Document:

SECOND AMENDMENT TO CREDIT AGREEMENT

 Exhibit 10.59 
  
 SECOND AMENDMENT TO CREDIT AGREEMENT 
  
 THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into this 31st day of October, 2003, by and among REMINGTON
ARMS COMPANY, INC., a Delaware corporation (“Remington”); RA FACTORS, INC., a Delaware corporation (“Factors”; together with Remington, the ”Borrowers” and individually a “Borrower”); WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association with an office at 191 Peachtree Street, Atlanta, Georgia 30303, in its capacity as administrative and collateral agent (together with its successors on such capacity, “Agent”)
for various financial institutions (“Lenders”), and Lenders. 
  
 Recitals: 
  
 Agent, Lenders and Borrowers
are parties to a certain Credit Agreement dated January 24, 2003; and as amended in the First Amendment to Credit Agreement dated June 30, 2003 (as at any time amended, the “Credit Agreement”) pursuant to which Lenders have made certain
revolving credit loans to Borrowers. 
  
 The parties desire to
amend the Credit Agreement as hereinafter set forth. 
  
 NOW,
THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency of which are hereby severally acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

  
 1. Definitions. All capitalized terms used in
this Amendment, unless otherwise defined herein, shall have the meaning ascribed to such terms in the Credit Agreement. 
  
 2. Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows: 
  
 (a) by deleting the definition of “Applicable Margin” in Section
1.1 of the Credit Agreement its entirety and by substituting in lieu thereof the following: 
  
 Applicable Margin – a percentage equal to 2.50% for Revolver Loans which are Euro-Dollar Loans and 1.25% for Revolver Loans
which are Base Rate Loans; provided that, commencing on the first Pricing Adjustment Date by reference to the immediately preceding Pricing Determination Date and on each Pricing Adjustment Date thereafter, the Applicable Margin shall
be increased or decreased, based upon the Average Consolidated Funded Debt to EBITDA Ratio as of such Pricing Determination Date, as set forth in the applicable table below (but decreased only if on the relevant Pricing Determination Date no Default
or Event of Default exists): 
  

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 If the Pricing Determination Date occurs during the Availability Test Period, then the Applicable Margin
shall be determined in accordance with the following table: 
  

	 Average Consolidated
 Funded Debt to EBITDA Ratio

	 	 Applicable Margin for
 Euro-Dollar Loans

	 	 Applicable Margin for
 Base Rate Loans

	 Greater than 4.75 to 1.00
	 	3.00%	 	1.50%
			
	 Greater than or equal to 4.25 to 1.00 and less than 4.75 to 1.00
	 	2.75%	 	1.25%
			
	 Greater than or equal to 3.75 to 1.00 and less than 4.25 to 1.00
	 	2.50%	 	1.00%
			
	 Greater than or equal to 3.25 to 1.00 and less than 3.75 to 1.00
	 	2.25%	 	0.75%
			
	 Greater than or equal to 2.75 to 1.00 and less than 3.25 to 1.00
	 	2.00%	 	0.50%
			
	 Less than 2.75 to 1.00
	 	1.75%	 	0.25%

  
 If the Pricing
Determination Date occurs other than during the Availability Test Period, then the Applicable Margin shall be determined in accordance with the following table: 
  

	 Average Consolidated
 Funded Debt to EBITDA Ratio

	 	 Applicable Margin for
 Euro-Dollar Loans

	 	 Applicable Margin for
 Base Rate Loans

	 Greater than or equal to 5.75 to 1.00
	 	3.50%	 	1.50%
			
	 Greater than or equal to 5.25 to 1.00 and less than 5.75 to 1.00
	 	3.25%	 	1.50%
			
	 Greater than or equal to 4.75 to 1.00 and less than 5.25 to 1.00
	 	3.00%	 	1.50%
			
	 Greater than or equal to 4.25 to 1.00 and less than 4.75 to 1.00
	 	2.75%	 	1.25%

  

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	 Greater than or equal to 3.75 to 1.00 and less than 4.25 to 1.00
	 	2.50%	 	1.00%
			
	 Greater than or equal to 3.25 to 1.00 and less than 3.75 to 1.00
	 	2.25%	 	0.75%
			
	 Greater than or equal to 2.75 to 1.00 and less than 3.25 to 1.00
	 	2.00%	 	0.50%
			
	 Less than 2.75 to 1.00
	 	1.75%	 	0.25%

  
 Except as set forth
in the last sentence hereof, any such increase or reduction in the Applicable Margin shall be effective on the first day of the Fiscal Quarter following Agent’s receipt of the applicable financial statements and corresponding Compliance
Certificate (each a “Pricing Adjustment Date”). If the financial statements and the Compliance Certificate of Borrowers setting forth the Average Consolidated Funded Debt to EBITDA Ratio are not received by Agent by the date required
pursuant to Section 10.1.3 of this Agreement, the Applicable Margin shall be determined as if the Average Consolidated Funded Debt to EBITDA Ratio exceeds (i) 4.75 to 1.00 (if the applicable Pricing Determination Date occurs during the
Availability Test Period) or (ii) 5.75 to 1.00 (if the applicable Pricing Determination Date occurs other than during the Availability Test Period), in each case until such time as such financial statements and Compliance Certificate are received
and any Event of Default resulting from a failure to timely deliver such financial statements or Compliance Certificate is waived in writing by Agent and Lenders in their sole discretion; provided, however, that nothing herein shall be
deemed to prevent Agent and Lenders from charging interest at the Default Rate for so long as an Event of Default exists. For the final Fiscal Quarter of any Fiscal Year of Borrowers, Borrowers may provide the unaudited financial statements of
Borrowers, subject only to absence of footnotes and year-end adjustments, for the purpose of determining the Applicable Margin, but if, upon delivery of the annual audited financial statements required to be submitted by Borrowers to Agent pursuant
to Section 10.1.3(i) of this Agreement, Borrowers have not met the criteria for reduction of the Applicable Margin pursuant to the terms hereinabove for the final Fiscal Quarter of the Fiscal Year of Borrowers then ended, then (a) such
Applicable Margin reduction shall be terminated and, effective on the first day of the month following receipt by Agent of such audited financial statements, the Applicable Margin shall be the Applicable Margin that would have been in effect if such
reduction had not been implemented based upon the unaudited financial statements of Borrowers for the final Fiscal Quarter of the Fiscal Year of Borrowers then ended, and (b) Borrowers shall pay to Agent, for the benefit of the Lenders, on the first
day of the month following receipt by Agent of such audited financial statements, an amount equal to the difference between the amount of 
  

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 interest that would have been paid on the principal amount of the Obligations using the Applicable Margin
determined based upon such audited financial statements and the amount of interest actually paid during the period in which the reduction of the Applicable Margin was in effect based upon the unaudited financial statements for the final Fiscal
Quarter of the Fiscal Year of Borrowers then ended. 
  
