Exhibit 10.15


 


Environmental
Liability Services Agreement


 


ENVIRONMENTAL LIABILITY
SERVICES AGREEMENT, dated as of December 1, 1993, between E.I. du Pont de
Nemours and Company (“DuPont”) and RACI Acquisitions Corporation (the “Company”).  capitalized terms used herein without being defined
shall have the meanings specified in the Asset Purchase Agreement, dated as of
November 24, 1993 (the “Asset Purchase Agreement”), among DuPont, the
Company and Remington Aras Company, Inc. (“RAC”).


 


WHEREAS, the Company has
assumed, and has agreed to indemnify DuPont against, certain Environmental
Liabilities relating to conditions existing at the Closing Date, up to an
amount of Losses equal to the Environmental Liability Threshold:


 


WHEREAS, DuPont has
retained and has agreed to indemnify the Company against Losses in respect of
all Environmental Liabilities above that amount, and the Company has agreed to
indemnify DuPont against all Environmental Liabilities exclusively associated
with the operation of the Business and the ownership of the Real Property after
the Closing Date:


 


WHEREAS, an contemplated
by Section 5.2.5 of the Asset Purchase Agreement, DuPont and the Company desire
to set forth in this Agreement their respective rights and responsibilities
relating to identification, remediation, management and handling of, and the
accounting for costs with respect to, any and all


 

















 


Environmental Liabilities
assumed by Buyer pursuant to Section 2.5 (a) (iii) of the Asset
Purchase Agreement (the “Assumed Environmental Liabilities”), as well as with
respect to those Environmental Liabilities retained by DuPont under the Asset
Purchase Agreement (the “Excluded Environmental Liabilities”).


 


NOW THEREFORE DuPont and
the Company hereby agree as follows:


 


SECTION 1.                            Non-Compliance Matters.


 


(a)                                  Identification.  If
at any time after the Closing Date the Company identifies an instance of
non-compliance with Environmental Laws existing and in effect at the Closing,
which instance to non-compliance the Company believes predated the Closing
Date, the Company shall promptly so notify DuPont, in writing, giving as such
detail as is reasonably available at that time. If the identification by the
Company is based upon receipt of a written communication from any governmental
authority or third person, the Company shall include a copy of the written
communication as part of its notice to DuPont.


 


(b)                                 Effect.  Each
non-compliance set forth on Schedule 3.1.23(b) to the Asset Purchase
Agreement existing as of the Closing Date, each instance of non-compliance
identified by the Company prior to the Closing, and each later-discovered
instance of non-compliance pursuant to subsection (a) hereof which is
agreed by DuPont to pre-date the Closing, or absent such agreement is
determined pursuant to Section 4 to pre-date the


 


2

















 


Closing, shall be defined
as a “Non-Compliance Matter”.


 


(c)                                  Corrective Action Required.  The
parties agree that each and every Non-Compliance Matter must be corrected to
bring the Business and the Real Property into compliance with Environmental
Laws.  This provision shall govern the
process by which the corrective action shall be defined.


 


(d)                                 Development of Compliance Programs.


 


(1)                                  As to Non - Compliance Matters identified
prior to Closing, within sixty (60) days of the Closing representatives of
DuPont and the Company shall meet to agree upon a series of actions to be taken
to bring each such Non-Compliance Matter into compliance with applicable Environmental
Laws, including a timetable for implementation and completion thereof (a
“Compliance Program”). Subject to Section 5 of this Agreement, the Company
shall promptly initiate the agreed upon Compliance Program.


 


(2)                                  As to Non-Compliance Matters identified
after Closing, within sixty (60) days of receipt by DuPont of the notice
provided for pursuant to Section 1(a) above or, in the event that DuPont does
not agree that the instance of non-compliance identified in such notice
pre-dated the Closing, within sixty (60) days of a determination pursuant to
Section 4 that such instance did pre-date the Closing, representatives of
DuPont and the Company shall meet to agree upon a series of actions to be taken
to bring the Non-Compliance Matter(s) identified in the


 


3

















 


notice into compliance
with applicable Environmental Laws, including a timetable for implementation
and completion thereof (also a “Compliance Program”). Subject to Section 5 of
this Agreement, the Company shall promptly initiate the agreed upon Compliance
Program.


