Exhibit
10.8


 


PLEDGE
AGREEMENT


 


THIS PLEDGE AGREEMENT
(this “Agreement”), dated as of June 30, 2004, is made and entered into by
and between TWC Holding LLC, a Delaware limited liability company (“Pledgor”),
and TEXAS STATE BANK, a Texas banking corporation (“Secured Party”), with
reference to the following:


 


WHEREAS, THE WORNICK
COMPANY, a Delaware corporation (“Obligor”), 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, Pledgor, and Secured Party have entered into a Loan Agreement of
even date herewith (as amended and in effect from time to time, the “Loan
Agreement”); and


 


WHEREAS, Pledgor
beneficially owns the Equity Interests (as hereinafter defined) in the Issuers
(as hereinafter defined); and


 


WHEREAS, to induce
Secured Party to make the financial accommodations provided to the Obligor
pursuant to the Loan Agreement, Pledgor desires to pledge, grant, transfer, and
assign to Secured Party a security interest in the Collateral to secure all
Obligations.


 


NOW, THEREFORE, in
consideration of the mutual promises, covenants, representations, and
warranties set forth herein and for other good and valuable consideration, the
parties hereto agree as follows:


 


1.                                     
Definitions and Construction.


 


(a)                                 
Definitions.


 


All capitalized terms
used herein, not otherwise defined herein, shall have the meaning ascribed
thereto in the Loan Agreement. As used in this Agreement:


 


“Bankruptcy Code” means
United States Bankruptcy Code (11 U.S.C. Section 101 et seq.), as in
effect from time to time, and any successor statute thereto.


 


“Code” means the Uniform
Commercial Code as in effect in the State of Texas from time to time.


 


“Collateral” shall mean
the Pledged Interests, the Future Rights, and the Proceeds, collectively.


 


“Equity Interests” means
all securities, shares, units, options, warrants, interests, participations, or
other equivalents (regardless of how designated) of or in a corporation,
partnership,


 





















 


limited liability company, or similar entity, whether
voting or nonvoting, certificated or uncertificated, including general partner
partnership interests, limited partner partnership interests, common stock,
preferred stock, or any other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934).


 


“Future Rights” shall
mean: (a) all Equity Interests (other than Pledged Interests) of the Issuers,
and all securities convertible or exchangeable into, and all warrants, options,
or other rights to purchase, Equity Interests of the Issuers; and (b) the
certificates or instruments representing such Equity Interests, convertible or
exchangeable securities, warrants, and other rights and all dividends, cash,
options, warrants, rights, instruments, and other property or proceeds from
time to time received, receivable, or otherwise distributed in respect of or in
exchange for any or all of such Equity Interests.


 


“Holder” and “Holders”
shall have the meanings ascribed thereto in Section 3 of this Agreement.


 


“Issuers” shall mean each
of the Persons identified as an Issuer on Schedule 1
attached hereto (or any addendum thereto), and any successors thereto, whether
by merger or otherwise.


 


“Lien” shall mean any
lien, mortgage, pledge, assignment (including any assignment of rights to
receive payments of money), security interest, charge, or encumbrance of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, or any agreement to give any security interest).


 


“Pledged Interests” shall
mean (a) all Equity Interests of the Issuers identified on Schedule 1; and (b) the certificates
or instruments representing such Equity Interests.


 


“Pledgor” shall have the
meaning ascribed thereto in the preamble to this Agreement.


 


“Proceeds” shall mean all
proceeds (including proceeds of proceeds) of the Pledged Interests and Future
Rights including all: (a) rights, benefits, distributions, premiums, profits,
dividends, interest, cash, instruments, documents of title, accounts, contract
rights, inventory, equipment, general intangibles, payment intangibles, deposit
accounts, chattel paper, and other property from time to time received,
receivable, or otherwise distributed in respect of or in exchange for, or as a
replacement of or a substitution for, any of the Pledged Interests, Future
Rights, or proceeds thereof (including any cash, Equity Interests, or other
securities or instruments issued after any recapitalization, readjustment,
reclassification, merger or consolidation with respect to the Issuers and any
security entitlements, as defined in Section 8-102(a)(17) of the Code,
with respect thereto); (b) “proceeds,” as such term is defined in
Section 9-102(a)(64) of the Code; (c) proceeds of any insurance,
indemnity, warranty, or guaranty (including guaranties of delivery) payable
from time to time with respect to any of the Pledged Interests, Future Rights,
or proceeds thereof; (d) payments (in any form whatsoever) made or due and
payable to Pledgor from time to time in connection with


