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Exhibit 10.10
PROMISSORY NOTE
$_____________ June 24, 1999
FOR VALUE RECEIVED, the undersigned and its successors,
assigns, heirs and personal representatives ("Borrower"), hereby unconditionally
promises to pay to the order of RACI Holding, Inc., a Delaware corporation, and
its successors and assigns (the "Company") at the office of the Company, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the United
States and in immediately available funds, the aggregate principal sum set forth
on the signature page hereof, as follows:
1. Repayment of Principal. On June 30, 2009, the entire unpaid
principal balance of this Note shall be due and payable, together with all
interest and other charges due hereunder, unless earlier due and payable by
reason of the acceleration of the maturity of this Note.
2. Interest. Borrower agrees to pay interest on this Note
("Note"), which interest payment shall be due and payable, annually in arrears
commencing June 30, 2000 and continuing on each and every June 30 thereafter
while this Note is outstanding at a rate per annum equal to five and
seventy-nine hundredths of a percent (5.79%) (the "Interest Rate"), adjusted
annually on each June 30th to the applicable Federal rate (as defined in Section
1274(d) of the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder) then in effect. ▇▇▇▇▇▇▇▇ agrees that the Company shall
not be obligated to notify Borrower of any change in said Federal Rate.
Interest at the Interest Rate shall be calculated by computing
a daily amount of interest for a 360-day year, then multiplying such amount by
the actual number of days elapsed in an interest calculation period.
If any payment which is to be made hereunder is not paid when
due, such payment shall bear interest, payable on demand, at a rate per annum
equal to the Interest Rate plus two percent (2%), but not to exceed the maximum
amount permitted by law.
If the payment of principal or interest on this Note becomes
payable on a Saturday, Sunday or a day on which the Company is to be closed,
then such payment shall be extended to the next succeeding business day, and
interest on such payment shall be payable at the Interest Rate during such
extension.
3. Use of Funds. Borrower covenants and agrees that the funds
advanced pursuant to this Note shall be used to finance ▇▇▇▇▇▇▇▇'s purchase of
shares of Class A
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common stock, par value $.01 per share (hereinafter referred to as the "Common
Stock"), of the Company, pursuant to the Management Stock Subscription
Agreement, dated as of the date hereof, between Borrower and the Company.
4. Full Recourse. This Note shall be the personal obligation
of the Borrower and the Company shall be entitled to full recourse against the
Borrower for performance and satisfaction of all obligations of the Borrower
hereunder. In addition, the obligations of the Borrower under this Note shall be
secured, pursuant to a Pledge and Security Agreement, dated as of the date
hereof (the "Pledge Agreement"), between the Borrower and the Company, by the
pledge of (i) shares of Common Stock and all shares of Common Stock issued upon
the exercise of the Pledged Options (as defined below) (collectively, the
"Pledged Shares"), (ii) options to purchase _____ shares of Common Stock (the
"Pledged Options") under one or more Management Stock Option Agreements entered
into prior to the date hereof (the "Stock Option Agreement") and (iii) all
non-cash dividends and distributions (including any non-cash property
distributed in connection therewith but less any portion of such non-cash
dividends and distributions that is applied to pay any tax due thereon) paid
with respect to the Pledged Shares and the Pledged Options.
5. Optional Prepayment. The Borrower may, at his or her
option, prepay at any time all or any portion of the outstanding principal
amount of this Note then outstanding, together with all accrued interest on the
outstanding principal amount of this Note through the date of such prepayment,
without premium or penalty.
6. Mandatory Prepayment.
a. Borrower hereby covenants and agrees that if Borrower shall
sell, transfer or otherwise dispose of any shares of Common Stock or any options
to purchase shares of Common Stock (collectively, a "Stock Sale") to any person,
including, but not limited to, the Company, Remington Arms Company, Inc.
