Document:

Exhibit
10.1

 

THE
WORNICK COMPANY

 

$125,000,000
107/8% Senior Secured Notes due 2011

 

PURCHASE
AGREEMENT

 

June 24, 2004

 

JEFFERIES
& COMPANY, INC.

CIBC WORLD MARKETS CORP.

c/o Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, California  90025

 

Ladies
and Gentlemen:

 

Each of The Wornick Company, a Delaware corporation
(the “Company”), and each
Guarantor (as defined below) hereby agrees with you as follows:

 

1.     Issuance of Securities.  The Company proposes to issue and
sell to the initial purchasers listed on Schedule 1 hereto (each, an “Initial Purchaser” and, together, the “Initial Purchasers”), and the Initial
Purchasers propose to purchase, $125,000,000 aggregate principal amount of the
Company’s 107/8% Senior Secured Notes due 2011, Series A
(the “Series A Notes”).  The
Series A Notes will be issued pursuant to an indenture (the “Indenture”), to be dated as of the Closing
Date (as defined below), among the Company, the Guarantors, and U.S. Bank
National Association, as trustee (the “Trustee”). 
The Series A Notes and the Series B Notes (as defined below), each with the
Guarantee (as defined below) endorsed thereon, are collectively referred to
herein as the “Notes.”

 

Each of the entities listed on Schedule 2
hereto and any future subsidiary guarantors party to the Indenture (such
entities and such future subsidiary guarantors, each a “Guarantor” and collectively the “Guarantors”) will jointly and severally,
fully and unconditionally guarantee on a senior secured basis, the obligations
under the Indenture, the Notes and the Security Documents (as defined below),
including the payment of principal of and interest, premium, if any, and
Liquidated Damages (as defined in the Offering Circular (as defined below)), if
any, on the Notes (the “Guarantees”). 
The Company and the Guarantors are sometimes collectively referred to herein as
the “Company Entities.”

 

 

Pursuant to the terms of the Security Documents, all
of the respective obligations of the Company Entities under the Indenture, the
Notes and the Guarantees will be secured by security interests in, or pledges
of (the “Security Interests”),
substantially all of the assets (other than certain excluded assets) of the
Company, the Guarantors and the Company’s future restricted subsidiaries, and
all of the shares of capital stock of and membership and partnership interests
in the Guarantors and the Company’s future restricted subsidiaries (subject to
certain exceptions), in each case as set forth in the Offering Circular (the “Collateral”).

 

The Series A Notes will be offered and sold to the
Initial Purchasers pursuant to exemptions from the registration requirements
under the Securities Act of 1933, as amended (the “Act”).  The Company and the Guarantors have prepared a
preliminary offering circular, dated June 14, 2004 (the “Preliminary Offering Circular”), and a
final offering circular, dated June 24, 2004 (the “Offering Circular”), relating to the offer and sale of the
Series A Notes (the “Offering”).

 

Upon original issuance thereof, and until such time as
the same is no longer required under the Indenture or the applicable
requirements of the Act, the Series A Notes shall bear the following legend:

 

THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.  THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE WHICH IS
TWO YEARS (OR SUCH OTHER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE
144(k) UNDER THE SECURITIES ACT AS PERMITTING RESALES OF RESTRICTED SECURITIES
BY NON-AFFILIATES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH EITHER OF THE COMPANY OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE

 

 

144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
“ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (E) OR (F) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND
IN EACH CASE IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY U.S. STATE OR
ANY OTHER APPLICABLE JURISDICTION.  THE HOLDER OF THIS SECURITY AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.

 

2.     Agreements to Sell and Purchase.   On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions hereof, the Company shall issue and sell to each of the
Initial Purchasers (and, in order to induce the Initial Purchasers to purchase
the Series A Notes, the Guarantors shall enter into the Guarantees and the
Company Entities shall grant the Security Interests), and each of the Initial
Purchasers, severally and not jointly, shall purchase from the Company, the
principal amount of Series A Notes set forth opposite

 

 

the
name of such Initial Purchaser on Schedule 1 hereto.  The purchase
price for the Series A Notes shall be 97% of the principal amount thereof.

 

3.     Terms of Offering.   The Initial Purchasers have advised
the Company that the Initial Purchasers will make offers to sell (the “Exempt Resales”) the Series A Notes
purchased by the Initial Purchasers hereunder on the terms set forth in the
Offering Circular, as amended or supplemented, solely to persons whom the
Initial Purchasers reasonably believe to be (a) ”qualified institutional
buyers,” as defined in Rule 144A under the Act (“QIBs”), (b) persons permitted to purchase Series A Notes in
offshore transactions in reliance upon Regulation S under the Act (each, a “Regulation S Purchaser”) or (c) a limited
number of institutional “accredited investors,” as defined in Rule 501(a)(1),
(2), (3) or (7) under the Act that make certain representations and warranties
to the Company as set forth in the Accredited Investor Letter (the “Accredited Investor Letter”) attached as
Annex A to the Offering Circular (“Accredited
Investors” and, together with QIBs and Regulation S Purchasers, “Eligible Purchasers”).

 

Holders of the Series A Notes (including subsequent
transferees) will have the registration rights set forth in the registration
rights agreement (the “Registration Rights
Agreement”), to be executed on and dated as of the Closing
Date.  Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree, among other things, to file with the Securities and
Exchange Commission (the “Commission”)
under the circumstances set forth therein (a) a registration statement under
the Act (the “Exchange Offer Registration
Statement”) relating to, among other things, the 107/8%
Senior Secured Notes due 2011, Series B, of the Company (the “Series B Notes”), identical in all material
respects to the Series A Notes, including with respect to the Guarantees
thereof (except that the Series B Notes shall have been registered pursuant to
such registration statement and not subject to the transfer restrictions), to
be offered in exchange for the Series A Notes (such offer to exchange being
referred to as the “Registered  Exchange Offer”), and (b) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the
Act (the “Shelf Registration Statement”)
relating to the resale by certain holders of the Series A Notes.

 

On the Closing Date, the Company Entities will enter
into certain security agreements, pledge agreements and other collateral
documents (collectively, the “Security
Documents”), that will provide for the grant of the Security Interests
in the Collateral to the Trustee, as collateral agent for the Trustee and the
holders of the Notes (in such capacity, the “Secured
Party”).  The Security Interests will secure the payment and
performance when due of all of the respective obligations of the Company
Entities under the Indenture, the Notes and the Guarantees.

 

In addition, on the Closing Date, the Company expects
to enter into a new senior secured credit facility (the “New Credit Facility”).  In connection
with

 

 

entering
into the New Credit Facility, the Trustee and the lender under the New Credit
Facility shall enter into an Intercreditor Agreement, to be dated as of the
Closing Date, in a form reasonably satisfactory to the Initial Purchasers,
which form shall be attached as an exhibit to the Indenture (the “Intercreditor Agreement”).

 

As described in the Offering Circular under “The
Transactions,” proceeds from the issuance and sale of the Series A Notes,
together with cash of the Company, will be used to consummate the acquisition
(the “Acquisition”) by the Company
and the Subsidiaries (as defined below) of substantially all of the assets of
The Wornick Company, a Nevada corporation (the “Predecessor”), and its subsidiaries, pursuant to an Assets
Purchase and Sale Contract, dated as of December 3, 2003 and amended as of May
4, 2004 (as so amended, the “Purchase and
Sale Contract”). The Purchase and Sale Contract provides for the
purchase by the Company and the Subsidiaries, and the sale by the Predecessor
and its subsidiaries, of their business as a going concern, including
substantially all of their operating assets, and the assumption of certain of
the liabilities of the Predecessor and its subsidiaries.

 

This Agreement, the Indenture, the Registration Rights
Agreement, the Notes, the Guarantees and the Security Documents collectively
are referred to herein as the “Operative
Documents.”  The Purchase and Sale Contract, the New Credit
Facility and the Intercreditor Amendment together with the Operative Documents
collectively are referred to herein as the “Transaction
Documents.”  The transactions contemplated by the Transaction
Documents, including, without limitation, the Offering and the application of
the proceeds therefrom as described in the Offering Circular, the issuance and
sale of the Notes in accordance with this Agreement, the creation, grant,
recording and perfection of the Security Interests, and the initial borrowing
(if any) under the New Credit Facility on the Closing Date, collectively are
referred to herein as the “Transactions.”

 

4.     Delivery and Payment.  Delivery to the Initial Purchasers
of and payment for the Series A Notes shall be made at a Closing (the “Closing”) to be held at 9:00 a.m., New York
City time, on June 30, 2004, or such later date as may be agreed between the
Initial Purchasers and the Company (such time and date, the “Closing Date”) at the offices of Winston
& Strawn LLP, 200 Park Avenue, New York, New York 10166, or such other
location as may be agreed between the Initial Purchasers and the Company.

 

The Company shall deliver to the Initial Purchasers
one or more certificates representing the Series A Notes (the “Global Securities”), each in definitive
form, registered in the name of Cede & Co., as nominee of The Depository
Trust Company (“DTC”), or such
other names as the Initial Purchasers may request upon at least one Business
Day notice to the Company, in respective amounts corresponding to the
respective aggregate principal amounts of the Series A Notes sold pursuant to
Exempt Resales to QIBs, to Accredited Investors and to non-U.S. persons under

 

 

Regulation
S, in each case against payment by the Initial Purchasers of the purchase price
therefor by immediately available Federal funds bank wire transfer to such bank
account as the Company shall designate to the Initial Purchasers at least two
Business Days prior to the Closing.  “Business
Day” means any day other than a Saturday, a Sunday or a day on which
banking institutions in The City of New York or at a place of payment are authorized
by law, regulation or executive order to remain closed.

 

The Global Securities in definitive form shall be made
available to the Initial Purchasers for inspection at the offices of Winston
& Strawn LLP, 200 Park Avenue, New York, New York 10166 (or such other
place as shall be acceptable to the Initial Purchasers) not later than 9:30
a.m., New York City time, one Business Day immediately preceding the Closing
Date.

 

5.     Agreements of the Company Entities.  Each of the Company Entities,
jointly and severally, hereby agrees:

 

(a)          
Certain Events.  To (i)
advise the Initial Purchasers promptly after obtaining knowledge (and, if
requested by the Initial Purchasers, confirm such advice in writing) of (A) the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Series A Notes for
offer or sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority, and
(B) the happening of any event as a result of which the Offering Circular, as
then amended or supplemented, would include any untrue statement of a material
fact, or would omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, (ii) use its best efforts to prevent the issuance of any stop order
or order suspending the qualification or exemption from qualification of any of
the Notes under any state securities or Blue Sky laws, and (iii) if at any time
any state securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification of any of
the Series A Notes under any such laws, use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.

 

(b)          
Offering Circular.  To (i)
furnish the Initial Purchasers and those persons identified by the Initial
Purchasers to the Company, without charge, as many copies of the Preliminary
Offering Circular and the Offering Circular, and any amendments or supplements
thereto, as the Initial Purchasers may reasonably request, and (ii) promptly
prepare, upon the Initial Purchasers’ reasonable request, any amendment or
supplement to the Offering Circular that the Initial Purchaser deems may be
necessary in connection with Exempt Resales (and the Company Entities hereby
consent to the use of the Preliminary Offering Circular and the Offering Circular,
and any amendments and

 

 

supplements
thereto, by the Initial Purchaser in connection with Exempt Resales).

 

(c)          
Notice of Amendment or Supplement. 
Not to amend or supplement the Offering Circular prior to the Closing Date, or
at any time prior to the completion of the resale by the Initial Purchasers of
all of the Series A Notes, unless the Initial Purchasers shall previously have
been advised thereof and shall not have objected thereto.

 

(d)          
Preparation of Amendments and Supplements. 
At any time prior to the completion of the resale by the Initial Purchasers of
all of the Series A Notes, (i) if any event shall occur as a result of which,
in the reasonable judgment of the Company or the Initial Purchasers or their
respective counsel, it becomes necessary or advisable to amend or supplement
the Offering Circular in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it is
necessary to amend or supplement the Offering Circular to comply with
Applicable Law (as defined below), forthwith to prepare an appropriate
amendment or supplement to the Offering Circular (in form and substance
reasonably satisfactory to the Initial Purchasers) so that as so amended or supplemented,
(A) the Offering Circular will not include an untrue statement of material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and (B) the Offering Circular will comply with Applicable Law, and
(ii) if it becomes necessary or advisable to amend or supplement the Offering
Circular so that the Offering Circular will contain all of the information
specified in, and meet the requirements of, Rule 144A(d)(4) under the Act,
forthwith to prepare an appropriate amendment or supplement to the Offering
Circular (in form and substance reasonably satisfactory to the Initial
Purchasers) so that the Offering Circular, as so amended or supplemented, will
contain the information specified in, and meet the requirements of, such Rule.