 


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any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Pledged Interests, Future Rights, or
proceeds thereof; and (e) other amounts from time to time paid or payable under
or in connection with any of the Pledged Interests, Future Rights, or proceeds
thereof.


 


“Secured Party” shall
have the meaning ascribed thereto in the preamble to this Agreement, together
with its successors or assigns.


 


“Securities Act” shall
have the meaning ascribed thereto in Section 9(c) of this Agreement.


 


(b)                                
Construction.


 


(i)                                    
Unless the context of
this Agreement clearly requires otherwise, references to the plural include the
singular and to the singular include the plural, the part includes the whole,
the term “including” is not limiting, and the term “or” has, except where
otherwise indicated, the inclusive meaning represented by the phrase “and/or.”
The words “hereof,” “herein,” “hereby,” “hereunder,” and other similar terms in
this Agreement refer to this Agreement as a whole and not exclusively to any
particular provision of this Agreement. Article, section, subsection, exhibit,
and schedule references are to this Agreement unless otherwise specified.
All of the exhibits or schedules attached to this Agreement shall be deemed
incorporated herein by reference. Any reference to any of the following
documents includes any and all alterations, amendments, restatements,
extensions, modifications, renewals, or supplements thereto or thereof, as
applicable: this Agreement, the Loan Agreement, or any of the other Loan
Documents.


 


(ii)                                 
Neither this
Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved against Secured Party or Pledgor, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by
both of the parties and their respective counsel and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of the parties hereto.


 


(iii)                              
In the event of any
direct conflict between the express terms and provisions of this Agreement and
of the Loan Agreement, the terms and provisions of the Loan Agreement shall
control.


 


2.                                     
Pledge.


 


As security for the
prompt payment and performance of the Obligations when due, whether at stated
maturity, by acceleration or otherwise (including amounts that would become due
but for the operation of the provisions of the Bankruptcy Code), Pledgor hereby
pledges, grants, transfers, and assigns to Secured Party a security interest in
all of Pledgor’s right, title, and interest in and to the Collateral.


 


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3.                                     
Delivery and Registration of Collateral.


 


(a)                                 
All certificates or
instruments representing or evidencing the Collateral shall be promptly
delivered by Pledgor to Secured Party or Secured Party’s designee pursuant
hereto at a location designated by Secured Party and shall be held by or on
behalf of Secured Party pursuant hereto, and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed indorsement
certificate in the form attached hereto as Exhibit
A or other instrument of transfer or assignment in blank, in form
and substance satisfactory to Secured Party.


 


(b)                                
Upon the occurrence
and during the continuance of an Event of Default, Secured Party shall have the
right, at any time in its discretion and without notice to Pledgor, to transfer
to or to register on the books of the Issuers (or of any other Person
maintaining records with respect to the Collateral) in the name of Secured
Party or any of its nominees any or all of the Collateral. In addition, Secured
Party shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of
smaller or larger denominations.


 


(c)                                 
If, at any time and
from time to time, any Collateral (including any certificate or instrument
representing or evidencing any Collateral) is in the possession of a Person
other than Secured Party or Pledgor (a “Holder”), then Pledgor shall
immediately, at Secured Party’s option, either cause such Collateral to be
delivered into Secured Party’s possession, or cause such Holder to enter into a
control agreement, in form and substance satisfactory to Secured Party, and
take all other steps deemed necessary by Secured Party to perfect the security
interest of Secured Party in such Collateral, all pursuant to Sections 9-106
& 9-313 of the Code or other applicable law governing the perfection of
Secured Party’s security interest in the Collateral in the possession of such
Holder.


