EXHIBIT 10.28
CONSULTING AGREEMENT
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This CONSULTING AGREEMENT, dated as of December 1, 1993, by and among
RACI Holding, Inc., a Delaware corporation ("Holding"), Remington Arms Company,
Inc., a Delaware corporation and wholly owned subsidiary of Holding (the
"Company") and Xxxxxxx, Dubilier & Rice, Inc., a Delaware corporation ("CD&R").
W I T N E S S E T H:
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WHEREAS, the Company acquired its business in a transaction arranged
by CD&R, and in connection therewith CD&R provided financial and managerial
advisory services to the Company, including arranging the financing therefor;
WHEREAS, Holding and the Company desire to continue to receive
financial and managerial advisory services from CD&R, and CD&R desires to
provide such services to Holding and the Company; and
WHEREAS, this Agreement has been approved by a majority of the
disinterested directors of each of Holding and the Company;
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth and the mutual benefits to be derived herefrom,
the parties hereto hereby agree as follows:
1. Engagement. Holding and the Company hereby engage CD&R as a
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consultant, and CD&R hereby agrees to provide financial and managerial advisory
services to Holding and the Company, all on the terms and subject to the
conditions set forth below.
2. Services, etc. (a) CD&R hereby agrees during the term of this
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engagement to assist, advise and consult with the respective Boards of Directors
and management of Holding and the Company and their respective subsidiaries in
such manner and on such business, management and financial matters, and provide
such other financial and managerial advisory services, as may be reasonably
requested from time to time by the Boards of Directors of Holding and the
Company, including but not limited to assistance in:
(i) establishing and maintaining banking, legal and other business
relationships for the Company and its subsidiaries;
(ii) developing and implementing corporate and business strategy and
planning for the Company and its subsidiaries, including plans
and programs for improving operating, marketing and financial
performance, budgeting of future corporate investments,
acquisition and divestiture strategies, and reorganizational
programs;
(iii) arranging future debt and equity financings and refinancings; and
(iv) providing professional employees to serve as directors or
officers of Holding and the Company.
(b) Holding and the Company will furnish CD&R with such information
as CD&R believes appropriate to its engagement hereunder (all such information
so furnished being referred to herein as the "Information"). Holding and the
Company recognize and confirm that (i) CD&R will use and rely primarily on the
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Information and on information available from generally recognized public
sources in performing the services to be performed hereunder and (ii) CD&R does
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not assume responsibility for the accuracy or completeness of the Information
and such other information.
3. Compensation; Payment of Expenses. (a) The Company agrees to pay
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to CD&R, as compensation for services rendered and to be rendered by CD&R
hereunder, a fee of $400,000 per year (the "Fee"), payable in alternating
monthly installments of $33,333.33 and $33,333.34 in arrears commencing on
December 31, 1993. Such Fee may, in the sole discretion of a majority of the
members of the Company's Board of Directors who are not affiliated with CD&R, be
increased but may not be decreased without the prior written consent of CD&R. If
any employee of CD&R shall be elected to serve on the Board of Directors of
Holding or the Company or any of their affiliates (a "Designated Director"), in
consideration of the Fee being paid to CD&R, CD&R shall cause such Designated
Director to waive any and all fees to which such director would otherwise be
entitled as a director for any period for which the Fee or any installment
thereof is paid.
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(b) The Company shall reimburse CD&R for such reasonable travel and
other out-of-pocket expenses ("Expenses") as may be incurred by CD&R and its
employees and agents in the course or on account of rendering of any services
hereunder, including but not limited to any fees and expenses of any legal,
accounting or other professional advisors to CD&R engaged in connection with the
services being provided hereunder and any expenses incurred by any Designated
Director in connection with the performance of his duties. CD&R may submit
monthly expense statements, which shall be payable within thirty days.
4. Term, etc. (a) This Agreement shall be in effect until, and
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shall terminate upon, the tenth anniversary of the date hereof, and may be
earlier terminated by either party hereto upon 30 days' prior written notice to
the other party hereto. The provisions of this Agreement shall survive any
termination of this Agreement, except for the provisions of Section 1, Section
2(a), the first sentence of Section 2(b) and (solely as to any portion of the
Fee or any Expense not paid or reimbursed prior to such termination and not
required to be paid or reimbursed thereafter pursuant to Section 4(c) hereof)
Section 3 hereof.
(b) Upon any consolidation or merger, or any conveyance, transfer or
lease of all or substantially all of the assets of the Company as an entirety,
the successor corporation formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, the Company under this Agreement with the same
effect as if such successor corporation has been a party thereto. No such
consolidation, merger or conveyance, transfer or lease of all or substantially
all of the assets of the Company shall have the effect of terminating this
Agreement or of releasing the Company or any such successor corporation from its
obligations hereunder.
