement.

The security interest in and Lien on the Collateral granted to the Agent for the benefit of the Secured Parties hereunder constitutes (a) a legal and valid security interest in all the Collateral securing the payment and performance of the Obligations and (b) subject to the filings and other actions described in Schedule 6 to the Perfection Certificate (to the extent required to be listed on the schedules to the Perfection Certificate as of the date this representation is made or deemed made), a perfected security interest in all the Collateral, except to the extent perfection therein is not required hereunder.  The security interest and Lien granted to the Agent for the benefit of the Secured Parties pursuant to this Agreement in and on the Collateral will at all times constitute a perfected, continuing security interest therein, prior to all other Liens on the Collateral except for Permitted Liens and except as otherwise provided for in the Indenture and the Intercreditor Agreement.

4.4Title to Properties; Priority of Liens

Each Grantor has good and marketable title to (or valid leasehold interests in) all of its Real Property, and good title to, or valid leasehold interests in, all of its personal property purported to be owned by it, except as would not result in a Material Adverse Effect, including all property reflected in any financial statements delivered to the Agent, in each case free of Liens except Permitted Liens.

4.5Intellectual Property

Each Grantor owns or has the lawful right to use all Intellectual Property necessary for the conduct of its business, without known conflict with any rights of others.  There is no pending or, to such Grantor’s knowledge, threatened Intellectual Property claim with respect to such Grantor or any of its property (including any Intellectual Property), except for any such Intellectual Property claim that could not reasonably be expected to have a Material

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Adverse Effect.  Except as disclosed on Schedules 11(a) and (b) to the Perfection Certificate, on the Issue Date each Grantor neither pays nor owes any royalty or other compensation to any Person with respect to any material Intellectual Property.

4.6Governmental Approvals

Such Grantor has, is in compliance with, and is in good standing with respect to, all governmental approvals necessary to conduct its business and such Grantor has not received any notice of proceedings relating to the revocation or modification of, or non-compliance with any such government approvals, individually or in the aggregate, except as would not have a Material Adverse Effect.  All necessary import, export or other licenses, permits or certificates for the import or handling of any goods or other Collateral have been procured and are in effect except as would not have a Material Adverse Effect, and such Grantor has complied with all foreign and domestic laws with respect to the shipment and importation of any goods or Collateral, except where noncompliance could not reasonably be expected to have a Material Adverse Effect.

4.7Compliance with Laws

Such Grantor has duly complied, and its properties and business operations are in compliance, in all material respects with all applicable law, except where noncompliance could not reasonably be expected to have a Material Adverse Effect.  There have been no material citations, notices or orders of material noncompliance received by such Grantor under any applicable law.

4.8Compliance with Environmental Laws

Except as disclosed on Schedule 4.8 on the Issue Date, or as otherwise would not result in a Material Adverse Effect, on the Issue Date such Grantor is not subject to any federal, state or local investigation to determine whether any remedial action is needed to address any environmental pollution, hazardous material or environmental clean-up.  Except as disclosed on Schedule 4.8 as of the Issue Date, such Grantor has not received any notice of any material environmental liability of any Grantor.

4.9Pledged Shares

All Pledged Shares has been duly and validly authorized and issued to the applicable Grantor and, if applicable, is fully paid and nonassessable.

Except in connection with the local law requirements for pledges of Pledged Shares issued by Foreign Subsidiaries, the delivery of the Pledged Shares to the Agent pursuant to this Agreement (and, with respect to Pledged Shares consisting of membership interests or partnership interests that are not “securities” under Article 8 of the UCC, the filing in the appropriate filing office of a UCC financing statement describing the same as collateral) is effective to create a valid and perfected first priority security interest in the Pledged Shares, free of any adverse claim, securing the payment of the Obligations.  Subject only to the consummation of the delivery described in the immediately preceding sentence (and, if

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applicable, the filing of a financing statement described in such sentence), Agent has a valid and perfected first priority security interest in the Pledged Shares securing the payment of the Obligations, and such security interest is entitled to all of the rights, priorities and benefits afforded by the UCC or other applicable law as enacted in any relevant jurisdiction which relates to perfected security interests.

No Pledged Shares consisting of either (i) a membership interest in an issuer that is a limited liability company or (ii) a partnership interest in an Issuer that is a partnership, provides by its terms that it is a “security” governed by Article 8 of the UCC.

None of the Pledged Shares constitutes margin stock, as defined in Regulation U of the Board of Governors of the Federal Reserve System.

4.10Complete Disclosure

Such Grantor has disclosed to the Agent all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  The Agent, each Secured Party and each Grantor agree that the Perfection Certificate and all descriptions of Collateral, schedules, amendments and supplements thereto are and shall at all times remain a part of this Agreement.

SECTION 5.AFFIRMATIVE COVENANTS

As long as any Obligations are outstanding (other than contingent obligations which by their terms survive the discharge or defeasance of the Indenture and each Additional Pari Passu Agreement), each Grantor shall:

5.1Notices

Notify the Agent in writing, promptly after such Grantor’s obtaining knowledge thereof, of any of the following that affects such Grantor:  any environmental release by such Grantor or on any property owned, leased or occupied by such Grantor, which environmental release could reasonably be expected to have a Material Adverse Effect; or receipt of any environmental notice, if an adverse resolution could reasonably be expected to have a Material Adverse Effect.  In the event of any change by any Grantor of (i) such Grantor’s legal name, (ii) such Grantor’s jurisdiction of organization, (iii) such Grantor’s organizational identification number, if any, (iv) such Grantor’s federal taxpayer identification number or (v) such Grantor’s chief executive office, the Grantors will notify the Agent thereof and will cause such amendments to any UCC financing statements and other filings or registrations relating to the Collateral as may be reasonably required to maintain the perfection and priority of the Agent’s security interest in the Collateral of such Grantor.

5.2ABL Agent

In the event any Grantor takes any action to grant or perfect a Lien in favor of the ABL Agent (as defined in the Intercreditor Agreement) in any assets (other than granting

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“control” over any ABL Priority Collateral to the ABL Agent (as defined in the Intercreditor Agreement) but including actions to perfect security interests in leasehold mortgages or under the laws of foreign jurisdictions), such Grantor shall also take such action to grant or perfect a Lien in favor of the Agent to secure the Obligations.

5.3Compliance with Laws

Comply with all applicable laws, and maintain all governmental approvals necessary to the ownership of its properties or conduct of its business, unless failure to comply or maintain could not reasonably be expected to have a Material Adverse Effect.

SECTION 6.THE COLLATERAL AGENT

6.1Duties of Agent

(a)If an Event of Default has occurred and is continuing and the Agent has received written notice thereof from the Company, the Trustee or any Additional Pari Passu Agent, the Agent shall exercise such of the rights and powers vested in it by this Agreement and the Security Documents, and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs, it being understood that the Agent shall have no obligation to exercise such rights request unless instructed in writing to do so by the Required Secured Parties.

(b)Except during the continuance of an Event of Default:

(i)the duties of the Agent shall be determined solely by the express provisions of this Agreement and the Agent need perform only those duties that are specifically set forth in this Agreement and the Security Documents and no others, and no implied covenants or obligations shall be read into this Agreement or the Security Documents against the Agent; and

(ii)in the absence of bad faith on its part, the Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Agent.

(c)The Agent may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i)this paragraph does not limit the effect of paragraph (b) or (e) of this Section 6.1;

(ii)the Agent shall not be liable for any error of judgment made in good faith by an officer of the Agent, unless it is proved that the Agent was negligent in ascertaining the pertinent facts; and

(iii)the Agent shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 7

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hereof or otherwise in accordance with the direction of the Required Secured Parties, or for the method and place of conducting any proceeding for any remedy available to the Agent, or exercising any trust or power conferred upon the Agent, under this Agreement or any Security Document.

(d)Whether or not therein expressly so provided, every provision of this Agreement or any provision of any Security Document that in any way relates to the Agent is subject to paragraphs (a), (b), (c), (e) and (f) of this Section 6.1.

(e)No provision of this Agreement or any Security Document shall require the Agent to expend or risk its own funds or incur any liability.  The Agent shall be under no obligation to exercise any of its rights and powers under this Agreement or any Security Document at the request of any Secured Parties, unless such Secured Parties shall have offered to the Agent security and indemnity satisfactory to it against any loss, liability or expense.

(f)The Agent shall not be liable for interest on any money received by it except as the Agent may agree in writing with the Grantors.  Money held in trust by the Agent need not be segregated from other funds except to the extent required by law.

6.2Rights of Agent

(a)The Agent may conclusively rely and shall be fully protected in acting or refraining from acting on any document believed by it to be genuine and to have been signed or presented by the proper Person.  The Agent need not investigate any fact or matter stated in any such document. The Agent shall not be obligated to communicate with or deal in any way with any Secured Party other than the Trustee or any Additional Pari Passu Agent.  In determining (x) the amount of Obligations outstanding under the Indenture or any Additional Pari Passu Agreement or (y) whether the consent of any Secured Party to any amendment, waiver or other action under this Agreement or any other Security Document has been obtained, the Agent may conclusively rely on any statement by the Trustee or the applicable Additional Pari Passu Agent as to such matter.

(b)Before the Agent acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both.  The Agent shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel.  The Agent may consult with counsel of the Agent’s own choosing and the Agent shall be fully protected from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance on the advice or opinion of such counsel or on any Opinion of Counsel.

(c)The Agent may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any attorney or agent appointed with due care.

(d)The Agent shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Agreement or any Security Document.  Any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officers’ Certificate.  Whenever in the

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administration of this Agreement or any Security Document the Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officers’ Certificate.

(e)Unless otherwise specifically provided in this Agreement or any Security Document, any demand, request, direction or notice from any Grantor shall be sufficient if signed by an Officer of such Grantor.

(f)The Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement or any Security Document at the request or direction of any of the Secured Parties unless such Secured Parties shall have offered to the Agent security and indemnity satisfactory to the Agent against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

(g)The Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or documents, but the Agent, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Agent shall determine to make such further inquiry or investigation, it shall be entitled to examine during normal business hours the books, records and premises of any Grantor, personally or by agent or attorney at the sole cost of the Grantors, and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(h)The rights, privileges, protections and benefits given to the Agent, including, without limitation, its rights to be indemnified, are extended to, and shall be enforceable by, the Agent in each of its capacities hereunder, and to each agent, custodian and other Persons employed to act hereunder or under any Security Document.

(i)The Agent may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Agreement or any other Security Document, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

(j)The permissive right of the Agent to take or refrain from taking any actions enumerated in this Agreement or any Security Document shall not be construed as a duty.

(k)In the event that the Agent (in such capacity or in any other capacity hereunder or under any Security Document) is unable to decide between alternative courses of action permitted or required by the terms of this Agreement or any Security Document, or in the event that the Agent is unsure as to the application of any provision of this Agreement or any Security Document, or believes any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement or any Security Document permits any determination by or the exercise of discretion on the part

19

of the Agent or is silent or is incomplete as to the course of action that the Agent is required to take with respect to a particular set of facts, the Agent shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Noteholders requesting instruction as to the course of action to be adopted, and to the extent the Agent acts in good faith in accordance with any written instructions received from a majority in aggregate principal amount of the then outstanding Notes, the Agent shall not be liable on account of such action to any Person.  If the Agent shall not have received appropriate instruction within 10 days of such notice (or such shorter period as reasonably may be specified in such notice or as may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action as it shall deem to be in the best interests of the Noteholders and the Agent shall have no liability to any Person for such action or inaction.

6.3Individual Rights of Agent

The Agent in its individual or any other capacity may become the owner or pledgee of Obligations and may otherwise deal with any Grantor or any Affiliate of any Grantor with the same rights it would have if it were not Agent.

6.4Agent’s Disclaimer

The Agent shall not be responsible for and makes no representation as to the validity or adequacy of this Agreement or any other Security Document, or the existence, genuineness, value or protection of any Collateral or Mortgaged Property (except for the safe custody of Collateral in its possession and the accounting for Trust Monies actually received by it in accordance with the terms hereof) for the legality, effectiveness or sufficiency of any Security Document, or for the creation, perfection, priority, sufficiency or protection of any Lien on any Collateral or Mortgaged Property, and it shall not be responsible for any statement or recital herein or any statement in this Agreement or any Security Document.

6.5Replacement of Agent

A resignation or removal of the Agent and appointment of a successor Agent shall become effective only upon the successor Agent’s acceptance of appointment as provided in this Section 6.5.

The Agent may resign in writing at any time and be discharged from the trust hereby created upon 45 days prior notice to the Company, the Trustee and each Additional Pari Passu Agent.  The Company may remove the Agent if:

(a)the Agent is removed as Trustee under the Indenture;

(b)the Agent fails to comply with Section 6.7 hereof;

(c)the Agent is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Agent under any Bankruptcy Law;

(d)a custodian or public officer takes charge of the Agent or its property; or

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(e)           the Agent becomes incapable of acting.

If the Agent resigns or is removed or if a vacancy exists in the office of Agent for any reason, the Company shall promptly appoint a successor Agent which complies with the eligibility requirements contained in the Indenture and each Additional Pari Passu Agreement.  Within one year after the successor Agent takes office, the Required Secured Parties may appoint a successor Agent to replace the successor Agent appointed by the Grantors and prior to an Event of Default, with the consent of the Company (not to be unreasonably withheld).

If a successor Agent does not take office within 10 days after the retiring Agent resigns or is removed, the retiring Agent, the Company or the holders of at least 10% in principal amount of the then outstanding principal amount of Obligations may petition any court of competent jurisdiction for the appointment of a successor Agent.

A successor Agent shall deliver a written acceptance of its appointment to the retiring Agent and to the Company.  Thereupon, the resignation or removal of the retiring Agent shall become effective, and the successor Agent shall have all the rights, powers and the duties of the Agent under this Agreement and the Security Documents.  The successor Agent shall mail a notice of its succession to the Trustee and each Additional Pari Passu Agent.  The retiring Agent shall promptly transfer all property held by it as Agent to the successor Agent, provided that all sums owing to the Agent hereunder have been paid.  Notwithstanding replacement of the Agent pursuant to this Section 6.5, the Grantors’ obligations under Section 8.2 and Section 8.3 shall continue for the benefit of the retiring agent.

6.6          Successor Agent by Merger, Etc.

If the Agent consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another Person, the successor Person without any further act shall be the successor Agent under this Agreement and the other Security Documents.

6.7          Eligibility

There shall at all times be an Agent hereunder that (i) meets the requirements for being a Trustee under the Indenture (prior to the discharge or defeasance of the Indenture) and (ii) following the discharge or defeasance of the Indenture, meets the requirements for being the Additional Pari Passu Agent under any then extant Additional Pari Passu Agreement.

6.8          Agent’s Application for Instructions from the Company

Any application by the Agent for written instructions from the Company may, at the option of the Agent, set forth in writing any action proposed to be taken or omitted by the Agent under this Agreement or any other Security Document and the date on and/or after which such action shall be taken or such omission shall be effective.  The Agent shall not be liable for any action taken by, or omission of, the Agent in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than 20 Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking

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any such action (or the effective date in the case of an omission), the Agent shall have received written instructions in response to such application specifying the action to be taken or omitted.

6.9          Co-Agent; Separate Agent

At any time or times, for the purpose of meeting the legal requirements of any jurisdiction in which any of the Collateral or Mortgaged Property may at the time be located, the Company and the Agent shall have power to appoint agents and sub-agents to the extent permitted under the Indenture.

SECTION 7.REMEDIAL PROVISIONS

7.1          General

If any Event of Default exists, the Agent may (but, except as provided below, shall be under no obligation to any Secured Party or any Grantor to unless instructed in writing to do so by the Required Secured Parties) from time to time exercise any rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC.  Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require each Grantor to assemble Collateral, at such Grantor’s expense, and make it available to the Agent at a place designated by the Agent; (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by any Grantor, such Grantor agrees not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by applicable law, in lots or in bulk, at such locations, all as the Agent, acting only upon the written direction of the Required Secured Parties (or, in the absence of such direction, in any manner), deems advisable.  Each Grantor agrees that 10 days’ notice of any proposed sale or other disposition of Collateral by the Agent shall be reasonable.  The Agent shall have the right to (but shall be under no obligation to any Secured Party or any Grantor to unless instructed in writing to do so by Required Secured Parties) conduct such sales on any Grantor’s premises, without charge, and such sales may be adjourned from time to time in accordance with applicable law.  The Agent shall have the right to (but shall be under no obligation to any Secured Party or any Grantor to) sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and the Agent may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase price, may set off the amount of such price against the Obligations.

7.2          License

The Agent is hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of each Grantor, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels, packaging materials and other property, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral.  Each Grantor’s rights and interests under Intellectual Property shall inure to the Agent’s benefit.

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7.3          [Reserved]

7.4          Remedies Cumulative; No Waiver

7.4.1.             Cumulative Rights

All covenants, conditions, provisions, warranties, guaranties, indemnities and other undertakings of any Grantor contained in the Senior Secured Note Documents are cumulative and not in derogation or substitution of each other.  In particular, the rights and remedies of the Agent are cumulative, may be exercised at any time and from time to time, concurrently or in any order, and shall not be exclusive of any other rights or remedies that the Agent may have, whether under any agreement, by law, at equity or otherwise.

7.4.2.             Waivers

The failure or delay of the Agent to require strict performance by any Grantor with any terms of this Agreement, or to exercise any rights or remedies with respect to Collateral or otherwise, shall not operate as a waiver thereof nor as establishment of a course of dealing.  All rights and remedies shall continue in full force and effect until the Discharge of Obligations.  No modification of any terms of this Agreement or any Security Document (including any waiver thereof) shall be effective, unless such modification is specifically provided in a writing directed to the applicable Grantor and executed by the Agent with the consent of any Secured Parties required by the Indenture and any Additional Pari Passu Agreement, and such modification shall be applicable only to the matter specified.

SECTION 8.MISCELLANEOUS

8.1          Notices

All notices, approvals, requests, demands and other communications hereunder shall be given if to:

(i)Freedom Group, Inc.
870 Remington Drive
Madison, NC  27025
Attn:  Fredric E. Roth, Jr.
Telecopy No.:  336-548-8810;

(ii)Wilmington Trust FSB
246 Goose Lane, Suite 105
Guildford, CT 06437
Attn:  Joseph O’Donnell
Telecopy No.:  203-453-1183;

(iii)any Additional Pari Passu Agent, to it at the address specified in the applicable Additional Pari Passu Joinder Agreement;

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in each case, or to such other address as may be specified by such party to the other parties hereto in writing from time to time.

8.2          Indemnity

EACH GRANTOR SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER SECURITY DOCUMENT, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE.  In no event shall any Grantor have any obligation thereunder to indemnify or hold harmless an Indemnitee to the extent a claim is determined in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee.

8.3          Reimbursement Obligations

Each Grantor shall be obligated to reimburse the Agent, as part of the Obligations, for all fees, costs and expenses incurred by it in connection with this Agreement, including without limitation, any fees, costs and expenses incurred by it in enforcing its rights and remedies under this Agreement and the Security Documents.

8.4          Successors and Assigns

This Agreement shall be binding upon Grantors and their respective successors and assigns and shall inure to the benefit of the Agent and its respective successors and assigns.

8.5          Changes in Writing

No amendment, modification, termination or waiver of any provision of this Agreement shall be effective unless the same shall be in writing signed by the Agent and each Grantor, subject to any consent requirements of the Indenture and each Additional Pari Passu Agreement.

8.6          GOVERNING LAW

THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).

8.7          Consent to Forum

8.7.1.             Forum

EACH GRANTOR HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH

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JURISDICTION OVER NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO THIS AGREEMENT, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT.  EACH GRANTOR IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 8.1 HEREIN.  Nothing herein shall limit the right of the Agent to bring proceedings against any Grantor in any other court, nor limit the right of any party to serve process in any other manner permitted by applicable law.  Nothing in this Agreement shall be deemed to preclude enforcement by the Agent of any judgment or order obtained in any forum or jurisdiction.

8.7.2.             Waivers by Grantors

To the fullest extent permitted by applicable law, each party hereto waives (a) the right to trial by jury in any proceeding or dispute of any kind relating in any way to this Agreement or any Security Document; (b) presentment, demand, protest, notice of presentment, default, non-payment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, documents, instruments, chattel paper and guaranties at any time held by the Agent on which each Grantor may in any way be liable, and hereby ratifies anything the Agent may do in this regard, such ratification to apply only if the Agent has not acted with bad faith, willful misconduct or gross negligence; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing the Agent to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against the Agent, on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any enforcement action; and (g) notice of acceptance hereof.  Each party hereto acknowledges that the foregoing waivers are a material inducement to the Agent entering into this Agreement and that the Agent is relying upon the foregoing in its dealings with each Grantor.  Each Grantor has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel.  In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

8.8          Counterparts; Integration

This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement shall become effective when the Agent has received counterparts bearing the signatures of all parties hereto.  Delivery of a signature page of this Agreement by telecopy or other electronic communication shall be effective as delivery of a manually executed counterpart of such agreement.

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8.9          Permitted Additional Pari Passu Obligations

On or after the Issue Date, the Company may from time to time designate additional obligations as Permitted Additional Pari Passu Obligations by delivering to the Agent, the Trustee and each Additional Pari Passu Agent (a) a certificate signed by the chief financial officer of the Company (i) identifying the obligations so designated and the aggregate principal amount or face amount thereof, stating that such obligations are designated as “Permitted Additional Pari Passu Obligations” for purposes hereof, (ii) representing that such designation of such complies with the terms of the Indenture and each then extant Additional Pari Passu Agreement, (iii) specifying the name and address of the Additional Pari Passu Agent for such obligations (if other than the Trustee) and (iv) stating that the Grantors have complied with their obligations under Section 2.3; (b) except in the case of Additional Notes, a fully executed Additional Pari Passu Joinder Agreement (in the form attached as Annex I); and (c) an Opinion of Counsel to the effect that the designation of such obligations as “Permitted Additional Pari Passu Obligations” does not violate the terms of the Indenture and each then extant Additional Pari Passu Agreement (upon which the Agent may conclusively and exclusively rely).

8.10        Additional Grantors

If, pursuant to the terms of the Indenture or any Additional Pari Passu Agreement, the Company shall be required to cause any Subsidiary that is not a Grantor to become a Grantor hereunder, such Subsidiary shall execute and deliver to the Agent a Joinder Agreement in the form of Annex II and a Perfection Certificate substantially in the form of the Perfection Certificate dated as of the date hereof and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Issue Date (it being understood that each Subsidiary that becomes a Guarantor pursuant to the Indenture shall become a Grantor under this Agreement).

8.11        Intercreditor Matters

By accepting the benefits of this Agreement and the other Security Documents, each Secured Party agrees that it is bound by (i) the terms of the Intercreditor Agreement applicable to such Secured Party and (ii) the provisions of Annex III.

8.12        Release of Liens

(a)           This Agreement, the security interest in the Collateral, the pledge of the Pledged Shares and all other security interests granted hereby shall terminate and be released (i) in full upon the Discharge of Obligations, (ii) with respect to any Permitted Additional Pari Passu Obligation, upon repayment of such Permitted Additional Pari Passu Obligation which entitles the Grantor to obtain a release of the Liens securing such Permitted Additional Pari Passu Obligation and (iii) in whole or in part (1) as to the Obligations under the Indenture, as provided in the Indenture and (2) as to the Permitted Additional Pari Passu Obligations under any Additional Pari Passu Agreement, as provided in such Additional Pari Passu Agreement.

(b)           In addition the security interest in the Collateral, the pledge of the Pledged Shares and all other security interests granted hereby shall be released as provided in the

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Indenture with respect to liens securing the Notes and Additional Notes and each Additional Pari Passu Agreement with respect to liens securing Permitted Additional Pari Passu Obligations.

(c)           In connection with any termination or release pursuant to paragraph (a) or (b) above, the Agent shall promptly execute and deliver to any Grantor, at such Grantor’s expense, all Uniform Commercial Code termination statements and similar documents that such Grantor shall reasonably request to evidence such termination or release.  Any execution and delivery of documents pursuant to this Section 8.12 shall be without recourse to or representation or warranty by the Agent or any other Secured Party.  Without limiting the provisions of Section 6.1(e), the Company shall reimburse the Agent upon demand for all reasonable out-of-pocket costs and expenses, including the fees, charges and expenses of counsel, incurred by it in connection with any action contemplated by this Section 8.12.

[Signature page follows]

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Witness the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above.

FREEDOM GROUP, INC., a Delaware corporation
By:
Name:
Title:
Address:	870 Remington Drive
	Box 700
	Madison, North Carolina 27025
GRANTORS:
RACI HOLDING, INC., a Delaware corporation
By:
Name:
Title:
Address:	870 Remington Drive
	Box 700
	Madison, North Carolina 27025
REMINGTON ARMS COMPANY, INC., a Delaware corporation
By:
Name:
Title:
Address:	870 Remington Drive
	Box 700
	Madison, North Carolina 27025
REMINGTON STEAM, LLC, a New York Limited Liability Company
By:
Name:
Title:
Address:	870 Remington Drive
	Box 700
	Madison, North Carolina 27025

S-1

RA BRANDS, L.L.C., a Delaware Limited Liability Company
By:
Name:
Title:
Address:	870 Remington Drive
	Box 700
	Madison, North Carolina 27025
THE MARLIN FIREARMS COMPANY, a Connecticut corporation
By:
Name:
Title:
Address:	870 Remington Drive
	Box 700
	Madison, North Carolina 27025
H&R 1871, LLC, a Connecticut Limited Liability Company
By:
Name:
Title:
Address:	870 Remington Drive
	Box 700
	Madison, North Carolina 27025
DA ACQUISITIONS, LLC, a Delaware Limited Liability Company
By:
Name:
Title:
Address:	870 Remington Drive
	Box 700
	Madison, North Carolina 27025

S-2

BUSHMASTER HOLDINGS, LLC, a Delaware Limited Liability Company
By:
Name:
Title:
Address:	999 Roosevelt Trail
	Windham, Maine 04062
BUSHMASTER FIREARMS INTERNATIONAL, LLC, a Delaware Limited Liability Company
By:
Name:
Title:
Address:	999 Roosevelt Trail
	Windham, Maine 04062
DPMS FIREARMS, LLC, a Delaware Limited Liability Company
By:
Name:
Title:
Address:	999 Roosevelt Trail
	Windham, Maine 04062
E-RPC, LLC, a Delaware Limited Liability Company
By:
Name:
Title:
Address:	870 Remington Drive
	Box 700
	Madison, North Carolina 27025

S-3

WILMINGTON TRUST FSB, not in its individual capacity, but solely as Collateral Agent appointed under the Indenture, as Agent

By:

Name:

Title:

S-4

SCHEDULE 1

Subsidiary Grantors

Bushmaster Firearms International, LLC

Bushmaster Holdings, LLC

DA Acquisitions, LLC

DPMS Firearms, LLC

E-RPC, LLC

H&R 1871, LLC

RA Brands, L.L.C.

RACI Holding, Inc.

Remington Arms Company, Inc.

Remington Steam, LLC

The Marlin Firearms Company

Annex I to
Security Agreement

ADDITIONAL PARI PASSU JOINDER AGREEMENT

The undersigned is the agent for Persons wishing to become “Secured Parties” (the “New Secured Parties”) under the Security Agreement, dated as of  July 29, 2009 (as amended and/or supplemented, the “Security Agreement” (terms used without definition herein have the meanings assigned to such terms by the Security Agreement)) among Freedom Group, Inc., the other Grantors party thereto and Wilmington Trust FSB, as Agent (the “Agent”) and the other Security Documents.

In consideration of the foregoing, the undersigned hereby:

(i)           represents that the Additional Pari Passu Agent has been authorized by the New Secured Parties to become a party to the Security Agreement on behalf of the New Secured Parties under that [DESCRIBE OPERATIVE AGREEMENT] (the “New Secured Obligations”) and to act as the Additional Pari Passu Agent for the New Secured Parties hereunder;

(ii)            acknowledges that the New Secured Parties have received a copy of the Security Agreement;

(iii)            irrevocably appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Security Agreement and the other Security Documents as are delegated to the Agent by the terms thereof, together with all such powers as are reasonably incidental thereto; and

(iv)           accepts and acknowledges the terms of Agreement applicable to it and the New Secured Parties and agrees to serve as Additional Pari Passu Agent for the New Secured Parties with respect to the New Secured Obligations and agrees on its own behalf and on behalf of the New Secured Parties to be bound by the terms of the Security Agreement and the other Security Documents applicable to holders of Obligations, with all the rights and obligations of a Secured Party thereunder and bound by all the provisions thereof as fully as if it had been a Secured Party on the effective date of the Security Agreement.

The name and address of the representative for purposes of Section 8.1 of the Security Agreement are as follows:

[name and address of Additional Pari Passu Agent]

A-I-1

IN WITNESS WHEREOF, the undersigned has caused this Additional Pari Passu Joinder Agreement to be duly executed by its authorized officer as of the            day of                   , 20    .

[NAME]
By:
	Name:
	Title:

A-I-2

Annex II to
Security Agreement

FORM OF JOINDER AGREEMENT

This JOINDER AGREEMENT, dated as of [               ], 20[  ], is delivered pursuant to Section 8.10 of the Security Agreement, dated as of  July 29, 2009 (as amended and/or supplemented, the “Security Agreement” (terms used without definition herein have the meanings assigned to such terms by the Security Agreement)), among Freedom Group, Inc., the other Grantors party thereto and Wilmington Trust FSB, as Agent (the “Agent”) and the other Security Documents.  Capitalized terms used herein but not defined herein are used with the meanings given them in the Security Agreement.

By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 8.10 of the Security Agreement, hereby becomes a party to the Security Agreement as a Grantor thereunder with the same force and effect as if originally named as a Grantor therein and, without limiting the generality of the foregoing, hereby grants to the Agent, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations, hereby collaterally assigns, conveys, mortgages, pledges, hypothecates and transfers to the Agent and grants to the Agent Liens on and security interest in, all of its right, title and interest in, to and under the Collateral and expressly assumes all obligations and liabilities of a Grantor thereunder.

The undersigned hereby represents and warrants that each of the representations and warranties contained in the Security Agreement applicable to it is true and correct on and as the date hereof as if made on and as of such date.

A-II-1

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL GRANTOR]
By:
	Name:
	Title:

ACKNOWLEDGED AND AGREED
as of the date of this Joinder Agreement
first above written.

WILMINGTON TRUST FSB, not in its individual capacity, but solely as Collateral Agent appointed under the Indenture, as Agent
By:
	Name:
	Title:

A-II-2

EX-10.3

Exhibit 10.3

EXECUTION VERSION

INTELLECTUAL PROPERTY SECURITY AGREEMENT

This INTELLECTUAL PROPERTY SECURITY AGREEMENT (this “Agreement”) is dated as of July 29, 2009, by and among FREEDOM GROUP, INC., a Delaware corporation (“FGI”), REMINGTON ARMS COMPANY, INC., a Delaware corporation (“Remington”),  THE MARLIN FIREARMS COMPANY, a Connecticut corporation (“Marlin”), H&R 1871, LLC, a Connecticut limited liability company (“H&R”), BUSHMASTER FIREARMS INTERNATIONAL, LLC, a Delaware limited liability company (“Bushmaster”), DPMS FIREARMS, LLC, a Delaware limited liability company (“DPMS”), E-RPC, LLC, a Delaware limited liability company (“E-RPC”), DA ACQUISITIONS, LLC, a Delaware limited liability company (“Dakota”), and RA BRANDS, L.L.C., a Delaware limited liability company (“Brands”),  RACI HOLDING, INC., a Delaware corporation (“RACI”), BUSHMASTER HOLDINGS, LLC, a Delaware limited liability company (“Bushmaster Holdings”), and REMINGTON STEAM, LLC, a New York limited liability company (“Steam”; each of Remington, Marlin, H&R, Bushmaster, DPMS, E-RPC, Dakota, Brands, RACI, Bushmaster Holdings, and Steam hereinafter referred to individually as a “Guarantor” and collectively as the “Guarantors”; and together with FGI, the “Companies”), WILMINGTON TRUST FSB, a federal savings bank, in its capacity as agent (together with its successors in such capacity, “Agent”) for the Secured Parties (as hereinafter defined).

Recitals:

FGI and Guarantors are parties to an Indenture, dated on or about the date hereof, with Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), pursuant to which FGI is issuing $200,000,000 aggregate amount of its 10¼% Senior Secured Notes due 2015 (the “Notes”), which are guaranteed by each of the Guarantors.

Each Company is a party to a Security Agreement, dated on or about the date hereof, with Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), pursuant to which the Notes and guarantees under the Indenture are secured by liens upon substantially all of the assets of each Company.

Each Company will receive substantial benefits from the execution, delivery and performance of the obligations under the Indenture, the Notes, the Security Agreement and any Additional Pari Passu Agreement (as defined in the Security Agreement) and each is, therefore, willing to execute and deliver this Agreement to Agent.

In consideration for, among other things, the execution and delivery of the Indenture and the Notes by the Agent, each of the Companies agrees to grant a second priority security interest to the Agent, for the benefit of the Secured Parties (as defined in the Security Agreement), in and to the Collateral described herein, in each case in order to ensure and secure the full and prompt payment and performance of the Obligations (as defined in the Security Agreement), all on the terms set forth herein.

NOW, THEREFORE, for Ten Dollars ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Companies hereby agrees with Agent as follows:

1.Definitions.  Capitalized terms used herein (including those used in the Recitals hereto), unless otherwise defined, shall have the meanings ascribed to them in the Security Agreement or the Indenture, as the context may require.  As used herein, the term “Full Payment” shall mean full and final payment of the Obligations leading to Discharge of Obligations; and the term “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York, and any successor statute, as in effect from time to time.

2.Grant of Security Interest in Collateral.  To secure the prompt payment and performance of all of the Obligations, each Company hereby grants, assigns and pledges to Agent, for the benefit of the Secured Parties, a continuing security interest in and Lien upon all of the following property of such Company, whether now existing or hereafter created or acquired (collectively, the “Intellectual Property Collateral”):

(a)the entire right, title and interest of such Company in and to all patents, patent registrations, and patent applications, including, without limitation, the patents and applications listed on Exhibit A attached hereto and made a part hereof (as the same may be amended from time to time), and (i) all re-issues, divisions, continuations, renewals, extensions and continuations in part thereof, (ii) the right to sue for past, present and future infringements thereof, (iii) all rights corresponding thereto throughout the world and (iv) all income, royalties, damages and payments now or hereafter due or payable with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith and all damages and payments for past or future infringements, misappropriations or dilutions thereof and all other proceeds of the foregoing, (all of the foregoing patents, patent registrations and patent applications are hereinafter collectively referred to as the “Patents”, and together with the items described in clauses (i)-(iv), as the “Patent Collateral”);

(b)the entire right, title and interest of such Company in and to all trademarks, trademark registrations, trade names and trademark applications, including, without limitation, the trademarks and applications listed on Exhibit B attached hereto and made a part hereof (as the same may be amended from time to time), and (i) all re-issues, continuations, extensions and renewals thereof, (ii) the right to sue for past, present and future infringements or dilutions thereof, (iii) the goodwill of such Company’s business connected with and symbolized by the foregoing, (iv) all rights corresponding thereto throughout the world and (v) all income, royalties, damages and payments now or hereafter due or payable with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith and all damages and payments for past or future infringements, misappropriations or dilutions thereof, and all other proceeds of the foregoing (all of the foregoing trademarks, trademark registrations and trademark applications are hereinafter collectively referred to as the “Trademarks”, and together with the items described in clauses (i)-(v), as the “Trademark Collateral”);

(c)the entire right, title and interest of such Company in and to all copyrights, copyright registrations and recordings thereof, and copyright applications, including, without limitation, the copyrights and applications listed on Exhibit C attached hereto and made a part hereof (as the same may be amended from time to time), and (i) all continuations, renewals, and extensions thereof, (ii) the right to sue for past, present and future infringements or misappropriations thereof, (iii) all rights corresponding thereto throughout the world and (iv) all income, royalties, damages and payments now or hereafter due or payable with respect thereto, including, without limitation, payments under all licenses

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entered into in connection therewith and all damages and payments for past or future infringements, misappropriations or dilutions thereof, and all other proceeds of the foregoing, (all of the foregoing copyrights, copyright registrations and copyright applications are hereinafter collectively referred to as the “Copyrights”, and together with the items described in clauses (i)-(iv), as the “Copyright Collateral”); and

(d)any and all rights now owned or hereafter acquired by any Company (but not the obligations of such Company) under any written agreement granting any exclusive right to use any other Person’s patents, trademarks, or copyrights, or applications therefor, including, without limitation, the patents, trademarks and copyrights and applications therefor listed on Exhibit D attached hereto and made a part hereof, to the extent permitted thereunder, and all proceeds of the foregoing (all of the foregoing licenses and other agreements are hereinafter collectively referred to as the “Intellectual Property Licenses”).

3.Representations and Warranties.  Each Company represents and warrants to Agent and the other Secured Parties that, to the best of such Company’s knowledge:

(a)Each of the Patents, Trademarks and Copyrights of such Company is valid and enforceable, and has not been adjudged invalid or unenforceable, in whole or in part;

(b)Subject to the exceptions disclosed in the attached Exhibits and except for Permitted Liens and licenses permitted pursuant to paragraphs 6 and 7 below, such Company is the sole and exclusive owner of the entire and unencumbered right, title and interest in and to each of the Patents, Trademarks and Copyrights, free and clear of any Liens, charges and encumbrances, including, without limitation, pledges, assignments, licenses, registered user agreements and covenants by such Company not to sue third Persons; and

(c)No claim or litigation is pending or threatened against or affecting such Company contesting its right to sell or use any Intellectual Property Collateral that would reasonably be expected to have a Material Adverse Effect.

4.Covenants Regarding Collateral.  Each Company covenants and agrees with Agent and the other Secured Parties with respect to its respective portion of the Intellectual Property Collateral that,

(a)Except for those Patents, Trademarks and Copyrights abandoned or disposed of by such Company in the ordinary course of business (provided such abandonment or disposition individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect and, to the extent any Event of Default then exists, Companies have obtained the written consent of Agent to such abandonment or disposition), such Company has used, and will continue to use for the duration of this Agreement, to the extent commercially reasonable and practicable, proper statutory notice in connection with its use of the Patents, Trademarks and Copyrights and has made, and will continue to make, to the extent commercially reasonable and practicable, all appropriate filings with the USPTO or USCO, as applicable, and any applicable foreign filing offices to maintain the Patents, Trademarks and Copyrights in existence, and take such other actions as may be necessary to maintain the registration thereof without loss of protection therefor, including, without limitation, the filing of all applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings;

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(b)Such Company will use commercially reasonable efforts to maintain the quality of the products associated with the Trademarks of such Company except for those Trademarks abandoned by such Company in the ordinary course of business (provided such abandonment individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect and, to the extent any Event of Default then exists, Companies have obtained the written consent of Agent to such abandonment), at a level reasonably consistent with the quality at the time of this Agreement; and

(c)Such Company shall use commercially reasonable efforts to preserve, protect and maintain all of its rights, powers, privileges, remedies and benefits under and with respect to each of the Intellectual Property Licenses.

5.No Assumption of Intellectual Property Licenses.   Neither this Assignment or any action taken by Agent or any other Secured Party pursuant to the terms hereof shall constitute an assumption by any such Secured Party of any obligations under any of the Intellectual Property Licenses, and the Companies shall continue to be liable for all obligations of the Companies thereunder.

6.Access to Collateral; License to Use Collateral, Royalties and Term.

(a)Each Company hereby grants to Agent, and its employees and agents (and any Secured Parties and their respective employees and agents), the visitation, audit, and inspection rights with respect to the Companies and the Intellectual Property Collateral as set forth in the Security Agreement.

(b)Each Company hereby grants to Agent for the ratable benefit of the Secured Parties a non-exclusive, assignable right and license, during the existence of an Event of Default, (i) under each of its Patents, Trademarks and Copyrights, and (ii) under any Intellectual Property License held by such Company with respect to any patents, trademarks or copyrights owned by any person or entity other than such Company to the extent permitted under such Intellectual Property License, in each case to use such Patents, Trademarks and Copyrights and the patents, trademarks and copyrights subject to such Intellectual Property Licenses, in order to complete work-in-process and to sell any Inventory or other Collateral utilizing or incorporating any such Patents, Trademarks and Copyrights and the patents, trademarks and copyrights subject to such Intellectual Property Licenses to the extent that such license is reasonably necessary to permit or to facilitate the collection, during the existence of an Event of Default, of any accounts of such Company or the disposition, during the existence of an Event of Default, of any Inventory or other Collateral (the “Secured Party License”). The Secured Party License shall be without royalty or any other payments or fees by Agent or any of the other Secured Parties to any Company and the permitted use by Agent thereunder (i) shall be co-extensive with such Company’s rights under the Patents, Trademarks and Copyrights and the Intellectual Property Licenses, and (ii) shall be limited only by those restrictions to which Companies are subject under the Patents, Trademarks and Copyrights and the Intellectual Property Licenses.

7.Third Party Licenses.  Until Full Payment of the Obligations, no Company shall enter into any license agreement relating to any of the Intellectual Property Collateral with any Person except as permitted under the Security Agreement or otherwise in the ordinary course of such Company’s business, provided, that, no Company shall become a party to any agreement with any

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Person that is inconsistent with the Company’s obligations under this Agreement or that would reasonably be expected to restrict or inhibit in any material respect Agent’s rights to sell or otherwise dispose of the Intellectual Property Collateral or any part thereof during the existence of an Event of Default.

8.After Acquired Collateral. If, before Full Payment of the Obligations, any Company shall obtain rights to any new patentable inventions, trademarks or copyrights, or shall become entitled to the benefit of (i) any patent application or patent or any reissue, division, continuation, renewal, extension or continuation in part of any existing Patent or any improvement on any Patent, (ii) any trademark application or trademark or any renewal of any existing Trademark, or (iii) any new copyrights or any modification of any existing Copyright, the provisions of paragraph 2 hereof shall automatically apply thereto, and such Company shall give to Agent notice thereof in writing within forty-five (45) days after the end of the calendar quarter in which any registration or application relating to such right or interest is filed or obtained.

9.Amendments.  Each Company hereby irrevocably authorizes and empowers Agent to modify this Agreement from time to time by amending Exhibits A, B, C and D, as applicable, to include any future patents, trademarks and copyrights, and applications therefor, and licenses  with respect thereto, in each case pursuant to paragraphs 2 and 8 hereof.

10.Remedies.

(a)At any time that an Event of Default exists, Agent shall have, in addition to all other rights and remedies given it by this Agreement, the Security Agreement and the other Senior Secured Note Documents, all rights and remedies under applicable law and all rights and remedies of a secured party under the UCC and all other rights and remedies under any other applicable law.

(b)Without limiting the generality of the foregoing remedies with respect to the Intellectual Property Collateral, prior to any sale or other disposition of any of the Intellectual Property Licenses or of any right, remedy or privilege of the Companies thereunder, Agent shall have the right, at any time that an Event of Default exists, and subject to the terms of the limitations of the applicable Intellectual Property License (and to the extent permitted thereby), to (i) use and enjoy the rights and benefits of the Intellectual Property Licenses; (ii) exercise any rights, powers and remedies of the Companies in connection with any of the Intellectual Property Licenses, including, but not limited to, any rights of the Companies to demand or otherwise require payment of any amount under, or performance of any provision of, any of the Intellectual Property Licenses and to modify, amend, terminate, replace, settle or compromise any right or claim under any of the Intellectual Property Licenses; (iii) prosecute any action or proceeding with respect to any of the Intellectual Property Licenses; (iv) use, and permit any purchaser of any of the Intellectual Property Licenses from Agent to use, without charge, the Companies’ labels, general intangibles, advertising matter or any property of a similar nature, as it pertains to or is included in any of the Intellectual Property Licenses, in advertising, preparing for sale and selling any Inventory and in finishing the manufacture, processing, fabrication, packaging and delivery of any Inventory; and (v) collect, receive, appropriate, repossess and realize upon all or any part of the Inventory or the Intellectual Property Licenses, and Agent may forthwith sell, lease, assign, give options to purchase or sell or otherwise dispose of and deliver all or any part of the Inventory (or contract to do so), for cash, on credit or for future delivery without assumption

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of any credit risk.  The rights, remedies, powers, benefits and privileges provided for herein shall be in addition to, and not in lieu of the rights, remedies, powers, benefits and privileges contained in the Security Agreement or any of the other Senior Secured Note Documents and may be exercised concurrently with the exercise of any other right, remedy, power, benefit or privilege available to Agent under the Security Agreement or any of the other Senior Secured Note Documents or applicable law.  Agent shall apply any proceeds received to the payment of the Obligations in such order and manner as may be authorized or required by the Security Agreement.  Any remainder of the proceeds after Full Payment of the Obligations shall be paid over to the Companies to the extent permitted by applicable law.

11.Appointment of Agent as Attorney-in-Fact.  Each Company hereby makes, constitutes and appoints Agent, and any officer or agent of Agent as Agent may select, as such Company’s true and lawful attorney-in-fact, with full power to do any or all of the following if an Event of Default shall exist:  to endorse the Company’s name on all applications, documents, papers and instruments necessary for Agent to continue the registration or maintenance of or to use the Patents, Trademarks or Copyrights, or to grant or issue any exclusive or nonexclusive license under the Patents, Trademarks or Copyrights to any other Person, or to assign, pledge, convey or otherwise transfer title in or dispose of any Collateral to any other Person.  Each Company hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof.  This power of attorney, being coupled with an interest, shall be irrevocable until Full Payment of the Obligations.

12.Fees and Expenses of Agent. Any and all reasonable fees, costs and expenses, of whatever kind or nature (including, without limitation, reasonable attorneys’ fees and legal expenses) incurred by Agent in connection with the preparation of this Agreement and any other documents relating hereto and the consummation of this transaction, the filing or recording of any documents (including, without limitation, all taxes in connection therewith) with the USPTO or USCO, as applicable, or in any other public offices, the payment or discharge of any taxes, counsel fees, maintenance fees, Liens, or otherwise protecting, maintaining, or preserving the Collateral, or in defending or prosecuting any actions or proceedings arising out of or related to the Collateral, shall be borne and paid by the Companies in accordance with the provisions of the Security Agreement or, if paid by Agent in its sole discretion, shall be reimbursed by the Companies to Agent on demand by Agent and until so paid shall be added to the principal amount of the Obligations and shall bear interest at the per annum interest rate of the Notes.

13.Infringement, Misappropriation and Dilution; Prosecution of Pending Applications; Abandonment.  Except with respect to (i) those Patents, Trademarks and Copyrights abandoned or disposed of by such Company in the ordinary course of business (provided such abandonment or disposition individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect and, to the extent any Event of Default then exists, Companies have obtained the written consent of Agent to such abandonment or disposition), and (ii) those Intellectual Property Licenses that such Company is permitted to cancel, surrender or release under the terms of this Agreement and the Security Agreement:

(a)Each Company shall use commercially reasonable efforts to detect any infringement, misappropriation or dilution of the Patents, Trademarks and Copyrights, and of any of the Intellectual Property Licenses, and shall notify Agent in writing of material infringements, misappropriation or dilution detected.  Subject to such Company’s reasonable discretion in the ordinary course of business or, during the existence of an Event of Default, upon Agent’s request, each Company shall have the duty to (i) prosecute diligently any

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application for a patent, trademark or copyright pending as of the date of this Agreement or thereafter until Full Payment of the Obligations, (ii) make federal application on unpatented but patentable inventions, registrable but unregistered trademarks and copyrights, (iii) file and prosecute opposition and cancellation proceedings and lawsuits to protect or enforce any of the Patents, Trademarks or Copyrights and (iv) do any and all acts which are deemed necessary or desirable by Agent to preserve and maintain all rights in such Patents, Trademarks and Copyrights, and the Intellectual Property Licenses, and applications therefor, unless in any such case no Event of Default then exists and the applicable Company has determined that such Patent, Trademark or Copyright, or Intellectual Property License, is not material to the conduct of its business.

