Exhibit
10.4


 


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. 10th 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 on the due date
(“Notes Debt”); or if there is not sufficient availability under the Borrowing
Base from which to fund an Advance pursuant to the terms of the Loan
Agreement,  Borrower’s failure to have
sufficient cash on hand at least five (5) calendar days prior to a required
Notes Debt payment date in order to make the required Notes Debt payment; or to
pay amounts required of tenants under the Leases; shall constitute an Event of
Default immediately upon the occurrence of the event constituting such default;


 


(ii)  Monetary Default, and/or the occurrence of
any Non-Monetary Default listed in Section 10.01 (j) or (l) of the Loan
Agreement shall constitute an Event of Default hereunder if Lender shall
declare such occurrence as a default, and Lender notifies the parties in
default in writing of same, and the parties in default fail to remedy such
default within eight (8) calendar days following notice from Lender; and


 


(iii)
Non-Monetary Defaults listed in Section 10.01 of the Loan Agreement which
are not otherwise included in sub-items (i) or (ii) of this
sub-section (b) shall constitute an Event of Default hereunder if Lender
shall declare such occurrence as a default and notifies the parties in default
in writing of same, and such parties in default fail to remedy such default
within fifteen (15) calendar days following notice from Lender, provided,
within five (5) days after the delivery or mailing of the notice of default,
the parties in default commence to remedy such default and


 


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at
the time such parties commence the remedy of such default they submit to Lender
in writing their plan to remedy the default, and said cure is thereafter
continuously pursued by the defaulting parties with due diligence and is
remedied within such fifteen (15) calendar day period. If such Non-Monetary
Default is not reasonably capable of being remedied within fifteen (15)
calendar days, the defaulting parties, on written request to Lender, shall have
such additional time as is reasonable under the circumstances to complete the
cure of such default, but in no event more than thirty (30) calendar days after
the delivery or mailing of the original notice of default;


 


however,
if in Lender’s reasonable judgment: (x) the Monetary Default or Non-Monetary
Default otherwise subject to notice and an opportunity to remedy default listed
in sub-items (ii) and (iii) of this sub-section are not capable of being
remedied by the defaulting parties during the period otherwise permitted herein
for the cure of such default; or (y) allowing the parties in default an
opportunity to remedy the default will likely result in the Collateral being
damaged or destroyed, uninsured or rendered unavailable to Lender; or (z)
allowing the parties in default an opportunity to remedy the default will
likely result in the Collateral being materially and adversely affected; then
Lender will notify the parties in default of such determination (“Lender
Determination”), and if such determination is made, no notice and opportunity
to remedy default is available for such Monetary Default or Non-Monetary
Default.  In addition, in no event is
Lender obligated to provide the parties in default notice and opportunity to
cure any default of the same type or nature which is repeated more than twice
in any one (1) calendar year.  The
provisions of sub-section (b) shall apply to Events of Default under all
Loan Documents applicable to this Promissory Note, and unless expressly stated
to the contrary in such documents, any notice and opportunity to remedy default
period referred to therein shall be deemed to incorporate said provisions. If
any of the Loan Documents applicable to this Promissory Note are inconsistent
with this paragraph,  the terms of this
Promissory Note shall be controlling, unless the other Loan Document expressly
provides otherwise.  Nothing in this
sub-section (b) shall be construed as extending the term of this
Promissory Note or the date upon which a default occurs, and no decision to
forego any remedy for any given Event of Default shall be deemed a waiver on
the part of the holder hereof of any right relating to any other Event of
Default.


 


(c)           Remedies for an Event of Default: Provided a Lender Determination has not been
made with respect to an Event of Default, Lender will not initiate a Selected
Enforcement Activity with respect to an Event of Default during any applicable
notice and cure period described in sub-section (b) hereof.  Except as provided in the preceding sentence,
if an Event of Default exists and is continuing, Lender may, without notice or
demand, declare the entire unpaid Principal Amount and all accrued and earned
but unpaid interest at once due and payable, and exercise all rights and
remedies available to Lender under the Loan Documents.  The limitation on Lender’s rights with
respect to initiating a Selected Enforcement Activity following certain Events
of Default shall be strictly construed, and such limitation shall not impair
the exercise of any remedy not referred to in such definition, including,
without limitation, the seeking of any mandatory or prohibitive injunction or
restraining order.