 (b) by
deleting the definition of “Consolidated EBITDA” in Section 1.1 of the Credit Agreement its entirety and by substituting in lieu thereof the following: 
  
 Consolidated EBITDA – of any Person, for any period, the Consolidated Net Income of such Person
for such period adjusted (i) to exclude the following items of income or expense to the extent that such items are included in the calculation of such Consolidated Net Income: (a) Consolidated Interest Expense, (b) any non-cash expenses and charges,
(c) total income tax expense, (d) depreciation expense, (e) the expense associated with amortization of intangible and other assets, (f) non-cash provisions for reserves for discontinued operations, (g) any extraordinary, unusual or non-recurring
gains or losses or charges or credits (without limiting the foregoing, Borrowers may not increase Consolidated EBITDA for plant closure expenses resulting from management’s election to temporarily close one or more plants), (h) any gain or loss
associated with the sale or write-down of assets, (i) any gain or loss accounted for by the equity method of accounting (except in the case of income to the extent of the amount of cash dividends or cash distributions paid to a Borrower or any
Subsidiary by the entity accounted for by the equity method of accounting) and (j) amounts paid as permitted dividends that are treated as compensation expense, and (ii) to include the amount of any cash expenditures for charges previously added
back to the calculation of Consolidated Net Income in prior periods. 
  
 (c) by inserting the following new defined terms in Section 1.1 of the Credit Agreement in the proper alphabetical sequence: 
  
 Availability Test Period – the period commencing on October 31, 2003, and ending on the Availability Test Period Termination
Date. 
  
 Availability Test Period Termination
Date – as defined in Section 10.3.4. 
  
 Minimum Availability Condition – as defined in Section 10.3.1. 
  
 Most Recent Covenant Test Period – The period of 4 consecutive Fiscal Quarters ended on the last day of the Fiscal Quarter for
which Agent has most recently received from Borrowers the financial statements and the Compliance Certificate required pursuant to Section 10.1.3(ii) of this Agreement. 
  
 Seasonal Testing Period – as defined in Section 10.3.1. 
  

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 (d) by deleting Section 4.1.1(i) of the Credit Agreement in its entirety and by substituting in lieu
thereof the following: 
  
 4.1.1. Notice of
Borrowing. 
  
 (i) Whenever a Borrower
desires to make a Borrowing under Section 2.1 of this Agreement (other than a Borrowing resulting from a conversion or continuation pursuant to Section 3.1.2), Remington shall give Agent prior written notice (or telephonic notice
promptly confirmed in writing) of such Borrowing request (a “Notice of Borrowing”), which shall be in the form of Exhibit D annexed hereto and signed by an authorized officer of Remington. Such Notice of Borrowing shall be
given by Remington no later than 12:00 noon at the office of Agent designated by Agent from time to time (a) on the Domestic Business Day of the requested funding date of such Borrowing, in the case of Base Rate Loans, and (b) at least 3 Euro-Dollar
Business Days prior to the requested funding date of such Borrowing, in the case of Euro-Dollar Loans. Notices received after 12:00 noon shall be deemed received on the next Domestic Business Day. The Revolver Loans made by each Lender on the
Closing Date shall be made as Base Rate Loans and thereafter may be made or continued as or converted into Base Rate Loans or Euro-Dollar Loans. Each Revolver Loan (other than Settlement Loans) requested by Borrowers after the Closing Date shall be
for an amount of $100,000 or integral multiples of $100,000 in excess of that amount, except for Revolver Loans deemed requested pursuant to clause (ii) of this Section 4.1.1. Each Notice of Borrowing (or telephonic notice thereof) shall be
irrevocable and shall specify (a) the principal amount of the Borrowing, (b) the date of Borrowing (which shall be a Domestic Business Day), (c) whether the Borrowing is to consist of Base Rate Loans or Euro-Dollar Loans, (d) in the case of
Euro-Dollar Loans, the duration of the Interest Period to be applicable thereto, and (e) the account of Borrowers to which the proceeds of such Borrowing are to be disbursed. Borrowers may not request any Euro-Dollar Loans if a Default or Event of
Default exists. 
  
 (e) by deleting Section 8.2.5(ii) of the
Credit Agreement in its entirety and by substituting in lieu thereof the following: 
  
 (ii) If at any time a Cash Management Event (as defined below) occurs, each Borrower and each relevant Guarantor shall promptly open a
lockbox with Agent (or at the option of Agent, Agent shall be given exclusive control of the existing lockbox or lockboxes) (in either case, a “Lockbox”), and Agent shall notify Wachovia and all other Approved Depositories to remit
balances in Deposit Accounts maintained by them to Agent. Agent agrees not to exercise its exclusive control over any such Deposit Accounts except after and during the continuance of a Cash Management Event. Agent also agrees, upon Borrowers’
written request, to notify Wachovia and all other Approved Depositories to remit 
  

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 balances in Deposit Accounts maintained by them to Borrowers after the occurrence of a Cash Management
Reinstatement Event (as defined below), unless a subsequent Cash Management Event shall occur, whereupon Agent shall notify Wachovia and all other Approved Depositories to remit balances in Deposit Accounts maintained by them to Agent. Agent shall
remove from all Lockboxes, and shall deposit to a Collateral Reserve Account promptly after receipt, all cash and Payment Items received from Account Debtors and all amounts received from Approved Depositories and, subject to clause (iii) below,
Agent shall apply the proceeds thereof against the Obligations in accordance with the terms of this Agreement, with remaining collected amounts in each Collateral Reserve Account to be transferred by Agent to the operating account of a Borrower,
provided that Net Deposition Proceeds shall be held subject to the provisions of Section 5.4. As used herein, the term “Cash Management Event” shall mean the occurrence or existence of any of the following events or conditions: (x)
Availability on any date during the Availability Test Period shall be less than $35,000,000 or on any other date shall be less than $12,500,000 (in either case whether or not Availability shall thereafter equal or exceed such amount); (y) there
shall occur any event or condition that has had or could reasonably be expected to have a Material Adverse Effect, as determined in the reasonable judgment of Agent or the Required Lenders; or (z) an Event of Default shall exist and Agent or the
Required Lenders shall have, in its or their sole discretion, elected to enforce, collect and receive all amounts owing with respect to the Accounts and/or other Collateral. As used herein, the term “Cash Management Reinstatement Event”
shall mean the occurrence or existence of the following events or conditions after a Cash Management Event has occurred: (i) Availability shall have been not less than (A) $35,000,000 for a period of 120 consecutive days during the Availability Test
Period after the occurrence of a Cash Management Event, or (B) $17,500,000 for a period of 90 consecutive days at any other time after the occurrence of a Cash Management Event, and (ii) during such 120-day or 90-day period, as the case may be, no
event or condition shall exist which would constitute a Cash Management Event. 
  