 

(e)          
Qualification of Securities. 
To cooperate with the Initial Purchasers and the Initial Purchasers’ counsel in
connection with the qualification of the Notes under the securities or Blue Sky
laws of such jurisdictions as the Initial Purchasers may request and continue
such qualification in effect so long as reasonably required for Exempt Resales,
and to file such consents to service of process or other documents as may be
necessary in order to effect such qualification; provided, that none of the Company Entities shall be
required in connection therewith to file any consent to service of process in
suits other than those arising out of the offering or sale of the Notes or to
register or qualify as a foreign corporation in any jurisdiction where it is
not now so qualified or to subject itself to general taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.

 

 

(f)           
Costs and Expenses.  Whether
or not any of the Transactions are consummated or this Agreement is terminated,
to pay (i) all costs, expenses, fees and taxes incident to and in connection
with the performance of the obligations of the Company Entities under this
Agreement, including:  (A) the preparation, printing and distribution of
the Preliminary Offering Circular and the Offering Circular and all amendments
and supplements thereto (including, without limitation, financial statements
and exhibits), and all preliminary and final Blue Sky memoranda and all other
agreements, memoranda, correspondence and other documents prepared and
delivered in connection herewith (including the furnishing of copies of the
foregoing to the Initial Purchasers and such other persons as the Initial
Purchasers may designate), (B) the printing, processing and distribution
(including, without limitation, word processing and duplication costs) and
delivery of, and performance under, each of the Transaction Documents and any other
agreements or documents in connection with the Transactions, (C) the
preparation, issuance and delivery of the Notes, including the fees and
expenses of the Trustee (including fees and expenses of its counsel) and the
cost of their respective personnel, and all costs and expenses related to the
delivery of the Notes to the Initial Purchasers and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon, and (D) the
qualification of the Notes for offer and sale under the securities or Blue Sky
laws of the several states (including, without limitation, filing fees and fees
and disbursements of the Initial Purchasers’ counsel relating to such
registration or qualification and the preparation of memoranda related
thereto); (ii) all fees and expenses of the counsel and accountants of the
Company Entities; (iii) all expenses and listing fees in connection with the
application for quotation of the Series A Notes in The Portal Market (“PORTAL”) of The NASDAQ Stock Market, Inc.;
(iv) all fees and expenses (including fees and expenses of counsel) of the
Company Entities in connection with approval of the Notes by DTC for
“book-entry” transfer; (v) all fees charged by rating agencies in connection
with the rating of the Notes; (vi) the costs and charges of any transfer agent,
registrar and/or depositary (including DTC); (vii) all costs and expenses of
the Registered Exchange Offer, the Exchange Offer Registration Statement and
any Shelf Registration Statement, as set forth in the Registration Rights
Agreement; (viii) all costs and expenses in connection with the creation and
perfection of the Security Interests (including, without limitation, filing and
recording fees, search fees and taxes); (ix) all fees and expenses (including
reasonable fees and expenses of counsel) incurred by the Initial Purchasers in
connection with the preparation, negotiation and execution of the Transaction
Documents and the consummation of the Transactions; (x) all costs and expenses
of the Transactions; and (xi) all other costs and expenses incident and
necessary to the performance of the obligations of the Company Entities for
which provision is not otherwise made in this section.

 

 

(g)          
Use of Proceeds.  To use the
proceeds from the sale of the Series A Notes in the manner described in the
Offering Circular under the caption “Use of Proceeds.”

 

(h)          
Waiver of Certain Laws.  To
the extent it may lawfully do so, not to insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension usury
or other law, wherever enacted, now or at any time hereafter in force, that
would prohibit or forgive the payment of all or any portion of the principal of
or interest on the Notes, or that may affect the covenants or the performance
of the Indenture or any of the Security Documents (and, to the extent it may
lawfully do so, each Company Entity hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power granted to the
Trustee in the Indenture or to the Secured Party in the Security Documents but
shall suffer and permit the execution of every such power as though no such law
had been enacted).

 

(i)           
Security Interests.  To do
and perform all things required to be done and performed under the Security
Documents prior to, on and after the Closing Date, including, without
limitation, all things necessary or advisable to obtain on or prior to the Closing
Date (i) all Permits (as defined below) necessary for the granting, perfection
and enforcement of the Security Interests and for the foreclosure by the
Secured Party thereon following an Event of Default (as defined in the Offering
Circular), (ii) all termination statements, mortgage releases and other
documents necessary to terminate any Liens (as defined in the Offering
Circular) on the Collateral (other than Liens created by the Indenture, Liens
created by the Security Documents and Permitted Liens (as defined in the
Offering Circular)), and (iii) subject to the terms of the Intercreditor
Agreement, a valid and perfected, first priority Security Interest with respect
to each of the assets, shares of capital stock and membership interests which
are to constitute, as of the Closing Date, the Collateral.

 

(j)           
Integration.  Not to, and to
ensure that no affiliate (as defined in Rule 501(b) under the Act) of any of
the Company Entities will, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any “security” (as defined in the Act) that would be
integrated with the sale of the Series A Notes in a manner that would require
the registration under the Act of the sale to the Initial Purchasers or of the
offers or sales of Series A Notes pursuant to Exempt Resales.

 

(k)          
Rule 144A Information.  For
so long as any of the Series A Notes remain outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the Act, during any
period in which the Company is not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as

 

 

amended (the “Exchange Act”), to make available, upon
request, to any holder of such restricted securities in connection with any
sale thereof and any prospective Eligible Purchaser of such restricted
securities from such holder, the information required by Rule 144A(d)(4) under
the Act.

 

(l)           
DTC.  To use its best
efforts to obtain the approval of DTC for “book entry” transfer of the Notes.

 

(m)         
PORTAL.  To use its best
efforts effect the admission of the Series A Notes for trading in PORTAL and to
use its best efforts to maintain the inclusion of the Series A Notes for
trading on PORTAL for so long as the Series A Notes are outstanding.

 

(n)          
Reporting Requirements.  For
so long as any of the Notes are outstanding, and whether or not required to do
so by the rules and regulations of the Commission, (i) to furnish to the
Trustee and deliver or cause to be delivered to the holders of the Notes and
the Initial Purchasers, within 15 days after the Company is or would have been
required to file such with the Commission, (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including for each a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and, with respect to the annual
information only, a report thereon by the Company’s independent certified
public accountants and (B) all information that would be required to be
contained in a filing with the Commission on Form 8-K if the Company were
required to file such reports, and (ii) from and after the time the Exchange
Offer Registration Statement or the Shelf Registration Statement (or other
registration statement under the Act with respect to the Notes) is filed with
the Commission, to file such information with the Commission so long as the
Commission will accept such filings.

 

(o)          
No Selling Efforts or General Solicitation. 
Except in connection with the Registered Exchange Offer or the filing of the
Shelf Registration Statement, not to, and not to authorize or permit any person
acting on its behalf to, (i) distribute any offering material in connection
with the offer and sale of the Series A Notes other than the Preliminary
Offering Circular and the Offering Circular and any amendments and supplements
to the Offering Circular prepared in compliance with Section 5(d), or (ii)
solicit any offer to buy or offer to sell the Series A Notes by means of any
form of general solicitation or general advertising (as such terms are used in
Regulation D under the Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Act.

 

(p)          
No Similar Offerings.  Not
to, directly or indirectly, without the prior consent of the Initial
Purchasers, offer, sell, contract to sell, grant any

 

 

option to purchase
or otherwise dispose of (or announce any offer or sale of, contract to sell,
grant of any option to purchase or other disposition of) any debt securities of
any of the Company Entities substantially similar to the Notes or the
Guarantees for a period of six months after the date of the Offering Circular,
except as contemplated by the Registration Rights Agreement; provided, that the
foregoing will not apply to (i) the Notes or the Guarantees or (ii) borrowings
(not constituting the issuance of securities) from financial institutions to
the extent not prohibited by the Indenture.

 

(q)          
ERISA.  At any time prior to
the completion of the resale by the Initial Purchasers of the Notes, to notify
the Initial Purchasers promptly in writing if any of the Company Entities or any
of their Affiliates becomes a party in interest or a disqualified person with
respect to any employee benefit plan, other than any plan set forth in Schedule
4 hereto, and to identify such plans.  The terms “ERISA,”
“Affiliates,” “party in interest,” “disqualified person” and “employee benefit
plan” shall have the meanings as set forth in Section 6(jj) hereof.

 

(r)           
Performance of Agreements. 
To comply with all of its agreements set forth in the Transaction Documents,
and to use its best efforts to do and perform all things required or necessary
to be done and performed under the Operative Documents by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Series A Notes and the Guarantees and the granting, perfection and enforcement
of the Security Interests.

 

6.     Representations and Warranties of the Company
Entities. 
Each of the Company Entities, jointly and severally, represents and warrants to
the Initial Purchasers that:

 

(a)          
Offering Circular.  The
Preliminary Offering Circular as of its date did not, and the Offering
Circular, as of its date does not and as of the Closing Date will not, and each
supplement or amendment thereto as of its date will not, contain any untrue
statement of a material fact or omit to state any material fact (except, in the
case of the Preliminary Offering Circular, for pricing terms and other
financial terms intentionally left blank) necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  The foregoing representation and warranty made in
this Section 6(a) shall not apply to any statements or omissions made in
reliance on and in conformity with information relating to the Initial Purchasers
furnished in writing to the Company by the Initial Purchasers specifically for
inclusion in the Preliminary Offering Circular or the Offering Circular. 
The parties hereto acknowledge that for purposes of this Agreement (including
this Section 6(a) and Section 8) the only information furnished in writing to
the Company by the Initial Purchasers specifically for use in the

 

 

Preliminary
Offering Circular or the Offering Circular is the information set forth (i) on
the cover page of the Offering Circular with respect to the price of the Notes,
(ii) in the third paragraph on page 141 of the Offering Circular concerning
offering the Notes for resale by the Initial Purchasers, (iii) in the fifth
paragraph on page 141 of the Offering Circular concerning market-making by the
Initial Purchasers, (iv) in the sixth paragraph on page 141 of the Offering
Circular concerning stabilization by the Initial Purchasers and (v) in the
fifth full paragraph on page 142 of the Offering Circular concerning the
affiliation of the Initial Purchasers and their respective affiliates with the
Company and its affiliates (such information described in the immediately
preceding clauses (i) through (v) of this Section 6(a), the “Furnished Information”).  Each of the
Preliminary Offering Circular and the Offering Circular, as of their respective
dates contained, and the Offering Circular, as of the Closing Date and as
amended or supplemented, will contain, all of the information specified in, and
meet the requirements of, Rule 144A(d)(4) under the Act.  Each of the
Transaction Documents, as executed and delivered, and each of the Transactions
will conform in all material respects to the description thereof in the
Offering Circular.

 

(b)          
144A Eligibility.  There are
no securities of any Company Entity registered under the Exchange Act or listed
on a national securities exchange registered under Section 6 of the Exchange
Act or quoted in a United States automated inter-dealer quotation system. 
The Series A Notes are eligible for resale pursuant to Rule 144A under the Act.

 

(c)          
Due Organization; Good Standing. 
Each of the Company Entities (i) has been duly organized, is validly existing
and is in good standing under the laws of its jurisdiction of organization,
(ii) has all requisite power and authority to conduct and carry on its business
and to own, lease, use and operate its properties and assets as described in
the Offering Circular, and (iii) is duly qualified or licensed to do business
and is in good standing as a foreign limited partnership or corporation, as the
case may be, authorized to do business in each jurisdiction in which the nature
of its business or the ownership, leasing, use or operation of its properties
and assets requires such qualification or licensing.

