Exhibit
10.8


 


PLEDGE AGREEMENT


 


THIS
PLEDGE AGREEMENT (this “Agreement”), dated as of June 30, 2004, is made
and entered into by and between the entities listed on Schedule 2
attached hereto and made a part hereof for all purposes, 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, TWC HOLDING, LLC, a Delaware limited liability company,
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,
Obligor, Right Away Management Corporation, and The Wornick Company Right Away
Division (collectively, “Pledgor”), beneficially own 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


 


2
















 


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 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.


 


3
















 


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, with respect to Equity Interests in
Right Away Management Corporation and The Wornick Company Right Away Division,
shall be accompanied by duly executed indorsement certificate in the form
attached hereto as Exhibit A and Exhibit B 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.


 


4
















 


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


 


5
















 


of
Secured Party and the Liens granted to the Trustee as collageral agent under
the Indenture and the related security documents.


 


(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.


 


6
















 


(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, 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


 


7
















 


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 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


 


8
















 


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 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


 


9
















 


advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto;


 


(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.


 


10
















 


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


 


11
















 


the
laws of the State of Texas (without reference to the choice of law principles
thereof).  The 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.


 


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 PAGES FOLLOW]


 


15
















 


	
   

  	
  PLEDGOR:

  
	
   

  	
   

  
	
   

  	
  THE
  WORNICK COMPANY, a
  Delaware

  corporation

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert B. McKeon

  	
   

  
	
   

  	
  By:  Robert B. McKeon

  
	
   

  	
  Its:
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  WORNICK COMPANY RIGHT

  AWAY DIVISION, a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert B. McKeon

  	
   

  
	
   

  	
  By:  Robert B. McKeon

  
	
   

  	
  Its:
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RIGHT
  AWAY MANAGEMENT

  CORPORATION, a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert B. McKeon

  	
   

  
	
   

  	
  By:  Robert B. McKeon

  
	
   

  	
  Its:
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SECURED
  PARTY:

  
	
   

  	
   

  
	
   

  	
  TEXAS
  STATE BANK

  
	
   

  	
   

  
	
   

  	
  /s/
  Douglas G. Bready

  	
   

  
	
   

  	
  By:  Douglas G. Bready

  
	
   

  	
  Its:  President

  



 


16