("Remington") or The ▇▇▇▇▇▇▇ & Dubilier Private Equity Fund IV Limited
Partnership, or to any of either of their respective successors or assigns, then
Borrower shall be obligated to, immediately after Borrower's receipt of the
proceeds of such Stock Sale, prepay this Note by the amount equal to the
proceeds of such Stock Sale (less any necessary fees, commissions or expenses
paid by Borrower in connection therewith and other than proceeds previously
offset against this Note pursuant to Section 8), which amount, together with
interest on the amount required to be prepaid through the date of prepayment,
shall be automatically due and payable under this Note on such date. Such
prepayment(s) shall be without premium or penalty. Borrower covenants and agrees
to notify the Company immediately in writing if Borrower sells, transfers or
otherwise disposes of any shares of Common Stock or any options to purchase
shares of Common Stock to any person other than the Company. Such amount will be
applied first to accrued interest on the outstanding
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principal amount of this Note and then to the repayment of such outstanding
principal amount.
b. The Borrower shall prepay, concurrently with the payment of
any cash dividends or distributions in respect of the Pledged Shares or the
Pledged Options or the receipt of any other cash Collateral (as defined in the
Pledge Agreement), an amount equal to the cash dividends or distributions paid
on any Pledged Shares or the Pledged Options or other cash Collateral received
(less the portion of any such dividends, distributions or cash Collateral
necessary to pay any tax due thereon), such amount to be applied first to
accrued interest on the outstanding principal amount of this Note and then to
the repayment of such outstanding principal amount.
c. In the event a "Termination Event" (as defined below)
occurs, the Company may demand prepayment in full of the obligations evidenced
by this Note by written notice to Borrower (an "Acceleration Notice"). If the
Company sends an Acceleration Notice to Borrower requiring prepayment as set
forth above, Borrower shall be required to prepay the outstanding principal
balance of this Note in full, together with all unpaid accrued interest and
other charges, on (i) if the Termination Date occurs prior to an underwritten
public offering of the common stock of the Company led by one or more
underwriters, at least one of which has a nationally recognized standing, the
first day immediately following the expiration of the periods during which (A)
The ▇▇▇▇▇▇▇ & Dubilier Private Equity Fund IV Limited Partnership may repurchase
any shares of Stock or (B) if applicable, the Borrower may require the Company
to repurchase the shares of stock or (ii) in all other events, the date which is
ten days after the delivery of the Acceleration Notice. For purposes of this
Note, a "Termination Event" shall be deemed to have occurred in the event that
▇▇▇▇▇▇▇▇'s employment with the Company or Remington is terminated for any reason
whatsoever.
7. Events of Defaults. If any of the following events (each,
an "Event of Default") shall occur: (i) a default in the payment of any
principal of or interest on this Note whenever it becomes due and payable
(whether at maturity or any date filed for prepayment or by declaration or
otherwise); or (ii) a default in the performance or the material breach of any
covenant, representation or warranty of the Borrower contained in this Note, the
Pledge Agreement, the Stock Subscription Agreement or a Stock Option Agreement;
or (iii) the Borrower's (A) application for or consent to the appointment of a
receiver, trustee, custodian or liquidator of any of his property, (B) admission
in writing of his inability to pay his debts as they mature, (C) making of a
general assignment for the benefit of creditors, (D) adjudication as a bankrupt
or insolvent or being the subject of an order for relief under Chapter 13 of the
United States Bankruptcy Code or (E) filing a voluntary petition in bankruptcy,
or a petition or an answer seeking an arrangement with creditors or to take
advantage of any bankruptcy, insolvency, readjustment of debt or liquidation law
or statute, or an answer admitting the material allegations of a petition filed
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against him in any preceding under any such law; or (iv) the entry of an order,
judgment or decree, without the application, approval or consent of the
Borrower, by any court of competent jurisdiction, approving a petition
appointing a receiver, trustee, custodian or liquidator of all or a substantial
part of the assets of the Borrower, and such order, judgment or decree
continuing unstayed and in effect for a period of thirty days, then this Note
and all other obligations of Borrower shall become due and payable forthwith,
upon declaration to that effect by the Company, without notice to Borrower,
anything contained herein or in any other document, instrument or agreement to
the contrary notwithstanding. This Note shall become immediately and
automatically due and payable, without presentment, demand, protest or notice of
any kind, upon the commencement by or against Borrower of a case or proceeding
under any bankruptcy, insolvency or other law relating to the relief of debtors,
the readjustment, composition or extension of indebtedness or reorganization or
liquidation.