(b)Any expenses incurred in connection with such applications or proceedings shall be borne jointly and severally by the Companies in accordance with the provisions of the Security Agreement.

No Company shall abandon any right to file a patent, trademark or copyright application, or any pending patent, trademark or copyright application or patent, trademark or copyright without the prior written consent of Agent, unless no Event of Default then exists and the applicable Company has determined that the applicable patent, trademark or copyright is not material to the conduct of its business.

14.Agent’s Right to File Suit.  Notwithstanding anything to the contrary contained in paragraph 13 hereof, at any time that an Event of Default exists, Agent shall have the right (but shall in no way be obligated) to bring suit instead in its own name to enforce the Patents, Trademarks or Copyrights, and the Secured Party License hereunder, or to defend any suit or counterclaim in its own name to protect such Patents, Trademarks or Copyrights, and the Secured Party License hereunder, in either of which events each Company shall at the request of Agent do any and all lawful acts (including bringing suit) and execute any and all proper documents required by Agent to aid such enforcement, or defense, and the Company shall promptly, upon demand, reimburse and indemnify Agent for all reasonable costs and expenses incurred in the exercise of Agent’s rights under this paragraph 14.  Agent shall apply any proceeds from such suit under this paragraph 14 to the payment of the Obligations in such order and manner as may be authorized or required by the Security Agreement.  Any remainder of the proceeds after Full Payment of the Obligations shall be paid over to the Companies to the extent permitted by applicable law.  This paragraph in no way affects such Company’s right to join or bring suit in its own name to enforce Patents, Trademarks or Copyrights, and the Intellectual Property Licenses, or to join or defend any suit or counterclaim in its own name to protect such Patents, Trademarks or Copyrights, and the Intellectual Property Licenses.

15.Agent’s Actions on Behalf of Companies; Reimbursement.  If any Company fails to comply with any of its obligations hereunder and at the time of such failure or as a result thereof an Event of Default exists, then to the extent permitted by applicable law, Agent may discharge such obligations in the Company’s name or in Agent’s name, in Agent’s sole discretion, but at Companies expense, and Companies agree to jointly and severally reimburse Agent in full for all expenses, including, without limitation, reasonable attorneys’ fees, incurred by Agent in prosecuting, defending or maintaining the Patents, Trademarks or Copyrights, or Intellectual Property Licenses, or Agent’s interest therein pursuant to this Agreement.

16.No Waiver. No course of dealing between any Company and Agent or any Secured Party, nor any failure to exercise, nor any delay in exercising, on the part of Agent or any Secured

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Party, any right, power or privilege hereunder or under any of the other Senior Secured Note Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or future exercise thereof or the exercise of any other right, power or privilege.

17.Remedies Cumulative. All of Agent’s rights and remedies with respect to the Intellectual Property Collateral, whether established hereby or by any of the other Senior Secured Note Documents, or by any other agreements or by applicable law shall be cumulative and may be exercised singularly or concurrently.

18.Severability. The provisions of this Agreement are severable, and if any clause or provision shall be held invalid and unenforceable, in whole or in part, in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction, and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Agreement in any jurisdiction.

19.Entire Agreement. This Agreement, together with the other Senior Secured Note Documents, constitutes and expresses the entire understanding of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings, inducements or conditions, whether express or implied, oral or written.  This Agreement is subject to modification only by a writing signed by the parties, except as provided in paragraph 9 hereof.

20.Successors and Assigns. The benefits and burdens of this Agreement shall inure to the benefit of and be binding upon the successors and assigns of Agent and each other Secured Party and upon the successors and permitted assigns of each Company.  No Company shall assign its rights or delegate its rights or assign its duties hereunder without the prior written consent of Agent.

21.Waiver of Acceptance.  Each Company hereby waives notice of Agent’s acceptance hereof.

22.Governing Law. This Agreement shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

23.Waiver of Jury Trial. To the fullest extent permitted by applicable law, each Company  and Agent each waives the right to trial by jury in any action, suit, proceeding or counterclaim of any kind arising out of  or related to this Agreement or the Collateral.

[Remainder of page intentionally left blank-signatures appear on following page]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

COMPANIES:

FREEDOM GROUP, INC.

By:

Title:

REMINGTON ARMS COMPANY, INC.

By:

Title:

THE MARLIN FIREARMS COMPANY

By:

Title:

H&R 1871, LLC

By:

Title:

BUSHMASTER FIREARMS INTERNATIONAL, LLC

By:

Title:

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DPMS FIREARMS, LLC

By:

Title:

E-RPC, LLC

By:

Title:

DA ACQUISITIONS, LLC

By:

Title:

RA BRANDS, L.L.C.

By:

Title:

RACI HOLDING, INC.

By:

Title:

BUSHMASTER HOLDINGS, LLC

By:

Title:

REMINGTON STEAM, LLC

By:

Title:

10

AGENT:

WILMINGTON TRUST FSB, as Agent

By:

Title:

11

EX-10.4

Exhibit 10.4

EXECUTION VERSION

INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT (this “Agreement”) is made on July 29, 2009, among WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as agent (in such capacity, together with its successors in such capacity, the “ABL Agent”) for the financial institutions (each, an “ABL Lender” and, collectively, the “ABL Lenders”) parties from time to time to the ABL Loan Agreement (as defined below); and WILMINGTON TRUST FSB, in its capacity as collateral agent (in such capacity, together with its successors in such capacity, the “Notes Agent”) for the holders of the Notes (as defined below) (each a “Note Holder” and collectively, the “Note Holders”) and the holders of Permitted Additional Pari Passu Obligations (as defined below)(each, an “Additional Pari Passu Obligations Holder” and collectively, the “Additional Pari Passu Obligations Holders”; and together with the Note Holders, the “Holders” and each a “Holder”).

Recitals:

FREEDOM GROUP, INC., a Delaware corporation (“FGI”), REMINGTON ARMS COMPANY, INC., a Delaware corporation (“Remington”), THE MARLIN FIREARMS COMPANY, a Connecticut corporation (“Marlin”), H&R 1871, LLC, a Connecticut limited liability company (“H&R”), BUSHMASTER FIREARMS INTERNATIONAL, LLC, a Delaware limited liability company (“Bushmaster”), DPMS FIREARMS, LLC, a Delaware limited liability company (“DPMS”), E-RPC, LLC, a Delaware limited liability company (“E-RPC”), DA ACQUISITIONS, LLC, a Delaware limited liability company (“Dakota Arms”), and RA BRANDS, L.L.C., a Delaware limited liability company (“Brands,” and together with FGI, Remington, Marlin, H&R, Bushmaster, DPMS, E-RPC and Dakota Arms, each individually a “Borrower” and collectively, “Borrowers” as further defined in the ABL Loan Agreement), RACI HOLDING, INC., a Delaware corporation (“RACI”), BUSHMASTER HOLDINGS, LLC, a Delaware limited liability company (“Bushmaster Holdings”), and REMINGTON STEAM, LLC, a New York limited liability company (“Steam” and together with RACI and Bushmaster Holdings, each individually a “Guarantor” and collectively, “Guarantors” as further defined in the ABL Loan Agreement), are parties to a Loan and Security Agreement, dated on or about the date hereof, with ABL Lenders and ABL Agent (as at any time amended, restated, renewed, refinanced or extended, the “ABL Loan Agreement”), pursuant to which ABL Lenders may from time to time make loans and other extensions of credit to Borrowers secured by Liens upon substantially all of the assets of each Obligor.  Capitalized terms used in these Recitals, unless otherwise defined, shall have the meanings ascribed to them in Section 1 below.

FGI, as issuer, and the other Borrowers and Guarantors, as guarantors, are parties to an Indenture, dated on or about the date hereof, with WILMINGTON TRUST FSB, in its capacity as Trustee (“Trustee”), and Notes Agent (as at any time amended, restated, renewed, refinanced or extended, the “Notes Indenture”), pursuant to which FGI has issued its $200,000,000 senior secured notes due 2015 (as at any time amended, restated, renewed, refinanced or extended, the “Initial Notes”), secured by Liens upon substantially all of the assets of each Obligor (as defined below)(the “Notes Liens”).

FGI may at a later date issue Permitted Additional Pari Passu Obligations (as defined in the Notes Indenture as in effect on the date hereof or as amended with the consent of the ABL Required Lenders (as defined below)) pursuant to Additional Pari Passu Documents (as defined below) with the Notes Agent as trustee and collateral agent, pursuant to which FGI may issue additional notes from time to time (the

“Additional Notes” and together with the Initial Notes, the “Notes” and each a “Note”), secured by the Notes Liens.

The parties hereto desire to enter into this Agreement for the purpose of establishing the relative priorities of their respective Liens in the Collateral and setting forth certain other agreements between them with respect to the Collateral and Obligors.

NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and in consideration of the foregoing premises and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and the mutual covenants herein, the parties hereto, intending to be legally bound hereby, agree as follows:

1.Certain Definitions; Rules of Construction.

(a)Capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed to them in the ABL Loan Agreement as in effect on the date of this Agreement and without giving effect to any subsequent amendments to any of those terms except to the extent that such amendments are consented to in writing by Notes Agent or are otherwise permitted hereunder.  As used in this Agreement (and in the Exhibits hereto), the following terms shall have the meanings ascribed to them (with terms used in the singular to have the same meanings when used in the plural, and vice versa) as follows:

“ABL Agent” shall have the meaning ascribed thereto in the preamble to this Agreement.

“ABL Cash Collateral” shall have the meaning ascribed to it in Section 7(b).

“ABL Debt” shall mean all of the “Obligations” under (and as defined in) the ABL Loan Agreement, including all ABL Loans, Letter of Credit Obligations, Accruals and Indemnity Payments.  ABL Debt shall expressly include any and all interest accruing and out-of-pocket costs and Enforcement Expenses incurred after the date of any filing by or against any Obligor of any petition or complaint initiating any Insolvency Proceeding, regardless of whether any ABL Secured Party’s claim therefor is allowed or allowable in the Insolvency Proceeding commenced by the filing of such petition or complaint.

“ABL Document Default” shall mean an “Event of Default” (as defined in the ABL Loan Agreement as in effect on the date hereof or as amended with the consent of Notes Agent or as otherwise permitted hereunder) under the ABL Loan Agreement.

“ABL Document Default Day” shall mean a day on which an ABL Document Default exists and the ABL Debt has been accelerated or matured, but only if prior to such day ABL Agent has given to Notes Agent written notice pursuant to Section 13 that such ABL Document Default exists and that the ABL Debt has been accelerated or matured.  The notice of an ABL Document Default and acceleration or maturity shall not constitute the giving of any notice required under applicable law with respect to any Lien Enforcement Action by ABL Agent, and Notes Parties do not waive any rights to any such notice.

“ABL Documents” shall mean “Financing Agreements” under (and as defined in) the ABL Loan Agreement.

“ABL Lenders” shall have the meaning ascribed thereto in the preamble to this Agreement.

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“ABL Loan Agreement” shall have the meaning ascribed to it in the recitals to this Agreement.

“ABL Loans” shall mean all “Revolving Loans” under (and as defined in) the ABL Loan Agreement.

“ABL Parties” shall mean, collectively, ABL Agent and ABL Lenders.

“ABL Priority Collateral” shall mean all of the types and items of property of each Obligor that are described in Exhibit A attached hereto and made a part hereof.

“ABL Required Lenders” shall mean the “Required Lenders” as defined in the ABL Loan Agreement.

“ABL Secured Parties” shall mean, collectively, each ABL Party and each Affiliate or Subsidiary of such ABL Party to the extent any ABL Debt is owed to such Affiliate or Subsidiary.

“Accruals” shall mean, on any date of determination thereof, all accrued but unpaid interest, fees, and other charges (including Enforcement Expenses) owing by any Obligor to any Party under any of the Debt Documents on such date, including any advances made by any Parties to pay such amounts and interest accrued upon any such advances.  Accruals shall expressly include any and all interest accruing or out-of-pocket costs or expenses (including Enforcement Expenses) incurred after the commencement of any Insolvency Proceeding, regardless of whether any Party’s claim therefor is allowed or allowable in such Insolvency Proceeding.

“Actionable ABL Document Default” shall mean the occurrence of any of the following events:  (i) the first date during any 365-day period on which 180 consecutive ABL Document Default Days have occurred, provided that ABL Agent shall have delivered to Notes Agent written notice of such ABL Document Default(s) required by the definition of ABL Document Default Day; or (ii) the commencement of an Insolvency Proceeding by or against an Obligor.

“Actionable Notes Document Default” shall mean the occurrence of any of the following events:  (i) the first date during any 365-day period on which 180 consecutive Notes Document Default Days have occurred, provided that Notes Agent shall have delivered to ABL Agent written notice of such Notes Document Default(s) required by the definition of Notes Document Default Day; or (ii) the commencement of an Insolvency Proceeding by or against an Obligor.

“Adequate Protection” means the protection described in Section 361 of the Bankruptcy Code (or any similar provision of any federal, state or foreign law) that is required to be given, pursuant to Sections 362, 363 or 364 of the Bankruptcy Code (or any similar provision of any federal, state or foreign law), to the holder of a claim against a debtor that is secured by a Lien on property of such debtor.

“Additional Notes” shall have the meaning ascribed to it in the recitals to this Agreement.

“Additional Pari Passu Debt” shall mean Permitted Additional Pari Passu Obligations (as such term is defined in the Notes Security Agreement as in effect on the date hereof or as amended with the consent of the ABL Required Lenders).

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“Additional Pari Passu Documents” shall mean any Additional Pari Passu Agreement (as such term is defined in the Notes Indenture as in effect on the date hereof or as amended with the consent of the ABL Required Lenders) and other documentation relating to any other Permitted Additional Pari Passu Obligations (as defined in the Notes Indenture as in effect on the date hereof or as amended with the consent of the ABL Required Lenders).

“Additional Pari Passu Obligations Holders” shall have the meaning ascribed to it in the preamble to this Agreement.

“Agent” shall mean ABL Agent or Notes Agent, as the context may require, and “Agents” shall mean both ABL Agent and Notes Agent.

“Banking Relationship Debt” shall mean indebtedness or other obligations of Obligors to any ABL Secured Party arising out of or relating to Bank Products.

“Bankruptcy Case” shall mean a case commenced by or against an Obligor as debtor under any chapter of the Bankruptcy Code (or any similar provision of any federal, state or foreign law) and any case under another chapter of the Bankruptcy Code (or any similar provision of any federal, state or foreign law) to which any such case is converted.

“Bankruptcy Code” shall mean title 11 of the United States Code.

“Borrower” shall have the meaning ascribed to it in the recitals to this Agreement.

“Borrowing Base” shall have the meaning ascribed to it in the Notes Indenture (as it exists on the date hereof).

“Borrowing Base Certificate” shall mean a certificate that includes a calculation of the Borrowing Base delivered to ABL Agent under the ABL Loan Agreement or in connection with any DIP Financing by which a Borrower certifies to the ABL Agent the amount of the Borrowing Base as of the date of the certificate.

“Capped ABL Debt” shall mean, on any date of determination thereof, the sum of (a) an amount equal to the greater of (i) the Capped ABL Line on such date and (ii) the Maximum ABL Formula Amount on such date, plus (b) Banking Relationship Debt on such date, plus (c) all Accruals (other than Accruals consisting of interest accrued on the principal balance of ABL Debt that is Non-Priority ABL Debt, from and after the date on which such ABL Debt becomes Non-Priority ABL Debt or consisting of Enforcement Expenses incurred solely in connection with the collection of any Non-Priority ABL Debt) and all Indemnity Amounts (excluding those relating solely to the payment of any Non-Priority ABL Debt).

“Capped ABL Line” shall mean, on any date of determination thereof, an amount equal to $180,000,000.

“Capped Notes Debt” shall mean, on any date of determination thereof, an amount equal to (a) the original principal amount of the Initial Notes, minus all principal payments on the Initial Notes after the date of this Agreement, plus (b) the original principal amount of any Additional Notes to the extent the incurrence of such Additional Notes is permitted pursuant to the Notes Indenture as it exists on the date hereof or as amended with the consent of ABL Required Lenders, minus all principal payments on the Additional Notes after the issuance thereof, plus (c) all Accruals (other than Accruals consisting of interest accrued on, or Enforcement Expenses

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incurred solely in connection with, the collection of the principal balance of Notes Debt that exceeds the amounts described in clauses (a) and (b) of this definition), plus (d) Indemnity Amounts (excluding those Indemnity Amounts relating solely to the payment of Notes Debt that exceeds the amounts described in clauses (a), (b) and (c) of this definition).

“Collateral” shall mean all real and personal property of each Obligor that is at any time subject to a Lien in favor of either Agent, including all property and property interests encompassed within the definition of “Collateral” in any of the ABL Documents or within the definitions of “ABL Priority Collateral” or “Notes Priority Collateral,” and regardless of whether such property now exists or is hereafter created or acquired (and including any such property created, acquired or arising during the pendency of an Insolvency Proceeding).

“Court” shall mean a court of competent jurisdiction.

“Debt Documents” shall mean, in the case of any ABL Party, the ABL Documents to which such ABL Party is a party or in respect of which such ABL Party is a beneficiary; and, in the case of any Notes Party, the Notes Documents to which such Notes Party is a party or in respect of which such Notes Party is a beneficiary.

“DIP Financing” shall mean an extension of credit pursuant to Section 364 of the Bankruptcy Code (or any similar provision of any federal, state or foreign law) by a Person (including any Party) to an Obligor in a Bankruptcy Case of such Obligor, whether such extension of credit is in the form of loans, letters of credit, Bank Products or otherwise and whether such extension of credit is secured by a Lien that is subordinate to, on parity with, or, in the case of any such financing by a Party, senior to or on parity with any Lien of a Party.

“DIP Lender” shall mean a Person who provides DIP Financing to an Obligor, whether individually or in concert with one or more other providers of such financing.

“Discharge of the Priority ABL Debt” shall mean, except to the extent otherwise provided in Section 7(d), the occurrence of all of the following:  (i) termination of all Commitments of ABL Parties for ABL Loans, Letters of Credit or other extensions of credit; (ii) Payment in Full of all principal, interest, premium (if any), fees and other charges comprising Priority ABL Debt (other than undrawn Letters of Credit), whether or not such interest, fees or other charges accrue or are incurred prior to or during pendency of an Insolvency Proceeding and whether or not any of the same are allowed or recoverable in any Bankruptcy Case pursuant to Section 506 of the Bankruptcy Code or otherwise; (iii) discharge or cash collateralization (at 105% of the aggregate undrawn amount) of all outstanding Letters of Credit constituting Priority ABL Debt; and (iv) Payment in Full of all other Priority ABL Debt that is outstanding and unpaid at the time that the termination, expiration, payment, discharge and/or cash collateralization set forth in clauses (i) through (iii) above have occurred (other than any obligations for taxes, indemnifications, and other contingent liabilities in respect of which no claim or demand for payment has been made at such time).

“Discharge of the Priority Notes Debt” shall mean, except to the extent otherwise provided in Section 7(d), the occurrence of all of the following:  (i) Payment in Full of all principal, interest, premium (if any), fees and other charges comprising Priority Notes Debt, whether or not such interest, fees or other charges accrue or are incurred prior to or during pendency of an Insolvency Proceeding and whether or not any of the same are allowed or recoverable in any Bankruptcy Case pursuant to Section 506 of the Bankruptcy Code or otherwise; and (ii) Payment in Full of all other Priority Notes Debt that is outstanding and unpaid

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at the time that payment set forth in clause (i) above has occurred (other than any obligations for taxes, indemnifications, and other contingent liabilities in respect of which no claim or demand for payment has been made at such time).

“Enforcement Expenses” shall mean all costs, expenses, fees or advances that any Party may make, suffer or incur, in each case after the occurrence of an ABL Document Default or Notes Document Default on account of or in connection with (i) the repossession, storage, repair, field examination, audit, appraisal, insuring, completion of the manufacture of, preparing for sale, advertising for sale, selling, collecting, or otherwise preserving or realizing upon any Collateral; (ii) the settlement or satisfaction of any prior Lien or other encumbrance upon any of the Collateral (other than Liens in favor of a Party); (iii) the retention by a Party of consultants, including turnaround management consultants, accountants, attorneys, appraisers, auctioneers and environmental engineers; or (iv) the enforcement of any of the Debt Documents or the collection of any of the ABL Debt or Notes Debt, as applicable.  Such costs, expenses, and advances may include, without limitation, storage fees, legal fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and commissions, environmental assessment fees, and wages and salaries paid to employees of any Obligor or any independent contractors in liquidating or collecting any Collateral.

“Enforcement Notice” shall mean a written notice provided by an Agent to the other Agent in which the notifying Agent indicates its intent to initiate a Lien Enforcement Action and specifies the date on or after which the notifying Agent proposes to initiate such Lien Enforcement Action (but such notice need not be sent to any Obligor or any other Party).

“Equipment Collateral” shall mean any portion of the Collateral consisting of equipment, as that term is defined in the UCC.

“Holder” and “Holders” shall have the meanings ascribed to it in the preamble to this Agreement.

“Inadequate Protection Claim” shall mean the claim under Section 507(b) of the Bankruptcy Code that may be asserted by the holder of a secured claim to the extent that the Adequate Protection afforded the holder of such claim proves to be inadequate.

“Indemnity Amount” shall mean, on any date of determination thereof, the amount required to be paid by any Obligor to any Party on such date pursuant to any indemnity provisions contained in any of the Debt Documents (excluding any obligations to pay the principal amount of any Loans, the reimbursement amount of any Letter of Credit or Accruals).

“Initial Notes” shall have the meaning ascribed to it in the recitals to this Agreement.

“Insolvency Proceeding” shall mean any action, case or proceeding commenced by or against an Obligor, or any agreement of such Obligor, for (i) the entry of an order for relief against such Obligors under any chapter of the Bankruptcy Code or other insolvency or debt adjustment law (whether state, federal or foreign), (ii) the appointment of a receiver, trustee, liquidator or other custodian for such Obligor or any part of such Obligor’s assets, (iii) an assignment or trust mortgage for the benefit of creditors of such Obligor, or (iv) the total or partial liquidation, dissolution or winding up of the affairs of such Obligor.

“Lien” shall mean any security interest, lien, security title or other interest in property securing an obligation owed to, or a claim by, a Person, whether such security interest, lien,

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security title or other interest is based on common law, statute, contract, judgment or court order, including any Adequate Protection or other Liens granted in any Insolvency Proceeding (including any agreement to provide any of the foregoing, and any conditional sale or other title retention agreement, and any lease in the notice thereof).  The term “Lien” shall also include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting property.

“Lien Enforcement Action” shall mean any action taken by an Agent, during any period that an ABL Document Default or Notes Document Default exists, to seize, repossess, replevy, attach, garnish, levy upon, collect the proceeds of, foreclose its Lien upon, sell or otherwise dispose of any Collateral, whether by judicial action, under power of sale, by self-help repossession, by notification to account debtors or otherwise, including any effort to seek relief from the automatic stay in any Insolvency Proceeding, the exercise of any right of setoff or recoupment or the exercise of any rights under any landlord, bailee, control, mortgage or similar agreement with a Person who is not an Obligor and that relates to any Collateral; provided that, for the avoidance of doubt, none of the following shall constitute a Lien Enforcement Action: (i) making demand for payment or accelerating the maturity of the ABL Debt or the Notes Debt; (ii) the receipt and application by ABL Agent to the ABL Debt of collections of Accounts or proceeds of other ABL Priority Collateral received from account debtors or through any lockbox or other cash management arrangement, whether or not any ABL Document Default exists at the time of application; (iii) the implementation of reserves under the ABL Loan Agreement; (iv) the reduction of advance rates under the ABL Loan Agreement; (v) the cessation (whether temporary or permanent) of lending under the ABL Loan Agreement due to the existence of an overadvance, the existence of an ABL Document Default or failure to satisfy conditions precedent; (vi) the exercise by any ABL Secured Party of any right of offset with respect to Banking Relationship Debt; or (vii) the filing by a Party of a proof of claim in any Insolvency Proceeding.

“Maximum ABL Formula Amount” shall mean, on any date of determination thereof, an amount equal to the Borrowing Base.  The Maximum ABL Formula Amount shall be calculated solely by reference to the most recent Borrowing Base Certificate received by ABL Agent (or, if not required to be delivered to ABL Agent under the ABL Loan Agreement or any DIP Financing, solely by reference to the most recent consolidated balance sheet of FGI and its Restricted Subsidiaries (as defined in the Notes Indenture)) prior to the funding of any Revolver Loans or the incurrence of any Letter of Credit Obligations and without regard to any events, transactions or occurrences subsequent to ABL Agent’s receipt of such Borrowing Base Certificate (or, if applicable, such consolidated balance sheet), including any decreases in the Maximum ABL Formula Amount occurring as a result of (i) any decrease in the book value (calculated in accordance with GAAP) of accounts receivable or inventory thereafter; (ii) the return of uncollected checks or other items of payment applied to the reduction of the Revolver Loans, or other similar or involuntary or unintentional actions; (iii) any failure of Borrowers to report accurately the book value of accounts receivable or inventory on any Borrowing Base Certificate (or, if applicable, such consolidated balance sheet); or (iv) the appraisal or revaluation of any account or inventory.

“Non-Priority ABL Debt” shall mean, on any date, the amount of ABL Debt on such date in excess of the Capped ABL Debt.  Non-Priority ABL Debt shall not include any portion of the ABL Loans or Letter of Credit Obligations that, on the date of funding by ABL Lenders in the case of ABL Loans or the date of issuance in the case of Letter of Credit Obligations, did not cause the aggregate amount of ABL Loans and Letter of Credit Obligations outstanding on such date to exceed the Borrowing Base (as the calculation of the Borrowing Base is described in the definition of Maximum ABL Formula Amount).  The Capped ABL Debt on any date shall not be

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deemed to have been exceeded on such date solely by the addition to the amount of ABL Loans outstanding of any ABL Loan or Refunding Loan to pay Accruals, Indemnity Amounts or Letter of Credit Obligations.

“Non-Priority Notes Debt” shall mean, on any date, the amount of Notes Debt on such date that exceeds the Capped Notes Debt.

“Notes” shall have the meaning ascribed to it in the recitals to this Agreement.

“Notes Agent” shall have the meaning ascribed to it in the preamble to this Agreement.

“Notes Cash Collateral” shall have the meaning ascribed to it in Section 7(c) hereof.

“Notes Debt” shall mean, on any date of determination thereof, all liabilities and obligations of Obligors under the Notes Indenture, the Initial Notes and the Additional Pari Passu Documents (including the Additional Pari Passu Debt).  Notes Debt shall expressly include any and all interest accruing and out-of-pocket costs and Enforcement Expenses incurred after the date of any filing by or against any Obligor of any petition or complaint initiating any Insolvency Proceeding, regardless of whether any Notes Party’s claim therefor is allowed or allowable in the Insolvency Proceeding commenced by the filing of such petition or complaint.

“Notes Document Default” shall mean an “Event of Default” (as defined in the Notes Security Agreement as in effect on the date hereof or as amended with the consent of ABL Required Lenders or as permitted hereunder) under the Notes Indenture.

“Notes Document Default Day” shall mean a day on which a Notes Document Default exists and the Notes Debt (other than the Additional Pari Passu Debt) or the Additional Pari Passu Debt, or both, has or have been accelerated or matured, but only if prior to such day Notes Agent has given to ABL Agent written notice pursuant to Section 13 that such Notes Document Default exists and that the Notes Debt (other than the Additional Pari Passu Debt) or the Additional Pari Passu Debt, or both, has or have been accelerated or matured.  The notice of a Notes Document Default and acceleration or maturity shall not constitute the giving of any notice required under applicable law with respect to any Lien Enforcement Action by Notes Agent, and ABL Parties do not waive any rights to any such notice.

“Notes Documents” shall mean the Notes Indenture, the Initial Notes, the Notes Security Agreement, the Additional Pari Passu Documents and all other instruments or agreements now or hereafter evidencing or securing the payment or performance of all or any part of the Notes Debt.

“Notes Holder” shall have the meaning ascribed to it in the preamble to this Agreement.

“Notes Indenture” shall have the meaning ascribed to it in the recitals to this Agreement.

“Notes Liens” shall have the meaning ascribed to it in the recitals to this Agreement.

“Notes Parties” shall mean, collectively, Notes Agent, Trustee and Holders.

“Notes Priority Collateral” shall mean all the types and items of Collateral that are described in Exhibit B attached hereto and made a part hereof.

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“Notes Security Agreement” shall mean the Security Agreement dated as of the date hereof among Obligors and Notes Agent, as amended, restated or otherwise modified from time to time.

“Obligor” shall mean each Borrower, each Guarantor and each other Person who is at any time liable for payment of the whole or any part of the ABL Debt or the Notes Debt or who has granted a Lien upon any of such Person’s assets to secure the payment of the whole or any part of the ABL Debt or the Notes Debt.

“Party” shall mean each ABL Secured Party and each Notes Party.

“Payment in Full” shall mean, with respect to any debt (including any ABL Debt or any Notes Debt), the full, final and indefeasible payment, in cash, of such debt.

“Person” shall mean any natural person, sole proprietorship, corporation, partnership, limited liability company, joint venture, business trust, other business entity, or any governmental unit, agency, bureau or political subdivision.

“Priority ABL Debt” shall mean all ABL Debt other than Non-Priority ABL Debt, and shall include all DIP Financing provided by one or more ABL Lenders to the extent permitted by Section 7(b) or otherwise approved by a Court and subject to the last sentence of Section 7(b).

“Priority Notes Debt” shall mean all Notes Debt other than Non-Priority Notes Debt, and shall include all DIP Financing provided by one or more Notes Parties to the extent permitted by Section 7(c) or otherwise approved by a Court and subject to the last sentence of Section 7(c).

“Qualified Refinancing” shall mean, on any date, a refinancing of all of the ABL Debt or the Notes Debt by loans, notes or other extensions of credit to one or more Obligors, but only if the Person providing such refinancing is not an Obligor or an Affiliate of an Obligor and agrees to be bound by the terms of this Agreement and such refinancing would not (i) shorten the date for any scheduled principal payment of the indebtedness being refinanced, (ii) increase the default or the non-default rate of interest that would otherwise be applicable to the indebtedness being refinanced in excess of 2% of the rate of interest in effect on the date of this Agreement, (iii) subject Borrowers to covenants or events of default that are materially more restrictive or onerous than those contained in the documentation evidencing the indebtedness being refinanced in the good faith judgment of the Company, (iv) subject Borrowers to a greater rate of principal amortization than the rate required in documentation evidencing the indebtedness being refinanced, or (v) fail to comply with the restrictions in Section 8(e) or Section 8(f), as applicable.

“Real Estate Collateral” shall mean any portion of the Collateral consisting of real estate and any improvements thereon or fixtures thereto.

“Refunding Loan” shall mean an advance made by any ABL Party, after the occurrence and during the continuance of any ABL Document Default, to pay or cash collateralize any ABL Loan, Indemnity Amounts, Letter of Credit Obligations or Accruals (except to the extent that any of the foregoing components of ABL Debt constitute, on the date of funding any such Refunding Loan used to pay such components, Non-Priority ABL Debt).

“Required Lenders” shall mean “Required Lenders” under (and as defined in) the ABL Loan Agreement.

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“Superpriority Claim” shall mean a claim under Section 364(c)(1) of the Bankruptcy Code.

“Trustee” shall have the meaning ascribed to it in the recitals to this Agreement.

“UCC” shall mean the Uniform Commercial Code as in force and effect in the State of New York or any other applicable jurisdiction, the laws of which are required to be applied in connection with the issuance, perfection, enforcement, validity or effect of security interests.

(b)The terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or subdivision; all references to a “Section” shall be to a section of this Agreement unless otherwise specifically provided herein; all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations; all references to any instruments or agreements shall include any and all amendments or modifications thereto and any and all restatements, extensions or renewals thereof; all references to “including” and “include” shall be understood to mean “including, without limitation” and “include, without limitation”; all references to Liens in favor of an Agent shall be understood to mean Liens held by such Agent for its benefit and for the benefit of ABL Secured Parties or Notes Parties, as applicable; all references to a Person (including a Party) shall be understood to mean such Person’s successors and permitted assigns; and all references to any dollar amount or payment in cash shall be understood to mean such amount in Dollars and such payment in Dollars.

(c)All agreements made herein by ABL Agent shall be deemed to have been made by ABL Agent on behalf of itself and the other ABL Secured Parties; all agreements made herein by Notes Agent shall be deemed to have been made by Notes Agent on behalf of itself and the other Notes Parties; and all representations and agreements by a Party that is not a signatory hereto shall be deemed to have been made by such Party and binding upon it to the extent that such Party is a party to any of the Notes Documents or ABL Documents.

2.Consents to Liens.  ABL Agent hereby consents to each Obligor’s grant of Liens in the Collateral to Notes Agent pursuant to the  Notes Documents as security for payment and performance of all of the Notes Debt and agrees that the existence of such Liens shall not constitute an ABL Document Default.  Notes Agent hereby consents to each Obligor’s grant of Liens in the Collateral to ABL Agent pursuant to the ABL Documents as security for the payment and performance of all of the ABL Debt and agrees that the existence of such Liens shall not constitute a Notes Document Default.  ABL Agent does not consent to any Notes Party (other than Notes Agent) obtaining any Liens with respect to any of the Collateral (other than Liens obtained by operation of law or a judicial proceeding, which Liens shall be subject to Section 3(a) regardless of whether such Liens are in favor of Notes Agent or any other Notes Party), and Notes Agent does not consent to any ABL Party (other than ABL Agent) obtaining any Liens with respect to any of the Collateral (other than Liens obtained by operation of law or a judicial proceeding, which Liens will be subject to Section 3(a) regardless of whether such Liens are in favor of ABL Agent or any other ABL Party); and if any ABL Party (other than ABL Agent) or any Notes Party (other than Notes Agent) obtains any Lien with respect to the Collateral to secure the ABL Debt or Notes Debt, respectively, such Lien shall be subject to all of the provisions of this Agreement as if it were obtained and held by Notes Agent, in the case of any Lien obtained by any other Notes Party, or by ABL Agent, in the case of any Lien obtained by any other ABL Party.

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3.Priority of Liens.

(a)Agents agree that, at all times, whether before, after or during the pendency of any Insolvency Proceeding and notwithstanding the priorities that would ordinarily result from the order of granting, attachment or perfection of any Liens, the order of filing or recording of any financing statements, mortgages, assignments, or other charges or encumbrances in respect of the Collateral or of possession or control of any Collateral, the priorities that would otherwise apply under applicable law or the enforceability of any such Liens, (i) any Liens that ABL Agent may at any time have in or with respect to any of the ABL Priority Collateral shall constitute first priority Liens in such property to secure the payment and performance of all of the ABL Debt and any DIP Financing provided by any ABL Parties in accordance with Section 7(b) and shall be superior to all Liens or other interests at any time held by Notes Agent in the same property arising pursuant to the Notes Documents, by operation of applicable law or otherwise, and all Liens and other interests at any time held by Notes Agent in any of the ABL Priority Collateral shall be subordinate and junior in priority to any Liens at any time held by ABL Agent therein; and (ii) any Liens that Notes Agent may at any time have in or with respect to any of the Notes Priority Collateral shall constitute first priority Liens in such property to secure the payment and performance of all of the Notes Debt and any DIP Financing provided by any Notes Parties in accordance with Section 7(c) and shall be superior to all Liens or other interests, if any, at any time held by ABL Agent in the same property arising pursuant to the ABL Documents, by operation of applicable law or otherwise, and all Liens and other interests, if any, at any time held by ABL Agent in any of the Notes Priority Collateral shall be subordinate and junior in priority to any Liens at any time by Notes Agent therein.  For purposes of the foregoing priorities, any claim of a right of setoff by any Party shall be treated in all respects as a Lien and no claim to right of setoff by any Party shall be asserted to defeat or diminish the rights or priorities provided for herein in favor of another Party having a senior Lien in respect of the property of an Obligor that is subject to offset, provided that nothing herein shall affect, impair or defeat in any way the right of any ABL Party to assert offset rights in respect of Banking Relationship Debt.

(b)The subordination provisions contained in Section 3(a) relate to the priority of all Liens granted to, or otherwise obtained by, each Agent by Obligors (whether by grant, possession, statute, operation of law, subrogation or otherwise).  It is not Notes Agent’s responsibility to ensure the validity, perfection or enforceability of the Liens granted by each Obligor to ABL Agent for the benefit of ABL Parties; and it is not ABL Agent’s responsibility to ensure the validity, perfection or enforceability of the Liens granted by each Obligor to Notes Agent for the benefit of Notes Parties.  No Party shall (and each Party waives any right it may ever have to) institute, encourage, or join as a party in the institution of, or assist in the prosecution of, any action, suit or other proceeding (including any adversary proceeding or contested matter in any Bankruptcy Case or other Insolvency Proceeding) seeking a determination that the Lien of any other Party in any of the Collateral is invalid, unenforceable, unperfected, avoidable, subject to equitable subordination or recharacterization or not entitled to the priorities described herein.  Nothing in this Agreement shall be construed to prevent or impair the rights of either of the Agents to enforce this Agreement, including the priority of the Liens established by this Agreement, or to be or operate as a subordination of any of the Notes Debt to any of the ABL Debt, or vice versa.

(c)If at any time either Agent shall make a Permitted Subordination (as defined below), with respect to any Collateral, to or in favor of any Person, the priority of such Agent’s Liens vis-à-vis the Liens therein of the other Agent shall not be affected thereby and the subordinating Agent’s Liens shall continue to be junior in priority to the other Agent’s Liens in the affected Collateral as and to the extent provided in this Section 3.  As used herein, the term “Permitted Subordination” shall mean a voluntary subordination by ABL Agent of its Liens with respect to any or all ABL Priority Collateral, or by Notes Agent of its Liens with respect to any or all Notes Priority Collateral, in favor of depository banks, securities or commodities intermediaries, landlords, mortgagees, custom brokers, freight forwarders, carriers, warehousemen, factors, Persons who provide DIP Financing and other Persons who provide goods or services to an Obligor in the ordinary course of business.

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4.Lien Enforcement Action.

(a)Notwithstanding any rights or remedies available to any Party under its Debt Documents, applicable law or otherwise, and whether before, during or after the pendency of any Insolvency Proceeding, (i) no Notes Party shall initiate any Lien Enforcement Action with respect to any ABL Priority Collateral prior to the Discharge of the Priority ABL Debt, and no ABL Party shall initiate any Lien Enforcement Action with respect to any Notes Priority Collateral prior to the Discharge of the Priority Notes Debt; (ii) ABL Agent shall have the exclusive right and sole power to initiate any Lien Enforcement Action with respect to, and thereby to collect, foreclose upon, sell, transfer, liquidate or otherwise dispose of, the ABL Priority Collateral as provided in the ABL Documents or by applicable law, in the manner deemed appropriate by ABL Agent, without regard to any Lien of Notes Agent therein and without consultation with or the consent of any Notes Parties and Notes Parties will not oppose, object to or delay ABL Agent’s action in enforcing its Liens and remedies with respect to any of the ABL Priority Collateral, unless and to the extent ABL Agent shall act in a manner that is violative of applicable law or this Agreement; and (iii) Notes Agent shall have the exclusive right and sole power to initiate any Lien Enforcement Action with respect to, and thereby to collect, foreclose upon, sell, transfer, liquidate or otherwise dispose of, the Notes Priority Collateral as provided in the Notes Documents or by applicable law, in the manner deemed appropriate by Notes Agent, without regard to any Lien of ABL Agent therein (subject to Section 9) and without consultation with or the consent of any ABL Parties, and ABL Parties will not oppose, object to or delay Notes Agent’s action in enforcing its Liens and remedies with respect to any of the Notes Priority Collateral unless and to the extent that Notes Agent shall act in a manner that is violative of applicable law or this Agreement.  If a Party, in violation of the terms of this Agreement, initiates any Lien Enforcement Action against any Obligor or any of the Collateral, the Agent for the other Parties may intervene in any such Lien Enforcement Action and may interpose this Agreement as a defense or plea thereto (in its name or in the name of Obligors) and shall be entitled to specific performance of the terms hereof.

(b)(i)Notwithstanding the foregoing Section 4(a), if any Actionable Notes Document Default shall occur and be continuing, Notes Agent may initiate a Lien Enforcement Action with respect to any ABL Priority Collateral, subject to Notes Agent’s providing prior notice to ABL Agent (no more than 30 days and no less than 10 days prior to the commencement of any Lien Enforcement Action, which notice may be given during the 180 day period described in the definition of Actionable Notes Document Default) of Notes Agent’s intent to do so; provided, however, that, until Discharge of the Priority ABL Debt, Notes Agent will not take (or continue to take) any Lien Enforcement Action or seek or exercise (or continue to seek or exercise) any remedies under the Notes Documents or applicable law with respect to any of the ABL Priority Collateral if and for so long as ABL Agent is either diligently pursuing, in good faith, its own Lien Enforcement Action with respect to all or a material part of the ABL Priority Collateral or is enjoined or stayed or otherwise prohibited by applicable law from taking such Lien Enforcement Action.

(ii)Notwithstanding the foregoing Section 4(a), if any Actionable ABL Document Default shall occur and be continuing, ABL Agent may initiate a Lien Enforcement Action with respect to any Notes Priority Collateral, subject to ABL Agent’s providing prior written notice to Notes Agent (no more than 30 days and no less than 10 days prior to the commencement of any Lien Enforcement Action, which notice may be given during the 180 day period described in the definition of Actionable ABL Document Default) of ABL Agent’s intent to do so; provided, however, that, until Discharge of the Priority Notes Debt, ABL Agent will not take (or continue to take) any Lien Enforcement Action or seek or exercise (or continue to seek or exercise) any remedies under the ABL Documents or applicable law with respect to any of the Notes Priority Collateral if and for so long as Notes Agent is either diligently pursuing in good faith, its own Lien Enforcement Action with respect to

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all or a material part of the Notes Priority Collateral or is enjoined or stayed or otherwise prohibited by applicable law from taking such Lien Enforcement Action.

(c)Nothing in this Agreement shall be construed to limit or impair in any manner any right of (i) Notes Agent to commence a Lien Enforcement Action with respect to any Notes Priority Collateral in accordance with the Notes Documents and applicable law or ABL Agent to commence a Lien Enforcement Action with respect to any ABL Priority Collateral in accordance with the ABL Documents and applicable law, (ii) any Party otherwise having authority under applicable law to do so to bid for and purchase, for cash (in the case of a bid by any Notes Party with respect to ABL Priority Collateral prior to Discharge of the Priority ABL Debt, or in the case of a bid by any ABL Party with respect to Notes Priority Collateral prior to Discharge of the Priority Notes Debt), any Collateral at any private, public or judicial foreclosure or other sale initiated by any other Party, (iii) any Party to seek to join (but not control or unreasonably delay in any manner) any foreclosure or other judicial Lien enforcement proceeding with respect to any of the Collateral initiated by any other Party if such joinder is required under applicable law for such Party to be entitled to receive any proceeds of Collateral to the extent allowed by this Agreement, (iv) any Party to receive the proceeds of any authorized Lien Enforcement Action in respect of any Collateral in accordance with the terms of this Agreement, (v) any party to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading by any other Person objecting to or otherwise seeking the disallowance of the claims of such Party, including any claims secured by any of the Collateral, subject in all events to the terms of this Agreement, (vi) any Party to vote on any plan of reorganization or liquidation and to file any proof of claim in any Insolvency Proceeding or otherwise, in each case subject to all of the terms of this Agreement, (vii) any Agent to file a claim or statement of interest with respect to the Note Debt or ABL Debt, as applicable; provided that an Insolvency Proceeding has been commenced by or against any Obligor, or (viii) any Agent to take any action (not adverse to the priority status of the Liens described hereunder) in order to create, perfect, preserve or protect (but, subject to the provisions of Section 4(b) hereof, not enforce) its Lien on any of the ABL Priority Collateral or Notes Priority Collateral.

(d)(i)ABL Agent’s Liens on the proceeds of ABL Priority Collateral shall not be released, terminated, discharged, impaired, or extinguished by any Lien Enforcement Action by Notes Agent undertaken by Notes Agent with respect to any ABL Priority Collateral, and the priority of such Liens shall continue to be governed by Section 3.  If any Notes Party shall receive proceeds from any sale, collection, liquidation, casualty or other disposition of any ABL Priority Collateral in connection with the initiation of any Lien Enforcement Action, the Notes Party in receipt of such proceeds shall be obligated to hold such proceeds in trust and promptly turn over such proceeds to ABL Agent for application to the ABL Debt or Notes Debt, as applicable, in accordance with Section 5.  ABL Agent shall be empowered to endorse, in the name and on behalf of any Notes Party, any check or other payment item made payable to such Notes Party and turned over to ABL Agent pursuant to the provisions of this Section 4(d)(i).

(ii)Notes Agent’s Liens on the proceeds of Notes Priority Collateral shall not be released, terminated, discharged, impaired, or extinguished by any Lien Enforcement Action by ABL Agent undertaken by ABL Agent with respect to any Notes Priority Collateral, and the priority of such Liens shall continue to be governed by Section 3.  If any ABL Party shall receive proceeds from any sale, collection, liquidation, casualty or other disposition of any Notes Priority Collateral in connection with the initiation of any Lien Enforcement Action, the ABL Party in receipt of such proceeds shall be obligated to hold such proceeds in trust and promptly turn over such proceeds to Notes Agent for application to the Notes Debt or ABL Debt, as applicable, in accordance with Section 5.  Notes Agent shall be empowered to endorse, in the name and on behalf of any ABL Party, any check or other payment

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item made payable to such ABL Party and turned over to Notes Agent pursuant to the provisions of this Section 4(d)(ii).

(e)Each Party waives any right to require any other Party to marshal any security or Collateral or otherwise to compel any Party to seek recourse against or satisfaction of any of the ABL Debt or Notes Debt, as applicable, from one source before seeking recourse or satisfaction from any other source.  Except as expressly set forth in this Agreement or as may be imposed under or required by applicable law, no Party shall have any duties or responsibilities to any other Parties with respect to any of the Collateral.  Notes Parties will not contest, protest or object to any Lien Enforcement Action taken by ABL Parties in respect of ABL Priority Collateral, including the method, manner or timing of any such Lien Enforcement Action, and ABL Parties will not contest, protest or object to any Lien Enforcement Action with respect to the Notes Priority Collateral taken by Notes Parties, including the method, manner or timing of any such Lien Enforcement Action.

(f)In the event that the ABL Agent becomes a judgment Lien creditor in respect of Notes Priority Collateral or the Notes Agent becomes a judgment Lien creditor in respect of ABL Priority Collateral, such judgment Lien shall be subject to the terms of this Agreement for all purposes as the other Liens securing the Notes Debt and ABL Debt, respectively, are subject to this Agreement.

5.Allocation of Proceeds of Collateral.

(a)(i)All proceeds that are received by any Party from any sale, collection, lease or other disposition of any ABL Priority Collateral (whether received from an Obligor, pursuant to a Lien Enforcement Action or in connection with any claim under any insurance policy or condemnation award) shall be distributed as follows:  (A) first, in payment of any Enforcement Expenses incurred by the Agent conducting Lien Enforcement Action with respect to such ABL Priority Collateral, provided such Lien Enforcement Action was not initiated in violation of this Agreement; (B) second, to ABL Agent for application to the Priority ABL Debt, in such order of application as the holders of such Priority ABL Debt may elect consistent with the ABL Documents, until Discharge of the Priority ABL Debt; (C) third, to Notes Agent for application to the Priority Notes Debt, in such order of application as Notes Parties may elect consistent with the Notes Documents, until Discharge of the Priority Notes Debt; (D) fourth, to ABL Agent for application to any Non-Priority ABL Debt remaining until Payment in Full of all such Non-Priority ABL Debt; and (E) fifth, to Notes Agent for application to any Non-Priority Notes Debt remaining until Payment in Full of all such Non-Priority Notes Debt; provided, that notwithstanding anything in this Agreement that may be construed to the contrary in the event Notes Agent receives, in connection with any Bankruptcy Case or other Insolvency Proceeding, any proceeds of any ABL Priority Collateral and the Lien in favor of ABL Agent with respect to such ABL Priority Collateral has been voided, avoided or equitably subordinated by a court of competent jurisdiction pursuant to a final order, then such proceeds received by Notes Agent with respect to the ABL Priority Collateral in respect of which the Lien in favor of ABL Agent has been voided, avoided, equitably subordinated or otherwise invalidated may be applied, to the extent permitted under applicable law, to the payment of the Notes Debt in accordance with the Notes Documents.