 (f) by deleting Section 8.4.4 of the Credit Agreement in its entirety and by substituting in lieu thereof the following: 
  
 8.4.4. Appraisals. Agent reserves the right, exercisable from time to time hereafter in Agent’s credit judgment, to
require each Borrower and each Guarantor to obtain, and each Borrower and each Guarantor shall promptly obtain, at each Borrower’s expense, appraisals or updates to existing appraisals being obtained in connection with the execution and
delivery of this Agreement, reflecting then current values of the Equipment or Inventory; provided, however, that unless a Default or Event of Default exists, not more than one such appraisal annually shall be conducted at
Borrowers’ expense. Nothing herein shall be construed to 
  

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 prohibit Agent from obtaining any such appraisal, either directly or through any Agent Professional, and
charging the cost of any such appraisal to Borrowers, subject to the limitations hereinabove set forth. 
  
 (g) by inserting the following new sentence at the end of Section 8.5 of the Credit Agreement: 
  
 Notwithstanding the foregoing, during the Availability Test
Period, Borrowers shall deliver a Weekly Borrowing Base Certificate on or before the third Domestic Business Day of each week, in which the Borrowing Base shall be calculated as of the last day of the immediately preceding week. 
  
 (h) by deleting Section 10.2.7 of the Credit Agreement in its entirety and by
substituting in lieu thereof the following: 
  
 10.2.7. Restricted Payments. Declare or make any Restricted Payments except for (a) Upstream Payments; (b) the Special Distribution, to the extent funded solely from proceeds of the New Senior Notes and provided that Agent has
first received a Solvency Certificate certifying that each Borrower and each Guarantor is Solvent at the time of such Special Distribution and after giving effect thereto; and (c) the reasonable operating expenses of Holding that arise in the
Ordinary Course of Business and the tax obligations of Holding (including franchise taxes) to the extent related to (A) Borrowers’ operations and not paid directly by a Borrower as part of the payment of the consolidated tax obligations of
Borrowers, Holding and their Affiliates, or (B) Restricted Payments received by Holding, provided that the aggregate amount of cash Distributions made under this clause (c) does not exceed $100,000 in any Fiscal Year. In addition, Remington and its
Subsidiaries may (x) during the Availability Test Period make cash Distributions to Holding in an amount sufficient for Holding to pay the accrued and unpaid interest on the $20,000,000 Senior Note A Due 2011 and the $12,891,480.11 Senior Note B Due
2012, each dated February 12, 2003, and each made by Holding payable to C&D Fund IV, in accordance with their terms in effect on the date of issuance thereof, provided,that at the time of such Restricted Payment, and after giving
effect thereto, both the Minimum Availability Condition and each of the conditions to the making of cash Distributions to Holding described in sub-clauses (i) through (vi), inclusive, of clause (y) of this Section 10.2.7 is satisfied; and (y)
at any time other than during the Availability Test Period, make cash Distributions to Holding and repurchases or redemptions of New Senior Notes, provided that, in each case, at the time of such Restricted Payment, and after giving
effect thereto, each of the following conditions is satisfied: (i) no Default or Event of Default exists at the time of or after giving effect to any such Restricted Payment and, after giving effect to the Restricted Payment, no Event of Default
under Section 10.3 is projected to occur as shown in the then current Projections; (ii) Borrowers give to Agent not less than 10 Business Days prior written notice of Remington’s intent to make any such Restricted Payment, the amount
thereof and the proposed date of the Restricted 
  

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 Payment (which shall in any event not be more than 30 days after the date on which such notice is given
to Agent); (iii) after giving effect to such Restricted Payment, Borrowers will have total Availability of not less than $15,000,000 and calculated from Borrowers’ then current projections, Borrowers will have total Availability of not less
than $15,000,000 at any time during the 12-month period immediately following the month in which such Restricted Payment is to be paid; (iv) the Restricted Payment is not violative of any Applicable Law relating to Restricted Payments generally; (v)
if the aggregate amount of all cash Restricted Payments paid during the 12-month period prior to the date of payment of the proposed Restricted Payment when added to the proposed Restricted Payment exceeds $10,000,000, Borrowers provide Agent with a
Solvency Certificate certifying that each Obligor is Solvent and will remain Solvent after payment of the proposed Restricted Payment; and (vi) the amount of the Restricted Payment, when added to the aggregate amount of all other Restricted Payments
after October 1, 2002, does not exceed the sum of (A) 50% of the aggregate amount of Consolidated Net Income of Borrowers accrued on a cumulative basis during the period commencing October 1, 2002, and ending on the last day of the Fiscal Quarter
ending immediately prior to the date of the Restricted Payment for which Agent has received the financial statements required pursuant to Section 10.1.3(ii), plus (B) $5,000,000. 
  
 (i) by deleting Section 10.2.13 of the Credit Agreement in its entirety and by substituting in lieu thereof the following:

  
 10.2.13. Acquisitions. Make any
Acquisition other than a Permitted Acquisition. As used herein, the term “Acquisition” shall mean any transaction, or any series of transactions, by which a Borrower or any of its Subsidiaries directly or indirectly (a) acquires any
ongoing business unit or all or substantially all of the assets of any Person, whether through the purchase of assets, merger or otherwise, (b) acquires (in one transaction or as the most recent transaction in a series of transactions) control of at
least a majority in ordinary voting power of the securities of a corporation which have ordinary voting power for the election of directors or (c) acquires control of 50% or more ownership interest in any partnership or joint venture. As used
herein, the term “Permitted Acquisition” shall mean any Acquisition by Remington or any of its Subsidiaries (other than Factors or Brands) in which each of the following conditions is satisfied: (1) the business of the Person that is the
subject of the Acquisition is related or substantially similar to the business of Remington and its Subsidiaries on the date hereof; (2) immediately before and after giving effect to such Acquisition, no Default or Event of Default shall have
occurred and be continuing or would result therefrom, Borrowers shall have Projected Availability of not less than $15,000,000 and each Borrower shall be Solvent; (3) the aggregate consideration (other than common stock and warrants or options to
acquire common stock) paid by Borrowers and/or any of their Subsidiaries (including the assumption of any Debt) in connection with all such acquisitions from and 
  