 

(d)          
Subsidiaries.  Immediately
following the Closing, the only subsidiaries of the Company will be the direct
or indirect subsidiaries of the Company listed on Schedule 3 hereto
(collectively, the “Subsidiaries”
and each, a “Subsidiary”) and the
Company will directly own 100% of the outstanding shares of capital stock and
100% of the membership interests or partnership interests, as applicable, in
each Subsidiary, in each case, free and clear of all Liens (as defined in the
Offering Circular), except for Liens created by the Indenture, Liens created by
the Security Documents and Permitted Liens.  Except as disclosed in the
Offering Circular, there are no outstanding (i)

 

 

securities
convertible into or exchangeable for any capital stock of or any membership
interests or partnership interests in, as the case may be, any of the Company
Entities, (ii) options, warrants or other rights to purchase or subscribe for
any capital stock or any securities convertible into or exchangeable for any
capital stock, membership interests or partnership interests of any of the
Company Entities or (iii) contracts, commitments, agreements, understandings,
arrangements, undertakings, rights, calls or claims of any kind relating to the
issuance of any capital stock of or any membership interests or partnership
interests in, as the case may be, any of the Company Entities, any such
convertible or exchangeable securities or any such options, warrants or
rights.  Except as set forth above, immediately following the Closing,
none of the Company Entities will directly or indirectly own any capital stock
of or other equity interest in any person.

 

(e)          
Capitalization.  All of the
outstanding shares of capital stock of or membership interests or partnership
interests in, as the case may be, each of the Company and each of the
Subsidiaries have been duly authorized, are validly issued, fully paid and
nonassessable, and were not issued in violation of, and are not subject to, any
preemptive or similar rights.  The table under the caption
“Capitalization” in the Offering Circular (including the footnotes thereto)
sets forth, as of its date, the pro forma capitalization of the Company and the
Subsidiaries, on a consolidated basis, after giving effect to the Transactions. 
Immediately following the Closing, except as set forth in such table, neither
the Company nor any of the Subsidiaries will have any liabilities, absolute,
accrued, contingent or otherwise other than:  (i) liabilities that are
reflected in the Company Financial Statements (as defined below), (ii) loans
made under the New Credit Facility (if any) or (iii) liabilities incurred
subsequent to April 3, 2004, in the ordinary course of business that would not,
singly or in the aggregate, have a material adverse effect on (A) the
properties, business, prospects, operations, earnings, assets, liabilities or
condition (financial or otherwise) of the Company and the Subsidiaries, taken
as a whole, (B) the ability of any of the Company Entities to perform its obligations
under any of the Transaction Documents, (C) or the enforceability of any
Security Documents or the attachment, perfection or priority of any of the
Security Interests intended to be created thereby in any portion of the
Collateral or (D) the validity of any of the Transaction Documents or the
consummation of any of the Transactions (each, a “Material Adverse Effect”).

 

(f)           
No Other Registration Rights. 
Except for this Agreement and the Registration Rights Agreement, there are no
contracts, commitments, agreements, arrangements, understandings or
undertakings of any kind to which any of the Company Entities is a party, or by
which any of them is bound, granting to any person the right (i) to require any
of the Company Entities to file a registration statement under the Act with
respect to any securities of any of the

 

 

Company Entities
or requiring any of the Company Entities to include such securities with the
Notes registered pursuant to any registration statement, or (ii) to purchase or
offer to purchase any securities of any of the Company Entities or any of their
respective affiliates.

 

(g)          
Power and Authority.  Each
of the Company Entities has all requisite power and authority to execute and
deliver, and to perform its obligations under, the Transaction Documents to
which it is a party and to consummate the Transactions.

 

(h)          
Authorization of this Agreement. 
This Agreement and the Transactions contemplated hereby (including, without
limitation, the Offering and the issuance and sale of the Notes in accordance
with this Agreement) have been duly authorized by each of the Company Entities,
and this Agreement has been validly executed and delivered by, and is the
legal, valid and binding obligation of, each of the Company Entities,
enforceable against each of the Company Entities in accordance with its terms,
except that (i) such enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors’ rights
generally and (ii) any rights of acceleration and the availability of equitable
remedies may be subject to general principles of equity (whether considered in
a proceeding in equity or at law).

 

(i)           
Authorization of Indenture. 
The Indenture and the Transactions contemplated thereby have been duly
authorized by each of the Company and the Guarantors and, on the Closing Date,
when executed and delivered by each of the Company and the Guarantors, the
Indenture will have been validly executed and delivered by, and assuming due
authorization, execution and delivery by the Trustee, will be the legal, valid
and binding obligation of, each of the Company and the Guarantors, enforceable
against each of the Company and the Guarantors in accordance with its terms,
except that (i) such enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors’
rights generally and (ii) any rights of acceleration and the availability of
equitable remedies may be subject to general principles of equity (whether
considered in a proceeding in equity or at law).  On the Closing Date, the
Indenture will conform to the requirements of the Trust Indenture Act of 1939,
as amended (the “TIA”), applicable
to an indenture that is required to be qualified under the TIA.

 

(j)           
Authorization of Registration Rights
Agreement.  The Registration Rights Agreement and the
Transactions contemplated thereby have been duly authorized by each of the
Company and the Guarantors and, on the Closing Date, when executed and
delivered by each of the Company and the Guarantors, the Registration Rights
Agreement will have been validly executed

 

 

and delivered by,
and will be the legal, valid and binding obligation of, each of the Company and
the Guarantors, enforceable against each of the Company and the Guarantors in
accordance with its terms, except that (i) such enforceability may be limited
by applicable bankruptcy, reorganization, insolvency, moratorium or similar
laws and (ii) any rights of acceleration and the availability of equitable
remedies may be subject to general principles of equity (whether considered in
a proceeding in equity or at law).

 

(k)          
Authorization of Series A Notes. 
The Series A Notes have been duly authorized by the Company for issuance and
sale to the Initial Purchasers pursuant to this Agreement and, on the Closing
Date, when executed by the Company and authenticated by the Trustee, will have
been validly executed, authenticated, issued and delivered by the Company in
accordance with the terms of this Agreement and the Indenture.  When the
Series A Notes have been issued, executed and authenticated in accordance with
the terms of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Series A Notes
will be legal, valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in accordance
with their terms, except to the extent that (i) such enforceability may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law).  When issued, the Series A Notes will rank pari passu in right of payment with all
senior Indebtedness (as defined in the Offering Circular) of the Company that
is outstanding on the date hereof and senior in right of payment to all other
Indebtedness of the Company that is outstanding on the date hereof; provided, that pursuant to the
Intercreditor Agreement, the Lien on the Collateral securing the New Credit
Facility will be senior to the Lien on the Collateral securing the Notes and
the Guarantees.

 

(l)           
Authorization of Series B Notes. 
The Series B Notes have been duly authorized by the Company and, if and when
issued in the Registered Exchange Offer, and executed by the Company and
authenticated by the Trustee, (A) will have been validly executed,
authenticated, issued and delivered in accordance with the terms of the
Indenture, the Registration Rights Agreement and the Registered Exchange Offer
and (B) will be legal, valid and binding obligations of the Company, entitled
to the benefits of the Indenture and enforceable against the Company in
accordance with their terms, except to the extent that (i) such enforceability
may be limited by applicable bankruptcy, reorganization, insolvency, moratorium
or similar laws affecting creditors’ rights generally and (ii) any rights of
acceleration and the availability of equitable remedies may be subject to
general principles of equity (whether considered in a proceeding in equity or
at law).

 

 

(m)         
Authorization of Guarantees of Series A
Notes.  The Guarantee to be endorsed on the Series A Notes by
each Guarantor has been duly authorized by each such Guarantor and, on the
Closing Date, when executed by each such Guarantor, will have been validly
executed and delivered by each such Guarantor in accordance with the terms of
the Indenture.  When the Series A Notes have been issued, executed and
authenticated in accordance with the terms of the Indenture and delivered to
and paid for by the Initial Purchasers in accordance with the terms of this
Agreement, the Guarantee of each Guarantor endorsed on the Series A Notes will
be the legal, valid and binding obligation of each such Guarantor, enforceable
against each such Guarantor in accordance with its terms, except to the extent
that (i) such enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors’
rights generally and (ii) any rights of acceleration and the availability of
equitable remedies may be subject to general principles of equity (whether
considered in a proceeding in equity or at law).  When issued, the
Guarantees to be endorsed on the Series A Notes will rank pari passu in right of payment with all
senior Indebtedness of the Guarantors that is outstanding on the date hereof
and senior in right of payment to all other Indebtedness of the Guarantors that
is outstanding on the date hereof; provided,
that pursuant to the Intercreditor Agreement, the Lien on the Collateral
securing the New Credit Facility will be senior to the Lien on the Collateral
securing the Notes and the Guarantees.

 

(n)          
Authorization of Guarantees of Series B
Notes.  The Guarantee to be endorsed on the Series B Notes by
each Guarantor has been duly authorized by each such Guarantor and, if and when
the Series B Notes are issued, when executed by each such Guarantor, will have
been validly executed and delivered by each such Guarantor in accordance with
the terms of the Indenture, the Registration Rights Agreement and the
Registered Exchange Offer.  When the Series B Notes have been issued,
executed and authenticated in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Registered Exchange Offer, the Guarantee
of each Guarantor endorsed on the Series B Notes will be the legal, valid and
binding obligation of each such Guarantor, enforceable against each such
Guarantor in accordance with its terms, except to the extent that (i) such
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency , moratorium or similar laws affecting creditors’ rights generally
and (ii) any rights of acceleration and the availability of equitable remedies
may be subject to general principles of equity (whether considered in a
proceeding in equity or at law).  When issued, the Guarantees to be
endorsed on the Series B Notes will rank pari
passu in right of payment with all senior Indebtedness of the
Guarantors that is outstanding on the date hereof and senior in right of
payment to all other Indebtedness of the Guarantors that is outstanding on the
date hereof; provided, that
pursuant to the Intercreditor Agreement, the Lien on the Collateral securing
the New Credit

 

 

Facility will be
senior to the Lien on the Collateral securing the Notes and the Guarantees.

 

(o)          
Authorization of Security Documents. 
Each of the Security Documents and the Transactions contemplated thereby
(including, without limitation, the creation, grant, recording and perfection
of the Security Interests, the execution and filing of financing statements and
the payment of any fees and taxes in connection therewith) have been duly
authorized by each of the Company and the Guarantors party thereto and, on the
Closing Date, when executed by the Company and the Guarantors party thereto,
each of the Security Documents will have been validly executed and delivered
by, and (assuming the due authorization, execution and delivery thereof by the
other parties thereto) will be the legal, valid and binding obligation of, the
Company and the Guarantors party thereto, enforceable against the Company and
the Guarantors party thereto in accordance with its terms, except that (i) such
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditor’s rights generally and (ii) any
rights of acceleration and the availability of equitable remedies may be
subject to general principles of equity (whether considered in a proceeding in
equity or at law).

 

(p)          
Authorization of Transaction Documents. 
Each of the other Transaction Documents and the Transactions contemplated
thereby have been duly authorized by each of the Company Entities party
thereto, and when executed and delivered by the applicable Company Entities,
each of the Transaction Documents will have been validly executed and delivered
by, and, assuming due authorization, execution and delivery by the other
parties thereto, will be the legal, valid and binding obligation of, each of
the Company Entities party thereto, enforceable against each of the Company
Entities party thereto in accordance with its terms, except that (i) such
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors’ rights generally
and (ii) any rights of acceleration and the availability of equitable remedies
may be subject to general principles of equity (whether considered in a
proceeding in equity or at law).

 

(q)          
No Violation.  The Company
is not in violation of its certificate of incorporation or bylaws (the “Company Charter Documents”), and none of
the Guarantors is in violation of its certificate of incorporation or bylaws or
other organizational documents (the “Guarantor
Charter Documents” and, collectively with the Company Charter
Documents, the “Charter Documents”). 
Neither the Company nor any of the Subsidiaries is (i) in violation of any
federal, state, local or foreign statute, law or ordinance, or any judgment,
decree, rule, regulation or order, in each case applicable to the Company or
any of the Subsidiaries (collectively, “Applicable
Law”), of any government, governmental or regulatory agency or body,
court or arbitrator,

 

 

domestic or
foreign (each, a “Governmental Authority”),
other than violations that would not, singly or in the aggregate, have a
Material Adverse Effect, or (ii) in breach of or default under any bond,
debenture, note or other evidence of indebtedness, indenture, mortgage, deed of
trust, lease or any other agreement or instrument to which any such person is a
party or by which any of them or any of their respective property is bound
(collectively, “Applicable Agreements”),
other than breaches or defaults that would not, singly or in the aggregate,
have a Material Adverse Effect.  Except as disclosed in the Offering
Circular, there exists no condition that, with the passage of time or
otherwise, would (x) constitute a violation of such Charter Documents or (y)
constitute a violation of Applicable Laws or breach of or default under any
Applicable Agreement or (z) result in the imposition of any penalty or the
acceleration of any indebtedness, other than, in the case of the immediately
preceding clauses (y) and (z), such breaches, penalties or defaults that would
not, singly or in the aggregate, have a Material Adverse Effect.

