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                                                                  Exhibit 4.5



                          SECOND SUPPLEMENTAL INDENTURE

                  SECOND SUPPLEMENTAL INDENTURE, dated as of August 25, 2000
(this "Supplemental Indenture"), among RA Factors, L.L.C., as a Subsidiary
Guarantor ("Factors"), Remington Arms Company, Inc. (formerly named RACI
Acquisition Corporation, the "Company"), RACI Holding, Inc., as a Guarantor
("Holding") and U.S. Bank National Association, as Trustee (the "Trustee"), to
the Indenture referred to below.

                              W I T N E S S E T H:

                  WHEREAS, the Company, Holding and the Trustee are parties to
an Indenture, dated as of November 30, 1993 (as amended, supplemented, waived or
otherwise modified, the "Indenture"), under which the Company's 9 1/2% Senior
Subordinated Notes Due 2003 (the "Notes") are issued and outstanding;

                  WHEREAS, Factors is a Subsidiary of the Company, and intends
to enter into a guarantee of the Company's indebtedness under its Credit
Agreement;

                  WHEREAS, Section 1013 of the Indenture provides that any
Subsidiary which becomes liable with respect to any Indebtedness of the Company
will execute and deliver to the Trustee a supplemental indenture providing for a
guarantee of payment of the Securities by such Subsidiary, all as more
particularly described in such Section;

                  WHEREAS, Factors desires to enter into this Supplemental
Indenture in consideration of, among other things, the contribution to it of
capital by the Company; and

                  WHEREAS, pursuant to Section 901 of the Indenture, the parties
hereto are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture, without the consent of any Holder;

                  NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, Factors, the Company, Holding and the Trustee mutually covenant
and agree for the benefit of the Holders of the Notes as follows:

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                                   ARTICLE ONE

                                   DEFINITIONS

        1.1. Defined Terms. Terms used in this Supplemental Indenture that are
defined herein are used as so defined. Capitalized terms used herein without
definition shall have the meaning ascribed to them in the Indenture. 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.

                                   ARTICLE TWO

                                    GUARANTEE

        2.1. Guarantee. For value received, Factors, in accordance with this
Article Two, hereby absolutely, unconditionally and irrevocably guarantees to
the Trustee and the Holders, as if Factors were the principal debtor and not
merely a surety, the punctual payment and performance when due of all Indenture
Obligations (which for purposes of this Guarantee shall also be deemed to
include all commissions, fees, charges, costs and other expenses (including
reasonable legal fees and disbursements of one counsel) arising out of or
incurred by the Trustee or the Holders in connection with the enforcement of
this Guarantee).

        2.2. Continuing Guarantee; No Right of Set-Off; Independent Obligation.

        (a) This Guarantee shall be a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Factors covenants and agrees to comply with all
obligations, covenants, agreements and provisions applicable to it in the
Indenture including those set forth in Article Eight of the Indenture. Without
limiting the generality of the foregoing, Factors' liability shall extend to all
amounts which constitute part of the Indenture Obligations and would be owed by
the Company under this Indenture and the Securities but for the fact that they
are unenforceable, reduced, limited, impaired, suspended or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Company.

        (b) Factors hereby guarantees that the Indenture Obligations will be
paid to the Trustee without set-off or counterclaim or other reduction
whatsoever (whether for taxes, withholding or otherwise) in lawful currency of
the United States of America.

        (c) Factors guarantees that the Indenture Obligations shall be paid
strictly in accordance with their terms regardless of any law, regulation or
order now or

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hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the holders of the Securities.

        (d) Factors' liability to pay or perform or cause the performance of the
Indenture Obligations under this Guarantee shall arise forthwith after demand
for payment or performance by the Trustee has been given to Factors in the
manner prescribed in Section 106 of the Indenture.

        (e) Except as provided herein, the provisions of this Article Two cover
all agreements between the parties hereto relative to this Guarantee and none of
the parties shall be bound by any representation, warranty or promise made by
any Person relative thereto which is not embodied herein; and it is specifically
acknowledged and agreed that this Guarantee has been delivered by Factors free
of any conditions whatsoever and that no representations, warranties or promises
have been made to Factors affecting its liabilities hereunder, and that the
Trustee shall not be bound by any representations, warranties or promises now or
at any time hereafter made by the Company to Factors.