 


(e)                                  Chargeable Costs.  All
Losses incurred by the Company in respect of any Compliance Program shall be
paid by the Company up to the Environmental Liability Threshold; thereafter, DuPont
shall indemnify the Company for all Losses incurred by the Company in
connection with any Compliance Program.


 


SECTION 2.                            Environmental Conditions on or Associated With Real
Property.


 


(a)                                  Existence.  Prior to the
Closing Date, DuPont has performed various studies, surveys and audits of the
Real Property and the operations thereon to determine and define the locations,
nature and extent of waste disposal and/or contamination existing on or
associated with the Real Property as of the Closing Date (“Environmental
Assessments”), said Environmental Assessments having been provided to and
reviewed by the Company. The Company has in the course of its due diligence
prior to the Closing Date also conducted various studies, surveys and audits to
determine the existence of contamination on or associated with the Real
Property and has or will promptly upon completion provide copies of such
studies, surveys and audits to DuPont (also, “Environmental Assessments”). The
Environmental


 


4

















 


Assessments have identified a number of areas of contamination or
conditions on or associated with the Real Property that are considered by the
parties as possible bases for future incurrence of Environmental Liabilities.
Each such area of contamination and/or condition identified by either party in
such Environmental Assessments shall be defined as a “Pre-Closing Condition”.


 


(b)                                 Identification. 
The parties agree that additional areas of contamination and conditions
that have not yet been identified and which could be possible bases for future
incurrence of Environmental Liabilities may exist as of the Closing Date. If at
any time after the Closing Date the Company identifies such an area or
condition that has not been previously identified and that the Company believes
existed prior to the Closing Date, it shall promptly so notify DuPont, in
writing, giving as much detail as is reasonably available at that time. If the
identification by the Company is based upon receipt of a written communication
from any Governmental Authority or third person, the Company shall include a
copy of the written communication as part of its notice to DuPont. It DuPont
agrees, the contamination or condition shall be defined as a “Pre-Closing
Condition”. If DuPont disagrees, the dispute shall be resolved as provided in
Section 4 hereof.


 


(c)                                  Definition of Need For Remedial Action. 
Within sixty (60) days of the Closing Date, and within sixty (60) days
of the receipt by DuPont of any notice provided for in subsection (b) 


 


5

















 


above or, in the event DuPont does not agree that the contamination or
condition identified in such notice pre-dated the Closing, within sixty (60)
days of a determination pursuant to Section 4 that such contamination or condition
did pre-date the Closing (in which case the condition shall also be a
Pre-Closing Condition), representatives of the parties shall meet and determine
whether any Pre-Closing Conditions require Remedial Action (i) pursuant to
Environmental Laws and/or (ii) absent legal compulsion because such Pre-Closing
Condition, in the reasonable judgment of the Company, has had or is reasonably
likely to have a significant adverse effect on the Company’s operations at any
location; provided, however, that the Company shall not request Remedial Action
with respect to any condition associated with products or substances
incorporated in the structures and buildings located on the Real Property
unless Remedial Action is required by Applicable Laws existing and in effect at
the Closing.  If the parties agree with
respect to the need for Remedial Action, the parties shall develop a Remedial
Action Plan pursuant to subsection (e) below. If the parties disagree with
respect to the need for Remedial Action, the dispute shall be handled pursuant
to Section 4 below.


 


(d)                                 Additional Remediation Requirements.  If
at any time any Governmental Authority requires or purports to require
additional Remedial Actions with respect to any Pre-Closing Condition
remediated or subject to agreed remediation pursuant to


 


6

















 


this Agreement, or with
respect to any Pre-Closing Condition not subject to a Remedial Action Plan
developed pursuant to subsection (e) below (and whether previously identified
by one or both of the Parties), the Company shall provide notice thereof to
DuPont and such requirement shall be subject to development of a Remedial
Action Plan pursuant to subsection (e) below. In addition, even absent
governmental action, if at any time after the Closing Date the Company
reasonably determines that any such Pre-Closing Condition has created or is
likely to create significant operational difficulties for the Company, the
Company shall provide notice of such to DuPont. If DuPont agrees, the parties
shall develop and implement a Remedial Action Plan as set forth in subsection
(e) below. If DuPont does not agree, the dispute shall be resolved pursuant to
Section 4.