(ii)All proceeds that are received by any Party from any sale, collection, lease or other disposition of any Notes Priority Collateral (whether received from an Obligor, pursuant to a Lien Enforcement Action or in connection with any claim under any insurance policy or condemnation award) shall be distributed as follows:  (A) first, in payment of any Enforcement Expenses incurred by the Agent conducting Lien Enforcement Action with respect to such Notes Priority Collateral, provided such Lien Enforcement Action was not initiated in violation of this Agreement; (B) second, to Notes Agent for application to the Priority Notes Debt, in such order of application as the holders of such Priority Notes Debt may elect consistent with the Notes Documents, until Discharge of the Priority Notes Debt; (C)

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third, to ABL Agent for application to the Priority ABL Debt, in such order of application as ABL Parties may elect consistent with the ABL Documents, until Discharge of the Priority ABL Debt; (D) fourth, to Notes Agent for application to any Non-Priority Notes Debt remaining until Payment in Full of all such Non-Priority Notes Debt; and (E) fifth, to ABL Agent for application to any Non-Priority ABL Debt remaining until Payment in Full of all such Non-Priority ABL Debt; provided, that notwithstanding anything in this Agreement that may be construed to the contrary in the event ABL Agent receives, in connection with any Bankruptcy Case or other Insolvency Proceeding, any proceeds of any Notes Priority Collateral and the Lien in favor of Notes Agent with respect to such Notes Priority Collateral has been voided, avoided or equitably subordinated by a court of competent jurisdiction pursuant to a final order, then such proceeds received by ABL Agent with respect to the Notes Priority Collateral in respect of which the Lien in favor of Notes Agent has been voided, avoided, equitably subordinated or otherwise invalidated may be applied, to the extent permitted under applicable law, to the payment of the ABL Debt in accordance with the ABL Documents.

(b)Nothing herein shall be construed to require ABL Loan Parties to reduce any of their Commitments with respect to the funding of ABL Loans or the issuance of Letters of Credit as a result of their receipt of any amounts applied to any portion of the ABL Debt.  If any ABL Party shall receive any insurance proceeds or condemnation awards related to the ABL Priority Collateral, such ABL Party shall be authorized to hold such proceeds or awards and release them to Borrowers in accordance with the provisions of such ABL Party’s Debt Documents; and if any Notes Party shall receive any insurance proceeds or condemnation awards related to the Notes Priority Collateral, such Notes Party shall be authorized to hold such proceeds or awards and release them to Borrowers in accordance with the provisions of such Notes Party’s Notes Documents.

6.Release of Liens.

(a)In connection with any sale or other disposition of any ABL Priority Collateral (A) by an Obligor, if such sale or other disposition of ABL Priority Collateral is authorized by the Notes Documents or otherwise permitted under the ABL Documents (as in effect on the date hereof or as hereafter in effect); or (B) by ABL Agent pursuant to a Lien Enforcement Action, in each case which results in the release of the ABL Lien on such item of ABL Priority Collateral, the Notes Lien on such item of ABL Priority Collateral will be automatically released and all Notes Parties shall be deemed to have consented to any sale or other disposition of any ABL Priority Collateral to the extent that Notes Agent is obligated pursuant to the foregoing provisions to release and discharge its Liens with respect to such Collateral; provided that the net proceeds realized from any sale or other disposition of ABL Priority Collateral as described in this Section 6(a) shall be allocated and applied in accordance with Section 5 and this Section 6(a) and neither Agent’s Liens in respect of such proceeds shall be deemed to have been released or discharged prior to such application of such proceeds.  Notes Agent promptly shall execute and deliver to ABL Agent such termination statements, releases and other documents as ABL Agent may request to confirm such release and discharge.

(b)Subject to the provisions of Section 9, in connection with any sale or other disposition of any Notes Priority Collateral (A) by an Obligor, if such sale or other disposition of Notes Priority Collateral is authorized by the ABL Documents or otherwise permitted under the Notes Documents (as in effect on the date hereof or as hereafter in effect); or (B) by Notes Agent pursuant to a Lien Enforcement Action, in each case which results in the release of the Notes Lien on such item of Notes Priority Collateral, the ABL Lien on such item of Notes Priority Collateral will be automatically released and all ABL Parties shall be deemed to have consented to any sale or other disposition of any Notes Priority Collateral to the extent that ABL Agent is obligated pursuant to the foregoing provisions to release and discharge its Liens with respect to such Collateral; provided that the net proceeds realized from any sale or other disposition of Notes Priority Collateral as described in this Section 6(b) shall be

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allocated and applied in accordance with Section 5 and this Section 6(b) and neither Agent’s Liens in respect of such proceeds shall be deemed to have been released or discharged prior to such application of such proceeds.  ABL Agent promptly shall execute and deliver to Notes Agent such termination statements, releases and other documents as Notes Agent may request to confirm such release and discharge.

7.Agreement on Certain Bankruptcy Matters.

(a)This Agreement shall be applicable both before and after the commencement by or against any Obligor of a Bankruptcy Case or other Insolvency Proceeding and all converted or succeeding cases or proceedings in respect thereof.  The relative rights of the Parties, as provided for in this Agreement, in or to any distributions from or in respect of any Collateral or proceeds thereof shall continue after the commencement of any such Insolvency Proceeding.  If in any Insolvency Proceeding debt obligations of a reorganized Obligor secured by any Liens upon property of such reorganized Obligor are distributed pursuant to a plan of reorganization or similar restructuring plan, both on account of ABL Debt and on account of Notes Debt, then to the extent the debt obligations distributed on account of the ABL Debt and on account of the Notes Debt are secured by Liens upon the same property, the provisions of this Agreement shall survive distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

(b)If, in any Insolvency Proceeding, ABL Agent (in its discretion or acting at the direction of Required Lenders) consents to the use of cash proceeds of any ABL Priority Collateral (“ABL Cash Collateral”) or provides or supports others in providing a DIP Financing secured by a Lien on the ABL Priority Collateral ranking prior to the Note Lien on such ABL Priority Collateral, then no Notes Party shall object to or contest (or support any other Person in objecting or contesting) the use of such ABL Cash Collateral or the provision of such DIP Financing so long as (i) the interest rates, fees, advance rates, lending sub-limits and other terms of such DIP Financing are determined by the Court to be fair and reasonable under the circumstances, (ii) any Lien on Notes Priority Collateral to secure any such DIP Financing is subordinate in priority and right of enforcement to all valid, perfected and unavoidable Liens on Notes Priority Collateral at any time held by Notes Agent as security for the Notes Debt (including Liens granted as Adequate Protection), (iii) DIP Lenders agree that they will not make loans or issue letter of credit accommodations pursuant to such DIP Financing that would intentionally and with actual knowledge on the part of such DIP Lenders at the time such loans or letter of credit accommodations are made cause the aggregate principal balance of the ABL Debt on any date, when added to the outstanding principal balance of such DIP Financing on such date, to exceed the Capped ABL Debt on such date, and (iv) such financing or use of ABL Cash Collateral does not compel any Obligor to seek confirmation of a specific plan of reorganization (other than payment in full of any DIP Financing on the effective date thereof) for which all or substantially all of the material terms are set forth in the financing documentation approved or otherwise authorized by the Court in connection with the DIP Financing or use of ABL Cash Collateral.  Nothing in this Agreement shall limit (x) the right of ABL Parties to consent to the use of ABL Cash Collateral or consent to or provide any DIP Financing on terms other than the terms set forth herein or (y) the right of any Notes Party to object to DIP Financing or the use of ABL Cash Collateral on terms other than those set forth herein; provided, that any Lien on Notes Priority Collateral securing any such DIP Financing provided by any ABL Parties shall be subject to the Lien priorities established hereunder.

(c)If, in any Insolvency Proceeding, Notes Agent (in its discretion or acting at the direction of the requisite holders of the Notes Debt) consents to the use of cash proceeds of any Notes Priority Collateral (“Notes Cash Collateral”) or provides or supports others in providing a DIP Financing secured by a Lien on Notes Priority Collateral ranking prior to the Lien of the ABL Agent on such Notes Priority Collateral, then no ABL Party shall object to or contest (or support any other Person in objecting

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or contesting) the use of such Notes Cash Collateral or the provision of such DIP Financing so long as (i) the interest rates, fees, advance rates, lending sub-limits and other terms of such DIP Financing are determined by the Court to be fair and reasonable under the circumstances, (ii) any Lien on ABL Priority Collateral to secure any such DIP Financing is subordinate in priority and right of enforcement to all valid, perfected and unavoidable Liens on ABL Priority Collateral at any time held by ABL Agent as security for the ABL Debt (including Liens granted as Adequate Protection), (iii) DIP Lenders agree that they will not make loans or issue letter of credit accommodations pursuant to such DIP Financing that would intentionally and with actual knowledge on the part of such DIP Lenders at the time such loans or letter of credit accommodations are made cause the aggregate principal balance of the Notes Debt on any date, when added to the outstanding principal balance of such DIP Financing on such date, to exceed the Capped Notes Debt on such date, and (iv) such financing or use of Notes Cash Collateral does not compel any Obligor to seek confirmation of a specific plan of reorganization (other than payment in full of any DIP Financing on the effective date thereof) for which all or substantially all of the material terms are set forth in the financing documentation approved or otherwise authorized by the Court in connection with the DIP Financing or use of Notes Cash Collateral.  Nothing in this Agreement shall limit (x) the right of Notes Parties to consent to the use of Notes Cash Collateral or consent to or provide any DIP Financing on terms other than the terms set forth herein or (y) the right of any ABL Party to object to DIP Financing or the use of Notes Cash Collateral on terms other than those set forth herein; provided, that any Lien on ABL Priority Collateral securing any such DIP Financing provided by any Notes Parties shall be subject to the Lien priorities established hereunder.

(d)If any Party shall be required by order of a Court to return, refund or repay (i) to an Obligor or any trustee or other custodian or committee appointed in the Bankruptcy Case or other Insolvency Proceeding any payment or proceeds of the Collateral in connection with any action, suit or proceeding alleging that such Party’s receipt of such payments or proceeds was a transfer voidable under state, federal or foreign law or (ii) to any other Person for any other reason, then such Party shall not be deemed ever to have received such payment or proceeds for purposes of this Agreement in determining whether and when Payment in Full of the ABL Debt or Notes Debt, as applicable, has occurred; provided, however,  that, if any such return, refund or repayment by any ABL Party of any amounts applied to the ABL Debt, and the resulting reinstatement of such amount of ABL Debt, shall be included in the calculation of the Capped ABL Debt then in no event shall the Capped ABL Debt be deemed to have been exceeded by virtue of any such reinstatement of ABL Debt by any ABL Party.

(e)No Notes Party shall oppose (or support the opposition of any other Person) in any Bankruptcy Case or other Insolvency Proceeding to (i) any motion or other request by any ABL Secured Party for Adequate Protection or similar remedy with respect to its Liens upon the ABL Priority Collateral, including any claim of any ABL Secured Party to post-petition interest as a result of the ABL Lien on the ABL Priority Collateral (so long as any post-petition interest paid as a result thereof is not paid from the proceeds of Notes Priority Collateral) or (ii) any objection by any ABL Secured Party to any motion, relief, action or proceeding based on such ABL Secured Party claiming a lack of Adequate Protection with respect to ABL Agent’s Liens in the ABL Priority Collateral.  No ABL Party shall oppose (or support the opposition of any other Person) in any Bankruptcy Case or other Insolvency Proceeding to (i) any motion or other request by any Notes Party for Adequate Protection or similar remedy of Notes Agent’s Liens upon any of the Notes Priority Collateral, including any claim of any Notes Party to post-petition interest as a result of the Notes Lien on the Notes Priority Collateral (so long as any post-petition interest paid as a result thereof is paid solely from the proceeds of Notes Priority Collateral) or (ii) any objection by any Notes Party to any motion, relief, action or proceeding based on such Notes Party claiming a lack of Adequate Protection with respect to Notes Agent’s Liens in the Notes Priority Collateral.  No Notes Party shall seek Adequate Protection with respect to Notes Agent’s Liens in the ABL Priority Collateral unless (A) such request for Adequate Protection consists solely of a request for a replacement Lien upon pre-petition or post-petition assets of such Obligor and the grant of an Inadequate

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Protection Claim in respect of Note Agent’s Lien on the ABL Priority Collateral to the extent authorized by Section 507(b) of the Bankruptcy Code, (B) ABL Agent receives a replacement Lien on the same assets of such Obligor as are made subject to a replacement Lien in favor of Notes Agent, and (C) such replacement Lien of ABL Priority Collateral in favor of Notes Agent is subordinate to all Liens at any time held by ABL Agent in the ABL Priority Collateral (including all pre-petition and post-petition Liens of ABL Agent thereon whether arising under the ABL Documents, securing DIP Financing provided by any ABL Secured Parties or constituting Adequate Protection replacement Liens) and such Inadequate Protection Claim in respect of the ABL Priority Collateral is subordinate in right of payment to any Inadequate Protection Claim or Superpriority Claim granted to any ABL Secured Parties with respect to the ABL Priority Collateral.  In the event Notes Agent, on behalf of itself or any Notes Parties, seeks or requests Adequate Protection in respect of Notes Agent’s Liens upon any of the ABL Priority Collateral and such Adequate Protection is granted in the form of additional collateral of a type of asset or property that would constitute ABL Priority Collateral, then Notes Agent agrees that ABL Agent shall also be granted a Lien on such property as security for the ABL Debt and for any DIP Financing provided by any ABL Secured Parties and that any Lien on such property in favor of Notes Agent shall be subordinated to the Lien on such property in favor of ABL Agent securing the ABL Debt and any such DIP Financing provided by any ABL Secured Parties (and all obligations relating thereto) and to any other Liens granted to the ABL Secured Parties as Adequate Protection on the same basis as the other Liens on ABL Priority Collateral in favor of Notes Agent are so subordinated to the Liens on ABL Priority Collateral in favor of ABL Agent under this Agreement.  No ABL Party shall seek Adequate Protection with respect to ABL Agent’s Liens in the Notes Priority Collateral unless (A) such request for Adequate Protection consists solely of a request for a replacement Lien upon pre-petition or post-petition assets of such Obligor and the grant of an Inadequate Protection Claim in respect of ABL Agent’s Liens on Notes Priority Collateral to the extent authorized by Section 507(b) of the Bankruptcy Code, (B) Notes Agent receives a replacement Lien on the same assets of such Obligor as are made subject to a replacement Lien in favor of ABL Agent, and (C) such replacement Lien of Notes Priority Collateral in favor of ABL Agent is subordinate to all Liens at any time held by Notes Agent in the Notes Priority Collateral (including all pre-petition and post-petition Liens of Notes Agent thereon whether arising under the Notes Documents, securing DIP Financing provided by any Notes Parties or constituting Adequate Protection replacement Liens) and such Inadequate Protection Claim in respect of Notes Priority Collateral is subordinate in right of payment to any Inadequate Protection Claim or Superpriority Claim granted to any Notes Parties in respect of the Notes Priority Collateral.  In the event ABL Agent, on behalf of itself or any ABL Parties, seeks or requests Adequate Protection in respect of ABL Agent’s Liens upon any of the Notes Priority Collateral and such Adequate Protection is granted in the form of additional collateral of a type of asset or property that would constitute Notes Priority Collateral, then ABL Agent agrees that Notes Agent shall also be granted a Lien on such property as security for the Notes Debt and for any DIP Financing provided by any Notes Parties and that any Lien on such property in favor of ABL Agent shall be subordinated to the Lien on such property in favor of Notes Agent securing the Notes Debt and any such DIP Financing provided by any Notes Parties (and all obligations relating thereto) and to any other Liens granted to the Notes Parties with respect to the Notes Priority Collateral as Adequate Protection on the same basis as the other Liens on Notes Priority Collateral in favor of ABL Agent are so subordinated to the Liens on Notes Priority Collateral in favor of Notes Agent under this Agreement.

(f)Prior to Discharge of the Priority ABL Debt (including any portion thereof consisting of DIP Financing), no Notes Party shall seek relief from the automatic stay in any Insolvency Proceeding with respect to any ABL Priority Collateral unless (i) otherwise consented to by ABL Agent or (ii) ABL Agent or DIP Lenders under Section 7(b) shall seek relief from the automatic stay to commence a Lien Enforcement Action.  Prior to Discharge of the Priority Notes Debt (including any portion thereof consisting of DIP Financing), no ABL Party shall seek relief from the automatic stay in any Insolvency Proceeding with respect to any Notes Priority Collateral unless (i) otherwise consented to

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by Notes Agent or (ii) Notes Agent or DIP Lenders under Section 7(c) shall seek relief from the automatic stay to commence a Lien Enforcement Action.

(g)If in any Insolvency Proceeding an Obligor (or any trustee or fiduciary appointed for such Obligor or its assets) shall request approval of a Court to conduct a sale of any ABL Priority Collateral (whether pursuant to Section 363 of the Bankruptcy Code or in accordance with any analogous insolvency law) and if any such sale is consented to by ABL Agent, then no Notes Party shall make (and shall not support the making by any other Person of) any objection to such sale as the holder of a Lien upon any ABL Priority Collateral that is the subject of such sale and, without limiting the generality of the foregoing, shall not object on the basis that the proposed purchase price for the assets is less than the “value” of the Liens of Notes Parties within the meaning of Section 363(f)(3) of the Bankruptcy Code (or any similar provision of any federal, state or foreign law), but Notes Parties may object to a sale on any basis that the holder of an unsecured claim against such Obligor could properly raise (including an objection that the proposed purchase price is inadequate).  If in any Insolvency Proceeding an Obligor (or any trustee or fiduciary appointed for such Obligor or its assets) shall request approval of a Court to conduct a sale of any Notes Priority Collateral (whether pursuant to Section 363 of the Bankruptcy Code or in accordance with any analogous insolvency law) and if any such sale is consented to by Notes Agent, then no ABL Party shall make (and shall not support the making by any other Person of) any objection to such sale as the holder of a Lien upon any Notes Priority Collateral that is the subject of such sale and, without limiting the generality of the foregoing, shall not object on the basis that the proposed purchase price for the assets is less than the “value” of the Liens of ABL Parties within the meaning of Section 363(f)(3) of the Bankruptcy Code (or any similar provision of any federal, state or foreign law), but ABL Parties may object to a sale on any basis that the holder of an unsecured claim against such Obligor could properly raise (including an objection that the proposed purchase price is inadequate).

(h)Each Notes Party hereby waives any claim that it may have against any ABL Secured Party arising out of the election of any ABL Secured Party for the application of Section 1111(b)(2) of the Bankruptcy Code.  Each ABL Party hereby waives any claim that it may have against any Notes Party arising out of the election of any Notes Party for the application of Section 1111(b)(2) of the Bankruptcy Code.

8.Loan Administration; Amendments to Documents.

(a)This Agreement is entered into solely for the purposes set forth herein and, except as is expressly provided otherwise herein, no Party assumes any responsibility to the other Parties to advise such other Parties of information known to such Party regarding the financial condition of any Obligor or regarding the Collateral, or of any other circumstances bearing upon the risk of nonpayment of the obligations of any Obligor under any Debt Documents.  Each Party shall be responsible for managing its relationship with each Obligor and its Debt Documents.  No Party shall be deemed the agent of the others for any purpose except as expressly provided in Section 10 hereof or in the ABL Documents or Notes Documents.

(b)ABL Secured Parties may, subject to the provisions of Section 8(e), agree to modify the terms of any of the ABL Debt and grant extensions of the time of payment or performance to and make compromises (including releases of Liens on ABL Priority Collateral or of guaranties) and settlements with any and all Obligors and all other Persons, in each case without the consent of Notes Parties and without affecting the agreements of Notes Parties in this Agreement.  If an ABL Secured Party should amend or waive any provisions of the ABL Documents, whether or not any ABL Secured Party has knowledge that such amendment or waiver would result in a breach of any Notes Documents or a Notes Document Default, or knowledge of an act, condition or event which with notice or passage of time or both would constitute a Notes Document Default, in no event shall ABL Secured Parties have any

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liability to any Notes Parties as a result of such breach and, without limiting the generality of the foregoing, ABL Secured Parties shall not have any liability for tortious interference with contractual relations or for inducement by ABL Parties of any Obligor to breach any contract or otherwise.  Nothing contained in this Section 8(b) shall limit, impair or waive any right that Notes Parties have to enforce any of the provisions of the Notes Documents against any Obligor and the provisions of this Agreement against any ABL Secured Party.

(c)Notes Parties may, subject to the provisions of Section 8(f), agree to modify the terms of any of the Notes Debt and grant extensions of time of payment or performance to and make compromises (including releases of liens on Collateral or of guaranties) and settlements with any and all Obligors and all other Persons, in each case without the consent of ABL Parties and without affecting the agreements of ABL Parties in this Agreement.  If a Notes Party should amend or waive any provisions of the Notes Documents, whether or not any Notes Party has knowledge that such amendment or waiver would result in a breach of any ABL Documents or an ABL Document Default, or knowledge of an act, condition or event, which with notice or passage of time or both would constitute an ABL Document Default, in no event shall Notes Parties have any liability to any ABL Party as a result of such breach and, without limiting the generality of the foregoing, Notes Parties shall not have any liability for tortious interference with contractual relations or for inducement by Notes Parties of any Obligor to breach of contract or otherwise.  Nothing in this Section 8(c) shall limit, impair or waive any right that ABL Parties have to enforce any of the provisions of the ABL Documents against any of Obligor and the provisions of this Agreement against any Notes Party.

(d)ABL Parties may make ABL Loans and other extensions of credit to any or all Obligors from time to time pursuant to the ABL Documents or otherwise, and all such ABL Loans and other extensions of credit (to the extent such other extensions of credit are secured by ABL Agent’s Liens upon the Collateral) shall constitute a part of the ABL Debt and nothing herein shall restrict in any manner or in any respect the right of Obligor to obtain additional credit from ABL Secured Parties or the right of ABL Secured Parties to make available such additional credit to any Obligor as ABL Secured Parties may elect in their sole and absolute discretion.  If any ABL Party shall honor a request by Borrowers for any ABL Loans or other financial accommodations under the ABL Loan Agreement, whether or not such ABL Party has knowledge that the honoring of such request would result in a Notes Document Default or has knowledge of any act, condition or event which with notice or passage of time, or both, would constitute a Notes Document Default under the Notes Documents, in no event shall any ABL Party have any liability to any Notes Party as a result of such breach, and, without limiting the generality of the foregoing, ABL Parties shall not have any liability for tortious interference with contractual relations or for inducement by any ABL Party of any Obligor to breach a contract or otherwise.  Nothing in this Section 8(d) shall limit or waive any right Notes Parties may have to enforce any of the Notes Documents against any Obligor on account of a Notes Document Default under the Notes Documents, subject to all of the other terms of this Agreement, including Section 2, Section 4 and Section 7 hereof.

(e)Without the prior written consent of Notes Agent, ABL Parties shall not enter into any amendments to the ABL Documents that would (i) increase the rate of interest (including any amendment to the default rate of interest chargeable under the ABL Documents, but excluding, in any event, any increase resulting from the accrual of interest at the default rate of interest) chargeable under the ABL Loan Agreement by more than 200 basis points, (ii) shorten the term of the credit facility under the ABL Loan Agreement by more than 12 months except after the occurrence of any ABL Document Default, (iii) add any additional material fees, except in connection with the provision of any Bank Products, Letters of Credit or overadvance or in connection with any amendment or restructuring after the occurrence of an ABL Document Default, (iv) condition or place restrictions upon the right of any Obligor to pay (other than to prepay or repurchase) any of the Notes Debt in accordance with the Notes

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Documents as in effect on the date hereof except for a restriction on payments that would be violative of this Agreement, or (v) add or make more restrictive any representations, warranties, events of default or covenants unless an ABL Document Default exists and notice thereof is given to Notes Agent or Borrowers concurrently agree to enter into amendments to the Notes Documents to contain substantially the same representations, warranties, events of default or covenants; provided, however, (1) ABL Agent’s discretion to establish additional reserves, release reserves, determine eligibility, reduce/modify advance rates or make overadvances shall not otherwise be limited or affected in any way and (2) the definition of Reserves may be amended to increase the amount of reserves so that the amount of borrowing availability may be reduced, or to release or eliminate such additional reserves to restore or increase the amount of borrowing availability that previously existed.

(f)Without the prior written consent of ABL Agent, Notes Parties will not agree to any amendment or modification of the Notes Documents that would (i) alter (other than to extend) the amortization schedule or maturity date for the Notes Debt to a date earlier than such amortization schedule or maturity date as in effect on the date hereof; (ii) require prepayments or repurchases of the Notes (in addition to those requirements included in the Notes Indenture on the date hereof); (iii) increase the rate of interest (including any amendment to the default rate of interest chargeable under the Notes Documents, but excluding, in any event, any increase resulting from the accrual of interest at the default rate of interest) chargeable on the Notes by more than 200 basis points; (iv) add any additional material fees, except in connection with any amendment or restructuring after the occurrence of a Notes Document Default; (v) condition or place restrictions upon the right of any Obligor to pay any of the ABL Debt in accordance with the ABL Documents as in effect on the date hereof; or (vi) add or make more restrictive any representations, warranties, events of default or covenants unless a Notes Document Default exists and notice thereof is given to ABL Agent or Borrowers concurrently agree to enter into amendments to the ABL Documents to contain substantially the same representations, warranties, events of default or covenants.  Notes Parties acknowledge the restrictions contained in Section 9.10(c) of the ABL Loan Agreement upon Borrowers’ right to make certain payments in respect of the Notes Debt and agree that they will not knowingly accept or retain any payment of the principal amount of the Notes Debt if such payment is or would be violative of Section 9.10(c) of the ABL Loan Agreement as in effect on the date hereof.

(g)ABL Agent shall ensure that the ABL Loan Agreement, and Notes Agent shall ensure that the Notes Documents, contain provisions to the effect that each Party thereto or beneficiary thereof (and its successors and assigns), by accepting the benefits thereof, is bound by the terms of this Agreement whether or not a signatory hereto and agrees to abide by and perform all of its obligations hereunder.  Each Agent agrees to include on any now existing or hereafter filed UCC financing statements naming any Obligor as debtor and such Agent as secured party the following text:  The liens of secured party are subject to that certain Intercreditor Agreement among Wachovia Bank, National Association, as ABL Agent, Wilmington Trust FSB, as Notes Agent and the other parties thereto, as amended, restated, supplemented or otherwise modified from time to time” or words of similar effect.

9.Access to and Use of Notes Priority Collateral.

(a)Prior to the completion of foreclosure by Notes Agent of its Lien on any Real Estate Collateral, Notes Parties will not take any action to impede or impair the rights of ABL Agent to enter upon any Real Estate Collateral to inspect or count any ABL Priority Collateral thereon or to remove any ABL Priority Collateral therefrom, without any obligation on the part of ABL Agent to pay rent or other compensation to any Notes Party.  Notes Parties will permit (and will require any purchaser of any of the real property constituting part of the Real Estate Collateral at any foreclosure or other sale to permit) ABL Agent to use such Real Estate Collateral to store, repair, prepare for sale, sell or otherwise dispose of any of the ABL Priority Collateral, without charge, for a period of 180 days from the date

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Notes Agent provides to ABL Agent written notice of the completion of foreclosure upon such Real Estate Collateral by Notes Agent (the “Period of Use”; provided, that as used in Section 9(b), “Period of Use” shall be deemed to be for a period of 180 days from the date Notes Agent provided to ABL Agent written notice of any sale of Equipment Collateral as contemplated by such Section 9(b)), which Period of Use under this Section 9(a) and under Section 9(b) shall be tolled for each day that ABL Agent is enjoined, stayed or otherwise precluded (whether by order of a Court, the imposition of the automatic stay in any Bankruptcy Case, other Insolvency Proceeding or otherwise by applicable law) from continuing its Lien Enforcement Action with respect to ABL Priority Collateral and each reference herein to “Period of Use” shall be to such Period of Use as so tolled.

(b)Prior to Notes Agent’s sale or other disposition of any Equipment Collateral pursuant to a Lien Enforcement Action, Notes Agent shall not interfere with ABL Agent’s access to any of the Equipment Collateral and use thereof to the extent ABL Agent deems it necessary to do so in effectively realizing upon any of the ABL Priority Collateral.  To the extent that any of the Equipment Collateral constitutes computer hardware or software that is used to store or maintain information relating to any ABL Priority Collateral or to process any such information, Notes Agent shall not sell or otherwise dispose of any such Equipment Collateral pursuant to a Lien Enforcement Action or otherwise unless the purchaser in any such sale agrees to allow ABL Agent use of such Equipment Collateral, for so long as ABL Agent may require the use of such Equipment Collateral, without charge, but in no event to exceed the Period of Use.

(c)ABL Parties shall promptly repair, at ABL Parties’ expense (but with Obligors remaining liable to reimburse ABL Parties), any physical damage to the Real Estate Collateral or Equipment Collateral directly caused by ABL Agent or its agent during the use and occupancy of the Real Estate Collateral or Equipment Collateral pursuant to this Section 9.

(d)If Notes Agent has obtained possession or control of any or all of the Collateral consisting of books or records, ABL Agent may make copies (including in the case of any books and records stored in electronic form, electronic copies thereof) of such books and records that are in Notes Agent’s possession and which pertain to any ABL Priority Collateral, to deal with or dispose of any such ABL Priority Collateral; provided, that if and to the extent such books and records relate solely to ABL Priority Collateral and upon request by ABL Agent, Notes Agent shall turnover to ABL Agent the original copies of such books and records.  To the extent that any such books and records constitute Notes Priority Collateral, each of Notes Agent (to the extent it may lawfully do so) and Obligors hereby grant to ABL Agent an irrevocable and non-exclusive license to use any and all such books and records for the purpose of dealing with and realizing upon the ABL Priority Collateral.  Such license shall be worldwide and none of Obligors, Notes Agent nor any other Notes Party shall be entitled to any payment or other compensation in respect of such license from ABL Agent.

(e)If ABL Agent has obtained possession or control of any or all of the Collateral consisting of books or records, Notes Agent may make copies (including in the case of any books and records stored in electronic form, electronic copies thereof) of such books and records that are in ABL Agent’s possession and which pertain to any Notes Priority Collateral, to deal with or dispose of any such Notes Priority Collateral; provided, that if and to the extent such books and records relate solely to Notes Priority Collateral and upon request by Notes Agent, ABL Agent shall turnover to Notes Agent the original copies of such books and records.  To the extent that any such books and records constitute ABL Priority Collateral, each of ABL Agent (to the extent it may lawfully do so) and Obligors hereby grant to Notes Agent an irrevocable and non-exclusive license to use any and all such books and records for the purpose of dealing with and realizing upon the Notes Priority Collateral.  Such license shall be worldwide and none of Obligors, ABL Agent nor any ABL Lender shall be entitled to any payment or other compensation in respect of such license from Notes Agent.

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10.Bailee for Perfection Purposes; Delivery or Surrender of Collateral.

(a)Each Agent agrees that, with respect to any Collateral at any time or times in its possession or control and in which the other Agent has a Lien (whether or not subordinate pursuant to the terms hereof to the Lien of the Agent in possession), the Agent in possession or control of any such Collateral shall be the agent and bailee of the other Agent solely for purposes of perfecting (to the extent not otherwise perfected) such other Agent’s Lien in such Collateral, subject in all events to the relative priorities established pursuant to Section 3 hereof.

(b)If an Agent shall be in possession or control of any Collateral subject to its Lien after Payment in Full of the ABL Debt (other than in connection with a Qualified Refinancing as contemplated by Section 24(d) in which the Person providing such Qualified Refinancing (or its agent) elects to become a party hereto), in the case of ABL Agent, or the Notes Debt (other than in connection with a Qualified Refinancing as contemplated by Section 24(d) in which the Person providing such Qualified Refinancing (or its agent) elects to become a party hereto), in the case of Notes Agent, such Agent shall (unless otherwise restricted by applicable law and subject in all events to the receipt of an indemnification of all liabilities arising from such delivery or surrender of possession) promptly deliver or surrender possession of the same or execute an assignment of any agreement giving such Agent control of the same under the UCC (to the extent permitted by the terms of such agreement and applicable law) to the other Agent in accordance with the priorities of Liens established pursuant to Section 3 hereof, without recourse to or warranty by such Agent in possession.

11.Provisions Concerning Insurance.  Proceeds of Collateral include insurance proceeds and condemnation proceeds (including proceeds of business interruption insurance), and therefore the priorities set forth in Section 3 hereof and the provisions of Section 5 hereof govern the ultimate disposition of insurance and condemnation proceeds.  ABL Agent, for the benefit of the other ABL Parties, shall have the sole and exclusive right, as against Notes Parties, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of any ABL Priority Collateral or any settlement of any business interruption claim.  Notes Agent, for the benefit of Notes Parties, shall have the sole and exclusive rights, as against ABL Parties, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of any Notes Priority Collateral and approve.  All Parties shall cooperate to the extent reasonably necessary and in a reasonable manner to facilitate the payment of insurance proceeds to the appropriate Agent for disposition in accordance with Section 5 hereof.  ABL Agent shall have the right (as against Notes Parties) to determine whether insurance proceeds may be used to replace any affected ABL Priority Collateral.  Notes Agent shall have the right (as against ABL Parties) to determine whether insurance proceeds may be used to repair or replace any affected Notes Priority Collateral.

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12.Certain Matters in Connection with Sale or Loss of Assets.  If any sale or other disposition of assets (including any casualty loss) includes ABL Priority Collateral and Notes Priority Collateral, unless otherwise agreed to by the Agents, as between the Parties the Parties agree that the amount of the purchase price allocated to Receivables and Inventory (each as defined on Exhibit A attached hereto) sold or otherwise disposed of shall not be less than the book value (in accordance with GAAP) of such Receivables and Inventory and the amount of the purchase price allocated to IP Collateral (as defined on Exhibit A attached hereto) sold or otherwise disposed of shall not be less than the orderly liquidation value of such IP Collateral as determined by the most recent appraisal of such property.  Nothing in this Section 12 shall be deemed to be a consent by any ABL Secured Party to any sale of the ABL Priority Collateral that is insufficient to satisfy in full the amount of the ABL Debt and nothing in this Section 12 shall be deemed to be a consent by any Notes Party to any sale of the Notes Priority Collateral that is insufficient to satisfy in full the amount of the Notes Debt.

13.Notices.  All notices, requests and demands to or upon a party hereto shall be in writing and shall be delivered by hand, sent by certified or registered mail, return receipt requested, or by telecopier and shall be deemed to have been validly served, given or delivered when delivered against receipt or three (3) Business Days after deposit in the U.S. mail, postage prepaid, or, in the case of telecopy notice, when received at the office of the noticed party during normal business hours, in each case addressed as follows:

(A)	If to ABL Parties:	Wachovia Bank, National Association, as Agent
		301 South College Street
		Charlotte, NC 28288-0737
		Attention: Freedom Group Loan Administration
		Telecopy: (704) 374-273
	With a courtesy copy (which shall not
		constitute notice) to:
		Parker, Hudson, Rainer & Dobbs LLP
		1500 Marquis Two Tower
		285 Peachtree Center Avenue, N.E.
		Atlanta, GA 30303
		Attention: Mitchell Purvis, Esq.
		Telecopy: (404) 522-8409
(B)	If to Notes Parties:	Wilmington Trust FSB
		246 Goose Lane, Suite 105
		Guilford, CT 06437
		Attention: Joseph O’Donnell
		Telecopy: (203) 453-1183
		With a courtesy copy (which shall not
		constitute notice) to:
		Dorsey & Whitney LLP
		Suite 1500
		50 South Sixth Street
		Minneapolis, MN 55402
		Attention: Steven J. Heim
		Telecopy: (612) 340-2643

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or to such other address as each party may designate for itself by like notice given in accordance with this Section; provided, however, that any notice, request or demand to or upon an Agent pursuant to Section 4(b) shall not be effective until received by such Agent.  Any written notice that is not sent in conformity with the provisions hereof shall nevertheless be effective on the date that such notice is actually received by the noticed party.  Each Agent hereby agrees that any requirement for the giving of notice by an Agent under the UCC or otherwise in connection with any exercise by such Agent of any of its rights or remedies with respect to the Collateral (including the taking of any Lien Enforcement Action) shall be satisfied by the giving of written notice at least ten (10) days prior to the date on which such rights or remedies are to be exercised by such Agent, provided that nothing herein shall be deemed to require the giving of any notice when such notice is not required by applicable law.

14.No Duties Imposed Upon Parties.  The rights granted to the Parties in this Agreement are solely for their protection and nothing herein contained imposes on any Party any duties with respect to any of the Collateral.  No Party has any duty to preserve rights against prior parties on any instrument or chattel paper received from any Obligor as collateral security for any of the ABL Debt or Notes Debt.

15.Representations of Parties.  Each Party represents and warrants to the other Parties that (i) the execution, delivery and performance of this Agreement by such Party is within the powers of such Party, has been duly authorized by all internal action of such Party (including, as applicable, approval of its board of directors, partners, shareholders or a limited liability company members) and does not contravene any applicable law, any provision of any applicable Debt Documents, or any agreement by which such Party or its property is bound; (ii) this Agreement constitutes the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms; and (iii) this Agreement has been duly executed and delivered on its behalf by an individual officer, director, shareholder, partner or other authorized person.

16.No Additional Rights of Obligors Hereunder; No Effect on Liens.  Nothing herein shall be construed to confer additional rights upon any Obligor.  Without limiting the generality of the foregoing, if either of Agents shall enforce its rights or remedies in violation of this Agreement, no Obligor shall be authorized to use such violation as a defense to any right or remedy exercised by such Agent, nor assert such violation as a counterclaim or basis of setoff or recoupment against any Party.  Nothing contained in this Agreement is intended to affect or limit in any way the Liens of either of Agents with respect to any of the Collateral or other assets of any Obligor, whether tangible or intangible, insofar as such Obligor and third parties are concerned.  Agents specifically reserve all of their respective Liens, and rights to assert such Liens, as against each Obligor and all third parties.

17.Independent Credit Investigations.  Neither the Parties nor any of their respective directors, officers, agents or employees shall be responsible to any other Party or any other Person for any Obligor’s solvency, financial condition or ability to repay any of the Notes Debt or any of the ABL Debt, or for statements of any Obligor, oral or written, or for the validity, sufficiency or enforceability of any of the applicable Debt Documents, or the validity, perfection or priority of any Liens granted by any Obligor to either of Agents in connection with any of the applicable Debt Documents.  Each Party hereto has entered into its agreements with each Obligor based upon its own independent investigation, and makes no warranty or representation to any other Party and does not rely upon any representation of any other Party with respect to matters identified or referred to in this Section.

18.Term of Agreement.  This Agreement shall continue in full force and effect and shall be irrevocable by any Party hereto until the earliest to occur of the following:  (i) the Parties hereto in writing mutually agree to terminate this Agreement; (ii) Payment in Full of the Notes Debt; or (ii) Payment in

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Full of the ABL Debt and termination of the Commitments.  Notwithstanding the foregoing, the provisions of this Agreement shall continue to be effective or be reinstated, as the case may be, if at any time payment of any of the ABL Debt or Notes Debt, as applicable, is made in a manner that is violative of this Agreement, or is rescinded or otherwise must be returned by a Party connection with an Insolvency Proceeding, all as if any such payment had not been made.

19.Governing Law.  This Agreement shall be interpreted, and the rights and obligations of the parties hereto determined, in accordance with the laws of the State of New York (without giving effect to any conflict of laws principles).

20.No Third Party Beneficiaries.  Nothing contained in this Agreement shall be deemed to indicate that this Agreement has been entered into for the benefit of any Person other than (i) Agents and their respective successors and permitted assigns and (ii) ABL Secured Parties and Notes Parties, together with their respective successors and permitted assigns.  No Person other than a Party shall be authorized to enforce any of the provisions of this Agreement.

21.Conflict with Documents.  The provisions of this Agreement are intended by the Parties to control any conflicting provisions in the Debt Documents, including any covenants prohibiting further borrowing or encumbrances of Collateral; provided, however, that nothing herein shall modify or relieve any Obligor from any liability or obligations that such Obligor may have to any Party under any ABL Documents or any Notes Document.  The definitions of “Payment in Full,” “Discharge of the Priority ABL Debt,” and “Discharge of the Priority Notes Debt,” as used herein, are intended solely to define the circumstances under which the ABL Debt, Notes Debt, Priority ABL Debt or Priority Notes Debt are deemed to be paid in full under this Agreement as a condition to the exercise of certain rights or the discharge of certain duties by ABL Parties or Notes Parties, as applicable, and nothing herein shall be deemed to limit, restrict or otherwise affect any of the indemnities or other undertakings of Obligors that are set forth in the ABL Documents or the Notes Documents, all of which indemnities and other undertakings of Obligors shall survive Payment in Full of the ABL Debt or the Notes Debt, as applicable, and shall continue in full force and effect as if this Agreement had never been entered into by the Parties.

22.Section Headings.  The section headings contained in this Agreement are and shall be deemed to be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

23.Counterparts; Facsimile Signatures.  This Agreement may be executed in any number of counterparts and by different Parties hereto in separate 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.  In proving this Agreement in any judicial proceeding, it shall not be necessary to produce or account for more than one such counterpart signed by the Party against whom such enforcement is sought.  Any signature delivered by a Party by facsimile or other electronic mail transmission shall be deemed to be an original signature hereto.

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24.Binding Effect; Participations and Assignments.

(a)This Agreement shall be binding upon each of Obligors, ABL Secured Parties and Notes Parties and shall inure to the benefit of the Parties and their respective successors and permitted assigns.  In no event shall any Obligor or any Affiliate of an Obligor be deemed to be a permitted assign of any Party.  Each Agent represents that it has not agreed to any modification of the provisions of the applicable ABL Documents or Notes Documents authorizing it to execute this Agreement and to bind all of the ABL Secured Parties or Notes Parties, as applicable.  Notwithstanding any implication to the contrary in any provision in this Agreement, neither Agent makes any representation regarding the validity or binding effect of any of the ABL Documents or Notes Documents or its authority to bind any of the ABL Secured Parties or Notes Parties, as applicable, through its execution of this Agreement.

(b)To the extent provided in the ABL Documents or Notes Documents, as applicable, each ABL Lender and Holder reserves the right to grant participations in, or otherwise sell, assign, transfer or negotiate all or any part of, or any interest in, the ABL Debt or the Notes Debt, as the case may be; provided, however, that no Party shall be obligated to give any notices to or otherwise in any manner deal directly with any such participant in the ABL Debt or Notes Debt, as the case may be, and no participant shall be entitled to any rights or benefits under this Agreement except through the ABL Lender or Holder, as applicable, with which it is a participant and any sale of a participation in the ABL Debt or the Notes Debt shall be expressly made subject to the provisions of this Agreement.

(c)In no event shall an Agent transfer or assign any Lien that it may have with respect to any of the Collateral to any Person unless the transferee or assignee thereof shall first agree in writing to be bound by the terms of this Agreement the same as if an original signatory hereto.

(d)If Payment in Full of all of the ABL Debt or Notes Debt is made by loans, notes or other extensions of credit made to one or more Obligors in connection with a Qualified Refinancing, each Person providing (or in the case of notes, purchasing) such loans, notes or other extensions of credit (or an agent or authorized representative acting on its behalf) may elect by written notice to Agents to be a party hereto and substituted for the ABL Parties (if such Person’s loans, notes or other extensions of credit are used for Payment in Full of the ABL Debt) or Notes Parties (if such Person’s loans, notes or other extensions of credit are used for Payment in Full of the Notes Debt).

25.Obligations Unconditional; Several Obligations.  All rights, interest, agreements and obligations of the Parties under this Agreement shall remain in full force and effect irrespective of (a) except as otherwise expressly provided in this Agreement, any lack of validity or enforceability of any Notes Document or any ABL Document; (b) except as otherwise provided in this Agreement, any change in the time, manner or place of payment of, or in any other terms of, any of the Notes Debt or ABL Debt, or any amendment, waiver or other modification, whether by course of conduct or otherwise, of the terms of any of the Notes Documents or any ABL Documents; (c) any exchange of any security interest or other Lien in any of the Collateral or any amendment, waiver or other modification permitted hereunder, whether in writing, by course of conduct or otherwise, of any of the Notes Debt or ABL Debt; or (d) the commencement of any Insolvency Proceeding in respect of any Obligor.

26.Further Assurances.  Each of the Parties agrees to execute such amendments to financing statements and other documents as may be necessary to reflect of record the existence of this Agreement and the relative priorities established pursuant to Section 3 hereof.  If at any time or from time to time hereafter it becomes necessary or advisable in connection with any Lien Enforcement Action or other disposition of any ABL Priority Collateral by ABL Agent for ABL Agent to obtain a subordination, release or discharge of Notes Agent’s Liens in any such ABL Priority Collateral in order to convey good and marketable title to such ABL Priority Collateral, then, so long as such Lien Enforcement Action or

27

other disposition, and the application of the proceeds derived therefrom, have been accomplished in conformity herewith, upon the request of ABL Agent, Notes Agent shall execute such instruments of subordination, release or discharge of such Liens, in recordable and registerable form, as may be reasonable and appropriate in the circumstances; provided, however, that in no event shall any such subordination, release or discharge alter, impair, release, discharge, terminate or otherwise modify any Liens of Notes Agent in and to any other portion of the Collateral then existing or any proceeds of such ABL Priority Collateral or the claims of Notes Parties against Obligors for any of the Notes Debt. If at any time or from time to time hereafter it becomes necessary or advisable in connection with any Lien Enforcement Action or other disposition of any Notes Priority Collateral by Notes Agent for Notes Agent to obtain a subordination, release or discharge of ABL Agent’s Liens in any such Notes Priority Collateral in order to convey good and marketable title to such Notes Priority Collateral, then, so long as such Lien Enforcement Action or other disposition, and the application of the proceeds derived therefrom, have been accomplished in conformity herewith, upon the request of Notes Agent, ABL Agent shall execute such instruments of subordination, release or discharge of such Liens, in recordable and registerable form, as may be reasonable and appropriate in the circumstances; provided, however, that in no event shall any such subordination, release or discharge alter, impair, release, discharge, terminate or otherwise modify any Liens of ABL Agent in and to any other portion of the Collateral then existing or any proceeds of such Notes Priority Collateral or the claims of ABL Parties against Obligors for any of the ABL Debt.

27.Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

28.Specific Performance.  Each Agent, on behalf of itself and the other Parties for which it serves as such agent, may demand specific performance of this Agreement, and each Party irrevocably waives any defense based upon the adequacy of the remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action that may be brought by either Agent.

29.Entire Agreement; Amendments.  This Agreement expresses the entire understanding and agreement of the Parties hereto with respect to the subject matter hereof and supersedes all prior understandings and agreements of the Parties regarding the same subject matter.  This Agreement may not be amended or modified except by a writing signed by the Parties hereto.

30.Jury Trial Waiver.  To the fullest extent permitted by applicable law, each Party hereby waives all rights to a trial by jury in connection with any action, suit or other proceeding arising out of or related to this Agreement.