        2.3. Guarantee Absolute. The obligations of Factors hereunder are
independent of the obligations of the Company under the Securities and the
Indenture and a separate action or actions may be brought and prosecuted against
Factors whether or not an action or proceeding is brought against the Company
and whether or not the Company is joined in any such action or proceeding. The
liability of Factors hereunder is irrevocable, absolute and unconditional and
(to the extent permitted by law) the liability and obligations of Factors
hereunder shall not be released, discharged, mitigated, waived, impaired or
affected in whole or in part by:

        (a) any defect or lack of validity or enforceability in respect of any
indebtedness or other obligation of the Company or any other Person under the
Indenture or the Securities, or any agreement or instrument relating to any of
the foregoing;

        (b) any grants of time, renewals, extensions, indulgences, releases,
discharges or modifications which the Trustee or the Holders may extend to, or
make with, the Company, Factors or any other Person, or any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Indenture Obligations, or any other amendment or waiver of, or any consent to or
departure from, this Indenture or the Securities, including any increase or
decrease in the Indenture Obligations;

        (c) the taking of security from the Company, Factors or any other
Person, and the release, discharge or alteration of, or other dealing with, such
security;

        (d) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental

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authority or court amending, varying, reducing or otherwise affecting, or
purporting to amend, vary, reduce or otherwise affect, any of the Indenture
Obligations and the obligations of Factors hereunder;

        (e) the abstention from taking security from the Company, Factors or any
other Person or from perfecting, continuing to keep perfected or taking
advantage of any security;

        (f) any loss, diminution of value or lack of enforceability of any
security received from the Company, Factors or any other Person, and including
any other guarantees received by the Trustee;

        (g) any other dealings with the Company, Factors or any other Person, or
with any security;

        (h) The Trustee's or the Holders' acceptance of compositions from the
Company or Factors;

        (i) the application by the Holders or the Trustee of all monies at any
time and from time to time received from the Company, Factors or any other
Person on account of any indebtedness and liabilities owing by the Company or
Factors to the Trustee or the Holders, in such manner as the Trustee or the
Holders deems best and the changing of such application in whole or in part and
at any time or from time to time, or any manner of application of collateral, or
proceeds thereof, to all or any of the Indenture Obligations, or the manner of
sale of any Collateral;

        (j) the release or discharge of the Company or Factors or of any other
guarantor of the Securities or of any Person liable directly as surety or
otherwise by operation of law or otherwise for the Securities, other than an
express release in writing given by the Trustee, on behalf of the Holders, of
the liability and obligations of Factors under the Indenture;

        (k) any change in the name, business, capital structure or governing
instrument of the Company or Factors or any refinancing or restructuring of any
of the Indenture Obligations;

        (l) the sale of the Company's or Factors' business or any part thereof;

        (m) any merger or consolidation, arrangement or reorganization of the
Company, Factors, any Person resulting from the merger or consolidation of the
Company or Factors with any other Person or any other successor to such Person
or merged or consolidated Person or any other change in the corporate existence,
structure or ownership of the Company or Factors;

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        (n) the insolvency, bankruptcy, liquidation, winding-up, dissolution,
receivership or distribution of the assets of the Company or its assets or any
resulting discharge of any obligations of the company (whether voluntary or
involuntary) or of Factors or the loss of corporate existence;

        (o) any arrangement or plan of reorganization affecting the Company or
Factors;

        (p) any other circumstance (including any statute of limitations) that
might otherwise constitute a defense available to, or discharge of, the Company
or Factors; or

        (q) any modification, compromise, settlement or release by the Trustee,
or by operation of law or otherwise, of the Indenture Obligations or the
liability of the Company or any other obligor under the Securities, or of any
collateral, in whole or in part, and any refusal of payment by the Trustee, in
whole or in part, from any other obligor or other guarantor in connection with
any of the Indenture Obligations, whether or not with notice to, or further
assent by, or any reservation of rights against, Factors.