 


(e)                                  Development of Remedial Action Plans. If Remedial Action is required by any
Governmental Authority or requested by the Company pursuant to subsection (c),
(d) or (f) hereof, and either agreed as provided for in this section or
determined to be required or appropriate pursuant to Section 4, the parties
shall jointly agree upon a plan for remediation of each such Pre-Closing
Condition(s) (“Remedial Action Plan”, or “Plan”). Such Remedial Action Plan
shall specify, among other matters, the timetable for remediation, the methods
to be used, and the levels to which contamination shall be remediated and shall
in all respects represent the mutual judgment of the parties as to cost-


 


7

















 


effective and
operationally acceptable remediation standards reasonably likely to be
acceptable to the federal, state and other environmental Governmental
Authorities having jurisdiction, in light of such Authorities’ then-current
policies and practices and in light of the then-current uses of the property.
In reaching such judgment, the parties shall follow, as to the remediation to
be implemented with respect to any particular substance, any standards
respecting limits for such substance specified by Environmental Laws, except if
in the mutual judgment of the parties the application of such standard would not
be appropriate for remediation, in light of the general standard of
acceptability to Governmental Authorities. Any dispute between the parties
relating to such Remedial Action Plans shall be subject to section 4 hereof.


 


(f)                                    The Company’s Additional Requests. 
The Company may request the incorporation into any Remedial Action Plan
of additional remediation requirements or standards more stringent than or of a
different nature from that otherwise acceptable to any applicable Governmental
Authority if the Company can demonstrate that the remediation required by or
acceptable to the Governmental Authority is reasonably likely to have a
significant adverse operational impact on the Company, and if the Company can
obtain governmental approval for implementation of a Remedial Action Plan
incorporating such additional requirements or standards. If DuPont agrees, the
parties shall develop and


 


8

















 


implement a Remedial Action Plan as set forth in subsection (e) above. If
DuPont does not agree, the dispute shall be resolved pursuant to Section 4.


 


(g)                                 Approval of Remedial Action Plans.  Once the parties have agreed on a Remedial
Action Plan, the parties shall jointly submit such Plan to and seek approval
for such Plan from appropriate Governmental Authorities. Upon receiving such
approval, the Company shall implement the Plan, subject to Section 5 hereof. In
the event approval of such Plan is not obtained, the parties shall jointly
negotiate in good faith with the appropriate Governmental Authorities to obtain
a Remedial Action Plan that is acceptable. If Remedial Action not otherwise
acceptable to the parties is nonetheless required by appropriate Governmental
Authorities, the parties shall perform any Remedial Action so required, after
exhaustion of appropriate remedies including good faith negotiations with such
governmental agency (ies). In the event of failure to obtain governmental
approval of any proposed Plan to address a condition not required by Applicable
Law to be remediated, the Plan shall not be implemented; provided however that
the Company shall retain the right to implement such Plan at its sole cost and
its sole risk.


 


(h)                                 Chargeable Costs.  Except as specifically provided in subsection
(g) of this Section 2, all Losses incurred by the Company in respect of any
Remedial Action Plans shall be paid by the Company up to the Environmental
Liability Threshold except to 


 


9

















 


the extent such Losses are related to and based upon conditions which
do not constitute Pre-Closing Conditions; thereafter, DuPont shall indemnify
the Company for all Losses incurred by the Company in connection with any
Remedial Action Plan.


 


(i)                                     Non-Waiver. In no circumstances will the failure of the Company
to request or require the development and implementation of a Remedial Action
Plan with respect to any Pre-Closing Condition imply or effect any waiver by
the Company of DuPont’s indemnification obligation contained in Section 5.2(a)
of the Asset Purchase Agreement with respect to actions that may be required at
a later date in connection with Pre-Closing Conditions, nor shall the
implementation of any agreed upon and governmental-approved Remedial Action
Plan effectuate any transfer of liability to the Company with respect to
conditions covered by such Plan.


 


SECTION 3.                            Off-Site Matters.