 

(r)           
No Conflict.  None of the
execution, delivery or performance of any of the Transaction Documents, nor the
compliance with the terms and provisions thereof, nor the consummation of any
of the Transactions shall conflict with, violate, constitute a breach of or a
default (with the passage of time or otherwise) under, result in the imposition
of a Lien on any assets or capital stock of or membership interests in either
of the Company or any of the Subsidiaries (except for Liens created by the
Indenture, Liens created by the Security Documents and Permitted Liens), or
result in an acceleration of indebtedness under or pursuant to, (i) the Charter
Documents, (ii) any Applicable Agreement or (iii) any Applicable Law, other
than, in the case of the immediately preceding clauses (ii) and (iii), such
conflicts, violations, breaches or defaults, Liens or accelerations that would
not, singly or in the aggregate, have a Material Adverse Affect. 
Immediately after giving effect to the Transactions, no Default or Event of
Default (each as defined in the Indenture) will exist.

 

(s)          
Permits.  No permit, certificate,
authorization, approval, consent, license or order of, or filing, registration,
declaration or qualification with, any Governmental Authority (collectively, “Permits”) is required in connection with,
or as a condition to, the execution, delivery or performance by the Company
Entities of any of the Transaction Documents, the compliance by the Company
Entities with the terms and provisions thereof or the consummation by the
Company Entities of any of the Transactions, other than (i) such Permits as
have been made or obtained on or prior to the Closing Date, which Permits are
in full force and effect on the Closing Date, (ii) such as may be required
under the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Notes by the Initial Purchasers, (iii) the order of the
Commission declaring the Exchange Offer Registration Statement or the

 

 

Shelf Registration
Statement, as the case may be, effective and (iv) the qualification of the
Indenture under the TIA pursuant to the filing of Form T-1.

 

(t)           
No Proceedings.  There is no
action, claim, suit, demand, hearing, notice of violation or deficiency, or
proceeding (including, without limitation, any investigation or partial
proceeding, such as a deposition), domestic or foreign (collectively, “Proceedings”), pending or, to the knowledge
of the Company Entities, threatened (i) with respect to any of the Company
Entities in connection with, or that seeks to restrain, enjoin, prevent the
consummation of, or otherwise challenge, any of the Transaction Documents or
any of the Transactions, or (ii) that could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No injunction or
order has been issued and no Proceeding is pending or, to the knowledge of the
Company Entities, threatened that (i) asserts that the offer, sale and delivery
of the Series A Notes and the Guarantees to the Initial Purchasers pursuant to
this Agreement or the initial resale of the Series A Notes and the Guarantees
by the Initial Purchasers in the manner contemplated by this Agreement is
subject to the registration requirements of the Act, or (ii) would prevent or
suspend the issuance or sale of the Notes, including the Exempt Resales, or the
use of the Preliminary Offering Circular, the Offering Circular, or any
amendment or supplement thereto, in any jurisdiction.

 

(u)          
Title to Assets. 
Immediately following the consummation of the Transactions the Company and each
of the Subsidiaries (i) will have good and marketable title, free and clear of
all Liens (other than Liens created by the Indenture, Liens created by the
Security Documents and Permitted Liens), to all property and assets described
in the Offering Circular as being or to be owned by it and (ii) will hold a
valid leasehold interest with respect to each real property lease.

 

(v)          
Sufficiency and Condition of Assets. 
The assets of the Company and the Subsidiaries will include all of the assets
and properties necessary or required in, or otherwise material to, the conduct
of the businesses of each of them as currently conducted and as proposed to be
conducted, and such assets are in working condition, except where the failure
of such assets to be in working condition would not, singly or in the
aggregate, have a Material Adverse Effect.

 

(w)         
Insurance.  Immediately
following the consummation of the Transactions, each of the Company Entities
will have reasonably adequate insurance covering its properties, operations,
personnel and businesses against losses and risks in accordance with customary
industry practice, and all such insurance will be duly in force.

 

 

(x)           
Real Property.  Neither the
Company nor any of its Subsidiaries owns the fee interest in any real property. 
The Offering Circular contains a true and accurate description of all real
property leased by the Company or its Subsidiaries (collectively, the “Leased Properties”).  The Company or
its Subsidiaries enjoy peaceful and undisturbed possession of each of the
Leased Properties.  To the knowledge of the Company and its Subsidiaries,
there is no pending or contemplated condemnation, eminent domain or similar
proceeding which would affect any of the Leased Properties in any way
whatsoever.  Each Leased Property is subject to a lease, license or other
agreement (collectively, the “Existing Leases”)
which is in full force and effect, and no party thereto is in default or breach
under any such Existing Lease.  No event has occurred which, with the
passage of time or the giving of notice or both, would cause a breach of or
default under any of such Existing Leases.

 

(y)          
Related Party Transactions. 
Except as disclosed in the Offering Circular, there are no related party
transactions that would be required to be disclosed in the Offering Circular if
the Offering Circular were a prospectus included in a registration statement on
Form S-1 filed under the Act.

 

(z)           
Security Interests.  Upon
execution and delivery of the Security Documents and the issuance of the Notes,
(i) the Security Documents will create, in favor of the Secured Party, for the
benefit of the holders of the Notes, a legal, valid and enforceable security
interest in (subject to Permitted Liens) all of the right, title and interest
of the Company and the Guarantors in the Collateral and the proceeds thereof,
and (ii) the Security Interests will be valid and perfected (to the extent
required thereunder), and, subject only to the Intercreditor Agreement, will
constitute first priority security interests in (subject to Permitted Liens)
such Collateral.  As of the Closing Date, the Collateral will be subject
to no Liens other than Permitted Liens (subject to the Intercreditor
Agreement).

 

(aa)        
Taxes.  All tax returns required
to be filed by the Company or any of the Subsidiaries in any jurisdiction
(including foreign jurisdictions) have been filed and, when filed, all such
returns were accurate in all material respects, and all taxes, assessments,
fees and other charges (including, without limitation, withholding taxes,
penalties and interest) due or claimed to be due from either of the Company or
from any of the Subsidiaries have been paid, other than those being contested
in good faith by appropriate proceedings, or those that are currently payable
without penalty or interest and, in each case, for which an adequate reserve or
accrual has been established on the books and records of the Company or the
Subsidiaries, as applicable, in accordance with generally accepted accounting
principles of the United States, consistently applied (“GAAP”).  There are no actual or
proposed additional tax

 

 

assessments for
any tax period against the Company or any of the Subsidiaries that could,
singly or in the aggregate, have a Material Adverse Effect.  The charges,
accruals and reserves on the books and records of the Company and the
Subsidiaries, as applicable, in respect of any tax liability for any tax
periods not finally determined are adequate to meet any assessments of tax or
re-assessments of additional tax for any such period.

 

(bb)        
Intellectual Property. 
Immediately following the consummation of the Transactions, the Company and the
Subsidiaries will own, possess or will be licensed under, and will have the
right to use, all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names (collectively, “Intellectual
Property”) currently used in, or necessary for the conduct of, their
businesses, free and clear of all Liens, other than Permitted Liens.  To
the knowledge of the Company Entities, no claims have been asserted by any
person challenging the use of any such Intellectual Property by the Company or
the Subsidiaries or questioning the validity or effectiveness of any license or
agreement related thereto, and there is no valid basis for any such claim, and
the use of such Intellectual Property by the Company and the Subsidiaries will
not infringe on the Intellectual Property rights of any other person.

 

(cc)        
Accounting Controls.  Each
of the Company and the Subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) material
transactions are executed in accordance with management’s general or specific
authorization, (ii) material transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP, and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any material differences.

 

(dd)        
Financial Statements.  The
audited historical consolidated financial statements and related notes of the
Company and the Subsidiaries contained in the Offering Circular (the “Company Audited Financial Statements”) and
the unaudited condensed consolidated financial statements and related notes of
the Company and the Subsidiaries contained in the Offering Circular (the “Company Interim Financial Statements” and,
together with the Company Audited Financial Statements, the “Company Financial Statements”) present
fairly the consolidated financial position, results of operations and cash
flows of the Company and the Subsidiaries, as of the respective dates and for
the respective periods to which they apply, and, except

 

 

as disclosed in
the Offering Circular, have been prepared in accordance with GAAP consistently
applied throughout the periods involved and the requirements of Regulation S-X
that would be applicable if the Offering Circular were a prospectus included in
a registration statement on Form S-1 filed under the Act (the “S-X Requirements”).  The summary
historical financial data included in the Offering Circular for the Company and
the Subsidiaries have been prepared on a basis consistent with that of the
Company Financial Statements and present fairly the financial position and
results of operations of the Company and the Subsidiaries, on a consolidated
basis, as of the respective dates and for the respective periods indicated.

 

The
pro forma consolidated financial information and related notes included in the
Offering Circular (w) except as disclosed in the Offering Circular, comply with
the S-X Requirements and all other rules and guidelines of the Commission with
respect to pro forma financial statements, (x) present fairly the pro forma
consolidated financial position and results of operations of the Company and
the Subsidiaries as of the dates and for the periods indicated, after giving
effect to the Transactions, (y) have been prepared on a basis consistent with
the Company Financial Statements, except for the pro forma adjustments
specified therein, and (z) are based on good faith, reasonable estimates and
assumptions of the Company.  The summary pro forma financial data included
in the Offering Circular have been derived from such pro forma financial
information and present fairly the pro forma consolidated financial position
and results of operations of the Company and the Subsidiaries as of the respective
dates and for the respective periods indicated.

 

The
statistical and market and industry related data included in the Offering
Circular are based on or derived from sources the Company believes to be
reliable and accurate.  Each of The Hanke Group, P.C. and
PricewaterhouseCoopers LLP are independent public accountants with respect to
the Company Entities.

 

(ee)        
No Material Adverse Change. 
Subsequent to the respective dates as of which information is given in the
Offering Circular, except as disclosed in the Offering Circular, (i) neither
the Company nor any of the Subsidiaries has incurred any liabilities, direct or
contingent, that are material, singly or in the aggregate, to any of them, or
has entered into any material transactions not in the ordinary course of
business, (ii) there has not been any decrease in the capital stock, or any
material increase in long-term indebtedness or any increase in short-term
indebtedness of the Company or any of the Subsidiaries, or any payment of or declaration
to pay any dividends or any other distribution with respect to any of the
Company or the Subsidiaries, and (iii) there has not been any material adverse
change in the properties, business, prospects, operations, earnings, assets,
liabilities or condition (financial or

 

 

otherwise) of the
Company and the Subsidiaries taken as a whole (each of clauses (i), (ii) and
(iii), a “Material Adverse Change”). 
Except as disclosed in the Offering Circular, there is no event that has
occurred or that is reasonably likely to occur which, if it were to occur,
could reasonably be expected, singly or in the aggregate, to have a Material
Adverse Effect or result in a Material Adverse Change.

 

(ff)          
Ratings.  No “nationally
recognized statistical rating organization” as such term is defined for
purposes of Rule 436(g)(2) under the Act (i) has imposed (or has informed the
Company or any Guarantor that it is considering imposing) any condition
(financial or otherwise) on the Company’s or any Guarantor’s retaining any
rating assigned to any securities of the Company or any Guarantor, or (ii) has
indicated to the Company or any Guarantor that it is considering (A) the
downgrading, suspension, or withdrawal of, or any review for a possible change
that does not indicate the direction of the possible change in, any rating so
assigned, or (B) any change in the outlook for any rating of any securities of
the Company or any Guarantor.

 

(gg)        
Solvency.  The Company and
each Guarantor is incurring its respective indebtedness under the Series A
Notes and the Guarantees for proper purposes and in good faith. 
Immediately before and after giving effect to the issuance of the Series A
Notes, (i) the assets of the Company and the Subsidiaries (including the Guarantors),
considered as a whole and as a going concern, at a fair valuation, will exceed
the sum of their debts, taken as a whole; (ii) the present fair salable value
of the assets of the Company and the Subsidiaries (including the Guarantors),
considered as a whole and as a going concern, will exceed the amount required
to pay their liability on their debts, taken as a whole; (iii) the Company will
have adequate capital with which to conduct its present and anticipated
businesses; and (iv) neither the Company nor any Guarantor will intend to incur
or believe or reasonably should believe that it will incur debts beyond its
ability to pay as those debts become due.  The Company is not aware of any
reason why it would be inappropriate to consider, for purposes of clauses (i)
and (ii) above, the Company and the Subsidiaries as a going concern.  For
purposes of this paragraph, “debts” includes contingent and unliquidated debts.