(c) Upon any termination of this Agreement, any accrued and unpaid
installment of the Fee or portion thereof (pro rated, with respect to the month
in which such termination occurs, for the portion of such month that precedes
such termination), and any unpaid and unreimbursed Expenses that shall have been
incurred prior to such termination (whether or not such Expenses shall then have
become payable), shall be immediately paid or reimbursed, as the case may be, by
the Company. In the event of the liquidation of the Company, all amounts due
CD&R hereunder
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shall be paid to CD&R before any liquidating distributions or similar payments
are made to stockholders of the Company.
5. Indemnification. (a) Holding and the Company confirm and
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reaffirm their obligations pursuant to the Indemnification Agreement, dated as
of November 30, 1993, (the "Indemnification Agreement"), among Holding, the
Company, CD&R and The Xxxxxxx & Dubilier Private Equity Fund IV Limited
Partnership. Without limiting the generality of the foregoing, Holding and the
Company confirm and agree that (a) Holding and the Company shall indemnify,
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defend and hold harmless CD&R, the C&D Fund (as defined in the Indemnification
Agreement), C&D Associates (as defined in the Indemnification Agreement) and
each of the respective directors, officers, partners, employees, agents,
advisors, representatives and controlling persons (within the meaning of the
Securities Act of 1933, as amended) of CD&R, the C&D Fund and C&D Associates
(collectively, "Indemnitees") from and against any and all claims, obligations,
liabilities, causes of action, actions, suits, proceedings, investigations,
judgments, decrees, losses, damages, fees, costs and expenses (including without
limitation interest, penalties and fees and disbursements of attorneys,
accountants, investment bankers and other professional advisors) (collectively,
"Obligations"), whether incurred with respect to third parties or otherwise, in
any way resulting from, arising out of or in connection with, based upon or
relating to, the performance of the services contemplated hereby, except to the
extent that any such Obligation is found in a final judgment by a court having
jurisdiction to have resulted from the gross negligence or intentional
misconduct of CD&R, (b) no Indemnitee shall have any liability (whether direct
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or indirect, in contract or tort or otherwise) to Holding, the Company or their
respective security holders or creditors with respect to any Obligation in any
way resulting from, arising out of or in connection with, based upon or relating
to, the performance of the services contemplated hereby, except to the extent
that any such Obligation is found in a final judgment by a court having
jurisdiction to have resulted from the gross negligence or intentional
misconduct of CD&R, and (c) the rights of each Indemnitee to be indemnified
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under any agreement, document, certificate or instrument or applicable law are
independent of and in addition to any rights of such Indemnitee under any other
agreement, document, certificate or instrument or applicable law.
(b) The Company hereby agrees to advance costs and expenses,
including attorneys' fees, incurred by CD&R (acting on its own behalf or, if
requested by any such
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Indemnitee other than itself, on behalf of such Indemnitee) or any Indemnitee in
defending any claim relating to any Obligation in advance of the final
disposition of such claim within 30 days of receipt from CD&R of (i) a notice
setting forth the amount of such costs and expenses (a "Payment Notice") and
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(ii) an undertaking by or on behalf of CD&R or such Indemnitee to repay amounts
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so advanced if it shall ultimately be determined that CD&R or such Indemnitee is
not entitled to be indemnified by the Company as authorized by this Agreement.
CD&R may submit Payment Notices to the Company monthly.
6. Independent Contractor Status. The parties agree that CD&R shall
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perform services hereunder as an independent contractor, retaining control over
and responsibility for its own operations and personnel. Neither CD&R nor any of
its employees or agents shall, solely by virtue of the Agreement or the
arrangements hereunder, be considered employees or agents of the Company nor
shall any of them have authority to contract in the name of or bind the Company,
except (a) to the extent that any professional employee of CD&R may be serving
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as an officer of the Company pursuant to Section 2(a)(iv) hereof, (b) as
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expressly agreed to in writing by the Company and (c) the Company hereby
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acknowledges and agrees that any agreements, arrangements or understandings
entered into by CD&R on behalf of the Company prior to the date hereof in
connection with the formation of the Company and the acquisition by the Company
of its business (including, but not limited to, any confidentiality agreements,
agreements with brokers or finders and any arrangements relating to the
financing of such acquisition) shall be obligations of the Company binding on it
to the same extent as such obligations may be binding on CD&R and the Company
shall fully perform, and shall indemnify and hold harmless CD&R from and
against, all such obligations. Any duties of CD&R arising out of its engagement
to perform services hereunder shall be owed solely to the Company.