 


(a)                                  Definition.  Pursuant to
the Asset Purchase Agreement, claims and liabilities associated with pre-Closing
off-site release, transport, handling, treatment, storage and disposal of
wastes and other substances, including claims under CERCLA and state law
analogues (collectively, “Superfund Claims”), and claims by third parties for
personal injury and/or property damage with respect to allegations of exposure
to such wastes and substances and similar substances sent, emitted and/or
discharged from the Real Property (whether under permit or not, and whether


 


10














 


legal
at the time of the discharge or omission involved and whether operationally
related or not) (collectively, “Toxic Tort Claims”) are encompassed within the
definition of Environmental Liabilities.


 


(b)           Management.  Promptly upon receipt of any Superfund Claim
or Toxic Tort Claim, the party receiving such Claim shall notify the other
party of the Claim, providing a copy of such Claim (if in writing) and such
detail relating thereto as is reasonably available at that time with respect to
such Claim. DuPont shall be responsible for the handling of any such Claims
received prior to the Closing Date, all subject to the provisions of Section 5.
Until the Environmental Liability Threshold has been exceeded, the Company
shall be responsible for handling any such Superfund Claims and Toxic Tort
Claims received after the Closing Date. As to any Superfund Claim which does
not implicate the ongoing operations or facilities of the Company, DuPont shall
have the option, within fifteen (15) days of its receipt of notice of the
Superfund Claim, to assume, by written notice to the Company, the defense and
management of such Superfund Claim. Any dispute between the parties relating to
whether a Superfund Claim implicates the ongoing operations or facilities of
the company shall be subject to Section 4 hereof. Losses incurred by the
Company in connection with the handling of any such Claims shall be chargeable
against the Environmental Liability Threshold or, if such Threshold has been
exceeded, shall be reimbursed by


 


11

















 


DuPont.


 


SECTION 4.           Procedures in the Event of
Disputes.


 


(a)           Procedures Governing Resolution of
Disputes.  If the parties are unable
to agree on any matter covered by Sections 1, 2 or 3 of this Agreement, such
disagreements shall be handled in accordance with this Section. In the event of
an inpasse, and upon thirty (30) days written notice of intent provided to the
other party, either the Company or DuPont may elect for a qualified and
recognized individual or firm of environmental engineers (to be selected
jointly be the Company and DuPont from time to time when and if necessary) (the
“Arbitrator”) to review the respective positions of DuPont and the Company and,
based upon the standards set forth below and in light of the provisions hereof
and of the Asset Purchase Agreement governing the various substantive areas,
make a determination as to the appropriate resolution of the dispute. In the
event the parties cannot agree within thirty (30) days on the identity of an
Arbitrator, each party shall appoint one representative qualified to be the
Arbitrator, and those two representatives shall jointly select a third
independent Arbitrator. The common costs of such dispute resolution process,
including the fee of the Arbitrator(s), shall be borne by the parties equally,
with each party bearing its own fees and costs; provided that none of such
costs shall be chargeable against the Environmental Liability Threshold. If the
Arbitrator specifically finds that either party has been acting


 


12

















 


in bad faith in
connection with a dispute, the Arbitrator may assess all of the costs of the
process against the party so acting in bad faith.  Each determination made by such Arbitrator
shall constitute an arbitration, the Arbitrator shall have the privileges and
immunities of arbitrators and its decision shall be final and binding on the
parties.


 


(b)           Standards for Substantive Areas.
Many substantive areas under this Agreement may be areas of dispute between the
parties on occasion and the parties may find themselves unable to agree despite
good faith attempts to achieve agreement. 
Disputes in all areas shall be handled pursuant to the procedures set
forth in subsection (a) above, provided that the standard for decision
shall be as set forth below.


 


(1)   Definition of Pre-Closing versus
Post-Closing Conditions.  In the
event the Company identifies a condition or area of contamination as a
Pre-Closing condition and DuPont believes that such condition or contamination
either did not pre-date the Closing or only partially pre-dated the Closing and
therefore is solely or partially the Company’s responsibility under the Asset
Purchase Agreement, and the parties cannot agree on the existence and/or extent
of post-Closing involvement, if any, the parties shall each submit their
positions, including all relevant factual and technical supporting information,
to the Arbitrator, who shall decide based on a reasonable assessment of all the
available evidence whether and to what extent each matter


 


13

















 


involves pre-Closing as
opposed to post-Closing components, and shall issue a decision based thereon.