 


(d)                                
Any and all
Collateral (including dividends, interest, and other cash distributions) at any
time received or held by Pledgor shall be so received or held in trust for
Secured Party, shall be segregated from other funds and property of Pledgor and
shall be forthwith delivered to Secured Party in the same form as so received
or held, with any necessary indorsements; provided that cash dividends or
distributions received by Pledgor, may be retained by Pledgor in accordance
with Section 4 and used in the ordinary course of Pledgor’s business.


 


(e)                                 
If at any time, and
from time to time, any Collateral consists of an uncertificated security or a
security in book entry form, then Pledgor shall immediately cause such
Collateral to be registered or entered, as the case may be, in the name of
Secured Party, or otherwise cause Secured Party’s security interest thereon to
be perfected in accordance with applicable law.


 


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4.                                     
Voting Rights and Dividends.


 


(a)                                 
So long as no Event
of Default shall have occurred and be continuing, Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Collateral or any part thereof for any purpose not inconsistent with the terms
of the Loan Documents and shall be entitled to receive and retain any cash dividends
or distributions paid or distributed in respect of the Collateral.


 


(b)                                
Upon the occurrence
and during the continuance of an Event of Default, all rights of Pledgor to
exercise the voting and other consensual rights or receive and retain cash
dividends or distributions that it would otherwise be entitled to exercise or
receive and retain, as applicable pursuant to Section 4(a), shall cease,
and all such rights shall thereupon become vested in Secured Party, who shall
thereupon have the sole right to exercise such voting or other consensual
rights and to receive and retain such cash dividends and distributions. Pledgor
shall execute and deliver (or cause to be executed and delivered) to Secured
Party all such proxies and other instruments as Secured Party may reasonably
request for the purpose of enabling Secured Party to exercise the voting and
other rights which it is entitled to exercise and to receive the dividends and
distributions that it is entitled to receive and retain pursuant to the
preceding sentence.


 


5.                                     
Representations and Warranties.


 


Each Pledgor represents,
warrants, and covenants, as to the Collateral owned by such Pledgor, as
follows:


 


(a)                                 
Pledgor has taken all
steps it deems necessary or appropriate to be informed on a continuing basis of
changes or potential changes affecting the Collateral (including rights of
conversion and exchange, rights to subscribe, payment of dividends, reorganizations
or recapitalization, tender offers and voting and registration rights), and
Pledgor agrees that Secured Party shall have no responsibility or liability for
informing Pledgor of any such changes or potential changes or for taking any
action or omitting to take any action with respect thereto.


 


(b)                                
Pledgor is an
individual or an entity as designated and described on Schedule 2. The Pledgor’s mailing
address, principal place of business address, state of organization,
organization number and taxpayer identification number are set forth on Schedule 2.


 


(c)                                 
All information
herein or hereafter supplied to Secured Party by or on behalf of Pledgor in
writing with respect to the Collateral is, or in the case of information
hereafter supplied will be, accurate and complete in all material respects.


 


(d)                                
Pledgor is and will
be the sole legal and beneficial owner of the Collateral (including the Pledged
Interests and all other Collateral acquired by Pledgor after the date hereof)
free and clear of any adverse claim, Lien, or other right, title, or interest
of any party, other than the Liens in favor of Secured Party and the Liens
granted to the Trustee as collateral agent under the Indenture and the related
security documents.


 


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(e)                                 
This Agreement, and
the delivery to Secured Party of the Pledged Interests representing Collateral
(or the control agreements referred to in Section 3 of this Agreement),
creates a valid, perfected, and first priority security interest in one hundred
percent (100%) of the Pledged Interests in favor of Secured Party securing
payment of the Obligations, and all actions necessary to achieve such
perfection have been duly taken.


