Exhibit 10.7


 


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.

  	
   

  
						



 


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  (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.


 


14
















 


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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