 


(2)   Definition of Non-Compliance Matters.
In the event the Company identifies an instance of non-compliance as predating
the Closing, and DuPont believes that such instance of non-compliance did not
pre-date the closing and therefore is solely or partially the Company’s
responsibility under the Asset Purchase Agreement, and the parties cannot
agree, the parties shall each submit their positions, including all relevant factual and technical supporting
information, to the Arbitrator, who shall decide based on a reasonable
assessment of all the available evidence whether and to what extent each matter
constitutes an instance of non-compliance that was in existence as of the Closing
Date, and shall issue a decision based thereon.


 


(3)   Scope of Corrective Action for
Non-Compliance Matters. In the event the parties cannot agree on the
definition of a Compliance Program, the Arbitrator shall, based on all of the evidence
submitted and the positions of the parties, define a Compliance program which
will achieve compliance as required while balancing the interests of DuPont in
achieving compliance cost effectively with the interests of the Company in
guaranteeing permanent compliance without the imposition of undue operational
restrictions.


 


(4)   Need for and Scope of Remedial Action Plan. If the parties are unable to agree on
any details of a Remedial Action


 


14

















 


Plan
the Arbitrator shall make a determination based upon the standards of
acceptability to applicable Governmental Authorities and acceptability in view
of expected impact on existing operations of the Company, considering and appropriately
balancing the legitimate interest of DuPont in controlling costs with the
legitimate interest of the Company in minimizing oversight and management
commitments and avoiding operational constraints. The decision of the
Arbitrator shall be final and binding as the definition of the Remedial Action
Plan to be submitted to the Governmental Authorities for approval.


 


(5)   Additional Remediation Beyond Existing
Legal Requirements.  In the event that the Company seeks
additional remediation for operational reasons pursuant to Section 2(d) or
(f) above, and DuPont does not agree that such additional remediation is
appropriate, the sole recourse of the parties for resolution of the dispute is
to submit the matter to the Arbitrator selected pursuant to Subsection 4(a).
The Arbitrator’s decision in that event shall be based on the factors and
balancing of interests set forth in subsection 4(b)(4) hereof, provided,
however, that despite a decision by the Arbitrator in favor of DuPont, the
Company say at its own cost and its sole option, implement any and all
additional remediation it deems appropriate.


 


15

















 


SECTION 5.           Access and General Provisions
Respecting Implementation.


 


(a)           Access to Real Property.  Pursuant
to this Agreement, after the Closing Date, DuPont and its representatives will
require access to the Real Property in order to conduct, and monitor the action
of the Company with respect to, cleanup, remediation and/or other actions with
respect to Pre-Closing conditions and to correct and/or resolve Non-Compliance
Matters. The Company acknowledges and agrees that DuPont and its
representatives may enter upon the Real Property subsequent to the Closing Date
for such purposes. In connection with DuPont’s access to the Real Property,
both DuPont and the Company will exercise best efforts to avoid unreasonably
interfering with the actions, business and operations of the other Party on and
associated with the Real Property and the access of each party thereto. DuPont
will abide by all applicable health and safety requirements of the Company
while on the Real Property.


 


(b)           Communications and Cooperation
Between Parties. In connection with any Compliance Program or Plan, each
party shall keep the other party reasonably apprised of its progress and
activities. The parties shall cooperate with each other in all matters related
to such access, including in connection with scheduling and coordination of
planned activities to minimize disruption to the Company’s operations. The
Company agrees to cooperate with DuPont and its representatives, if such
cooperation is reasonably requested and required, in obtaining any governmental
approvals, consents, waivers or permits which


 


16

















 


may be required, and which will be obtained
in DuPont’s name and at DuPont’s sole cost with respect to any authorized
actions of DuPont pursuant to this agreement.