 


(f)                                   
Schedule 1 to this Agreement is true and correct
and complete in all material respects. Without limiting the generality of the
foregoing: (i) except as set forth on Schedule 1,
all the Pledged Interests are in certificated form, and, except to the extent
registered in the name of Secured Party or its nominee pursuant to the
provisions of this Agreement, are registered in the name of Pledgor; and (ii)
the Pledged Interests as to each of the Issuers constitute at least the
percentage of all the fully diluted issued and outstanding Equity Interests of
such Issuer as set forth in Schedule 1
to this Agreement.


 


(g)                                
There are no
presently existing Future Rights or Proceeds owned by Pledgor.


 


(h)                                
The Pledged Interests
have been duly authorized and validly issued and are fully paid and
nonassessable.


 


(i)                                    
Neither the pledge of
the Collateral pursuant to this Agreement nor the extensions of credit
represented by the Obligations violates Regulation T, U or X of the Board of
Governors of the Federal Reserve System.


 


6.                                     
Further Assurances.


 


(a)                                 
Pledgor agrees that
from time to time, at the expense of Pledgor, Pledgor will promptly execute and
deliver all further instruments and documents, and take all further action that
may be necessary or reasonably desirable, or that Secured Party may request, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the generality
of the foregoing, Pledgor will: (i) at the request of Secured Party, mark
conspicuously each of its records pertaining to the Collateral with a legend,
in form and substance reasonably satisfactory to Secured Party, indicating that
such Collateral is subject to the security interest granted hereby; (ii)
execute and such instruments or notices, as may be necessary or reasonably
desirable, or as Secured Party may request, in order to perfect and preserve
the first priority security interests granted or purported to be granted
hereby; (iii) allow inspection of the Collateral by Secured Party or Persons
designated by Secured Party; and (iv) appear in and defend any action or
proceeding that may affect Pledgor’s title to or Secured Party’s security interest
in the Collateral.


 


(b)                                
Pledgor hereby
authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral. A carbon,


 


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photographic, or other reproduction of this Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.


 


(c)                                 
Pledgor will furnish
to Secured Party, upon the request of Secured Party: (i) a certificate executed
by an authorized officer of Pledgor, and dated as of the date of delivery to
Secured Party, itemizing in such detail as Secured Party may request, the
Collateral which, as of the date of such certificate, has been delivered to
Secured Party by Pledgor pursuant to the provisions of this Agreement; and (ii)
such statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
request.


 


7.                                     
Covenants of Pledgor.


 


Pledgor shall:


 


(a)                                 
Perform each and
every covenant in the Loan Documents applicable to Pledgor;


 


(b)                                
Not change its
principal residence, if Pledgor is an individual, without giving Secured Party
at least thirty (30) days’ prior written notice thereof;


 


(c)                                 
Not, if Pledgor is an
entity, change its jurisdiction of organization or cease to be an entity, in
each case, without giving Secured Party at least thirty (30) days’ prior
written notice thereof;


 


(d)                                
To the extent it may
lawfully do so, use its best efforts to prevent the Issuers from issuing Future
Rights or Proceeds, except for cash dividends and other distributions to be
paid by any Issuer to Pledgor, unless any new Equity Interests associated with
Future Rights are pledged to Secured Party;


 


(e)                                 
Upon receipt by
Pledgor of any material notice, report, or other communication from any of the
Issuers or any Holder relating to all or any part of the Collateral, deliver
such notice, report or other communication to Secured Party as soon as possible,
but in no event later than five (5) days following the receipt thereof by
Pledgor.


 


8.                                     
Secured Party as Pledgor’s Attorney-in-Fact.


 


(a)                                 
Pledgor hereby
irrevocably appoints Secured Party as Pledgor’s attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Party or otherwise, from time to time at Secured Party’s discretion, to take
any action and to execute any instrument that Secured Party may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including:
(i) upon the occurrence and during the continuance of an Event of Default, to
receive, indorse, and collect all instruments made payable to Pledgor


 


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representing any dividend, interest payment or other
distribution in respect of the Collateral or any part thereof to the extent
permitted hereunder and to give full discharge for the same and to execute and
file governmental notifications and reporting forms; (ii) to enter into any
control agreements Secured Party deems necessary pursuant to Section 3 of
this Agreement; or (iii) to arrange for the transfer of the Collateral on the
books of any of the Issuers or any other Person to the name of Secured Party or
to the name of Secured Party’s nominee.