 

(hh)        
No Solicitation.  Neither
the Company nor any of its affiliates nor anyone acting on their behalf has (i)
taken, directly or indirectly, any action designed to cause or to result in, or
that has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Notes or to facilitate the
sale or resale of any of the Notes, (ii) sold, bid for, purchased, or paid
anyone any compensation for soliciting purchases of, any of the Notes, or (iii)
paid or agreed to pay to any person any

 

 

compensation for
soliciting another to purchase any other securities of the Company.

 

(ii)          
No Registration.  No
registration under the Act and no qualification of the Indenture under the TIA
is required for the sale of the Series A Notes and the Guarantees to the
Initial Purchasers as contemplated hereby or for the Exempt Resales, assuming
(i) that the purchasers in the Exempt Resales are Eligible Purchasers, (ii) the
accuracy of the Initial Purchasers’ representations contained in Section 7, and
(iii) the accuracy of the representations made by each Accredited Investor that
purchases the Series A Notes pursuant to an Exempt Resale as set forth in the
Accredited Investor Letter.  No form of general solicitation or general
advertising (as such terms are defined in Regulation D under the Act) was used
by the Company or any of its affiliates or any of its representatives in
connection with the offer and sale of any of the Series A Notes or in
connection with Exempt Resales.  No securities of the same class as the
Series A Notes have been offered, issued or sold by the Company or any of its
affiliates within the six-month period immediately prior to the date hereof.

 

(jj)          
ERISA.  Except as set forth
in Schedule 4 hereto, neither the Company nor any of its “Affiliates”
maintains a plan that is intended to qualify under Section 401(a) of the Code,
or is a “party in interest” or a “disqualified person” with respect to any
employee benefit plans.  No condition exists or event or transaction has
occurred in connection with any employee benefit plan that could result in the
Company or any such “Affiliate” incurring any liability, fine or penalty that
could, singly or in the aggregate, have a Material Adverse Effect. 
Neither the Company nor any trade or business under common control with the Company
(for purposes of Section 414(c) of the Code) maintains any employee pension
benefit plan that is subject to Title IV of the Employee Retirement Income Act
of 1974, as amended, or the rules and regulations promulgated thereunder (“ERISA”).

 

The
terms “employee benefit plan,” “employee pension benefit plan,” and “party in
interest” shall have the meanings assigned to such terms in Section 3 of
ERISA.  The term “Affiliate” shall have the meaning assigned to such term
in Section 407(d)(7) of ERISA, and the term “disqualified person” shall have
the meaning assigned to such term in section 4975 of the Internal Revenue Code
of 1986, as amended, or the rules, regulations and published interpretations
promulgated thereunder (collectively the “Code”).

 

(kk)        
Investment Company Act and Other Federal
Regulations.  None of the Company nor any of the Subsidiaries
has taken, and none of them will take, any action that may cause this Agreement
or the issuance of the Series A Notes to, and none of the Transactions will,
violate or result in a violation of

 

 

Section 7 of the
Exchange Act (including, without limitation, Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System).  Neither the Company
nor any Subsidiary is, or shall become upon the consummation of the Offering
and sale of the Series A Notes and the application of the net proceeds thereof
as described in the Offering Circular, or the consummation of any of the other
Transactions, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

(ll)          
No Brokers.  Neither of the
Company nor any of the Subsidiaries has engaged any broker, finder, commission agent
or other person (other than the Initial Purchasers) in connection with the
Transactions and neither of the Company or any of the Subsidiaries is under any
obligation to pay any broker’s fee or commission in connection with the
Transactions (other than commissions and fees to the Initial Purchasers as set
forth in the Offering Circular).

 

(mm)      
No Labor Disputes.  Except
as disclosed in the Offering Circular or as otherwise would not, singly or in
the aggregate, have a Material Adverse Effect, (i) none of the Company Entities
is engaged in any unfair labor practice, (ii) there is no unfair labor practice
complaint or other proceeding pending or, to the knowledge of the Company
Entities, threatened against the Company or any of the Subsidiaries before the
National Labor Relations Board or any state, local or foreign labor relations
board or any industrial tribunal, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending or,
to the knowledge of the Company Entities, threatened, (iii) there is no strike,
labor dispute, slowdown or stoppage pending or, to the knowledge of the Company
Entities, threatened against any of the Company Entities, and (iv) there is no
union representation question existing with respect to the employees of either
of the Company or any of the Subsidiaries, and, to the knowledge of the Company
Entities, no union organizing activities are taking place.

 

(nn)        
Environmental Laws.  Except
as disclosed in the Offering Circular or as otherwise would not, singly or in
the aggregate, have a Material Adverse Effect or otherwise require disclosure
in the Offering Circular, (i) neither the Company nor any of the Subsidiaries
has been or is in violation of any federal, state or local laws and regulations
relating to pollution or protection of human health or the environment,
including, without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of toxic or hazardous substances, materials
or wastes, or petroleum and petroleum products (“Materials of Environmental Concern”), or otherwise relating to
the protection of human health and safety, or the use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern
(collectively,

 

 

“Environmental Laws”), which violation
includes, but is not limited to, noncompliance with, or lack of, any permits or
other environmental authorizations; (ii) there are no circumstances, either
past, present or that are reasonably foreseeable, that may lead to any such
violation in the future; (iii) neither the Company nor any of the Subsidiaries
has received any communication (written or oral), whether from a Governmental
Authority or otherwise, alleging any such violation; (iv) there is no pending
or threatened claim, action, investigation, notice (written or oral) or other
Proceeding by any person or entity alleging potential liability of either the
Company or any of the Subsidiaries (or against any person or entity for whose
acts or omissions the Company or any of the Subsidiaries is or may reasonably
be expected to be liable, either contractually or by operation of law) for
investigatory, cleanup, or other response costs, or natural resources or
property damages, or personal injuries, attorney’s fees or penalties relating
to (A) the presence, or release into the environment, of any Materials of
Environmental Concern at any location, or (B) circumstances forming the basis
of any violation or potential violation, of any Environmental Law
(collectively, “Environmental Claims”);
and (v) there are no past or present actions, activities, circumstances,
conditions, events or incidents that could form the basis of any Environmental
Claim.

 

In the
ordinary course of business, the Company and each of the Subsidiaries, as
appropriate, (i) conducts a periodic review of the effect of Environmental Laws
on the business, operations and properties of each of the Company and each of
the Subsidiaries, in the course of which, or as a result of which, the Company
has identified and evaluated associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for cleanup,
closure of properties or compliance with Environmental Laws or any permit, license
or approval, any related constraints on operating activities, and any potential
liabilities to third parties); and (ii) has conducted environmental
investigations of, and has reviewed reasonably available information regarding,
the business, properties and operations of the Company and each of the
Subsidiaries, and of other properties within the vicinity of its business,
properties and operations, as appropriate for the circumstances of each such
property and operation; on the basis of such reviews, investigations and
inquiries, the Company has reasonably concluded that any costs and liabilities
associated with such matters would not have, singularly or in the aggregate, a
Material Adverse Effect, except as disclosed in the Offering Circular or
otherwise require disclosure in the Offering Circular.

 

(oo)        
Regulation S.  None of the
Company Entities nor any of their respective affiliates or any person acting on
its or their behalf (other than the Initial Purchasers, as to whom the Company
Entities make no representation) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S under the Act (“Regulation S”) with respect to the Series A
Notes

 

 

or the Guarantees,
and each of them has complied with the other requirements and conditions of
Rules 903(a) and 903(b)(3) under Regulation S.

 

(pp)        
Representations and Warranties. 
No statement, representation or warranty made by any of the Company Entities in
any of the Transaction Documents or in any certificate, document or instrument
required by any of the Transaction Documents to be delivered to the Initial
Purchasers was or will be, when made, inaccurate, untrue or incorrect in any
material respect.  Each certificate signed by any officer of any of the
Company Entities and delivered to the Initial Purchasers or counsel for the
Initial Purchasers in connection with the Transactions shall be deemed to be a
representation and warranty by such Company Entities to the Initial Purchasers
as to the matters covered thereby.

 

7.     Representations and Warranties of the Initial
Purchasers.  Each Initial Purchaser, severally but not jointly, represents and
warrants to the Company and the Guarantors that:

 

(a)          
QIB or Accredited Investor. 
It is either a QIB or an Accredited Investor, in either case, with such
knowledge and experience in financial and business matters as is necessary in
order to evaluate the merits and risks of an investment in the Series A Notes.

 

(b)          
Eligible Purchasers.  It (i)
is not acquiring the Series A Notes with a view to any distribution thereof
that would violate the Act or the securities laws of any state of the United
States or any other applicable jurisdiction, and (ii) will be soliciting offers
for the Series A Notes only from, and will be reoffering and reselling the
Series A Notes only to, (A) persons in the United States whom it reasonably
believes to be QIBs in reliance on the exemption from the registration
requirements of the Act provided by Rule 144A under the Act, (B) Accredited
Investors that execute and deliver to each of the Company and the Initial
Purchasers an Accredited Investor Letter or (C) Regulation S Purchasers in
Offshore Transactions in reliance upon Regulation S under the Act.

 

(c)          
No General Solicitation.  No
form of general solicitation or general advertising within the meaning of Rule
502(c) under the Act has been or will be used by the Initial Purchasers or any
of their representatives in connection with the offer and sale of any of the
Series A Notes.

 

(d)          
Power and Authority.  It has
all requisite power and authority to enter into, deliver and perform its
obligations under this Agreement and the Registration Rights Agreement and each
of this Agreement and the Registration Rights Agreement has been duly and
validly authorized by it.

 

 

(e)          
Directed Selling Efforts. 
Such Initial Purchaser and its affiliates or any person acting on its or their
behalf have not engaged and will not engage in any directed selling efforts
within the meaning of Regulation S with respect to the Series A Notes or the
Guarantees.

 

(f)           
Offshore Transactions.  The
Series A Notes offered and sold by such Initial Purchaser pursuant hereto in
reliance on Regulation S have been and will be offered and sold only in
Offshore Transactions.

 

(g)          
Regulation S Offering Restrictions. 
Such Initial Purchaser agrees that it has not offered or sold and will not
offer or sell the Series A Notes in the United States or to, or for the benefit
or account of, a U.S. Person (other than a distributor), in each case, as
defined in Rule 902 under the Act (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering of the Series A Notes pursuant hereto and the Closing Date, other than
in accordance with Regulation S of the Act or another exemption from the
registration requirements of the Act.  Such Initial Purchaser agrees that,
during such 40-day restricted period, it will not cause any advertisement with
respect to the Series A Notes (including any “tombstone” advertisement) to be
published in any newspaper or periodical or posted in any public place and will
not issue any circular relating to the Series A Notes, except such
advertisements as permitted by and include the statements required by
Regulation S.

 

(h)          
Notice Required.  Such
Initial Purchaser agrees that, at or prior to confirmation of a sale of Series
A Notes by it to any distributor, dealer or person receiving a selling
concession, fee or other remuneration during the 40-day restricted period
referred to in Rule 903(b)(3) under the Act, it will send to such distributor,
dealer or person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:

 

“The Series A
Notes covered hereby have not been registered under the U.S. Securities Act of
1933, as amended (the “Securities Act”),
and may not be offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of your distribution at any
time or (ii) otherwise until 40 days after the later of the commencement of the
Offering and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A under the Securities Act or
to institutional “accredited investors,” as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) in transactions that are exempt from the
registration requirements of the Securities Act), and in connection with any
subsequent sale by you of the Series A

 

 

Notes covered
hereby in reliance on Regulation S during the period referred to above to any
distributor, dealer or person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the foregoing effect.
 Terms used above have the meanings assigned to them in Regulation S.”

 

(i)           
Regulation S Security.  Such
Initial Purchaser agrees that the Series A Notes offered and sold in reliance
on Regulation S will be represented upon issuance by a global security that may
not be exchanged for definitive securities until the expiration of the 40-day
restricted period referred to in Rule 903(b)(3) of the Act and only upon
certification of beneficial ownership of such Series A Notes by non-U.S.
persons or U.S. persons who purchased such Series A Notes in transactions that
were exempt from the registration requirements of the Act.