 


(c)           Services.     DuPont
or its agents may need access to services including potable water, electric and
telephone utilities, security and possibly wastewater treatment facilities in connection
with its activities on the Real Property subsequent to the Closing Date.  To the extent allowed by law and to the
extent available without adversely impacting upon the Company’s operations, the
Company will provide DuPont or its agents with access to such utilities and
facilities, on DuPont’s reasonable request, for all purposes authorized or
required under this Agreement such access is utilized by DuPont or its agents
in a reasonable manner which shall minimize interference with the Company’s
operations. DuPont will reimburse the Company for DuPont’s share of the
reasonable cost of providing such services upon receipt from the Company of
reasonably satisfactory evidence of the cost for such service based on a
proportional share mutually agreed to by the parties.


 


(d)           Contact by or with Governmental
Agencies or other Third parties:


 


(i)    Each
party shall use its best efforts to promptly notify the other party of any
contact, whether written, oral, or in person, by or with any Governmental
Authority representative, the press or communication media, or any public interest
group 


 


17

















 


relating to or regarding any
matter governed by this Agreement.


 


(ii)    Each
party shall notify the other party of any significant submissions or
disclosures it intends to make to any Governmental Authority or other third
party in connection with any Pre-Closing Condition or Non-Compliance Matter
(Including actions relating thereto), which notice shall include a reasonable
time period under the circumstances for review and comment. DuPont shall not
propose or make such a submittal or disclosure which would prevent or
significantly impair (which impairment any include a material increase in
costs), the ability of the Company to operate in the ordinary course of
business. Neither DuPont nor the Company shall disclose information about the
environmental condition of the Real Property or the Business which is unrelated
to the matters governed by this Agreement, provided, however, that
nothing herein shall impair the abilities of each party to submit or disclose
such information which that party reasonably deems necessary to fulfill its
obligations under applicable Environmental Laws as in effect at the time the
action is taken.


 


SECTION 6.           Indemnification Procedures.


 


(a)   Notices.    Any
notices provided to DuPont pursuant to Sections 1(a), 2(b), 2(d) and 3(b) above
shall constitute notice of a claim for indemnification pursuant to Section 8.2(d)
of the Asset Purchase agreement. In the event the Company contends it has a
claim for Indemnification pursuant to Section 8.2 of the


 


18

















 


Asset Purchase Agreement that is not covered by one of those identified
subsections, the Company shall reasonably promptly after becoming aware of such
claim provide written notice to DuPont. 
In the event DuPont has a claim for indemnification relating to
environmental matters pursuant to Section 8.2 of the Asset Purchase Agreement,
DuPont shall reasonably promptly after becoming aware of such claim provide
written notice to the Company.  Notices
of claim shall detail the nature of the claim and the basis therefore, and
shall include a copy of any written notification received, and shall otherwise
provide as such detail as is reasonably available at that time.  Failure to give notice as net set forth
herein shall not defeat a claim for indemnification but the parties’
indemnification obligations shall be apportioned to the extent that the
indemnifying party’s expenses are increased by the notifying party’s failure to
give notice as required.


 


(b)           Management
of Claims.  Subject to the provisions
of Section 5, the parties shall have the rights and responsibilities regarding
defense and management of any Toxic Tort Claim and Superfund Claim received as
provided for in Section 3.  However, each
party shall keep the other party informed of the progress of each Claim, and
provide the other party with reasonable opportunity to review and comment upon
the Claim and the proposals of the managing party with respect thereto.  Neither party shall propose nor enter into
any settlement of any Claims


 


19

















 


which could adversely impact the other party without the concurrence of
the other party, which concurrence shall not be unreasonably withheld.  It shall not be considered reasonable for
DuPont to attempt to require the Company to agree to restrictions on its
operations in lieu of or to otherwise avoid or minimize the payment of monetary
damages.


 


(c)           Accounting
for and Payment of Costs Incurred For Matters Subject to the Environmental
Liability Threshold.