 


(b)                                
In addition to the
designation of Secured Party as Pledgor’s attorney-in-fact in
subsection (a), Pledgor hereby irrevocably appoints Secured Party as
Pledgor’s agent and attorney-in-fact to make, execute and deliver any and all
documents and writings which may be necessary or appropriate for approval of,
or be required by, any regulatory authority located in any city, county, state
or country where Pledgor or any of the Issuers engage in business, in order to
transfer or to more effectively transfer any of the Pledged Interests or
otherwise enforce Secured Party’s rights hereunder.


 


9.                                     
Remedies upon Default.


 


Upon the occurrence and
during the continuance of an Event of Default:


 


(a)                                 
Secured Party may
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
of a secured party on default under the Code (irrespective of whether the Code
applies to the affected items of Collateral), and Secured Party may also
without notice (except as specified below) sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker’s board or at any of Secured Party’s offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as Secured Party may deem commercially
reasonable, irrespective of the impact of any such sales on the market price of
the Collateral. To the maximum extent permitted by applicable law, Secured
Party may be the purchaser of any or all of the Collateral at any such sale and
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at any such
public sale, to use and apply all or any part of the Obligations as a credit on
account of the purchase price of any Collateral payable at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from
any claim or right on the part of Pledgor, and Pledgor hereby waives (to the
extent permitted by law) all rights of redemption, stay, or appraisal that it
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. Pledgor agrees that, to the extent notice of
sale shall be required by law, at least five (5) Business Days’ notice to
Pledgor of the time and place of any public sale or the time after which a
private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. To the maximum extent permitted by law,
Pledgor hereby waives any claims against Secured Party


 


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arising because the price at which any Collateral may
have been sold at such a private sale was less than the price that might have
been obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree.


 


(b)                                
Pledgor hereby agrees
that any sale or other disposition of the Collateral conducted in conformity with
reasonable commercial practices of banks in the city and state where Secured
Party is located in disposing of property similar to the Collateral shall be
deemed to be commercially reasonable.


 


(c)                                 
Pledgor hereby acknowledges
that the sale by Secured Party of any Collateral pursuant to the terms hereof
in compliance with the Securities Act of 1933 as now in effect or as hereafter
amended, or any similar statute hereafter adopted with similar purpose or
effect (the “Securities Act”), as well as applicable “Blue Sky” or other state
securities laws, may require strict limitations as to the manner in which
Secured Party or any subsequent transferee of the Collateral may dispose
thereof. Pledgor acknowledges and agrees that in order to protect Secured
Party’s interest it may be necessary to sell the Collateral at a price less
than the maximum price attainable if a sale were delayed or were made in
another manner, such as a public offering under the Securities Act. Pledgor has
no objection to sale in such a manner and agrees that Secured Party shall have
no obligation to obtain the maximum possible price for the Collateral. Without
limiting the generality of the foregoing, Pledgor agrees that, upon the
occurrence and during the continuation of an Event of Default, Secured Party
may, subject to applicable law, from time to time attempt to sell all or any
part of the Collateral by a private placement, restricting the bidders and
prospective purchasers to those who will represent and agree that they are
purchasing for investment only and not for distribution. In so doing, Secured
Party may solicit offers to buy the Collateral or any part thereof for cash,
from a limited number of investors reasonably believed by Secured Party to be institutional
investors or other accredited investors who might be interested in purchasing
the Collateral. If Secured Party shall solicit such offers, then the acceptance
by Secured Party of one of the offers shall be deemed to be a commercially
reasonable method of disposition of the Collateral.


