Exhibit 10.5
REVOLVING LINE OF
CREDIT
PROMISSORY NOTE
June 30, 2004
Promise to Pay:
For value received, The
Wornick Company, a Delaware corporation, promises to pay to the
order of Lender the Principal Amount, to the extent the same is
advanced by Lender and remains unpaid, together with interest on
the unpaid balance of such amount, in lawful money of the United
States of America, in accordance with all the terms, conditions and
covenants set forth below. Capitalized terms in this
Promissory Note not otherwise defined herein shall have the meaning
assigned such terms in a Loan Agreement of even date herewith by
and among Lender, Borrower, Right Away Management Corporation, a
Delaware corporation, The Wornick Company Right Away Division, a
Delaware corporation, The Wornick Company Right Away Division,
L.P., a Delaware limited partnership, and TWC Holding LLC, a
Delaware limited liability company
Borrower:
The Wornick Company, a
Delaware corporation
Borrower’s Address for
Notice:
The Wornick
Company
Attention: Larry
L. Rose
President and
CEO
10825 Kenwood
Road
Cincinnati, OH
45242
Fax: (513)
791-4148
With copy to:
Robert B. McKeon
Veritas Capital
Management II, L.L.C.
660 Madison
Avenue
New York, New York
10021
Fax: (212)
688-9411
Lender :
Texas State Bank, a Texas
banking corporation
Lender’s Address for
Payment:
3900 N. 10
th Street
McAllen, Texas
78501
Principal Amount:
Fifteen Million and 00/100
Dollars ($15,000,000.00)
Permitted
Borrowings:
The least of the: (i)
Principal Amount; or (ii) Borrowing Base; or (iii) Maximum
Amount
Interest Rate:
Applicable Rate
(hereinafter defined)
Default Interest
Rate:
Applicable Rate plus two
percent (2%) per annum based on the actual number of days elapsed
over a 360 day year
Payment Terms:
(a)
Interest, computed at the
Interest Rate on the unpaid balance of the Principal Amount from
time to time outstanding, is due and payable monthly as it accrues
on the last day of each calendar month, beginning July 31,
2004, and continuing regularly on the last day of each calendar
month thereafter until June 30, 2009, when all accrued, but
unpaid, interest shall be due and payable.
(b)
If at any time the
outstanding principal balance of all Obligations shall exceed the
lesser of (i) the Borrowing Base or (ii) the Maximum Amount,
Borrower shall immediately upon receipt of written notice from
Lender pay to Lender the entire amount of such excess, which amount
will be credited by Lender to the unpaid Principal Amount or to
unpaid principal on such other outstanding Obligations as Lender
may elect.
(c)
The entire unpaid
Principal Amount owing on this Promissory Note shall be due and
payable on June 30, 2009.
Interest
Provisions:
(a)
Rate
: The Principal Amount of
this Promissory Note advanced from time to time and remaining
unpaid prior to maturity shall bear interest at a varying or
fluctuating rate per annum based on the actual number of days
elapsed over a 360 day year (the “Applicable Rate”)
that is equal to the “Prime Rate” as that term is
defined and stated in this Promissory Note, but never greater than
the “Maximum Lawful Rate”, as defined below. The term
“Prime Rate” as used in this Promissory Note means a
per annum interest rate equal to the “Prime Rate” as
published each day by The Wall Street Journal in its
“Money Rates” section, and if more than one such rate
is published, then the highest such rate. On any day when The
Wall Street Journal is not published or a Prime Rate is not
published under the Money Rates section thereof, then the
Prime Rate published for the preceding publication date of The
Wall Street Journal shall apply. Should the method of
establishing the Prime Rate, or the publication of such Prime Rate,
cease or be abolished, then the Prime Rate used for the balance of
the term of this Promissory Note shall be that interest rate,
established, adopted or used by holder as its prime or base
interest rate. The Applicable Rate will automatically fluctuate
upward or downward with changes to the Prime Rate, without notice
to Borrower or any other person. Interest shall be calculated on
the amount of each Advance of the Principal Amount of this
Promissory Note from the date of each Advance.
(b)
Maximum Lawful
Rate : The term
“Maximum Lawful Rate” means the maximum lawful
contractual rate of interest, and the term “Maximum Lawful
Amount” means the maximum lawful contractual amount of
interest, that are permissible and nonusurious under
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applicable state or
federal law for the type of loan evidenced by this Promissory Note
and the other Loan Documents. To the extent that the Texas Finance
Code, as amended, is applicable to this Promissory Note, the
“Weekly Ceiling” defined in Chapter 303, Texas Finance
Code, shall be the basis for determining the Maximum Lawful Rate in
effect from time to time.