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 after the Closing Date does not exceed $7,500,000; (4) in the case of an Acquisition of all or
substantially all of the assets of a Person, there will be no Liens on any of such assets after the Acquisition other than Permitted Liens; (5) at least 5 Domestic Business Days before the Acquisition, Borrowers shall have delivered to Agent (i) a
Compliance Certificate for the period of 4 full Fiscal Quarters immediately preceding such Acquisition (prepared in good faith and in a manner and using such methodology that is consistent with the most recent financial statements delivered to Agent
pursuant to this Agreement) giving pro forma effect to the consummation of such Acquisition and evidencing compliance with the covenants contained in Section 10.3 hereof, and (ii) a certificate from the chief financial officer of Borrowers
and related projections which demonstrate to the satisfaction of Agent that Borrowers shall remain in pro-forma compliance with all financial covenants set forth in Section 10.3 of this Agreement and shall satisfy the Minimum Availability
Condition after giving pro forma effect to the consummation of such Acquisition; (6) Agent shall have received copies of (i) the definitive documents, (ii) lien search reports, title insurance commitments and environmental assessments, if any,
obtained by or provided to Borrowers, (iii) historical financial statements of the Person to be acquired, including the audited financial statements for such Person’s most recently completed fiscal year, certified by its independent certified
public accountants, if any, and (iv) all other financial information, and such other documents and information of the Person to be acquired, including related due diligence documents, as Agent may reasonably request; (7) Agent contemporaneously with
the closing of such Acquisition shall have received (i) such documents and instruments as may be necessary to grant or confirm to Agent a first priority perfected Lien on and security interest in all of the assets so acquired, and (ii) if a Person
is acquired and not merged into a Borrower and such Person becomes a Subsidiary other than a Foreign Subsidiary, a guaranty of the Obligations and a security agreement (together with applicable UCC-1 financing statements) executed by such Person,
together with such other collateral documents and opinions of counsel relating to the validity, legality and enforceability of the legal documentation described in clauses (i) and (ii) of this subsection and the creation of a perfected Lien on such
assets or Equity Interests as may be reasonably requested by Agent; and (8) if so requested by Agent (and Agent shall make such request at the direction of the Required Lenders), in the case of any Acquisition of Equity Interests, such Equity
Interests shall promptly be pledged to Agent as security for the payment of the Obligations pursuant to documentation acceptable to Agent; provided, however, only sixty-five percent (65%) of the Equity Interests of any Foreign Subsidiary shall be so
pledged. If such assets consist of Inventory acquired by Remington or Accounts acquired by a Borrower that are to be included in the Borrowing Base simultaneously with the consummation of the Permitted Acquisition, Agent’s examiners 

 

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 shall have completed a field exam and audit of the Person to be acquired, in scope and with results
reasonably acceptable to Agent, or if such field exam and audit are not conducted prior to the consummation of such Permitted Acquisition, then any Accounts or Inventory of such Person to be acquired shall not be included in the Borrowing Base and
shall be ineligible for borrowing purposes until such exam and audit are conducted in scope and with results reasonably acceptable to Agent. 
  
 (j) by deleting Section 10.3.1 of the Credit Agreement in its entirety and by substituting the following in lieu thereof: 
  
 10.3.1. Consolidated Fixed Charge Coverage
Ratio. At any time that the Minimum Availability Condition is not satisfied, have maintained a Consolidated Fixed Charge Coverage Ratio for the Most Recent Covenant Test Period of not less than 1.1 to 1.0. As used herein, “Minimum
Availability Condition” shall mean, on any date of determination, Availability of not less than $35,000,000, provided that (a) Availability may be less than $35,000,000 but not less than $25,000,000 at any time during a single period of not
more than 60 consecutive days during each Seasonal Testing Period, and (b) other than during the Seasonal Testing Period, Availability may be less than $35,000,000 but not less than $30,000,000 for any period of not more than five (5) consecutive
Domestic Business Days no more frequently than once in each Fiscal Quarter. As used herein, “Seasonal Testing Period” shall mean the period commencing on June 1 and ending on September 30 in each year. Upon the occurrence of the
Availability Test Period Termination Date, Borrowers’ compliance with this financial covenant shall be determined as set forth in Section 10.3.4. 
  
 (k) by deleting Section 10.3.2 of the Credit Agreement in its entirety and by substituting the following in lieu thereof: 
  
 10.3.2. Average Consolidated Net Funded Debt to EBITDA
Ratio. At any time that the Minimum Availability Condition is not satisfied, have maintained an Average Consolidated Net Funded Debt to EBITDA Ratio for the Most Recent Covenant Test Period of no more than 6.0 to 1.0. Upon the occurrence of
the Availability Test Period Termination Date, Borrowers’ compliance with this financial covenant shall be determined as set forth in Section 10.3.4. 
  
 (l) by inserting the following new Sections 10.3.3 and 10.3.4 in the Credit Agreement following Section 10.3.2: 

 
 10.3.3. Minimum Consolidated EBITDA.
During the Availability Test Period, maintain a Consolidated EBITDA of not less than the amount set forth below as of the last day of each Fiscal Quarter 
  

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 for the four (4) consecutive Fiscal Quarters ending on the date set forth opposite such amount:

  

	 Four (4) Fiscal
 Quarters
Ending

	  	Minimum
Amount

	 December 31, 2003
	  	$	34,800,000
	 March 31, 2004
	  	$	31,900,000
	 June 30, 2004
	  	$	30,200,000
	 September 30, 2004
	  	$	30,300,000
	 December 31, 2004
	  	$	38,300,000
	 March 31, 2005
	  	$	41,000,000
	 June 30, 2005
	  	$	41,000,000
	 September 30, 2005
	  	$	43,000,000
	 December 31, 2005
	  	$	45,000,000

  
 10.3.4. Termination of Availability Test Period; Compliance with Financial Covenants Thereafter. The Availability Test Period shall terminate on the sooner to occur of (i) the date on which written notice is received by
Agent from Borrowers, in which notice Borrowers state their election to terminate the Availability Test Period, or (ii) March 30, 2006 (the “Availability Test Period Termination Date”). After the occurrence of the Availability Test Period
Termination Date, Borrowers’ compliance with the financial covenants set forth in Sections 10.3.1 and 10.3.2 shall be determined as follows: 
  

(A) for the Most Recent Covenant Test Period prior to the Availability Test Period Termination Date, Borrowers shall have maintained a Consolidated
Fixed Charge Coverage Ratio of at least 1.1 to 1.0, and an Average Consolidated Net Funded Debt to EBITDA Ratio of no more than 6.0 to 1.0.; and 
  
 (B) on and at all times after the Availability Test Period Termination Date, Borrowers shall maintain (I) a Consolidated Fixed Charge Coverage Ratio for
the 4 consecutive Fiscal Quarters ending on the last day of each Fiscal Quarter of at least 1.1 to 1.0. and (II) an Average Consolidated Net Funded Debt to EBITDA Ratio of no more than 6.0 to 1.0. 
  
 3. Limited Waiver of Default. If at any time prior to December
31, 2003, the Minimum Availability Condition is not satisfied, Lenders hereby waive any Event of Default that may occur or exist as a result of the Borrowers’ Average Consolidated Net Funded Debt to EBITDA Ratio as of September 30, 2003 having
been more than 6.0 to 1.0, but only so long as the Average Consolidated Net Funded Debt to EBITDA Ratio as of September 30, 2003, did not exceed 7.0 to 1.0. The foregoing waiver is limited to its express terms and shall not be deemed 
  

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 to be a waiver of any other Event of Default or Default which may have existed on or prior to the date hereof or any
Event of Default or Default which may hereafter arise under any provision of the Credit Agreement or any of the other Credit Documents. Further, the granting of this waiver shall not be construed as an agreement or understanding by the Lenders to
grant any other waiver or other accommodation in the future with respect to any provision of the Credit Agreement or any of the other Credit Documents. 
  