        2.4. Right to Demand Full Performance. In the event of any demand for
payment or performance by the Trustee from Factors hereunder, the Trustee or the
Holders shall have the right to demand its full claim and to receive all
dividends or other payments in respect thereof until the Indenture Obligations
have been paid in full, and Factors shall continue to be liable hereunder for
any balance which may be owing to the Trustee or the Holders by the Company
under the Indenture and the Securities. The retention by the Trustee or the
Holders of any security, prior to the realization by the Trustee or the Holders
of its rights to such security upon foreclosure thereon, shall not, as between
the Trustee and Factors, be considered as a purchase of such security, or as
payment, satisfaction or reduction of the Indenture Obligations due to the
Trustee or the Holders by the Company or any part thereof.

        2.5. Waivers. (a) Factors hereby expressly waives (to the extent
permitted by law) notice of the acceptance of this Guarantee and notice of the
existence, renewal, extension or the non-performance, non-payment, or
non-observance on the part of the Company of any of the terms, covenants,
conditions and provisions of the Indenture or the Securities or any other notice
whatsoever to or upon the Company or Factors with respect to the Indenture
Obligations. Factors hereby acknowledges communication to it of the terms of
this Indenture and the Securities and all of the provisions therein contained
and consents to and approves the same. Factors hereby expressly waives (to the
extent permitted by law) diligence, presentment, protest and demand for payment.

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        (b) Without prejudice to any of the rights or recourses which the
Trustee or the Holders may have against the Company, Factors hereby expressly
waives (to the extent permitted by law) any right to require the Trustee or the
Holders to:

                (i) initiate or exhaust any rights, remedies or recourse against
        the Company, Factors or any other Person;

                (ii) value, realize upon, or dispose of any security of the
        Company or any other Person held by the Trustee or the Holders; or

                (iii) initiate or exhaust any other remedy which the Trustee or
        the Holders may have in law or equity;

before requiring or becoming entitled to demand payment from Factors under this
Guarantee.

        2.6. Factors Remains Obligated In Event The Company Is No Longer
Obligated to Discharge Indenture Obligations. It is the express intention of the
Trustee and Factors that if for any reason the Company has no legal existence,
is or becomes under no legal obligation to discharge the Indenture Obligations
owing to the Trustee or the Holders by the Company or if any of the Indenture
Obligations owing by the Company to the Trustee or the Holders becomes
irrecoverable from the Company by operation of law or for any reason whatsoever,
this Guarantee and the covenants, agreements and obligations of Factors
contained in this Article Two shall nevertheless be binding upon Factors, as
principal debtor, until such time as all such Indenture Obligations have been
paid in full to the Trustee and all Indenture Obligations owing to the Trustee
or the Holders by the Company have been discharged, or such earlier time as
Section 402 of the Indenture shall apply to the Securities and Factors shall be
responsible for the payment thereof to the Trustee or the Holders upon demand.

        2.7. Waiver of Rights. Factors agrees (to the extent permitted by law)
that it hereby waives and will not in any manner whatsoever claim or take the
benefit or advantage of, any rights of reimbursement, exoneration, contribution,
indemnity or subrogation (whether contractual, under Section 509 of Title Eleven
of the United States Code, under common law or otherwise) or any similar rights
or "claims" (as such term is defined under Title Eleven of the United States
Code), against the Company or any Subsidiary arising from the existence of, or
performance by, Factors under this Guarantee.

        2.8. Guarantee Is In Addition to other Security. This Guarantee shall be
in addition to and not in substitution for any other guarantees or other
security which the Trustee may now or hereafter hold in respect of the Indenture
Obligations owing to the Trustee or the Holders by the Company and (except as
may be required by law) the

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Trustee shall be under no obligation to marshal in favor of Factors any other
guarantees or other security or any moneys or other assets which the Trustee may
he entitled to receive or upon which the Trustee or the Holders may have a
claim.

        2.9. Release of Security Interests. Without limiting the generality of
the foregoing and except as otherwise provided in the Indenture, Factors hereby
consents and agrees, to the fullest extent permitted by applicable law, that the
rights of the Trustee hereunder, and the liability of Factors hereunder, shall
not be affected by any and all releases for any purpose of any collateral, if
any, from the Liens and security interests created by any collateral document
and that this Guarantee shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Indenture obligations is
rescinded or must otherwise be returned by the Trustee upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, all as though such
payment had not been made.