 


(i)            Until
the amount of Losses incurred by the Company in respect of any Assumed
Environmental Liability is equal to the Environmental Liability Threshold, at
least once per year, beginning no later than one year from the Closing Date,
the Company shall submit to DuPont an accounting (the “Annual Accounting”) of
any and all Losses incurred by the Company during the preceding year in respect
of the Assumed Environmental Liabilities. 
Such Annual Accounting shall include a reasonably detailed statement of
each cost item of loss, the purpose of the expenditure, and the basis for the
contention that such loss is chargeable against the Environmental Liability
Threshold,


 


(ii)           Within
sixty (60) days of receipt of each Annual Accounting DuPont shall provide a
written response, either accepting the accounting or questioning specific items
and entries. As to each and every specific entry and item questioned, DuPont
shall include a reasonably detailed explanation of the basis for the question
and its contention as


 


20














 


to
the proper treatment of such item, as well as a request for any additional
information it requires in order to determine its position respecting the
appropriates treatment of such item under the Asset Purchase Agreement.


 


(iii)                               Within sixty
(60) days of the receipt of DuPont’s response, the Company and DuPont shall meet
and attempt to agree upon each questioned item. As to all items not questioned
or resolved by the good faith negotiations of the parties, the Annual
Accounting, as modified by agreement, shall be definitive. As to all items
questioned as to which the parties are unable to reach agreement, such disputes
shall be referred for resolution to a firm of independent public accountants of
national standing chosen by agreement of DuPont’s and the Company’s
accountants, the fees and expenses of such firm to be divided evenly between
DuPont and the Company. The decision of such independent accounting firm with
respect to the dispute shall be final and binding.


 


(iv)                              Once the
Environmental Liability Threshold has been exceeded, the Company shall submit
to DuPont on a quarterly basis claims for indemnification of all Losses in
respect of all Environmental Liabilities incurred by the Company, providing the
same level of detail as required for the accounting provided for in subsection
(c)(i) above. DuPont shall either promptly remit payment of the amount claimed
if there is no dispute or, if DuPont disputes or requires additional
information with respect


 


21

















 


to any Losses claimed, remit payment in the
amount of the undisputed charges contemporaneously with providing a notice
questioning the costs in the same detail as provided for in subsection (c)(ii)
above. Any such disputes shall be governed by and handled in accordance with
subsection (c)(iii) above.


 


Section 7.                                            Miscellaneous


 


(a)                                  Severability. If any
provision of this Agreement is inoperative or unenforceable for any reason,
such circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of rendering
any other provision or provisions herein contained invalid, inoperative, or
unenforceable to any extent whatsoever. The invalidity of any one or more
phrases, sentences, clauses, Sections or subsections of this Agreement shall
not affect the remaining portions of this Agreement.


 


(b)                                 Notices. All notices
and other communications made in connection with this Agreement shall be in
writing and shall be (a) mailed by first-class, registered or certified mail,
return receipt requested, postage prepaid, or (b) transmitted by hand delivery,
addressed as follows:


 


(i)                                     if to the
Company,


 


	
  RACI
  Acquisition Corporation

  
	
  c/o
  The Clayton & Dubilier Private Equity Fund IV Limited Partnership

  
	
  270
  Greenwich Avenue

  
	
  Greenwich,
  Connecticut 06830

  
	
  Telecopy:
  (203) 661-0544

  
	
  Attention:
  Clayton & Dubilier Associates IV

  



 


22

















 


	
  Limited
  Partnership, attention: Joseph L. Rice III, a general partner

  



 


	
  with a copy to:

  
	
   

  
	
  Clayton,
  Dubilier & Rice, Inc.

  
	
  126 East 56th Street

  
	
  New York, New York
  10022

  
	
  Telecopy:

  	
    (212)  355-7629

  
	
  Telephone:

  	
    (212)  355-0740

  
	
  Attention:

  	
    Richard C. Drandala

  
	
   

  	
   

  
	
  and to:

  
	
   

  
	
  Shumway &
  Nerle

  
	
  200 Pequot Avenue

  
	
  P.O. Box 550

  
	
  Southport, CT 06490

  
	
  Telecopy:

  	
    (203)  255-0365

  
	
  Telephone:

  	
    (203)  255-7444

  
	
  Attention:

  	
    Susan H. Shumway

  
	
   

  
	
  (ii) if to DuPont,

  
	
   

  
	
  Vice President and
  Treasurer

  
	
  E.I. Du Pont de Nemours
  and Company

  
	
  1007 Market Street

  
	
  Wilmington, Delaware
  19898

  
	
  Telecopy: (302)
  773-3995

  
	
   

  
	
  and to:

  
	
   

  
	
  Victor Ordija

  
	
  Sporting Goods
  Properties, Inc.