[Signatures on following pages]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

ABL AGENT:

WACHOVIA BANK, NATIONAL ASSOCIATION, as ABL Agent

By:

Name:

Title:

NOTES AGENT:

WILMINGTON TRUST, FSB, as Notes Agent

By:

Name:

Title:

ACKNOWLEDGMENT, CONSENT AND AGREEMENT

The undersigned, the Obligors described in the foregoing Intercreditor Agreement (the “Agreement”), each (i) acknowledges receipt of a copy of the Agreement, (ii) to the extent required, consents to the terms and conditions thereof and (iii) agrees to be bound by the allocation of proceeds of Collateral as between the Notes Parties and ABL Secured Parties provided for in the Agreement; acknowledges and agrees that it is not a third-party beneficiary of, and does not have any rights or benefits under, the Agreement; although it is signing below, acknowledges and agrees that it is not a party to the Agreement and that the Agreement may be modified or amended at any time or times without notice to or the consent of any of the undersigned (provided that its consent to the Agreement shall not extend to any modification or amendment thereof that is not itself consented to by the undersigned (it being understood that nothing herein is intended to imply that any such consent is required)); and agrees not to assert any provision of the Agreement as a defense to, or otherwise assert any provision thereof in connection with, any action, suit or other proceeding relating to any of the Debt Documents or Collateral, or as a counterclaim or basis for setoff or recoupment against any Party.

This Acknowledgment, Consent and Agreement and any amendment hereof may be executed in several counterparts and by each Obligor on a separate counterpart, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute but one and the same instrument.  Capitalized terms used in this Acknowledgment, Consent and Agreement without definition have the meanings specified in the Agreement unless the context otherwise requires.

July       , 2009.

	“OBLIGORS”
ATTEST:	FREEDOM GROUP, INC.
	By:
Secretary	Name:
	Title:
ATTEST:	REMINGTON ARMS COMPANY, INC.
	By:
Secretary	Name:
	Title:
ATTEST:	THE MARLIN FIREARMS COMPANY
	By:
Secretary	Name:
	Title:

[Signatures continue on following page.]

ATTEST:	H&R 1871, LLC
	By:
Secretary	Name:
	Title:
ATTEST:	BUSHMASTER FIREARMS INTERNATIONAL, LLC
	By:
Secretary	Name:
	Title:
ATTEST:	DPMS FIREARMS, LLC
	By:
Secretary	Name:
	Title:
ATTEST:	E-RPC, LLC
	By:
Secretary	Name:
	Title:
ATTEST:	DA ACQUISITIONS, LLC
	By:
Secretary	Name:
	Title:
ATTEST:	RA BRANDS, L.L.C.
	By:
Secretary	Name:
	Title:

[Signatures continue on following page.]

ATTEST:	RACI HOLDING, INC.
	By:
Secretary	Name:
	Title:
ATTEST:	REMINGTON STEAM, LLC
	By:
Secretary	Name:
	Title:
ATTEST:	BUSHMASTER HOLDINGS, LLC
	By:
Secretary	Name:
	Title:

EXHIBIT A

ABL Priority Collateral

“ABL Priority Collateral” shall mean all of each Obligor’s right, title or interest in or to all of the following types and items of property of such Obligor, whether now owned or existing or hereafter created, acquired or arising and wherever located:

(i)              all Inventory;

(ii)             all contracts and Documents that evidence the ownership of or right to receive or possess, or that otherwise relate to, any Inventory, including, without limitation, contracts and documents that relate to the acquisition or sale or other disposition of any Inventory;

(iii)            all rights of an unpaid vendor with respect to Inventory;

(iv)            all Receivables;

(v)             all contracts out of which any Receivable has arisen and all rights under each such contract;

(vi)            all Deposit Accounts Collateral;

(vii)           all Notes Receivable given to evidence one or more Receivables, however evidenced and whenever made;

(viii)          all Instruments, Chattel Paper, Documents, Letter-of-Credit Rights and Supporting Obligations, in each case to the extent arising out of, relating to or given in exchange or settlement for any of the Inventory, Receivables or Notes Receivable referred to in clause (vii) above or given to evidence the obligation to pay any Receivables or Notes Receivable referred to in clause (vii) above;

(ix)            all General Intangibles that relate in any way to any of the Inventory, including, without limitation, all warranties of title, or any other ABL Priority Collateral;

(x)             all cash and cash equivalents of any kind at any time deposited with or held by or under the control of ABL Agent or any other ABL Party (but excluding on any date amounts on deposit therein that are traceable to and identifiable on such date as the direct cash proceeds of Notes Priority Collateral);

(xi)            all Commercial Tort Claims related to or arising out of (a) the manufacture, distribution, sale or other disposition of an Obligor’s Inventory or (b) the collection of or realization upon any Receivables of an Obligor;

(xii)           the proceeds of any business interruption insurance policy, including, without limitation, all rights to payment thereunder;

(xiii)          all IP Collateral;

(xiv)          all substitutions for and replacements, products, accessions, rents, profits and cash and non-cash Proceeds of any of the foregoing items of ABL Priority Collateral, including, without

limitation, Proceeds of any insurance policies, claims against third parties, and condemnation or requisition payments with respect to all or any of the foregoing items of ABL Priority Collateral;

(xv)           all Collateral Records; and

(xvi)          to the extent not included above, all Collateral Support and Supporting Obligations relating to any of the foregoing.

For the avoidance of doubt, (A) no proceeds of ABL Loans shall constitute ABL Priority Collateral to the extent that the proceeds thereof are used to acquire assets or property that would otherwise constitute Notes Priority Collateral and (B) no assets or property that would otherwise constitute Notes Priority Collateral shall constitute ABL Priority Collateral to the extent such assets or property are purchased with funds in any disbursement account of an Obligor that are transferred to such disbursement account from an account described in clause (vi) or (x) above in compliance with the ABL Documents at a time when no Cash Management Event has occurred.

Applicable Definitions

Capitalized terms used in this Exhibit A and not otherwise defined herein shall have the respective meanings ascribed thereto in the Intercreditor Agreement to which this Exhibit A is attached.

“Account” shall mean and include an “account” as defined in the UCC.

“Agent Payment Account” shall mean a Deposit Account maintained by Agent to which (a) all monies from time to time deposited to any Blocked Accounts shall be transferred and (b) collections, deposits, and other payments on or with respect to ABL Priority Collateral may be made pursuant to the terms of the ABL Documents.

“Blocked Account” shall mean a special account established by Obligors or ABL Agent at a bank selected by Obligors, but acceptable to ABL Agent in its discretion, and over which ABL Agent shall have sole and exclusive access and control for withdrawal purposes on or after any Cash Management Event.

“Chattel Paper” shall mean and include all “chattel paper” as defined in the UCC, including, without limitation, “electronic chattel paper” or “tangible chattel paper,” as each term is defined in Article 9 of the UCC.

“Collateral Records” shall mean books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and related data processing software and similar items that at any time evidence or contain information relating to any of the ABL Priority Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon.

“Collateral Support” shall mean all property (real or personal) assigned, hypothecated or otherwise securing any ABL Priority Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

“Commercial Tort Claim” shall have the meaning given to the term “commercial tort claim” in the UCC.

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“Deposit Account” shall have the meaning given to the term “deposit account” in the UCC and shall include, without limitation, all checking and other deposit accounts maintained with any financial institution.

“Deposit Accounts Collateral” shall mean Deposit Accounts (and any associated lockboxes) maintained by any ABL Party or other bank for the deposit of proceeds of ABL Priority Collateral pursuant to the ABL Documents or for disbursing the proceeds of ABL Loans made by ABL Lenders pursuant to the ABL Documents and all amounts from time to time deposited in such Deposit Accounts (but excluding on any date amounts on deposit therein that are traceable to and identifiable on such date as the direct cash proceeds of Notes Priority Collateral).  For the avoidance of doubt, all Blocked Accounts and the Agent Payment Account shall constitute Deposit Accounts Collateral.

“Document” shall mean and include a “document” as defined in the UCC and shall include, without limitation, for each Obligor, all of such Obligor’s bills-of-lading, warehouse receipts or other documents of title.

“General Intangible” shall mean and include a “general intangible” as defined in the UCC.

“Goods” shall mean and include “goods” as defined in the UCC.  The term “Goods” shall include Inventory.

“Instrument” shall mean and include an “instrument” as defined in the UCC.

“Inventory” shall mean (i) all “inventory” as defined in Article 9 of the UCC, (ii) all Goods which are returned to or repossessed by any Obligor and that prior to the sale or lease thereof constituted “inventory” as defined in Article 9 of the UCC, (iii) all computer programs embedded in any such Goods described in clauses (i) and (ii) of this definition and (iv) all accessions thereto and products thereof (in each case, regardless of whether characterized as inventory under the UCC).

“IP Collateral” shall mean any and all patents, patent rights, patent applications, copyrights, works which are the subject matter of copyrights, copyright applications, copyright registrations, trademarks, servicemarks, trade names, trade styles, trademark and service mark applications, and licenses and rights to use any of the foregoing and all applications, registrations and recordings relating to any of the foregoing as may be filed in the United States Copyright Office, the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof, any political subdivision thereof or in any other country or jurisdiction, together with all rights and privileges arising under applicable law with respect to any Obligor’s use of any of the foregoing; all extensions, renewals, reissues, divisions, continuations, and continuations-in-part of any of the foregoing; all rights to sue for past, present and future infringement of any of the foregoing; inventions, trade secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys, reports, manuals, and operating standards; goodwill (including any goodwill associated with any trademark or servicemark, or the license of any trademark or servicemark); customer and other lists in whatever form maintained; trade secret rights, copyright rights, rights in works of authorship, domain names and domain name registration; software and contract rights relating to computer software programs, in whatever form created or maintained.

“Letter-of-Credit Right” shall have the meaning given to the term “letter-of-credit right” in the UCC.

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“Notes Receivable” means any promissory note or other writing evidencing an obligation to pay money to an Obligor.

“Payment Intangible” shall have the meaning given to the term “payment intangible” in the UCC.

“Proceeds” shall mean:  (i) all “proceeds” as defined in Article 9 of the UCC, (ii) payments or distributions made with respect to any Notes Receivable referred to in clause (vii) of the definition of ABL Priority Collateral or Deposit Accounts Collateral, and (iii) whatever is receivable or received when ABL Priority Collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary.

“Receivables” shall mean (i) all Accounts (and related Supporting Obligations), and (ii) all other rights to payment, in each case under clauses (i) and (ii), arising from services rendered or to be rendered or from the sale, lease, license, assignment or other disposition of Inventory or Documents evidencing Inventory, whether such rights to payment constitute Payment Intangibles, Letter-of-Credit Rights, Supporting Obligations or any other classification of property, or are evidenced in whole or in part by Instruments, Chattel Paper or Documents.

“Supporting Obligation” shall mean and include “supporting obligation” as defined in the UCC.

“UCC” means the Uniform Commercial Code (or any successor statute), as adopted and in force in the State of New York or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any of the Collateral, the Uniform Commercial Code (or any successor statute) of such state.

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EXHIBIT B

Notes Priority Collateral

“Notes Priority Collateral” shall mean all “Collateral” as defined in the Notes Documents and all other assets pledged pursuant to the Notes Documents to secure the Notes Debt (in each case, other than ABL Priority Collateral).

EX-10.5

Exhibit 10.5

REMINGTON

COLLECTIVE BARGAINING
AGREEMENT

Between

REMINGTON ARMS COMPANY,

INC

lLION, NEW YORK

and

INTERNATIONAL UNION,

UNITED MINE WORKERS OF
AMERICA

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Table of Contents

Article I - Enabling Clause	5
Section (a) Prior Agreements, Practices and Customs	5
Section (b) Recognition	5
Section (c) Non-Discrimination	5
Section (d) Definitions	5
Section (e) Payroll Deduction	6
Section (f) Successorship	6
Article II – Scope and Coverage	7
Section (a) Work Jurisdiction	7
Section (b) Exemptions Clause	7
Section (c) Supervisors Shall Not Perform-Classified Work	7
Section (d) Management of the Plant	8
Section (e) UNION’S Rights	8
Section (f) Contracting and Subcontracting	9
Section (g) Job Security	9
Article III - Wages and Hours	10
Section (a) Basic Workday	10
Section (b) Basic Workweek	10
Section (c) Overtime Pay and Premium Pay	10
Section (d) Standard Daily Wage Rate	13
Section (e) Hourly Wage Rates and Shift Differential	13
Article IV – Holidays	15
Section (a) Holidays Observed	15
Section (b) Saturday and Sunday Holidays	15
Section (c) Plant Floater and December 24	16
Section (d) Pay for holidays Worked	16
Section (e) Pay for Holidays Not Worked	16
Section (f) Birthday Holidays	16
Section (g) Time of Payment	17
Article V – Vacation	17
Section (a) Regular Vacation	17
Section (b) Plant Shutdown	17
Section (c) Staggered Vacation	18
Section (d) Work During Shutdown	18
Section (e) Time of Payment	18
Section (f) Obligation for Payment	19
Article VI – Allowance	19
Section (a) Bereavement Pay	19
Section (b) Jury Duty	20
Section (c) Reporting Pay and Call - In Pay	21
Section (d) Military Duty	21
Article VII – Joint Labor – Management Communication Committee	21
Article VIII – Health and Safety	22
Section (a) Right to a Safe Working place	22

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Section (b) Health and Safety Committee	22
Section (c) Settlement of Health or Safety Disputes	24
Section (d) Drug and Alcohol Testing	24
Article IX – Seniority	24
Section (a) Definition of Seniority	24
Section (b) Termination of Seniority	24
Section (c) Probationary Period	25
Section (d) Filling Vacancies	25
Section (e) Reduction Realignment Procedure	25
Section (f) Panel	27
Section (g) Panel Custodians	27
Section (h) Panel Members Accrue Seniority	27
Section (i) Right to be Recalled	27
Section (j) Recall of Persons on Layoff Status	28
Section (k) Job Bidding and Posting Procedure	28
Section (1) Temporary Assignments	31
Section (m) Separation Pay	32
Article X – Settlement of Disputes	33
Section (a) Grievance Committee	33
Section (b) Grievance Procedure	34
Section (c) Finality of Decision or Settlement	37
Section (d) Waiver of Time Limits	37
Article XI – Discipline and Discharge	37
Section (a) Just Cause Required	37
Section (b) Procedure	37
Section (c) Suspension	38
Section (d) Compensation for Lost Earnings	38
Section (e) Removal of Employee Disciplinary Records	38
Article XII – Benefits and Practices	38
Section (a) Eligibility	38
Section (b) Benefits of Choice	38
Section (c) Length of Service	39
Section (d) Practices	39
Section (e) Administrative and Design Matters and Uniformity	39
Article XIII – Miscellaneous	40
Section (a) Pay Day	40
Section (b) Bulletin Boards	40
Section (c) Safety Shoes	40
Section (d) Bye Examinations	40
Section (e) Disability Accommodation	41
Section (f) Medical Appointments	41
Article XIV – No Strike or Lockout	41
Section (a) Union Not to Strike	41
Section (b) Union to Halt Breach	42
Section (c) Discipline for Breach	42
Section (d) No Lockout	42

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Article XV – Maintain Integrity of the Contract and Resort to Courts	42
Article XVI – Modification and Severability Clause	42
Section (a) Modification	42
Section (b) Severability	43
Article XVII - Ratification and Termination of this Agreement	43
SHORT TERM DISABILITY PAY PLAN	45
APPENDIX A	46
APPENDIX B	48
APPENDIX C	49
APPPENDIX D	51

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AGREEMENT

Article I - Enabling Clause

Effective this 23rd day of October 2007, the Ilion Plant of REMINGTON ARMS COMPANY, INC., situated at Ilion, New York, hereinafter referred to as the PLANT or the EMPLOYER, and the INTERNATIONAL UNION, UNITED MINE WORKERS OF AMERICA, hereinafter referred to as the UNION, in consideration of the mutual covenants herein contained have agreed and do agree as follows:

Section (a) Prior Agreements, Practices and Customs

This agreement supersedes the collective bargaining agreements previously executed by the parties. There shall be no prior practices and customs observed at the Ilion Plant, unless identified in Appendix C. All previous agreements not contained in this agreement, will be superseded by this Agreement and to remain in effect must be signed and dated on or after the effective date of this Agreement.

Section (b) Recognition

The UNION has been and is recognized as the exclusive bargaining agency for the Employees of said Ilion Plant. This agreement pertains to only the unit to be recognized; it does not create any rights or obligations not expressly stated herein. All Employees shall be or become members of the UNION, to the extent and in the manner permitted by law.

Section (c) Non-Discrimination

The PLANT and the UNION affirm the policy of nondiscrimination against any Employee or applicant for employment because of age, disability (within the meaning of the ADA), race, creed, religion, color, sex, national origin, ancestry or political activity (whether intra-UNION or otherwise) with respect to wages, hours and working conditions.

Section (d) Definitions

Wherever the following terms are used in this Agreement, they are defined as follows:

(1)The term “PLANT” shall mean the Ilion Plant of Remington Arms Company, Inc. located at Ilion, New York.

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(2)The terms “Employee” or “Employees” shall mean any or all of those employees at the Plant included within the bargaining unit covered by this Agreement

(3)The terms “Current Employee” or “Current Employees” shall mean only those employees hired before September 11, 1997.

(4)The terms “New Employee” and “New Employees” shall mean only those employees hired on or after September 11, 1997.

(5)When the term “Employee(s)” or a personal noun or pronoun appears in this Agreement, it shall be understood to refer to either the masculine or feminine gender or both as applicable in the context in which it appears.

Section (e) Payroll Deduction

(1)The PLANT will deduct the membership dues, including initiation fees and assessments, or the legally required equivalent thereof, of the UNION and its various subdivisions, prescribed by the UNION, and other authorized deductions, from the salary payable within the month of an Employee who authorizes the PLANT to make such deductions on a form entitled United Mine Workers of America Checkoff Authorization Form.

(2)All sums deducted in this manner shall be turned over by the PLANT to the designated representatives of the UNION, together with a statement listing the names and social security numbers of all unit Employees and the amount checked off for each authorized deduction.

Section (f) Successorship

In consideration of the UNION’S execution of this Agreement, the EMPLOYER promises that the PLANT covered by this Agreement shall not be sold, conveyed, or otherwise transferred or assigned to any successor without first securing the successor’s agreement to assume the EMPLOYER’S obligations under this Agreement including Appendix A. Immediately upon the conclusion of any such sale, conveyance, assignment or transfer of the PLANT, the EMPLOYER shall notify the UNION of the transaction. Such notification shall be by certified mail to the Secretary-Treasurer of the International Union and shall be accompanied by documentation that the successor obligation set forth herein has been satisfied.

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Article II - Scope and Coverage

Section (a) Work Jurisdiction

All current bargaining unit work including processes related to the production and processing of firearms and routine repair and routine maintenance work normally performed at the PLANT, and work of the type customarily related to all of the above shall be performed by bargaining unit Employees of the EMPLOYER covered by and in accordance with the terms of this Agreement, except as otherwise specified herein.

Section (b) Exemptions Clause

It is the Intention of this Agreement to reserve to the EMPLOYER and except from this Agreement an adequate force of supervisory employees to effectively conduct the safe and efficient operation of the PLANT and at the same time, to provide against the abuse of such exemptions by excepting more such employees than are reasonably required for that purpose.

Exempt employees under this provision are salaried employees exempt under the Fair Labor Standards Act including the Plant Manager, his assistants and their staff, Supervisory employees, with authority to hire, discharge, promote, transfer, or otherwise effect changes in status of Employees or effectively to recommend such action. All non-exempt employees excluded from the bargaining unit will retain such status. All other Employees working in or around the PLANT shall be covered by this Agreement, except as otherwise specified herein.

The UNION will not seek to organize or ask recognition for such exempt employees during the life of this Agreement. The EMPLOYER shall not use this provision to exempt from the provisions of this Agreement more persons than are necessary for the safe and efficient operation of the PLANT.

Section (c) Supervisors Shall Not Perform Classified Work

Supervisory employees shall perform no classified work covered by this Agreement except in emergencies and except if such work is necessary for the purpose of training or instructing bargaining unit Employees. Plant Management retains the right to audit operations which may include measuring and gauging components and auditing finished product as well as engineering support for product development and troubleshooting so long as the number of bargaining unit Employees currently performing such work is not eliminated or reduced. When a dispute arises under this section, it shall be adjudicated through the grievance and arbitration procedures covered by this Agreement and in such proceedings the following rule will apply: the burden is

7

on the EMPLOYER to prove that classified work has not been performed by supervisory personnel.

Section (d) Management of the PLANT

(1)Management Rights

The UNION recognizes and agrees that, except as specifically limited by the express provisions of this Agreement, the PLANT maintains the sole and exclusive right to manage its business in such a manner as the PLANT shall determine to be in its best interest. The exercise or nonexercise of the rights retained by the PLANT shall not be deemed to waive any such rights or the discretion to exercise any such rights in some other way in the future.

(2)Most Favored Nations

During the term of this Agreement should the UNION either (A) enter into an agreement with any other competing firearm manufacturer (with comparable gross sales) other than Remington Arms Co., Inc. or any of its component divisions, the terms or conditions of which agreement are more advantageous to the other employer than those contained in this Agreement; or (B) Countenance a course of conduct by any other comparable competing firearms manufacturer signed to an agreement with the UNION, which course of conduct enables the other employer to operate under more advantageous terms and conditions than are provided for in this Agreement, the PLANT shall be privileged to adopt such advantageous terms and conditions upon written notice to the UNION of its intent to do so.

Section (e)UNION’S Rights

(1) Authorized representatives of the District and the International will be allowed access to the PLANT property to insure compliance with this Agreement, after giving notice and their reason for seeking access. The President, International Vice Presidents, Field Representatives and International Safety Representatives and Secretary-Treasurer of the International Union will be granted access to the PLANT provided that such officials have given a minimum of 48 hours advance notification and reason of their desire to visit, provided there is no interference with production. The EMPLOYER shall provide candidates for UNION office reasonable opportunity to campaign among its Employees during their non-working hours and in non-working areas, provided there is no interference with production. The EMPLOYER further agrees to provide space on PLANT property for the holding of UNION elections and the ratification of collective bargaining agreements. However, the UNION agrees that there shall be no solicitation or UNION meetings or promotional UNION activity on PLANT time.

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(2)The Local Union President, Vice President, Financial Secretary, Recording Secretary and Employees who are either elected or appointed to the Joint Labor-Management Communications Committee, the Health and Safety Committee, and the Grievance Committee shall have the right of movement throughout the PLANT in the performance of their official duties, provided the UNION officials noted above do not unreasonably interfere with the production of Employees. Local Union Officers and committee member shall seek permission from their supervisor to leave their work area in order to meet their responsibilities as outlined within this Agreement. Permission will be granted unless there is a justifiable business reason for denying such permission. Once permission has been granted, the Employee will be paid their regular rate as long as the responsibilities are carried out during the Employee’s regular work hours.

(3)UNION officials noted above in subsection (2), with proper advance notification to Human Resources, will be excused to participate in UNION activities. In cases where multiple UNION officials noted above in subsection (2) are requesting to be excused for multiple days, the request shall be submitted as far in advance as possible but no less than two (2) working days prior to the requested time off. In cases of District or International Conventions or conferences, no more than ten (10) Employees shall be excused to attend. Employees who have an official request for a leave of absence shall be granted leave to serve as District or International officers or representatives and shall retain their seniority and accrue seniority while they are on such leave. Employees who have an official request for a leave of absence shall be granted leave to accept a temporary UNION assignment, not to exceed four (4) consecutive months, and to return to their former jobs and shifts. No more than two (2) Employees may accept such temporary UNION assignments at the same time. Permanent UNION appointees and those Employees who are elected to District or International office shall be entitled to return to a job, provided that Employees with greater seniority at the PLANT are not on layoff.

Section (f) Contracting and Subcontracting

Notwithstanding anything to-the contrary in this Agreement, the PLANT has the unlimited right to contract out or transfer work.

Section (g) Job Security

During the life of this Agreement, and based on market demand, the M/7, M/700, M/7600, M/7400, M/1187, M/1100, M/870, SP10, M/552, M/572, M750, M7615 and 105CTi will continue to be produced only at the Ilion Plant; however, in accordance with Article II, Section (f), the PLANT retains the right to purchase and/or procure component parts and services for the foregoing models.

9

Article III - Wages and Hours

Section (a) Basic Workday

The regular or basic “workday” shall begin at 7:00 am and end the following day at 7:00 am. The EMPLOYER may designate other “workdays” for individual Employees or groups of Employees following discussion of the need to do so with the Local Union.

Section (b) Basic Workweek

The regular or basic “workweek” shall begin Monday at 7:00 a.m. and shall end the following Monday at 7:00 am. The EMPLOYER may designate other “workweeks” for individual Employees or groups of Employees following discussion of the need to do so and agreement by the Local Union. An Employee’s basic “workweek” will not be changed without seven days prior notice. In the event the parties are unable to reach agreement regarding the work week change, the EMPLOYER may implement the change, subject to the UNION’s right to file a grievance and submit the matter to arbitration for final resolution. In cases where the change is of a single week duration, the agreement and notice provisions of this section shall not apply, but the affected Employee(s) will be given as much notice as possible.

Section (c) Overtime Pay and Premium Pay

(1)Overtime pay at one and one-half times the Employee’s regular rate will be paid for:

(A)All hours worked at the direction of management in excess of eight (8) hours in any period of twenty-four (24) consecutive hours. This provision shall not be applicable if the excess hours worked are at the request of the Employee.

(B)All hours worked in excess of forty (40) in the regular workweek.

(C)All hours worked on the Employee’s sixth consecutive day off.

(D)All hours worked on Saturday unless Saturday is included in the Employee’s regularly scheduled workweek.

(2)Overtime pay at double the Employee’s regular rate will be paid for:

(A)All hours worked on the Employee’s seventh consecutive day.

10

(B)All hours worked on Sunday unless Sunday is included in the Employee’s regularly scheduled workweek.

(3)For the purpose of determining whether an Employee has worked a sixth or seventh day within the regular workweek as set forth in this Article, such Employee shall be considered to have performed a day’s work when:

(A)The Employee works the regularly scheduled hours in a day.

(B)The Employee is off work due to a Holiday or other Contractual day.

(C)The Employee is excused for part of the day by management.

(D)The Employee is absent a full day as a result of being sent home due to lack of work without prior notification not to report.

(4)Work on the seventh consecutive day and all holidays is optional. In the event all Employees refuse such work, management retains the right to assign the least senior Employees in the needed job title to work.

(5)An Employee who is required to work on one of his scheduled days of rest shall not be required to take compensating time off.

(6)Overtime opportunities shall be distributed on an equitable basis. The EMPLOYER is responsible for scheduling overtime and determining qualified Employees to perform overtime work. Weekend (and sixth and seventh day worked) overtime hours shall be distributed by the EMPLOYER among the Employees qualified to perform the work involved pursuant to the following guidelines:

(A)All shifts on a particular assignment working overtime:

(i)Ask regular operator(s) of that primary assignment on the shift that will be running.

(ii)If he refuses, ask other operators in the same Department, on the same shift, who are qualified to perform the work.

(iii)If they refuse, ask other operators in the same Area Manager’s area, on the same shift, who are qualified to perform the work.

11

(iv)          If they refuse, the EMPLOYER may assign the work to the least senior employee in the Area Manager’s area qualified to perform the work.

(B)         Only one shift of a multi-shift job working overtime:

The overtime opportunity will be offered to all regular operators of that assignment on all shifts on an equitable basis. Management reserves the right to schedule the specific hours of such overtime work. If there are an insufficient number of volunteers, the EMPLOYER may assign the work to the least senior regular operators of that assignment.

Note that in emergency situations, the EMPLOYER will take whatever steps are necessary to keep a job running and assure no break in the production flow.

(7)            When more than one rate is applicable to the same hours of work, the rates shall not be pyramided, but only the highest single rate applicable shall be paid. Any hours paid for at any overtime rate, except hours worked on Holidays, shall not be used again for the purpose of determining any other overtime hours. When time and one-half (1 1/2), two (2), or two and one half (2 1/12) times rates are paid for hours worked, such hours shall be considered overtime hours.

(8)            If there are an insufficient number of volunteers for overtime pursuant to Subsection (6) of this Article III(c), then the EMPLOYER may require mandatory overtime of up to ten (10) hours per work week consisting of work shifts not to exceed:

i.              Up to ten (10) hours on the first five (5) days of any scheduled work week (i.e., not to exceed two (2) hours of mandatory overtime per shift).

ii.             Six (6) hours on the sixth (6th) day worked.

(A)        The EMPLOYER has the right to determine the hours of work and determining qualified Employees to perform overtime work.

(B)         Employee absences during mandatory overtime and voluntary overtime once accepted by the Employee shall be logged on the Employee’s work history and counted as an unexcused absence in the Attendance Policy.

(C)         Overtime shall not be applicable for the Short Term Disability Pay Plan or vacation considerations.

(D)        Employees shall be given twenty-four (24) hour advance notice of mandatory overtime scheduled on the sixth (6th). By way of

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example, if an Employee is going to be scheduled for mandatory overtime on a Saturday, the Employee shall be informed of the assignment by the end of his shift on Thursday.

Section (d) Standard Daily Wage Rate

The Employee’s Standard daily wage rate as used herein shall be calculated in accordance with the following formula:

Employee’s Established
Monthly Salary x 12	=	Straight Time Rate
52 Weeks x 40 Hours Per Week		(Per hour)

The term regular rate as used herein shall mean the straight time rate plus shift differential, if any, but excluding all other payments.

Section (e) Hourly Wage Rates and Shift Differential

(1) Hourly Wage Rates

(A)        The four (4) Level Pay Structure is included in this Agreement as Appendix A. This structure will remain the same during the life of this Agreement however, all Employees actively employed on the effective date of this Agreement will receive:

Effective Date	Amount
October 29, 2007	3.5	%
November 3, 2008	3	%
November 2, 2009	3	%
November 1, 2010	3	%
November 7, 2011	3.5	%

(B)         Appendix B lists each of the pay levels and the job titles and job code numbers incorporated within each pay level. The EMPLOYER shall not introduce additional pay levels or job titles during the life of this

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Agreement or combine existing job titles or pay levels without discussions with and agreement by the Local Union. In the event the parties are unable to reach agreement regarding the appropriate pay level and job code number, the EMPLOYER may implement the change, subject to the UNION’s right to file a grievance and submit the matter to arbitration for final resolution.

(2) Shift Differential

An Employee permanently scheduled or temporarily assigned to work between the hours of 3:30 p.m. and 7:00 a.m. shall receive a night shift differential amounting to ten percent (10%) of the applicable rate for Current Employees and $0.75 per hour for New Employees for such hours, according to the procedures in paragraphs (A) through (E) of this Section. No shift differential shall be paid when such hours worked at the request of the Employee.

(A)        A day shift Employee shall receive shift differential when the hours worked in a workday amount to four or more* between the hours of 3:30 pm and 7:00 am, and provided the Employee worked his normal shift and the hours qualifying for shift differential are an extension of that shift.

*Employees scheduled to begin work at 4:00 a.m. will receive shift differential for those hours worked between the hours of 4:00 a.m. and 7:00 a.m.

(B)         A day shift Employee shall receive shift differential for all hours worked between 3:30 p.m. and 7:00 a.m. provided the Employee worked his normal shift and a break in work of one hour or more occurs between the normal shift and those hours qualifying for shift differential.

(C)         If the majority of hours worked by a day shift Employee are worked on a night shift (3:30 p.m. to 7:00 a.m.), he will be paid according to paragraph (D) of this Section.

(D)        A second or third shift Employee shall receive shift differential for all hours worked on his normal shift, as well as for all hours worked which are an extension of his normal shift, provided he works his normal shift.

(E)         If the majority of hours worked by a second or third shift Employee are worked on the day shift (7:00 am to 3:30 pm), he will be paid according to paragraphs (A) and (B) of this Section.

(F)         Night shift Employees may be temporarily assigned by the EMPLOYER to work the day shift. When these Employees are reassigned to days, they will continue to receive their night shift differential for a

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period not to exceed two (2) regular work weeks unless an extension of time is deemed necessary by both parties.

This policy will not apply when:

(i) The request to work the day shift is originated by the Employee.

(ii) Supervision determines a need for retraining due to a lack of performance on the part of the Employee.

(iii) An Employee who is a successful bidder to a night shift job which requires training on the day shift and is accordingly assigned to days for initial training.

(iv) An employee is moved pursuant to a medical restriction.

Article IV – Holidays

Section (a) Holidays Observed

(1)             In each year of this Agreement there shall be eleven paid Holidays:

New Year’s Day

Good Friday

Memorial Day

July 4th

Labor Day

Thanksgiving Day

Day after Thanksgiving

December 24 – day before Christmas

Christmas Day

Employee’s Birthday

Plant Floater

(2)           With the exception of the Employee’s Birthday and the Plant Floater, foregoing Holidays shall be celebrated on the legally designated days.

Section (b) Saturday and Sunday Holidays

(1)           When any of the foregoing Holidays falls on Saturday, the preceding Friday will be observed as the Holiday.

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(2)            When any of the foregoing Holidays, except December 24, falls on Sunday, the following Monday will be observed as the Holiday.

Section (c) Plant Floater and December 24

(1)            The date of celebration of the Plant Floater Holiday will be selected by each individual Employee to be scheduled in accordance with the provisions for scheduling vacations as set forth in Article V.

(2)            When December 24 falls on Friday, the preceding Thursday will be observed as the Holiday. When December 24 falls on Sunday, the following Tuesday will be observed as the Holiday.

Section (d) Pay for Holidays Worked

Employees who work on the foregoing Holidays, including designated birthday Holidays, shall be paid at one and one-half (1 1/2) times the Employee’s regular rate for all such hours worked, and in addition, will be paid a Holiday allowance calculated at the Employee’s regular rate for the hours normally scheduled on the day of the workweek, or the Employee shall be paid overtime pay at two and one-half (2 1/2) times the Employee’s regular rate for such Holiday hours worked, whichever yields the greater pay.

Section (e) Pay for Holidays Not Worked

Employees who do not work on the foregoing Holidays will be paid their regular earnings for such day, including regularly scheduled overtime rates.  In order to qualify for Holiday pay for Holidays not worked, the Employee must work both on the Employee’s last scheduled day prior to the Holiday and on the Employee’s next scheduled day following the Holiday, unless excused from work on such days by PLANT management.

Section (f) Birthday Holidays

With supervisory approval, an Employee may elect to float his/her birthday to any regularly scheduled workday within the calendar year in which the birthday falls except for Sunday, a day of vacation or a recognized PLANT wide holiday.

(1) Employees will be asked in order of seniority to schedule their birthday Holiday prior to any vacation scheduling each year.

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(2)            Employees who choose not to float their birthday Holiday and elect to take the day of their birthday off, will have preference over any employee floating the Holiday or scheduling a split day of vacation.

(3)            If an Employee elects not to schedule the birthday Holiday floater prior to vacation scheduling, the birthday Holiday will not take preference over vacation days but will be granted on a first-come first-served basis. The birthday Holiday will be given consideration along with any late vacation requests.

(4)            If the Employee’s birthday falls during a scheduled week of vacation, the Employee may reschedule the extra vacation day at some other time during the calendar year following established split vacation guidelines.

(5)            Employees will observe their birthday Holiday on the day selected. In emergency situations, however, an Employee’s birthday Holiday may be granted or changed with approval of Area Supervision prior to the start of the shift during which the Holiday was to be celebrated.

Section (g) Time of Payment

Payment for Holidays not worked shall be included with pay for the pay period in which the Holiday occurs.

Article V – Vacation

Section (a) Regular Vacation

Employees will qualify for up to five (5) weeks of regular vacation under the following formula:

Two weeks after one (1) year of service

Three weeks after five (5) years of service

Four weeks after ten (10) years of service

Five weeks after twenty (20) years of service

Section (b) PLANT Shutdown

The EMPLOYER shall have the option of declaring a vacation shutdown for up to 10 working days during any calendar year of this Agreement. If the EMPLOYER elects this option it will notify the Local Union President by January 15th of the year so elected. One of the two weeks elected for shutdown shall occur during the time period of June 1 - August 31. If the EMPLOYER elects to exercise the right to shut down the PLANT, up to

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10 working days of an Employee’s regular vacation may be assigned to these shutdown periods. Vacation shutdown weeks may include observed Holidays covered by this Agreement. In such cases the EMPLOYER may assign vacation only to those days not covered by Holidays for a combined total of five (5) days during the shutdown week.

Section (c) Staggered Vacation

Any vacation other than vacation described in Section (b) above, shall be scheduled by the EMPLOYER at times desired by the individual Employees provided the Employee requests the vacation two (2) working days prior to the actual vacation. Notwithstanding the foregoing, an Employee may request to use no more than three (3) vacation days per calendar year with less than two (2) working days notice prior to the actual vacation. The EMPLOYER may excuse the two (2) working day prior request requirement in the event of a verifiable severe weather condition. Vacations shall be scheduled by Employees in accordance with the past practice of vacation scheduling, recognizing production needs and the Employee’s right to schedule vacation in weekly segments or split action of single day or 1/2day segments.

Section (d) Work During Shutdown

In the event the EMPLOYER declares a vacation shutdown between the monthsof June 1 – August 31, Employees who are required to work during the shutdown shall beassured of scheduling equal days off during the months of June, July, or August, if theyso desire.

Section (e) Time of Payment

(1)            Vacation payment for three (3) or more consecutive days vacation shall be made by separate check no later than the last pay day immediately preceding the beginning of the respective vacation periods, providing advanced vacation forms are turned into the Payroll Department in a timely fashion. Any vacation of less than three (3) consecutive days will be paid in the same pay period in which the regular work for that week will be paid.

(2)

(A)          Employees who leave their employment (for reasons other than discharge for just cause) prior to receiving vacation pay shall receive their pro rata share of vacation payment earned for each of the qualifying years (i.e., first, fifth, tenth, and twentieth) by their second regular pay period from the time their employment is severed according to the following guidelines:

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· If the Employee leaves employment during or after their anniversary month, they will receive full pay for the additional week of vacation earned.

· Should the Employee leave employment before their anniversary month, their additional week of vacation pay will be reduced by 1/12 of a week for each month the Employee leaves prior to the anniversary month. For example, an Employee with an anniversary month of July who wants to leave in February of a qualifying year will be leaving five (5) months prior to his anniversary month and will therefore have the additional week’s vacation pay reduced by 5/12’s of a week.

(B)           Employees who leave their employment (for reasons other than discharge for just cause) prior to receiving vacation pay in the years between qualifying years, shall receive full vacation pay based on their years of service outlined in Section (a) of this Article.

(C)           Any vacation previously paid during the calendar year will be considered part of total allotment.

Section (f) Obligation for Payment

Failure of the EMPLOYER to make full and prompt payment of the amounts required hereby, in the manner and on the dates herein provided, shall at the option of the UNION, be deemed a violation of this Agreement.  This obligation shall be a direct and continuing obligation of the EMPLOYER during the life of this Agreement; and it shall be deemed a violation of this Agreement if the PLANT, to which this Agreement is applicable, shall be sold, leased, subleased, assigned or otherwise disposed of for the purpose of avoiding the obligation hereunder.

Article VI – Allowance

Section (a) Bereavement Pay

(1)            An Employee who is excused from work because of death in the Employee’s immediate family, shall be paid the Employee’s regular rate of pay for the Employee’s scheduled working hours excused for a maximum of three (3) scheduled working days, starting on the day of death or on the day following death to and including the day after the funeral, but in no event extending beyond the day after the funeral. A member of the Employee’s immediate family shall be limited for the purpose of this Section to Mother, Father, Step-Parent, Mother-in-law, Father-in-law, Sister, Brother, Husband, Wife, Son, Daughter, Step-child, Grandparent and Grandchild of the employee. No pay allowance shall be granted in the case where, because of distance or other cause,

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the Employee does not attend the funeral of the deceased. In instances of distant death, where a local memorial service is held, Employees will be excused with pay, for up to eight hours, on the day of the service.

(2)            Spring interment or split time off (funeral and interment at a later date) may be granted as long as it does not exceed three (3) working days in total time off. If an Employee is on vacation and a death occurs in the family, days used under the above provisions may be rescheduled at a later date.

(3)            In case of death of a Brother-in-law*, Sister-in-law*, Son-in-law, Daughter-in-law, an Employee may be excused from work up to eight (8) hours on the day of the funeral and shall be paid the Employee’s regular rate of pay for the working hours excused. No pay allowance shall be granted in the case where, because of distance or other cause, the Employee does not attend the funeral of the deceased. Notice of such deaths must be given to the Employee’s supervision as soon as it is reasonably possible. In instances of distant death, where a local memorial service is held, Employees will be excused with pay, for up to eight hours, on the day of the service.

(4)            The hours thus paid for but not worked shall not be used in computing overtime pay for hours worked in excess of forty (40) in the workweek, nor shall Such days be counted as days worked in determining whether the Employee has worked a sixth (6th) or seventh (7th) day in the regularly scheduled workweek.

(5)            The EMPLOYER may require verification of death and relation to the Employee.

*Brother-in-law and Sister-in-law are defined as the spouse of the Employee’s Brother or Sister and the Brother or Sister of-the Employee’s spouse.

Section (b) Jury Duty

When an Employee is called for jury duty service, he shall be excused from work for the hours he is required to appear in court and for time granted by supervision for the Employee to prepare for jury duty (travel time, clothes change, etc.). The amount of this time will be determined at the discretion of the EMPLOYER’s supervisor. Employees attending jury duty will be paid their regular rate for the excused hours they would have been scheduled to work, not to exceed eight (8) hours for any one day and shall be allowed to retain jury fees received for jury duty service. Time absent for jury duty will be paid as excused jury duty. An Employee called to jury duty while on vacation (other than previously scheduled vacation shutdown) will be permitted to reschedule vacation beginning with the first day of jury duty. Employees who have been selected to jury duty must complete proper PLANT forms and return them to their supervision each week of jury duty service.

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Section (c) Reporting Pay and Call - In Pay

(1)           An Employee who reports for scheduled work, without prior notification not to report, shall be retained for the half-day period and given such useful work as may be at hand at the Employee’s regular rate. If the Employee is offered and does not accept substitute work, the Employee will be paid only for the time spent at the PLANT until such work is offered. This provision does not apply to cases where work is not available for reasons beyond the EMPLOYER’s control, such as power failure, fire, or serious mechanical difficulties affecting an entire area, or in cases where Employees return to work following unexcused absences without notifying their supervision. Disability pay shall not be paid during periods of PLANT shutdown beyond the EMPLOYER’s control.

(2)           An Employee who is called in and reports for work between regular shifts with less than eight (8) hours notice shall receive a call-in allowance of two (2) hours pay at the Employee’s regular rate, in addition to any other pay to which may be entitled.

Section (d) Military Duty

Employees required to perform military service will receive compensation, rights and benefits per the Remington Military Leave Policy, as amended from time to time by the EMPLOYER.

Article VII – Joint Labor – Management Communication Committee

The parties recognize that the prosperity and efficiency of the PLANT are dependent upon their ability to work cooperatively. In order to further implement this expression of purpose, Joint Labor-Management Communication Committee shall be established at the PLANT. The UNION representation on this committee shall be the Local Union Executive Board. The EMPLOYER shall designate its representatives to the Committee. Neither party shall have more than six (6) representatives on the Committee. The Committee shall meet at mutually agreeable times, but no less than once a month. The function of the Committee shall be to identify problem areas, exchange information and to seek to develop a good working relationship within the PLANT. Representatives from the UNION or the EMPLOYER may suggest areas of special concern or interest as topics of discussion during these Committee meetings, as long as they are consistent with the purpose of this Committee and the provisions of this Agreement.

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Article VIII – Health and Safety

Section (a) Right to a Safe Working place

Every Employee covered by this Agreement is entitled to a safe and healthful place to work, and the parties jointly pledge their individual and joint efforts to attain and maintain this objective. Recognizing that the health and safety of the Employees covered by this Agreement are one of the highest priorities of the parties, the EMPLOYER and UNION will continue to cooperate to reach the objective of eliminating accidents and health hazards, and will encourage Employees to use the procedures stated herein to reach that objective.

Section (b) Health and Safety Committee

(1)           At the PLANT there shall be a Health and Safety Committee made up of nine (9) UNION members employed at the PLANT who are qualified by experience or training and selected by the Local Union. The Local Union shall inform the EMPLOYER of the names of the Committee members. Committee members shall be deemed to be acting within the scope of their employment at the PLANT within the meaning of the applicable workers’ compensation law, while in the performance of their duties as outlined within this Agreement. The Health and Safety Committee shall select, from among its members, a Chairman who shall coordinate the activities and functions of the Committee and who will serve as their representative on the Central Safety Committee and the joint Labor-Management Communications Committee.

(2)           A member of the Health and Safety Committee, assigned by the Committee Chairman, may participate with Management in the existing inspection program and scheduled Serious Potential Incident meetings.

(3)           Employees should first report health and safety complaints or conditions to their immediate supervision. Members of the Health and Safety Committee will make every effort to ensure that the Employee has first brought the complaint to the attention of their immediate supervision before presentation to the Plant Safety Supervisor. Upon presentation of alleged health and safety complaints or conditions by the Chairman of the Health and Safety Committee or his designee to the Safety Supervisor, the UNION and the Safety Supervisor will schedule a joint investigation of the complaint or condition.

Management will notify the Chairman of the Health and Safety Committee or his designee of a complaint or accident as soon as practicable, using its best efforts to do so. The Chairman of the Health and Safety Committee or his designee shall be given a copy of any incident report generated as a result of an injury to an Employee. A member of the Health and Safety Committee shall participate with the Safety Supervisor in the initial

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formal safety investigation if the Safety Supervisor determines that an investigation is necessary.

(4)           PLANT Management and up to three (3) members of the Health and Safety Committee shall meet regularly at times arranged by the parties for the purpose of discussing health and safety matters. Meetings shall be held on a monthly basis or more frequently if needed. No more than three (3) members of the Health and Safety Committee shall be compensated, at their regular rate of pay, by the EMPLOYER for any lost time spent in these meetings.

(5)           A member of the Health and Safety Committee, and an authorized representative of the International Union, shall be allowed to accompany a representative of any State or Federal agency regarding health and safety on an inspection of the PLANT.

(6)           A member of the Health and Safety Committee, assigned by the Health and Safety Committee Chairman, shall be invited to attend Serious Potential Incident meetings, Joint Complaint Investigations and other scheduled safety sub-committee meetings. Time spent performing the above recognized Committee activities will be compensated at his regular rate of pay, by the EMPLOYER, if performed during the member’s regularly scheduled work hours. Off shift employees will be scheduled to attend safety meetings as part of their regularly scheduled work hours.

(7)           The UNION and the EMPLOYER agree that, prior to requesting intervention from a federal or state agency on any matter relating to employee health and safety, the UNION will present the issue to the EMPLOYER, which will then be given a reasonable period of time within which to respond. Only after receipt of the EMPLOYER’s response, or the EMPLOYER’s failure to respond, will the UNION seek such outside intervention.

(8)           The Safety Supervisor shall each month provide the Health and Safety Committee with two copies of a list of all (i) first aid treatment cases and (ii) accidents reported to OSHA, which shall include, but not limited to the OSHA 200 log. Such report will reflect the nature of the injury and the location of the accident.

(9)           The Health and Safety Committee shall attend annual Health and Safety Training of up to five (5) working days as agreed to by the UMWA International Union and the EMPLOYER. The training will be designed to improve Health and Safety knowledge skills. Committee members attending and participating in such training shall be paid at their regular rate of pay for lost working time by the EMPLOYER for attendance at the training.

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Section (c) Settlement of Health or Safety Disputes

When a dispute arises at the PLANT involving Health and Safety, an immediate, earnest and sincere effort shall be made to resolve the matter. If the dispute is not resolved by the Employee and his immediate supervisor, nor with the assistance of the Health and Safety Committee, the dispute will be adjudicated through the grievance procedure.

Section (d) Drug and Alcohol Testing

(1)           During the Probationary Period, Employees shall be subject to the Remington Drug Free Workplace Policy, as amended from time to time by the EMPLOYER.

(2)           Employees shall be subject to the drug and alcohol testing policy set forth in Appendix C.

Article IX – Seniority

Section (a) Definition of Seniority

Seniority of Employees employed in the bargaining unit shall be the Employee’s most recent date of hire at the PLANT adjusted for any previous period of unbroken seniority provided such seniority was not terminated in accordance with section (b) below.

Section (b) Termination of Seniority

Seniority shall be terminated upon the Employee’s termination for just cause; voluntary resignation; transfer to a job outside the bargaining unit, expiration of recall rights after termination for lack of work; or failure to return to work as scheduled after completion of a leave of absence agreed to by the PLANT or the failure to return to work as return to work as scheduled. Employees who transfer to a job outside of the bargaining unit will lose their seniority and in the event the employee returns to the bargaining unit will be treated as a new employee.