        2.10. No Bar to Further Actions. Except as provided by law, no action or
proceeding brought or instituted under this Article and this Guarantee and no
recovery or judgment in pursuance thereof shall be a bar or defense to any
further action or proceeding which may be brought under this Guarantee by reason
of any further default or defaults under this Guarantee or in the payment of any
of the Indenture Obligations owing by the Company.

        2.11. Failure to Exercise Rights Shall Not operate As a Waiver; No
Suspension of Remedies. No failure to exercise and no delay in exercising, on
the part of the Trustee or the Holders, any right, power, privilege or remedy
under this Guarantee shall operate as a waiver thereof, nor shall any single or
partial exercise of any rights, power, privilege or remedy preclude any other or
further exercise thereof, or the exercise of any other rights, powers,
privileges or remedies. The rights and remedies herein provided for are
cumulative and not exclusive of any rights or remedies provided in law or
equity.

        Nothing contained in this Article shall limit the right of the Trustee
or the Holders to take any action to accelerate the maturity of the Securities
pursuant to Article Five of the Indenture or to pursue any rights or remedies
hereunder or under applicable law and subject to the rights, if any, under this
Guarantee of the holders, from time to time, of Senior Indebtedness to receive
the cash, property or securities receivable upon the exercise of such rights or
remedies.

        2.12. Trustee's Duties; Notice to Trustee. Any provision in this
Guarantee or in the Indenture allowing the Trustee to request any information,
or to take any action authorized by or on behalf of Factors, shall be permissive
and shall not be obligatory on the Trustee except as the Holders may direct in
accordance with the provisions of the

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Indenture or where the failure of the Trustee to request any such information or
to take any such action arises from the Trustee's negligence, bad faith or
willful misconduct.

        (a) The Trustee shall not be required to inquire into the existence,
powers or capacities of the Company, Factors or the officers, directors or
agents acting or purporting to act on their respective behalfs.

        (b) Notwithstanding the provisions of this Article Two or any provision
of the Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee under the Guarantee in respect of the Securities, unless and until
the Trustee shall have received written notice thereof from Factors, and, prior
to the receipt of any such written notice, the Trustee, subject to the
provisions of section 601 of the Indenture, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if a Responsible
Officer of the Trustee shall not have received any such notice from Factors at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of, or premium, if any, or interest on, any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purpose for which such money was received and shall not be affected by
any such notice to the contrary which may be received by it less than two
Business Days prior to such date; nor shall the Trustee be charged with
knowledge of the curing of any such default or the elimination of the act or
condition preventing any such payment unless and until the Responsible Officer
of the Trustee shall have received an Officers' Certificate to such effect.

        (c) In the case that at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Guarantee shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Guarantee in addition to or in place of the Trustee;
provided, however, that this Article shall not apply to the Company or any
Affiliate of the Company if the Company or such Affiliate acts as Paying Agent.

        2.13. Successors and Assigns. All terms, agreements and conditions of
this Guarantee shall extend to and by binding upon Factors and its successors
and permitted assigns and shall enure to the benefit of and may be enforced by
the Trustee and its successors and assigns; provided, however, that Factors may
not assign any of its rights or obligations hereunder other than in accordance
with Article Eight of the Indenture.

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        2.14. Release of Guarantee. (a) Concurrently with the payment in full of
all of the Indenture Obligations, then Factors shall be released from and
relieved of its obligations under this Guarantee. Upon the delivery by the
Company to the Trustee of an Officers' Certificate and, if reasonably requested
by the Trustee, an Opinion of Counsel to the effect that the transaction giving
rise to the release of this Guarantee was made by the Company in accordance with
the provisions of this Indenture and the Securities, the Trustee shall execute
any documents reasonably required in order to evidence the release of Factors
from its obligations under this Guarantee. If any of the Indenture Obligations
are revived and reinstated after the termination of this Guarantee, then all of
the obligations of Factors under this Guarantee shall be revived and reinstated
as if this Guarantee had not been terminated until such time as the Indenture
Obligations are paid in full, and Factors shall enter into an amendment to this
Guarantee, reasonably satisfactory to the Trustee, evidencing such revival and
reinstatement.

