Document:

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                                                                    Exhibit 4.19

                              SUBSIDIARY GUARANTEE

                  SUBSIDIARY GUARANTEE, dated as of August 25, 2000, made by RA
FACTORS, L.L.C., a Delaware limited liability company (the "Guarantor") in favor
of THE CHASE MANHATTAN BANK, a New York banking corporation, as administrative
agent (in such capacity, the "Administrative Agent") for the several banks and
other financial institutions (the "Lenders") from time to time parties to the
Amended and Restated Credit Agreement, dated as of April 28, 2000 (as the same
may be amended, supplemented, waived or otherwise modified from time to time,
the "Credit Agreement"), among Remington Arms Company, Inc., a Delaware
corporation (the "Borrower"), the Lenders, Chase Securities Inc. and Banc of
America Securities LLC, as joint lead arrangers, Bank of America, N.A., as
syndication agent, Goldman Sachs Credit Partners, L.P., as documentation agent,
(collectively the "Other Representatives") and the Administrative Agent.

                              W I T N E S S E T H :
                              - - - - - - - - - -

                  WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Extensions of Credit (as defined in the Credit
Agreement) to the Borrower upon the terms and subject to the conditions set
forth therein;

                  WHEREAS, pursuant to Section 8.17(b) of the Credit Agreement,
the Borrower agreed not to create any new Subsidiary unless such Subsidiary
shall have executed and delivered a guarantee to the Administrative Agent for
the benefit of the Lenders; and

                  WHEREAS, the Borrower owns directly or indirectly all of the
issued and outstanding units of the Guarantor;

                  NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent, the Other Representatives and the Lenders to continue
to make their respective Extensions of Credit to the Borrower under the Credit
Agreement, the Guarantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:

     1. Defined Terms. (a) Unless otherwise defined herein, capitalized terms
defined in the Credit Agreement are used herein as defined therein. The
following terms shall have the following meanings:

          "Guarantee": this Guarantee, as the same may be amended, supplemented,
     waived or otherwise modified from time to time.

          "Obligations": the collective reference to the unpaid principal of and
     interest on (including, without limitation, interest accruing after the
     maturity of the Loans and Reimbursement Obligations and interest accruing
     after the filing of any petition in bankruptcy, or the commencement of any
     insolvency, reorganization or like proceeding, relating to the Borrower,
     whether or not a claim for post-filing or post-petition interest is

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     allowed in such proceeding) the Loans, the Reimbursement Obligations and
     all other obligations and liabilities of the Borrower to the Administrative
     Agent, the Other Representatives and the Lenders, whether direct or
     indirect, absolute or contingent, due or to become due, or now existing or
     hereafter incurred, which may arise under, out of, or in connection with,
     the Credit Agreement, the Notes, the Letters of Credit, the other Loan
     Documents, any Interest Rate Agreement entered into with any Lender, any
     Guarantee Obligations of the Borrower referred to in Section 8.4(b) of the
     Credit Agreement as to which any Lender is a beneficiary, and any other
     document made, delivered or given in connection with any of the foregoing,
     in each case whether on account of principal, interest, reimbursement
     obligations, amounts payable in connection with a termination of any
     transaction entered into pursuant to an Interest Rate Agreement entered
     into with any Lender, amounts payable to any Lender in connection with any
     such Guarantee Obligation, fees, indemnities, costs, expenses or otherwise
     (including, without limitation, all reasonable fees and disbursements of
     counsel to the Administrative Agent, any Other Representative or any Lender
     that are required to be paid by the Borrower pursuant to the terms of the
     Credit Agreement or any other Loan Document).

     (b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole and
not to any particular provision of this Guarantee, and section and paragraph
references are to this Guarantee unless otherwise specified.

     (c) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.

     2 Guarantee. (a) The Guarantor hereby unconditionally and irrevocably
guarantees to the Administrative Agent, for the ratable benefit of the Lenders
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrower when due and payable
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

     (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of the Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable law, including applicable federal and state
laws relating to the insolvency of debtors.

     (c) The Guarantor further agrees to pay any and all reasonable expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by the Administrative Agent, any Other
Representative or any Lender in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
the Guarantor under this Guarantee. This Guarantee shall remain in full force
and effect until the payment in full of the Notes, the Reimbursement Obligations
and the other Obligations then due and owing, the termination of the Commitments
and the expiration, termination or return to the Issuing Lender of the Letters
of Credit, notwithstanding that from time to time prior thereto the Borrower may
be free from any Obligations.

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     (d) No payment or payments made by the Borrower or any other Person or
received or collected by the Administrative Agent, any Other Representative or
any Lender from the Borrower or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application, at any time or from
time to time, in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of the Guarantor
hereunder which shall, notwithstanding any such payment or payments other than
payments made by the Guarantor in respect of the Obligations or payments
received or collected from the Guarantor in respect of the Obligations pursuant
to this Guarantee, remain liable for the Obligations until payment in full of
the Notes, the Reimbursement Obligations and the other Obligations then due and
owing, the termination of the Commitments and the expiration, termination or
return to the Issuing Lender of the Letters of Credit.

     (e) The Guarantor agrees that whenever, at any time, or from time to time,
it shall make any payment to the Administrative Agent, any Other Representative
or any Lender on account of its liability hereunder, it will notify the
Administrative Agent, such Other Representative and such Lender in writing that
such payment is made under this Guarantee for such purpose.

     3 Right of Set-off. Upon the occurrence and during the continuance of any
Event of Default under Section 9(a) of the Credit Agreement, the Administrative
Agent and each Lender is hereby irrevocably authorized at any time and from time
to time without notice to the Guarantor, any such notice being expressly waived
by the Guarantor to the extent permitted by applicable law, to set off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Administrative Agent or such Lender to or for the credit or the account of the
Guarantor, or any part thereof in such amounts as the Administrative Agent or
such Lender may elect, against or on account of the obligations and liabilities
of the Guarantor to the Administrative Agent or such Lender hereunder with
respect to any amount then due and payable under Section 9(a) of the Credit
Agreement, whether or not the Administrative Agent or such Lender has made any
demand for payment and although such obligations and liabilities may be
contingent or unmatured. The Administrative Agent and each Lender, as the case
may be, shall notify the Guarantor promptly of any such set-off and the
application made by the Administrative Agent or such Lender, as the case may be,
of the proceeds thereof; provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the
Administrative Agent and each Lender under this paragraph are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Administrative Agent or such Lender may have.

     4 No Subrogation. Notwithstanding anything to the contrary in this
Guarantee, the Guarantor hereby irrevocably waives all rights which may have
arisen in connection with this Guarantee to be subrogated to any of the rights
(whether contractual, under the Bankruptcy Code, including Section 509 thereof,
under common law or otherwise) of the Administrative Agent, any Other
Representative or any Lender against the Borrower or against any collateral
security or guarantee or right of offset held by the Administrative Agent, any
Other Representative or any Lender for the payment of the Obligations. The
Guarantor hereby further irrevocably waives all contractual, common law,
statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Borrower or any other
Person which may have arisen in connection with this Guarantee. So long as the

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Obligations remain outstanding, if any amount shall be paid by or on behalf of
the Borrower to the Guarantor on account of any of the rights waived in this
paragraph, such amount shall be held by the Guarantor in trust for the
Administrative Agent and each Lender, segregated from other funds of the
Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over to
the Administrative Agent in the exact form received by the Guarantor (duly
indorsed by the Guarantor to the Administrative Agent, if required), to be held
as collateral security for the Obligations (whether matured or unmatured),
and/or then or at any time thereafter may be applied against the Obligations
then due and owing in such order as the Administrative Agent may determine. The
provisions of this paragraph shall survive the termination of this Guarantee,
the payment in full of the Notes, the Reimbursement Obligations and the other
Obligations, the termination of the Commitments and the expiration, termination
or return of the Letters of Credit.