 


(d)                                
If Secured Party
shall determine to exercise its right to sell all or any portion of the
Collateral pursuant to this Section, Pledgor agrees that, upon request of
Secured Party, Pledgor will, at its own expense:


 


(i)                                    
use its best efforts
to execute and deliver, and cause the Issuers and the directors and officers
thereof to execute and deliver, all such instruments and documents, and to do
or cause to be done all such other acts and things, as may be necessary or, in
the opinion of Secured Party, advisable to register such Collateral under the
provisions of the Securities Act, and to cause the registration statement
relating thereto to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make all amendments
and supplements thereto and to the related prospectuses which, in the opinion
of Secured Party, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;


 


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(ii)                                 
use its best efforts
to qualify the Collateral under the state securities laws or “Blue Sky” laws
and to obtain all necessary governmental approvals for the sale of the
Collateral, as requested by Secured Party;


 


(iii)                              
cause the Issuers to
make available to their respective security holders, as soon as practicable, an
earnings statement which will satisfy the provisions of Section 11(a) of
the Securities Act;


 


(iv)                             
execute and deliver,
or cause the officers and directors of the Issuers to execute and deliver, to
any person, entity or governmental authority as Secured Party may choose, any
and all documents and writings which, in Secured Party’s reasonable judgment,
may be necessary or appropriate for approval, or be required by, any regulatory
authority located in any city, county, state or country where Pledgor or the
Issuers engage in business, in order to transfer or to more effectively
transfer the Pledged Interests or otherwise enforce Secured Party’s rights
hereunder; and


 


(v)                                
do or cause to be
done all such other acts and things as may be necessary to make such sale of
the Collateral or any part thereof valid and binding and in compliance with
applicable law.


 


Pledgor acknowledges that
there is no adequate remedy at law for failure by it to comply with the
provisions of this Section and that such failure would not be adequately
compensable in damages, and therefore agrees that its agreements contained in
this Section may be specifically enforced.


 


(e)                                 
PLEDGOR EXPRESSLY
WAIVES TO THE MAXIMUM EXTENT PERMITTED BY LAW: (i) ANY CONSTITUTIONAL OR OTHER
RIGHT TO A JUDICIAL HEARING PRIOR TO THE TIME SECURED PARTY DISPOSES OF ALL OR
ANY PART OF THE COLLATERAL AS PROVIDED IN THIS SECTION; (ii) ALL RIGHTS OF
REDEMPTION, STAY, OR APPRAISAL THAT IT NOW HAS OR MAY AT ANY TIME IN THE FUTURE
HAVE UNDER ANY RULE OF LAW OR STATUTE NOW EXISTING OR HEREAFTER ENACTED; AND
(iii) EXCEPT AS SET FORTH IN SUBSECTION (a) OF THIS SECTION 9, ANY
REQUIREMENT OF NOTICE, DEMAND, OR ADVERTISEMENT FOR SALE.


 


10.                              
Application of Proceeds.


 


Upon the occurrence and during the continuance of an
Event of Default, any cash held by Secured Party as Collateral and all cash
Proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral pursuant to the
exercise by Secured Party of its remedies as a secured creditor as provided in
Section 9 shall be applied from time to time by Secured Party as provided
in the Loan Agreement.


 


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11.                              
Indemnity and Expenses.


 


Pledgor agrees:


 


(a)                                 
To indemnify and hold
harmless the Released Parties (hereinafter defined) from and against any and
all claims, damages, demands, losses, obligations, judgments and liabilities
(including, without limitation, reasonable attorneys’ fees and expenses) in any
way arising out of or in connection with this Agreement or the Obligations, except
to the extent the same shall arise as a result of the gross negligence or
willful misconduct of the party seeking to be indemnified; and


 


(b)                                
To pay and reimburse
Secured Party upon demand for all reasonable costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) that Secured Party
may incur in connection with (i) the custody, use or preservation of, or the
sale of, collection from or other realization upon, any of the Collateral, including
the reasonable expenses of re-taking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, (ii) the
exercise or enforcement of any rights or remedies granted hereunder, under the
Loan Agreement, or under any of the other Loan Documents or otherwise available
to it (whether at law, in equity or otherwise), or (iii) the failure by Pledgor
to perform or observe any of the provisions hereof. The provisions of this
Section shall survive the execution and delivery of this Agreement, the
repayment of any of the Obligations, the termination of the commitments of
Secured Party under the Loan Agreement and the termination of this Agreement or
any other Loan Document.