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Section (c) Probationary Period

During the first one hundred twenty (120) calendar days of employment, a new Employee will be subject to demotion, transfer, or termination by the PLANT and such action shall not be subject to Articles X and XI of this Agreement After one hundred twenty (120) days probationary period, the Employee’s seniority will be established in accordance with the provisions of Section (a) of this Article. Any discipline in the first 120 days will carry into the next sixty (60) days.

Section (d) Filling Vacancies

When vacancies occur, they will be filled in the following order:

(1)           To Employees qualified for the job, per provisions of the Job Bidding and Posting Procedure.

(2)           To reasonably available former bargaining unit Employees laid off due to reduction of force and on a panel and possessing the necessary qualifications to step in and perform the work of the job at the time the job is awarded.

(3)           To new applicants qualified to step in and perform the work of the job.

If opportunities arise to bring products of any type currently manufactured elsewhere to the Ilion facility, Management reserves the right to permanently fill jobs associated with those products without regard to the provisions of Article IX section (d), Filling Vacancies, and such placements will not be subject to the Grievance Procedure under Article X section (b). Any openings that occur after the first year of production will be filled in accordance with the provisions of Article IX, section (d). During the first year of production, employees placed under this provision will not be subject to displacement under Article IX, section (e), Reduction Realignment Procedure, unless a PLANT-wide excess creates a reduction in force. This section does not apply to product designed and developed to be produced at Ilion.

Section (e) Reduction Realignment Procedure

In the event the EMPLOYER determines that there is an “excess” of jobs within a job code in the bargaining unit, representatives of the EMPLOYER shall notify the Local Union and the parties will follow the process covered within this section. In all cases where the work force is to be reduced, Employees with the greatest seniority at the PLANT shall be retained provided that they have the required qualifications (as would normally be posted) and the ability to perform the available work. If at any time there is an excess within a training progression, those Employees in level 03 of the training progression will be added to the excess list and Employees on temporary assignments

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will be returned to their primary assignments for purposes of regression. When an excess occurs in normal progression positions, the least senior person in the progression will be excessed. Prior to any excess process, all open jobs will be posted one cycle. Employees considered excess will be given twenty four (24) hour written notice prior to posting, if the business conditions indicate that the excess condition could reverse within the next six (6) months, which may allow some or all of the operators to return to their primary assignment, management may place the group of employees on Temporary Assignments during that period. Realignments or reductions of the work force shall be in accordance with the following guidelines:

(1)           Once excess assignments are determined, if the Employees in those assignments are not the lowest senior Employees, they will have the option to replace the lowest senior Employees within the Department, level, job code and shift.

(2)           Excessed employees will be given options, by seniority, providing their choice does not result in a higher pay level:

(A)          Accept any open position and receive immediate bid rights and retain preferential treatment or:

(B)           Bump the lowest seniority person in the PLANT in the same pay level and shift. If Employee(s) cannot preserve pay level and shift, or:

(C)           Bump the lowest seniority person in the PLANT in same pay level or same shift. When neither (A) nor (B) is satisfied, Employee(s) will be advised of their options to preserve (C), prior to choosing shift or level.

(3)           When Employee(s) have no options in their pay level, they will drop one (1) pay level at a time until their need is satisfied maintaining their shift.

(4)           When an excess is declared, all open jobs will be posted one cycle.

(5)           Bidding restrictions will be removed for excessed Employees only. If an excessed employee is successful in bidding they will receive immediate bid rights and retain preferential treatment.

(6)           In a bumping situation if shift and level are preserved, the Employee will not have bid rights restored for six (6) months following the date an excess offering was awarded.

(7)           For purposes of regression, all Employees within code 742 (Department Specialist) will return to code 741 (Machine Line Operator).

(8)           Employees transferring for any reason between production and support departments will receive the second step of the pay level and will progress depending on performance. If the Employee left the support department within twenty-four (24)

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months and at the top of the rate of pay, the Employee will return to the support department at the top rate of the job.

(9)           During any excess resulting in a layoff, the Volunteer Leave of Absence (VOLA) procedure will be followed as per current practice.

Section (f) Panel

Employees with seniority who are laid off because of a reduction in the work force shall be placed on a panel from which they shall be returned to employment on the basis of seniority as outlined in Section (d)(2) of this Article.

Section (g) Panel Custodians

A designated representative of the EMPLOYER and the Recording Secretary of the Local Union shall retain panel records. It shall be the obligation of laid off Employees, with seniority, to keep the custodians of the panel informed of any change of address and/or phone number where they may be regularly reached. Notice to the last known address of the laid-off Employee by certified mail shall be sufficient notice of recall. The Employee so notified may either accept or reject the job which is available; but if the Employee rejects a job which he has the ability to perform, or fails to respond within five (5) working days after receipt of such notice, or accepts but fails to report for work in a reasonable amount of time, his name shall be removed from the panel and he shall sacrifice his seniority rights at the PLANT.

Section (h) Panel Members Accrue Seniority

Employees who are placed on the panel shall retain the seniority earned prior to their layoff, and, in order to protect their relative seniority standing, will continue to accrue seniority while on the panel.

Section (i) Right to be Recalled

(1)            Employees, with seniority, laid off for lack of work shall retain their seniority for five (5) years. Employees laid-off for lack of work may exercise their seniority in accordance with the provisions of this Article.

(2)            Any person on the panel list who secures other employment during the period when no work is available for him at the PLANT shall in no way jeopardize his seniority rights while engaged in such other employment. However, any person on the panel list who secures other employment and does not return to work when there is

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available employment at the PLANT, shall sacrifice his seniority rights at the PLANT and shall have his name removed from the panel list.

Section (j) Recall of Persons on Layoff Status

When a job at the PLANT exists that is not filled by Employees within the active working force, the panel custodians will review the list and the EMPLOYER shall recall the appropriate person from the panel list to the job to be filled.

Section (k) Job Bidding and Posting Procedure

(1)          Eligibility: Employees with one year or more of service will be eligible to bid open jobs unless the employee is not available to return to work within 30 work days from time of bid. All open jobs will be posted at the appropriate pay level for the job title as listed in Appendix B. The senior Employee, among those eligible bidders, with the required posted qualifications and ability to perform the job will be awarded the job. If an excess situation exists, and an excess Employee has less than one year of service, the excessed Employee will be allowed to bid. If an employee has been shift realigned, they will be able to bid for shift.

(2)          Job Progressions: All open jobs will be posted at the level of the opening. If there is no successful bidder who meets requirements stipulated, a training bid (when appropriate) will then be offered at the training bid level (the training bid level is one step below the normal entry level for the position). In the event of a training bid, some minimal established requirements will be necessary to fill the opening. The successful bidder of a training bid will then take the responsibility to get education, etc. and demonstrate improvement in order to progress.

(3)           Posting Procedure: Open jobs will be posted PLANT wide for three (3) working days. Open jobs within a progression will be filled by qualified people in the progression prior to posting. Each posting will include:

·              job title

·              rate level

·              shift

·              department

·              brief description of the job

·              qualifications and experience needed.

(4)           Bidding Procedure:

(A)          Open jobs, not filled by normal progressions, will be posted PLANT wide. Any Employee interested in the position must bid during

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the posting period. Skilled jobs will be awarded by seniority following successful interviews and demonstrations of skills and abilities. With the exception of skilled jobs, no job will be reposted waiving restrictions. Skilled jobs may be reposted to provide for training bids when appropriate. Training bids will be awarded by seniority upon successful demonstrations of abilities and interviews. Any Employee restricted from bidding otherwise shall be allowed to bid on training bid positions. Once the posting has been removed from the boards the job posted cannot be withdrawn without agreement between the UNION and the EMPLOYER.

(B)           If the Employee is the senior qualified bidder, meets qualification and medical requirements to more than one job at a given time, the Employee will be given 24 hours from the time notified to select which bid to accept. The Employee will also have the option of rejecting any or all successful bids during that 24 hour period.

(C)           Successful bidders will be moved to the new assignment within 20 production days following the award of the bid, unless an extension of time is agreed upon by both parties. If the new job involves transferring to a higher level of pay, and an extension beyond 20 production days is required, the Employee will receive the higher level of pay, at one step above crossover, beginning on the twenty-first day. Employees transferring, for any reason, between Production and Support Departments will receive the second step of the pay level and will progress depending on performance.

(D)          Preferential treatment shall be awarded to Employees who were “excessed” from a job back to the same primary assignment he/she was “excessed” or “bumped” from, for a period of 24 months from the date of the “excess”, provided the Employee has not successfully bid to another job opening in this 24 month period.

(E)           If there are no qualified bidders (including Employees entitled to preferential treatment) or other bargaining unit personnel in need of a permanent assignment, the job may be filled by posting a training bid (if applicable) or by a qualified person from the layoff panel. If there are no qualified persons on the panel list, the job may be filled by hiring a new Employee.

(F)           Employees will be restricted to one (1) bid per 24 month period throughout the term of this Agreement.

(G)           Training of Employees shall take place on their normal shift, unless such training is not reasonably available on that shift.

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(5)       Training: Appropriate training periods for successful bidders, excessed placements, new hires, and all other transfers should not exceed the following:

·Three (3) weeks for level three (3) jobs.

·Level four (4), level five (5) and level six (6) jobs will allow for reasonable amounts of training appropriate for the specific assignment.

·Training time for job moves will be determined by management based on the complexity of the assignment and the training required to operate the job safely.

Employees who are unable to satisfactorily perform jobs after the appropriate amount of training will, at the discretion of management, be declared non-performers and will be placed according to the Non-Performance section of this Agreement.

(6)       Non-Performance: An Employee, not capable of performing all the requirements and duties of a job, will be placed by the Employment Office to an open job. This procedure will be available two (2) times per affected Employee during the duration of this Agreement upon the third time the employee is not capable of performing all the requirements and duties of a job, the employee will be discharged.

(7)       Medical Placement Procedure: Employees with permanent medical impairments will be placed on jobs best suited for their permanent work restrictions and which are equal to or less than their existing rate of pay in accordance with the following procedure:

(A)          Permanent medical impairment and work restrictions will be determined after consultation with the Medical Department.

(B)           Employees with a permanent medical impairment will be placed in the first job for which they have the required skill and which meets their work restriction following the sequence outlined in Article IX, Section (e)(2).

Employees displaced by this process will also be handled in accordance with the same provisions as outlined in Article IX, Section (e)(2).

(C)           This procedure does not apply to Employees who are temporarily impaired.

(D)          Once employed, an Employee cannot be terminated or refused recall from the panel for medical reasons over his objection without the concurrence of a majority of a group composed of an EMPLOYER approved physician, an Employee-approved physician, and a neutral qualified third party (if necessary), that there is a permanent medical condition or physical restriction which prevents the Employee from performing an established job, within the bargaining unit, which their

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seniority would entitle them to hold. Each party shall bear the cost of examination by the physician it designates and shall share equally the cost of examination by the qualified third party. Where the EMPLOYER challenges the physical ability of an Employee or panel member to perform his regular work and is subsequently proven wrong, the Employee shall be compensated for time lost due to the EMPLOYER’s challenge.

Section (l) Temporary Assignments

It is understood that to meet production needs operators may be moved to other assignments within their Area Manager’s area.

All primary assignments in an area may not have full time operators assigned. Assignments requiring less than a full time person every day or is not operated on a full time basis will be covered by the flexibility of the operators in the area.

Additionally flexibility in the area will be used to cover for absences, short term bottlenecks, short term fluctuations in the schedule and back filling for cross training. The parties recognize that there are instances where such assignments are necessary, and agree that temporary assignments may be made under the following guidelines:

Only if the reassignment is outside the Area Manager’s area will it be considered a temporary assignment.

(1)           The temporary assigning of an individual Employee shall not exceed one hundred eight 180 working days in a rolling 12 month period.

(2)           Employees filling temporary assignments shall be compensated at the higher of the two rates involved (the regular rate of his normal job or the regular rate of his temporary assignment).

(3)           Notification of temporary assignments of more than 10 consecutive work days duration will be made to the Chairman of the Grievance Committee.

(4)           All regular full time job openings that are determined to be greater than six (6) months in duration will be posted according to the provisions of the Job Bidding and Posting Procedure unless mutually agreed to by the EMPLOYER and the UNION.

(5)           DCSI or its replacement will be the official record keeping system for tracking of temporary moves. The Grievance Committee Chairman will have access to this information when requested.

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Section (m) Separation Pay

(1)           The receipt of separation of pay provided under this Article is conditioned upon the separation of an Employee from the active workforce employment rolls as laid-off due to lack of work during the term of this Agreement.

(2)           An Employee who has one (1) year or more of service shall be paid separation pay each time he is terminated because of lack of work, except that such pay will not be paid when:

(A)          He accepts, before his separation becomes effective, a job at any REMINGTON ARMS COMPANY, INC’s location;

(B)           He is pensioned;

(C)           He resigns his employment;

(D)          He is scheduled off from work temporarily due to curtailment or cessation of operation caused by;

i.              Fire, flood, power failure, transportation difficulties, material shortages, and the like; or

ii.             Any emergency condition beyond the direct control of the EMPLOYER. When an Employee is “scheduled off” for such reason for a definite or indefinite temporary period, he shall not be considered as terminated for the purpose of this Article; or

(E)           A buyer or recipient of Remington assets offers an Employee continued employment.

(3)           The PLANT may elect to pay separation pay in a lump sum or weekly installments.

(4)           Separation pay, if being paid in weekly installments, shall be discontinued when a former Employee is re-employed at any REMINGTON ARMS COMPANY, INC’s plant, or is offered and refuses re-employment at the Ilion Plant.

(5)           The amount of an Employee’s separation pay, subject to the foregoing provisions in this Article, shall be:

(A)          One (1) week’s pay for each of the first four (4) years of service, plus,

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(B)           One (1) week’s pay for each year of service over four (4) reduced by the amount of any separation pay previously paid at any REMINGTON ARMS COMPANY, INC’s location for service after December 1, 1993 over four (4) years. However, this reduction shall be reduced in monthly increments to zero over a forty-eight (48) month period of re-employment from last termination for lack of work.

A fractional part of a year, after his first year of service, shall be computed at the rate of one-twelfth (1/12) of one (1) week’s pay for each month of service. In such computation, if, in addition to full months of service an Employee has accrued fifteen (15) or more days on the date he is terminated, he shall be credited with a full month.

For separation pay purposes, a week’s pay shall be the Employee’s current “straight-time” rate per hour multiplied by the number of hours, not to exceed forty (40) hours, constituting his normal weekly hours of work at the time of his termination.

(C)           Any other provisions of the Article to the contrary notwithstanding, separation pay shall never exceed twenty (20) weeks.

(6)           An employee who has received separation pay shall not be required to return any portion of such pay to the PLANT in the event he is reemployed.

(7)           Separation pay shall be in addition to any vacation allowance and any employment compensation benefits to which the Employee may be entitled.

(8)           Nothing contained in the Article shall be deemed to qualify, limit or alter in any way the PLANT’s rights to reduce hours of work to avoid terminations because of lack of work.

(9)           Wherever the term “service” is used in this Article, it shall mean the total length of time an Employee has been actively employed by the PLANT.

Article X – Settlement of Disputes

Section (a) Grievance Committee

(1)           A Grievance Committee consisting of fifteen (15) members shall be elected by the members of the UNION employed at the PLANT. Each member of the Committee shall be an Employee at the PLANT and shall be eligible to serve as a Committee member only so long as he continues to be an Employee of the PLANT who is not on layoff. The duties of the Grievance Committee shall be confined to the adjustment of disputes arising out of this Agreement that the PLANT and the Employee

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or Employees, with the assistance of the Grievance Committee, fail to adjust. The Grievance Committee shall have the authority on behalf of the grievants to settle or withdraw any grievance at step 2 or proceed to step 3 of the grievance procedure.

(2)            The Grievance Committee shall have no other authority or exercise any other control, except as outlined in this Agreement, nor shall the Committee in any way interfere with the operation of the PLANT.

A Grievance Committee member who violates this provision shall not be suspended or discharged for official actions as a Committee member, but may be removed from the Committee by the PLANT. If the PLANT seeks to remove a Committee member for violation of this section, it shall so notify the affected Committee member and the other members of the Committee. If the Committee objects to such removal, the matter shall be submitted directly to arbitration. If the other members of the Committee so determine, the affected member shall remain on the Committee until the case is settled or decided by an arbitrator.

(3)           The Grievance Committee shall select a Chairman from among its members to coordinate its activities and to sit as their representative on the joint Labor-Management Communication Committee.

Section (b) Grievance Procedure

Should differences arise between the UNION and the PLANT as to the meaning and application of the provisions of this Agreement, an earnest effort shall be made to settle such differences at the earliest practicable time. If differences arise about matters not specifically mentioned in this Agreement, those matters are to be referred to the Joint Labor-Management Communication Committee set forth in Article VII and are not subject to grievance/arbitration provisions found in Article X of this Agreement. At all steps of the complaint and grievance procedure, the grievant and the UNION representatives shall disclose to the PLANT representatives a full statement of the facts and provisions of the Agreement relied upon by them. In the same manner, the PLANT representatives shall disclose all the facts relied upon by it. The grievant shall have the right to be present at each step of the grievance procedure until such time as all evidence is taken. Disputes that remain unresolved despite such effort shall be resolved as follows:

(1)           Step 1 – The Employee will make his complaint to his immediate Supervisor who shall have the authority to settle the dispute. The Employee shall make the complaint within ten (10) working days of when he first knew or should have known of the complaint. Where an Employee makes a complaint during work time, the Supervisor shall, if possible without interrupting production, discuss the matter briefly on the spot. The Employee shall be entitled, at his request, to have a member of the Grievance Committee present to assist him at any discussion with his supervisor. If the PLANT so chooses, the supervisor shall be entitled to have another representative of the PLANT in attendance. The Employee’s immediate supervisor will notify the Employee

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of his decision by the end of the Employee’s second regular scheduled shift following the complaint. Settlements or withdrawals at this step shall not constitute a precedent in the handling of other grievances.

(2)           Step 2 – If no agreement is reached between the Employee and his supervisor, the complaint will be reduced to writing and shall be submitted on the Standard Grievance form and shall be taken up within five (5) working days of the supervisor’s decision by no more than two (2) members of the Grievance Committee and the President of the Local Union and the PLANT’s Step 2 representative(s). At the step 2 meeting the Grievance Committee and the PLANT representative(s) will complete the standard grievance form and, if the complaint is not settled, the grievance shall be referred to a representative of the UMWA District and the PLANT’s representative(s) for step 3.

(3)           Step 3 – Within seven working days of the time the grievance is referred to them, the District representative and the representative(s) of the PLANT, who shall be different from the PLANT’s step 2 representative(s) shall meet and review the facts and pertinent contract provisions in an effort to resolve the grievance. No more than three (3) members of the Grievance Committee and the President of the Local Union and the PLANT’s step 2 representative(s) shall have the right to be present. No verbatim transcript of the testimony shall be taken nor shall either party be represented by an attorney licensed to practice law in any jurisdiction in steps 1 through 3 of the grievance procedure except by mutual agreement applicable to a particular case.

(4)           Step 4 – In cases where the District representative and the representative(s) of the PLANT fail to resolve the grievance at step 3, the matter shall, within 10 working days after referral to them, be referred to the appropriate arbitrator who shall decide the case without delay. Cases shall be assigned to arbitrators in the following manner:

(A)          The District representative and the Company representative shall attempt to select an arbitrator. In the event the parties do not agree on the selection of an arbitrator, the District representative shall request from the Federal Mediation and Conciliation Service (FMCS) three panels of seven (7) arbitrators (including biographical sketches) by fax or mail with a copy of the request provided to the Plant Human Resources Manager.

(B)           Within ten (10) working days after receipt of the three panels of arbitrators from FMCS, the parties shall alternately strike names of the seven arbitrators on each panel so as to end up with a single name from each panel. The parties shall alternate the right of first strike.

(C)           The parties shall then jointly contact each of the three (3) arbitrators so selected to determine who among these three who has the earliest available date to hear the case within two weeks to sixty days, and the case then shall be scheduled by FMCS

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with the arbitrator who has the earliest available date.

(D)          Both the PLANT and the UNION shall have the right to cross-examine all witnesses.

(E)           The arbitrator shall render his decision as expeditiously as possible. Failure to do so within sixty (60) days after the record is closed shall be reported to the FMCS.

(F)           The arbitrator shall have no authority to change, add to or subtract from, or to modify any provisions of this Agreement. The arbitrator shall make his decision based on the provisions of the contract and the evidence before him.

(G)           The decision and or award of the arbitrator shall be final and binding on both parties and enforceable in a court of law.

(H)          Compensation and expenses of the arbitrator and general expenses of the arbitration shall be shared equally by the parties, except that each party shall bear the expenses of its representatives and witnesses.

(I)            Hearings shall take place at a location mutually agreed upon by the parties.

(J)            In cases in which the parties have agreed that there is no question of fact involved in the grievance, the arbitrator may decide the case upon the basis of a joint statement of the parties and such exhibits as they shall submit.

(K)          The hearing shall be recorded by the arbitrator and shall be closed upon the completion of testimony, except for the purpose of filing post-hearing briefs (copies of which will be provided to all parties). The arbitrator shall render his decision as soon after the close of the hearing as may be feasible. If the arbitrator is unable to make his decision within 60 days of the close of the hearing, he shall promptly advise the parties of the reasons for the delay and the date when his decision will be submitted. Either party may make an official transcript of the hearing. A copy of such transcript shall be provided to the other party at no charge.

(L)           In cases involving compensation, in no event may the arbitrator award compensation for more than ten (10) working days prior to the date the grievant(s) knew or should have known of the complaint.

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Section (c) Finality of Decision or Settlement

Settlements reached at any step of the grievance procedure shall be final and binding on both parties and shall not be subject to further proceedings under this Article except by mutual agreement. Settlements reached at steps 2 and 3 shall be in writing and signed by appropriate representatives of the UNION and the PLANT.

Section (d) Waiver of Time Limits

By agreement the parties may waive the time limits set forth in each step of the grievance procedure. Absent a mutual agreement, if the PLANT’s answer is not appealed (i) within fifteen (15) calendar days of the EMPLOYER’s response in Step 2, or (ii) within twenty (20) calendar days of the EMPLOYER’s response in Step 3, then the answer made by the PLANT at that step shall be final.

Article XI – Discipline and Discharge

Section (a) Just Cause Required

No Employee covered by this Agreement may be disciplined or discharged except for just cause. The burden shall be on the EMPLOYER to establish grounds for discipline or discharge in all proceedings under this Article. In no event, will the EMPLOYER initiate any form of discipline, beyond ten (10) working days of the time it knew, or should have known of the infraction, or against an Employee without a member of the Grievance Committee present, if the Employee requests UNION representation.

Section (b) Procedure

Where the EMPLOYER concludes that the conduct of an Employee justifies discharge, the Employee shall be suspended with the intent to discharge and shall be given written notice stating the reason, with a copy to be furnished to the Grievance Committee. After 24 hours, but within 48 hours, the Employee shall be afforded the right to meet with the PLANT’s Step 3 representative(s). At such meeting, no more than three (3) members of the Grievance Committee and the President of the Local Union shall be present and, if requested by the Employee or the Grievance Committee, a representative of the District shall also be present. Upon request by the Employee, the Grievance Committee, or the District representative, the forty-eight hour time limit will be extended by an additional 48 hours. The EMPLOYER shall be entitled to have an equal number of representatives at the meeting. Full disclosure of all information relied upon by the parties shall be provided at the 24/48 hour meeting.

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Section (c) Suspension

If within 24 hours after the conclusion of the 24/48 hour meeting, the EMPLOYER informs the Employee and the Grievance Committee that it still intends to discharge the Employee (or if no meeting was requested) the Employee shall have five (5) working days to file the grievance. If the Employee does not file a grievance within five (5) working days of the notice of suspension with intent to discharge, the discharge shall become effective immediately. Grievances involving discharge shall bypass steps 1 through 3 and shall proceed directly to step 4 of the grievance procedure.

Section (d) Compensation for Lost Earnings

In all arbitration cases where it is determined that just cause for discharge has not been established, the Employee shall be reinstated and compensated for lost earnings at his applicable regular rates and any regularly scheduled mandatory overtime prior to discharge less monies earned during the back pay period. Nothing in this section shall be construed to, in any way, limit the arbitrator’s right to modify or mitigate the penalty of discharge.

Section (e) Removal of Employee Disciplinary Records

All records of Employee discipline issued during the term of this Agreement may be used as the basis for subsequent progressive disciplinary action no later than fifteen (15) months following the date of issuance and shall not be used in subsequent disciplinary action against the Employee. However, all records of Employee discipline only shall remain in an Employee’s file in Human Resources.

Article XII – Benefits and Practices

Section (a) Eligibility

Employees, except as set forth below, shall be entitled to participate in the following benefit plans and practices of the EMPLOYER.

Section (b) Benefits of Choice

·Remington Arms Company, Inc. Pension and Retirement Plan

·Remington Savings and Investment Plan

·Remington Arms Company Welfare Plan

·The Remington Medical Plan

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·The Remington Dental Plan

·Vision Care

·Employee Life Insurance

·Optional Life Insurance

·Dependent Optional Life Insurance

·Long Term Disability Insurance

·Accidental Death & Dismemberment

·Flexible Spending Accounts

·Employee Assistance Program

The specifications for the structure of the benefit arrangements are set out in Appendix D and are incorporated herein as though fully stated in this Article XII.

Section (c) Length of Service

With the exception of the Remington Arms Company, Inc. Pension and Retirement Plan as provided below, a Current Employee on the old Remington payroll on November 30, 1993 and hired on the new Remington payroll on December 1, 1993 shall have his length of service at DuPont recognized for consideration of the benefits and practices set forth in Sections (b) and (d) herein.

Section (d) Practices

Service Recognition Plan

Section (e) Administrative and Design Matters and Uniformity

The EMPLOYER (or appropriate fiduciary of the applicable plan) in its sole and exclusive discretion, may modify the benefits (consistent with the terms set forth in Appendix D), change the administrator, add or delete investment options offered to participants and beneficiaries, change funding vehicles, investment advisers and managers, and service providers and/or (without any limitation arising from the foregoing enumeration) make any other changes as it determines in its sole and exclusive discretion provided that any such amendment, modification, change or termination shall apply equally to employees and non-unit employees unless otherwise agreed to by the UNION and the EMPLOYER.

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Article XIII – Miscellaneous

Section (a) Pay Day

All Employees will be paid on a weekly basis. Payment shall be made by check, or by Direct Deposit if elected by the employee, with recognition for legitimate deductions. The Employee shall receive, with his pay, a plain statement itemizing the number of hours worked during the pay period and setting forth straight time, overtime and premium time hours worked during the pay period. The statement shall also itemize all payroll deductions.

Section (b) Bulletin Boards

The PLANT will provide and maintain bulletin boards at mutually agreeable locations for exclusive use by the UNION on which the UNION may post notices. Such notices shall not be offensive in nature to any individual or group of persons. Such notices shall show a removal date and shall be delivered to the Human Resources Manager or their designee prior to posting. An Employee designated by the President of the Local Union to post notices only will be compensated by the EMPLOYER for time spent posting notices on bulletin boards for up to two (2) hours per posting no more than twelve (12) postings per month on the first (1st) shift or as otherwise agreed upon by the Local Union and the Human Resources Manager.

Section (c) Safety Shoes

Each calendar year of this Agreement’s term, the PLANT will provide each Employee the option of electing either (i) an allowance per current practice up to $125.00 for the purchase of safety shoes, or (ii) a cash allowance of seventy five dollars ($75.00).

Employees may purchase shoes from the “Shoe Truck” Program or from an authorized dealer(s) in this area.

Section (d) Eye Examinations

Each Employee requiring an eye examination within an eighteen (18) month time period, upon presenting a paid receipt to the Plant Medical Department, will be reimbursed for the expense of such examination up to a maximum of $50, but in no case is the reimbursement to exceed the cost of the examination. This section shall not apply to any employee participating in the EMPLOYER’s vision care benefit plan.

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Section (e) Disability Accommodation

This Agreement shall not prevent the PLANT from making a reasonable accommodation of disabled persons as required by state and/or federal law, including the Americans With Disabilities Act. In the event a proposed accommodation would conflict with an express provision of this Agreement, the parties, at either’s request, shall meet to discuss the proposed accommodation. Nothing in this section shall require the UNION to agree to modify terms of this Agreement or to waive seniority rights under this Agreement. In the event the PLANT and the UNION, in settling a grievance or litigation would agree, or a court or arbitrator would order that the PLANT make an accommodation that otherwise conflicts with the terms of this Agreement, that accommodation shall supersede such conflicting terms of this Agreement. The parties agree that any accommodation made by the PLANT with respect to job duties or any other term or condition of employment made pursuant to settlement of a grievance or litigation (whether formal or informal), or arbitral or court order, shall not, in any way, become applicable to any other individual, class, or group of Employees but shall apply only to the person or persons accommodated in the particular situation. The fact that such person(s) was accommodated, the manner and method of such accommodation shall be without precedent and therefore may not be used or relied upon by any person for that purpose at any time in the future.

Section (f) Medical Appointments

Employees shall make every attempt to schedule medical appointments during non-working time. With prior approval, Employees will be excused from work and paid for up to four (4) hours up to twelve (12) times per calendar year for the Employee to report for a medical appointment during work hours. Such medical appointments must be for diagnosis, follow-up to a recent problem or diagnostic testing. Dental appointments will be covered only for tooth extractions and root canals. Routine visits are not covered by this procedure and must be scheduled during non-working hours. Where that is not possible, the supervisor may excuse the employee without pay. The EMPLOYER reserves the right to deny the granting of time off for a medical appointment. Employees are required to provide verification from a licensed healthcare provider of the medical appointment, including the time of the appointment and the time the employee arrived and left the appointment.

Article XIV – No Strike or Lockout

Section (a) UNION Not to Strike

Under no circumstances will the UNION or Employees participate in, instigate, cause, or encourage, any strike during the term of this Agreement, including economic,

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unfair labor practice strikes, sympathy strikes, jurisdictional strikes, slowdown, walkout, sit-down, mass absenteeism, retarding of work or boycott or work stoppages.

Section (b) UNION to Halt Breach

In the event of a breach of Section (a), the UNION shall use reasonable means to end the breach, including advising the involved Employees that their conduct may be in violation of the Agreement, and if it is they may be disciplined up to and including discharge, and that they should immediately cease the offending conduct.

Section (c) Discipline for Breach

The PLANT has the right to discipline, up to and including discharge, any Employee who violates this Article and such discipline shall be deemed to be for good cause. Any such discipline or discharge under this Section shall be subject to the grievance procedure.

Section (d) No Lockout

The PLANT agrees not to lockout the Employees during the term of this Agreement.

Article XV — Maintain Integrity of the Contract and Resort to Courts

The UMWA and the EMPLOYER agree and affirm that, except as provided herein, they will maintain the integrity of this contract and that all disputes which are not settled by agreement shall be settled by the machinery provided in the “Settlement of Disputes” Article of this Agreement. Nothing in this provision, however, is intended to diminish any individual rights an Employee might enjoy by law. In addition, the EMPLOYER expressly authorizes the UNION to seek judicial relief, without exhausting the grievance machinery, in cases involving successorship.

Article XVI — Modification and Severability Clause

Section (a) Modification

If during the life of this Agreement there shall be in existence any applicable law, rule, regulation or order issued by Governmental authority, which shall be inconsistent with any provision of this Agreement, the parties will meet to modify such provision to the extent necessary to comply with such law, rule, regulation or order.

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Section (b) Severability

In the event that any provision of this Agreement shall at any time be declared invalid by any court of competent jurisdiction, such decision shall not invalidate the entire Agreement, it being the express intention of the parties hereto that all other provisions not so declared invalid shall remain in full force and effect.

Article XVII - - Ratification and Termination of this Agreement

This Agreement shall become effective at 12:01 am on the day following notification to the Remington Arms Co., Inc., by the International Union, United Mine Workers of America, that this Agreement has been ratified and approved by the membership covered hereby.

This Agreement shall not be subject to termination by either party signatory hereto prior to 12:01 a.m. October 28, 2012, provided, however, that either the party the first part or the party of the second part may terminate this Agreement on or after 12:01 a.m. October 28, 2012, by giving at least sixty days written notice to the other party of such desired termination date.

IN WITNESS WHEREOF, each of the parties signatory hereto has caused this Agreement to be signed, effective this 27th day of October 2007, the Agreement having been ratified and approved by the membership covered hereby on October 26, 2007.

On Behalf of:
UNITED MINE WORKERS OF AMERICA
By:	/s/ Edward D. Yankovich Jr.
	Edward D. Yankovich Jr.
	International District 2 Vice President
On Behalf of:
LOCAL UNION 717
By:	/s/ Stu Kennedy
	Stu Kennedy
	President

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On Behalf of:
REMINGTON ARMS COMPANY, INC.
By:	/s/ Joseph B. Gross
	Joseph B. Gross
	Plant Manager

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SHORT TERM DISABILITY PAY PLAN

The Short term Disability Pay Plan for Ilion hourly Employees shall be amended as of the effective date of this Agreement to read as follows:

Disability Pay

All Employees will be entitled to participate in the Company’s Short Term Disability Plan as outlined in the Health and Welfare Summary Plan Description, starting on the Employee’s first calendar day of disability. The pay structure will be as follows:

Duration Per Occurrence	Percentage of regular rate of pay*
First calendar day	0	%
Consecutive Days 2 through 9	50	%
Consecutive Days 10 through 180	100	%

*Or awarded State Workers Compensation, whichever is higher.

All Employees will be expected to see a doctor on the second calendar day of illness and must report to the Plant Medical Department on any absence which extends to the third day.

To receive disability pay, an Employee must submit medical documentation explaining and confirming: (1) the date the Employee became disabled, (2) the medical reasons why the Employee is unable to work, (3) the cause of the disability, if known, and (4) the nature, severity and expected duration of the disability. The EMPLOYER, at its expense, may require an examination by a second health care provider designated by the EMPLOYER. If the second health care provider’s opinion conflicts with the medical documentation submitted by the Employee, the EMPLOYER, at its expense, may require a neutral qualified third party to conduct an examination and provide a final and binding opinion. If an Employee fails to provide the medical documentation required under this provision, or fails to submit to the examinations specified herein, the Employee’s claim for disability pay may be denied.

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EX-10.6

Exhibit 10.6

Lazard FrÈres & CO. LLC
30 ROCKEFELLER PLAZA
NEW YORK, NY 10020
PHONE 212-632-6000
www.lazard.com

June 30, 2009

Freedom Group, Inc.
870 Remington Drive
Madison, NC 27025-0700

Ladies and Gentlemen:

This letter confirms the retention of Lazard Frères & Co. LLC (“Lazard”) to act as investment banker to Freedom Group, Inc. (the “Company”) to provide financial advice with respect to the proposed issuance of debt by the Company or any subsidiary thereof having an aggregate amount of at least $200 million (the “Debt Issuance”) and the potential initial public offering of common equity securities of the Company or any subsidiary thereof (the “IPO”). Each of the Debt Issuance and the IPO may be reffered to herein individually or jointly as a “Financing”. By signing this letter, we hereby accept our appointment as your investment banker under the terms hereof.

We will act with respect to the foregoing until the earlier of the completion date of both the Debt Issuance and the IPO and one year from the date hereof, subject to the following conditions:

1.We will, as necessary and requested, assist the Company in its evaluation of a Financing, including the timing, structure and size of the Financing. For the avoidance of doubt, our services hereunder will not include assistance in execution of a Financing.

2.You will furnish or cause to be furnished to us such current and historical financial information and other information regarding the business of the Company and any relevant subsidiary as we may request. You represent and warrant to us that all of the foregoing information will be accurate and complete at the time it is furnished, and you agree to keep us advised of all material developments affecting the Company and any relevant subsidiary. In connection with our activities hereunder, you authorize us to make appropriate use of such information, including discussing it with any third parties as to whom we may mutually agree.

3.In consideration of our services, you agree to pay us the following fees:

(i)            a fee, payable upon consummation of the Debt Issuance, of $600,000, and

(ii)           a fee, payable upon consummation of the IPO, of $400,000.

PARIS     LONDON     NEW YORK     AMSTERDAM     ATLANTA     BEIJING     BORDEAUX     BOSTON     BRISBANE     CHICAGO     FRANKFURT

HAMBURG      HONG KONG       HOUSTON      LOS ANGELES      LYON      MADRID      MELBOURNE       MILAN       MINNEAPOLIS       MONTREAL      MUMBAI

ROME       SAN FRANCISCO       SÂO PAULO      SEOUL     SHANGHAI       SINGAPORE       STOCKHOLM       SYDNEY       TOKYO       TORONTO        ZURICH

In the event of any extension or modification of our engagement hereunder, you will pay us such additional fees as may be mutually agreed in writing. In the absence of any such written extension or modification, no more than $1,000,000 in fees shall be payable pursuant to this agreement.

4.You agree to reimburse us periodically, upon request, for all our reasonable expenses incurred in connection with this engagement; provided that reimbursable expenses hereunder in connection with each Financing shall not exceed 5% of the fee payable pursuant to paragraph 3 in connection with such Financing unless approved in advance by the Company (which approval shall not be unreasonably withheld). Generally these expenses include travel costs, document production and other expenses of this type, and, if approved in advance by the Company (such approval not to be unreasonably withheld), will also include the reasonable fees of outside counsel and other professional advisors. We will provide separate invoices for the expenses related to each of the Financings. All payments to be made by you pursuant to this agreement shall be made promptly after receipt of invoices for such payments.

5.No fee payable to any third party, by you or any other person or entity in connection with the subject matter of this engagement, shall reduce or otherwise affect any fee payable hereunder.

6.Simultaneously herewith, the parties hereto are entering into an indemnification letter (the “Indemnification Letter”) in the form attached hereto. The Indemnification Letter shall survive any termination or expiration of this agreement.

7.Our engagement hereunder may be terminated by you or us at any time without liability or continuing obligation to you or us, except that, following such termination or any expiration of this agreement, we shall remain entitled to any fees accrued pursuant to paragraph 3 but not yet paid prior to such termination or expiration, as the case may be, and to reimbursement of expenses incurred prior to such termination or expiration, as the case may be, as contemplated by paragraph 4 hereof. In addition, in the case of termination by the Company (other than for cause, as reasonably determined by the Company) prior to the expiration of this agreement and in the case of expiration of this agreement, we shall remain entitled to full payment of all fees contemplated by paragraph 3 hereof in respect of any Financing consummated during the period from the date hereof until one year following such termination or expiration of this agreement.

8.Any financial advice, written or oral, rendered by us pursuant to this agreement is intended solely for the benefit and use of senior management and the Board of Directors of the Company in considering the matters to which this agreement relates, and the Company agrees that such advice may not be disclosed publicly or made available to third parties (other than disclosures as necessary to your officers, directors and legal and accounting advisors who are required to maintain the confidentiality thereof) without the prior written consent of Lazard. Notwithstanding the foregoing, nothing herein shall prohibit you from disclosing (a) to any and all persons the tax treatment and tax structure

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of any Financing and the portions of any materials that relate to such tax treatment or tax structure; and (b) any such information as required by applicable law, rule, regulation or compulsory legal process, including in connection with the Financings, subject to prior consulation with us regarding the form and scope of such disclosure to the extent practicable. Lazard will not be responsible for and will not provide you with any tax, accounting, actuarial, legal or other specialist advice.

9.The provisions hereof shall inure to the benefit of and be binding upon the successors and assigns of the Company, Lazard and any other person entitled to indemnity under the Indemnification Letter.

10.Lazard has been retained under this agreement as an independent contractor, and it is understood and agreed that this agreement does not create a fiduciary relationship between Lazard and the Company or its management or Board of Directors.

11.In carrying out services hereunder, Lazard may, as it considers appropriate, draw upon the resources of and involve as agent other members of the Lazard Group and Lazard Capital Markets LLC and its affiliates. In this agreement, “Lazard Group” means Lazard Group LLC and its direct and indirect subsidiaries.

12.This agreement and any claim related directly or indirectly to this agreement (including any claim concerning advice provided pursuant to this agreement) shall be governed and construed in accordance with the laws of the State of New York (without giving regard to the conflicts of law provisions thereof). No such claim shall be commenced, prosecuted or continued in any forum other than the courts of the State of New York located in the City and County of New York or the United States District Court for the Southern District of New York, and each of the parties hereby submits to the jurisdiction of such courts. Each party hereby waives on behalf of itself and its successors and assigns any and all right to argue that this choice of forum provision is or has become unreasonable. Each party waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) related to or arising out of the engagement of Lazard pursuant to, or the performance by Lazard of the services contemplated by, this agreement.

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If the foregoing correctly sets forth the understanding between us, please so indicate on the enclosed signed copy of this letter in the space provided therefor and return it to us, whereupon this letter shall constitute a binding agreement between us.

Very truly yours,
LAZARD FRERES & CO. LLC
By:	/s/ Daniel M. Aronson
	Daniel M. Aronson
	Managing Director

AGREED TO AND ACCEPTED
as of the date first above written:

FREEDOM GROUP, INC.

By
	Name:
	Title:

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Lazard FrÈres & CO. LLC
30 ROCKEFELLER PLAZA
NEW YORK, NY 10020
PHONE 212-632-6000
www.lazard.com

June 30, 2009

Freedom Group, Inc.
870 Remington Drive
Madison, NC 27025-0700

Ladies and Gentlemen:

In connection with our engagement to advise and assist you with the matters set forth in the engagement letter of even date herewith, you and we are entering into this letter agreement. It is understood and agreed that in the event that Lazard Frères & Co. LLC or any of our affiliates, or any of our or their respective directors, officers, members, employees, agents or controlling persons, if any (each of the foregoing, including Lazard Frères & Co. LLC, being an “Indemnified Person”), become involved in any capacity in any action, claim, proceeding or investigation brought or threatened by or against any person, including your securityholders, related to, arising out of or in connection with our engagement, you will promptly reimburse each such Indemnified Person for its reasonable legal and other expenses (including the cost of any investigation and preparation) as and when they are incurred in connection therewith. You will indemnify and hold harmless each Indemnified Person from and against any losses, claims, damages, liabilities or expenses to which any Indemnified Person may become subject under any applicable federal or state law, or otherwise, related to, arising out of or in connection with our engagement, whether or not any pending or threatened action, claim, proceeding or investigation giving rise to such losses, claims, damages, liabilities or expenses is initiated or brought by you or on your behalf and whether or not in connection with any action, claim, proceeding or investigation in which you or any such Indemnified Person are a party, except to the extent that any such loss, claim, damage, liability or expense is found by a court of competent jurisdiction in a judgment which has become final in that it is no longer subject to appeal or review to have resulted from such Indemnified Person’s bad faith, willful misconduct or gross negligence. You also agree that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to you or your securityholders or creditors related to, arising out of or in connection with our engagement except to the extent that any loss, claim, damage or liability is found by a court of competent jurisdiction in a judgment which has become final in that it is no longer subject to appeal or review to have resulted from such Indemnified Person’s bad faith, willful misconduct or gross negligence. If multiple claims are brought against any Indemnified Person in an arbitration related to, arising out of or in connection with our engagement, and indemnification is permitted under applicable law with respect to at least one such claim, you agree that any arbitration award shall be conclusively deemed to be based on claims as to which indemnification is permitted and provided for hereunder, except to the extent the arbitration award expressly states that the award, or any portion thereof, is based solely on a claim as to which indemnification is not available.

PARIS     LONDON     NEW YORK     AMSTERDAM     ATLANTA     BEIJING     BORDEAUX     BOSTON     BRISBANE     CHICAGO     FRANKFURT

HAMBURG      HONG KONG       HOUSTON      LOS ANGELES      LYON      MADRID      MELBOURNE       MILAN       MINNEAPOLIS       MONTREAL      MUMBAI

ROME       SAN FRANCISCO       SÂO PAULO      SEOUL     SHANGHAI       SINGAPORE       STOCKHOLM       SYDNEY       TOKYO       TORONTO        ZURICH

If any action, claim, proceeding or investigation is commenced, as to which an Indemnified Person proposes to demand indemnification, we or such Indemnified Person shall notify you with reasonable promptness; provided, however, that any failure by us or such Indemnified Person to notify you shall not relieve you from your obligations hereunder (except to the extent that you are materially prejudiced by such failure to promptly notify). Unless we or another Indemnified Person have been advised by counsel that there exist actual or potential conflicting interests between you and us or another Indemnified Person, you shall be entitled to assume and control the defense of any such action, claim, proceeding or investigation, including the employment of counsel reasonably satisfactory to us. Any Indemnified Person shall have the right to counsel of its own choice to represent it, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) you have failed promptly to assume the defense and employ counsel reasonably satisfactory to us in accordance with the preceding sentence or (ii) we or the Indemnified Person shall have been advised by counsel that there exist actual or potential conflicting interests between you and us pr such Indemnified Person; provided, however, that you shall not, in connection with any one such action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations be liable for fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time selected by us for all Indemnified Persons; and such counsel shall, to the extent consistent with its professional responsibilities and any conflict of interests between you and us or another Indemnified Person, cooperate with you and any counsel designated by you.

If for any reason the foregoing indemnification is held unenforceable (other than due to a failure to meet the standard of care set forth above), then you shall contribute to the loss, claim, damage, liability or expense for which such indemnification is held unenforceable in such proportion as is appropriate to reflect the relative benefits received, or sought to be received, by you and your securityholders and creditors on the one hand and the Indemnified Persons on the other hand in the matters contemplated by our engagement as well as the relative fault of yourselves and such persons with respect to such loss, claim, damage, liability or expense and any other relevant equitable considerations. You agree that for the purposes hereof the relative benefits received, or sought to be received, by you and your securityholders and creditors and the Indemnified Persons shall be deemed to be in the same proportion as (i) the total value paid or proposed to be paid by or to you and your securityholders and creditors, as the case may be, pursuant to any transaction (whether or not consummated) for which we have been engaged to perform investment banking services bears to (ii) the fees paid or proposed to be paid to us in connection with such engagement; provided, however, that, to the extent permitted by applicable law, in no event shall we or any other Indemnified Person be required to contribute an aggregate amount in excess of the aggregate fees actually paid to us for such investment banking services. Your reimbursement, indemnity and contribution obligations under this agreement shall be in addition to any liability which you may otherwise have, shall not be limited by any rights we or any other Indemnified Person may otherwise have and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of yourselves, ourselves, and any other Indemnified Persons.

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You agree that, without our prior written consent (which will not be unreasonably withheld), you will not settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action, proceeding or investigation in respect of which indemnification or contribution could be sought hereunder (whether or not we or any other Indemnified Persons are an actual or potential party to such claim, action, proceeding or investigation), unless such settlement, compromise or consent includes an unconditional release of each Indemnified Person from all liability arising out of such claim, action, proceeding or investigation. We agree that, without your prior written consent (which will not be unreasonably withheld), we will not settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action, proceeding or investigation in respect of which indemnification or contribution could be sought hereunder. No waiver, amendment or other modification of this agreement shall be effective unless in writing and signed by each party to be bound thereby. This agreement and any claim related directly or indirectly to this agreement shall be governed and construed in accordance with the laws of the State of New York (without giving regard to the conflicts of law provisions thereof). No such claim shall be commenced, prosecuted or continued in any forum other than the courts of the State of New York located in the City and County of New York or the United States District Court for the Southern District of New York, and each of us hereby submits to the jurisdiction of such courts. Each of us hereby waive on behalf of yourself and your successors and assigns any and all right to argue that the choice of forum provision is or has become unreasonable. We and you (each on our own behalf and, to the extent permitted by applicable law, on behalf of our securityholders and creditors) waive all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) related to, arising out of or in connection with our engagement.

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This agreement shall remain in effect indefinitely, notwithstanding any termination or expiration of our engagement.