     5 Amendments, etc. with respect to the Obligations; Waiver of Rights. The
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor, and without notice to or further
assent by the Guarantor, any demand for payment of any of the Obligations made
by the Administrative Agent or any Lender may be rescinded by the Administrative
Agent or such Lender, and any of the Obligations continued, and the Obligations,
or the liability of any other party upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, and the Credit Agreement, any Notes, and
the other Loan Documents (other than this Agreement) and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders, as the case may be) may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Administrative Agent or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or for
this Guarantee or any property subject thereto. When making any demand hereunder
against the Guarantor, the Administrative Agent or any Lender may, but shall be
under no obligation to, make a similar demand on the Borrower or any other
guarantor, and any failure by the Administrative Agent or any Lender to make any
such demand or to collect any payments from the Borrower or any such other
guarantor or any release of the Borrower or such other guarantor shall not
relieve the Guarantor of its obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of the Administrative Agent, any Other Representative or any Lender against
the Guarantor. For the purposes hereof "demand" shall include the commencement
and continuance of any legal proceedings.

     6 Guarantee Absolute and Unconditional. The Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by the Administrative Agent, any Other
Representative or any Lender upon this Guarantee or acceptance of this
Guarantee; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guarantee; and all dealings between the Borrower
or the Guarantor, on the one hand, and the Administrative Agent, the Other
Representatives and the Lenders, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Guarantee. The
Guarantor waives diligence, presentment, protest, demand for payment

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and notice of default or nonpayment to or upon the Borrower or the Guarantor
with respect to the Obligations. To the extent permitted by law, this Guarantee
shall be construed as a continuing, absolute and unconditional guarantee of
payment without regard to (a) the validity or enforceability of the Credit
Agreement, any Note, or any other Loan Document, any of the Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent, any
Other Representative or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower against the Administrative Agent,
any Other Representative or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or the Guarantor) (other
than payment in full of the Obligations) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the
Guarantor, the Administrative Agent, any Other Representative and any Lender
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against the Borrower or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent, any Other Representative
or any Lender to pursue such other rights or remedies or to collect any payments
from the Borrower or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower or any such other Person or of any such collateral
security, guarantee or right of offset, shall not relieve the Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent, any Other Representative or any Lender against the Guarantor. This
Guarantee shall remain in full force and effect and be binding in accordance
with and to the extent of its terms upon the Guarantor and its successors and
assigns thereof, and shall inure to the benefit of the Administrative Agent, the
Other Representatives and the Lenders, and their respective successors,
indorsees, transferees and assigns, until the payment in full of the Notes, the
Reimbursement Obligations, the other Obligations then due and owing and the
obligations of the Guarantor under this Guarantee then due and owing, the
termination of the Commitments and the expiration, termination or return to the
Issuing Lender of the Letters of Credit, notwithstanding that from time to time
during the term of the Credit Agreement the Borrower may be free from any
Obligations, upon the occurrence of all of which this Guarantee shall, subject
to paragraph 7 hereof, terminate.

     7 Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent, any Other Representative or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Borrower or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

     8 Payments. The Guarantor hereby agrees that the Obligations will be paid
to the Administrative Agent without set-off or counterclaim in Dollars at the
office of the Administrative Agent set forth in Section 11.2 of the Credit
Agreement.

     9 Representations and Warranties. The Guarantor represents and warrants to
the Administrative Agent, the Other Representatives and the Lenders that:

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          (a) the Guarantor is a limited liability company duly formed, validly
     existing and in good standing under the laws of the jurisdiction of its
     formation and has the limited liability company power and authority to own
     and operate its property, to lease the property it operates and to conduct
     the business in which it is currently engaged;

          (b) the Guarantor has the limited liability company power and
     authority to make, deliver and perform its obligations under this Guarantee
     and has taken all necessary limited liability action to authorize its
     execution, delivery and performance of this Guarantee and the other Loan
     Documents to which it is a party;

          (c) each of this Guarantee and the other Loan Documents to which it is
     a party has been duly executed and delivered on behalf of the Guarantor and
     constitutes a legal, valid and binding obligation of the Guarantor
     enforceable against the Guarantor in accordance with its terms, except as
     enforceability may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium and similar laws affecting the enforcement of
     creditors' rights generally and by general equitable principles (whether
     enforcement is sought by proceedings in equity or at law);

          (d) the execution, delivery and performance of this Guarantee and the
     other Loan Documents to which it is a party will not violate any
     Requirement of Law or Contractual Obligation of the Guarantor in any
     respect that would reasonably be expected to have a Material Adverse Effect
     and will not result in, or require, the creation or imposition of any Lien
     on any of the properties or revenues of the Guarantor pursuant to any such
     Requirement of Law or Contractual Obligation (other than pursuant to any
     Loan Document);

          (e) no consent or authorization of, filing with, or other act by or in
     respect of, any Governmental Authority or any other Person is required in
     connection with the execution, delivery, performance, validity or
     enforceability of this Guarantee and the other Loan Documents to which the
     Guarantor is a party;

     The Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by the Guarantor on the date of each Extension
of Credit to the Borrower under the Credit Agreement as though made hereunder on
and as of such date.

     10 Covenants. The Guarantor hereby covenants and agrees with the
Administrative Agent, the Other Representatives and the Lenders that, from and
after the date of this Guarantee until payment in full of the Notes, the
Reimbursement Obligations and the other Obligations then due and owing, the
termination of the Commitments and the expiration, termination or return to the
Issuing Lender of the Letters of Credit,

               (a) the Guarantor shall not, and shall not permit any of its
          Subsidiaries to, take any action or fail to take any action, as the
          case may be, if such action or failure would result in a violation of
          any of the covenants of the Borrower contained in Sections 7 and 8 of
          the Credit Agreement,

     11 Further Assurances. The Guarantor hereby covenants and agrees with the
Administrative Agent, the Other Representatives and the Lenders that, from and
after the date of

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this Guarantee until payment in full of the Notes, the Reimbursement Obligations
and the other Obligations then due and owing, the termination of the Commitments
and the expiration, termination or return to the Issuing Lender of the Letters
of Credit, at any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Guarantor, the Guarantor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purposes of obtaining or preserving the full benefits
of this Guarantee and of the rights and powers herein granted.

     12 Authority of Administrative Agent. The Guarantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Guarantee
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Guarantee shall, as among the Administrative Agent, the Other Representatives
and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Guarantor, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and the Guarantor shall
not be under any obligation to make any inquiry respecting such authority.

     13 Notices. All notices, requests and demands under this Guarantee shall be
given in accordance with Section 11.2 of the Credit Agreement and, in the case
of the Guarantor, its address or transmission number for notices shall be as set
forth under its signature below.

     The Administrative Agent, each Other Representative, each Lender and the
Guarantor may change its address and transmission numbers for notices by notice
in the manner provided in Section 11.2 of the Credit Agreement.

     14 Counterparts. This Guarantee may be executed on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the counterparts of this
Guarantee shall be lodged with the Administrative Agent.

     15 Severability. Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     16 Integration. This Guarantee represents the entire agreement of the
Guarantor and the Administrative Agent with respect to the subject matter hereof
and there are no promises or representations by the Guarantor, the
Administrative Agent, any Other Representative or any Lender relative to the
subject matter hereof not reflected or referred to herein.

     17 Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the
terms or provisions of this Guarantee may be waived, amended, supplemented or
otherwise

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modified except by a written instrument executed by the Guarantor and the
Administrative Agent in accordance with Section 11.1 of the Credit Agreement.

     (b) Neither the Administrative Agent, any Other Representative nor any
Lender shall by any act (except by a written instrument pursuant to paragraph
17(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof. No failure
to exercise, nor any delay in exercising, on the part of the Administrative
Agent, any Other Representative or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent, any Other Representative or any Lender of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Administrative Agent, such Other
Representative or such Lender would otherwise have on any future occasion.

     (c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

     18 Section Headings. The section headings used in this Guarantee are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

     19 Submission To Jurisdiction; Waivers. Each party hereto hereby
irrevocably and unconditionally:

          (a) submits for itself and its property in any legal action or
     proceeding relating to this Guarantee and the other Loan Documents to which
     it is a party, or for recognition and enforcement of any judgement in
     respect thereof, to the non-exclusive general jurisdiction of the Courts of
     the State of New York, the courts of the United States of America for the
     Southern District of New York, and appellate courts from any thereof;

          (b) consents that any such action or proceeding may be brought in such
     courts and waives any objection that it may now or hereafter have to the
     venue of any such action or proceeding in any such court or that such
     action or proceeding was brought in an inconvenient court and agrees not to
     plead or claim the same;

          (c) agrees that service of process in any such action or proceeding
     may be effected by mailing a copy thereof by registered or certified mail
     (or any substantially similar form of mail), postage prepaid, to the
     Guarantor, the applicable Lender, the applicable Other Representative or
     the Administrative Agent, as the case may be, at the address referred to in
     paragraph 13 or at such other address of which the Administrative Agent
     shall have been notified pursuant thereto;

          (d) agrees that nothing herein shall affect the right to effect
     service of process in any other manner permitted by law or shall limit the
     right to sue in any other jurisdiction; and

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          (e) waives, to the maximum extent not prohibited by law, any right it
     may have to claim or recover in any legal action or proceeding referred to
     in this paragraph any punitive damages.