 


12.                              
Duties of Secured Party.


 


The powers conferred on
Secured Party hereunder are solely to protect its interests in the Collateral
and shall not impose on it any duty to exercise such powers. Except as provided
in Section 9-207 of the Code, Secured Party shall have no duty with
respect to the Collateral or any responsibility for taking any necessary steps
to preserve rights against any Persons with respect to any Collateral.  It
is also expressly understood and agreed that except for the obligation of
“honesty in fact” as provided in Section 1.203 of the Texas Business and
Commerce Code (to the extent applicable),  the Secured Party, in
exercising its rights and performing its obligations under any of the Loan
Documents, owes no duty of good faith and/or fair dealing to Pledgor, Obligor,
any guarantor of the Obligations, or any shareholder of Obligor, and no
fiduciary duty exists between or among Pledgor, Obligor, any guarantor of the
Obligations, any shareholder of Obligor, and the Secured Party.


 


13.                              
Choice of Law.


 


The validity of this
Agreement, its construction, interpretation, and enforcement, and the rights of
the parties hereto shall be determined under, governed by, and construed in
accordance with the laws of the State of Texas (without reference to the choice
of law principles thereof).  The


 


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Pledgor and Secured Party agree that any action or
claim arising out of, or any dispute in connection with, this Agreement, any
rights, remedies, obligations, or duties hereunder, or the performance or
enforcement hereof or thereof, shall be decided by binding arbitration as set
forth in the Loan Agreement.


 


14.                              
Amendments; etc.


 


No amendment or waiver of
any provision of this Agreement nor consent to any departure by Pledgor
herefrom shall in any event be effective unless the same shall be in writing
and signed by Secured Party, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
failure on the part of Secured Party to exercise, and no delay in exercising
any right under this Agreement, any other Loan Document, or otherwise with
respect to any of the Obligations, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under this Agreement, any other
Loan Document, or otherwise with respect to any of the Obligations preclude any
other or further exercise thereof or the exercise of any other right. The
remedies provided for in this Agreement or otherwise with respect to any of the
Obligations are cumulative and not exclusive of any remedies provided by law.


 


15.                              
Notices.


 


Unless otherwise
specifically provided herein, all notices shall be in writing and either (i)
delivered against a written receipt therefor; or (ii) mailed by registered or
certified mail, return receipt requested; in each case addressed as follows:


 


	
   

  	
  (a)

  	
  If to Obligor, to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  The Wornick Company

  	
   

  
	
   

  	
   

  	
   

  	
  Attention: Larry L.
  Rose, President and CEO

  	
   

  
	
   

  	
   

  	
   

  	
  10825 Kenwood Road

  	
   

  
	
   

  	
   

  	
   

  	
  Cincinnati, Ohio 45242

  	
   

  
	
   

  	
   

  	
   

  	
  with copy to:

  	
   

  
	
   

  	
   

  	
   

  	
  Robert B. McKeon

  	
   

  
	
   

  	
   

  	
   

  	
  Veritas Capital
  Management II, L.L.C.

  	
   

  
	
   

  	
   

  	
   

  	
  660 Madison Avenue

  	
   

  
	
   

  	
   

  	
   

  	
  New York, New York
  10021

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  If to Pledgor, to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  The respective address
  set forth on Schedule 2
  hereto.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


12





















 


	
   

  	
  (c)

  	
  If to Lender, to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Texas State Bank

  	
   

  
	
   

  	
   

  	
  3900 North 10th Street

  	
   

  
	
   

  	
   

  	
  McAllen, Texas 78501

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: G. E. Roney,
  Chairman of the Board

  	
   

  



 


or to such other address as a party may hereafter
designate by notice to the other parties in accordance herewith.  Notices
shall be deemed to have been given (whether actually received or not) when
delivered or, if mailed, on the next Business Day.  All time references
used herein refer to Central Standard Time or Central Daylight Savings Time, as
then applicable in McAllen, Hidalgo County, Texas.


