Exhibit 10.1
FIRST AMENDED FORBEARANCE
AGREEMENT
This FIRST AMENDED
FORBEARANCE AGREEMENT (this “ First Amended Forbearance Agreement
”), is dated as of August 13, 2007, is entered into by and
among DDJ Total Return Loan Fund, L.P., as the Lender (as defined
in the Loan Agreement referred to below), The Wornick Company, a
Delaware corporation (the “ Company ”), Right Away Management
Corporation, a Delaware corporation, The Wornick Company Right Away
Division, a Delaware corporation, and The Wornick Company Right
Away Division, L.P., a Delaware limited partnership (each, a
“ Subsidiary ”,
and, collectively, the “ Subsidiaries ”).
RECITALS:
A.
The Company, the Lender (as assignee of Texas State Bank) and the
Subsidiaries are parties to that certain Loan Agreement, dated as
of June 30, 2004 (as amended by the First Amendment thereto dated
as of March 16, 2007 and as further amended, modified, supplemented
or amended and restated from time to time, the “ Loan Agreement ”).
B.
As of the date hereof, the Events of Default referred to herein as
the “ Specified
Defaults” have occurred and are
continuing.
C.
The Company, the Lender and the Subsidiaries entered into a
Forbearance Agreement dated as of July 16, 2007 (the “
Forbearance Agreement
”) pursuant to which the Lender agreed to forbear from
exercising its rights and remedies under the Loan Agreement during
the Forbearance Period.
D.
The Forbearance Period (as defined in the Forbearance Agreement)
under the Forbearance Agreement will expire on August 13, 2007 and
the Company and Subsidiaries have asked the Lender to extend the
Forbearance Period through September 12, 2007;
E.
The Company and the Subsidiaries entered into a forbearance
agreement with certain holders (the “ Noteholders ”) of the
Company’s 10.875% Senior Secured Notes due 2011 (the “
Notes ”) holding not
less than $100 million in aggregate principal amount of the Notes,
representing not less than 80% of the aggregate principal amount of
the Notes outstanding on July 16, 2007 (the “ Noteholder Forbearance Agreement
”) pursuant to which the Noteholders agreed to forbear from
exercising their rights and remedies under the Indenture until the
expiration of the Forbearance Period (as defined in the Noteholder
Forbearance Agreement) on August 15, 2007.
F.
The Company and the Subsidiaries have advised the Lender that the
Company, the Subsidiaries and the Noteholders will, simultaneously
with the execution of this First Amended Forbearance Agreement,
enter into a separate amended forbearance agreement with the
Noteholders pursuant to which the Noteholders shall agree to
forbear from exercising the rights and remedies available to the
Noteholders under the Indenture, the Intercreditor Agreement and
the Collateral Agreements (as defined in the Indenture) until
September 17, 2007, all on the terms and conditions set forth in
such amended forbearance agreement (as such agreement may be
amended, modified, supplemented or amended and restated from time
to time, the “ Amended
Noteholder Forbearance Agreement ”).
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NOW, THEREFORE, in
consideration of the premises and the respective representations,
warranties, covenants and agreements set forth in this First
Amended Forbearance Agreement, and intending to be legally bound,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1
Defined Terms.
(a)
Capitalized terms that are defined in this First Amended
Forbearance Agreement shall have the meanings ascribed to such
terms in this First Amended Forbearance Agreement. All other
capitalized terms shall have the meanings ascribed in the Loan
Agreement. Unless the context of this First Amended Forbearance
Agreement clearly requires otherwise, references to the plural
include the singular; references to the singular include the
plural; the words “include,” “includes,”
and “including” will be deemed to be followed by
“without limitation”; and the term “or”
has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or”.
(b)
This First Amended Forbearance Agreement constitutes a “Loan
Document” as defined in the Loan Agreement.
(c)
References in this First Amended Forbearance Agreement to the
Lender shall constitute references to DDJ Total Return Loan Fund,
L.P. solely in its capacity as the Lender.
ARTICLE II
FORBEARANCE AND AMENDMENT TO LOAN AGREEMENT
2.1
Forbearance; Forbearance Default Rights and
Remedies.