  
	
  1207 Prospect Drive

  
	
  Stratford, Connecticut
  06497

  
	
  Telephone: (203)
  377-0601

  
	
   

  
	
  (iii) if to RAC,

  
	
   

  
	
  Remington Arms
  Company, Inc.

  
	
  c/o Administrator,

  
	
  Du Pont
  Chemical & Energy operations

  
	
  Room 2045

  
	
  Du Pont Building

  
	
  Wilmington, Delaware
  19898

  
	
  Telephone: (302)
  773-3407

  



 


23

















 


	
  with
  a copy to:

  
	
   

  
	
  General
  Counsel

  
	
  E.I.
  Du Pont de Nemours and Company

  
	
  Legal
  Department

  
	
  Wilmington,
  Delaware 19898

  
	
  Telephone:
  (302) 774-7202

  



 


or,
in each case, at such other address as may be specified in writing to the other
parties hereto.


 


(c)                                  Headings.  The headings contained in this Agreement are
for purposes of convenience only and shall not affect the meaning or
interpretation of this Agreement.


 


(d)                                 Entire
Agreement.  This
Agreement and the Asset Purchase Agreement constitute the entire Agreement and
supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof. Nothing in this
Agreement shall modify in any way the scope of the assumption or retention of
Environmental Liabilities by the Company and DuPont, repectively, under the
Asset Purchase Agreement.


 


(e)                                  Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.


 


(f)                                    Governing Law,
etc.  This Agreement shall be
governed in all respects, including as to validity, interpretation and effect,
by the internal laws of the State of New York, without giving effect to the
conflict of laws rules thereof.


 


24

















 


(g)                                 Binding Effect. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors and permitted assigns.


 


(h)                                 Assignment. This
Agreement shall not be assignable by the Company without the prior written
consent of Dupont or by DuPont without the prior written consent of the Buyer, provided
that the Company may assign this Agreement to any Subsidiary of the Buyer or to
any lender to the Company or any Subsidiary or Affiliate thereof as security
for obligations to such lender in respect of the financing arrangements entered
into in connection with the transactions contemplated hereby and any
refinancings, extensions, refundings or renewals thereof, provided, further,
that no assignment hereunder shall in any way affect the Company’s obligations
or liabilities under this Agreement.


 


(i)                                     No Third Party
Beneficiaries. Except as provided in Section 8.2 of the Asset
Purchase Agreement with respect to indemnification of Indemnified Parties
nothing in this Agreement shall confer any rights upon any person or entity
other than the parties hereto and their respective heirs, successors and
permitted assigns.


 


(j)                                     Amendment:
Waivers, etc. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth
in writing and duly executed by the party against whom enforcement of the
amendment, modification discharge or waiver is sought. Any such waiver 


 


25

















 


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 granting such waiver
in any other respect or at any other time. 
Neither the waiver by any of the parties hereto of a breach of or a default
under any of the provisions of this Agreement, nor the failure by any of the
parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder, shall be construed
as a waiver of any other branch or default of a similar nature, or as a waiver
of any of such provisions, rights or privileges hereunder.  The rights and remedies of any party based
upon, arising out of or otherwise in respect of any such inaccuracy or breach
of any representation, warranty, covenant or agreement or failure to fulfill
any condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement as to which there is no inaccuracy or breach.


 


(k)                                  Effect on
Agreement on Use.  As between
the parties hereto, the terms of this Agreement shall supersede the provisions
of Section 3 of the Agreement on Use between Remington, the Company, and
DuPont, dated contemporaneously with this Agreement, and Section 3 of the
Agreement on Use shall have no effect as among and between the parties hereto.


 


26

















 


IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.


 


 


	
   

  	
  RACI
  ACQUISITION CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michical G. Babiarz

  
	
   

  	
   

  	
  Name:
  Michical G. Babiarz

  
	
   

  	
   

  	
  Title:
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  E.I
  DU PONT DE NEMOURS AND COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard H. Heath

  
	
   

  	
   

  	
  Name:
  Richard Heath

  
	
   

  	
   

  	
  Title:
  Attorney-in-Fact for DuPont

  



 


27