     20 WAIVERS OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

     21 Acknowledgements. The Guarantor hereby acknowledges that:

          (a) it has been advised by counsel in the negotiation, execution and
     delivery of this Guarantee and the other Loan Documents to which it is a
     party;

          (b) none of the Administrative Agent, any Other Representative nor any
     Lender has any fiduciary relationship with or duty to the Guarantor arising
     out of or in connection with this Guarantee or any of the other Loan
     Documents, and the relationship between the Administrative Agent, the Other
     Representatives and Lenders, on one hand, and the Borrower and the
     Guarantor, on the other hand, in connection herewith or therewith is solely
     that of debtor and creditor; and

          (c) no joint venture is created hereby or by the other Loan Documents
     or otherwise exists by virtue of the transactions contemplated hereby among
     the Lenders or among the Borrower, the Guarantor and the Lenders.

     22 Successors and Assigns. This Guarantee shall be binding upon the
respective successors and assigns of the Guarantor, the Administrative Agent,
the Other Representatives and the Lenders, and shall inure to the benefit of the
Administrative Agent, the Other Representatives and the Lenders and their
respective successors and assigns.

     23 GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

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     IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.

                                     RA FACTORS, L.L.C.

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

                                     Address for Notices:

                                     RA FACTORS, L.L.C.
                                     870 Remington Drive
                                     Madison, N.C. 27025
                                     Attention: Mark Little, Vice President
                                     Telecopy: (336) 548-7779

ACKNOWLEDGED AND AGREED AS
OF THE DATE HEREOF BY:

THE CHASE MANHATTAN BANK, as Administrative Agent

By:/s/Kathy A. Duncan
   -----------------------------------------
     Title: Vice President

                                       10<PAGE>   1
                                                                    Exhibit 4.20

                          SUBSIDIARY SECURITY AGREEMENT

                  SUBSIDIARY SECURITY AGREEMENT, dated as of August 25, 2000,
made by RA FACTORS, L.L.C., a Delaware limited liability company (the
"Grantor"), in favor of THE CHASE MANHATTAN BANK, a New York banking
corporation, as administrative agent (in such capacity, the "Administrative
Agent") for the several banks and other financial institutions (the "Lenders")
from time to time parties to the Amended and Restated Credit Agreement, dated as
of April 28, 2000 (as the same may be amended, supplemented, waived or otherwise
modified from time to time, the "Credit Agreement"), among the Remington Arms
Company, Inc. (the "Borrower"), Chase Securities Inc. and Banc of America
Securities LLC, as joint lead arrangers, Bank of America, N.A., as Syndication
agent, Goldman Sachs Credit Partners, L.P., as documentation agent (collectively
the "Other Representatives") and the Administrative Agent.

                              W I T N E S S E T H :
                              - - - - - - - - - -

                  WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make Extensions of Credit to the Borrower upon the terms and
subject to the conditions set forth therein; and

                  WHEREAS, pursuant to Section 8.17(b) of the Credit Agreement,
the Borrower agreed not to create any new Subsidiary unless such Subsidiary
shall have executed and delivered a security agreement to the Administrative
Agent for the benefit of the Lenders;

                  NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent, the Other Representatives and the Lenders to continue
to make their respective Extensions of Credit to the Borrower under the Credit
Agreement, the Grantor hereby agrees with the Administrative Agent, for the
benefit of the Lenders, as follows:

     1. Defined Terms. (a) Unless otherwise  defined herein,  capitalized  terms
defined  in the  Credit  Agreement  are used  herein  as defined therein.  The
following  terms are used  herein as defined in the Uniform  Commercial  Code in
effect  in the State of New York from  time to time:  Accounts,  Chattel  Paper,
Documents, Equipment, Farm Products, Fixtures, General Intangibles, Instruments,
Inventory and Proceeds. The following terms shall have the following meanings:

          "Agreement":  this  Security  Agreement,  as the same may be  amended,
     supplemented, waived or otherwise modified from time to time.

          "Code":  the Uniform Commercial Code as from time to time in effect in
     the State of New York.

          "Collateral": as defined in Section 2 of this Agreement.

                                        1
<PAGE>   2

          "Contracts": all contracts, agreements, instruments and indentures in
     any form, and portions thereof, to which the Grantor is a party or under
     which the Grantor has any right, title or interest or to which the Grantor
     or any property of the Grantor is subject, as the same may from time to
     time be amended, supplemented or otherwise modified, including, without
     limitation, (a) all rights of the Grantor to receive moneys due and to
     become due to it thereunder or in connection therewith, (b) all rights of
     the Grantor to damages arising out of, or for, breach or default in respect
     thereof and (c) all rights of the Grantor to perform and to exercise all
     remedies thereunder, in each case to the extent the grant by the Grantor of
     a security interest pursuant to this Agreement in its right, title and
     interest in such contract, agreement, instrument or indenture is not
     prohibited by such contract, agreement, instrument or indenture without the
     consent of any other party thereto, would not give any other party to such
     contract, agreement, instrument or indenture the right to terminate its
     obligations thereunder, or is permitted with consent if all necessary
     consents to such grant of a security interest have been obtained from the
     other parties thereto (it being understood that the foregoing shall not be
     deemed to obligate the Grantor to obtain such consents); provided, that the
     foregoing limitation shall not affect, limit, restrict or impair the grant
     by the Grantor of a security interest pursuant to this Agreement in any
     Account or any money or other amounts due or to become due under any such
     contract, agreement, instrument or indenture.

          "Copyright Licenses": all United States written license agreements
     with any unaffiliated Person in connection with any of the Copyrights or
     such other Person's copyrights, whether the Grantor is a licensor or a
     licensee under any such license agreement, subject, in each case, to the
     terms of such license agreements, and the right to prepare for sale, sell
     and advertise for sale, all Inventory now or hereafter covered by such
     licenses.

          "Copyrights": all United States copyrights, whether or not the
     underlying works of authorship have been published, and whether or not the
     copyrights have been registered, copyright registrations and applications,
     and all works of authorship and other intellectual property rights therein,
     including, without limitation, (a) all renewals thereof, (b) all income,
     royalties, damages and other payments now and hereafter due and/or payable
     with respect thereto (including, without limitation, payments under all
     licenses entered into in connection therewith, and damages and payments for
     past or future infringements thereof), (c) the right to sue for past,
     present and future infringements and misappropriations thereof, and (d) all
     rights corresponding thereto throughout the world and all other rights of
     any kind whatsoever of the Grantor accruing thereunder or pertaining
     thereto.

          "Obligations": the obligations and liabilities of the Grantor under
     the Subsidiary Guarantee, the Subsidiary Patent and Trademark Security
     Agreement and this Security Agreement.

          "Patent License": all United States written license agreements with
     any unaffiliated Person in connection with any of the Patents or such other
     Person's patents, whether the Grantor is a licensor or a licensee under any
     such license agreement, including, without limitation, the license
     agreements listed in Schedule II attached hereto and made a part hereof,
     subject, in each case, to the terms of such license agreements, and the
     right to prepare for sale, sell and advertise for sale, all Inventory now
     or hereafter covered by such licenses.

                                       2
<PAGE>   3

          "Patents": all United States patents, patents applications and
     patentable inventions, including, without limitation, all patents and
     patent applications identified in Schedule II attached hereto and made a
     part hereof, and including without limitation (a) all inventions and
     improvements described and claimed therein, and patentable inventions, (b)
     the right to sue or otherwise recover for any and all past, present and
     future infringements and misappropriations thereof, (c) all income,
     royalties, damages and other payments now and hereafter due and/or payable
     with respect thereto (including, without limitation, payments under all
     licenses entered into in connection therewith, and damages and payments for
     past or future infringements thereof), and (d) all rights corresponding
     thereto in the United States and all reissues, divisions, continuations,
     continuations-in-part, substitutes, renewals, and extensions thereof, all
     improvements thereon, and all other rights of any kind whatsoever of the
     Grantor accruing thereunder or pertaining thereto.