(a)
Effective as of the Amended Forbearance Effective Date (as defined
below), the Lender agrees that until the expiration of the
“Forbearance Period” (as defined below), it will
forbear from exercising its rights and remedies against the Company
or the Subsidiaries under the Loan Agreement, the other Loan
Documents and/or applicable law solely with respect to the
Specified Defaults and any Event of Default resulting solely from
the Company’s failure to make the scheduled interest payment
due under the Notes on July 15, 2007 (excluding, however, in each
case, its right to charge interest on any Obligations during the
Forbearance Period at the default interest rate specified in the
Revolving Note and the Term Note); provided , however
, (i) each of the Company and the Subsidiaries shall comply, except
to the extent such compliance is expressly excused by the terms of
this First Amended Forbearance Agreement, with all explicit
restrictions or prohibitions triggered by the existence and/or
continuance of any Event of Default under the Loan Agreement, this
First Amended Forbearance Agreement or any of the other Loan
Documents, (ii) nothing herein shall restrict, impair or otherwise
affect the Lender’s rights and remedies under any agreements
containing subordination provisions in favor of the Lender
(including, without limitation, any rights or remedies available to
the Lender as a result of the occurrence or continuation of the
Specified Defaults or any Event of Default resulting from the
Company’s failure to make the scheduled interest payment due
under the Notes on July 15, 2007), and (iii) nothing herein shall
restrict, impair or otherwise
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affect the exercise of the Lender’s
rights under this First Amended Forbearance Agreement. As
used herein, the term “ Specified Defaults ” shall mean
the Events of Default listed on Annex I hereto. During
the Forbearance Period, any condition to the making of an Advance
under the Loan Agreement that would not be met solely because of
the occurrence and continuance of any Specified Default or any
Event of Default resulting solely from the Company’s failure
to make the scheduled interest payment due under the Notes on July
15, 2007 is hereby waived.
(b)
As used herein, the term “ Forbearance Period ” shall mean
the period beginning on the Amended Forbearance Effective Date (as
defined below) and ending upon the occurrence of a Termination
Event. As used herein, “ Termination Event ” shall mean
the earlier to occur of (i) the delivery by the Lender to the
Company, the counsel to the Noteholder Group (as defined in the
Amended Noteholder Forbearance Agreement) and the Trustee (as
defined in the Intercreditor Agreement) of a written notice
terminating the Forbearance Period, which notice may be delivered
at any time upon or after the occurrence of any Forbearance Default
(as defined below), and (ii) September 13, 2007. As used
herein, the term “ Forbearance Default ” shall mean:
(A) the occurrence of any Event of Default that is not (i) a
Specified Default or (ii) an Event of Default resulting solely from
the Company’s failure to make the scheduled interest payment
due under the Notes on July 15, 2007, (B) the delivery of any
written notice by the Noteholders to the Company terminating the
Amended Noteholder Forbearance Agreement, and/or the Forbearance
Period (as defined in the Amended Noteholder Forbearance Agreement)
as a result of the occurrence and continuation of any Forbearance
Default (as defined in the Amended Noteholder Forbearance
Agreement) or any other termination of the Amended Noteholder
Forbearance Agreement, (C) the delivery of any Indenture Payment
Notice (as defined in Section 2.4 below) to the Lender, (D) the
failure of the Company or any Subsidiary to comply with any term,
condition, covenant or agreement set forth in this First Amended
Forbearance Agreement, (E) the failure of any representation or
warranty made by the Company or any Subsidiary under this First
Amended Forbearance Agreement to be true and correct in all
material respects as of the date when made, (F) the failure of the
Company promptly to notify the Lender of any amendment or
modification to the Amended Noteholder Forbearance Agreement;
(G) the execution of any amendment or modification to the
Amended Noteholder Forbearance Agreement, which amendment or
modification has a material adverse effect on the Lender, as
determined by the Lender in its discretion, (H) any occurrence,
event or change in facts or circumstances occurring on or after the
Amended Forbearance Effective Date that would result in a Material
Adverse Change, (I) the occurrence of any violation or breach of,
or other failure to observe, perform or comply with, the terms of
the Intercreditor Agreement by the Trustee, or (J) the commencement
by or against the Company or any Subsidiary of a proceeding under
any Debtor Relief Laws. Any Forbearance Default shall
constitute an immediate Event of Default under the Loan
Agreement.