 4. Consent to Merger of RBC into Remington. Borrowers have requested that Agent and Lenders consent to a merger, on or before December 31,
2003, of RBC Holding, Inc., a Delaware corporation (“RBC”), with and into Remington Arms Company, Inc., a Delaware corporation (“Remington”), with Remington as the surviving entity of such merger. Borrowers intend that such
merger will be given effect as of January 1, 2003, for Borrowers’ tax purposes. Borrowers represent and warrant to Agent and Lenders that, after giving effect to such merger and the limited waiver of Event of Default included in this Amendment,
Borrowers shall be in compliance with all of the terms of the Credit Agreement. In reliance upon the foregoing, and notwithstanding anything to the contrary contained in any of the Loan Documents, Agent and each Lender hereby grants its consent to
the merger of RBC with and into Remington, subject to the receipt by Agent of documentation in form and substance reasonably satisfactory to Agent. In order to reflect such merger, from and after the date of the effectiveness of such merger, all
references to RBC in the Loan Documents shall mean and be deemed references to Remington. 
  
 5. Ratification and Reaffirmation. Each Borrower hereby ratifies and reaffirms the Obligations, each of the Credit Documents and all of such Borrower’s covenants, duties, indebtedness and
liabilities under the Credit Documents. 
  
 6.
Acknowledgments and Stipulations. Each Borrower acknowledges and stipulates that the Credit Agreement and the other Credit Documents executed by such Borrower are legal, valid and binding obligations of such Borrower that are enforceable
against such Borrower in accordance with the terms thereof, except as the enforceability thereof may be limited by laws relating to Insolvency Proceedings or other similar laws of general application affecting the enforcement of creditors’
rights generally or by general equitable principles; all of the Obligations are owing and payable without defense, offset or counterclaim (and to the extent there exists any such defense, offset or counterclaim on the date hereof, the same is hereby
waived by each Borrower); the Liens granted by each Borrower in favor of Agent are first priority Liens, subject only to those Permitted Liens which are expressly permitted by the terms of the Credit Documents to have priority over the Liens of
Agent; and, as of the close of business on October 29, 2003, the unpaid principal amount of the Revolver Loans totaled $33,600,000, and the face amount of outstanding Letters of Credit totaled $3,376,000. 
  
 7. Representations and Warranties. Each Borrower represents and
warrants to Agent and Lenders, to induce Agent and Lenders to enter into this Amendment, that no Default or Event of Default exists on the date hereof; the execution, delivery and performance of this Amendment have been duly authorized by all
requisite corporate action on the part of such Borrower and this Amendment has been duly executed and delivered by such Borrower; and all of the representations and warranties made by each Borrower in the Credit Agreement are true and correct in all
material respects on and as of the date hereof after giving effect to this Amendment (except where such representations and warranties expressly relate to an earlier date 
  

 12 

 in which case such representations and warranties were true and correct in all material respects as of such earlier
date). 
  
 8. Reference to Credit Agreement.
Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” or words of like import shall mean and be a reference to the Credit Agreement, as amended by this Amendment.

  
 9. Breach of Amendment. This Amendment
shall be part of the Credit Agreement and a breach of any representation, warranty or covenant herein shall constitute an Event of Default. 
  
 10. Amendment Fee; Expenses of Agent and Lenders. In consideration of Agent’s and Lenders’ willingness to enter into this
Amendment and consent to the merger of RBC into Remington, Borrowers agree to pay to Agent, for the Pro Rata benefit of Lenders, an amendment fee in the amount of $212,500 in immediately available funds on the date hereof. Additionally, each
Borrower agrees to pay, on demand, all reasonable costs and expenses incurred by Agent and Lenders in connection with the preparation, negotiation and execution of this Amendment and any other Credit Documents executed pursuant hereto,
including, without limitation, the reasonable costs and fees of Agent’s and Lenders’ legal counsel. 
  
 11. Effectiveness; Governing Law. This Amendment shall be effective upon execution and delivery by Borrowers and acceptance by Agent
and the Required Lenders (notice of which acceptance is hereby waived), whereupon the same shall be governed by and construed in accordance with the internal laws of the State of New York (without giving effect to the conflict of laws principles
thereof, other than Section 5-1401 of the New York General Obligations Law). 
  
 12. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 
  
 13. No Novation, etc.. Except as otherwise expressly
provided in this Amendment, nothing herein shall be deemed to amend or modify any provision of the Credit Agreement or any of the other Credit Documents, each of which shall remain in full force and effect. This Amendment is not intended to be, nor
shall it be construed to create, a novation or accord and satisfaction, and the Credit Agreement as herein modified shall continue in full force and effect. 
  
 14. Counterparts; Telecopied Signatures. This Amendment may be executed in any number of counterparts and by different parties to this
Amendment on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed to
be an original signature hereto. 
  
 15. Further
Assurances. Each Borrower agrees to take such further actions as Agent shall reasonably request from time to time in connection herewith to evidence or give effect to the amendments set forth herein or any of the transactions contemplated
hereby. 
  

 13 

 16. Section Titles. Section titles and references used in this Amendment shall be without
substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto. 
  
 17. Release of Claims. To induce Agent and Lenders to enter into this Amendment, Borrower
hereby releases, acquits and forever discharges Agent and Lenders, and all officers, directors, agents, employees, successors and assigns of Agent and Lenders, from any and all liabilities, claims, demands, actions or causes of action of any kind or
nature (if there be any), whether absolute or contingent, disputed or undisputed, at law or in equity, that are known to either Borrower as of the date of this Amendment, or that either Borrower should have reasonably known, arising under or in
connection with any of the Credit Documents. Each Borrower represents and warrants to Lender that such Borrower has not transferred or assigned to any Person any claim that such Borrower ever had or claimed to have against Agent or any Lender.

  
 [Signatures appear on following pages] 
  

 14 

 18. Waiver of Jury Trial. To the fullest extent permitted by applicable law, the parties hereto
each hereby waives the right to trial by jury in any action, suit, counterclaim or proceeding arising out of or related to this Amendment. 
  
 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed under seal and delivered by their respective duly authorized
officers on the date first written above. 
  

	 REMINGTON ARMS COMPANY, INC.
 (“Borrower”)

		
	By:	 	/s/    Mark A. Little        
	 	

	 Title:
	 	Executive Vice President, Chief Financial Officer and Chief Administrative Officer

  

	 RA FACTORS, INC.
 (“Borrower”)

		
	By:	 	/s/     Mark A. Little        
	 	

	 Title:
	 	President

  

	 WACHOVIA BANK,
 NATIONAL ASSOCIATION, as Agent and Lender

		
	By:	 	/s/    Brian O’Fallon        
	 	

	 Title:
	 	Director

  
  
 [Signatures continued on next page] 
  

 15 

	 FLEET CAPITAL CORPORATION,
 as Lender

		
	By:	 	/s/    Kristina T. Lee        
	 	

	 Title:
	 	Vice President

  

	 NATIONAL CITY COMMERCIAL
 FINANCE, INC., as Lender

		
	By:	 	/s/    William E. Welsh, Jr.        
	 	