        (b) This Guarantee shall be automatically and unconditionally released
and discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all of the Capital Stock held by the Company or any
Subsidiary in, or all or substantially all the assets of, such Subsidiary, which
is in compliance with this Indenture or (ii) the release by the holders of the
Indebtedness of the Company described in Section 1013(a) of the Indenture of
their guarantee by such Subsidiary (including any deemed release upon payment in
full of all obligations under such Indebtedness), which release occurs at a time
when (A) no other Indebtedness of the Company remains guaranteed by such
subsidiary (other than pursuant to Permitted Guarantees), as the case may be, or
(B) the holders of all such other Indebtedness which is guaranteed by such
Subsidiary (other than pursuant to Permitted Guarantees) also release their
guarantee by such Subsidiary (including any deemed release upon payment in full
of all obligations under such Indebtedness).

        2.15. Execution of Guarantee. To evidence the Guarantee, Factors hereby
agrees to execute a guarantee substantially in the form set forth in Section
205, to be endorsed on each Security authenticated and delivered by the Trustee
and that the Indenture shall be executed on behalf of Factors by its Chairman of
the Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.

        If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates a Security on which the Guarantee
is so endorsed, such Guarantee shall be valid nevertheless.

        2.16. Guarantee Subordinate to Senior Guarantor Indebtedness. Factors
covenants and agrees, and each Holder of a Security, by his acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this

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Article, the Guarantee is hereby expressly made subordinate and subject in right
of payment as provided in this Section to the prior payment in full of all
Senior Guarantor Indebtedness in cash or Cash Equivalents or in any other form
acceptable to the requisite holders of Senior Guarantor Indebtedness; provided,
however, that the Indebtedness represented by this Guarantee in all respects
shall rank equally with, or prior to, all existing and future Indebtedness of
Factors that is expressly subordinated in right of payment to Senior Guarantor
Indebtedness.

        This Article Two shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Guarantor Indebtedness; and such provisions are made for the benefit of the
holders of Senior Guarantor Indebtedness; and such holders are made obligees
hereunder and they or each of them may enforce such provisions.

        2.17. Payment Over of Proceeds Upon Dissolution of Factors, etc. In the
event of (1) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to Factors or to its creditors, as such, or to
its assets, or (2) any liquidation, dissolution or other winding up of Factors,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (3) any assignment for the benefit of creditors or any other
marshaling of assets or liabilities of Factors, then and in any such event:

        (a) the holders of Senior Guarantor Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents or in any other form
acceptable to the requisite holders of Senior Guarantor Indebtedness, or
provision acceptable to the requisite holders of Senior Guarantor Indebtedness
made for such payment, of all amounts due on or in respect of all Senior
Guarantor Indebtedness, before the Holders of the Securities are entitled to
receive any payment or distribution of any kind or character (excluding
Permitted Guarantor Junior Securities) on account of the principal of, or
premium, if any, or interest on the Securities or on account of the purchase,
redemption, defeasance or other acquisition of or in respect of the Securities
(including any payment or other distribution which may be received from the
holders of Subordinated Indebtedness as a result of any payment on such
Subordinated Indebtedness); and

        (b) any payment or distribution of assets of Factors of any kind or
character, whether in cash, property or securities (excluding Permitted
Guarantor Junior Securities), by set-off or otherwise, to which the Holders or
the Trustee would be entitled but for the provisions of this Article shall be
paid by the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Guarantor Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Guarantor

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Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Guarantor Indebtedness held or
represented by each, to the extent necessary to make payment in full in cash or
Cash Equivalents or in any other form acceptable to the requisite holders of
Senior Guarantor Indebtedness, of all Senior Guarantor Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution to the
holders of such Senior Guarantor Indebtedness; and