          "Trademark License": all United States written license agreements with
     any unaffiliated Person in connection with any of the Trademarks or such
     other Person's names or trademarks, whether the Grantor is a licensor or a
     licensee under any such license agreement, including, without limitation,
     the license agreements listed in Schedule I attached hereto and made a part
     hereof, subject, in each case, to the terms of such license agreements, and
     the right to prepare for sale, sell and advertise for sale, all Inventory
     now or hereafter covered by such licenses.

          "Trademarks": all United States trademarks, service marks, trade
     names, trade dress or other indicia of trade origin, trademark and service
     mark registrations, and applications for trademark or service mark
     registrations (except for "intent to use" applications for trademark or
     service mark registrations filed pursuant to Section 1(b) of the Lanham
     Act, unless and until an Amendment to Allege Use or a Statement of Use
     under Sections 1(c) and 1(d) of said Act has been filed), and any renewals
     thereof, including, without limitation, each registration and application
     identified in Schedule I attached hereto and made a part hereof, and
     including without limitation (a) the right to sue or otherwise recover for
     any and all past, present and future infringements and misappropriations
     thereof, (b) all income, royalties, damages and other payments now and
     hereafter due and/or payable with respect thereto (including, without
     limitation, payments under all licenses entered into in connection
     therewith, and damages and payments for past or future infringements
     thereof), and (c) all rights corresponding thereto in the United States and
     all other rights of any kind whatsoever of the Grantor accruing thereunder
     or pertaining thereto, together in each case with the goodwill of the
     business connected with the use of, and symbolized by, each such trademark,
     service mark, trade name, trade dress or other indicia of trade origin.

          "Work": any work which is subject to copyright protection pursuant to
     Title 17 of the United States Code.

          (b) The words "hereof," "herein" and "hereunder" and words of similar
     import when used in this Agreement shall refer to this Agreement as a whole
     and not to any particular provision of this Agreement, and section and
     paragraph references are to this Agreement unless otherwise specified.

                                       3
<PAGE>   4

          (c) The meanings given to terms defined herein shall be equally
     applicable to both the singular and plural forms of such terms.

     2. Grant of Security Interest. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, the Grantor hereby assigns,
pledges and grants, subject to existing licenses to use Patents or Trademarks
granted by the Grantor in the ordinary course of business, to the Administrative
Agent, for the benefit of the Lenders, a security interest in and Lien on all of
the following property now owned or at any time hereafter acquired by the
Grantor or in which the Grantor now has or at any time in the future may acquire
any right, title or interest (collectively, the "Collateral"):

(i)       all Accounts;

(ii)      all Chattel Paper;

(iii)     all Contracts;

(iv)      all Documents;

(v)       all Equipment (other than motor vehicles covered by certificate of
          title statutes);

(vi)      all General Intangibles;

(vii)     all Instruments;

(viii)    all Inventory;

(ix)      all Patent Licenses;

(x)       all Patents;

(xi)      all Trademark Licenses;

(xii)     all Trademarks; and

(xiii)    to the extent not otherwise included, all Proceeds and products of any
          and all of the foregoing;

provided, that the foregoing grant of a security interest with respect to
General Intangibles, Patent Licenses and Trademark Licenses shall not include a
security interest in, and the Collateral shall not include, any license or
permit with a Governmental Authority or Patent License or Trademark License with
or issued by Persons other than a Subsidiary of the Grantor that would otherwise
be included in the Collateral to the extent that the grant by the Grantor of
such security interest is prohibited by the terms and provisions of the written
agreement or document or instrument creating or evidencing such license or
permit or Patent License or Trademark License (or, if such grant of a security
interest is permitted with the consent of a Governmental Authority or any other
party thereto, to the extent all necessary consents to such grant have not been
obtained therefrom, it being understood that the Grantor shall not be deemed

                                       4
<PAGE>   5

to be obliged to obtain such consents), or such agreement, document or
instrument gives the other party thereto the right to terminate such license or
permit with a Governmental Authority or Patent License or Trademark License in
the event of the grant of a security interest with respect thereto. The Grantor
shall use its reasonable best efforts to (i) avoid entering into agreements or
contracts which would prohibit the Grantor from granting a security interest in
such licenses or permits, Patent Licenses or Trademark Licenses pursuant to the
terms of this Agreement and (ii) cause each such license, permit, Patent License
or Trademark License entered into, created or made by it after the Effective
Date to be subject to the Lien and security interest created pursuant to this
Agreement.

     3. Rights of Administrative Agent, Other Representatives and Lenders;
Limitations on Administrative Agent's, Other Representative's and Lenders'
Obligations.

          (a) No Liability of Administrative Agent or Lenders under Accounts or
     Contracts. None of the Administrative Agent, any Other Representative nor
     any Lender shall have any obligation or liability under any Account (or any
     agreement giving rise thereto) or Contract by reason of or arising out of
     this Agreement or the receipt by the Administrative Agent, any Other
     Representative or any such Lender of any payment relating to such Account
     or Contract pursuant hereto, nor shall the Administrative Agent, any Other
     Representative or any Lender be obligated in any manner to perform any of
     the obligations of the Grantor under or pursuant to any Account (or any
     agreement giving rise thereto) or Contract, to make any payment, to make
     any inquiry as to the nature or the sufficiency of any payment received by
     it or as to the sufficiency of any performance by any party under any
     Account (or any agreement giving rise thereto) or Contract, to present or
     file any claim, to take any action to enforce any performance or to collect
     the payment of any amounts which may have been assigned to it or to which
     it may be entitled at any time or times.

          (b) Notice to Account Debtors. Upon the request of the Administrative
     Agent at any time after the occurrence and during the continuance of an
     Event of Default, the Grantor shall notify the account debtors on the
     Accounts and the parties to the Contracts that the Accounts and Contracts
     have been assigned to the Administrative Agent, for the benefit of the
     Lenders, and that payments in respect thereof shall be made directly to the
     Administrative Agent. At any time and from time to time after the
     occurrence and during the continuance of an Event of Default, the
     Administrative Agent may in its own name or in the name of others
     communicate with account debtors on the Accounts and the parties to the
     Contracts to verify with them to its satisfaction the existence, amount and
     terms of any Accounts or Contracts.

                                       5
<PAGE>   6

          (c) Collections on Accounts. If required by the Administrative Agent
     at any time when an Event of Default has occurred and is continuing, any
     payments of Accounts, when collected by the Grantor, shall be forthwith
     (and, in any event, within two Business Days of receipt by the Grantor)
     transferred by the Grantor to the Administrative Agent, subject to
     disposition by the Administrative Agent for the account of the Lenders
     only, as hereinafter provided. Until so turned over, all such payments
     shall be held by the Grantor in trust for the benefit of the Administrative
     Agent and the Lenders, segregated from other funds of the Grantor. All
     Proceeds constituting collections of Accounts while held by the
     Administrative Agent (or by the Grantor in trust for the benefit of the
     Administrative Agent, the Other Representatives and the Lenders) shall
     continue to be collateral security for all of the Obligations and shall not
     constitute payment thereof until applied as hereinafter provided. At any
     time when an Event of Default has occurred and is continuing, at the
     Administrative Agent's election, the Administrative Agent shall hold all or
     any part of such funds on account of the Obligations (whether matured or
     unmatured) and may apply such funds to the obligations then due and owing,
     and any part of such funds which the Administrative Agent does not so apply
     shall be paid over from time to time by the Administrative Agent to the
     Grantor or to whomsoever may be lawfully entitled to receive the same. At
     any time when an Event of Default has occurred and is continuing, at the
     Administrative Agent's request, the Grantor shall deliver to the
     Administrative Agent all original and other documents evidencing, and
     relating to, the agreements and transactions which gave rise to the
     Accounts, including, without limitation, all statements relating to the
     Accounts.