	 Title:
	 	Officer

  

	 HSBC BANK USA, as Lender

		
	By:	 	/s/    Stephen J. Gorczynski        
	 	

	 Title:
	 	First Vice President

  

	 MANUFACTURERS AND TRADERS
 TRUST COMPANY, as Lender

		
	By:	 	/s/    Timothy P. McDevitt        
	 	

	 Title:
	 	Vice President

  
  

 16 

 CONSENT AND REAFFIRMATION 
  
 Each of the undersigned guarantors of the Obligations of Borrowers at any time owing to Agent and Lenders hereby (i)
acknowledges receipt of a copy of the foregoing Second Amendment to Credit Agreement; (ii) consents to each Borrower’s execution and delivery thereof; and (iii) affirms that nothing contained therein shall modify in any respect whatsoever its
respective guaranty of the Obligations and reaffirms that such guaranty is and shall remain in full force and effect. 
  
 IN WITNESS WHEREOF, each of the undersigned has executed this Consent and Reaffirmation as of the date of such Second Amendment to Credit Agreement.

  

	RBC HOLDING, INC.
		
	By:	 	/s/    Mark A. Little        
	 	

	 Title:
	 	Vice President

  

	 RA BRANDS, L.L.C.

		
	By:	 	/s/    Mark A. Little        
	 	

	 Title:
	 	Vice President

  
  

 17EXHIBIT 10.3

 Exhibit 10.3 
  
 BAY BANKS OF VIRGINIA 
 2003 INCENTIVE
STOCK OPTION PLAN 
  
 ARTICLE I 
  
 Establishment, Purpose, and Duration 
  
 1.1 Establishment of the Plan. Bay Banks of Virginia, Inc., a Virginia
corporation (the “Company”), hereby establishes an incentive compensation plan for the Company and its Subsidiaries to be known as the “Bay Banks of Virginia 2003 Incentive Stock Option Plan” (the “Plan”), as set forth
in this document. Unless otherwise defined herein, all capitalized terms shall have the meanings set forth in Section 2.1 herein. The Plan permits the grant of Incentive Stock Options to Officers and Key Employees of the Company or its Subsidiaries.

  
 The Plan was adopted by the Board of Directors of the Company
on March 19, 2003, and shall become effective on May 19, 2003 (the “Effective Date”), subject to the approval by vote of shareholders of the Company in accordance with applicable laws. 
  
 1.2 Purpose of the Plan. The purpose of the Plan is to promote the
success of the Company by providing greater incentive to employees to associate their interests with the long-term financial success of the Company. Additionally, the Plan is intended to provide a financial reward by means of ownership of Company
Stock for those employees who achieve specified goals which in turn are likely to enhance the value of the Company’s Stock for the benefit of the shareholders. The Plan is designed to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of employees upon whose judgment, interest, and special effort the successful conduct of the Company’s operations largely depends. 
  
 1.3 Duration of the Plan. The Plan shall commence on the Effective Date, as described in Section 1.1 herein, and
shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article X herein, until April 30, 2013, at which time it shall terminate except with respect to Awards made prior to, and
outstanding on, that date which shall remain valid in accordance with their terms. 
  
 ARTICLE II 
 Definitions 
  
 2.1 Definitions. Except as otherwise defined in the Plan, the following terms shall have the meanings set forth
below: 
  
 (a) “Affiliate” and
“Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 
  
 (b) “Agreement” means a written Agreement implementing the grant of each Award signed by an
authorized officer of the Company and by the Participant. 
  
 (c) “Award” means, individually or collectively, a grant under this Plan of Incentive Stock Options. 
  
 (d) “Award Date” or “Grant Date” means the date on which an Award is made by the Committee under this Plan.

  
 (e) “Beneficial Owner” shall have
the meaning ascribed to such term in Rule 13d-3 under the Exchange Act. 
  
 (f) “Board” or “Board of Directors” means the Board of Directors of the Company, unless otherwise indicated. 
  
 (g) “Change in Control” shall be deemed to have occurred if the conditions set forth in any one of
the following paragraphs shall have been satisfied: 
  
 (i) any Person (other than the Company, any Subsidiary, a trustee or other fiduciary holding securities under any employee benefit Plan of the Company, or its Subsidiaries), who or which, together with all Affiliates and Associates of such
Person, is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company 
  

 19 

 representing 33% or more of the combined voting power of the Company’s then outstanding securities;
or 
  
 (ii) if, at any time after the Effective
Date, the composition of the Board of Directors of the Company shall change such that a majority of the Board of the Company shall no longer consist of Continuing Directors; or 
  
 (iii) if at any time, (1) the Company shall consolidate with, or merge with, any other Person and the
Company shall not be the continuing or surviving corporation, (2) any Person shall consolidate with or merge with the Company, and the Company shall be the continuing or surviving corporation and, in connection therewith, all or part of the
outstanding Stock shall be changed into or exchanged for Stock or other securities of any other Person or cash or any other property, (3) the Company shall be a party to a statutory share exchange with any other Person after which the Company is a
Subsidiary of any other Person, or (4) the Company shall sell or otherwise transfer 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons. 
  
 (h) “Code” means the Internal Revenue Code of
1986, as amended from time to time. 
  
 (i)
“Committee” means the Compensation Committee of the Board of Directors appointed by the Company to administer the Plan pursuant to Article III herein, the majority of the members of which shall be “disinterested persons” as
defined in Rule 16b-3, as amended, under the Exchange Act or any similar or successor rule. Unless otherwise determined by the Board of Directors of the Company, the members of the Committee responsible for executive compensation who are not
employees of the Company or its Subsidiaries shall constitute the Committee. 
  
 (j) “Company” means Bay Banks of Virginia, or any successor thereto as provided in Article XII herein. 
  
 (k) “Continuing Director” means an individual who was a member of the Board of Directors of the Corporation on the Effective
Date or whose subsequent nomination for election or re-election to the Board of Directors of the Corporation was recommended or approved by the affirmative vote of two-thirds of the Continuing Directors then in office. 
  
 (l) “Disabled” means a disability within the
meaning of Code Section 22(e)(3). 
  
 (m)
“Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 (n) “Fair Market Value” of a Share means the Fair Market Value as quoted on a recognized Stock quotation system, exchange or
bulletin Board or, in the alternative, as determined pursuant to a reasonable method adopted by the Committee in good faith for such purpose. 
  
 (o) “Incentive Stock Option” or “ISO” means an Option to purchase Stock, granted under Article VI herein, which is
designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code. 
  
 (p) “Key Employee” means an officer or other Key Employee of the Company or its Subsidiaries, who, in the opinion of the
Committee, can contribute significantly to the growth and profitability of, or perform services of major importance to, the Company and its Subsidiaries. 
  
 (q) “Option” means an Incentive Stock Option. 
  
 (r) “Participant” means a Key Employee who is granted an Award under the Plan. 
  
 (s) “Person” shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d). 
  
 (t) “Plan” means the Bay Banks of Virginia 2003 Incentive Stock Plan, as described and as hereafter from time to time amended.

  
 (u) “Stock” or “Shares”
means the common stock of the Company. 
  