        (c) in the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of Factors of any kind or character, whether
in cash, property or securities, in respect of principal of, or premium, if any,
and interest on the Securities or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of the Securities before all
Senior Guarantor Indebtedness is paid in full, then and in such event such
payment or distribution (excluding Permitted Guarantor Junior Securities)
(including any payment or other distribution which may be received from the
holders of Indebtedness expressly subordinated in right of payment to the
Guarantee as a result of any payment on such subordinated Indebtedness) shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other person making payment
or distribution of assets of Factors for application to the payment of all
Senior Guarantor Indebtedness remaining unpaid, to the extent necessary to pay
all Senior Guarantor Indebtedness in full in cash or Cash Equivalents or in any
other form acceptable to the requisite holders of Senior Guarantor Indebtedness
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Guarantor Indebtedness and until so paid shall be held in
trust for the benefit of the holders of Senior Guarantor Indebtedness.

        The consolidation of Factors with, or the merger of Factors with or
into, another Person or the liquidation or dissolution of Factors following the
sale, assignment, conveyance, transfer, lease or other disposal of all or
substantially all of its properties or assets to another Person upon the terms
and conditions set forth in Article Eight of the Indenture shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshaling of assets and liabilities of Factors for the purposes
of this Section if the Person formed by such consolidation or the surviving
entity of such merger or the Person which acquires by sale, assignment,
conveyance, transfer, lease or other disposal of all or substantially all of
Factors' properties or assets, as the case may be, shall, as a part of such
consolidation, merger, sale, assignment, conveyance, transfer, lease or other
disposal, comply with the conditions set forth in Article Eight of the
Indenture.

        2.18. Default on Senior Guarantor Indebtedness.

        (a) Upon the maturity of any Senior Guarantor Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof and interest thereon and
other

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amounts due in connection therewith shall first be paid in full in cash or Cash
Equivalents or in any other form acceptable to the requisite holders of such
Senior Guarantor Indebtedness, or such payment acceptable to the holders of
Senior Guarantor Indebtedness duly provided for, before any payment is made by
Factors or any Person acting on behalf of Factors in respect of the Guarantee.

        (b) No payment (excluding payments in the form of Permitted Guarantor
Junior Securities) shall be made by Factors in respect of the Guarantee during
the period in which Section 2.17 shall be applicable, during any suspension of
payments in effect under Section 1203(a) of the Indenture or during any Payment
Blockage Period in effect under Section 1203(b) of the Indenture.

        (c) In the event that, notwithstanding the foregoing, Factors shall make
any payment to the Trustee or the Holder of any Security pursuant to this
Guarantee prohibited by the foregoing provisions of this Article, then and in
such event such payment shall be paid over and delivered forthwith to the
representatives of Senior Guarantor Indebtedness or as a court of competent
jurisdiction shall direct and until so paid shall be held in trust for the
benefit of the holders of Senior Guarantor Indebtedness.

        2.19. Payment Permitted by Factors if No Default. Nothing contained in
this Article, in the Indenture or in any of the Securities shall prevent
Factors, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of Factors referred to
in Section 2.17 of this Article or under the conditions described in Section
2.18 of this Article, from making payments at any time of principal of, premium,
if any, or interest on the Securities in respect of the Guarantee.

        2.20. Subrogation to Rights of Holders of Senior Guarantor Indebtedness.
Subject to the payment in full of all Senior Guarantor Indebtedness in cash or
Cash Equivalents or in any other form acceptable to the requisite holders of
Senior Guarantor Indebtedness, the Holders of the Securities shall be subrogated
to the rights of the holders of such Senior Guarantor Indebtedness to receive
payments and distributions of cash, property and securities applicable to Senior
Guarantor Indebtedness until the principal of, premium, if any, and interest on
the Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of Senior Guarantor Indebtedness of any
cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Guarantor Indebtedness by Holders of the Securities or the Trustee,
shall, as among Factors, its creditors other than holders of Senior Guarantor
Indebtedness, and the Holders of the Securities, be deemed to be a payment or
distribution by Factors to or on account of the Senior Guarantor Indebtedness.

