EXHIBIT 10.01
SECOND AMENDED FORBEARANCE
AGREEMENT
This SECOND AMENDED FORBEARANCE AGREEMENT (this
“ Second Amended Forbearance
Agreement ”), is dated as of September 12, 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 (as defined in the Forbearance
Agreement).
D.
The Company, the Lender and the Subsidiaries entered into a First
Amended Forbearance Agreement dated as of August 13, 2007 (the
“ First Amended Forbearance
Agreement ”) pursuant to which the Forbearance Period
was extended through September 12, 2007.
E.
The Forbearance Period (as defined in the First Amended Forbearance
Agreement) under the First Amended Forbearance Agreement will
expire on September 13, 2007 and the Company and Subsidiaries have
asked the Lender to further extend the Forbearance Period through
October 14, 2007;
F.
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. On August 13, 2007, the
Company and the Subsidiaries entered into a First Amended and
Restated Forbearance Agreement with the Noteholders (the
“Amended Noteholder
Forbearance Agreement” ) pursuant to which the
Forbearance Period was further extended through September 16,
2007.
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G.
The Company and the Subsidiaries have advised the Lender that the
Company, the Subsidiaries and the Noteholders will, simultaneously
with the execution of this Second Amended Forbearance Agreement,
amend and restate the Amended Noteholder Forbearance Agreement
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 October 17, 2007,
all on the terms and conditions set forth in such amended and
restated forbearance agreement (as such agreement may be amended,
modified, supplemented or amended and restated from time to time,
the “ Second Amended
Noteholder Forbearance Agreement ”).
NOW, THEREFORE, in consideration of the
premises and the respective representations, warranties, covenants
and agreements set forth in this Second 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 Second Amended
Forbearance Agreement shall have the meanings ascribed to such
terms in this Second Amended Forbearance Agreement. All other
capitalized terms shall have the meanings ascribed in the Loan
Agreement. Unless the context of this Second 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 Second Amended Forbearance Agreement constitutes a “Loan
Document” as defined in the Loan Agreement.
(c)
References in this Second 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 Second 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
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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 Second 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
Second 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 affect the exercise of the
Lender’s rights under this Second 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 Second 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
Second 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) October 15, 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 Second Amended Noteholder Forbearance
Agreement, and/or the Forbearance Period (as defined in the Second
Amended Noteholder Forbearance Agreement) as a result of the
occurrence and continuation of any Forbearance Default (as defined
in the Second Amended Noteholder Forbearance Agreement) or any
other termination of the Second 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 Second Amended Forbearance
Agreement, (E) the failure of any representation or warranty made
by the Company or any Subsidiary under this Second 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 Second Amended Noteholder Forbearance Agreement; (G) the
execution of any amendment or modification to the Second 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 Second 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
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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
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
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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 provid
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