(c)
Upon the occurrence of a Termination Event, the agreement of the
Lender hereunder to forbear from exercising its rights and remedies
in respect of the Specified Defaults and any Event of Default
resulting solely from the Company’s failure to make the
scheduled interest payment due under the Notes on July 15, 2007
shall immediately terminate without the requirement of any demand,
presentment, protest, or notice of any kind, all of which each of
the Company and the Subsidiaries hereby waives. The Company
and the Subsidiaries agree that the Lender may at any time after
the occurrence of a Termination Event proceed to exercise any or
all of its rights and remedies under the Loan Agreement, any other
Loan
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Document, the Intercreditor Agreement and/or
applicable law, including, without limitation, its rights and
remedies on account of the Specified Defaults and any other Events
of Default that may then exist. Without limiting the
generality of the foregoing, upon the occurrence of a Termination
Event, the Lender may, upon such notice or demand as is specified
by the Loan Agreement, any other Loan Documents, the Intercreditor
Agreement or applicable law, (i) collect and/or commence any legal
or other action to collect any or all of the Obligations from the
Company and the Subsidiaries, (ii) foreclose or otherwise realize
on any or all of the Collateral, and/or appropriate, setoff or
apply to the payment of any or all of the Obligations, any or all
of the Collateral or proceeds thereof, and (iii) take any other
enforcement action or otherwise exercise any or all rights and
remedies provided for by or under the Loan Agreement, any other
Loan Documents, the Intercreditor Agreement and/or applicable law,
all of which rights and remedies are fully reserved by the
Lender.
(d)
Any agreement by the Lender to extend the Forbearance Period or
enter into any other forbearance or similar arrangement must be set
forth in writing and signed by a duly authorized signatory of the
Lender. The Company and each of the Subsidiaries acknowledges
that the Lender has made no assurances whatsoever concerning any
possibility of any extension of the Forbearance Period, any other
forbearance or similar arrangement or any other limitations on the
exercise of its rights, remedies and privileges under or otherwise
in connection with the Loan Agreement, the other Loan Documents,
the Intercreditor Agreement and/or applicable law.
(e)
The Company and each of the Subsidiaries acknowledges and agrees
that any forbearance, waiver, consent or other financial
accommodation (including the funding of any borrowing request under
the Revolving Loan) which the Lender may make on or after the date
hereof has been made by the Lender in reliance upon, and is
consideration for, among other things, the general releases and
reaffirmation of indemnities contained in Article 4 hereof and the
other covenants, agreements, representations and warranties of the
Company and each of the Subsidiaries hereunder.
2.2
Amendment to Section 8.02. Section 8.02 of the Loan
Agreement is hereby amended and restated in its entirety to read as
follows:
“Borrower will not permit the aggregate
rentals payable under all non-cancelable operating leases entered
into after Closing to which Borrower or Subsidiary is a party to
exceed (a) $500,000 during any fiscal year ending with fiscal year
2006, (b) $1,250,000 during the fiscal year 2007, and (c)
$1,500,000 thereafter. Without the prior written consent of
the Lender in its sole discretion, no such operating lease entered
into after May 1, 2007 and having a term greater than one year
shall contain any restriction on the Borrower’s or applicable
Subsidiary’s right to grant a lien to the Lender on such
Person’s leasehold interest in the subject property, and the
lessor in respect of each such lease shall have agreed to provide
upon request a collateral access agreement substantially in the
form provided by the Lender with such modifications therein as
shall be reasonably acceptable to the Lender. Lender
acknowledges and consents to the Leases pledged to Lender by
Leasehold Deed of Trust to secure the Obligations and the other
existing leases on other real property disclosed to Lender.
Borrower agrees not to amend the Leases in any material respect
without the prior written consent of the Lender. At
Lender’
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