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<PAGE>   13

        2.21. Provisions Solely to Define Relative Rights. The provisions of
Sections 2.16 through 2.29 of this Guarantee are intended solely for the purpose
of defining the relative rights of the holders of the Guarantee on the one hand
and the holders of Senior Guarantor Indebtedness on the other hand. Nothing
contained in this Guarantee or elsewhere in the Indenture or in the Securities
is intended to or shall (a) impair, as among Factors, its creditors other than
holders of Senior Guarantor Indebtedness and the Holders of the Securities, the
obligation of Factors, which is absolute and unconditional, to pay to the
holders of the Guarantee the principal of, or premium, if any, and interest on,
the Securities as and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against Factors of the
Holders of the Securities and creditors of Factors other than the holders of
Senior Guarantor Indebtedness; or (c) prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon
default under the Indenture, subject to the rights, if any, under this Article
of the holders of Senior Guarantor Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of Factors referred to
in Section 2.17, to receive, pursuant to and in accordance with such Section,
cash, property and securities otherwise payable or deliverable to the Trustee or
such Holder, or (2) under the conditions specified in Section 2.18, to prevent
any payment prohibited by such Section or enforce their rights pursuant to
Section 2.18(c).

        2.22. Trustee to Effectuate Subordination. Each holder of the Guarantee
by his acceptance thereof authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of Factors whether in
bankruptcy, insolvency, receivership proceedings, or otherwise, the timely
filing of a claim for the unpaid balance of the indebtedness of Factors owing to
such holder in the form required in such proceedings and the causing of such
claim to be approved. If the Trustee does not file a proper claim at least 30
days before the expiration of the time to file such claim, then the holders of
Senior Guarantor Indebtedness and their agents, trustees or other representative
are authorized to do so and on behalf of the holders.

        2.23. No Waiver of Subordination Provisions.

        (a) No right of any present or future holder of any Senior Guarantor
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
Factors or by any act or failure to act by any such holder, or by any
non-compliance by Factors with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.

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<PAGE>   14

        (b) Without limiting the generality of Subsection (a) of this Section,
the holders of Senior Guarantor Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Section or
the obligations hereunder of the holders of the Guarantee to the holders of
Senior Guarantor Indebtedness, do any one or more of the following: (1) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Guarantor Indebtedness or any instrument evidencing the same or
any agreement under which Senior Guarantor Indebtedness is outstanding; (2)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Guarantor Indebtedness; (3) release any Person
liable in any manner for the collection or payment of Senior Guarantor
Indebtedness; and (4) exercise or refrain from exercising any rights against
Factors and any other Person; provided, however, that in no event shall any such
actions limit the right of the Holders of the Securities to take any action to
accelerate the maturity of the Securities in accordance with provisions
described under "Events of Default" and as set forth pursuant to Article Five in
the Indenture or to pursue any rights or remedies hereunder or under applicable
laws if the taking of such action does not otherwise violate the terms of this
Article.

        2.24. Notice to Trustee by Factors.

        (a) Factors shall give prompt written notice to the Trustee of any fact
known to Factors which would prohibit the making of any payment to or by the
Trustee in respect of the Guarantee. Notwithstanding the provisions of this
Article or any provision of the Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Guarantee, unless and until the
Trustee shall have received written notice thereof from Factors or a holder of
Senior Guarantor Indebtedness or from any representative, trustee, fiduciary or
agent therefor; and, prior to the receipt of any such written notice, the
Trustee shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of, or premium, if
any, or interest on any Security), then, anything herein contained to the
contrary notwithstanding but without limiting the rights and remedies of the
holders of Senior Guarantor Indebtedness or any trustee, fiduciary or agent
thereof, the Trustee shall have full power and authority to receive such money
and to apply the same to the purpose for which such money was received and shall
not be affected by any notice to the contrary which may be received by it less
than two Business Days prior to such date; nor shall the Trustee be charged with
knowledge of the curing of any such default or the elimination of the act or
condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect.

                                       14
<PAGE>   15

        (b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and Factors by a Person representing himself to be
a representative of a holder or a holder of Senior Guarantor Indebtedness (or a
trustee, fiduciary or agent therefor) to establish that such notice has been
given by a representative of a holder or a holder of Senior Guarantor
Indebtedness (or a trustee, fiduciary or agent therefor); provided, however,
that failure to give such notice to the Company shall not affect in any way the
ability of the Trustee to rely on such notice. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Guarantor Indebtedness to participate
in any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Guarantor Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article,
and if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.