 (v)
“Subsidiary” shall mean a corporation at least 50% of the total combined voting power of all classes of Stock of which is owned by the Company, either directly or through one or more of its Subsidiaries. 
  

 20 

 ARTICLE III 
 Administration 
  
 3.1
The Committee. The Plan shall be administered by the Compensation Committee which shall have all powers necessary or desirable for such administration. The express grant in this Plan of any specific power to the Committee shall not be
construed as limiting any power or authority of the Committee. In addition to any other powers and, subject to the provisions of the Plan, the Committee shall have the following specific powers: (i) to determine the terms and conditions upon which
the Awards may be made and exercised; (ii) to determine all terms and provisions of each Agreement, which need not be identical; (iii) to construe and interpret the Agreements and the Plan; (iv) to establish, amend or waive rules or regulations for
the Plan’s administration; (v) to accelerate the exercisability of any Award or the termination of any Period of Restriction; and (vi) to make all other determinations and take all other actions necessary or advisable for the administration of
the Plan. 
  
 3.2 Selection of Participants. The Committee
shall have the authority to grant Awards under the Plan, from time to time, to such Key Employees as may be selected by it. Each Award shall be evidenced by an Agreement. 
  
 3.3 Decisions Binding. All determinations and decisions made by the Board or the Committee pursuant to the provisions
of the Plan shall be final, conclusive and binding. 
  
 3.4
Rule 16b-3 Requirements. Notwithstanding any other provision of the Plan, the Board or the Committee may impose such conditions on any Award, and amend the Plan in any such respects, as may be required to satisfy the requirements of Rule
16b-3, as amended (or any successor or similar rule), under the Exchange Act. 
  
 3.5 Indemnification of Committee. In addition to such other rights of indemnification as they may have as directors or as members of the Committee, the members of the Committee shall be indemnified by the
Company against reasonable expenses, including attorneys’ fees, actually and reasonably incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted or made hereunder, and against all amounts reasonably paid by them in settlement thereof or paid by them in satisfaction of a judgment in
any such action, suit or proceeding, if such members acted in good faith and in a manner which they believed to be in, and not opposed to, the best interests of the Company and its Subsidiaries. 
  
 ARTICLE IV 
 Stock Subject to the Plan 
  
 4.1 Number of Shares. Subject to adjustment as provided in Section 4.3 herein, the maximum aggregate number of Shares that may be issued pursuant to Awards made under the Plan shall not exceed 175,000. Except
as provided in Sections 4.2 herein, the issuance of Shares in connection with the exercise of, or as other payment for Awards, under the Plan shall reduce the number of Shares available for future Awards under the Plan. 
  
 4.2 Lapsed Awards or Forfeited Shares. If any Award granted under this
Plan (for which no material benefits of ownership have been received, including dividends) expires or lapses, or if Shares issued pursuant to Awards (for which no material benefits of ownership have been received, including dividends) are forfeited,
any Stock subject to such Award again shall be available for the grant of an Award under the Plan. 
  
 4.3 Capital Adjustments. The number of Shares subject to each outstanding Award, the Option Price and the aggregate number of Shares for which
Awards thereafter may be made shall be subject to such adjustment, if any, as the Committee in its sole discretion deems appropriate to reflect such events as Stock dividends, Stock splits, recapitalizations, mergers, consolidations or
reorganizations of or by the Company. To the extent required to avoid a charge to earnings for financial accounting purposes, adjustments made by the Committee pursuant to this Section 4.3 to outstanding Awards shall be made so that that both (i)
the aggregate intrinsic value of an Award immediately after the adjustment is not greater than or less than the Award’s aggregate intrinsic value before the adjustment and (ii) the ratio of the Option Price to the market value per Share is not
reduced. 
  
 4.4 Per-Employee Limit. The maximum number of
Shares with respect to which an Award may be granted in any calendar year to any Key Employee during such calendar year shall be 50,000. 
  

 21 

 ARTICLE V 
 Eligibility 
  
 Persons
eligible to participate in the Plan include all employees of the Company and its Subsidiaries who, in the opinion of the Committee, are Key Employees. 
  
 ARTICLE VI 
 Stock Options

  
 6.1 Grants to Key Employees. Subject to the terms
and provisions of the Plan, Options may be granted to Key Employees at any time and from time to time as shall be determined by the Committee. The Committee shall have complete discretion in determining the number of Shares subject to Options
granted to each Participant, provided, however, that the aggregate Fair Market Value (determined at the time the Award is made) of Shares with respect to which any Participant may first exercise ISO’s granted under the Plan during any calendar
year may not exceed $100,000 or such amount as shall be specified in Section 422 of the Code and rules and regulation there-under. 
  
 6.2 Option Agreement. Each Option grant shall be evidenced by an Agreement that shall specify the conditions upon which the Option or portions
thereof, shall be deemed earned, the Option Price (as hereinafter defined), the duration of the Option, the number of Shares to which the Option pertains, any conditions imposed upon the exercisability of Options in the event of retirement, death,
disability or other termination of employment, and such other provisions as the Committee shall determine. The Agreement shall specify that the Option is intended to be an Incentive Stock Option within the meaning of Section 422 of the Code.

  
 6.3 Option Price. The exercise price per share of Stock
covered by an Option (“Option Price”) shall be determined by the Committee subject to the following limitations. The price for the Shares of Stock to be issued upon the exercise of the Option shall be at least 100% of the Fair Market Value
of the common Stock on the date on which the grant is made; provided, however, that in the case of an Incentive Stock Option granted to an individual who may own more than 10% of the total voting power of the Company, the Option price shall be at
least 110% of the Fair Market Value at the time of the grant of the Option. 
  
 6.4 Duration of Options. Each Option shall expire at such time as the Committee shall determine at the time of grant provided, however, that no ISO shall be exercisable later than the tenth (10th) anniversary
date of its Award Date. 
  
 6.5 Notification of Status of
Options. The Compensation Committee shall notify the Participants if all, or a portion, of the Optioned Stock shall have been deemed earned in accordance with the terms and conditions of the Option Agreement. 
  
 6.6 Exercisability. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as the Committee shall determine, which need not be the same for all Participants. (i) The Option shall not be exercisable after the expiration of ten (10) years from the
date such Option is granted; provided, however, the Committee may impose a shorter term for any Participant, and shall require that any Participant who owns more that 10% of the total voting power of the Company shall not have an Option exercisable
after the expiration of five years from the date such Option is granted; (ii) the Option price is not less than the Fair Market Value of the Stock at the time such Option is granted. 
  
 6.7 Method of Exercise. Options shall be exercised by the delivery of a written notice to the Company in the form
prescribed by the Committee setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. No Participant shall sell Stock of the Company obtained through the exercise of an Option
within two years of the date of grant of the Option or within one year after the date of exercise, whichever shall be later, unless the Company shall be notified and shall consent. No Participant shall, as a result of receiving an Option, have any
rights as a Stockholder until the date such Participant exercises the Option. No Option may be exercised unless the Participant has achieved the performance objectives specified in the Option Agreement, within the time specified therein, and is then
employed by the Company or its subsidiaries and shall have been continuously employed since the date of grant of the Option, except as specified in this Section 6.7. 
  