Very truly yours,
LAZARD FRERES & CO. LLC
By:	/s/ Daniel M. Aronson
	Daniel M. Aronson
	Managing Director

AGREED TO AND ACCEPTED
as of the date first above written:

FREEDOM GROUP, INC.

By	/s/ Ted Torbeck
	Name:
	Title:

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EX-10.7

Exhibit 10.7

EXECUTION COPY

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of the 4th day of February, 2008, between REMINGTON ARMS COMPANY, INC., a Delaware corporation (“Employer”), and Theodore H. Torbeck (“Executive”).

R E C I T A L S:

1.Employer is engaged in the business of designing, manufacturing, marketing, and selling (a) sporting goods products, including, by way of illustration, firearms and ammunition, as well as hunting and gun care accessories and clay targets, for the global hunting and shooting sports marketplace, and (b) products with law enforcement, military and government applications, including, by way of illustration, surveillance technology products and powdered metal products (the “Business”).

2.Employer desires to employ Executive as the Chief Operating Officer of Employer, and Executive desires to be employed by Employer in that capacity.

NOW, THEREFORE, in consideration of the mutual covenants and obligations herein and the compensation and benefits Employer agrees herein to pay Executive, and of other good and valuable consideration, the receipt of which is hereby acknowledged, Employer and Executive agree as follows:

1.Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, Employer hereby employs Executive, and Executive hereby accepts employment by Employer.

2.Term; Position and Responsibilities; Location.

(a)Term of Employment. Subject to earlier termination pursuant to Section 7, the term of Executive’s employment under this Agreement shall be for a period beginning on the date hereof (the “Commencement Date”) and continuing until the second (2nd) anniversary of the Commencement Date, and shall be extended automatically for twelve (12) month periods thereafter, unless either party gives the other at least sixty (60) days written notice in advance of the expiration of the then current term of his or its intention not to renew (the initial term and any extensions, together, the “Employment Period”).

(b)Position and Responsibilities. During the Employment Period, Executive will serve in the executive position specified in Section 1 of Attachment A or in such other executive position as the Board of Directors of Employer (the “Board”) may determine from time to time. Executive shall have such duties and responsibilities as are customarily assigned to individuals serving in the position to which he is assigned, and such other duties consistent with Executive’s position as the Board or Chief Executive Officer may specify from time to time. Executive will devote all of his skill, knowledge and working time to the conscientious performance of the duties of such position or positions (except for (i) vacation time as set forth in Section 6(b) hereof and absence for sickness or similar disability and (ii) to the extent that it does

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not interfere with the performance of Executive’s duties hereunder, (A) such reasonable time as may be devoted to service on outside charitable boards of directors and the fulfillment of civic responsibilities or to service on the boards of such corporations as Executive is serving on the date hereof or which he may hereafter join with the consent of the Board and (B) such reasonable time as may be necessary from time to time for personal financial matters).

(c)Location. Executive’s primary work location shall be at Employer’s headquarters in Madison, North Carolina; provided, however, that in the first twenty-four (24) months of his employment hereunder, Executive shall not be required to relocate his primary residence to such location; and provided, further, that Employer may, at its option, provide Executive with the use of a corporate apartment in Madison, North Carolina, during the first twenty-four (24) months of his employment.

3.Base Salary. As compensation for the services to be performed by Executive during the Employment Period, Employer will pay Executive the annual base salary specified in Section 2 of Attachment A. The Board will review Executive’s base salary annually during the Employment Period and, in the discretion of the Board, may increase (but may not decrease) such base salary from time to time based upon the performance of Executive, the financial condition of Employer, prevailing industry salary levels and such other factors as the Board shall consider relevant. The annual base salary payable to Executive under this Section 3, as the same may be increased from time to time and without regard to any reduction therefrom in accordance with the next sentence, shall hereinafter be referred to as the “Base Salary”. The Base Salary payable under this Section 3 shall be reduced to the extent that Executive elects to defer such Base Salary under the terms of any deferred compensation, savings plan or other voluntary deferral arrangement maintained or established by Employer. The pay period under this Agreement shall equal one (1) month, and Employer shall pay Executive the Base Salary for each pay period in semi-monthly installments or in such other installments as are paid to other executives of Employer.

4.Incentive Compensation.

(a)Annual Incentive Compensation. During the Employment Period, Executive shall be eligible to participate in Employer’s annual incentive compensation plan for its executive officers as in effect from time to time (the “Annual Incentive Compensation Plan”), at a targeted level specified in Section 3 of Attachment A, and commensurate with his position and duties with Employer based on reasonable performance targets established from time to time by the Board or a committee thereof.

(b)Equity. During the Employment Period, Executive shall be eligible to participate in the 2008 American Heritage Arms, Inc. Stock Incentive Plan. Subject to the terms of the plan and an Award Agreement entered into pursuant thereto, Executive shall be awarded a two percent (2%) interest in American Heritage Arms on a fully diluted basis, which shall vest in four (4) annual installments of fifteen (15%) on the first (lst) anniversary of the effective date hereof and twenty percent (20), twenty-five percent (25) and forty percent (40), respectively on each anniversary thereafter.

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(c)Other Incentive Plans. During the Employment Period, Executive shall be eligible to participate in any other bonus or incentive plans which Employer may hereafter establish in which other senior executive officers of Employer are eligible to participate.

5.Employee Benefits. During the Employment Period (and thereafter to the extent provided under the terms of Employer’s employee benefit plans or programs), Executive shall be eligible to participate in any employee benefit plans and programs as in effect from time to time generally made available to similarly situated executives of Employer, in a manner consistent with the terms and conditions of each such plan or program and on a basis that is commensurate with Executive’s position and duties with Employer hereunder. In the event of a conflict between any benefit plan or program and this Agreement, the terms of this Agreement shall govern.

6.Expenses.

(a)Business Travel. During the Employment Period, Employer shall reimburse Executive for reasonable travel, lodging, meal and other reasonable expenses incurred by him in connection with his performance of services hereunder upon submission of evidence, satisfactory to Employer, to support the existence and purpose of the incurred expense and otherwise in accordance with Employer’s business travel reimbursement policy applicable to senior executives as in effect from time to time. In the event Executive’s employment hereunder terminates for any reason, Employer shall reimburse Executive (or in the event of death, his personal representative) for expenses incurred by Executive on behalf of Employer prior to the date of his termination of employment to the extent such expenses have not been previously reimbursed by Employer pursuant to this Section 6(a).

(b)Vacation and Sick Leave. During the Employment Period, Executive shall be entitled to vacation and sick leave as determined in accordance with the prevailing policies of Employer applicable to senior executives.

7.Termination of Employment.

(a)Termination Due to Death or Disability. In the event that Executive’s employment hereunder terminates due to death or is terminated by Employer due to Executive’s Disability (as defined below), no termination benefits shall be payable to or in respect of Executive except as provided in Section 7(f)(ii). If Employer desires to terminate Executive’s employment due to Executive’s Disability, it shall give notice to Executive as provided in Section 7(e). For purposes of this Agreement, “Disability” shall mean a physical or mental disability that prevents the performance by Executive of his duties hereunder lasting for a period of one hundred eighty (180) days or longer, whether or not consecutive, in any twelve (12) month period. The determination of Executive’s Disability shall be made by the Board after receiving an evaluation from an independent physician selected by Employer and reasonably acceptable to Executive and shall be final and binding on the parties hereto.

(b)Termination by Employer for Cause. Employer may terminate Executive for Cause. If Employer desires to terminate Executive’s employment for Cause, it shall give notice to Executive as provided in Section 7(e). For purposes of this Agreement, “Cause” shall

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mean (i) the failure of Executive substantially to perform his duties hereunder (other than any such failure due to physical or mental illness) or other material breach by Executive of any of his obligations hereunder, after a demand for substantial performance or demand for cure of such breach is delivered, and a reasonable opportunity to cure is given, to Executive by Employer, which demand identifies the manner in which Employer believes that Executive has not substantially performed his duties or breached his obligations, (ii) Executive’s gross negligence or serious misconduct that has caused or would reasonably be expected to result in material injury to Employer or any of its affiliates, (iii) Executive’s conviction of, or entering a plea of nolocontendere to, a crime that constitutes a felony, or (iv) Executive’s violation of any provision of Employer’s business ethics policy that has resulted or would reasonably be expected to result in material injury to Employer or any of its affiliates, but only after a demand for cure of such violation is delivered, and a reasonable opportunity to cure is given, to Executive by Employer, which demand identifies the manner in which Employer believes that Executive has violated a material provision of Employer’s business ethics policy.

(c)Termination Without Cause. Employer may terminate Executive’s employment at any time “Without Cause”. If Employer desires to terminate Executive’s employment Without Cause, it shall give notice to Executive as provided in Section 7(e). For purposes of this Agreement, a termination “Without Cause” shall mean a termination of Executive’s employment by Employer other than as described in Section 7(a) or for Cause as defined in Section 7(b).

(d)Termination by Executive. Executive may terminate his employment at any time. If Executive desires to terminate for Good Reason, he shall give notice to Employer as provided in Section 7(e). Notwithstanding the foregoing, Executive may not terminate his employment for Good Reason if Employer has, within fifteen (15) days of the receipt of Executive’s written notice of his desire to terminate for Good Reason, cured the conduct alleged to give rise to the basis for the Good Reason termination. For purposes of this Agreement, “Good Reason” shall mean a termination of employment by Executive within thirty (30) days following the occurrence of any of the following events without Executive’s consent: (i) the assignment of Executive to a position the duties of which are a material diminution of the duties contemplated by Section 2(b) hereof, (ii) a reduction of Executive’s Base Salary or his Incentive Compensation Target Opportunity pursuant to Section 4 and as set forth on Attachment A, or (iii) a material breach by Employer of any of its obligations hereunder. In addition, Executive shall have the right to terminate his employment for Good Reason pursuant to this Section 7(d) if Employer requires him to relocate his primary residence at any time during the first twenty-four (24) months of his employment.

(e)Notice of Termination. Any termination of Executive’s employment by Employer pursuant to Section 7(a), 7(b) or 7(c), or by Executive pursuant to Section 7(d), shall be communicated by a written “Notice of Termination” addressed to the other party to this Agreement. A “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) subject to the provisions of Section 7(h), specifies the effective date of termination. The failure by Executive or Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of the reason given for the

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termination of Executive’s employment shall not waive any right of Executive or Employer hereunder or preclude Executive or Employer from asserting such fact or circumstance in enforcing Executive’s or Employer’s rights hereunder.

(f)Payments Upon Certain Terminations.

(i)If Executive’s employment is terminated by Employer Without Cause or Executive terminates his employment for Good Reason, Employer shall pay or provide to Executive as severance payments and benefits the following:

A.Executive shall receive his Base Salary for the period from the Date of Termination (as defined in Section 7(h) below) through the expiration of the Severance Period as set forth on Section 4 of Attachment A, paid in semi-monthly installments as provided in Section 3;

B.Executive shall receive the product of

(i)the amount of incentive compensation that would have been payable to Executive pursuant to Sections 4(a), 4(c) and the Annual Incentive Compensation Plan for the calendar year in which his employment terminates with achievement of performance objectives determined as of the Date of Termination, multiplied by

(ii)a fraction, the numerator of which is equal to the number of days in such calendar year that precede the Date of Termination and the denominator of which is 365;

C.continuation of participation in Employer’s group medical plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) at Employer’s expense until the earlier of the conclusion of the Severance Period and the date on which Executive first becomes eligible for substantially equivalent insurance coverage provided by any other entity following termination; provided, however, that in the event Employer cannot reasonably provide Executive and his dependents with coverage under Employer’s Group Benefits Plan for the full Severance Period, Employer may provide coverage under one or more alternative plans or arrangements providing substantially equivalent coverage to the coverage then being provided to active employees and their dependants under Employer’s group benefits plan; and

D.a pro-rated acceleration of the next installment in the equity vesting schedule set forth in Section 4(b) following termination based on the number of days Executive worked in the applicable twelve (12) month vesting period in which termination occurs. By way of example, if Executive is terminated by Employer without Cause or Executive terminates his employment for Good Reason and the Date of Termination is half way through the second twelve (12) month vesting period,

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Executive will previously have vested in 15% on the first anniversary and will be vested in 50% (representing the half-year worked) of the 20% vesting amount for the second year.

(ii)Upon his death or Disability or if Employer terminates Executive’s employment for Cause, Employer shall pay Executive his Base Salary through the Date of Termination, plus, in the case of termination upon Executive’s death or Disability, a pro-rata amount of incentive compensation pursuant to the Annual Incentive Compensation Plan calculated in the same manner as Section 7(f)(i)(B) above (but excluding any time between the onset of a physical or mental disability that prevents the performance by Executive of his duties hereunder and the resulting Date of Termination). Executive shall not be entitled to severance compensation under any severance compensation plan of Employer; provided, however, that other than severance compensation, any benefits payable to or in respect of Executive under any otherwise applicable plans, policies and practices of Employer shall not be limited by this provision. Any payments required to be made on account of Executive’s death or Disability shall be made to Executive or his designated beneficiary in the case of death no later than two and one-half (21/2) months following the end of the calendar year in which Executive’s employment terminates on account of death or Disability. Finally, Executive or his designated beneficiary in the case of death shall be entitled to the equity vested pursuant to Section 4(b).

(iii)Notwithstanding anything to the contrary in this Agreement, in the event of Employee’s voluntary termination without Good Reason or his termination for Cause, Employer shall have the right to continue to pay Employee’s Base Salary for a period of up to twelve (12) months following the Date of Termination (which period shall also be referred to as the Severance Period), paid in semi-monthly installments as provided in Section 3, in exchange for Employee’s compliance with the covenants contained in Sections 9, 10 and 1l. Finally, Executive shall be entitled to the equity vested pursuant to Section 4(b).

(g)Conditions to Receipt of Payments Upon Certain Terminations

(i)In consideration of the severance payments and benefits provided in Section 7(f), Employee agrees to (A) waive all rights to post termination benefits, other than vested equity awards and vested benefits under Employer’s tax-qualified and non-qualified deferred compensation plans, if any, after the Date of Termination, (B) waive any claims to other severance or termination payments or benefits, and (C) execute a general release releasing Employer from all claims, including but not limited to claims under the Age Discrimination in Employment Act or for wrongful discrimination and wrongful discharge from Employer, which release shall be in substantially the form attached hereto as Attachment B. Prior to Executive’s termination of employment, the release of claims may be revised by Employer. Employer may in any event modify the release of claims to conform it to the laws of the local jurisdiction applicable to Executive.

(ii)Executive shall not have a duty to mitigate the costs to Employer under Section 7(f).

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(h)Date of Termination. As used in this Agreement, the term “Date of Termination” shall mean (A) if Executive’s employment is terminated by his death, the date of his death, (B) if Executive’s employment is terminated by Employer for Cause, the date on which Notice of Termination is given or, if later, the date of termination specified in such Notice, as contemplated by Section 7(e), and (C) if Executive’s employment is terminated by Employer Without Cause, due to Executive’s Disability or by Executive for Good Reason, thirty (30) days after the date on which Notice of Termination is given as contemplated by Section 7(e) or, if no such Notice is given, the actual date of termination of Executive’s employment; provided, however, that Employer may discontinue Executive’s services hereunder during any notice period as long as Executive continues to receive his Base Salary and benefits as if he were continuing to provide such services.

8.Unauthorized Disclosure.

(a)Without the prior written consent of the Board or its authorized representative, except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, in which event, Executive will use his best efforts to consult with Employer’s Chief Executive Officer prior to responding to any such order or subpoena, and except as required in the performance of his duties hereunder, Executive shall not disclose any confidential or proprietary trade secrets, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, manufacturing plans, any information covered by the Uniform Trade Secrets Act of Delaware or any other similar legal protections that may be applicable (or any successor thereto), management organization information (including data and other information relating to members of the Board, the Board of Directors of RACI Holding, Inc. (“Holding”) and management of Employer or Holding), operating policies or manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information relating to Holding, Employer or any of their respective subsidiaries or affiliates or that Holding, Employer or any of their respective subsidiaries or affiliates may receive belonging to suppliers, customers or others who do business with Holding, Employer or any of their respective subsidiaries or affiliates (collectively, “Confidential Information”) to any third person unless such Confidential Information has been previously disclosed to the public or is in the public domain (other than by reason of Executive’s breach of this Section 8). The parties expressly agree that Confidential Information does not exist in written form only.

(b)Executive acknowledges and agrees that he will have broad access to Confidential Information, that Confidential Information will in fact be developed by him in the course of his employment with Employer, and that Confidential Information furnishes a competitive advantage in many situations and constitutes, separately and in the aggregate, a valuable, special and unique asset of Employer. Executive shall use his best efforts to prevent the disclosure of or removal of any Confidential Information from the premises of Employer, except as required in connection with the performance of his duties as an executive of Employer. Executive agrees that all Confidential Information (whether now or hereafter existing) conceived, discovered or developed by him during the Employment Period belongs exclusively to Employer and not to him.

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9.Non-Competition.

(a)During the Employment Period and thereafter during the Restriction Period (as defined in this Section 9), Executive shall not, directly or indirectly, engage in, become employed by, serve as an agent or consultant to, or become a partner, principal or stockholder (other than a holder of less than one percent (1%) of the outstanding voting shares of any publicly held company) of, or otherwise support, any business within the Restricted Area (as defined in this Section 9) which engages in the Business or which is competitive with the Business. For purposes of this Agreement, the “Restriction Period” shall be equal to any Severance Period, and “Restricted Area” means any geographical area in which Employer and its affiliates are engaged in the Business.

(b)Executive agrees and acknowledges that Employer and its affiliates are engaged in the Business and sell and distribute their products throughout the United States and other jurisdictions throughout the world, and that it would not be reasonable to limit the geographic scope of this covenant to any particular geographic location.

10.Non-Solicitation of Employees. During the Employment Period and thereafter during the Restriction Period, Executive shall not, directly or indirectly, for his own account or for the account of any other person or entity with which he is or shall become associated in any capacity, (a) solicit for employment, employ or otherwise interfere with the relationship of Employer with any person who at any time during the six (6) months preceding such solicitation, employment or interference is or was employed by or otherwise engaged to perform services for Employer other than any such solicitation or employment during Executive’s employment with Employer on behalf of Employer, or (b) induce or attempt to induce any employee of Employer who is a member of management to engage in any activity which Executive is prohibited from engaging in under any of Sections 8, 9, 10, 11, 12 or 13 hereof or to terminate his or her employment with Employer.

11.Non-Solicitation of Customers. During the Employment Period and thereafter during the Restriction Period, Executive shall not, directly or indirectly, solicit, divert or otherwise attempt to establish for himself or any other person, firm or entity (other than Employer or its subsidiaries or affiliates) any business relationship of a nature that is competitive with the Business or any relationship of Employer with any person, firm or corporation which during the twelve (12) month period preceding the prohibited conduct was a customer, client or distributor of Employer or any of its subsidiaries or affiliates.

12.Return of Property. In the event of the termination of Executive’s employment for any reason, or such earlier time as Employer may request, Executive will deliver to Employer all of Employer’s property and documents and data of any nature and in whatever medium pertaining to Executive’s employment with Employer (except for that which is personal to Executive), and he will not take with him any such property, documents or data of any description or any reproduction thereof, or any documents containing or pertaining to any Confidential Information.

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13.Non-Disparagement. During the Employment Period and thereafter during the Restriction Period, Executive will not make any statement, written or oral, whether expressed as a fact, opinion or otherwise, to any person (or induce any third party to make any such statement) which disparages, impugns, maligns, defames, libels, slanders or otherwise casts in an unfavorable light Employer or any officer, director, shareholder or employee of Employer.

14.Failure to Comply with Covenants.

(a)Without limiting the damages available to Employer, in the event that Executive fails to comply with any of the covenants in Sections 8, 9, 10, 11, 12 or 13, to the extent applicable, following his termination of employment, and such failure continues following delivery of notice thereof by Employer to Executive, all rights of Executive and any person claiming under or through him to the payments and benefits described in Sections 7(f) shall thereupon terminate and no person shall be entitled thereafter to receive any payments or benefits hereunder; provided,however, that Executive shall not have the option of foregoing such payments and benefits in order to be relieved of compliance with such covenants.

(b)Executive acknowledges and agrees that the covenants and obligations of Executive described in Sections 8, 9, 10, 11, 12 and 13 relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause Employer irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that Employer shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain Executive from committing any violation of the covenants and obligations referred to in this Section 14. These injunctive remedies are cumulative and in addition to any other rights and remedies Employer may have at law or in equity. If Employer does not prevail in obtaining any such injunctive relief, Employer shall reimburse Executive for any legal expenses incurred by him in defending against the imposition of such injunctive relief.

15.Intellectual Property. During the Employment Period, Executive will disclose to Employer all ideas, inventions and business plans developed by him during such period which relate directly or indirectly to the Business of Employer or any of its subsidiaries or affiliates, including without limitation, any process, operation, product or improvement which may be proprietary, patentable or copyrightable. Executive agrees that all of the foregoing will be the property of Employer and that he will at Employer’s request and cost do whatever is necessary to secure the rights thereto by patent, copyright or otherwise for Employer.

16.Assignability; Merger or Consolidation; Assumption of Agreement.

(a)The obligations of Executive hereunder may not be delegated, and Executive may not, without Employer’s written consent, assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any interest herein. Any such attempted delegation or disposition shall be null and void and without effect.

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(b)Employer and Executive agree that this Agreement and all of Employer’s rights and obligations hereunder may be assigned or transferred by Employer. Employer will require any successor (by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Employer, by agreement in form and substance reasonably satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no such succession had taken place. Failure of Employer to obtain such agreement prior to the effectiveness of any such succession shall entitle Executive to compensation from Employer in the same amount and on the same terms as Executive would be entitled hereunder if Employer terminated his employment Without Cause as contemplated by Section 7 (c), except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed both the date of the Notice of Termination and the Date of Termination.

17.Entire Agreement. Except as otherwise expressly provided herein, this Agreement (including the Attachments hereto) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and all promises, representations, understandings, arrangements and prior agreements relating to such subject matter (including, without limitation, those between Executive and any other person or entity) are merged into and superseded by this Agreement, and the terms of any prior employment agreement or arrangement shall, from and after the date of this Agreement, be of no further force or effect.

18.Indemnification. Employer agrees that it shall indemnify, defend and hold harmless Executive to the fullest extent permitted by law from and against any and all liabilities, costs, claims and expenses, including without limitation all costs and expenses incurred in defense of litigation, including attorneys’ fees, arising out of the employment of Executive hereunder, except to the extent arising out of or based upon the gross negligence or willful misconduct of Executive. Costs and expenses incurred by Executive in defense of litigation, including attorneys’ fees, shall be paid by Employer in advance of the final disposition of such litigation upon receipt of an undertaking by or on behalf of Executive to repay such amount if it shall ultimately be determined that Executive is not entitled to be indemnified by Employer under this Agreement.

19.Compliance with Code Section 409A. To the extent applicable, the parties hereto intend that this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, and all rules, regulations and other similar guidance issued thereunder (“Code Section 409A”). The parties agree that this Agreement shall at all times be interpreted and construed in a manner to comply with Code Section 409A and that should any provision be found not in compliance with Code Section 409A, the parties are contractually obligated to execute any and all amendments to this Agreement deemed necessary and required by Employer’s legal counsel to achieve compliance with Code Section 409A unless such action results in substantial additional costs to Employer. By execution and delivery of this Agreement, Executive irrevocably waives any objections he may have to the amendments required by Code Section 409A. The parties also agree that in no event shall any payment required to be made pursuant to this Agreement be made to Employee unless compliant with Code Section 409A. In the event amendments are required to make this Agreement compliant with Code Section 409A, Employer shall use its best efforts to provide Executive with substantially the same benefits and

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payments he would have been entitled to pursuant to this Agreement had Code Section 409A not applied, but in a manner that is compliant with Code Section 409 A and does not result in substantial additional costs to Employer. The manner in which the immediately preceding sentence shall be implemented shall be the subject of good faith negotiations between the parties.

20.Miscellaneous.

(a)Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. The arbitration shall be held within the State of Delaware, and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the Employment Arbitration Rules of the American Arbitration Association then in effect at the time of the arbitration, and otherwise in accordance with principles which would be applied by a court of law or equity. The arbitrator shall be acceptable to both Employer and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute shall be heard by a panel of three arbitrators, one appointed by each of the parties and the third appointed by the other two arbitrators. All expenses of arbitration shall be borne by the party who incurs the expense or, in the case of joint expenses, by both parties in equal portions, except that, in the event Executive substantially prevails on the principal issues of such dispute or controversy, all such expenses shall be borne by Employer. Notwithstanding the above, however, because time is of the essence, whenever a violation or threatened violation of the covenants contained in Sections 8, 9, 10, 11, 12 or 13 is alleged, then the parties agree that the enforcement of such covenants and any request for injunctive relief pursuant to Section 14 shall be excepted from the provisions of this Section 20(a).

(b)Governing Law; Consent to Jurisdiction.

(i)This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (without regard to conflict of law principles thereof) applicable to contracts made and to be performed therein, and in any action or other proceeding that may be brought arising out of, in connection with or by reason of this Agreement, the laws of the State of Delaware shall be applicable and shall govern to the exclusion of the laws of any other forum.

(ii)Any action to enforce any of the provisions of this Agreement, except as provided in Section 20(a), shall be brought exclusively in a court of the State of Delaware or in a Federal court located within the State of Delaware, and by execution and delivery of this Agreement, Executive and Employer irrevocably consent to the exclusive jurisdiction of those courts and Executive hereby submits to personal jurisdiction in the State of Delaware. Executive and Employer irrevocably waive any objection, including any objection based on lack of jurisdiction, improper venue or forum non conveniens, which either may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect to this Agreement or any transaction related hereto. Executive and Employer acknowledge and agree that any service of legal process by mail in the manner provided for notices under this Agreement constitutes proper legal service of process under applicable law in any action or proceeding under or in respect to this Agreement.

(c)Taxes. Employer may withhold from any payments made under this Agreement all federal, state, city or other applicable taxes as shall be required by law.

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(d)Amendments. Except as otherwise provided in Section 19, no provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is approved by the Board or a duly authorized committee thereof. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by any party hereto to assert his or its rights hereunder on any occasion or series of occasions.

(e)Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. Specifically, in the event any part of the covenants set forth in Sections 8, 9, 10, 11, 12 or 13 is held to be invalid or unenforceable, the remaining parts thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. In the event that any provision of Sections 8, 9, 10 or 11 is declared by a court of competent jurisdiction to be overbroad as written, Executive specifically agrees that the court should modify such provision in order to make it enforceable, and that a court should view each such provision as severable and enforce those severable provisions deemed reasonable by such court.

(f)Notices. Any notice or other communication required or permitted to be delivered under this Agreement shall be (i) in writing, (ii) delivered personally, by courier service or by certified or registered mail, first-class postage prepaid and return receipt requested, (iii) deemed to have been received on the date of delivery or on the third business day after the mailing thereof, and (iv) addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof);

(i)If to Employer, to it at:

Remington Arms Company, Inc.

Post Office Box 700

Madison, North Carolina 27025

Attention: Secretary

(ii)If to Executive, to him at the address listed in Section 5 of Attachment A.

(g)Survival. Sections8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 19, 20(a), (b), (c) and (f) and, if Executive’s employment terminates in a manner giving rise to a payment under Section 7(f), Section 7(f) shall survive the termination of Executive’s employment hereunder.

(h)No Conflicts. Executive and Employer each represent that they are entering into this Agreement voluntarily and that Executive’s employment hereunder and each party’s compliance with the terms and conditions of this Agreement will not conflict with or result in the breach by such party of any agreement to which he or it is a party or by which he or it may be bound.

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(i)Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

(j)Headings. The sections and other headings contained in this Agreement are for the convenience of the parties only and are not intended to be a part hereof or to affect the meaning or interpretation hereof.

(k)Recitals. The Recitals to this Agreement are incorporated herein and shall constitute an integral part of this Agreement.

21.Legal Fees. Employer will pay for or reimburse Executive for his costs reasonably incurred in retaining legal counsel to review this Agreement and advise him in connection therewith prior to execution to a maximum amount of fifteen thousand dollars ($15,000), subject to the Executive’s submission of appropriate documentation of such expenses.

22.Acknowledgement. Executive (a) has had a reasonable amount of time in which to review and consider this Agreement prior to signature, (b) has in fact read the terms of this Agreement, (c) has the full legal capacity to enter into this Agreement and has had the opportunity to consult with legal counsel before signing this Agreement, (d) fully and completely understands the meaning, intent and legal effect of this Agreement, and (e) has knowingly and voluntarily executed this Agreement.

[Signatures on following page.]

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IN WITNESS WHEREOF, Employer has duly executed this Agreement by its authorized representative and Executive has hereunto set his hand, in each case effective as of the date first above written.

REMINGTON ARMS COMPANY, INC.
By:	/s/ Paul A. Miller
Name:	Paul A. Miller
Title:	Chairman of the Board
EXECUTIVE:
/s/ Theodore H. Torbeck
Theodore H. Torbeck

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EX-10.8

Exhibit 10.8

2007 EXECUTIVE EMPLOYMENT AGREEMENT

THIS 2007 EMPLOYMENT AGREEMENT (this “Agreement”), dated as of the 31st day of May, 2007, between REMINGTON ARMS COMPANY, INC., a Delaware corporation (“Employer”), and Stephen Jackson (“Executive”).

R E C I T A L S:

1.Employer is engaged in the business of designing, manufacturing, marketing, and selling (a) sporting goods products, including, by way of illustration, firearms and ammunition, as well as hunting and gun care accessories and clay targets, for the global hunting and shooting sports marketplace, and (b) products with law enforcement, military and government applications, including, by way of illustration, surveillance technology products and powdered metal products (the “Business”). Executive is experienced in, and knowledgeable concerning, all aspects of the Business.

2.Executive has heretofore been employed by Employer as the Chief Financial Officer of Employer. Employer desires to continue to employ Executive, and Executive desires to continue to be employed by Employer.

NOW, THEREFORE, in consideration of the mutual covenants and obligations herein and the compensation and benefits Employer agrees herein to pay Executive, and of other good and valuable consideration, the receipt of which is hereby acknowledged, Employer and Executive agree as follows:

1.Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, Employer hereby employs Executive, and Executive hereby accepts employment by Employer.

2.Term: Position and Responsibilities.

(a)Term of Employment. Pursuant to the terms of this Agreement, Employer shall continue to employ Executive for the term commencing on the date hereof and terminating as provided in Section 7. The period during which Executive is employed pursuant to this Agreement shall be referred to as the “Employment Period”.

(b)Position and Responsibilities. During the Employment Period, Executive will serve in the executive position specified in Section 1 of Attachment A or in such other executive position as the Board of Directors of Employer (the “Board”) may determine from time to time. Executive shall have such duties and responsibilities as are customarily assigned to individuals serving in the position to which he is assigned, and such other duties consistent with Executive’s position as the Board or Chairman may specify from time to time. Executive will devote all of his skill, knowledge and working time to the conscientious performance of the duties of such position or positions (except for (i) vacation time as set forth in Section 6(b) hereof and absence for sickness or similar disability and (ii) to the extent that it does not interfere with the performance of Executive’s duties hereunder, (A) such reasonable time as may be

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devoted to service on outside charitable boards of directors and the fulfillment of civic responsibilities or to service on the boards of such corporations as Executive is serving on the date hereof or which he may hereafter join with the consent of the Board and (B) such reasonable time as may be necessary from time to time for personal financial matters).

3.Base Salary. As compensation for the services to be performed by Executive during the Employment Period, Employer will pay Executive the annual base salary specified in Section 2 of Attachment A. The Board will review Executive’s base salary annually during the Employment Period and, in the discretion of the Board, may increase (but may not decrease) such base salary from time to time based upon the performance of Executive, the financial condition of Employer, prevailing industry salary levels and such other factors as the Board shall consider relevant. The annual base salary payable to Executive under this Section 3, as the same may be increased from time to time and without regard to any reduction therefrom in accordance with the next sentence, shall hereinafter be referred to as the “Base Salary”. The Base Salary payable under this Section 3 shall be reduced to the extent that Executive elects to defer such Base Salary under the terms of any deferred compensation, savings plan or other voluntary deferral arrangement maintained or established by Employer. The pay period under this Agreement shall equal one (1) month, and Employer shall pay Executive the Base Salary for each pay period in semi-monthly installments or in such other installments as are paid to other executives of Employer.

4.Incentive Compensation.

(a)Annual Incentive Compensation During the Employment Period, Executive shall be eligible to participate in Employer’s annual incentive compensation plan for its executive officers as in effect from time to time (the “Annual Incentive Compensation Plan”), at a targeted level specified in Section 3 of Attachment A, and commensurate with his position and duties with Employer based on reasonable performance targets established from time to time by the Board or a committee thereof.

(b)Other Incentive Plans. During the Employment Period, Executive shall be eligible to participate in the Remington Arms Company, Inc. 2006 Long Term Incentive Plan (the “Long Term Incentive Plan”) and in any other bonus or incentive plans which Employer may hereafter establish in which other senior executive officers of Employer are eligible to participate.

5.Employee Benefits. During the Employment Period (and thereafter to the extent provided under the terms of Employer’s employee benefit plans or programs), Executive shall be eligible to participate in any employee benefit plans and programs as in effect from time to time generally made available to similarly situated executives of Employer, in a manner consistent with the terms and conditions of each such plan or program and on a basis that is commensurate with Executive’s position and duties with Employer hereunder. In the event of a conflict between any benefit plan or program and this Agreement, the terms of this Agreement shall govern.

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6.Expenses.

(a)Business Travel. During the Employment Period, Employer shall reimburse Executive for reasonable travel, lodging, meal and other reasonable expenses incurred by him in connection with his performance of services hereunder upon submission of evidence, satisfactory to Employer, to support the existence and purpose of the incurred expense and otherwise in accordance with Employer’s business travel reimbursement policy applicable to senior executives as in effect from time to time. In the event Executive’s employment hereunder terminates for any reason, Employer shall reimburse Executive (or in the event of death, his personal representative) for expenses incurred by Executive on behalf of Employer prior to the date of his termination of employment to the extent such expenses have not been previously reimbursed by Employer pursuant to this Section 6(a).

(b)Vacation and Sick Leave. During the Employment Period, Executive shall be entitled to vacation and sick leave as determined in accordance with the prevailing policies of Employer applicable to senior executives.

7.Termination of Employment.

(a)Termination Due to Death or Disability. In the event that Executive’s employment hereunder terminates due to death or is terminated by Employer due to Executive’s Disability (as defined below), no termination benefits shall be payable to or in respect of Executive except as provided in Section 7(f)(ii). If Employer desires to terminate Executive’s employment due to Executive’s Disability, it shall give notice to Executive as provided in Section 7(e). For purposes of this Agreement, “Disability” shall mean a physical or mental disability that prevents the performance by Executive of his duties hereunder lasting for a period of one hundred eighty (180) days or longer, whether or not consecutive, in any twelve (12) month period. The determination of Executive’s Disability shall be made by the Board after receiving an evaluation from an independent physician selected by Employer and reasonably acceptable to Executive and shall be final and binding on the parties hereto.

(b)Termination by Employer for Cause. Employer may terminate Executive for Cause. If Employer desires to terminate Executive’s employment for Cause, it shall give notice to Executive as provided in Section 7(e). For purposes of this Agreement, “Cause” shall mean (i) the failure of Executive substantially to perform his duties hereunder (other than any such failure due to physical or mental illness) or other material breach by Executive of any of his obligations hereunder, after a demand for substantial performance or demand for cure of such breach is delivered, and a reasonable opportunity to cure is given, to Executive by Employer, which demand identifies the manner in which Employer believes that Executive has not substantially performed his duties or breached his obligations, (ii) Executive’s gross negligence or serious misconduct that has caused or would reasonably be expected to result in material injury to Employer or any of its affiliates, (iii) Executive’s conviction of, or entering a plea of nolo contendere to, a crime that constitutes a felony, or (iv) violation of any provision of Employer’s business ethics policy.

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(c)Termination Without Cause. Employer may terminate Executive “Without Cause”. If Employer desires to terminate Executive’s employment Without Cause, it shall give notice to Executive as provided in Section 7(e). For purposes of this Agreement, a termination “Without Cause” shall mean a termination of Executive’s employment by Employer other than as described in Section 7(a) or for Cause as defined in Section 7(b).

(d)Termination by Executive. Executive may terminate his employment at any time. If Executive desires to terminate for Good Reason, he shall give notice to Employer as provided in Section 7(e). Notwithstanding the foregoing, Executive may not terminate his employment for Good Reason if Employer has, within fifteen (15) days of the receipt of Executive’s written notice of his desire to terminate for Good Reason, cured the conduct alleged to give rise to the basis for the Good Reason termination. For purposes of this Agreement, “Good Reason” shall mean a termination of employment by Executive within thirty (30) days following the occurrence of any of the following events without Executive’s consent: (i) the assignment of Executive to a position the duties of which are a material diminution of the duties contemplated by Section 2(b) hereof, (ii) a reduction of Executive’s Base Salary or his Incentive Compensation Target Opportunity pursuant to Section 4 and as set forth on Attachment A, (iii) the assignment of Executive to a principal office located beyond a 50-mile radius of Executive’s then current work place, or (iv) a material breach by Employer of any of its obligations hereunder.

(e)Notice of Termination. Any termination of Executive’s employment by Employer pursuant to Section 7(a), 7(b) or 7(c), or by Executive pursuant to Section 7(d), shall be communicated by a written “Notice of Termination” addressed to the other party to this Agreement. A “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) subject to the provisions of Section 7(i), specifies the effective date of termination. The failure by Executive or Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of the reason given for the termination of Executive’s employment shall not waive any right of Executive or Employer hereunder or preclude Executive or Employer from asserting such fact or circumstance in enforcing Executive’s or Employer’s rights hereunder.

(f)Payments Upon Certain Terminations.

(i)If Executive’s employment is terminated by Employer Without Cause or Executive terminates his employment for Good Reason, Employer shall pay or provide to Executive as severance payments and benefits the following:

A.Executive shall receive his Base Salary for the period from the Date of Termination (as defined in Section 7(i) below) through the expiration of the Severance Period as set forth on Attachment A, paid in semi-monthly installments as provided in Section 3.

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B.Executive shall receive the product of

(i)the amount of incentive compensation that would have been payable to Executive pursuant to the Annual Incentive Compensation Plan for the calendar year in which his employment terminates with achievement of performance objectives determined as of the Date of Termination, multiplied by

(ii)a fraction, the numerator of which is equal to the number of days in such calendar year that precede the Date of Termination and the denominator of which is 365.

C.Executive shall receive the amount of any incentive compensation earned and payable under the terms of the Long Term Incentive Plan as of the Date of Termination.

D.Subject to the other terms and conditions of this subsection (D), Executive and his dependents shall be permitted to participate in the health, dental and prescription drug benefits provided to active employees and their dependents under Employer’s Group Benefits Plan until Executive attains age 65 or, if later, the end of the Severance Period (“Continuation Coverage”). Executive shall be responsible for paying the premium charged for such Continuation Coverage at the applicable active employee rate. The Continuation Coverage provided to Executive and his dependents is intended to satisfy the continuation of coverage requirements of Section 4980B of the Code and Part 6 of Title I of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”). In the event that the period of Continuation Coverage expires prior to the end of the period of continuation coverage to which Executive and his dependents would be entitled under COBRA (the “COBRA Period”), Executive and his dependents may elect continuation coverage under COBRA (“COBRA Coverage”) for the remainder of the COBRA Period. Executive and his dependents shall be responsible for paying the full amount of the premium charged for such COBRA Coverage under the Employer’s Group Benefits Plan.

Notwithstanding the foregoing provisions of this subsection (D), in the event that the Continuation Coverage for whatever reason does not satisfy the continuation of coverage requirements of COBRA, Executive and his dependents shall be entitled to elect COBRA Coverage in lieu of the Continuation Coverage described in this subsection (D). In such event, Executive and his dependents shall be responsible for paying the full amount of the premiums charged for such COBRA Coverage under the Employer’s Group Benefits Plan, and Employer shall no longer have any obligation to provide Executive and his dependents with the Continuation Coverage described in this subsection (D).

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In the event Employer cannot reasonably provide Executive and his dependents with coverage under Employer’s Group Benefits Plan for the full Continuation Coverage period, Employer may provide coverage under one or more alternative plans or arrangements providing substantially equivalent coverage to the coverage then being provided to active employees and their dependants under Employer’s group benefits plan.

E.During the Severance Period Employer shall reimburse Executive for the premiums paid to continue coverage under any supplemental long-term disability policy maintained by Executive as of January 1, 2007.

F.During the Severance Period Executive shall be entitled to continue to participate in the Remington Arms Company, Inc. All Groups Life Insurance Plan (the “Life Insurance Program”) as in effect from time to time. Employer shall be responsible for paying the premiums for such coverage.

G.During the Severance Period, Executive shall continue to receive financial planning services pursuant to The Comprehensive (or Executive) Counseling Program (the “Financial Planning Services Program”) as in effect from time to time. With respect to each calendar year during the Severance Period, Employer shall report as income to Executive for federal and state income tax purposes the value of the financial planning services received by Executive for such calendar year pursuant to the Financial Planning Services Program. In addition, Employer shall pay to Executive a payment equal to the amount necessary to pay the federal and state income taxes imposed upon Executive as a result of the receipt of the financial planning services (i.e., a gross-up payment). For purposes of determining the amount of the gross-up payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation for individuals in the calendar year in which the gross-up payment is paid. In addition, Executive shall be deemed to pay state income taxes at a rate determined in accordance with the following formula:

(1 – [highest marginal rate of federal income taxation for individuals]) X (highest marginal rate of income tax in the state in which Executive is domiciled for individuals in the calendar year in which the gross-up payment is paid).

The amount of the gross-up payment shall be determined by Employer’s outside independent accountants and shall be final and binding on Employer and Executive. The gross-up payment shall be paid to Executive in a single lump sum payment on or prior to December 31 of each calendar year during which the financial services are provided pursuant to this Section (7)(f)(i)(G).

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H.Executive shall receive his vested accrued benefits under the Remington Arms Company, Inc. Pension and Retirement Plan and the Remington Arms Company 401(k) Plan in accordance with the terms and provisions of such plans as in effect from time to time.

I.Executive shall receive his benefit under the Remington SupplementalPension Plan (the “SERP”) in accordance with the terms and provisions of the SERP as in effect from time to time.

(ii)Upon his death or Disability or if Employer terminates Executive’s employment for Cause, Employer shall pay Executive his full Base Salary through the Date of Termination, plus, in the case of termination upon Executive’s death or Disability, a pro rata amount of incentive compensation pursuant to the Annual Incentive Compensation Plan calculated in the same manner as Section 7(f)(i)(B) above (but excluding any time between the onset of a physical or mental disability that prevents the performance by Executive of his duties hereunder and the resulting Date of Termination). Executive shall not be entitled to severance compensation under any severance compensation plan of Employer when Executive receives compensation under this Section 7(f)(ii). Other than severance compensation, any benefits payable to or in respect of Executive under any otherwise applicable plans, policies and practices of Employer shall not be limited by this provision. Any payments required to be made on account of Executive’s death or Disability shall be made to Executive or his designated beneficiary in the case of death no later than two and one-half (21/2) months following the end of the calendar year in which Executive’s employment terminates on account of death or Disability.

(iii)Notwithstanding anything to the contrary in this Agreement, in the event of Employee’s voluntary termination without Good Reason or his termination for Cause, Employer shall have the right to continue to pay Employee’s Base Salary for a period of up to twelve (12) months following the Date of Termination (which period shall also be referred to as the Severance Period), paid in semi-monthly installments as provided in Section 3, in exchange for Employee’s compliance with the covenants contained in Sections 9, 10 and 11.

(g)Conditions to Receipt of Payments Upon Certain Terminations

(i)In consideration of the severance payments and benefits provided in Section 7(f), Employee agrees to (A) waive all rights to post termination benefits, other than vested equity awards and vested benefits under Employer’s tax-qualified and non-qualified deferred compensation plans, if any, after the Date of Termination, (B) waive any claims to other severance or termination payments or benefits, and (C) execute a general release releasing Employer from all claims, including but not limited to claims under the Age Discrimination in Employment Act or for wrongful discrimination and wrongful discharge from Employer, which release shall be in substantially the form attached hereto as Attachment B. Prior to Executive’s termination of employment, the release of claims may be revised by Employer. Employer may in any event modify the release of claims to conform it to the laws of the local jurisdiction applicable to Executive.

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(ii)Executive shall generally not have a duty to mitigate the costs to Employer under Section 7(f), except that (A) if the period over which Employer continues to pay Executive his Base Salary pursuant to Section 7(f) extends beyond twelve (12) months from the Date of Termination, the amount payable pursuant to Section 7(f) as Base Salary for any period after the expiration of such twelve (12) months shall be reduced (but not below zero) by the amount of compensation received by Executive for services performed in any capacity, including self-employment, and (B) the continued benefits described in subsections (E) through (G) (“Continued Benefits”) for such period shall be reduced or canceled to the extent of any comparable benefit coverage offered to Executive by a subsequent employer during the period the Continued Benefits are to be provided.

(iii)Notwithstanding the provisions of Section 7(f), Employer shall be entitled to provide an alternate form of any particular benefit described in subsections (D) through (G) (e.g., an individual insurance policy) so long as such alternate form of benefit is substantially equivalent and no lapses in coverage of Executive result from such change in benefits.

(h)Date of Termination. As used in this Agreement, the term “Date of Termination” shall mean (A) if Executive’s employment is terminated by his death, the date of his death, (B) if Executive’s employment is terminated by Employer for Cause, the date on which Notice of Termination is given or, if later, the date of termination specified in such Notice, as contemplated by Section 7(e), and (C) if Executive’s employment is terminated by Employer Without Cause, due to Executive’s Disability or by Executive for Good Reason, thirty (30) days after the date on which Notice of Termination is given as contemplated by Section 7(e) or, if no such Notice is given, the actual date of termination of Executive’s employment; provided, however, that Employer may discontinue Employee’s services hereunder during any notice period as long as Executive continues to receive his Base Salary and benefits as if he were continuing to provide such services.

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8.Unauthorized Disclosure.

(a)Without the prior written consent of the Board or its authorized representative, except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, in which event, Executive will use his best efforts to consult with Employer’s Chairman prior to responding to any such order or subpoena, and except as required in the performance of his duties hereunder, Executive shall not disclose any confidential or proprietary trade secrets, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, manufacturing plans, any information covered by the Uniform Trade Secrets Act of Delaware or any other similar legal protections that may be applicable (or any successor thereto), management organization information (including data and other information relating to members of the Board, the Board of Directors of RACI Holding, Inc. (“Holding”) and management of Employer or Holding), operating policies or manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information relating to Holding, Employer or any of their respective subsidiaries or affiliates or that Holding, Employer or any of their respective subsidiaries or affiliates may receive belonging to suppliers, customers or others who do business with Holding, Employer or any of their respective subsidiaries or affiliates (collectively, “Confidential Information”) to any third person unless such Confidential Information has been previously disclosed to the public or is in the public domain (other than by reason of Executive’s breach of this Section 8). The parties expressly agree that Confidential Information does not exist in written form only.

(b)Executive acknowledges and agrees that he will have broad access to Confidential Information, that Confidential Information will in fact be developed by him in the course of his employment with Employer, and that Confidential Information furnishes a competitive advantage in many situations and constitutes, separately and in the aggregate, a valuable, special and unique asset of Employer. Executive shall use his best efforts to prevent the removal or disclosure of any Confidential Information from the premises of Employer, except as required in connection with the performance of his duties as an executive of Employer. Executive agrees that all Confidential Information (whether now or hereafter existing) conceived, discovered or developed by him during the Employment Period belongs exclusively to Employer and not to him.

9.Non-Competition.

(a)During the Employment Period and thereafter during the Restriction Period (as defined in this Section 9), Executive shall not, directly or indirectly, engage in, become employed by, serve as an agent or consultant to, or become a partner, principal or stockholder (other than a holder of less than one percent (1%) of the outstanding voting shares of any publicly held company) of, or otherwise support, any business within the Restricted Area (as defined in this Section 9) which engages in the Business or which is competitive with the Business. For purposes of this Agreement, the “Restriction Period” shall be equal to any Severance Period, and “Restricted Area” means any geographical area in which Employer and its affiliates are engaged in the Business.