     4. Representations and Warranties. The Grantor hereby represents and
warrants that:

          (a) Title; No Other Liens. Except for the Lien granted to the
     Administrative Agent, for the benefit of the Lenders, pursuant to this
     Agreement and the other Liens permitted to exist on the Collateral pursuant
     to the Credit Agreement and the other Loan Documents, ( including without
     limitation Liens permitted to exist pursuant to Section 8.3 of the Credit
     Agreement), the Grantor owns each item of the Collateral free and clear of
     any and all Liens. No security agreement, financing statement or other
     public notice similar in effect with respect to all or any part of the
     Collateral is on file or of record in any public office, except such as may
     have been filed in favor of the Administrative Agent, for the benefit of
     the Lenders, pursuant to this Agreement, or as may be permitted pursuant to
     the Loan Documents.

          (b) Perfected First Priority Liens. (i) This Agreement is effective to
     create, as collateral security for the Obligations, valid and enforceable
     Liens on the Collateral in favor of the Administrative Agent, for the
     benefit of the Lenders, except as enforceability may be affected by
     bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
     and other similar laws relating to or affecting creditor's rights
     generally, general equitable principles (whether considered in a proceeding
     in equity or at law) and an implied covenant of good faith and fair
     dealing.

          (ii) Except with regard to Liens (if any) on Specified Assets, upon
     the completion of the Filings, and the delivery to and continuing
     possession by the Administrative Agent of all Instruments, Chattel Paper
     and Documents a security interest in which is perfected by possession, the
     Liens created pursuant to this Agreement will constitute valid Liens on and
     (to the extent provided herein) perfected security interests in the
     Collateral in favor of

                                       6
<PAGE>   7

     the Administrative Agent for the benefit of the Lenders, and will be prior
     to all other Liens of all other Persons other than Permitted Liens, and
     enforceable as such as against all other Persons other than Ordinary Course
     Buyers, except to the extent that the recording of an assignment or other
     transfer of title to the Administrative Agent or the recording of other
     applicable documents in the United States Patent and Trademark Office or
     United States Copyright Office may be necessary for perfection or
     enforceability, and except as enforceability may be limited by applicable
     bankruptcy, insolvency, reorganization, moratorium or similar laws
     affecting the enforcement of creditors' rights generally and by general
     equitable principles (whether enforcement is sought by proceedings in
     equity or at law) or by an implied covenant of good faith and fair dealing.
     As used in this Section 4(b)(ii), the following terms shall have the
     following meanings:

               "Filings": the filing or recording of the Financing Statements,
          any Patent and Trademark Security Agreement and any filings after the
          Closing Date in any other jurisdiction as may be necessary under any
          Requirement of Law.

               "Financing Statements": the financing statements delivered to the
          Administrative Agent by the Borrower on the Closing Date for filing in
          the jurisdictions listed in Schedule 6.1(e) to the Credit Agreement.

               "Ordinary Course Buyers": with respect to goods only, buyers in
          the ordinary course of business to the extent provided in Section
          9-307(1) of the Uniform Commercial Code as in effect from time to time
          in the relevant jurisdiction.

               "Permitted Liens": Liens permitted pursuant to the Loan
          Documents, including without limitation those permitted to exist
          pursuant to subsection 8.3 of the Credit Agreement.

               "Specified Assets": the following property and assets of the
          Grantor:

                    (1) Equipment constituting Fixtures;

                    (2) Patents, Patent Licenses, Trademarks and Trademark
               Licenses to the extent that (a) Liens thereon which cannot be
               perfected by the filing of financing statements under the Uniform
               Commercial Code or by the filing and acceptance thereof in the
               United States Patent and Trademark Office or (b) such Patents,
               Patent Licenses, Trademarks and Trademark Licenses are not,
               individually or in the aggregate, material to the business of
               Grantor and its Subsidiaries taken as a whole;

                    (3) Copyrights and Copyright Licenses and Accounts or
               receivables arising therefrom to the extent that the Uniform
               Commercial Code as in effect from time to time in the relevant
               jurisdiction is not applicable to the creation or perfection of
               Liens thereon;

                    (4) Collateral for which the perfection of Liens thereon
               requires filings in or other actions under the laws of
               jurisdictions outside the United

                                       7
<PAGE>   8

               States of America, any State, territory or dependency thereof or
               the District of Columbia;

                    (5) Contracts, Accounts or receivables subject to the
               Assignment of Claims Act;

                    (6) goods included in Collateral received by any Person for
               "sale or return" within the meaning of Section 2-326 of the
               Uniform Commercial Code of the applicable jurisdiction, to the
               extent of claims of creditors of such Person;

                    (7) Proceeds of Accounts, receivables of Inventory which do
               not themselves constitute Collateral or which have not been
               transferred to or deposited in the Collateral Proceeds Account
               (if any); and

                    (8) Equipment at various sales offices with a fair market
               value of less than $10,000 per sales office and mobile goods.

          (c) Accounts. The places where the Grantor keeps its records
     concerning the Accounts constituting Collateral are 870 Remington Drive,
     Madison, N.C. 27025 or such other location or locations of which the
     Grantor shall have provided prior written notice to the Administrative
     Agent pursuant to Section 5(p).

          (d) Consents. Except as set forth in Schedules I and II hereto no
     consent of any party (other than the Grantor) to any Patent --------
     License or Trademark License constituting Collateral or any obligor in
     respect of any material Account constituting Collateral or which owes in
     the aggregate a material portion of all the Accounts constituting
     Collateral is required, or purports to be required, to be obtained by or on
     behalf of the Grantor in connection with the execution, delivery and
     performance of this Agreement that has not been obtained. Each Patent
     License, Trademark License and Account constituting Collateral is in full
     force and effect and constitutes a valid and legally enforceable obligation
     of the Grantor and (to the knowledge of the Grantor) each other party
     thereto except as enforceability may be limited by bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting the enforcement of
     creditor's rights generally and by general equitable principles (whether
     enforcement is sought by proceedings in equity or at law) and except to the
     extent the failure of any such Patent License, Trademark License or Account
     to be in full force and effect or valid or legally enforceable would not be
     reasonably expected, in the aggregate, to have a material adverse effect on
     the value of the Collateral (as defined in the Credit Agreement). Except as
     set forth in Schedules I and II hereto, no consent or authorization of,
     filing with or other act by or in respect of any Governmental Authority is
     required in connection with the execution, delivery, performance, validity
     or enforceability of any of the Patent Licenses, Trademark Licenses or
     Accounts constituting Collateral by any party thereto other than those
     which have been duly obtained, made or performed and are in full force and
     effect and those the failure of which to make or obtain would not be
     reasonably expected, in the aggregate, to have a material adverse effect on
     the value of the Collateral (as defined in the Credit Agreement). Except as
     set forth in Schedules I and II hereto, neither the Grantor nor (to the
     knowledge of the Grantor) any other party to any Patent License, Trademark
     License or Account constituting Collateral is in default in the performance
     or observance of any of the terms thereof, except for such defaults as
     would not reasonably be expected, in the

                                       8
<PAGE>   9

     aggregate, to have a material adverse effect on the value of the Collateral
     (as defined in the Credit Agreement). The right, title and interest of the
     Grantor in, to and under each Patent License, Trademark License and Account
     constituting Collateral are not subject to any defense, offset,
     counterclaim or claim which would be reasonably expected, either
     individually or in the aggregate, to have a material adverse effect on the
     value of the Collateral (as defined in the Credit Agreement).

          (e) Location of Tangible Property. The Inventory constituting
     Collateral and the Equipment constituting Collateral are kept at the
     locations listed in Schedule III hereto and/or such other locations of
     which the Grantor shall provide written notice to the Administrative Agent
     pursuant to Section 5(p).

          (f) Chief Executive Office. The Grantor `s chief executive office and
     chief place of business is located at 870 Remington Drive, Madison, N.C.
     27025 or such other location of which the Grantor shall have provided
     written notice to the Administrative Agent pursuant to Section 5(p).

          (g) Farm Products. None of the Collateral constitutes, or is the
     Proceeds of, Farm Products.

          (h) Patents and Trademarks. Schedules I and II hereto include all
     Trademarks and Patents owned by the Grantor in its own name as of the date
     hereof and all material Trademark Licenses and all material Patent Licenses
     owned by the Grantor in its own name as of the date hereof.