 

8.    
Indemnification.

 

(a)          
Indemnification of Initial Purchasers. 
Each of the Company Entities shall, jointly and severally, without limitation
as to time, indemnify and hold harmless each of the Initial Purchasers and each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) any of the Initial Purchasers (any of such
persons being hereinafter referred to as a “controlling
person”), and the respective officers, directors, partners,
employees, representatives and agents of any of the Initial Purchasers and any
such controlling person (collectively, the “Purchaser
Indemnified Parties”), to the fullest extent lawful, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, costs of preparation and reasonable attorneys’ fees) and
expenses (including, without limitation, costs and expenses incurred in
connection with investigating, preparing, pursuing or defending against any of
the foregoing) (collectively, “Losses”),
as incurred, that arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Circular or the Offering Circular (or any amendment or supplement
thereto) or (ii) any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided, that neither the Company nor any
Guarantor shall be liable under the indemnity provided in this Section 8(a) to
any Purchaser Indemnified Party for any Losses that (A) result solely from an
untrue statement of a material fact contained in, or the omission of a material
fact from, any Preliminary Offering Circular, which untrue statement or
omission was completely corrected in the Offering Circular (as then amended or
supplemented) if it shall have been determined by a court of competent

 

 

jurisdiction by
final and nonappealable judgment that (1) such Purchaser Indemnified Party sold
the Notes to the person alleging such Loss and failed to send or give, at or
prior to the written confirmation of such sale, a copy of the Offering Circular
(as then amended or supplemented), if required by law to have so delivered it;
and (2) the Company had previously furnished copies of the corrected Offering
Circular to such Purchaser Indemnified Party within a reasonable amount of time
prior to such sale or such confirmation, and (3) the corrected Offering
Circular, if delivered, would have been a complete defense against the person
asserting such Loss; or (B) are based on an untrue statement or omission or
alleged untrue statement or omission  or alleged omission made in reliance
on and in conformity with the Furnished Information.

 

(b)          
Indemnification of the Company Entities. 
Each of the Initial Purchasers shall, severally but not jointly, indemnify and
hold harmless each of the Company Entities and each of their controlling
persons and the respective members, managers, officers, directors, partners,
employees, representatives and agents of the Company Entities and any such
controlling person to the same extent as the foregoing indemnity from the
Company Entities to each of the Purchaser Indemnified Parties stated in Section
8(a), but only with respect to Losses that arise out of or are based upon an
untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with the Furnished Information. 
Notwithstanding the foregoing, any liability of an Initial Purchaser hereunder
shall be limited to an amount not to exceed the excess (such excess, the “Aggregate Amount”) of (i) the aggregate
gross proceeds received by such Initial Purchaser from the sale of the Series A
Notes over (ii) the sum of (A) the aggregate price at which such Initial
Purchaser purchased the Series A Notes from the Company and (B) the amount of
any Losses that such Initial Purchaser or such Initial Purchaser’s 
Purchaser Indemnified Parties otherwise have been required to pay by reason of
such untrue or alleged untrue statement of such omission or alleged omission.

 

(c)          
Actions Against Parties; Notification. 
If any Proceeding shall be brought or asserted against any person entitled to
indemnification hereunder (an “Indemnified
Party”), such Indemnified Party shall give prompt written notice to
the party or parties from which such indemnification is sought (the “Indemnifying Parties” and each, an “Indemnifying Party”); provided, that the failure to so notify
the Indemnifying Parties shall not relieve any of the Indemnifying Parties from
any obligation or liability except to the extent (but only to the extent) that
it shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal) that such Indemnifying Party has been
prejudiced materially by such failure.

 

The
Indemnifying Parties shall have the right, exercisable by giving written notice
to an Indemnified Party, within 20 Business Days after

 

 

receipt of written
notice from such Indemnified Party of such Proceeding, to assume, at their
expense, the defense of any such Proceeding; provided,
that an Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or parties unless: (i) the Indemnifying Parties have agreed
to pay such fees and expenses; (ii) the Indemnifying Parties shall have failed
promptly to assume the defense of such Proceeding or shall have failed to
employ counsel reasonably satisfactory to such Indemnified Party; or (iii) the
named parties to any such Proceeding (including any impleaded parties) include
both such Indemnified Party and one or more Indemnifying Parties (or any
affiliates or controlling persons of any of the Indemnifying Parties), and such
Indemnified Party shall have been advised by counsel that there may be one or
more defenses available to such Indemnified Party that are in addition to, or
in conflict with, those defenses available to the Indemnifying Party or such
affiliate or controlling person (in which case, if such Indemnified Party
notifies the Indemnifying Parties in writing that it elects to employ separate
counsel at the expense of the Indemnifying Parties, the Indemnifying Parties
shall not have the right to assume the defense thereof and the reasonable fees
and expenses of such counsel shall be at the expense of the Indemnifying
Parties; it being understood, however, that, the Indemnifying Parties shall
not, in connection with any one such Proceeding or separate but substantially
similar or related Proceedings in the same jurisdiction, arising out of the
same general allegations or circumstances, be liable for the fees and expenses
of more than one separate firm of attorneys (together with appropriate local
counsel) at any time for such Indemnified Party).

 

None
of the Indemnifying Parties shall, without the prior written consent of the
Indemnified Party, consent to entry of any judgment in or enter into any
settlement of any pending or threatened Proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Party is a party thereto) unless such judgment or settlement
includes, as an unconditional term thereof, the giving by the claimant or
plaintiff to each Indemnified Party of a release, in form and substance
reasonably satisfactory to the Indemnified Party, from all Losses that may
arise from such Proceeding or the subject matter thereof (whether or not any
Indemnified Party is a party thereto).

 

(d)          
Contribution.  If the
indemnification provided for in this Section 8 is unavailable to an Indemnified
Party or is insufficient to hold such Indemnified Party harmless for any Losses
in respect of which this Section 8 would otherwise apply by its terms (other
than by reason of exceptions provided in this Section 8), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute
to the amount paid or payable by such Indemnified Party as a result of such
Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the

 

 

Subsidiaries, on
the one hand, and the Initial Purchasers, on the other hand, from the Offering
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company Entities, on the one hand, and the Initial Purchasers, on the
other hand, in connection with the actions, statements or omissions that
resulted in such Losses, as well as any other relevant equitable
considerations.  The relative benefits received by the Company Entities,
on the one hand, and the Initial Purchasers, on the other hand, shall be deemed
to be in the same proportion as the total net proceeds from the Offering
(before deducting expenses) received by the Company Entities, on the one hand,
and the total discounts and commissions received by the Initial Purchasers, on
the other hand, bear to the total price of the Series A Notes in Exempt Resales
as set forth on the cover page of the Offering Circular.  The relative
fault of the Company Entities, on the one hand, and the Initial Purchasers, on
the other hand, shall be determined by reference to, among other things,
whether any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or any Subsidiary, on the one hand, or the Initial Purchasers, on
the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.  The amount paid or payable by an Indemnified Party as a result
of any Losses shall be deemed to include any legal or other fees or expenses
incurred by such party in connection with any Proceeding, to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 8 was available to such party.

 

Each
party hereto agrees that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8(d), the Initial Purchasers
shall not be required to contribute, in the aggregate, any amount in excess of
the Aggregate Amount.  No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

 

(e)          
Nonexclusive Remedy. The
indemnity and contribution agreements contained in this Section 8 are in
addition to any liability that any of the Indemnifying Parties may otherwise
have to the Indemnified Parties, and do not limit in any way rights or remedies
which may otherwise be available at law or in equity.

 

 

9.     Conditions.

 

(a)    
Conditions to Obligations of Initial
Purchasers.  The obligations of the Initial Purchasers to
purchase the Series A Notes under this Agreement are subject to the
satisfaction or waiver of each of the following conditions:

 

(i)           
Representations and Warranties of Company
Entities.  All the representations and warranties of each of
the Company Entities in this Agreement and in each of the Transaction Documents
to which it is a party shall be true and correct in all material respects
(other than representations and warranties with a Material Adverse Effect
qualifier or other materiality qualifier, which shall be true and correct as
written) at and as of the Closing Date after giving effect to the Transactions
with the same force and effect as if made on and as of such date.  On or
prior to the Closing Date, each of the Company Entities shall have performed or
complied in all material respects with all of the agreements and satisfied in
all material respects all conditions on their respective parts to be performed,
complied with or satisfied pursuant to the Transaction Documents.

 

(ii)          
Contents of Offering Circular. 
The Offering Circular as of its date did not, and without giving effect to any
amendment or supplement thereto, as of the Closing Date does not, and each
supplement or amendment thereto as of its date did not, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided,
that the foregoing shall not apply to any statements or omissions made by the
Company in reliance on and in conformity with the Furnished Information.

 

(iii)         
Availability of Offering Circular. 
The Offering Circular shall have been printed and copies made available to the
Initial Purchasers not later than 12:00 noon, New York City time, on the second
Business Day following the date of this Agreement or at such later date and
time as the Initial Purchasers may approve.

 

(iv)         
No Injunction.  No
injunction, restraining order or order of any nature by a Governmental
Authority shall have been issued as of the Closing Date that would prevent or
interfere with the issuance and sale of the Series A Notes and the Guarantees
or the consummation of any of the Transactions; and no stop order suspending
the qualification or exemption from qualification of any of the Series A Notes
in any jurisdiction shall have been issued and no Proceeding for that purpose
shall have been commenced or be pending or contemplated.

 

(v)          
No Proceedings.  No action
shall have been taken and no Applicable Law shall have been enacted, adopted or
issued that would,

 

 

as of the Closing
Date, prevent the consummation of any of the Transactions.  No Proceeding
shall be pending or threatened other than Proceedings that (A) if adversely
determined would not, singly or in the aggregate, adversely affect the issuance
or marketability of the Series A Notes, and (B) would not, singly or in the
aggregate, have a Material Adverse Effect.

 

(vi)         
No Material Adverse Change. 
Since the date as of which information is given in the Offering Circular
(without giving effect to any amendment thereto or supplement thereto), there
shall not have occurred any change in the properties, business, prospects,
operations, earnings, assets, liabilities or condition (financial or otherwise)
of the Company and the Subsidiaries taken as a whole that, in the Initial
Purchasers’ judgment, is material and adverse and could, in the Initial
Purchasers’ judgment, (i) make it impracticable or inadvisable to proceed with
the Offering or delivery of the Series A Notes, including the Exempt Resales,
on the terms and in the manner contemplated in the Offering Circular or (ii)
materially impair the investment quality of the Notes

 

(vii)        
PORTAL; Ratings.  The Notes
shall have (A) been designated PORTAL securities in accordance with the rules
and regulations adopted by the NASD relating to trading in the PORTAL market,
and (B) received a rating of “B2” and “B+” from Standard & Poor’s
Corporation and Moody’s Investors Service, Inc., respectively.

 

(viii)       
Maintenance of Rating.  As
of the Closing Date, (i) there shall not have occurred any downgrading,
suspension or withdrawal of, nor shall any notice have been given of any
potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of any
securities of the Company (including, without limitation, the placing of any of
the foregoing ratings on credit watch with negative or developing implications
or under review with an uncertain direction) by any “nationally recognized
statistical rating organization” as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any change, nor
shall any notice have been given of any potential or intended change, in the
outlook for any rating of any securities of the Company by any such rating
organization and (iii) no such rating organization shall have given notice that
it has assigned (or is considering assigning) a lower rating to the Notes than
that set forth in Section 9(a)(vii)(B) above.

 

(ix)          
Officers’, Secretary’s and Solvency
Certificates.  The Initial Purchasers shall have received on
the Closing Date (A) certificates dated the Closing Date, signed by  (1)
the Chief Executive Officer, and (2) the principal financial or accounting
officer of each of the Company Entities, on

 

 

behalf of such
Company Entity, (x) confirming the matters set forth in paragraphs (i), (ii),
(iv), (v), (viii) and (xv) of this Section 9(a) and (y) to the effect that
since the date as of which information is given in the Offering Circular
(without giving effect to any amendment thereto or supplement thereto), there
shall not have occurred any material adverse change in the properties,
business, prospects, operations, earnings, assets, liabilities or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a whole,
(B)  a certificate, dated the Closing Date, signed by the Secretary of
each of the Company Entities, certifying such matters as the Initial Purchasers
may reasonably request, and (C) a certificate of solvency, dated the Closing
Date, signed by the principal financial or accounting officer of the Company
Entities substantially in the form previously approved by the Initial
Purchasers.

 

(x)           
Opinions of Counsel.  The
Initial Purchasers shall have received a favorable opinion (in form and
substance satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers), dated the Closing Date, of each of the following: (A) Winston
& Strawn LLP, special counsel to the Company Entities, containing opinions
substantially to the effect of the opinions set forth in Exhibit A hereto; and
(B) Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the
Initial Purchasers.