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(b)Executive agrees and acknowledges that Employer and its affiliates are engaged in the Business and sell and distribute their products throughout the United States and other jurisdictions throughout the world, and that it would not be reasonable to limit the geographic scope of this covenant to any particular geographic location.

10.Non-Solicitation of Employees. During the Employment Period and thereafter during the Restriction Period, Executive shall not, directly or indirectly, for his own account or for the account of any other person or entity with which he is or shall become associated in any capacity, (a) solicit for employment, employ or otherwise interfere with the relationship of Employer with any person who at any time during the six (6) months preceding such solicitation, employment or interference is or was employed by or otherwise engaged to perform services for Employer other than any such solicitation or employment during Executive’s employment with Employer on behalf of Employer, or (b) induce or attempt to induce any employee of Employer who is a member of management to engage in any activity which Executive is prohibited from engaging in under any of Sections 8, 9,10, l1, 12 or l3 hereof or to terminate his or her employment with Employer.

11.Non-Solicitation of Customers. During the Employment Period and thereafter during the Restriction Period, Executive shall not, directly or indirectly, solicit, divert or otherwise attempt to establish for himself or any other person, firm or entity (other than Employer or its subsidiaries or affiliates) any business relationship of a nature that is competitive with the Business or any relationship of Employer with any person, firm or corporation which during the twelve (12) month period preceding the prohibited conduct was a customer, client or distributor of Employer or any of its subsidiaries or affiliates.

12.Return of Property. In the event of the termination of Executive’s employment for any reason, or such earlier time as Employer may request, Executive will deliver to Employer all of Employer’s property and documents and data of any nature and in whatever medium pertaining to Executive’s employment with Employer (except for that which is personal to Executive), and he will not take with him any such property, documents or data of any description or any reproduction thereof, or any documents containing or pertaining to any Confidential Information.

13.Non-Disparagement. During the Employment Period and thereafter during the Restriction Period, Executive will not make any statement, written or oral, whether expressed as a fact, opinion or otherwise, to any person (or induce any third party to make any such statement) which disparages, impugns, maligns, defames, libels, slanders or otherwise casts in an unfavorable light Employer or any officer, director, shareholder or employee of Employer.

14.Failure to Comply with Covenants.

(a)Without limiting the damages available to Employer, in the event that Executive fails to comply with any of the covenants in Sections 8, 9, 10, 11, 12 or 13, to the extent applicable, following his termination of employment, and such failure continues following delivery of notice thereof by Employer to Executive, all rights of Executive and any person claiming under or through him to the payments and benefits described in Sections 7(f) and (h) shall thereupon terminate and no person shall be entitled thereafter to receive any payments or

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benefits hereunder, provided, however, that Executive shall not have the option of foregoing such payments and benefits in order to be relieved of compliance with such covenants.

(b)Executive acknowledges and agrees that the covenants and obligations of Executive described in Sections 8, 9, 10, 11, 12 or 13 relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause Employer irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that Employer shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain Executive from committing any violation of the covenants and obligations referred to in this Section 14. These injunctive remedies are cumulative and in addition to any other rights and remedies Employer may have at law or in equity. If Employer does not prevail in obtaining any such injunctive relief, Employer shall reimburse Executive for any legal expenses incurred by him in defending the imposition of such injunctive relief.

15.Intellectual Property.  During the Employment Period, Executive will disclose to Employer all ideas, inventions and business plans developed by him during such period which relate directly or indirectly to the Business of Employer or any of its subsidiaries or affiliates, including without limitation, any process, operation, product or improvement which may be proprietary, patentable or copyrightable. Executive agrees that all of the foregoing will be the property of Employer and that he will at Employer’s request and cost do whatever is necessary to secure the rights thereto by patent, copyright or otherwise for Employer.

16.Assignability; Merger or Consolidations; Assumption of Agreement.

(a)The obligations of Executive hereunder may not be delegated, and Executive may not, without Employer’s written consent, assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any interest herein. Any such attempted delegation or disposition shall be null and void and without effect.

(b)Employer and Executive agree that this Agreement and all of Employer’s rights and obligations hereunder may be assigned or transferred by Employer. Employer will require any successor (by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Employer, by agreement in form and substance reasonably satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no such succession had taken place. Failure of Employer to obtain such agreement prior to the effectiveness of any such succession shall entitle Executive to compensation from Employer in the same amount and on the same terms as Executive would be entitled hereunder if Employer terminated his employment Without Cause as contemplated by Section 7(c), except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed both the date of the Notice of Termination and the Date of Termination.

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17.Entire Agreement. Except as otherwise expressly provided herein, this Agreement (including the Attachments hereto) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and all promises, representations, understandings, arrangements and prior agreements (including, without limitation, any predecessor agreement and any agreement entered into prior to any predecessor agreement) relating to such subject matter (including, without limitation, those between Executive and any other person or entity) are merged into and superseded by this Agreement, and the terms of any prior employment agreement or arrangement shall, from and after the date of this Agreement, be of no further force or effect.

18.Indemnification. Employer agrees that it shall indemnify, defend and hold harmless Executive to the fullest extent permitted by law from and against any and all liabilities, costs, claims and expenses, including without limitation all costs and expenses incurred in defense of litigation, including attorneys’ fees, arising out of the employment of Executive hereunder, except to the extent arising out of or based upon the gross negligence or willful misconduct of Executive. Costs and expenses incurred by Executive in defense of litigation, including attorneys’ fees, shall be paid by Employer in advance of the final disposition of such litigation upon receipt of an undertaking by or on behalf of Executive to repay such amount if it shall ultimately be determined that Executive is not entitled to be indemnified by Employer under this Agreement.

19.Compliance with Code Section 409A. To the extent applicable, the parties hereto intend that this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, and all rules, regulations and other similar guidance issued thereunder (“Code Section 409A”). The parties agree that this Agreement shall at all times be interpreted and construed in a manner to comply with Code Section 409A and that should any provision be found not in compliance with Code Section 409A, the parties are contractually obligated to execute any and all amendments to this Agreement deemed necessary and required by Employer’s legal counsel to achieve compliance with Code Section 409A unless such action results in substantial additional costs to Employer. By execution and delivery of this Agreement, Executive irrevocably waives any objections he may have to the amendments required by Code Section 409A. The parties also agree that in no event shall any payment required to be made pursuant to this Agreement be made to Employee unless compliant with Code Section 409A. In the event amendments are required to make this Agreement compliant with Code Section 409A, Employer shall use its best efforts to provide Executive with substantially the same benefits and payments he would have been entitled to pursuant to this Agreement had Code Section 409A not applied, but in a manner that is compliant with Code Section 409A and does not result in substantial additional costs to Employer. The manner in which the immediately preceding sentence shall be implemented shall be the subject of good faith negotiations between the parties.

20.Miscellaneous.

(a)Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. The arbitration shall be held within the State of Delaware, and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the Employment Arbitration Rules of the American Arbitration Association then in effect at the time of the arbitration, and otherwise in accordance with

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principles which would be applied by a court of law or equity. The arbitrator shall be acceptable to both Employer and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute shall be heard by a panel of three arbitrators, one appointed by each of the parties and the third appointed by the other two arbitrators. All expenses of arbitration shall be borne by the party who incurs the expense or, in the case of joint expenses, by both parties in equal portions, except that, in the event Executive prevails on the principal issues of such dispute or controversy, all such expenses shall be borne by Employer. Notwithstanding the above, however, because time is of the essence, whenever a violation or threatened violation of the covenants contained in Sections 8, 9, 10, 11, 12 and 13 is alleged, then the parties agree that the enforcement of such covenants and any request for injunctive relief pursuant to Section 14 shall be excepted from the provisions of this Section 20(a).

(b)Governing Law; Consent to Jurisdiction.

(i)This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (without regard to conflict of law principles thereof) applicable to contracts made and to be performed therein, and in any action or other proceeding that may be brought arising out of, in connection with or by reason of this Agreement, the laws of the State of Delaware shall be applicable and shall govern to the exclusion of the laws of any other forum.

(ii)Any action to enforce any of the provisions of this Agreement, except as provided in Section 20(a), shall be brought exclusively in a court of the State of Delaware or in a Federal court located within the State of Delaware, and by execution and delivery of this Agreement, Executive and Employer irrevocably consent to the exclusive jurisdiction of those courts and Executive hereby submits to personal jurisdiction in the State of Delaware. Executive and Employer irrevocably waive any objection, including any objection based on lack of jurisdiction, improper venue or forum non conveniens, which either may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect to this Agreement or any transaction related hereto. Executive and Employer acknowledge and agree that any service of legal process by mail in the manner provided for notices under this Agreement constitutes proper legal service of process under applicable law in any action or proceeding under or in respect to this Agreement.

(c)Taxes. Employer may withhold from any payments made under this Agreement all federal, state, city or other applicable taxes as shall be required by law.

(d)Amendments. Except as otherwise provided in Section 19, no provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is approved by the Board or a duly authorized committee thereof. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by any party hereto to assert his or its rights hereunder on any occasion or series of occasions.

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(e)Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. Specifically, in the event any part of the covenants set forth in Sections 8, 9, 10, 11, 12 or 13 are held to be invalid or unenforceable, the remaining parts thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. In the event that any provision of Sections 8, 9, 10 or 11 is declared by a court of competent jurisdiction to be overbroad as written, Executive specifically agrees that the court should modify such provision in order to make it enforceable, and that a court should view each such provision as severable and enforce those severable provisions deemed reasonable by such court.

(f)Notices. Any notice or other communication required or permitted to be delivered under this Agreement shall be (i) in writing, (ii) delivered personally, by courier service or by certified or registered mail, first-class postage prepaid and return receipt requested, (iii) deemed to have been received on the date of delivery or on the third business day after the mailing thereof, and (iv) addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

(i)If to Employer, to it at:

Remington Arms Company, Inc.

Post Office Box 700

Madison, North Carolina 27025

Attention: Secretary

(ii)If to Executive, to him at the address listed in Section 5 of Attachment A.

(g)Survival. Sections 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 19, 20(a), (b), (c) and (f) and, if Executive’s employment terminates in a manner giving rise to a payment under Section 7(f), Section 7(f) shall survive the termination of Executive’s employment hereunder.

(h)No Conflicts. Executive and Employer each represent that they are entering into this Agreement voluntarily and that Executive’s employment hereunder and each party’s compliance with the terms and conditions of this Agreement will not conflict with or result in the breach by such party of any agreement to which he or it is a party or by which he or it may be bound.

(i)Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

(j)Headings. The sections and other headings contained in this Agreement are for the convenience of the parties only and are not intended to be a part hereof or to affect the meaning or interpretation hereof.

(k)Recitals. The Recitals to this Agreement are incorporated herein and shall constitute an integral part of this Agreement.

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21.Acknowledgement. Executive (a) has had a reasonable amount of time in which to review and consider this Agreement prior to signature, (b) has in fact read the terms of this Agreement, (c) has the full legal capacity to enter into this Agreement and has had the opportunity to consult with legal counsel before signing this Agreement, (d) fully and completely understands the meaning, intent and legal effect of this Agreement, and (e) has knowingly and voluntarily executed this Agreement.

[Signatures on following page.]

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IN WITNESS WHEREOF, Employer has duly executed this Agreement by its authorized representative and Executive has hereunto set his hand, in each case effective as of the date first above written.

REMINGTON ARMS COMPANY, INC.
By:	/s/ Thomas L. Millner
Name:	Thomas L. Millner
Title:	CEO
EXECUTIVE:
Stephen Jackson
/s/ Stephen Jackson
Signature

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EX-10.9

Exhibit 10.9

2007 EXECUTIVE EMPLOYMENT AGREEMENT

THIS 2007 EMPLOYMENT AGREEMENT (this “Agreement”), dated as of the 31st day of May, 2007, between REMINGTON ARMS COMPANY, INC., a Delaware corporation (“Employer”), and E. Scott Blackwell (“Executive”).

R E C I T A L S:

1.             Employer is engaged in the business of designing, manufacturing, marketing, and selling (a) sporting goods products, including, by way of illustration, firearms and ammunition, as well as hunting and gun care accessories and clay targets, for the global hunting and shooting sports marketplace, and (b) products with law enforcement, military and government applications, including, by way of illustration, surveillance technology products and powdered metal products (the “Business”). Executive is experienced in, and knowledgeable concerning, all aspects of the Business.

2.             Executive has heretofore been employed by Employer as the President, Sales and Marketing of Employer. Employer desires to continue to employ Executive, and Executive desires to continue to be employed by Employer.

NOW, THEREFORE, in consideration of the mutual covenants and obligations herein and the compensation and benefits Employer agrees herein to pay Executive, and of other good and valuable consideration, the receipt of which is hereby acknowledged, Employer and Executive agree as follows:

1.             Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, Employer hereby employs Executive, and Executive hereby accepts employment by Employer.

2.             Term; Position and Responsibilities.

(a)           Term of Employment. Pursuant to the terms of this Agreement, Employer shall continue to employ Executive for the term commencing on the date hereof and terminating as provided in Section 7. The period during which Executive is employed pursuant to this Agreement shall be referred to as the “Employment Period”.

(b)           Position and Responsibilities. During the Employment Period, Executive will serve in the executive position specified in Section 1 of Attachment A or in such other executive position as the Board of Directors of Employer (the “Board”) may determine from time to time. Executive shall have such duties and responsibilities as are customarily assigned to individuals serving in the position to which he is assigned, and such other duties consistent with Executive’s position as the Board or Chairman may specify from time to time. Executive will devote all of his skill, knowledge and working time to the conscientious performance of the duties of such position or positions (except for (i) vacation time as set forth in Section 6(b) hereof and absence for sickness or similar disability and (ii) to the extent that it does not interfere with the performance of Executive’s duties hereunder, (A) such reasonable time as may be

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devoted to service on outside charitable boards of directors and the fulfillment of civic responsibilities or to service on the boards of such corporations as Executive is serving on the date hereof or which he may hereafter join with the consent of the Board and (B) such reasonable time as may be necessary from time to time for personal financial matters).

3.             Base Salary. As compensation for the services to be performed by Executive during the Employment Period, Employer will pay Executive the annual base salary specified in Section 2 of Attachment A. The Board will review Executive’s base salary annually during the Employment Period and, in the discretion of the Board, may increase (but may not decrease) such base salary from time to time based upon the performance of Executive, the financial condition of Employer, prevailing industry salary levels and such other factors as the Board shall consider relevant. The annual base salary payable to Executive under this Section 3, as the same may be increased from time to time and without regard to any reduction therefrom in accordance with the next sentence, shall hereinafter be referred to as the “Base Salary”. The Base Salary payable under this Section 3 shall be reduced to the extent that Executive elects to defer such Base Salary under the terms of any deferred compensation, savings plan or other voluntary deferral arrangement maintained or established by Employer. The pay period under this Agreement shall equal one (1) month, and Employer shall pay Executive the Base Salary for each pay period in semi-monthly installments or in such other installments as are paid to other executives of Employer.

4.             Incentive Compensation.

(a)           Annual Incentive Compensation   During the Employment Period, Executive shall be eligible to participate in Employer’s annual incentive compensation plan for its executive officers as in effect from time to time (the “Annual Incentive Compensation Plan”), at a targeted level specified in Section 3 of Attachment A, and commensurate with his position and duties with Employer based on reasonable performance targets established from time to time by the Board or a committee thereof.

(b)           Other Incentive Plans. During the Employment Period, Executive shall be eligible to participate in the Remington Arms Company, Inc. 2006 Long Term Incentive Plan (the “Long Term Incentive Plan”) and in any other bonus or incentive plans which Employer may hereafter establish in which other senior executive officers of Employer are eligible to participate. Notwithstanding anything to the contrary in the Long Term Incentive Plan, Executive shall be treated for all purposes of the Long Term Incentive Plan as if he had become a participant as of January 1, 2007.

5.             Employee Benefits. During the Employment Period (and thereafter to the extent provided under the terms of Employer’s employee benefit plans or programs), Executive shall be eligible to participate in any employee benefit plans and programs as in effect from time to time generally made available to similarly situated executives of Employer, in a manner consistent with the terms and conditions of each such plan or program and on a basis that is commensurate with Executives position and duties with Employer hereunder. In the event of a conflict between any benefit plan or program and this Agreement, the terms of this Agreement shall govern.

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6.             Expenses.

(a)           Business Travel. During the Employment Period, Employer shall reimburse Executive for reasonable travel, lodging, meal and other reasonable expenses incurred by him in connection with his performance of services hereunder upon submission of evidence, satisfactory to Employer, to support the existence and purpose of the incurred expense and otherwise in accordance with Employer’s business travel reimbursement policy applicable to senior executives as in effect from time to time. In the event Executive’s employment hereunder terminates for any reason, Employer shall reimburse Executive (or in the event of death, his personal representative) for expenses incurred by Executive on behalf of Employer prior to the date of his termination of employment to the extent such expenses have not been previously reimbursed by Employer pursuant to this Section 6(a).

(b)           Vacation and Sick Leave. During the Employment Period, Executive shall be entitled to vacation and sick leave as determined in accordance with the prevailing policies of Employer applicable to senior executives.

7.             Termination of Employment.

(a)           Termination Due to Death or Disability. In the event that Executive’s employment hereunder terminates due to death or is terminated by Employer due to Executive’s Disability (as defined below), no termination benefits shall be payable to or in respect of Executive except as provided in Section 7(f)(ii). If Employer desires to terminate Executive’s employment due to Executive’s Disability, it shall give notice to Executive as provided in Section 7(e). For purposes of this Agreement, “Disability” shall mean a physical or mental disability that prevents the performance by Executive of his duties hereunder lasting for a period of one hundred eighty (180) days or longer, whether or not consecutive, in any twelve (12) month period. The determination of Executive’s Disability shall be made by the Board after receiving an evaluation from an independent physician selected by Employer and reasonably acceptable to Executive and shall be final and binding on the parties hereto.

(b)           Termination by Employer for Cause. Employer may terminate Executive for Cause. If Employer desires to terminate Executive’s employment for Cause, it shall give notice to Executive as provided in Section 7(e). For purposes of this Agreement, “Cause” shall mean (i) the failure of Executive substantially to perform his duties hereunder (other than any such failure due to physical or mental illness) or other material breach by Executive of any of his obligations hereunder, after a demand for substantial performance or demand for cure of such breach is delivered, and a reasonable opportunity to cure is given, to Executive by Employer, which demand identifies the manner in which Employer believes that Executive has not substantially performed his duties or breached his obligations, (ii) Executive’s gross negligence or serious misconduct that has caused or would reasonably be expected to result in material injury to Employer or any of its affiliates, (iii) Executive’s conviction of, or entering a plea of nolo contendere to, a crime that constitutes a felony, or (iv) violation of any provision of Employer’s business ethics policy.

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(c)           Termination Without Cause. Employer may terminate Executive “Without Cause”. If Employer desires to terminate Executive’s employment Without Cause, it shall give notice to Executive as provided in Section 7(e). For purposes of this Agreement, a termination “Without Cause” shall mean a termination of Executive’s employment by Employer other than as described in Section 7(a) or for Cause as defined in Section 7(b).

(d)           Termination by Executive. Executive may terminate his employment at any time. If Executive desires to terminate for Good Reason, he shall give notice to Employer as provided in Section 7(e). Notwithstanding the foregoing, Executive may not terminate his employment for Good Reason if Employer has, within fifteen (15) days of the receipt of Executive’s written notice of his desire to terminate for Good Reason, cured the conduct alleged to give rise to the basis for the Good Reason termination. For purposes of this Agreement, “Good Reason” shall mean a termination of employment by Executive within thirty (30) days following the occurrence of any of the following events without Executive’s consent: (i) the assignment of Executive to a position the duties of which are a material diminution of the duties contemplated by Section 2(b) hereof, (ii) a reduction of Executive’s Base Salary or his Incentive Compensation Target Opportunity pursuant to Section 4 and as set forth on Attachment A, (iii) the assignment of Executive to a principal office located beyond a 50-mile radius of Executive’s then current work place, or (iv) a material breach by Employer of any of its obligations hereunder.

(e)           Notice of Termination. Any termination of Executive’s employment by Employer pursuant to Section 7(a), 7(b) or 7(c), or by Executive pursuant to Section 7(d), shall be communicated by a written “Notice of Termination” addressed to the other party to this Agreement. A “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) subject to the provisions of Section 7(i), specifies the effective date of termination. The failure by Executive or Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of the reason given for the termination of Executive’s employment shall not waive any right of Executive or Employer hereunder or preclude Executive or Employer from asserting such fact or circumstance in enforcing Executive’s or Employer’s rights hereunder.

(f)            Payments Upon Certain Terminations.

(i)            If Executive’s employment is terminated by Employer Without Cause or Executive terminates his employment for Good Reason, Employer shall pay or provide to Executive as severance payments and benefits the following:

A.Executive shall receive his Base Salary for the period from the Date of Termination (as defined in Section 7(i) below) through the expiration of the Severance Period as set forth on Attachment A, paid in semi-monthly installments as provided in Section 3.

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B.Executive shall receive the product of

(i)the amount of incentive compensation that would have been payable to Executive pursuant to the Annual Incentive Compensation Plan for the calendar year in which his employment terminates with achievement of performance objectives determined as of the Date of Termination, multiplied by

(ii)a fraction, the numerator of which is equal to the number of days in such calendar year that precede the Date of Termination and the denominator of which is 365.

C.Executive shall receive the amount of any incentive compensation earned and payable under the terms of the Long Term Incentive Plan as of the Date of Termination.

D.Subject to the other terms and conditions of this subsection (D), Executive and his dependents shall be permitted to participate in the health, dental and prescription drug benefits provided to active employees and their dependents under Employer’s Group Benefits Plan until Executive attains age 65 or, if later, the end of the Severance Period (“Continuation Coverage”). Executive shall be responsible for paying the premium charged for such Continuation Coverage at the applicable active employee rate. The Continuation Coverage provided to Executive and his dependents is intended to satisfy the continuation of coverage requirements of Section 4980B of the Code and Part 6 of Title I of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”). In the event that the period of Continuation Coverage expires prior to the end of the period of continuation coverage to which Executive and his dependents would be entitled under COBRA (the “COBRA Period”), Executive and his dependents may elect continuation coverage under COBRA (“COBRA Coverage”) for the remainder of the COBRA Period. Executive and his dependents shall be responsible for paying the full amount of the premium charged for such COBRA Coverage under the Employer’s Group Benefits Plan.

Notwithstanding the foregoing provisions of this subsection (D), in the event that the Continuation Coverage for whatever reason does not satisfy the continuation of coverage requirements of COBRA, Executive and his dependents shall be entitled to elect COBRA Coverage in lieu of the Continuation Coverage described in this subsection (D). In such event, Executive and his dependents shall be responsible for paying the full amount of the premiums charged for such COBRA Coverage under the Employer’s Group Benefits Plan, and Employer shall no longer have any obligation to provide Executive and his dependents with the Continuation Coverage described in this subsection (D).

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In the event Employer cannot reasonably provide Executive and his dependents with coverage under Employer’s Group Benefits Plan for the full Continuation Coverage period, Employer may provide coverage under one or more alternative plans or arrangements providing substantially equivalent coverage to the coverage then being provided to active employees and their dependants under Employer’s group benefits plan.

E.During the Severance Period Employer shall reimburse Executive for the premiums paid to continue coverage under any supplemental long-term disability policy maintained by Executive as of January 1, 2007.

F.During the Severance Period Executive shall be entitled to continue to participate in the Remington Arms Company, Inc. All Groups Life Insurance Plan (the “Life Insurance Program”) as in effect from time to time. Employer shall be responsible for paying the premiums for such coverage.

G.Executive shall receive his vested accrued benefits under the Remington Arms Company, Inc. Pension and Retirement Plan and the Remington Arms Company 401(k) Plan in accordance with me terms and provisions of such plans as in effect from time to time.

H.Executive shall receive his benefit under the Remington Supplemental Pension Plan (the “SERP”) in accordance with the terms and provisions of the SERP as in effect from time to time.

(ii)            Upon his death or Disability or if Employer terminates Executive’s employment for Cause, Employer shall pay Executive his full Base Salary through the Date of Termination, plus, in the case of termination upon Executive’s death or Disability, a pro rata amount of incentive compensation pursuant to the Annual Incentive Compensation Plan calculated in the same manner as Section 7(f)(i)(B) above (but excluding any time between the onset of a physical or mental disability that prevents the performance by Executive of his duties hereunder and the resulting Date of Termination). Executive shall not be entitled to severance compensation under any severance compensation plan of Employer when Executive receives compensation under this Section 7(f)(ii). Other than severance compensation, any benefits payable to or in respect of Executive under any otherwise applicable plans, policies and practices of Employer shall not be limited by this provision. Any payments required to be made on account of Executive’s death or Disability shall be made to Executive or his designated beneficiary in the case of death no later than two and one-half (21/2) months following the end of the calendar year in which Executive’s employment terminates on account of death or Disability.

(iii)          Notwithstanding anything to the contrary in this Agreement, in the event of Employee’s voluntary termination without Good Reason or his termination for Cause, Employer shall have the right to continue to pay Employee’s Base Salary for a period of up to twelve (12) months following the Date of Termination (which period shall also be referred to as the Severance Period), paid in semi-monthly installments as provided in Section 3, in exchange for Employee’s compliance with the covenants contained in Sections 9, 10 and 11.

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(g)           Conditions to Receipt of Payments Upon Certain Terminations

(i)            In consideration of the severance payments and benefits provided in Section 7(f), Employee agrees to (A) waive all rights to post termination benefits, other than vested equity awards and vested benefits under Employer’s tax-qualified and non-qualified deferred compensation plans, if any, after the Date of Termination, (B) waive any claims to other severance or termination payments or benefits, and (C) execute a general release releasing Employer from all claims, including but not limited to claims under the Age Discrimination in Employment Act or for wrongful discrimination and wrongful discharge from Employer, which release shall be in substantially the form attached hereto as Attachment B. Prior to Executive’s termination of employment, the release of claims may be revised by Employer. Employer may in any event modify the release of claims to conform it to the laws of the local jurisdiction applicable to Executive.

(ii)           Executive shall generally not have a duty to mitigate the costs to Employer under Section 7(f), except that (A) if the period over which Employer continues to pay Executive his Base Salary pursuant to Section 7(f) extends beyond twelve (12) months from the Date of Termination, the amount payable pursuant to Section 7(f) as Base Salary for any period after the expiration of such twelve (12) months shall be reduced (but not below zero) by the amount of compensation received by Executive for services performed in any capacity, including self-employment, and (B) the continued benefits described in subsections (E) through (G) (“Continued Benefits”) for such period shall be reduced or canceled to the extent of any comparable benefit coverage offered to Executive by a subsequent employer during the period the Continued Benefits are to be provided.

(iii)          Notwithstanding the provisions of Section 7(f), Employer shall be entitled to provide an alternate form of any particular benefit described in subsections (D) through (G) (e.g., an individual insurance policy) so long as such alternate form of benefit is substantially equivalent and no lapses in coverage of Executive result from such change in benefits.

(h)           Date of Termination. As used in this Agreement, the term “Date of Termination” shall mean (A) if Executive’s employment is terminated by his death, the date of his death, (B) if Executive’s employment is terminated by Employer for Cause, the date on which Notice of Termination is given or, if later, the date of termination specified in such Notice, as contemplated by Section 7(e), and (C) if Executive’s employment is terminated by Employer Without Cause, due to Executive’s Disability or by Executive for Good Reason, thirty (30) days after the date on which Notice of Termination is given as contemplated by Section 7(e) or, if no such Notice is given, the actual date of termination of Executive’s employment; provided,however, that Employer may discontinue Employee’s services hereunder during any notice period as long as Executive continues to receive his Base Salary and benefits as if he were continuing to provide such services.

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8.             Unauthorized Disclosure.

(a)           Without the prior written consent of the Board or its authorized representative, except to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency, in which event, Executive will use his best efforts to consult with Employer’s Chairman prior to responding to any such order or subpoena, and except as required in the performance of his duties hereunder, Executive shall not disclose any confidential or proprietary trade secrets, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, manufacturing plans, any information covered by the Uniform Trade Secrets Act of Delaware or any other similar legal protections that may be applicable (or any successor thereto), management organization information (including data and other information relating to members of the Board, the Board of Directors of RACI Holding, Inc. (“Holding”) and management of Employer or Holding), operating policies or manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information relating to Holding, Employer or any of their respective subsidiaries or affiliates or that Holding, Employer or any of their respective subsidiaries or affiliates may receive belonging to suppliers, customers or others who do business with Holding, Employer or any of their respective subsidiaries or affiliates (collectively, “Confidential Information”) to any third person unless such Confidential Information has been previously disclosed to the public or is in the public domain (other than by reason of Executive’s breach of this Section 8). The parties expressly agree that Confidential Information does not exist in written form only.

(b)           Executive acknowledges and agrees that he will have broad access to Confidential Information, that Confidential Information will in fact be developed by him in the course of his employment with Employer, and that Confidential Information furnishes a competitive advantage in many situations and constitutes, separately and in the aggregate, a valuable, special and unique asset of Employer. Executive shall use his best efforts to prevent the removal or disclosure of any Confidential Information from the premises of Employer, except as required in connection with the performance of his duties as an executive of Employer. Executive agrees that all Confidential Information (whether now or hereafter existing) conceived, discovered or developed by him during the Employment Period belongs exclusively to Employer and not to him.

9.             Non-Competition.

(a)           During the Employment Period and thereafter during the Restriction Period (as defined in this Section 9), Executive shall not, directly or indirectly, engage in, become employed by, serve as an agent or consultant to, or become a partner, principal or stockholder (other than a holder of less than one percent (1%) of the outstanding voting shares of any publicly held company) of, or otherwise support, any business within the Restricted Area (as defined in this Section 9) which engages in the Business or which is competitive with the Business. For purposes of this Agreement, the “Restriction Period” shall be equal to any Severance Period, and “Restricted Area” means any geographical area in which Employer and its affiliates are engaged in the Business.

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(b)           Executive agrees and acknowledges that Employer and its affiliates are engaged in the Business and sell and distribute their products throughout the United States and other jurisdictions throughout the world, and that it would not be reasonable to limit the geographic scope of this covenant to any particular geographic location.

10.           Non-Solicitation of Employees. During the Employment Period and thereafter during the Restriction Period, Executive shall not, directly or indirectly, for his own account or for the account of any other person or entity with which he is or shall become associated in any capacity, (a) solicit for employment, employ or otherwise interfere with the relationship of Employer with any person who at any time during the six (6) months preceding such solicitation, employment or interference is or was employed by or otherwise engaged to perform services for Employer other than any such solicitation or employment during Executive’s employment with Employer on behalf of Employer, or (b) induce or attempt to induce any employee of Employer who is a member of management to engage in any activity which Executive is prohibited from engaging in under any of Sections 8, 9, 10, 11, 12 or 13hereof or to terminate his or her employment with Employer.

11.           Non-Solicitation of Customers. During the Employment Period and thereafter during the Restriction Period, Executive shall not, directly or indirectly, solicit, divert or otherwise attempt to establish for himself or any other person, firm or entity (other than Employer or its subsidiaries or affiliates) any business relationship of a nature that is competitive with the Business or any relationship of Employer with any person, firm or corporation which during the twelve (12) month period preceding the prohibited conduct was a customer, client or distributor of Employer or any of its subsidiaries or affiliates.

12.         Return of Property. In the event of the termination of Executive’s employment for any reason, or such earlier time as Employer may request, Executive will deliver to Employer all of Employer’s property and documents and data of any nature and in whatever medium pertaining to Executive’s employment with Employer (except for that which is personal to Executive), and he will not take with him any such property, documents or data of any description or any reproduction thereof, or any documents containing or pertaining to any Confidential Information.

13.         Non-Disparagement. During the Employment Period and thereafter during the Restriction Period, Executive will not make any statement, written or oral, whether expressed as a fact, opinion or otherwise, to any person (or induce any third party to make any such statement) which disparages, impugns, maligns, defames, libels, slanders or otherwise casts in an unfavorable light Employer or any officer, director, shareholder or employee of Employer.

14.         Failure to Comply with Covenants.

(a)           Without limiting the damages available to Employer, in the event that Executive fails to comply with any of the covenants in Sections 8, 9, 10, 11, 12, or 13, to the extent applicable, following his termination of employment, and such failure continues following delivery of notice thereof by Employer to Executive, all rights of Executive and any person claiming under or through him to the payments and benefits described in Sections 7(f) and (h) shall thereupon terminate and no person shall be entitled thereafter to receive any payments or

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benefits hereunder; provided, however, that Executive shall not have the option of foregoing such payments and benefits in order to be relieved of compliance with such covenants.

(b)           Executive acknowledges and agrees that the covenants and obligations of Executive described in Sections 8, 9, 10, 11, 12 or 13 relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause Employer irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that Employer shall be entitled to an injunction, restraining order or such other equitable relief (without the requirement to post bond) as a court of competent jurisdiction may deem necessary or appropriate to restrain Executive from committing any violation of the covenants and obligations referred to in this Section 14. These injunctive remedies are cumulative and in addition to any other rights and remedies Employer may have at law or in equity. If Employer does not prevail in obtaining any such injunctive relief, Employer shall reimburse Executive for any legal expenses incurred by him in defending the imposition of such injunctive relief.

15.           Intellectual Property. During the Employment Period, Executive will disclose to Employer all ideas, inventions and business plans developed by him during such period which relate directly or indirectly to the Business of Employer or any of its subsidiaries or affiliates, including without limitation, any process, operation, product or improvement which may be proprietary, patentable or copyrightable. Executive agrees that all of the foregoing will be the property of Employer and that he will at Employer’s request and cost do whatever is necessary to secure the rights thereto by patent, copyright or otherwise for Employer.

16.           Assignability; Merger or Consolidation; Assumption of Agreement.

(a)           The obligations of Executive hereunder may not be delegated, and Executive may not, without Employer’s written consent, assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or any interest herein. Any such attempted delegation or disposition shall be null and void and without effect.

(b)           Employer and Executive agree that this Agreement and all of Employer’s rights and obligations hereunder may be assigned or transferred by Employer. Employer will require any successor (by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Employer, by agreement in form and substance reasonably satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no such succession had taken place. Failure of Employer to obtain such agreement prior to the effectiveness of any such succession shall entitle Executive to compensation from Employer in the same amount and on the same terms as Executive would be entitled hereunder if Employer terminated his employment Without Cause as contemplated by Section 7(c), except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed both the date of the Notice of Termination and the Date of Termination.

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17.           Entire Agreement. Except as otherwise expressly provided herein, this Agreement (including the Attachments hereto) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and all promises, representations, understandings, arrangements and prior agreements (including, without limitation, any predecessor agreement and any agreement entered into prior to any predecessor agreement) relating to such subject matter (including, without limitation, those between Executive and any other person or entity) are merged into and superseded by this Agreement, and the terms of any prior employment agreement or arrangement shall, from and after the date of this Agreement, be of no further force or effect.

18.           Indemnification. Employer agrees that it shall indemnify, defend and hold harmless Executive to the fullest extent permitted by law from and against any and all liabilities, costs, claims and expenses, including without limitation all costs and expenses incurred in defense of litigation, including attorneys’ fees, arising out of the employment of Executive hereunder, except to the extent arising out of or based upon the gross negligence or willful misconduct of Executive. Costs and expenses incurred by Executive in defense of litigation, including attorneys’ fees, shall be paid by Employer in advance of the final disposition of such litigation upon receipt of an undertaking by or on behalf of Executive to repay such amount if it shall ultimately be determined that Executive is not entitled to be indemnified by Employer under this Agreement.

19.           Compliance with Code Section 409A. To the extent applicable, the parties hereto intend that this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, and all rules, regulations and other similar guidance issued thereunder (“Code Section 409A”). The parties agree that this Agreement shall at all times be interpreted and construed in a manner to comply with Code Section 409A and that should any provision be found not in compliance with Code Section 409A, the parties are contractually obligated to execute any and all amendments to this Agreement deemed necessary and required by Employer’s legal counsel to achieve compliance with Code Section 409A unless such action results in substantial additional costs to Employer. By execution and delivery of this Agreement, Executive irrevocably waives any objections he may have to the amendments required by Code Section 409A. The parties also agree that in no event shall any payment required to be made pursuant to this Agreement be made to Employee unless compliant with Code Section 409A. In the event amendments are required to make this Agreement compliant with Code Section 409A, Employer shall use its best efforts to provide Executive with substantially the same benefits and payments he would have been entitled to pursuant to this Agreement had Code Section 409A not applied, but in a manner that is compliant with Code Section 409A and does not result in substantial additional costs to Employer. The manner in which the immediately preceding sentence shall be implemented shall be the subject of good faith negotiations between the parties.

20.           Miscellaneous.

(a)           Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be resolved by binding arbitration. The arbitration shall be held within the State of Delaware, and except to the extent inconsistent with this Agreement, shall be conducted in accordance with the Employment Arbitration Rules of the American Arbitration Association then in effect at the time of the arbitration, and otherwise in accordance with

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principles which would be applied by a court of law or equity. The arbitrator shall be acceptable to both Employer and Executive. If the parties cannot agree on an acceptable arbitrator, the dispute shall be heard by a panel of three arbitrators, one appointed by each of the parties and the third appointed by the other two arbitrators. All expenses of arbitration shall be borne by the party who incurs the expense or, in the case of joint expenses, by both parties in equal portions, except that, in the event Executive prevails on the principal issues of such dispute or controversy, all such expenses shall be borne by Employer. Notwithstanding the above, however, because time is of the essence, whenever a violation or threatened violation of the covenants contained in Sections 8, 9, 10, 11, 12 and 13 is alleged, then the parties agree that the enforcement of such covenants and any request for injunctive relief pursuant to Section 14 shall be excepted from the provisions of this Section 20(a).

(b)           Governing Law; Consent to Jurisdiction.

(i)            This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (without regard to conflict of law principles thereof) applicable to contracts made and to be performed therein, and in any action or other proceeding that may be brought arising out of, in connection with or by reason of this Agreement, the laws of the State of Delaware shall be applicable and shall govern to the exclusion of the laws of any other forum.

(ii)           Any action to enforce any of the provisions of this Agreement, except as provided in Section 20(a), shall be brought exclusively in a court of the State of Delaware or in a Federal court located within the State of Delaware, and by execution and delivery of this Agreement, Executive and Employer irrevocably consent to the exclusive jurisdiction of those courts and Executive hereby submits to personal jurisdiction in the State of Delaware. Executive and Employer irrevocably waive any objection, including any objection based on lack of jurisdiction, improper venue or forum non conveniens, which either may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect to this Agreement or any transaction related hereto. Executive and Employer acknowledge and agree that any service of legal process by mail in the manner provided for notices under this Agreement constitutes proper legal service of process under applicable law in any action or proceeding under or in respect to this Agreement.

(c)           Taxes. Employer may withhold from any payments made under this Agreement all federal, state, city or other applicable taxes as shall be required by law.

(d)           Amendments. Except as otherwise provided in Section 19, no provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is approved by the Board or a duly authorized committee thereof. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by any party hereto to assert his or its rights hereunder on any occasion or series of occasions.

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(e)           Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. Specifically, in the event any part of the covenants set forth in Sections 8, 9, 10, 11, 12 or 13 are held to be invalid or unenforceable, the remaining parts thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included therein. In the event that any provision of Sections 8, 9, 10 or 11 is declared by a court of competent jurisdiction to be overbroad as written, Executive specifically agrees that the court should modify such provision in order to make it enforceable, and that a court should view each such provision as severable and enforce those severable provisions deemed reasonable by such court.

(f)            Notices. Any notice or other communication required or permitted to be delivered under this Agreement shall be (i) in writing, (ii) delivered personally, by courier service or by certified or registered mail, first-class postage prepaid and return receipt requested, (iii) deemed to have been received on the date of delivery or on the third business day after the mailing thereof, and (iv) addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

(i)            If to Employer, to it at:

Remington Arms Company, Inc.

Post Office Box 700

Madison, North Carolina 27025

Attention: Secretary

(ii)           If to Executive, to him at the address listed in Section 5 of Attachment A.

(g)           Survival. Sections 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 19, 20(a), (b), (c) and (f) and, if Executive’s employment terminates in a manner giving rise to a payment under Section 7(f), Section 7(f) shall survive the termination of Executive’s employment hereunder.

(h)           No Conflicts. Executive and Employer each represent that they are entering into this Agreement voluntarily and that Executive’s employment hereunder and each party’s compliance with the terms and conditions of this Agreement will not conflict with or result in the breach by such party of any agreement to which he or it is a party or by which he or it may be bound.

(i)            Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

(j)            Headings. The sections and other headings contained in this Agreement are for the convenience of the parties only and are not intended to be a part hereof or to affect the meaning or interpretation hereof.

(k)           Recitals. The Recitals to this Agreement are incorporated herein and shall constitute an integral part of this Agreement.

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21.           Acknowledgement. Executive (a) has had a reasonable amount of time in which to review and consider this Agreement prior to signature, (b) has in fact read the terms of this Agreement, (c) has the full legal capacity to enter into this Agreement and has had the opportunity to consult with legal counsel before signing this Agreement, (d) fully and completely understands the meaning, intent and legal effect of this Agreement, and (e) has knowingly and voluntarily executed this Agreement.

[Signatures on following page.]

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IN WITNESS WHEREOF, Employer has duly executed this Agreement by its authorized representative and Executive has hereunto set his hand, in each case effective as of the date first above written.

REMINGTON ARMS COMPANY, INC.
By:	/s/ Thomas L. Millner
Name:	Thomas L. Millner
Title:	CEO
EXECUTIVE:
E. Scott Blackwell
/s/ E. Scott Blackwell
Signature

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EX-10.10

Exhibit 10.10

EMPLOYMENT AGREEMENT

This Agreement is made and entered into as of the 1st day of Nov., 2008, by and between John A. DeSantis (hereinafter referred to as the “Executive”) and Bushmaster Firearms International, LLC, a Delaware limited liability company (hereinafter referred to as the “Company”).

The Company hereby agrees to employ the Executive and the Executive accepts such employment upon the terms and conditions set forth in this Agreement.

1.Duties.

1.1Executive shall serve the Company as President and General Manager during the term of this Agreement and shall have such authority and perform such duties not inconsistent with such position as may from time to time be prescribed by the Board of Directors of the Company. Executive shall report to the Board or such other person designated by the Board of Directors of the Company.

1.2Executive shall devote his full time and best efforts to the performance of his duties for the Company and shall not engage in any other business activities during the Employment Term without prior written consent of the Company, acting through its Board of Directors; provided that Executive may manage his personal investments to the extent such activities do not otherwise violate the terms of this Agreement or interfere with the performance of his duties to the Company.

2.Term and Termination.

2.1Term: The term of Executive’s employment under this Agreement will commence on Nov 1, 2008 (the “Commencement Date”) and continue for two years through Nov 1, 2010 (the “Employment Term”) unless sooner terminated as set forth in Section 2.2 of this Agreement. Upon expiration of the Employment Term, the parties may by mutual agreement renew this Agreement. Such renewal must be in writing. Upon expiration of the Employment Term, should Executive continue in the Company’s employ and the parties do not execute a written renewal or new employment agreement, (i) Executive shall be an “Executive at will” at the same level of compensation as set forth in Sections 3.1 and 3.2, (ii) the provisions of Section 2.2 of this Agreement shall apply in accordance with its terms to any subsequent termination of employment and (iii) Sections 6.1, 6.2, 6.3, 6.4, 6.5, 7 and 12 below (and no other terms of this Agreement) shall continue to be applicable in accordance with their terms subsequent to the Employment Term.

2.2Termination:

(a)Executive’s employment under this Agreement shall be terminated upon the earliest to occur of any of the following:

(i)the death of the Executive.

(ii)the Executive’s inability to perform the essential functions of his duties with or without reasonable accommodation on account of disability or incapacity for a period of six (6) or more months, as reasonably determined by the Company’s Board of Directors.

(iii)written notice to Executive that the Company is terminating Executive’s employment hereunder without cause.

(iv)the termination of Executive’s employment by Executive because of a material adverse change in the duties of Executive from those described in Section 1 or a requirement by the Company that Executive relocate his place of residence by more than 50 miles, after written notice from Executive to the Company of the specific duties and changes in Executive’s duties to which he objects, the reasons for his objections, and his intent to terminate his employment because of such changes, said written notice to be served on the Company by the Executive within 90 days of the Executive’s knowledge of such alleged changes, and the Company’s failure to modify within thirty (30) days the duties of the Executive to conform to those described in or permitted by Section 1. The sale of the Company or any other change in control of the Company shall not, in and of itself, constitute a material adverse change in duties of the Executive.

(v)written notice to the Company of the termination of Executive’s employment by Executive at any time for any reason (other than as provided in clause (iv) above) including, without limitation, resignation or retirement.

(vi)the termination of Executive’s employment by Executive at any time for a material breach of this Agreement by the Company after written notice of such breach to the Company and the Company’s failure to cure such breach within thirty (30) days.

(vii)the termination of Executive’s employment by the Company at any time “for cause,” such termination to take effect immediately upon written notice from the Company to Executive. For purposes of this Agreement, the term “for cause” shall mean (a) if the Executive is convicted of, or pleads guilty or no contest to, a

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felony or any crime involving moral turpitude, dishonesty or theft; or (b) material failure by the Executive to comply with applicable laws or governmental regulations with respect to the Company’s operations or the performance of duties of the Executive; or (c) actions by the Executive involving embezzlement, theft, sexual harassment, discrimination, fraud or other acts of a criminal nature by the Executive in his dealings with the Company or its employees or representatives; or (d) Executive’s continued failure to perform his substantial job functions after written notice from the Company; or (e) Executive’s material violation of any written policy of the Company; or (f) Executive’s failure to fully cooperate in any investigation or audit of the Company or its affiliates, in each case as reasonably determined by the Board of Directors of the Company. Upon such termination for cause, the only obligation the Company will have under this Agreement will be to pay Executive’s unpaid base salary accrued through the date of termination.

(b)Upon the termination of this Agreement pursuant to clauses (iii), (iv) or (vi) only of Section 2.2 (a), Executive shall be entitled to receive as a severance payment, continued payments of his then current base salary in accordance with the Company’s regular payroll policies for 24 months following his date of termination. Executive’s severance payments shall be reduced by the amount of any disability insurance payments from coverage provided by the Company or its affiliates that are received by Executive during such severance payment period. The severance payments will be paid in accordance with the Company’s applicable payroll provisions and shall be reduced by any applicable withholding requirements. In addition, for the duration of Executive’s receipt of severance payments hereunder (but without abbreviating such period due to a prepayment by the Company for purposes of this sentence) or until Executive becomes eligible for similar benefits due to subsequent employment, Executive shall continue to receive the same health and dental benefits he had received immediately prior to such termination pursuant to Section 4 hereof, solely at the Company’s expense.

(c)A breach by Executive of any undertaking set forth in Sections 6 or 7 hereof shall result in an immediate termination of the rights of Executive hereunder (but shall not relieve Executive of his obligation to comply with Sections 6 or 7 hereof).

Upon the termination of Executive’s employment for any reason, by either party, the Executive shall immediately return to the Company any property of the Company in his possession and, in the case of a termination potentially entitling Executive to payment pursuant to Section 2.2(b) hereof, execute and deliver to the Company a general release of claims against the Company, its directors, officers, shareholders, employees and agents in form satisfactory to the Company; return of this property and the execution and delivery of such release shall be a

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precondition to the payment of any further compensation owed by the Company to the Executive, if any, pursuant to Section 2.2 (b) or the exercise of any options to purchase Common Stock of the Company granted to Executive pursuant to this Agreement.

3.Compensation. For all services rendered by the Executive, the Company shall pay to the Executive:

3.1Base Salary: Base salary at the rate of $350,000 per annum, payable in accordance with the Company’s regular payroll policies commencing upon the Commencement Date.