(c)
Usury
Disclaimer : All agreements between Lender and
Borrower, whether now existing or hereafter arising and whether
written or oral, are hereby limited so that in no contingency,
whether by reason of demand for payment or acceleration of the
maturity hereof or any other circumstance whatsoever, shall the
interest contracted for, charged or received by Lender exceed the
Maximum Lawful Amount. If, from any circumstance whatsoever,
interest would otherwise be payable to Lender in excess of the
Maximum Lawful Amount, the interest payable to Lender shall be
reduced to the Maximum Lawful Amount; and if from any circumstance
Lender shall ever receive any interest in excess of the Maximum
Lawful Amount, an amount equal to any excessive interest shall be
applied to the reduction of the Principal Amount and not to the
payment of interest, or if such excessive interest exceeds the
unpaid Principal Amount such excess shall be refunded to Borrower.
All interest paid or agreed to be paid to Lender shall, to the
extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full period until payment in
full of the Principal Amount (including the period of any renewal
or extension hereof) so that the interest hereon for such full
period shall not exceed the Maximum Lawful Amount. For purposes of
this paragraph, the term interest shall include all considerations
and amounts that constitute interest under applicable usury law.
This paragraph shall control all agreements between Borrower and
Lender.
(d)
Interest After
Default :
All past due installments of principal and interest on this
Promissory Note, and the unpaid principal balance during the
existence of any default and after maturity, shall bear interest at
a per annum rate equal to the lesser of (i) the Default Interest
Rate stated above or (ii) the Maximum Lawful Rate. Where no Maximum
Lawful Rate is applicable and a Default Interest Rate is not
specified, the interest rate on such amounts shall be the
Applicable Rate stated above.
Revolving Line of
Credit:
(a)
Indebtedness and
Liens : This
Promissory Note shall evidence principal indebtedness of Borrower
to Lender up to the Principal Amount based on Advances requested
and funded from time to time under a $25,000,000.00 revolving
credit line established under the Loan Agreement. Subject to
the Permitted Borrowings limitations, the indebtedness outstanding
from time to time pursuant to this Promissory Note may be
decreased, increased, paid in full and then renewed. This
Promissory Note and all Loan Documents securing it and the liens
and security interests thereunder with respect to the Collateral
shall remain in effect until this Promissory Note is formally
terminated in writing, and this Promissory Note and such other Loan
Documents, and liens and security interests shall not otherwise be
terminated by payment of all or any part of the indebtedness hereby
represented. All Advances requested under this Promissory
Note are subject to, and shall be made pursuant to the terms of
this Promissory Note, the Loan Agreement and the other Loan
Documents.
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(b)
Evidence of Amount
Outstanding :
The books and records of Lender relating to this Promissory Note
will be evidence of the amounts advanced, paid and owing hereunder.
Without limiting the foregoing, all advances and all payments made
on account of the principal hereof may be endorsed by Lender on the
back of or on an attachment to this Promissory Note, and when
endorsed thereon shall become a part hereof and evidence of the
amounts due hereunder.
Default
Provisions:
(a)
Definitions
: The term “Monetary
Default” shall mean a party’s failure, in whole or in
part, to pay any amounts due on any Obligation, including
Obligations pursuant to this Promissory Note, or to pay any amount
necessary to repair, maintain, replace or insure the Collateral, or
to pay taxes on the Collateral. The term “Non-Monetary
Default” shall mean any Event of Default other than a
Monetary Default. The term “Selected Enforcement
Activities” shall mean: (i) acceleration of maturity of the
indebtedness evidenced by the Promissory Note; (ii) advancing funds
to repair, maintain, replace or insure the Collateral, or to pay
taxes on the Collateral; or (iii) exercising collection rights or
foreclosure rights with respect to any Collateral.
(b)
Event of
Default:
The occurrence of any:
(i) Non-Monetary
Default listed in Section 10.01 (d), (e), (f), (g), (h), (i),
(k), (m), (n), (o) or (p) of the Loan Agreement; or
Borrower’s failure to make any interest or principal payment
on the $125,000,000 aggregate principal amount, 10 7/8% Senior
Secured Notes due 2011, owed by Borrower to the holders of such
notes