          (i) Governmental Obligors. As of the Effective Date, none of the
     Obligors on any Accounts, and none of the parties to any Contracts
     constituting Collateral, is a Governmental Authority, except for any such
     Accounts or Contracts that are not material in relation to the business of
     the Grantor.

          (j) Copyrights. As of the date hereof, the Grantor does not own any
     Copyrights and is not a party to any Copyright Licenses which are material
     to the business of the Grantor.

     The Grantor agrees that the foregoing representations and warranties shall
be deemed to have been made by the Grantor on and as of each date on which an
Extension of Credit is made by the Lenders to the Borrower under the Credit
Agreement, in each case as though made on and as of each such date (or, if any
such representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).

     5. Covenants. The Grantor covenants and agrees with the Administrative
Agent and the Lenders and, with respect to Section 5(a), the Administrative
Agent covenants and agrees with the Grantor, that, from and after the date of
this Agreement until the payment in full of the Notes, the Reimbursement
Obligations and the other Obligations then due and owing, the termination of the
Commitments and the expiration, termination or return to the Issuing Lender of
the Letters of Credit:

                                       9
<PAGE>   10

          (a) Further Documentation; Pledge of Instruments and Chattel Paper. At
     any time and from time to time, upon the written request of the
     Administrative Agent or the Grantor, as the case may be, and at the sole
     expense of the Grantor, the Grantor or the Administrative Agent, as the
     case may be, will promptly and duly execute and deliver such further
     instruments and documents and take such further action as the
     Administrative Agent or the Grantor may reasonably request for the purpose
     of obtaining or preserving the full benefits of this Agreement and of the
     rights and powers herein granted, including, without limitation, the filing
     of any financing or continuation statements under the Uniform Commercial
     Code in effect in any jurisdiction with respect to the Liens created
     hereby. The Grantor also hereby authorizes the Administrative Agent to file
     any such financing or continuation statement without the signature of the
     Grantor to the extent permitted by applicable law. A carbon, photographic
     or other reproduction of this Agreement shall be sufficient as a financing
     statement for filing in any jurisdiction. The Administrative Agent agrees
     to notify the Grantor and the Grantor agrees to notify the Administrative
     Agent of any financing or continuation statement filed by it pursuant to
     this Section 5(a), provided that any -------- failure to give any such
     notice shall not affect the validity or effectiveness of any such filing.
     Unless an Event of Default shall have occurred and be continuing, the
     Grantor shall be entitled to retain possession of all Collateral evidenced
     by any Instrument or Chattel Paper, and shall hold all such Collateral in
     trust for the Administrative Agent, for the benefit of the Lenders, and
     shall not commingle any of such Collateral with any other assets of the
     Grantor. In the event an Event of Default shall have occurred and be
     continuing, upon the request of the Administrative Agent, such Collateral
     shall be immediately delivered to the Administrative Agent, duly endorsed
     in a manner satisfactory to the Administrative Agent, to be held as
     Collateral pursuant to this Agreement. The Grantor shall not permit any
     other Person to possess any such Collateral at any time other than in
     connection with a transaction permitted under Section 8.14 of the Credit
     Agreement.

          (b) Indemnification. The Grantor agrees to pay, and to save the
     Administrative Agent, the Other Representatives and the Lenders harmless
     from, any and all liabilities and reasonable costs and expenses (including,
     without limitation, reasonable legal fees and expenses) (i) with respect
     to, or resulting from, any delay by the Grantor in paying, any and all
     excise, sales or other similar taxes which may be payable or determined to
     be payable with respect to any of the Collateral, (ii) with respect to, or
     resulting from, any delay by the Grantor in complying with any material
     Requirement of Law applicable to any of the Collateral or (iii) in
     connection with any of the transactions contemplated by this Agreement,
     provided that such indemnity shall not, as to the Administrative
     Agent, any Other Representative or any Lender, be available to the extent
     that such liabilities, costs and expenses resulted from the gross
     negligence or willful misconduct of the Administrative Agent, any Other
     Representative or any Lender. In any suit, proceeding or action brought by
     the Administrative Agent, any Other Representative or any Lender under any
     Account for any sum owing thereunder, or to enforce any provisions of any
     Account, the Grantor will save, indemnify and keep the Administrative
     Agent, such Other Representative and such Lender harmless from and against
     all expense, loss or damage suffered by reason of any defense, setoff,
     counterclaim, recoupment or reduction or liability whatsoever of the
     account debtor thereunder, arising out of a material breach by the Grantor
     of any obligation thereunder.

                                       10
<PAGE>   11

          (c) Maintenance of Records. The Grantor will keep and maintain at its
     own cost and expense reasonably satisfactory and complete records of the
     Collateral, including, without limitation, a record of all payments
     received and all credits granted with respect to the Accounts constituting
     Collateral. For the Administrative Agent's and the Lenders' further
     security, the Administrative Agent, for the benefit of the Lenders, shall
     have a security interest in all of the Grantor's books and records
     pertaining to the Collateral, and the Grantor shall permit the
     Administrative Agent or its representatives to review such books and
     records upon reasonable advance notice during normal business hours at the
     location where such books and records are kept and at the reasonable
     request of the Administrative Agent.

          (d) Right of Inspection. Upon reasonable advance notice to the Grantor
     and at reasonable intervals, or at any time and from time to time after the
     occurrence and during the continuance of an Event of Default, the
     Administrative Agent and the Lenders shall have reasonable access during
     normal business hours to all the books, correspondence and records of the
     Grantor, and the Administrative Agent and the Lenders and their respective
     representatives may examine the same, and to the extent reasonable take
     extracts therefrom and make photocopies thereof, and the Grantor agrees to
     render to the Administrative Agent and the Lenders, at the Grantor's
     reasonable cost and expense, such clerical and other assistance as may be
     reasonably requested with regard thereto. The Administrative Agent and the
     Lenders and their respective representatives shall also have the right upon
     reasonable advance notice to the Grantor to enter during normal business
     hours into and upon any premises where any of the Inventory or Equipment
     constituting Collateral is located for the purpose of inspecting the same,
     observing its use or otherwise protecting its interests therein.

          (e) Compliance with Laws, etc. The Grantor will comply in all material
     respects with all Requirements of Law applicable to the Collateral or any
     part thereof, except to the extent that the failure to so comply would not
     be reasonably expected to materially adversely affect, in the aggregate,
     the Administrative Agent's or the Lenders' rights hereunder, the priority
     of their Liens on the Collateral or the value of the Collateral (as defined
     in the Credit Agreement).

          (f) Compliance with Contractual Obligations. The Grantor will perform
     and comply in all material respects with all its Contractual Obligations
     relating to the Collateral, unless (i) such performance or compliance is
     fully excused by breach by the other party or parties thereto or (ii) such
     failure to comply or perform would not be reasonably expected, in the
     aggregate, to have a material adverse effect on the value of the Collateral
     (as defined in the Credit Agreement).

          (g) Payment of Obligations. The Grantor will pay promptly when due all
     taxes, assessments and governmental charges or levies imposed upon the
     Collateral, as well as all claims of any kind (including, without
     limitation, claims for labor, materials and supplies) against or with
     respect to the Collateral, except that no such tax, assessment, charge or
     levy need be paid if (i) the validity thereof is being contested in good
     faith by appropriate proceedings diligently conducted and (ii) such tax,
     assessment, charge or levy is adequately reserved against on the Grantor's
     books in accordance with GAAP.

                                       11
<PAGE>   12

          (h) Limitation on Liens on Collateral. The Grantor will not create,
     incur or permit to exist, will defend the Collateral against, and will take
     such other action as is reasonably necessary to remove, any Lien or
     material adverse claim on or to any of the Collateral, other than the Liens
     created hereby and other than as permitted pursuant to the Loan Documents,
     and will defend the right, title and interest of the Administrative Agent
     and the Lenders in and to any of the Collateral against the claims and
     demands of all Persons whomsoever.

          (i) Limitations on Dispositions of Collateral. Without the prior
     written consent of the Administrative Agent, the Grantor will not sell,
     assign, transfer, exchange or otherwise dispose of, or grant any option
     with respect to, the Collateral, or attempt, offer or contract to do so,
     except with respect to exclusive licenses in the ordinary course of
     business or as permitted by this Agreement or the Loan Documents.