 


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(d)           Waiver by Borrower: Except as provided in this Promissory Note,
Borrower and all other parties liable for this Promissory Note waive demand,
presentment for payment, notice of nonpayment, protest, notice of protest,
grace, notice of dishonor, notice of intent to accelerate, notice of
acceleration, and diligence in collection.


 


(e)           Non-Waiver by Lender: Any previous extension of time,
forbearance, failure to pursue some remedy, or acceptance of partial payment by
Lender, before or after maturity, does not constitute a waiver by Lender of the
existence of any Event of Default nor of its right to strictly enforce the
collection of this Promissory Note according to its terms.


 


(f)            Other Remedies Not Required: Lender shall not be required to first file
suit, exhaust all remedies, or enforce its rights against any security in order
to enforce payment of this Promissory Note.


 


(g)           Joint and Several Liability: Each Borrower who signs this Promissory
Note, and all of the other parties liable for the payment of this Promissory
Note, such as guarantors, endorsers, and sureties, are jointly and severally
liable for the payment of this Promissory Note.


 


(h)           Attorney’s Fees: If Lender requires the services of an
attorney to enforce the payment of this Promissory Note or the performance of
the other Loan Documents, or if this Promissory Note is collected through any
lawsuit, probate, bankruptcy, or other judicial proceeding, Borrower agrees to
pay Lender an amount equal to its reasonable attorney’s fees and other
collection costs. This provision shall be limited by any applicable statutory
restrictions relating to the collection of attorney’s fees.


 


Miscellaneous
Provisions:


 


(a)           Collateral: This Promissory Note is secured by a lien and security interest in
all the Collateral.


 


(b)           Application of Payments: All payments on the indebtedness evidenced
by this Promissory Note and by any documents securing or governing this
Promissory Note, other than regularly scheduled payments, shall be applied to
such indebtedness in such order and manner as Lender may from time to time
determine in its absolute discretion.


 


(c)           Prepayment: Borrower may prepay this Promissory Note in whole or in part at any
time, without penalty. Any prepayment shall be applied to the last maturing
installments of principal due on this Promissory Note, that is in the inverse
order of maturity and without reducing the amount or time of payment of the
remaining obligatory installments until the indebtedness evidenced by this
Promissory Note is fully paid.


 


(d)           Subsequent Holder: All references to Lender in this Promissory
Note shall also refer to any subsequent owner or holder of this Promissory Note
by transfer, assignment, endorsement or otherwise.


 


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(e)           Transfer or Participation: 
Borrower acknowledges and agrees that Lender may, from time to time,
transfer or sell this Promissory Note to one or more transferees or
participants. Borrower authorizes Lender to disseminate any information it has
pertaining to the loan evidenced by this Promissory Note, including, without
limitation, credit information on Borrower, any of its principals and any
guarantor of this Promissory Note, to any such transferee or participant or
prospective transferee or participant.


 


(f)            Set-Off: Borrower agrees that Lender may exercise Lender’s right of set-off to
pay all or any part of the outstanding Principal Amount and accrued interest,
costs, attorney’s fees, and advances owed on this Promissory Note against any
obligation Lender may have, now or hereafter, to pay money, securities or other
property to Borrower. This includes, without limitation:


 


(i)            any deposit account balance, securities
account balance or certificate of deposit balance (whether matured or
unmatured) Borrower has with Lender, whether general, special, time, savings,
checking or NOW account;


 


(ii)           any money owing to Borrower on an item presented to Lender or in
Lender’s possession for collection or exchange; and


 


(iii)          any repurchase agreement or any other non-deposit obligation or credit
in Borrower’s favor.


 


Lender’s
right of set-off may be exercised upon Borrower’s default:


 


(i)            without prior demand or notice;


 


(ii)           without regard to the existence or value of any Collateral securing
this Promissory Note; and


 


(iii)          without regard to the number or creditworthiness of any other persons
who have agreed to pay this Promissory Note.