3.2Bonuses:   Executive shall be eligible to earn an annual target bonus of up to 100% of his base salary, with an opportunity to earn up to 200% of his base salary, which, in each case, shall be earned based on the achievement of individual and/or Company performance goals established from time to time by the Board of Directors of the Company.

4.Executive Benefit Plans; Fringe Benefits.

Executive shall be entitled to (i) participate in whatever health and dental insurance, short term and long term disability leave and 401(k) plans are maintained by the Company from time to time for its salaried exempt employees and (ii) four weeks of vacation per calendar year, such vacation to be accrued and used in accordance with applicable Company policy.

5.Equity Compensation.

The Executive shall continue to participate in such equity and option agreements that he has entered into previously with the Company or its parents.

6.Restrictive Covenants.

In consideration of this Employment Agreement and the severance benefits conferred herein, Executive agrees to the following:

6.1Confidentiality: Executive agrees to maintain in strictest confidence all proprietary data and other confidential or non-public information (whether concerning the Company or any of its customers or proposed customers) obtained or developed by Executive before or in the course of his employment with the Company or with Bushmaster Firearms, Inc., a Maine corporation, substantially all of the assets of which were purchased by the Company on or about the Commencement Date. Such information and data shall include but not be limited to the Company’s trade secrets, patents, inventions, systems, computer programs and software, procedures, manuals, confidential reports and communications and lists of customers and clients, as well as information that the Company may obtain from third parties in confidence or subject

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to non-disclosure or similar agreements. All such information and data is and shall remain the exclusive property of the Company (or, in certain circumstances, its particular customer) and shall be used solely for the benefit of the Company. Any such information and data in Executive’s possession after termination of his employment shall be promptly returned to the Company. Executive’s obligations under this Section 6.1 shall survive any termination of his employment.

6.2Non-Competition: Executive acknowledges that he is a key employee of the Company and his talents and services are of a special, unique, unusual and extraordinary character and are of particular and peculiar benefit and importance to the Company. In order for the Company to protect its interests against the competitive use of any confidential information, knowledge or relationships concerning the Company and its business to which Executive will have access by virtue of the special nature of his relationship with the Company and his involvement in its affairs, and in consideration of the payments made to Executive hereunder and the agreements of the parties herein, Executive agrees that, for so long as this Agreement is in effect and for a period of two (2) years following the termination of Executive’s employment hereunder, Executive will not own (by ownership of securities or otherwise), manage, operate, control, engage in as an equity participant or be employed by or act as a consultant to, or be connected in any manner with, the ownership, management, operation or control of any business a substantial portion of whose business directly or indirectly competes with that of the Company. In recognition of the geographic extent of the Company’s existing and anticipated operations and the nature of the Company’s business and competitive circumstances, the restrictive covenant contained in this Section 6.2 shall apply throughout North America.

6.3Solicitation: Executive agrees that, for so long as this Agreement is in effect and for a period of two (2) years following the termination of Executive’s employment hereunder, Executive shall not solicit or induce any employee of the Company to leave the employ of the Company, or to hire or attempt to hire any person who was an employee of the Company within the 12 month period preceding such action on behalf of Executive or on behalf of any other person or entity, and Executive further agrees, during such period, not to interfere with, disrupt or attempt to disrupt any past, present or prospective contractual or other relationship between the Company and any of its clients, customers, suppliers or employees, current or prospective.

6.4Non-Disparagement. Executive agrees that he shall not make any statement that would disparage the Company, its subsidiaries or affiliates, their directors, officers or employees or any product line of the Company or its affiliates. The Company shall not authorize the making of any statement that would disparage Executive.

6.5Remedy for Breach: The parties recognize that the services to be rendered under this Agreement by Executive are special, unique, and of an extraordinary character, and that in the event of a breach of this Section 6 by Executive, then the Company shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction in equity, to enforce the specific performance of any terms, conditions, obligations and requirements of this Section 6, and/or to enjoin the Executive from continuing those actions which are in breach of this Agreement, or to take any or all of the foregoing actions. Without limitation of the foregoing, in

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the event of a breach by Executive of this Section 6, Executive shall forfeit any and all rights to receive severance payments under this Agreement. Nothing herein contained shall be construed to prevent the pursuit of any other remedy, judicial or otherwise, in case of any breach of this Section 6.

7.Inventions and Patents.   Executive hereby assigns to Company any and all right, title and interest in and to any and all ideas, inventions, discoveries, trademarks, trade names, copyrights, patents and all other information and data of any kind developed by the Executive during the period of his employment with the Company, and shall cooperate with the Company and execute any and all documents necessary to effect such assignments.

8.Section Headings. Section headings contained in this Agreement are for convenience only and shall in no manner be construed as a part of this Agreement.

9.Amendment. This Agreement may be amended or modified only in writing signed by both parties.

10.Counterparts. This Agreement may be executed in two or more counterparts each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

11.Waiver. The failure of either party hereto in any one or more incidences to insist upon the performance of any of the terms or conditions of this Agreement, or to exercise any rights or privileges conferred in this Agreement, or the waiver of any breach of any of the terms of this Agreement shall not be construed as waiving any such terms and the same shall continue to remain in full force and effect as if no such forbearance or waiver had occurred.

12.Applicable Law. This Agreement has been entered into in the State of New York. This Agreement shall be construed according to and governed by the laws of the State of New York (excluding conflict of laws principles), and Executive expressly irrevocably consents to submit himself to the jurisdiction of the federal and state courts of the State of New York, which shall be the exclusive forums in which any disputes arising under this Agreement or otherwise in connection with Executive’s relationship with the Company shall be adjudicated.

13.Reformation and Severability. In the event any provision or portion of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, any such provision or portion may be reformed by the court to the minimum extent necessary in order to make it valid or enforceable as so reformed, whereupon the parties agree that said provision or portion as so reformed shall be valid and enforceable by or upon them without

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further action by the parties. Any such holding shall not invalidate or render unenforceable any other term contained in this Agreement.

14.Entire Agreement. This Agreement is intended by the parties to integrate all prior discussions and writings, including memoranda and e-mail messages, term sheets, and similar expressions of intent into a single, complete statement of the understandings of the parties with respect to the matters covered by this Agreement and the documents referred to in it. Accordingly, the parties agree that this Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. In addition, the parties agree that this Agreement may not be amended except by a written agreement executed by the party to be charged with the amendment. The parties further agree and acknowledge that

(i)this Agreement has not been entered into under undue time pressure, and that both parties have had an adequate opportunity to review this Agreement with counsel,

(ii)no oral assurances have been given by either party that this Agreement is an interim agreement or that a more comprehensive agreement is or will be forthcoming,

(iii)there are no oral conditions or promises that supplement or modify this Agreement, and

(iv)this Section 14 does not constitute “boilerplate”, but rather is a critical substantive provision of this Agreement.

15.Assignment and Successors. Executive’s rights under this Agreement shall not be assignable by the Executive. This Agreement may be assigned by Company and shall inure to the benefit of and be binding upon Company, its successors and assigns.

16.Notices.  Any notice to be given under this Agreement must be in writing and either delivered in person or sent by first class certified or registered mail, return receipt requested, postage prepaid, if to the Company, in care of the board of directors, and if to the Executive, at his home address or addresses as either party shall have designated in writing to the other party hereto.

17.Representation. Executive represents and warrants that there is not agreement between him and any other person or entity that could interfere with the performance of his duties and obligations hereunder.

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IN WITNESS WHEREOF, Company has hereunto caused its corporate name to be signed and sealed, and Executive has hereunto set his hand, all being done in duplicate originals, with one original being delivered to each party as of the day and year first above written.

BUSHMASTER FIREARMS INTERNATIONAL LLC
By:
Name:	Paul Miller
Title:	Chairman of the Board
/s/ John A. DeSantis
John A. DeSantis

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EX-10.11

Exhibit 10.11

PERSONAL & CONFIDENTIAL

NOT VALID UNLESS EXECUTED BY BOTH PARTIES

April 6, 2009

Mr. Thomas L. Millner

3676 Dunloy Way

High Point, NC 27262

Re: Purchase and Separation Agreement and General Release

Dear Tommy:

This letter agreement (this “Agreement”) confirms your resignation from your employment with Freedom Group, Inc. (the “Company”) and the Company’s subsidiaries and related entities, and your resignation from the Boards of Directors of the Company and its subsidiaries, in each case, effective as of March 16, 2009 (the “Separation Date”). By signing this Agreement, you agree to the terms and conditions set forth below.

A.Purchase and Sale of Company Stock. Subject to your compliance with the obligations set forth in this Agreement, the Company agrees to the following:

1.Purchase and Sale. On the terms and subject to the conditions of this Agreement, the Company hereby agrees to purchase, and you agree to sell to the Company, all of your shares of Common Stock of the Company (the “Common Stock”) and Preferred Stock of the Company (the “Preferred Stock” and, collectively with the Common Stock, the “Company Stock”) as follows: (i) 70,000 shares of Common Stock for an aggregate price of $225,400 (the “Common Stock Purchase Price”) and (ii) 70,000 shares of Preferred Stock for an aggregate price of $831,434 (the “Preferred Stock Purchase Price” and, collectively with the Common Stock Purchase Price, the “Purchase Price”).

2.Closing. The closing of the purchase and sale of the Company Stock contemplated by this Agreement (the “Closing”) shall take place on the Effective Date, as that term is defined in Section I(4) below.

3.Delivery of and Payment for the Company Stock. At the Closing,

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(a)you will deliver to the Company the share certificates representing the Company Stock; and

(b)the Company will pay you the Purchase Price by wire transfer of immediately available funds to a bank account specified by you.

B.Additional Payment. As an inducement for you to enter into this Agreement, at the Closing the Company will pay to you, in addition to the Purchase Price, the sum of $324,600 by wire transfer of immediately available funds to a bank account specified by you.

C.Options. Notwithstanding any contrary provisions of the Nonqualified Stock Option Award Agreement, dated May, 2008, which was entered into by you and the Company pursuant to the American Heritage Arms, Inc. 2008 Stock Incentive Plan (the “AHA-SIP”), all stock options, whether vested or unvested, that were granted to you under the AHA-SIP shall be cancelled effective as of the Separation Date.

D.Company Representations and Warranties. The Company hereby represents and warrants to you that:

1.Corporate Organization; Authority to Conduct Business. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all corporate power and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and as proposed to be conducted and to own, operate and lease its properties and assets.

2.Authority. The Company has the requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

3.Legal and Binding Agreement. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.

E.Millner Representations and Warranties. You hereby represent and warrant to the Company that:

1.Legal and Binding Agreement. This Agreement has been duly executed and delivered by you and constitutes a legal, valid and binding agreement by you, enforceable against you in accordance with its terms.

2.Title. The Company Stock is all of the outstanding equity interests (other than unexpired options) of the Company beneficially owned by you. You own the Company Stock beneficially and of record, free and clear of any encumbrances and upon the Closing will transfer to the Company good and valid title to the Company Stock free and clear of any encumbrances.

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3.No Other Representations. Except as set forth herein, no representations or warranties have been made to you by the Company or any officer, employee, agent or affiliate of the Company with respect to this Agreement or the transactions contemplated hereby.

F.Millner’s Obligations. In consideration of the payments and benefits described in Sections A and B above, to which you are not otherwise entitled, you voluntarily agree to the following:

1.Your signature below indicates that:

(a)You are knowingly and voluntarily waiving and releasing forever whatever claims you have or may have against the Company and its direct and indirect parents (including Cerberus Capital Management, L.P.), and their subsidiaries and affiliates, together with their respective officers, members, managers, directors, partners, shareholders, investors, principals, executives, consultants, employees and agents, and any of their respective predecessors and successors in interest and assigns (collectively, the “Releasees”), based on your employment with the Company and any of its affiliates and the cessation of your employment (other than claims you may have based upon your rights under this Agreement).

(b)This release includes a complete waiver of all rights and claims that may have arisen, whether known or unknown, against any of the Releasees, including but not limited to, all rights and claims based on Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967 (including the Older Workers Benefit Protection Act), the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the Equal Pay Act, the Employee Retirement Income Security Act of 1974, the New York State Human Rights Law, and the New York Labor Laws, and the North Carolina Equal Employment Practices Act, and the North Carolina Labor Laws and any other similar state or local employment law (if and to the extent applicable and as any of the foregoing may be amended from time to time), and any common law, public policy, contract (whether oral or written, express or implied) or tort law, and any other local, state or federal law, regulation or ordinance having any bearing whatsoever on the terms and conditions of your employment and the cessation thereof and in any way related to your employment relationship with any of the Releasees.

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(c)You acknowledge that you may hereafter discover claims or facts in addition to or different from those which you now know or believe to exist with respect to the subject matter of this Agreement and which, if known or suspected at the time of executing this Agreement, may have materially affected this Agreement or your decision to enter into this Agreement. Nevertheless, you hereby waive any right, claim or cause of action that might arise as a result of such different or additional claims or facts to the extent that those rights, claims, or causes of action are based on your employment or the cessation thereof.

(d)You agree that if any court or governmental agency assumes jurisdiction over any claim, demand, charge, complaint, lawsuit or other legal action that is, in whole or in part, the subject of the release provided for in this Agreement or that, in whole or in part, pertains to your employment or the cessation thereof, you shall not be entitled to any monetary or other benefit that results from such claim, demand, charge, complaint or lawsuit, except as otherwise expressly required by applicable law.

2.The employment agreement entered into between you and Remington Arms Company, Inc. as of the 31st day of June, 2007 (the “Employment Agreement”), shall cease to have any further force or effect, as of the Separation Date, except as set forth in Sections H(4) and (5) and Section J(7) below, and by signing this Agreement you are acknowledging that no further payments or other compensation or benefits, other than as provided herein, are due to you thereunder or hereunder.

3.Except as may be required by law, you will not disclose the contents or substance of this Agreement to anyone except members of your immediate family and any tax or legal counsel you may consult regarding the meaning or effect hereof, and you will instruct each of the foregoing not to disclose the same.

4.You agree to provide assistance to the Company and its affiliates by making yourself available to provide information to, and to consult with, the Company and its affiliates on matters about which you have knowledge as a result of your employment, including but not limited to all matters (formal or informal) in connection with any investigations, litigation (potential or ongoing) and administrative, regulatory or other proceedings which currently exist, or which may have arisen prior to or which arise following the signing of this Agreement. Such cooperation will include, but not be limited to, your willingness to be interviewed by representatives of the Company and its affiliates and to participate in any such proceedings by deposition or testimony. In the event that you are required to retain separate legal counsel with respect to such deposition or testimony, the Company will reimburse you for such reasonable costs thereof.

In the event that you are subpoenaed or otherwise required by order of a court of competent jurisdiction or other legal process to appear in connection with any matter or proceeding involving the Company or its affiliates, you will notify the

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Company in accordance with the notice provisions set forth in Section J(1) below at least fifteen (15) business days in advance of such appearance, unless to do so would place you in violation of the subpoena, court order or other legal process, in which case you shall give as much notice as possible without placing yourself in violation of the subpoena, court order or other legal process.

G.Mutual Obligations and Understandings.

1.You represent that you have not disparaged, and will not disparage, directly or indirectly, the Company or any of the other Releasees, and you will not make any comments or statements, written or oral, that reflect adversely on any of them, nor will you make any comments or statements, written or oral, regarding the Company in any public forum, other than factual statements about your responsibilities and information about the Company that is in the public domain, without the prior written approval of the undersigned or his designee. The Company agrees that the Company’s controlling shareholders, directors and officers will not, directly or indirectly, disparage you.

2.By entering into this Agreement, the Company does not admit, and specifically denies, any liability, wrongdoing or violation of any law, statute, regulation or policy. Nothing herein shall be deemed to constitute an admission of wrongdoing by the Company or any of the other Releasees. Neither this Agreement nor any of its terms shall be used as an admission or introduced as evidence as to any issue of law or fact in any proceeding, suit or action, other than an action to enforce this Agreement.

3.You agree that if you materially breach any provision of this Agreement, in addition to any other legal or equitable remedy the Company may have, the Company will be entitled to recover the consideration provided in Section B above and you will reimburse the Company for all of its reasonable attorneys’ fees and costs incurred to enforce this Agreement, to the fullest extent permitted by applicable law. In the event that the Company materially breaches any provision of this Agreement, in addition to any other legal or equitable remedy you may have, the Company will reimburse you for all of your reasonable attorneys’ fees and costs incurred to enforce this Agreement, to the fullest extent permitted by applicable law.

H.Obligations Unrelated to this Agreement. Regardless of whether you sign this Agreement, the following shall apply:

1.You will be paid for all earned but unused vacation days as of the Separation Date.

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2.You are deemed to have resigned from all Company directorships and/or officer positions, effective as of the Separation Date. Should your signature be required on any other document to effect the foregoing, you will provide it immediately upon request.

3.You are required to return to the undersigned all records, materials and other property you have in your possession or control that are the property of the Company no later than the Separation Date, and by signing this Agreement, you are representing that you have done so.

4.You will comply with the obligations set forth in Sections 8 through 15 of the Employment Agreement as if set forth in their entirety in this Agreement.

5.Your participation in the Company’s benefit plans and programs will be determined as follows.

(a)Your continuing coverage under the Company’s group health and dental plans will be governed by Section 7(f)(i)(D) of the Employment Agreement.

(b)Your participation in all other pension and welfare plans and programs provided by the Company will cease on the Separation Date.

6.Pursuant to Section 5.2 of the Remington Arms Company, Inc. 2006 Long Term Incentive Plan (the “LTIP”), upon the Separation Date, you shall forfeit any Retention Bonus (as defined in the LTIP) if and to the extent payable thereunder and shall not have the right to receive any payment on the Payment Date (as defined in the LTIP).

I.Consideration Period. By signing this Agreement in the space provided below and returning it to the undersigned, you are confirming your acceptance of the terms and conditions set forth herein, and you are acknowledging the following:

1.Because the obligations as set out in this Agreement represent a complete waiver and release of all claims that you have against the Company and the other Releasees based on your employment and the cessation thereof, you should review it carefully before signing. You can take up to twenty-one (21) days from your receipt of this Agreement to consider its meaning and effect and to determine whether or not you wish to enter into it. During that time, you are advised to consult with an attorney.

2.If you sign this Agreement before the end of the twenty-one (21) day consideration period, you are doing so voluntarily.

3.In addition, you may take up to seven (7) days after signing this Agreement to revoke your signature. Any revocation shall be made in writing to the undersigned.

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4.This Agreement will not become effective, and your rights under Sections A and B above will not accrue, until after the seven (7) day period expires without revocation. Provided that you sign this Agreement within the consideration period and do not revoke your signature, the eighth (8th) day following the end of the revocation period will be the “Effective Date”.

5.If you elect not to sign this Agreement, or if you revoke your signature, you will not receive the payments or benefits described in Sections A and B above.

J.Miscellaneous.

1.All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to the Company, to:

Freedom Group, Inc.

870 Remington Drive

P.O. Box 700

Madison, NC 27025-0700

With a copy to (which shall not constitute notice):

Cerberus Capital Management, L.P.

299 Park Avenue

New York, NY 10171

Facsimile No.: (212) 891-1540

Attn: George Kollitides

With an additional copy to (which shall not constitute notice):

Milbank, Tweed, Hadley & McCloy LLP

One Chase Manhattan Plaza

New York, NY 10005

Facsimile No.: (212) 822-5921

Attn: Roland Hlawaty, Esq.

if to you, to:

Thomas L. Millner

3676 Dunloy Way

High Point, NC 27262

2.This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations or agreements relating thereto, whether written or oral, with the exception of any agreements expressly described herein as having created continuing rights and obligations. You represent that in executing this Agreement, you have not relied

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on any promise, representation, inducement, agreement or statement not set forth herein. No amendment or modification of this Agreement shall be valid or binding upon the parties unless in writing and signed by both parties.

3.No failure by any party to insist upon strict compliance with any term of this Agreement, enforce any right, or seek any remedy upon any default of the other will affect, or constitute a waiver of, the first party’s right to insist upon such strict compliance, enforce that right, or seek that remedy with respect to that default or any prior, contemporaneous, or subsequent default. No custom or practice of the parties at variance with any provision of this Agreement will affect or constitute a waiver of any party’s right to demand strict compliance with all provisions of this Agreement

4.In the event that any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Moreover, if any one or more of the provisions contained in this Agreement is held to be excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law.

5.This Agreement will be binding upon, inure to the benefit of, and be enforceable by and against the respective heirs, legal representatives, successors and assigns of the parties to this Agreement.

6.This Agreement may be executed in any number of counterparts (which may be exchanged by facsimile or email), each of which shall be deemed an original and both of which when taken together shall constitute one and the same instrument.

7.This Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to the conflict of law principles thereof. Any dispute arising under this Agreement will be resolved in accordance with Section 20 of the Employment Agreement, as if set forth in its entirety in this Agreement, provided that any such action or proceeding shall be heard in the State of New York, New York County. The parties expressly irrevocably consent to submit themselves to the jurisdiction of the American Arbitration Association in the of the State of New York, New York County and to the federal and state courts of the State of New York, New York County, which shall be the exclusive forums in which any disputes arising under this Agreement or otherwise in connection with the matters set forth herein.

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Sincerely,
FREEDOM GROUP, INC.
By:	/s/ Ted Torbeck
Title:	4-8-09 CEO

I am signing this Agreement knowingly, voluntarily and with full understanding of its terms and effects. I have not relied on any representations or statements not set forth herein.

/s/ Thomas L. Millner
Thomas L. Millner
Date:	4/6/09

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NOT VALID UNLESS EXECUTED BY BOTH PARTIES

April 6, 2009

Mr. Thomas L. Millner

3676 Dunloy Way

High Point, NC 27262

Re: Agreement Regarding Health Insurance

Dear Tommy:

This letter (this “Letter Agreement”) confirms the agreement between you and Remington Arms Company, Inc. (the “Company”) with respect to your health insurance (health, dental and prescription drugs) after March 16, 2009. By signing this Letter Agreement, you agree to the terms and conditions set forth below.

1.Subject to the other terms and conditions of this Letter Agreement, you and your qualified dependents shall be permitted to participate in the health, dental and prescription drug benefit plans provided to active employees of the Company and their qualified dependents under the Company’s Group Benefits Plan, as in effect from time to time, until you attain age 65 (the “Continuation Coverage”). You shall be responsible for paying the premiums charged for such Continuation Coverage at the applicable active employee rate.

2.The Continuation Coverage is intended to satisfy any continuation of coverage requirements of Section 4980B of the Code and Part 6 of Title I of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”). In the event that the period of Continuation Coverage expires prior to the end of any period of continuation coverage to which you and your qualified dependents would be entitled under COBRA (the “COBRA Period”), you and your qualified dependents may elect continuation coverage under COBRA (“COBRA Coverage”) for the remainder of the COBRA Period. You shall be responsible for paying the full amount of the premium charged for such COBRA Coverage.

3.In the event that the Continuation Coverage does not, for any reason, satisfy the continuation of coverage requirements of COBRA, you and your qualified dependents shall be entitled to elect COBRA Coverage in lieu of the Continuation Coverage. In such event, you and your qualified dependents shall be responsible for paying the full amount of the premiums charged for such COBRA Coverage under the Company Group Benefits Plan.

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4.In the event the Company cannot provide you and your qualified dependents with coverage under the Company’s Group Benefits Plan for the full Continuation Coverage period, the Company may provide coverage under one or more alternative plans or arrangements providing substantially equivalent coverage to the coverage then being provided to active employees and their dependants under the Company’s Group Benefits Plan.

5.This Letter Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations or agreements relating thereto, whether written or oral. You represent that in executing this Letter Agreement, you have not relied on any promise, representation, inducement, agreement or statement not set forth herein. No amendment or modification of this Letter Agreement shall be valid or binding upon the parties unless in writing and signed by both parties.

6.This Letter Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to the conflict of law principles thereof. Any dispute or controversy arising under or in connection with this Letter Agreement shall be resolved by binding arbitration. The arbitration shall be held within New York State and New York County, and shall be conducted in accordance with the Employment Arbitration Rules of the American Arbitration Association then in effect and otherwise in accordance with principles which would be applied by a court of law or equity. All expenses of arbitration shall be borne by the party who incurs the expense or, in the case of joint expenses, by both parties in equal portions. The parties expressly irrevocably consent to submit to the jurisdiction of the American Arbitration Association in the of the State of New York, New York County, and to the federal and state courts of the State of New York, New York County with respect to the enforcement of any arbitral award, which shall be the exclusive forums for any such disputes.

Sincerely,
Remington Arms Company, Inc.
By:	/s/ Ted Torbeck 4-8-09
Title:	CEO

I am signing this Letter Agreement knowingly, voluntarily and with full understanding of its terms and effects. I have not relied on any representations or statements not set forth herein.

/s/ Thomas L. Millner
Thomas L. Millner
Date:	4/6/09

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EX-10.12

Exhibit 10.12

[Freedom Group, Inc. Letterhead]

PERSONAL & CONFIDENTIAL

NOT VALID UNLESS EXECUTED BY BOTH PARTIES

August 31, 2009

Mr. Paul A. Miller

13202 Stable Brook Way

Herndon, VA 20171

Re:Purchase and Separation Agreement and General Release

Dear Paul:

This letter agreement (this “Agreement”) confirms your resignation from your employment with Freedom Group, Inc. (the “Company”) and the Company’s subsidiaries, affiliates and related entities, and your resignation from the Boards of Directors of the Company and its subsidiaries, affiliates and related entities, in each case, effective as of August 31, 2009 (the “Separation Date”).  By signing this Agreement, you agree to the terms and conditions set forth below.

A.Purchase and Sale of Company Stock and Options.  Subject to your compliance with the obligations set forth in this Agreement, the Company agrees to the following:

1.Vesting of Common Stock.  Pursuant to the terms of that certain Restricted Stock Agreement, dated December 12, 2007, as amended (the “Restricted Stock Agreement”), upon your resignation from the Company on the Separation Date, 57,510 shares of your restricted common stock of the Company (the “Common Stock”) granted pursuant to the Restricted Stock Agreement shall vest (the “Vested Common Stock”).  The remaining 22,684 shares of your restricted Common Stock shall remain unvested and shall be cancelled effective upon the Separation Date (the “Unvested Common Stock”).

2.Vesting of Options.  Pursuant to the terms of that certain Non-Qualified Stock Option Award Agreement dated [May 14, 2008] (the “Option Award Agreement”), upon your resignation from the Company on the Separation Date, options to purchase the Common Stock granted pursuant to the Option Award Agreement (the “Options”) (i) to purchase 127,392 shares of Common Stock shall vest (the “Vested Options”) and (ii) to purchase 171,918 shares of Common Stock

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shall remain unvested and shall be cancelled effective upon the Separation Date (the “Unvested Options”).

3.Purchase and Sale.  On the terms and subject to the conditions of this Agreement, the Company hereby agrees to purchase, and you agree to sell to the Company, (i) all of the Vested Common Stock for an aggregate price of $391,068.00 (the “Common Stock Purchase Price”) and (ii) all of the Vested Options for an aggregate price of $541,416.00 (the “Option Purchase Price” and, collectively with the Common Stock Purchase Price, the “Purchase Price”).

4.Closing.  The closing of the purchase and sale of the Vested Common Stock and Vested Options contemplated by this Agreement (the “Closing”) shall take place on the Effective Date, as that term is defined in Section J(4) below.

5.Delivery of and Payment for the Company Stock.  At the Closing,

(a)you will deliver to the Company any certificates representing the Company Stock and/or the Options; and

(b)the Company will pay you the Purchase Price by wire transfer of immediately available funds to a bank account specified by you.

B.Severance Payment and Additional Payment.

1.Severance Payment. In accordance with Section 6(f) of the Employment Agreement, the Company shall:

(a)Continue to pay to you your base salary of $350,000.00 per year from the Separation Date until the one-year anniversary of the Separation Date in semi-monthly installments in accordance with the Company’s standard payroll practices, and

(b)Pay you at Closing your accrued incentive compensation through August 31, 2009 in the amount of $233,333.00.

2.Additional Payment. As a further inducement for you to enter into this Agreement, the Company will pay to you, in addition to the Purchase Price and the Severance Payment, the sum of $2,639,183.00, as follows:

(a)At the Closing:  $639,183.00;

(b)On the first anniversary of the Closing:  $1,000,000.00;

(c)On the second anniversary of the Closing:  $500,000.00; and

(d)On the third anniversary of the Closing:  $500,000.00

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In each case, such payment will be by wire transfer of immediately available funds to a bank account specified by you.  In the event that any such day is not a business day, such payment shall be made on the next succeeding business day.

C.Company Representations and Warranties.  The Company hereby represents and warrants to you that:

1.Corporate Organization; Authority to Conduct Business.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  The Company has all corporate power and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and as proposed to be conducted and to own, operate and lease its properties and assets.

2.Authority.  The Company has the requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

3.Legal and Binding Agreement.  This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.

D.Miller Representations and Warranties.  You hereby represent and warrant to the Company that:

1.Legal and Binding Agreement.  This Agreement has been duly executed and delivered by you and constitutes a legal, valid and binding agreement by you, enforceable against you in accordance with its terms.

2.Title.  The Vested Common Stock, Unvested Common Stock, Vested Options and Unvested Options constitute all of the outstanding equity interests of the Company beneficially owned by you.  You own the Vested Common Stock and Vested Options beneficially and of record, free and clear of any encumbrances and upon the Closing will transfer to the Company good and valid title to the Common Stock free and clear of any encumbrances.

3.No Other Representations.  Except as set forth herein, no representations or warranties have been made to you by the Company or any officer, employee, agent or affiliate of the Company with respect to this Agreement or the transactions contemplated hereby.

E.Miller’s Obligations.

1.Except as may be required by law, you will not disclose the contents or substance of this Agreement to anyone except members of your immediate family and any tax or legal counsel you may consult regarding the meaning or effect hereof, and you will instruct each of the foregoing not to disclose the same.

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2.You agree to provide assistance to the Company and its subsidiaries, affiliates and related entities by making yourself available on a reasonable basis to provide information to, and to consult with, the Company and its subsidiaries, affiliates and related entities on matters about which you have knowledge as a result of your employment, including but not limited to all matters (formal or informal) in connection with any investigations, litigation (potential or ongoing) and administrative, regulatory or other proceedings which currently exist, or which may have arisen prior to or which arise following the signing of this Agreement.  Such cooperation will include, but not be limited to, your willingness to be interviewed by representatives of the Company and its subsidiaries, affiliates and related entities and to participate in any such proceedings by deposition or testimony.  Any reasonable expenses you incur as a result of such assistance or cooperation will be borne by the Company.  In the event that you are required to retain separate legal counsel with respect to such deposition or testimony, the Company will reimburse you, or cause you to be reimbursed, for such reasonable costs thereof.

3.In the event that you are subpoenaed or otherwise required by order of a court of competent jurisdiction or other legal process to appear in connection with any matter or proceeding involving the Company or its subsidiaries, affiliates and related entities, you will notify the Company in accordance with the notice provisions set forth in Section K(1) below at least fifteen (15) business days in advance of such appearance, unless to do so would place you in violation of the subpoena, court order or other legal process, in which case you shall give as much notice as possible without placing yourself in violation of the subpoena, court order or other legal process.

F.Employment Agreement; Management Board Member Agreement.

1.Except as set forth elsewhere in this Section F, the Executive Employment Agreement entered into between you and Remington Arms Company, Inc. (“Remington”) as of the 31st day of October, 2008 (the “Employment Agreement”, capitalized terms used but not defined in this Section F having the meanings set forth in the Employment Agreement) shall cease to have any further force or effect as of the Separation Date, and by signing this Agreement you are acknowledging that no further payments or other compensation or benefits, other than as provided herein, are due to you thereunder or hereunder.

2.Subject to your completion and submission of the appropriate election forms, you will be permitted to continue your health, dental and prescription drug coverage under the Remington’s Group Benefits Plan (as such Plan may be amended from time to time) pursuant to COBRA (see Section I(5) below) at your expense until the earlier of (i) the second anniversary of the Separation Date, and (ii) the date you first become eligible for substantially equivalent insurance coverage provided by any other entity following termination.

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3.Each of the following sections of the Employment Agreement will continue in full force and effect according to their terms as if set forth in their entirety in this Agreement:

(a)your obligations under Sections 7 (Unauthorized Disclosure), 8 (Non-Competition), 9 (Non-Solicitation of Employees), 10 (Non-Solicitation of Customers), 11 (Return of Property), 12 (Non-Disparagement), 13 (Failure to Comply with Covenants) and 14 (Intellectual Property); provided, however, that, the limitations set forth in the Employment Agreement not withstanding, your obligations in respect of each such section shall continue for a period of three years following the Separation Date;

(b)your rights under Section 17 (Indemnification); and

(c)the mutual obligations and understandings under Section 18 (Compliance with Section 409A), Section 19(a) (Arbitration), (b) (Governing Law; Consent to Jurisdiction) and (c) (Taxes).

4.The Management Board Member Agreement entered into between you and Bushmaster Holdings, LLC, effective as of August 1, 2008, shall cease to have any further force or effect as of the Separation Date, and by signing this Agreement you are acknowledging that no further payments or other compensation or benefits, other than as provided herein, are due to you thereunder or hereunder

G.General Release and Waiver.  You acknowledge that the payments and benefits provided for in Sections B and F above are conditioned upon your executing a General Release and Waiver which is attached to this Agreement as “Exhibit A.”

H.Mutual Obligations and Understandings.

1.Without limiting the obligations set forth in Section F(3)(a) above, you represent that you have not disparaged, and will not disparage, directly or indirectly, the Company or any of the other Releasees (as defined in Exhibit A), and you will not make any comments or statements, written or oral, that reflect adversely on any of them, nor will you make any comments or statements, written or oral, regarding the Company or any of the other Releasees in any public forum, other than factual statements about your responsibilities and information about the Company or any of the other Releasees that is in the public domain, without the prior written approval of the undersigned or his designee.  The Company agrees that the Company’s controlling shareholders, directors and officers will not, directly or indirectly, disparage you.

2.By entering into this Agreement, neither the Company nor any of the other Releasees admits, and each specifically denies, any liability, wrongdoing or violation of any law, statute, regulation or policy.  Nothing herein shall be deemed to constitute an admission of wrongdoing by the Company or any of the other

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Releasees.  Neither this Agreement nor any of its terms shall be used as an admission or introduced as evidence as to any issue of law or fact in any proceeding, suit or action, other than an action to enforce this Agreement.

3.You agree that if you materially breach any provision of this Agreement or the provisions of the Employment Agreement that expressly survive, in addition to any other legal or equitable remedy the Company or the other Releasees may have, you will reimburse the Company and/or the other Releasees for all of its/their reasonable attorneys’ fees and costs incurred to enforce this Agreement and/or the surviving provisions of the Employment Agreement, to the fullest extent permitted by applicable law.  In the event that the Company materially breaches any provision of this Agreement, in addition to any other legal or equitable remedy you may have, the Company will reimburse you for all of your reasonable attorneys’ fees and costs incurred to enforce this Agreement, to the fullest extent permitted by applicable law.

I.Obligations Unrelated to this Agreement.  Regardless of whether you sign this Agreement, the following shall apply:

1.You will be paid for all earned but unused vacation days as of the Separation Date; provided; however, that such payment is deemed part of the payments to be paid pursuant to Section B.

2.You are deemed to have resigned from all officer and director positions at the Company and its subsidiaries, affiliates and related entities, effective as of the Separation Date.  Should your signature be required on any other document to effect the foregoing, you will provide it immediately upon request.

3.You are required to return to the undersigned all records, materials and other property you have in your possession or control that are the property of the Company and its subsidiaries, affiliates and related entities as soon as possible.

4.You will comply with the surviving obligations set forth in the Employment Agreement as if set forth in their entirety in this Agreement.  (See Section F(3) above.)

5.Your coverage under the Remington Group Benefits Plan will continue until August 31, 2009.  You will be given separate information regarding your right to continue your coverage, as required by the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”).  If you decline to enter into this Agreement, the premiums will be your sole responsibility.  In such instance, you may be eligible for a COBRA subsidy in accordance with the American Recovery and Reinvestment Act of 2009 (the “Stimulus Act”), which was signed into law on February 17, 2009, and which permits eligible employees to pay only thirty-five percent (35%) of their COBRA premiums for up to nine (9) months.  Separate information will be provided to you about this benefit as well.

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6.You are fully vested in your account balances under the Remington Arms Company 401(k) Plan.

7.Your participation in all other benefit plans will cease as of the Separation Date.

J.Consideration Period.  By signing this Agreement in the space provided below and returning it to the undersigned, you are confirming your acceptance of the terms and conditions set forth herein, and you are acknowledging the following:

1.Because the obligations as set out in this Agreement (including Exhibit A) represent a complete waiver and release of all claims that you have against the Company and the other Releasees based on your employment and the cessation thereof, you should review it carefully before signing.  You can take up to twenty-one (21) days from your receipt of this Agreement to consider its meaning and effect and to determine whether or not you wish to enter into it.  During that time, you are advised to consult with an attorney.  If you desire to accept this offer then you must sign and return this Agreement no later than the 21st day of September, 2009.

2.If you sign this Agreement before the end of the twenty-one (21) day consideration period, you are doing so voluntarily.

3.In addition, you may take up to seven (7) days after signing this Agreement to revoke your signature.  Any revocation shall be made in writing to the undersigned.

4.This Agreement will not become effective, and your rights to payments under Sections B and F(2) will not accrue, until after the seven (7) day period expires without revocation.  Provided that you sign this Agreement within the consideration period and do not revoke your signature, the eighth (8th) day following the end of the revocation period will be the “Effective Date”.

5.If you elect not to sign this Agreement, or if you revoke your signature, you will not receive the payments or benefits described in Sections B and F(2).

K.Miscellaneous.

1.All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given,

if to the Company, to:

Freedom Group, Inc.

870 Remington Drive

P.O. Box 700

Madison, NC  27025-0700

Attention:  General Counsel

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With a copy to (which shall not constitute notice):

Cerberus Capital Management, L.P.

299 Park Avenue

New York, NY  10171

Facsimile No.:  (212) 891-1540

Attn:  George Kollitides

With an additional copy to (which shall not constitute notice):

Milbank, Tweed, Hadley & McCloy LLP

One Chase Manhattan Plaza

New York, NY  10005

Facsimile No.:  (212) 822-5735

Attn:  Roland Hlawaty, Esq.

if to you, to:

Paul A. Miller

13202 Stable Brook Way

Herndon, VA 20171

2.This Agreement (including Exhibit A) constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations or agreements relating thereto, whether written or oral, with the exception of any agreements expressly described herein as having created continuing rights and obligations.  You represent that in executing this Agreement, you have not relied on any promise, representation, inducement, agreement or statement not set forth herein.  No amendment or modification of this Agreement shall be valid or binding upon the parties unless in writing and signed by both parties.

3.No failure by any party to insist upon strict compliance with any term of this Agreement, enforce any right, or seek any remedy upon any default of the other will affect, or constitute a waiver of, the first party’s right to insist upon such strict compliance, enforce that right, or seek that remedy with respect to that default or any prior, contemporaneous, or subsequent default.  No custom or practice of the parties at variance with any provision of this Agreement will affect or constitute a waiver of any party’s right to demand strict compliance with all provisions of this Agreement.

4.In the event that any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.  Moreover, if any one or more of the provisions contained in this Agreement is held to be excessively broad as to duration, scope, activity or subject, such

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provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law.

5.This Agreement will be binding upon, inure to the benefit of, and be enforceable by and against the respective heirs, legal representatives, successors and assigns of the parties to this Agreement.

6.This Agreement may be executed in counterparts (which may be exchanged by facsimile or email), each of which shall be deemed an original and both of which when taken together shall constitute one and the same instrument.

7.This Agreement will be governed by and construed in accordance with the laws of the State of Delaware without regard to the conflict of law principles thereof.  Any dispute arising under this Agreement will be resolved in accordance with Section 19(a) of the Employment Agreement, as if set forth in its entirety in this Agreement, and any such action or proceeding shall be heard in the State of Delaware.

8.Nothing in this Agreement shall restrict you from providing consultation services to the Company after the Separation Date, for no additional remuneration, upon the mutual agreement of you and the Company.

Sincerely,
FREEDOM GROUP, INC.
By:	/s/ Theodore H. Torbeck
Name: Theodore H. Torbeck
Title: Chief Executive Officer

I am signing this Agreement knowingly, voluntarily and with full understanding of its terms and effects.  I have not relied on any representations or statements not set forth herein.

/s/ Paul A. Miller
Paul A. Miller
Date:	9/9/2009

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EXHIBIT A

GENERAL RELEASE AND WAIVER OF CLAIMS

In consideration of the payment by Remington Arms Company, Inc. (“Remington”) of the severance and other benefits to me as set forth in Sections B and F of the Agreement to which this GENERAL RELEASE AND WAIVER OF CLAIMS (this “Release”) is attached as Exhibit A, I, PAUL A. MILLER, agree to and do finally and completely release and forever discharge Remington, and its direct and indirect parents (including Freedom Group, Inc. and Cerberus Capital Management, L.P.) and its/their subsidiaries and its/their affiliates, and its/their respective officers, members, managers, directors, partners, shareholders, investors, principals, executives, consultants, employees and agents, and any of their respective predecessors and successors in interest and assigns (collectively, the “Releasees”) from any and all liabilities, claims, obligations, demands, and causes of action of any and every kind or nature whatsoever, in law, equity or otherwise, known or unknown, suspected or unsuspected, disclosed and undisclosed, which I now have, own or hold or claim to have, own or hold, against each or any of the Releasees or arising from and/or relating to my employment with Remington and any of the other Releasees and termination of that employment.

This Release includes, without limiting the generality of the foregoing, (a) claims arising under any provision of federal, state, or local law, any federal, state or local anti-discrimination statute, ordinance or regulation, the Age Discrimination in Employment Act of 1967 (“ADEA”), the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991 and the Civil Rights Act of 1866, the Employee Retirement Income Security Act of 1974, the New York State Human Rights Law, and the New York Labor Laws, and the North Carolina Equal Employment Practices Act and the North Carolina Labor Laws, the Virginia Human Rights Act and the Virginia Labor Laws, and any other similar state or local employment law (if and to the extent applicable and as any of the foregoing may be amended from time to time), and any similar federal, state, or local statutes, ordinances or regulations, or claims in the nature of a breach of contract, claims for wrongful discharge, emotional distress, defamation, fraud or breach of the covenant of good faith and fair dealing, tort and wage or benefit claims (other than the payments to which I am entitled under the Employment Agreement); (b) my waiver of all rights to post-termination benefits, and (c) my waiver of any claims to other severance or termination payments or benefits.

Notwithstanding the foregoing, this Release does not include actions brought by me (or my personal representative) to enforce any rights I have (a) under the Agreement, (b) to secure vested benefits under any other employee benefit plan of Remington of which I am a participant except as otherwise released in accordance with the preceding paragraph, (c) to seek indemnification under the Remington’s bylaws or other corporate governance documents, or (d) to seek worker’s compensation or unemployment compensation benefits.  This Release also does not apply to any rights or claims that I might have which arise as a result of any conduct that occurs after the date this Release is signed by me.  If I violate the terms of this Release, I agree to pay the Releasees’ costs and reasonable attorneys’ fees to the fullest extent permitted by applicable law.

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I acknowledge that, among other rights subject to this Release, I am hereby waiving and releasing any rights I may have under the ADEA, that this Release is knowing and voluntary, and that the consideration given for this Release is in addition to anything of value to which I was already entitled as an employee of Remington.

I acknowledge that I may hereafter discover claims or facts in addition to or different from those which I now know or believe to exist with respect to the subject matter of this Release and which, if known or suspected at the time of executing this Release, may have materially affected this Release or my decision to execute this Release.  Nevertheless, I hereby waive any right, claim or cause of action that might arise as a result of such different or additional claims or facts.

I agree that if any court or governmental agency assumes jurisdiction over any claim, demand, charge, complaint, lawsuit or other legal action that, in whole or in part, pertains to my employment or the cessation thereof, I shall not be entitled to any monetary or other benefit that results from such claim, demand, charge, complaint or lawsuit, except as otherwise expressly required by applicable law.

By signing the Agreement and this Release, I am acknowledging that no further payments or other compensation or benefits, other than as provided in the Agreement, are due to me thereunder or hereunder.

As provided by law, I have been advised in the Agreement to carefully consider the matters outlined in the Agreement and this Release and to consult with such professional advisors as I deem appropriate, including a lawyer of my own choice.  I acknowledge that I have had at least twenty-one (21) days from receipt of this Release to consider the terms and conditions set forth herein, and I understand that I have a period of seven (7) days following my execution of this Release to revoke my signature, in which event this Release shall not be effective or binding on the parties, and I will not receive the payments or benefits described in Sections B and F of the Agreement.  I understand fully and acknowledge the terms and consequences of this Release, and I voluntarily accept them.

ACKNOWLEDGED AND AGREED TO,

INTENDING TO BE LEGALLY BOUND HEREBY:

Dated:	9/9/2009	/s/ Paul A. Miller
		Paul A. Miller

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EX-21.1

Exhibit 21.1

SUBSIDIARIES OF REGISTRANT AS OF OCTOBER 20, 2009

Subsidiary	Jurisdiction of Organization	Percentage of Ownership
E-RPC, LLC	Delaware	100%
Remington Arms Company, Inc.	Delaware	100%
RA Brands, L.L.C.	Delaware	100%
Remington Licensing Corp.	Delaware	50%
The Marlin Firearms Company	Connecticut	100%
H&R 1871, LLC	Connecticut	100%
Advanced Armament Corp., LLC	Delaware	100%
EOTAC, LLC	Delaware	60%
Bushmaster Firearms International, LLC	Delaware	100%
DPMS Firearms, LLC	Delaware	100%
Bushmaster Custom Shop, LLC	Delaware	100% Preferred; 80% Common

EX-23.1

Exhibit 23.1

Audit · Tax ·Advisory

Grant Thornton LLP

201 South College Street

Suite 2500

Charlotte, NC 28244

T 704.632.3500

F 704.377.7612

www.GrantThornton.com

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated July 2, 2009, except for Note 14, as to which the date is October 20, 2009, with respect to the financial statements and schedule of Freedom Group, Inc. contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

Charlotte, North Carolina

October 20, 2009

Grant Thornton LLP

U.S. member firm of Grant Thornton International Ltd

Audit · Tax · Advisory

Grant Thornton LLP

201 South College Street

Suite 2500

Charlotte, NC 28244

Address Line 4

T 704.632..3500

F 704.377-7701

www.GrantThornton.com

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM

We have issued our report dated July 2, 2009, with respect to the financial statements of RACI Holding, Inc. contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

Charlotte, North Carolina
October 20, 2009

Grant Thornton LLP

U.S. member firm of Grant Thornton International Ltd

Audit · Tax · Advisory

Grant Thornton LLP

300 North Greene Street

Suite 800

Greensboro, NC 27401

Address Line 4

T 336.271.3900

F 336.271.3910

www.GrantThornton.com

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM

We have issued our report dated August 13, 2009, with respect to the financial statements of Defense/Procurement/Manufacturing Services, Inc. contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

Greensboro, North Carolina

October 20, 2009

Grant Thornton LLP

U.S. member firm of Grant Thornton International Ltd

Audit · Tax · Advisory

Grant Thornton LLP

300 N Greene Street, Suite 800

Greensboro, NC 27401-2198

T 336.271.3900

F 336.271.3910

www.GrantThornton.com

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated August 17, 2009, except for Note 11, as to which the date is October 20, 2009, with respect to the financial statements of Bushmaster Firearms Inc. contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

Greensboro, North Carolina

October 20, 2009

Grant Thornton LLP

U.S. member firm of Grant Thornton International Ltd

EX-23.2

Exhibit 23.2

PricewaterhouseCoopers LLP

185 Asylum Street, Suite 2400

Hartford CT 06103-3404

Telephone (860) 241 7000

Facsimile (860) 241 7590

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 of Freedom Group, Inc. of our report dated April 4, 2008 relating to the financial statements of The Marlin Firearms Company and Subsidiary, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

PricewaterhouseCoopers LLP

October 20, 2009