        2.25. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of Factors referred to in this
Article, the Trustee and the Holders of the Securities shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Guarantor Indebtedness
and other indebtedness of Factors, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section, provided that the foregoing shall apply only if such
court has been fully apprised of the provisions of this Article.

        2.26. Rights of Trustee as a Holder of Senior Guarantor Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Guarantor Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Guarantor Indebtedness, and nothing in the
Indenture shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article shall apply to claims of, or payments to, the Trustee under or
pursuant to the provisions in the Indenture regarding compensation and
indemnification of the Trustee.

        2.27. Section Applicable to Paying Agents. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting under the Indenture, the term "Trustee" as used in this Section
shall in such

                                       15
<PAGE>   16

case (unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Section in addition to or in
place of the Trustee; provided, however, that Section 2.26 of this Guarantee
shall not apply to Factors or any Affiliate of Factors if it or such Affiliate
acts as Paying Agent.

        2.28. No Suspension of Remedies. Nothing contained in this Article shall
limit the right of the Trustee or the Holders of Securities to take any action
to accelerate the maturity of the Securities pursuant to the provisions
described under Article Five of the Indenture and as set forth in the Indenture
or to pursue any rights or remedies thereunder or under applicable law, subject
to the rights, if any, under this Section of the holders, from time to time, of
Senior Guarantor Indebtedness to receive the cash, property or securities
receivable upon the exercise of such rights or remedies.

        2.29. Trustee's Relation to Senior Guarantor Indebtedness. With respect
to the holders of Senior Guarantor Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Guarantor Indebtedness shall be read into
this Article against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Guarantor Indebtedness and the Trustee
shall not be liable to any holder of Senior Guarantor Indebtedness if it shall
mistakenly in the absence of gross negligence or willful misconduct pay over or
deliver to Holders, Factors or any other Person moneys or assets to which any
holder of Senior Guarantor Indebtedness shall be entitled by virtue of this
Article or otherwise.

                                 ARTICLE THREE 3

                                  MISCELLANEOUS

        3.1. Parties. Except as otherwise specified herein, nothing in this
Supplemental Indenture is intended or shall be construed to give any Person,
other than the Holders and the Trustee, any legal or equitable right, remedy or
claim under or in respect of Factors' Guarantee or any provision contained
herein.

        3.2. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT THE
APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE
TRUSTEE, THE COMPANY, ANY OTHER OBLIGOR IN RESPECT OF THE NOTES AND (BY THEIR
ACCEPTANCE OF THE NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE JURISDICTION OF ANY
UNITED STATES

                                       16
<PAGE>   17

FEDERAL OR STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR
THE NOTES.

        3.3. Ratification of Indenture; Supplemental Indenture Is 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 Notes heretofore or
hereafter authenticated and delivered shall be bound hereby. The Trustee makes
no representation or warranty as to the validity or sufficiency of this
Supplemental Indenture.

        3.4. Counterparts. The parties hereto may sign one or more copies of
this Supplemental Indenture in counterparts, all of which together shall
constitute one and the same agreement.

        3.5. Headings. The section headings herein are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.


                                       17
<PAGE>   18


        IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.




                              RA FACTORS, L.L.C., as a Subsidiary Guarantor


                              By:/s/Nicole M. Apple
                                 ---------------------------------
                                 Name:  Nicole M. Apple
                                 Title: Vice President


                              REMINGTON ARMS COMPANY, INC., as Issuer


                              By: /s/Nicole M. Apple
                                 ---------------------------------
                                 Name:  Nicole M. Apple
                                 Title: Treasurer


                              RACI HOLDING, INC., as a Guarantor


                              By: /s/Nicole M. Apple
                                 ---------------------------------
                                 Name:  Nicole M. Apple
                                 Title: Treasurer


                              U.S. BANK NATIONAL ASSOCIATION,
                                   as Trustee


                              By: /s/Harry H. Hall
                                 ---------------------------------
                                 Name:  Harry H. Hall
                                 Title: Vice President

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