7. Notices. Any notice or other communication required or permitted
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to be given or made under this Agreement by one party to the other parties shall
be in writing and shall be deemed to have been duly given and effective (i) on
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the date of delivery if delivered personally or (ii) when sent if sent by
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prepaid telegram, or mailed first-class, postage prepaid, registered or
certified mail, or facsimile transmission as follows (or to such other address
as shall be given in writing by one party to the other parties in accordance
herewith):
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If to the Company to:
Remington Arms Company, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Secretary
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Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Holding, to it care of
the Company at the address set
forth above.
If to CD&R to:
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, III
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Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
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Telephone: (000) 000-0000
Telecopy: (000) 000-0000
8. Entire Agreement. This Agreement, together with the
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Indemnification Agreement and the Loanout Agreement, dated as of December 1,
1993 (the "Loanout Agreement"), among Holding, the Company and CD&R (a) contain
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the complete and entire understanding and agreement of CD&R, Holding and the
Company with respect to the subject matter hereof, and (b) supersede all prior
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and contemporaneous understandings, conditions and agreements, oral or written,
express or implied, in respect of the subject matter hereof, including but not
limited to in respect of the engagement of CD&R in connection with the subject
matter hereof. There are no representations or warranties of CD&R in connection
with this Agreement or the services to be provided hereunder, except as
expressly made and contained in this Agreement and the Loanout Agreement.
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9. Headings. The headings contained in this Agreement are for
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purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
10. Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
11. Binding Effect; Assignment. This Agreement shall be binding upon
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and inure to the benefit of the parties to this Agreement and their respective
successors and assigns and to each Indemnitee, provided that none of CD&R
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Holding or the Company may assign any of its rights or obligations under this
Agreement without the express written consent of the other party hereto. This
Agreement is not intended to confer any right or remedy hereunder upon any
person other than the parties to this Agreement and their respective successors
and permitted assigns and each Indemnitee.
12. Governing Law. This Agreement shall be deemed to be a contract
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made under, and is to be governed and construed in accordance with, the laws of
the State of New York, without regard to the conflict of laws principles or
rules thereof. Holding, the Company and CD&R hereby irrevocably submit to the
jurisdiction of the courts of the State of New York and the Federal courts of
the United States of America located in the State, City and County of New York
solely in respect of the interpretation and enforcement of the provisions of
this Agreement, and hereby waive, and agree not to assert, as a defense in any
action, suit or proceeding for the interpretation or enforcement hereof, that it
is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in such courts or that the venue thereof may not
be appropriate or that this Agreement may not enforced in or by such courts, and
the parties hereto irrevocably agree that all claims with respect to such action
or proceeding shall be heard and determined in such a New York State or Federal
court. Holding, the Company and CD&R hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of any
such dispute and agree that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 7, or in
such other manner as may be permitted by law, shall be valid and sufficient
service thereof.
13. Waiver of Jury Trial. Each party hereto acknowledges and agrees
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that any controversy that may arise
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under this Agreement is likely to involve complicated and difficult issues, and
therefore it hereby irrevocably and unconditionally waives any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of or relating to this Agreement, or the breach, termination or validity of
this Agreement, or the transactions contemplated by this Agreement. Each party
certifies and acknowledges that (a) no representative, agent or attorney of any
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other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver, (b) it
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understands and has considered the implications of this waiver, (c) it makes
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this waiver voluntarily, and (d) it has been induced to enter into this
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Agreement by, among other things, the mutual waivers and certifications
contained in this Section 13.
14. Amendment; Waivers. No amendment, modification, supplement or
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discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party or Indemnitee against
whom enforcement of the amendment, modification, supplement, discharge or waiver
is sought (and in the case of Holding and the Company, approved by resolution of
the Boards of Directors of Holding and the Company). Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party or Indemnitee
granting such waiver in any other respect or at any other time. Neither the
waiver by any of the parties hereto or any Indemnitee of a breach of or a
default under any of the provisions of this Agreement, nor the failure by any
party hereto or any Indemnitee on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right, powers or privilege
hereunder, shall be construed as a waiver of any other breach or default of a
similar nature, or as a waiver of any of such provisions, rights, power or
privileges hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party or Indemnitee may
otherwise have at law or in equity or otherwise.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
XXXXXXX, DUBILIER & RICE, INC.
By: /s/ Xxxxxx X. Xxxx, III
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Xxxxxx X. Xxxx, III
President
RACI HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: V.P. Controller & Treas.
REMINGTON ARMS COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: V.P. Controller & Treas
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