 


16.                              
Continuing Security Interest.


 


This Agreement shall
create a continuing security interest in the Collateral and shall: (a) remain
in full force and effect until the indefeasible payment in full of the
Obligations, including the cash collateralization, expiration, or cancellation
of all Obligations, if any, consisting of letters of credit, and the full and
final termination of any commitment to extend any financial accommodations
under the Loan Agreement; (b) be binding upon Pledgor and its successors and
assigns; and (c) inure to the benefit of Secured Party and its successors,
transferees, and assigns. Upon the indefeasible payment in full of the
Obligations, including the cash collateralization, expiration, or cancellation
of all Obligations, if any, consisting of letters of credit, and the full and
final termination of any commitment to extend any financial accommodations
under the Loan Agreement, the security interests granted herein shall
automatically terminate and all rights to the Collateral shall revert to
Pledgor. Upon any such termination, Secured Party will, at Pledgor’s expense,
execute and deliver to Pledgor such documents as Pledgor shall reasonably
request to evidence such termination. Such documents shall be prepared by
Pledgor and shall be in form and substance reasonably satisfactory to Secured
Party.


 


17.                              
Security Interest Absolute.


 


To the maximum extent
permitted by law, all rights of Secured Party, all security interests
hereunder, and all obligations of Pledgor hereunder, shall be absolute and
unconditional irrespective of:


 


(a)                                 
any lack of validity
or enforceability of any of the Obligations or any other agreement or
instrument relating thereto, including any of the Loan Documents;


 


(b)                                
any change in the
time, manner, or place of payment of, or in any other term of, all or any of
the Obligations, or any other amendment or waiver of or any consent to any
departure from any of the Loan Documents, or any other agreement or instrument
relating thereto;


 


13





















 


(c)                                 
any exchange,
release, or non-perfection of any other collateral, or any release or amendment
or waiver of or consent to departure from any guaranty for all or any of the
Obligations; or


 


(d)                                
any other
circumstances that might otherwise constitute a defense available to, or a
discharge of, Pledgor.


 


18.                              
Headings.


 


Section and
subsection headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement or be given
any substantive effect.


 


19.                              
Severability.


 


In case any provision in
or obligation under this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.


 


20.                              
Counterparts; Telefacsimile Execution.


 


This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same Agreement. Delivery
of an executed counterpart of this Agreement by telefacsimile shall be equally
as effective as delivery of an original executed counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by telefacsimile
also shall deliver an original executed counterpart of this Agreement but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, or binding effect hereof.


 


21.                              
Waiver of Marshaling.


 


Each of Pledgor and
Secured Party acknowledges and agrees that in exercising any rights under or
with respect to the Collateral: (a) Secured Party is under no obligation to
marshal any Collateral; (b) may, in its absolute discretion, realize upon the
Collateral in any order and in any manner it so elects; and (c) may, in its
absolute discretion, apply the proceeds of any or all of the Collateral to the
Obligations in any order and in any manner it so elects. Pledgor and Secured
Party waive any right to require the marshaling of any of the Collateral.


 


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NOTICE:
THIS AGREEMENT CONTAINS AN OBLIGATION FOR BINDING ARBITRATION.


 


THIS
WRITTEN LOAN AGREEMENT 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 NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


IN WITNESS WHEREOF,
Pledgor and Secured Party have caused this Agreement to be duly executed and
delivered by their officers thereunto duly authorized as of the date first
written above.


 


[SIGNATURE PAGE
FOLLOWS]


 


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  PLEDGOR:

  
	
   

  	
   

  
	
   

  	
  TWC HOLDING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert B. McKeon

  	
   

  
	
   

  	
  By:  Robert B.
  McKeon

  
	
   

  	
  Its:  
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SECURED
  PARTY:

  
	
   

  	
   

  
	
   

  	
  TEXAS STATE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Douglas G. Bready

  	
   

  
	
   

  	
  By:

  	
  Douglas G. Bready

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  



 


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