 Any unexercised portion of any Option shall automatically and without notice terminate and become null and void on the
earlier to occur of the following: (i) the expiration of the three months from the date of termination of the Participant’s employment with the Company, except in the case of Disability or death; (ii) the expiration of one-year following the
death of the Participant, if his or her death occurs during their employment with the Company or during the three month period following the date of termination of such employment because of Disability; (iii) the expiration of one-year 

 

 22 

 from the date of termination of employment with the Company solely resulting from the Disability of the Participant; (iv)
immediately upon termination of the Participant’s employment with the Company if the Committee determines that such termination is attributable to the Participant’s commission of a felony or misdemeanor or deliberate gross misconduct
against the Company; (v) such time as may be specified in the Option Agreement. 
  
 Notwithstanding the foregoing, the Option will terminate immediately after termination of employment unless the Participant (i) refrains from becoming or serving as an officer, director, or employee of a financial
services business (or its Affiliates and/or subsidiaries) in competition with the Company in its trading area as determined by the Committee in its sole discretion; (ii) makes their self available, if requested by the Company, to consult with and
supply information to and otherwise cooperate with the Company; and (iii) refrains from engaging in deliberate actions that are reasonably likely to cause substantial harm to the interests of the Company, all as determined by the Committee in its
sole discretion. If these conditions are not fulfilled, the Participant shall forfeit all rights to any unexercised Option as of the date of the breach of the condition. Additionally, if the Participant’s employment with the Company is
terminated for any reason, and if they accept employment as an officer, director, or employee of a financial service business (or any of its Affiliates or subsidiaries) in competition with the Company in its trading area, or engage in deliberate
actions that are reasonably likely to cause harm to the Company, all as determined by the Committee in its sole discretion, within one year after the issuance of certificates pursuant to this Option, the Participant will immediately return the Stock
issued hereunder to the Company in exchange for the funds provided as the full Exercise Price. 
  
 6.8 Restrictions on Stock Transferability. The Committee shall impose such restrictions on any Shares acquired pursuant to the exercise of an Option under the Plan as it may deem advisable, including, without
limitation, restrictions under the applicable Federal securities law, under the requirements of the National Association of Securities Dealers, Inc. or any Stock exchange upon which such Shares are then listed and under any blue sky or state
securities laws applicable to such Shares. 
  
 6.9
Non-transferability of Options. In general, no Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution. Options
granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant or his guardian or legal representative. Unless otherwise specifically provided in the Option Agreement, any payment of the Option Price paid
by delivery of Company Stock acquired directly or indirectly from the Company shall be paid only with Shares of Company Stock that have been held by the Participant for more than six months (or such longer or shorter period of time required to avoid
a charge to earnings for financial accounting purposes). 
  
 ARTICLE VII 
 Change in Control 
  
 In the event of a Change in Control of the Company, the Committee, as constituted before such Change in Control, in its sole
discretion may, at the time the Award is made, take any one or more of the following actions: (i) provide for the acceleration of any time periods relating to the exercise or realization of any such Award so that such Award may be exercised or
realized in full on or before a date initially fixed by the Committee; (ii) provide for the purchase or settlement of any such Award by the Company, upon a Participant’s request, for an amount of cash equal to the amount which could have been
obtained upon the exercise of such Award or realization of such Participant’s rights had such Award been currently exercisable or payable; (iii) make such adjustment to any such Award then outstanding as the Committee deems appropriate to
reflect such Change in Control; or (iv) cause any such Award then outstanding to be assumed, or new rights substituted therefor, by the acquiring or surviving corporation in such Change in Control. 
  
 ARTICLE VIII 
 Modification, Extension and Renewals of Awards 
  
 Subject to the terms and conditions and within the limitations of the Plan, the Committee may modify, extend or renew outstanding Awards, or, if
authorized by the Board, accept the surrender of outstanding Awards (to the extent not yet exercised) granted under the Plan and authorize the granting of new Awards pursuant to the Plan in substitution therefor, and the substituted Awards may
specify a lower exercise price than the surrendered Awards, a longer term than the surrendered Awards or may contain any other provisions that are authorized by the Plan. The Committee may also modify the terms of any outstanding Agreement.
Notwithstanding the foregoing, however, no modification of an Award, shall, without the consent of the Participant, adversely affect the rights or obligations of the Participant. 
  

 23 

 ARTICLE IX 
 Amendment, Modification and Termination of the Plan 
  
 9.1 Amendment, Modification and Termination. At any time and from time to time, the Committee may terminate, amend, or modify the Plan. Such amendment or modification may be without shareholder approval except
to the extent that such approval is required by the Code, pursuant to the rules under Section 16 of the Exchange Act, by any national securities exchange or system on which the Stock is then listed or reported, by any regulatory body having
jurisdiction with respect thereto or under any other applicable laws, rules or regulations. Unless the Stockholders of the Company shall consent, no amendment shall be made which will; (i) increase the total number of Shares reserved for Options
under the Plan (except for adjustments as provided in Section 4.3), (ii) change the minimum Option price hereinabove specified; (iii) change any provision relating to eligibility of employees, or; (iv) extend the maximum period of exercise beyond
the date specified. 
  
 9.2 Awards Previously Granted. No
termination, amendment or modification of the Plan other than pursuant to Section 4.3 herein shall in any manner adversely affect any Award theretofore granted under the Plan, without the written consent of the Participant. 
  
 ARTICLE X 
 Withholding 
  
 10.1 Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, State and local taxes (including the
Participant’s FICA obligation) required by law to be withheld (based on the minimum applicable statutory withholding rates) with respect to any grant, exercise, or payment made under or as a result of this Plan. 
  
 ARTICLE XI 
 Successors 
  
 All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger,
consolidation or otherwise, of all or substantially all of the business and/or assets of the Company. 
  
 ARTICLE XII 
 General 
  
 12.1 Requirements of Law. The granting of Awards and the issuance of
Shares of Stock under this Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies as may be required. 
  
 12.2 Effect of Plan. The establishment of the Plan shall not confer upon any Key Employee any legal or equitable
right against the Company, a Subsidiary or the Committee, except as expressly provided in the Plan. The Plan does not constitute an inducement or consideration for the employment of any Key Employee, nor is it a contract between the Company or any
of its Subsidiaries and any Key Employee. Participation in the Plan shall not give any Key Employee any right to be retained in the service of the Company or any of its Subsidiaries. 
  
 12.3 Creditors. The interests of any Participant under the Plan or any Agreement are not subject to the claims of
creditors and may not, in any way, be assigned, alienated or encumbered. 
  
 12.4 Governing Law. The Plan, and all Agreements hereunder, shall be governed, construed and administered in accordance with and governed by the laws of the Commonwealth of Virginia and the intention of the
Company is that ISOs granted under the Plan qualify as such under Section 422 of the Code. 
  
 12.5 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been included. 
  

 24

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