 

(xi)          
Accountants’ Comfort Letters. 
The Initial Purchasers shall have received from each of The Hanke Group, P.C.
and PricewaterhouseCoopers LLP, independent public accountants with respect to
the Company, (1) a customary comfort letter, dated as of the date of the
Offering Circular, in form and substance satisfactory to the Initial
Purchasers, containing the information and statements of the type ordinarily
included in accountants’ “comfort letters,” with respect to the financial
statements of the Company and the Subsidiaries and certain financial
information with respect to the Company and the Subsidiaries contained in the
Offering Circular and (2) a customary comfort letter, dated the Closing Date,
in form and substance satisfactory to the Initial Purchasers, to the effect
that each of The Hanke Group, P.C. and PricewaterhouseCoopers LLP reaffirms the
statements made in its letter furnished pursuant to clause (1) above, except
that the specified date referred to shall be a date not more than five days
prior to the Closing Date.

 

(xii)         
Execution and Delivery of Documents. 
The Transaction Documents shall have been executed and delivered by all parties
thereto and the Initial Purchasers shall have received a fully executed
original of each Transaction Document.

 

(xiii)        
Additional Transaction Documents. 
The Initial Purchasers or their counsel shall have received copies of all
opinions, certificates, letters and other documents delivered under or in
connection with

 

 

the Transactions.

 

(xiv)       
Security Documents.  The
Company shall have furnished to the Initial Purchasers the Security Documents
duly executed by the Company and the Guarantors party thereto, together with:

 

(A)         
proper financing statements, each in the form to be filed on the Closing Date
under the Uniform Commercial Code of all jurisdictions that may be deemed
necessary or desirable in order to perfect the Liens created by the Security
Documents, covering the Collateral and naming the Secured Party as secured
party, which financing statements shall be so filed on the Closing Date;

 

(B)          
contemplated requests for information and lien search results, listing all
effective financing statements filed in the jurisdictions referred to in
paragraph (A) above that name any of the Company Entities as debtor, together
with copies of such financing statements (none of which shall cover the
Collateral described in the Security Documents);

 

(C)          
copies of duly executed payoff letters, UCC-3 termination statements, mortgage
releases, intellectual property releases and other collateral releases and
terminations, each in form and substance satisfactory to the Initial Purchasers
evidencing the release of each item of Collateral and the termination of all
Liens thereon (other than Liens created by the Indenture and the Security
Documents), and each such payoff letter, release and termination shall be in
full force and effect.

 

(D)         
any other documents required to be delivered to the Secured Party pursuant to
the Security Documents and reasonable evidence that all other actions necessary
or desirable to perfect and protect the Liens created by the Security Documents
have been taken.

 

(xv)        
Consummation of Transactions. 
Each of the Transactions shall have been consummated on terms that conform, and
each of the Transaction Documents shall conform, in all material respects, to
the description thereof in the Offering Circular.

 

(xvi)       
Permits.  All Permits
required to be obtained from, and all notices or declarations required to be
made with, any Governmental Authority to permit the issuance and sale of the
Series A Notes and the Guarantees in accordance with the terms of, and in the
aggregate principal amount set forth in, this Agreement shall have been
obtained and made, in each case free of any conditions other than those set
forth in this Agreement; and all

 

 

Permits required
to be obtained from, and all notices or declarations required to be made with,
any Governmental Authority to consummate the other Transactions contemplated by
the Transaction Documents shall have been obtained and made, in each case free
of any conditions other than those set forth in such Transaction Documents.

 

(xvii)      
Additional Documents. 
Counsel to the Initial Purchasers shall have been furnished with such documents
as they may reasonably require for the purpose of enabling them to review or
pass upon the matters referred to in this Section 9 and in order to evidence
the accuracy, completeness and satisfaction of the representations, warranties
and conditions contained in this Agreement.

 

(b)          
Conditions to the Company’s and the
Guarantors’ Obligations.  The obligations of the Company to
sell, and the obligations of the Guarantors to guarantee, the Series A Notes
under this Agreement are subject to the satisfaction or waiver of each of the
following conditions:

 

(i)           
Payment.  The Initial
Purchasers shall have delivered payment to the Company for the Series A Notes
pursuant to Sections 2 and 4 of this Agreement and shall have complied with all
other obligations and agreements required to be complied with by them hereunder
on or prior to the Closing Date.

 

(ii)          
Representations and Warranties. 
All of the representations and warranties of the Initial Purchasers in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date, with the same force and effect as if made on and as of such date.

 

(iii)         
No Injunctions.  No
injunction, restraining order or order of any nature by a Governmental
Authority shall have been issued as of the Closing Date that would prevent or
interfere with the issuance and sale of the Series A Notes and the Guarantees
or the consummation of any of the Transactions; and no stop order suspending
the qualification or exemption from qualification of any of the Series A Notes
in any jurisdiction shall have been issued and no Proceeding for that purpose
shall have been commenced or be pending or contemplated as of the Closing Date.

 

10.  Termination.  This Agreement shall become effective upon the
execution and delivery of this Agreement by each of the parties hereto. 
The Initial Purchasers may terminate this Agreement at any time prior to the
Closing Date by written notice to the Company if any of the following has
occurred:

 

 

(a)          
Failure to Satisfy Conditions. 
Any of the conditions contained in Section 9(a) is not fulfilled or is not
capable of being fulfilled on or prior to the Closing Date.

 

(b)          
Outbreak of Hostilities. 
Any outbreak or escalation of hostilities, any declaration of war by the United
States, any other calamity, emergency or crisis, any material adverse change in
economic conditions in or the financial markets of the United States or
elsewhere or any change or development involving a prospective change in
national or international  political, financial or economic conditions, in
each case the effect of which could make it, in the Initial Purchasers’
judgment, impracticable or inadvisable to market or proceed with the offering
or delivery of the Series A Notes on the terms and in the manner contemplated
in the Offering Circular or to enforce contracts for the sale of any of the
Series A Notes.

 

(c)          
Suspension of Trading.  The
suspension or limitation of trading generally in securities on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market or
any setting of limitations on prices for securities on any such exchange or on
the Nasdaq National Market.

 

(d)          
Enactment of Adverse Law. 
The enactment, publication, decree or other promulgation after the date hereof
of any Applicable Law that in the Initial Purchasers’ opinion materially and
adversely affects, or could materially and adversely affect, the properties,
business, prospects, operations, earnings, assets, liabilities or condition
(financial or otherwise) of the Company or any of the Subsidiaries.

 

(e)          
Banking Moratorium.  (i) The
declaration of a banking moratorium by federal, New York State or Delaware
authorities, or (ii) the taking of any action by any Governmental Authority
after the date hereof in respect of its monetary or fiscal affairs that in the
Initial Purchasers’ opinion could have a material adverse effect on the
financial markets in the United States or elsewhere and which could make it, in
the Initial Purchasers’ judgment, impracticable or inadvisable to market or
proceed with the offering or delivery of the Series A Notes on the terms and in
the manner contemplated in the Offering Circular or to enforce contracts for
the sale of any of the Series A Notes.

 

The respective indemnities, contribution and expense
reimbursement provisions and agreements, and representations, warranties and
other statements of the Company Entities and the Initial Purchasers set forth
in or made pursuant to this Agreement shall remain operative and in full force
and effect, and will survive, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of the Initial Purchasers or
any of the Company Entities, or any of their respective officers, directors,
members or managers or any of their respective

 

 

controlling
persons, (ii) acceptance of the Notes, and payment for them hereunder, and
(iii) any termination of this Agreement (including, without limitation, any
termination pursuant to this Section 10).  Without limiting the foregoing,
notwithstanding any termination of this Agreement, the Company Entities shall
be and shall remain jointly and severally liable (i) for all expenses that they
have agreed to pay pursuant to Section 5(f), and (ii) pursuant to Section 8.

 

11.  Default of Initial Purchasers.  If one of the Initial Purchasers
defaults in its obligations to purchase Notes hereunder and the aggregate
principal amount of the Notes that such defaulting Initial Purchaser agreed but
failed to purchase does not exceed 10% of the total principal amount of the
Notes, the non-defaulting Initial Purchaser may make arrangements satisfactory
to the Company for the purchase of such Notes by other persons, including the
non-defaulting Initial Purchaser, but if no such arrangements are made by the
Closing Date, the non-defaulting Initial Purchaser shall be obligated to
purchase the Notes that such defaulting Initial Purchaser agreed but failed to
purchase. If one Initial Purchaser so defaults and the aggregate principal
amount of the Notes with respect to which such default occurs exceeds 10% of
the total principal amount of the Notes and arrangements satisfactory to the
non-defaulting Initial Purchaser and the Company for the purchase of such Notes
by other persons are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of the non-defaulting
Initial Purchaser or the Company, except as provided in Section 10
hereof.  As used in this Agreement, the term “Initial Purchaser” includes
any person substituted for an Initial Purchaser under this Section 11. Nothing
herein will relieve a defaulting Initial Purchaser from liability for its
default.

 

12.  Miscellaneous.

 

(a)          
Notices.  Notices given
pursuant to any provision of this Agreement shall be addressed as
follows:  (i) if to any of the Company Entities, to The Wornick Company,
3900 North 10th Street, Suite 900, McAllen, Texas 78501, facsimile number (958)
882-7816, Attention:  Chief Executive Officer, with copies to Schulte Roth
& Zabel LLP, 919 Third Avenue, New York, New York 10022, facsimile number
(212) 593-5955, Attention: Benjamin M. Polk, Esq. and Winston & Strawn LLP,
200 Park Avenue, New York, New York 10166, facsimile number (212) 294-4700,
Attention:  David A. Sakowitz, Esq., and (ii) if to the Initial
Purchasers, to c/o Jefferies & Company, Inc., 11100 Santa Monica Boulevard,
10th Floor, Los Angeles, California 90025, Attention:  Lloyd Feller, Esq.,
with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand
Avenue, Suite 3400, Los Angeles, California 90071, facsimile number (213)
687-5600, Attention:  Nicholas P. Saggese, Esq. (provided, that any notice
pursuant to Section 8 hereof will be mailed, delivered, telegraphed or sent by
facsimile and confirmed to the party to be notified and its counsel), or in any
case to such other address as the person to be notified may have requested in
writing.

 

 

(b)          
Successors and Assigns. 
This Agreement has been and is made solely for the benefit of and shall be
binding upon each of the Company Entities, the Initial Purchasers and, to the
extent provided in Section 8, the controlling persons, officers, directors,
partners, employees, representatives and agents referred to in Section 8, and
their respective heirs, executors, administrators, successors and assigns, all
as and to the extent provided in this Agreement, and no other person shall
acquire or have any right under or by virtue of this Agreement.  The term
“successors and assigns” shall not include a purchaser of any of the Series A
Notes from the Initial Purchasers merely because of such purchase. 
Notwithstanding the foregoing, it is expressly understood and agreed that each
purchaser who purchases Series A Notes from the Initial Purchasers is intended
to be a beneficiary of the Company’s covenants contained in the Registration
Rights Agreement to the same extent as if the Notes were sold and those
covenants were made directly to such purchaser by the Company, and each such
purchaser shall have the right to take action against the Company to enforce,
and obtain damages for any breach of, those covenants.

 

(c)          
GOVERNING LAW.  THIS
AGREEMENT SHALL BE CONSTRUED AND INTERPRETED, AND THE RIGHTS OF THE PARTIES
SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAWS AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS
AND RULES.  EACH OF THE COMPANY ENTITIES HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS.  EACH OF THE COMPANY ENTITIES IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDINGS BROUGHT IN SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.  EACH OF THE COMPANY ENTITIES
IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS
IN ANY SUCH ACTION OR PROCEEDING

 

 

BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY
OR SUCH GUARANTOR, AS THE CASE MAY BE, AT THE ADDRESS SET FORTH HEREIN, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.  NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE INITIAL PURCHASERS TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY OF THE COMPANY ENTITIES IN ANY OTHER JURISDICTION.

 

(d)          
Counterparts.  This
Agreement may be signed in various counterparts which together shall constitute
one and the same instrument.

 

(e)          
Headings.  The headings in
this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.  When a reference is made in this
Agreement to a Section, paragraph, subparagraph, Schedule or Exhibit, such
reference shall mean a Section, paragraph, subparagraph, Schedule or Exhibit to
this Agreement unless otherwise indicated.