8. Company's Right of Set-Off. The Company may apply, and
Remington or The ▇▇▇▇▇▇▇ & Dubilier Private Equity Fund IV Limited Partnership,
a Connecticut limited partnership ("C&D Fund IV"), may pay over to the Company
to be applied, any amounts to be paid by the Company, Remington or C&D Fund IV,
respectively, to repurchase shares of Class A Common Stock or options for such
shares from the Borrower pursuant to the terms of a Stock Subscription Agreement
or a Stock Option Agreement, as the case may be, against the outstanding
principal amount of this Note and accrued interest thereon. Such amounts shall
be applied first to accrued interest on the outstanding principal amount of this
Note and then to such outstanding principal amount.
9. Costs. ▇▇▇▇▇▇▇▇ agrees to pay on demand all reasonable
costs and expenses incurred by the Company incidental to or in any way relating
to the Company's collection of this Note, enforcement of the obligations of
Borrower hereunder or the administration, supervision, preservation or
protection of the Company's rights in connection herewith, including, but not
limited to, reasonable attorneys' fees and expenses.
10. WAIVER OF JURY TRIAL. BORROWER AND THE COMPANY HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS NOTE OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
11. GOVERNING LAW. THE PROVISIONS OF THIS NOTE SHALL BE
CONSTRUED AND INTERPRETED AND ALL RIGHTS AND OBLIGATIONS HEREUNDER DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES WOULD
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REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
12. Advice of Counsel. ▇▇▇▇▇▇▇▇ acknowledges that it has had
the opportunity to obtain the advice of counsel of its own choosing in entering
into this Note and the transactions contemplated hereby. Borrower is fully aware
of the contents of this Note and its legal effect and is entering into this Note
without threat, coercion, fraud or duress of any kind. Borrower is not relying
on any representation, statement, warranty of any party regarding this Note or
the transaction contemplated hereby.
13. Miscellaneous. Borrower hereby authorizes the Company to
date this Note as of the date of the making of the loan evidenced hereby and to
complete any blank space herein according to the terms upon which said loan was
granted. No amendment of this Note shall be effective unless in writing and
signed by the Borrower and the Company.
14. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Note shall be in
writing and shall be deemed to have been duly given if (a) delivered personally,
(b) mailed, certified or registered mail with postage prepaid, (c) sent by
next-day or overnight mail or delivery or (d) sent by telecopy or telegram, as
follows:
(i) if to the Company, to:
RACI Holding, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
(ii) if to the Borrower, to him or her at the address set
forth at the end of this Note.
15. Counter-Claims, Set-Off. Borrower waives the right to
interpose any counterclaim or set-off of any kind in any litigation relating to
this Note or the transaction contemplated hereby.
16. Assignment. This Note shall be assignable in full or in
part by the Company without the consent of ▇▇▇▇▇▇▇▇. No obligation or rights of
▇▇▇▇▇▇▇▇ hereunder can be assigned or transferred without the prior written
consent of the Company.
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17. No Waiver; Cumulative Remedies. No failure on the part of
the Company to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as waiver thereof, nor shall any single or partial
exercise by the Company of any right, remedy or power hereunder preclude any
other or future exercises of any other right, remedy or power.
Each and every right, remedy and power hereby granted to the
Company or allowed it by law or other agreement shall be cumulative and not
exclusive the one of any other, and may be exercised by the Company from time to
time.
18. Severability. Every provision of this Note is intended to
be severable; if any term or provision of this Note shall be invalid, illegal or
unenforceable for any reason whatsoever, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired.
19. Headings. The section headings in this Note are for
convenience only and are not intended to effect the construction of the
provisions of this Note.
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20. ENTIRE AGREEMENT. THIS NOTE REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NOT
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Principal Amount of Loan: $______________
Signature of Borrower:___________________________
Social Security of Borrower: _____ ___ _____
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Date:
Address of Borrower:
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Individual Acknowledgment
STATE OF )
) SS:
COUNTY OF )
Be it remembered that on this ___ day of __________ 1999,
personally came before me, the undersigned, a Notary Public in and for said
State duly commissioned and sworn,___________, party to the within and foregoing
instrument, known to me personally to be such and the person who executed such
instrument, and acknowledged to me that such instrument was his own act and
deed, that the signature therein is his own proper handwriting, and that the
facts stated therein are true. Given under my hand and seal of office the day
and year aforesaid.
[Seal]
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Signature of Notary Public
My Commission expires:
