Execution Copy

 

Exhibit 10.01

 

SECOND AMENDMENT TO LOAN AGREEMENT

 

This SECOND AMENDMENT TO LOAN AGREEMENT is dated as of November 13, 2007 (this
“Amendment”) among DDJ TOTAL RETURN LOAN FUND, L.P. (the “Lender”), THE WORNICK
COMPANY, a Delaware corporation (the “Borrower”), 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”).

WHEREAS, the Borrower, the Subsidiaries and the Lender (as assignee of Texas
State Bank) 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”); and

WHEREAS, the Borrower has requested and the Lender has agreed to make certain
modifications regarding the availability of the Revolving Loan and to amend the
Loan Agreement to, among other things, increase the Revolving Loan Commitment to
a maximum aggregate amount of $17,500,000.

NOW, THEREFORE, in consideration of the foregoing and the agreements contained
herein, the parties agree that the Loan Agreement is hereby amended as follows:

1.             Capitalized Terms.  Any capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Loan
Agreement, as amended by this Amendment.

2.             Amendments to Loan Agreement.

(a)         Amendment of Certain Defined Terms.  Section 1.01 of the Loan
Agreement is hereby amended by (i) deleting the defined term “Borrowing Base”,
(ii) deleting the defined terms “Revolving Loan”, “Revolving Loan Commitment”
and “Revolving Note” and replacing each such defined term in its entirety with
the new definition of such term set forth below and (iii) adding the following
new defined terms, all as more fully set forth below:

“Revolving Loan” shall mean Advances made by the Lender to the Borrower under
the Revolving Loan Commitment.

“Revolving Loan Commitment” means the commitment of the Lender, subject to the
terms of this Agreement, to make Advances to Borrower up to a maximum aggregate
amount of $17,500,000.

 

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“Revolving Note” shall mean that certain Amended and Restated Revolving Loan
Promissory Note dated as of November     , 2007 in the original principal amount
of $17,500,000, executed by Borrower and payable to the order of Lender,
maturing on June 30, 2011, and all renewals, extensions, modifications and
increases, if any, thereof.

“Second Amendment” shall mean the Second Amendment to Loan Agreement dated as of
November     , 2007, amending this Agreement.

“Second Amendment Effective Date” shall mean the date on which the Second
Amendment shall have become effective in accordance with its terms.

(b) Amendment to Section 2.01.  Section 2.01 of the Loan Agreement is hereby
amended by deleting subsections (a) and (c) thereof in their entirety and
replacing them with the following:

“Section 2.01         Loans.

 

(a)           Revolving Loan.  Subject to the terms and conditions of this
Agreement, Lender agrees to make the Revolving Loan in accordance with the terms
of this Agreement and the Revolving Note.  The aggregate principal amount of (i)
the Revolving Loan shall not at any time exceed $17,500,000, and (ii) the
Revolving Loan and the Term Loan shall not at any time exceed $27,500,000.  Each
Advance will be accompanied by a Draw Request (hereinafter defined), duly
tendered as required by Section 2.03 hereof, and accompanied by such
documentation as Lender may require.  At the time of each Advance made under or
pursuant to this Agreement, Borrower shall immediately become indebted to Lender
for the amount of such Advance and interest shall accrue on such Advance from
the date of the Advance.”

 

“(c)         Maximum Amount of Obligations.  Notwithstanding anything to the
contrary set forth herein or in any other Loan Document, the outstanding amount
of the Obligations shall not at any time exceed the Maximum Amount.”

(c) Amendments to Section 2.03.  Section 2.03 of the Loan Agreement is hereby
amended by deleting subsection (a) of such Section in its entirety and replacing
it with the following:

“(a)         (i) The outstanding principal amount of the Revolving Loan
Obligations, plus the amount of the requested Advance, shall not exceed the
Revolving Loan Commitment and (ii) the outstanding amount of the Obligations,
plus the amount of the Requested Advance, shall not exceed the Maximum Amount.”

(d) Amendment to Section 3.02.  Section 3.02 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:

“Section 3.02         Obligation to Repay Excess. Notwithstanding anything to
the contrary set forth herein or in any Loan Document, if at any time (i) the

 

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outstanding principal balance of the Revolving Loan Obligations shall exceed the
Revolving Loan Commitment or (ii) the outstanding amount of the Obligations
shall exceed the Maximum Amount, the Borrower shall notify the Lender of such
fact in writing, immediately after acquiring knowledge of such excess, and shall
immediately pay to the Lender the entire amount of such excess, which amount
shall be applied by the Lender, first, to prepay the outstanding principal
amount of the Revolving Loan Obligations, second, to prepay the outstanding
principal amount of the Term Loan Obligations, and third, to repay any other
outstanding Obligations.”

(e) Amendment to Section 8.02.  As previously provided pursuant to certain
forbearance agreements among the parties hereto (including the Forbearance
Agreement referred to below), Section 8.02 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:

                “Section 8.02         Limitation on Leases.  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’s request, Borrower and its Subsidiaries will
grant Lender first liens on the leasehold interest in all real property leases
to the extent Borrower and its Subsidiaries are permitted to grant liens on
their leasehold interest under such leases.”

(f)  Amendment to Revolving Note.  The Revolving Note is hereby amended and
restated in its entirety in the form attached as Annex A hereto.

3.             Confirmation of Security Documents and Guaranty.

(a)           The Borrower and each Subsidiary hereby ratifies and confirms all
of the terms and provisions of the Security Agreement, the Pledge Agreement and
all other documents evidencing or governing the Lender’s security interests in
the Collateral (collectively with the Security Agreement and the Pledge
Agreement, the “Security Documents”) and acknowledges and confirms that the
Obligations of the Borrower and each Subsidiary to the Lender under the Loan
Agreement, as amended hereby, and the

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other Loan Documents (including, without limitation, the Revolving Note and the
Term Note), constitute “Obligations” under the Security Documents, secured by
the Collateral.

(b)           Each Subsidiary hereby confirms and agrees that all indebtedness,
obligations and liabilities of the Borrowers under the Loan Agreement as amended
hereby, whether any such indebtedness, obligations and liabilities are now
existing or hereafter arising, due or to become due, actual or contingent, or
direct or indirect, constitute “Obligations” under and as defined in the Loan
Agreement and, subject to the limitation set forth therein, are guarantied by
and entitled to the benefits of the Guaranty.  Each Subsidiary hereby ratifies
and confirms the terms and provisions of the Guaranty and agrees that all of
such terms and provisions remain in full force and effect.

4.             No Default; Representations and Warranties, etc.  The Borrower
and each Subsidiary hereby confirms that, after giving effect to this Amendment,
(a) the representations and warranties of the Borrower and its Subsidiaries
contained in Article 6 of the Loan Agreement and the other Loan Documents are
true and correct on and as of the date hereof as if made on such date (except to
the extent that such representations and warranties expressly relate to an
earlier date, in which event such representations and warranties are true and
correct on and as of such earlier date); (b) except for the Specified Defaults
(as defined below), the Borrower and its Subsidiaries are in compliance with all
of the terms and provisions set forth in the Loan Agreement on their part to be
observed or performed thereunder; and (c) except for the Specified Defaults and
as otherwise previously disclosed to the Lender, no Default or Event of Default
has occurred and is continuing.  For purposes of this Amendment, “Specified
Defaults” means, collectively, (i) Specified Defaults (as such term is defined
in the Fourth Amended Forbearance Agreement, dated as of October 30, 2007 (the
“Forbearance Agreement”), by and among the Borrower, the Subsidiaries and the
Lender) and (ii) any Event of Default resulting solely from the Borrower’s
failure to make the scheduled interest payment due on July 15, 2007 under the
Borrower’s 10.875% Senior Secured Notes due 2011.  The Borrower and each
Subsidiary hereby ratify and confirm all of the terms and conditions of the
Forbearance Agreement, which remains in full force and effect.

5.             Conditions to Effectiveness.  The effectiveness of this Amendment
shall be subject to the satisfaction of the following conditions precedent:

(a)           Counterparts of Amendment.  The Lender shall have received
counterparts of this Amendment duly executed by the Borrower and each
Subsidiary.

(b)           First Amendment to Intercreditor Agreement; First Supplemental
Indenture.  The Lender shall have received (i) the Revolving Note in the form
attached as Annex A hereto, duly executed by the Borrower, evidencing the
Revolving Loan Obligations, (ii) the First Amendment to Intercreditor Agreement
in the form attached as Annex B hereto, duly executed by U.S. Bank National
Association, as trustee (the “Trustee”) under the Indenture, pursuant to the
written direction of the requisite holders of the Notes issued thereunder and
(iii) the First Supplemental Indenture in the form attached as Annex C hereto,
duly executed by the Trustee, pursuant to the written direction of the requisite
holders of the Notes issued under the Indenture, and the other parties thereto.

 

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(c)           Corporate Documents.  The Lender shall have received such
documents, instruments and certificates as the Lender or its counsel may
reasonably request relating to the Loan Documents and any other legal matters
relating to the Borrower and its Subsidiaries (including board of director
resolutions and evidence of the incumbency of officers), the Loan Agreement, as
amended by this Amendment, and the other Loan Documents.

(d)           Opinion of Counsel.  The Lender shall have received a written
opinion of Schulte Roth & Zabel LLP, counsel to the Borrower and its
Subsidiaries, dated the date of such effectiveness, in form and substance
reasonably satisfactory to the Lender, and covering such matters as the Lender
may reasonably request.

(e)           Other Documents.  The Lender shall have received such other
certificates, instruments and documents as the Lender shall have reasonably
requested.

6.             Miscellaneous.

(a) Except to the extent specifically amended hereby, the Loan Agreement, the
Loan Documents and all related documents shall remain in full force and effect. 
Whenever the terms or sections amended hereby shall be referred to in the Loan
Agreement, Loan Documents or such other documents (whether directly or by
incorporation into other defined terms), such defined terms shall be deemed to
refer to those terms or sections as amended by this Amendment.

(b) This Amendment may be executed in any number of counterparts, each of which,
when executed and delivered, shall be an original, but all counterparts shall
together constitute one instrument.

(c) This Amendment shall be governed by the laws of the State of New York, and
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.

(d) The Borrower and its Subsidiaries agree to pay all reasonable costs and
expenses, including legal fees and disbursements, incurred by the Lender in
connection with this Amendment and the transactions contemplated hereby.

[Signature pages follow.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment which shall
be deemed to be a sealed instrument as of the date first above written.

 

BORROWER

 

 

 

 

 

 

THE WORNICK COMPANY

 

 

 

 

 

 

 

By:

/s/ Jon P. Geisler

 

Name:

Jon P. Geisler

 

Title:

President & CEO

 

 

 

 

 

 

 

SUBSIDIARIES

 

 

 

 

 

 

THE WORNICK COMPANY RIGHT AWAY DIVISION, L.P.

 

 

 

 

 

 

 

By:

/s/ Jon P. Geisler

 

Name:

Jon P. Geisler

 

Title:

President & CEO

 

 

 

 

 

 

 

RIGHT AWAY MANAGEMENT CORPORATION

 

 

 

 

 

 

 

By:

/s/ Jon P. Geisler

 

Name:

Jon P. Geisler

 

Title:

President & CEO

 

 

 

 

 

 

 

THE WORNICK COMPANY RIGHT AWAY DIVISION

 

 

 

 

 

 

 

By:

/s/ Jon P. Geisler

 

Name:

Jon P. Geisler

 

Title:

President & CEO

 

 

 

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LENDER

 

 

 

 

DDJ TOTAL RETURN LOAN FUND, L.P.

 

 

 

By:

GP Total Return, LP, its General Partner

 

By:

GP Total Return, LLC, its General Partner

 

By:

DDJ Capital Management, LLC, Manager

 

 

 

 

 

 

 

 

 

 

By

/s/ David J. Breazzano

 

Name:

David J. Breazzano

 

Title:

President

 

 

 

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Annex A

 

Form of Revolving Note

 

 

 

 

 

 

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Annex B

 

Form of First Amendment to Intercreditor Agreement

 

 

 

 

 

 

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Annex C

 

Form of First Supplemental Indenture

 

 

 

 

 

 

 

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