          (j) Limitations on Modifications, Waivers, Extensions of Contracts,
     Licenses and Accounts. The Grantor will not, except in the ordinary course
     of business, amend, modify, terminate or waive any provision of any
     material Trademark License or any agreement giving rise to a material
     Account constituting Collateral in any manner which would reasonably be
     expected to materially adversely affect the value of such Trademark License
     or Account as Collateral.

          (k) Limitations on Discounts, Compromises, Extensions of Accounts. At
     all times, the Grantor will not, except in the ordinary course of business,
     grant any extension of the time of payment of any material Account
     constituting Collateral, compromise, compound or settle the same for less
     than the full amount thereof, release, wholly or partially, any Person
     liable for the payment thereof, or allow any credit or discount whatsoever
     thereon, unless such extensions, compromises, compoundings, settlements,
     releases, credits or discounts are permitted by the Loan Documents.

          (l) Maintenance of Equipment. The Grantor will maintain each material
     item of Equipment constituting Collateral in good operating condition,
     ordinary wear and tear and immaterial impairments of value and damage by
     the elements excepted, and will provide all maintenance, service and
     repairs necessary for such purpose, except to the extent that the failure
     to do any of the foregoing would not be reasonably expected to have a
     Material Adverse Effect.

                                       12
<PAGE>   13

          (m) Maintenance of Insurance. The Grantor will maintain, with
     financially sound and reputable insurance companies, (i) insurance
     (including property insurance) in at least such amounts and against at
     least such risks (but including in any event public liability, product
     liability and business interruption where reasonably obtainable) as are
     usually insured against in the same general area by companies engaged in
     the same or a similar business; and furnish to the Administrative Agent,
     upon written request, information in reasonable detail as to the insurance
     carried and (ii) insurance policies relating to the Inventory and Equipment
     constituting Collateral (A) insuring the Inventory and Equipment
     constituting Collateral against loss by fire, explosion, theft and such
     other casualties as are usually insured against by companies engaged in the
     same or a similar business, (B) insuring the Grantor against liability for
     personal injury and property damage relating to such Inventory and
     Equipment, (C) providing that no cancellation, material reduction in amount
     or material change in the coverage referred to in clause (A) shall be
     effective until at least 15 days after receipt by the Administrative Agent
     of written notice thereof, (D) naming the Administrative Agent and the
     Lenders as additional insured parties and (E) being otherwise reasonably
     satisfactory in all material respects to the Administrative Agent.

          (n) Further Identification of Collateral. The Grantor will furnish to
     the Administrative Agent and the Lenders from time to time such statements
     and schedules further identifying and describing the Collateral, and such
     other reports in connection with the Collateral, as the Administrative
     Agent may reasonably request, all in reasonable detail.

          (o) Notices. The Grantor will advise the Administrative Agent and the
     Lenders promptly, in reasonable detail, at their respective addresses set
     forth in the Credit Agreement, (i) of any Lien (other than Liens created
     hereby or permitted under the Loan Documents) on, or material adverse claim
     asserted against, any of the Collateral and (ii) of the occurrence of any
     other event which would reasonably be expected, in the aggregate, to have a
     material adverse effect on the aggregate value of the Collateral (as
     defined in the Credit Agreement) or the Liens created hereunder.

          (p) Changes in Locations, Name, etc. The Grantor will not (i) change
     the location of its chief executive office/chief place of business from
     that specified in Section 4(f) or remove its books and records from the
     locations specified in Section 4(c), (ii) permit any of the Inventory or
     Equipment constituting Collateral to be kept at locations other than those
     listed in Schedule III hereto, unless such Inventory or Equipment is
     conveyed, sold, leased, transferred, assigned or otherwise disposed of as
     permitted by Section 8.6 of the Credit Agreement or (iii) change its name,
     identity or corporate structure to such an extent that any financing
     statement filed by the Administrative Agent in connection with this
     Agreement would become seriously misleading, unless the Grantor shall have
     complied with the following:

               (A) with respect to clauses (i) and (iii) above, the Grantor (x)
          shall have given the Administrative Agent at least 30 days' prior
          written notice thereof and (y) prior to effecting any such change,
          shall have taken such actions as may be necessary or, upon the
          reasonable request of the Administrative Agent, advisable to continue
          the perfection and priority of the Liens granted pursuant hereto, and

                                       13
<PAGE>   14

               (B) with respect to clause (ii) above, the Grantor (x) shall have
          given the Administrative Agent at least fifteen days' prior written
          notice of the location thereof and (y) prior to keeping any Inventory
          or Equipment constituting Collateral at such new location shall have
          taken such actions as may be necessary or, upon the reasonable request
          of the Administrative Agent, advisable to perfect the Liens granted
          pursuant hereto with respect to such Inventory or Equipment;

          provided in each case under clauses (A)(y) and (B)(y), that the
          Administrative Agent shall have taken all actions required by Section
          5(a) hereof in connection with such actions of the Grantor.

          (q) Copyrights. The Grantor will not own nor at any time in the future
     acquire any right, title or interest in or to any Copyright or Copyright
     License which is material to the business of the Grantor and its
     Subsidiaries, taken as a whole, other than (i) with respect to computer
     software or hardware licenses or other Copyright licenses granted to the
     Grantor in the ordinary course of business, (ii) in connection with any
     rights of the Grantor in respect of security interests in collateral or
     (iii) with respect to which (A) the Administrative Agent shall have been
     given prior written notice of the acquisition of any right, title or
     interest therein or thereto and (B) if reasonably requested by the
     Administrative Agent, a security agreement reasonably satisfactory to the
     Administrative Agent shall have been executed by the Grantor.

          6. Administrative Agent's Appointment as Attorney-in-Fact.

          (a) Powers. The Grantor hereby irrevocably constitutes and appoints
     the Administrative Agent and any officer or agent thereof, with full power
     of substitution, as its true and lawful attorney-in-fact with full
     irrevocable power and authority in the place and stead of the Grantor and
     in the name of the Grantor or in its own name, from time to time in the
     Administrative Agent's discretion, for the purpose of carrying out the
     terms of this Agreement, to take any and all appropriate action and to
     execute any and all documents and instruments which may be necessary or
     desirable to accomplish the purposes of this Agreement, and, without
     limiting the generality of the foregoing, the Grantor hereby gives the
     Administrative Agent the power and right, on behalf of the Grantor, without
     notice to or assent by the Grantor, to do the following at any time when
     any Event of Default shall have occurred and be continuing, and to the
     extent permitted by law:

          (i) in the name of the Grantor or its own name, or otherwise, to take
     possession of and indorse and collect any checks, drafts, notes,
     acceptances or other instruments for the payment of moneys due under any
     Account, Contract, Instrument or General Intangible (to the extent that any
     of the foregoing constitute Collateral) or with respect to any other
     Collateral and to file any claim or to take any other action or institute
     any proceeding in any court of law or equity or otherwise deemed
     appropriate by the Administrative Agent for the purpose of collecting any
     and all such moneys due under any such Account, Contract, Instrument or
     General Intangible or with respect to any such other Collateral whenever
     payable;

          (ii) to pay or discharge taxes and Liens levied or placed on the
     Collateral, other than Liens permitted under this Agreement or the Loan
     Documents, to effect any

                                       14
<PAGE>   15

     repairs or any insurance required by the terms of this Agreement and to pay
     all or any part of the premiums therefor and the costs thereof; and

          (iii) (A) to direct any party liable for any payment under any of the
     Collateral to make payment of any and all moneys due or to become due
     thereunder directly to the Administrative Agent or as the Administrative
     Agent shall direct; (B) to ask for, or demand, collect, receive payment of
     and receipt for, any and all moneys, claims and other amounts due or to
     become due at any time in respect of or arising out of any Collateral; (C)
     to sign and indorse any invoices, freight or express bills, bills of
     lading, storage or warehouse receipts, drafts against debtors, assignments,
     verifications, notices and other documents in connection with any of the
     Collateral; (D) to commence and prosecute any suits, actions or proceedings
     at law or in equity in any court of competent jurisdiction to collect the
     Collateral or any thereof and to enforce any other right in respect of any
     Collateral; (E) to defend any suit, action or proceeding brought against
     the Grantor with respect to any of the Collateral; (F) to settle,
     compromise or adjust any suit, action or proceeding described in clause (E)
     above and, in connection therewith, to give such discharges or releases as
     the Administrative Agent may deem appropriate; (G) subject to any
     pre-existing rights or licenses, to assign any Patent or Trademark
     constituting Collateral (along with the goodwill of the business to which
     any such Patent or Trademark pertains), for such term or terms, on such
     conditions, and in such manner, as the Administrative Agent shall in its
     sole discretion determine; and (H) generally, to sell, transfer, pledge and
     make any agreement with respect to or otherwise deal with any of the
     Collateral as fully and completely as though the Administrative Agent were
     the absolute owner thereof for all purposes, and to do, at the
     Administrative Agent's option and the Grantor's expense, at any time, or
     from time to time, all acts and things which the Administrative Agent deems
     necessary to protect, preserve or realize upon the Collateral and the
     Administrative Agent's and the Lenders' Liens thereon and to effect the
     intent of this Agreement, all as fully and effectively as the Grantor might
     do.

The Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable until payment in full of the Notes, the
Reimbursement Obligations and the other Obligations then due and owing, the
termination of the Commitments and the expiration, termination or return to the
Issuing Lender of the Letters of Credit.

          (b) Other Powers. The Grantor also authorizes the Administrative
     Agent, from time to time if an Event of Default shall have occurred and be
     continuing, to execute, in connection with any sale provided for in Section
     9 hereof, any endorsements, assignments or other instruments of conveyance
     or transfer with respect to the Collateral.

          (c) No Duty on the Part of Administrative Agent, Other Representatives
     or Lenders. The powers conferred on the Administrative Agent, the Other
     Representatives and the Lenders hereunder are solely to protect the
     Administrative Agent's, the Other Representatives' and the Lenders'
     interests in the Collateral and shall not impose any duty upon the
     Administrative Agent, any Other Representative or any Lender to exercise
     any such powers. The Administrative Agent, the Other Representatives and
     the Lenders shall be accountable only for amounts that they actually
     receive as a result of the exercise of such powers, and neither they nor
     any of their officers, directors, employees or agents shall be responsible
     to the Grantor for any act or failure to act hereunder, except for their
     own gross negligence or willful misconduct.

                                       15
<PAGE>   16

     7. Performance by Administrative Agent of Grantor's Obligations. If the
Grantor fails to perform or comply with any of its agreements contained herein
and the Administrative Agent, as provided for by the terms of this Agreement,
shall itself perform or comply, or otherwise cause performance or compliance,
with such agreement, the reasonable expenses of the Administrative Agent
incurred in connection with such performance or compliance, together with
interest thereon at a rate per annum 2% above the rate applicable to ABR Loans,
shall be payable by the Grantor to the Administrative Agent on demand and shall
constitute Obligations secured hereby.

     8. Proceeds. It is agreed that if an Event of Default shall occur and be
continuing, (a) all Proceeds of any Collateral received by the Grantor
consisting of cash, checks and other near-cash items shall be held by the
Grantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of the Grantor, and at the request of the Administrative Agent
shall, forthwith upon receipt by the Grantor, be turned over to the
Administrative Agent in the exact form received by the Grantor (duly indorsed by
the Grantor to the Administrative Agent, if required by the Administrative
Agent), and (b) any and all such Proceeds received by the Administrative Agent
(whether from the Grantor or otherwise) may, in the sole discretion of the
Administrative Agent, be held by the Administrative Agent, for the benefit of
the Lenders, as collateral security for the Obligations (whether matured or
unmatured), and/or then or at any time thereafter may be applied by the
Administrative Agent against, the Obligations then due and owing. Any balance of
such Proceeds remaining after the payment in full of the Notes, the
Reimbursement Obligations and the other Obligations then due and owing, the
termination of the Commitments and the expiration, termination or return to the
Issuing Lender of the Letters of Credit shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive the same.

     9. Remedies. If an Event of Default shall occur and be continuing, the
Administrative Agent, on behalf of the Lenders, may exercise all rights and
remedies of a secured party under the Code, and, to the extent permitted by law,
all other rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations.
Without limiting the generality of the foregoing, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon the Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances, to the extent permitted by law, forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), but subject to any pre-existing rights or licenses, in one or
more parcels at public or private sale or sales, at any exchange, broker's board
or office of the Administrative Agent, any Other Representative or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent, any Other
Representative or any Lender shall have the right, to the extent permitted by
law, upon any such sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Grantor,
which right or equity is hereby waived or released. The Grantor further agrees,
at the Administrative Agent's request, upon the occurrence and during the
continuance of an Event of Default, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at the Grantor's premises or elsewhere. The

                                       16
<PAGE>   17

Administrative Agent shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent, the Other Representatives
and the Lenders hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the Obligations
then due and owing, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the Grantor. To the
extent permitted by applicable law, the Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent, any Other
Representative or any Lender arising out of the repossession, retention or sale
of the Collateral, other than any such claims, damages and demands that may
arise from the gross negligence or willful misconduct of any of them. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. The Grantor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the then outstanding Obligations, including
the reasonable fees and disbursements of any attorneys employed by the
Administrative Agent, any Other Representative or any Lender to collect such
deficiency.

     10. Limitation on Duties Regarding Preservation of Collateral. The
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. None of
the Administrative Agent, any Other Representative, any Lender, nor any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Grantor or any other Person.

     11. Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Collateral are powers coupled with an interest and
are irrevocable until payment in full of the Notes, the Reimbursement
Obligations and the other Obligations then due and owing, the termination of the
Commitments and the expiration, termination or return to the Issuing Lender of
the Letters of Credit.

     12. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     13. Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

     14. No Waiver; Cumulative Remedies. None of the Administrative Agent, any
Other Representative nor any Lender shall by any act (except by a written
instrument pursuant to Section 15 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of

                                       17
<PAGE>   18

any of the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, any Other Representative or
any Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
any Other Representative or any Lender of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent, such Other Representative or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.

     15. Amendments in Writing; No Waiver; Cumulative Remedies; Successors and
Assigns. None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Grantor and the Administrative Agent in accordance with Section
11.1 of the Credit Agreement. This Agreement shall be binding upon the
successors and assigns of the Grantor and shall inure to the benefit of the
Administrative Agent, the Other Representatives and the Lenders and their
respective successors and assigns, except that the Grantor may not assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent.

     16. Notices. All notices, requests and demands to or upon the respective
parties hereto shall be made in accordance with Section 11.2 of the Credit
Agreement.

     17. Authority of Administrative Agent. The Grantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as among the Administrative Agent, the Other
Representatives and the Lenders, be governed by the Loan Documents and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Grantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Lenders with
full and valid authority so to act or refrain from acting, and the Grantor shall
not be under any obligation to make any inquiry respecting such authority.

     18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

     19. Release of Collateral and Termination. (a) At such time as the payment
in full of the Notes, the Reimbursement Obligations and the other Obligations
then due and owing shall have occurred, the Commitments have been terminated and
the Letters of Credit have expired, terminated or been returned to the Issuing
Lender, the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and the Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantor. Upon
request of the Grantor following any such termination, the Administrative Agent
shall deliver (at the sole cost and expense of the Grantor) to the Grantor any
Collateral held by the Administrative Agent hereunder, and execute

                                       18
<PAGE>   19

and deliver (at the sole cost and expense of the Grantor) to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.

                  (b) If any of the Collateral shall be sold, transferred or
         otherwise disposed of by the Grantor in a transaction permitted by the
         Credit Agreement, then the Administrative Agent shall execute and
         deliver to the Grantor (at the sole cost and expense of the Grantor)
         all releases or other documents reasonably necessary or desirable for
         the release of the Liens created hereby on such Collateral.

                                       19
<PAGE>   20

                  IN WITNESS WHEREOF, the Grantor has caused this Agreement to
be duly executed and delivered as of the date first above written.

                                  RA FACTORS, L.L.C.

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

ACKNOWLEDGED AND AGREED AS OF
THE DATE HEREOF BY:

THE CHASE MANHATTAN BANK, as Administrative Agent

By:/s/Kathy A. Duncan
   ---------------------------------
     Title: Vice President

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