 


Lender
will not be liable for dishonor of a check or other request for payment where
there are insufficient funds in the account (or other obligation) to pay such
request because of Lender’s exercise of Lender’s right of set-off. Borrower
agrees to indemnify and hold Lender harmless from any person’s claims and the
costs and expenses, including without limitation, attorneys’ fees, incurred as
a result of such claims or arising as the result of Lender’s exercise of
Lender’s right of set-off.


 


If
any such money, securities or other property is also owned by some other person
who has not agreed to pay this Promissory Note (such as another depositor on a
joint account) Lender’s right of set-off will extend to the amount which could
be withdrawn or paid directly to Borrower on Borrower’s request, endorsement or
instruction alone. In addition, where Borrower may obtain payment from Lender
only with the endorsement or consent of someone who has not agreed to pay this
Promissory Note, Lender’s right of set-off will extend to Borrower’s interest
in


 


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the
obligation. Lender’s right of set-off will not apply to an account or other
obligation if it clearly appears that Borrower’s rights in the obligation are
solely as a fiduciary for another or to an account, which by its nature and
applicable law (for example an IRA or other tax deferred retirement account),
must be exempt from the claims of creditors. Borrower hereby appoints Lender as
Borrower’s attorney-in-fact and authorizes Lender to redeem or obtain payment
of any certificate of deposit in which Borrower has an interest in order to
exercise Lender’s right of set-off. Such authorization applies to any
certificate of deposit even if not matured. Borrower further authorizes Lender to
withhold any early withdrawal penalty without liability against Lender in the
event such penalty is applicable as a result of Lender’s set-off against a
certificate of deposit prior to its maturity.


 


(g)           Successors and Assigns: The provisions of this Promissory Note
shall be binding upon and for the benefit of the successors, assigns, heirs,
executors and administrators of Lender and Borrower.


 


(h)           Other Parties Liable:  All
promises, waivers, agreements and conditions applicable to Borrower shall
likewise be applicable to and binding upon any other parties primarily or
secondarily liable for the payment of this Promissory Note, including all
guarantors, endorsers and sureties.


 


(i)            Modifications: Any modifications agreed to by Lender
relating to the release of liability of any of the parties primarily or
secondarily liable for the payment of this Promissory Note, or relating to the
release, substitution, or subordination of all or part of the security for this
Promissory Note, shall in no way constitute a release of liability with respect
to the other parties or security not covered by such modification.


 


(j)            Borrower’s Address for Notice:  All
notices required to be sent by Lender to Borrower shall be sent by United
States Mail, postage prepaid, to Borrower’s Address for Notice stated on the
first page of this Promissory Note, until Lender shall receive written
notification from Borrower of a new address for notice.


 


(k)           Lender’s Address for Payment: All sums payable by Borrower to Lender
shall be paid at Lender’s Address for Payment stated on the first page of this
Promissory Note, until Lender shall notify Borrower of a new address for
payment.


 


(1)           Applicable Law: This Promissory Note has been executed and
delivered, and shall be construed, in accordance with the applicable laws of
the State of Texas and the United States of America. This Promissory Note is
payable in Hidalgo County, Texas, and venue shall lie in Hidalgo County, Texas,
with respect to any action brought with respect to this Promissory Note.  All disputes associated with this Promissory
Note shall be resolved by binding arbitration in accordance with the procedures
set forth in the Loan Agreement.


 


(m)          Time of Essence: Time is of the essence in Borrower’s
performance of all duties and obligations imposed by this Promissory Note.


 


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(n)           Business Use: Borrower represents and warrants to Lender
that the proceeds of this Promissory Note will be used solely for the purposes
permitted in the Loan Agreement.


 


(o)           Chapter 346 Not Applicable: It is understood that Chapter 346, Texas
Finance Code,  relating to certain
revolving credit loan accounts and tri-party accounts is not applicable to this
Promissory Note, and any applicability thereof is hereby expressly waived.


 


	
   

  	
  THE
  WORNICK COMPANY, a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  
	
   

  	
   

  	
  Robert
  B. McKeon

  
	
   

  	
   

  	
  Chairman
  of the Board

  
	
   

  	
   

  	
  Address:  c/o Veritas Capital Management II, L.L.C.

  
	
   

  	
   

  	
  660
  Madison Avenue

  
	
   

  	
   

  	
  New
  York, New York 10021

  



 


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