 

(f)           
Interpretation.  The words “include,” “includes,” and “including”
when used in this Agreement shall be deemed in each case to be followed by the
words “without limitation.” 
The phrases “the date of this Agreement,”
“the date hereof,” and terms of
similar import, unless the context otherwise requires, shall be deemed to refer
to June 24, 2004.   The words “hereof,”
“herein,” “herewith,”  “hereby” and “hereunder” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement.  The phrase “to the knowledge of the Company Entities”
means the actual knowledge, after due inquiry, of any of the directors or
officers of any of the Company Entities or any of their controlling
persons.  Unless the context otherwise requires, defined terms shall
include the singular and plural and the conjunctive and disjunctive forms of
the terms defined.

 

(g)          
Severability.  If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable best efforts
to find and employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision, covenant or
restriction.  It is hereby stipulated and declared to be the intention of
the parties that they would have executed the remaining terms,

 

 

provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.

 

(h)          
Amendment.  This Agreement
may be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may be given, provided
that the same are in writing and signed by each of the signatories hereto.

[signature pages follow]

 

 

Please confirm that the foregoing correctly sets forth
the agreement between the Company Entities and the Initial Purchasers.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  THE WORNICK COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas J. Campbell

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas J. Campbell

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
  RIGHT AWAY MANAGEMENT CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas J. Campbell

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas J. Campbell

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE WORNICK COMPANY RIGHT AWAY

  DIVISION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas J. Campbell

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas J. Campbell

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE WORNICK COMPANY RIGHT AWAY

  DIVISION, L.P.

  
	
   

  	
   

  	
  By: The Wornick Company Right Away Division, its

  General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  	
   Thomas J. Campbell

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas J. Campbell

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

ACCEPTED
AND AGREED TO:

 

	
  JEFFERIES & COMPANY, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  M. Brent Stevens

  	
   

  
	
   

  	
  Name:

  	
  M. Brent Stevens

  
	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  CIBC WORLD MARKETS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Brian S. Perman

  	
   

  
	
   

  	
  Name:

  	
  Brian S. Perman

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE
1

 

	
  Initial Purchaser

  	
   

  	
  Principal
  Amount of

  Notes to be Purchased

  	
   

  
	
  Jefferies
  & Company, Inc.

  	
   

  	
  $

  	
  100,000,000

  	
   

  
	
  CIBC
  World Markets Corp.

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  125,000,000

  	
   

  

 

 

SCHEDULE
2

GUARANTORS

 

	
  Name

  	
   

  	
  State
  of Organization

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The
  Wornick Company Right Away Division

  	
   

  	
  Delaware

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The
  Wornick Company Right Away Division, L.P.

  	
   

  	
  Delaware

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Right
  Away Management Corporation

  	
   

  	
  Delaware

  	
   

  

 

 

SCHEDULE
3

SUBSIDIARIES

 

	
  Name

  	
   

  	
  State
  of Organization

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The
  Wornick Company Right Away Division

  	
   

  	
  Delaware

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The
  Wornick Company Right Away Division, L.P.

  	
   

  	
  Delaware

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Right
  Away Management Corporation

  	
   

  	
  Delaware

  	
   

  

 

 

SCHEDULE
4

 

ERISA
PLANS

 

The Wornick Company Employee Stock Ownership Trust
(the “ESOT”)

The Wornick Company Employee Stock Ownership Plan (the
“ESOP”)Exhibit
10.2

 

INTERCREDITOR
AGREEMENT

 

This INTERCREDITOR
AGREEMENT, dated as of June 30, 2004 (this “Agreement”),
is made by and between U.S. BANK NATIONAL ASSOCIATION, in its capacity as
trustee under the Indenture (as defined below) and as secured party under the
Security Agreement (as defined in the Indenture) (together with its successors
in such capacities, the “Trustee”),
and TEXAS STATE BANK, as the lender (the “Bank”)
under the Credit Agreement (as defined below).

 

RECITALS

 

WHEREAS, The Wornick
Company, a Delaware corporation (the “Issuer”),
the Guarantors (as defined in the Indenture referred to below) and the Trustee
entered into that certain Indenture, dated as of the date hereof (as amended,
restated, supplemented, or otherwise modified from time to time, the “Indenture”), whereby indebtedness was
incurred by the Issuer, the repayment of which is guaranteed by the Guarantors
and secured by a continuing security interest in and lien on substantially all
of the assets of the Issuer and the Guarantors (other than the Excluded Assets
(defined therein)) (the “Collateral”);

 

WHEREAS, the Issuer, the
Guarantors and the Bank entered into that certain Loan Agreement, dated as of
the date hereof (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), whereby the Bank
agreed, upon the terms and conditions stated therein, to make loans and
advances to, or to issue letters of credit (or guaranties in respect thereof)
for the account of the Issuer, the repayment of which is secured by a
continuing security interest in and lien on the Collateral in accordance with
the Credit Agreement and all other Loan Documents (as defined in the Credit
Agreement) (collectively, the “Credit
Documents”);

 

WHEREAS, one of the conditions
of the Credit Agreement is that the security interest in the Collateral under
the Credit Documents be senior in priority to the security interest in the
Collateral under the Indenture Documents (defined below) in the manner and to
the extent provided for in this Agreement;

 

WHEREAS, the Trustee and
the Bank desire to enter into this Agreement concerning their respective rights
with respect to the priority of their respective security interests in the
Collateral; and

 

WHEREAS, the terms of the
Indenture permit the Issuer and the Guarantors to enter into the Credit
Agreement, and in connection therewith, authorize and direct the Trustee to
enter into an intercreditor agreement in the form of this Agreement.

 

NOW, THEREFORE, the
Parties hereby agree as follows:

 

ARTICLE
I

DEFINITIONS

 

Section
1.1                                  
Definitions.  In addition to the capitalized
terms defined above, as used in this Agreement, the following capitalized terms
are used:

 

 

“Credit Facility Indebtedness” means all
present and future Obligations (as defined in the Credit Agreement), contingent
or otherwise, of the Issuer and the Guarantors to the Senior Creditor arising
under or pursuant to the Credit Documents, including, in each case, interest,
fees, and expenses accruing after the initiation of any Insolvency Proceeding
(irrespective of whether allowed as a claim in such proceeding), and also
including the secured claims of the Senior Creditor in respect of the
Collateral in any Insolvency Proceeding.

 

“Enforcement Action” means, with respect to
the Trustee or the Senior Creditor, (a) the commencement of any action, whether
judicial or otherwise, for the enforcement of such Party’s rights and remedies
as a secured creditor with respect to the Collateral, including the
commencement of any receivership or foreclosure proceedings against, or any
other sale of, collection on, or disposition of, any Collateral, or any
exercise of remedies with respect to the Collateral under the Indenture
Documents or the Credit Documents; (b) notifying any third-party account
debtors of the Issuer, any Guarantor or any of their respective subsidiaries to
make payment directly to such Party or to any of its agents or other Persons
acting on its behalf; or (c) following the commencement of an Insolvency
Proceeding against the Issuer or any Guarantor, exercising any rights afforded
to secured creditors in a case under the Bankruptcy Code that directly relates
to or directly affects any of the Collateral.

 

“Enforcement Event” means the occurrence and
continuance of an Event of Default.

 

“Enforcement Event Notice” has the meaning
set forth in Section 3.2(a).

 

“Entitled Party” has the meaning set forth
in Section 4.1(a).

 

“Event of Default” has the meaning set forth
in the Financing Documents.

 

“Expiry Date” has the meaning set forth in Section
3.2(b)(i).

 

“Financing Documents” means the Indenture
Documents and the Credit Documents.

 

“Fully Paid” means the payment in cash or
cash equivalents in full of all obligations (other than inchoate indemnity
obligations that survive payment in full) under the Credit Documents or the
Indenture Documents, as the case may be, and in the case of the Credit
Documents, at such time when there shall no longer be any obligation to make
loans or advances or issue letters of credit (or guaranties in respect thereof)
thereunder and there shall no longer be any letter of credit (or guaranty in
respect thereof) outstanding thereunder or such letter of credit (or guaranty
in respect thereof) shall have been fully cash collateralized (in accordance
with the provisions of the Credit Documents).

 

“Indenture Documents” means the Indenture,
the Notes, the Security Documents and the Registration Rights Agreement, and
such other agreements, instruments and certificates executed and delivered (or
issued) by the Issuer or the Guarantors pursuant to the Indenture, as any or
all of the same may be amended, restated, supplemented or otherwise modified
from time to time.

 

“Insolvency Proceeding” means any proceeding
for the purposes of dissolution, winding up, liquidation, arrangement or
reorganization of the Issuer, any Guarantor, or any other subsidiary of the
Issuer, or its successors or assigns, whether in bankruptcy, insolvency,
arrangement, reorganization or receivership proceedings, or upon an assignment
for the benefit of

 

2

 

creditors or any other marshaling of the assets and
liabilities of the Issuer, any Guarantor, or any other subsidiary of the
Issuer, or its successors or assigns.

 

“Lien Priority” means, with respect to any
Lien in and to the Collateral, the order of priority of such Lien as specified
in Sections 2.1 and 2.2.

 

“Maximum Amount” means an aggregate amount
of Credit Facility Indebtedness incurred and outstanding at any time (plus any Refinancing Indebtedness incurred
to retire, defease, refinance, replace or refund such Indebtedness) of up to
the greater of (a) $15.0 million, plus
any Indebtedness owing to the Senior Creditor certified by the Issuer to the
Senior Creditor at the time of incurrence to be permitted under the Indenture
pursuant to clause (ii) of paragraph (g) or paragraph (h) of the definition of
“Permitted Indebtedness,” minus the
amount of any such Indebtedness certified by the Issuer to the Senior Creditor
to be (1) retired with the Net Cash Proceeds from any Asset Sale or Event of
Loss applied to permanently reduce the outstanding amounts or the commitments
with respect to such Indebtedness pursuant to Section 4.13 of the Indenture, or
(2) assumed by a transferee in an Asset Sale, and (b) the sum of (i) 85% of the
net book value of accounts receivable of the Issuer and the Subsidiaries, and
(ii) 65% of the net book value of inventory of the Issuer and the Subsidiaries,
in the case of each of clauses (b)(i) and (ii), as determined by the Issuer in
accordance with GAAP as of the date or dates of incurrence of such Indebtedness
under the Credit Agreement, and which Indebtedness is certified by the Issuer
to the Senior Creditor at the time of incurrence as permitted under the Indenture,
and including accounts receivable and inventory acquired with the proceeds of
the substantially concurrent incurrence of Indebtedness under the Credit
Agreement, plus in the instance
of either clause (a) or (b), all related interest, fees, indemnities, costs and
expenses.

 

“Notes” means the senior secured notes
issued under the Indenture.

 

“Party” means any signatory to this
Agreement.

 

“Secured Liability” means the Subordinated
Lien Indebtedness and the Credit Facility Indebtedness.

 

“Senior Creditor” means the Bank or, if
applicable, the administrative agent (or similar designation, if the Credit
Facility Indebtedness is syndicated among a group of lenders) under the Credit
Agreement.

 

“Subordinated Lien Indebtedness” means all
present and future obligations, contingent or otherwise, of the Issuer and the
Guarantors to the Trustee or the Holders arising under or pursuant to the
Indenture Documents, including, in each case, interest, fees and expenses
accruing after the initiation of any Insolvency Proceeding (irrespective of
whether allowed as a claim in such proceeding), and including the secured
claims of the Trustee or the Holders in respect of the Collateral in any
Insolvency Proceeding.

 

“Trigger Date” means the earlier of (i) the
date on which an event contemplated by clause (b) or (c) of the definition of
Trigger Event occurs, (ii) the date on which an Enforcement Event Notice is
delivered, and (iii) the final maturity date of the Credit Facility
Indebtedness (after giving effect to any extensions granted thereunder).

 

“Trigger Event” means:

 

(a)                     
the occurrence of an
Event of Default,

 

3

 

(b)                    
the acceleration of
the maturity of the Credit Facility Indebtedness by the Senior Creditor pursuant
to the Credit Agreement, or

 

(c)                     
the commencement of
any action or proceeding by the Senior Creditor, whether judicial or otherwise
(but excluding demands for payment or notices of default), for the enforcement
of the Senior Creditor’s rights and remedies under any of the Credit Documents,
including (i) commencement of any Enforcement Action against or any other sale
of, collection on or disposition of any Collateral, including any notification
to third parties to make payment directly to the Senior Creditor; (ii) exercise
of any right of set-off; (iii) commencement of any Insolvency Proceeding; and
(iv) commencement of any judicial action or proceeding against the Issuer or
any Guarantor to recover all or any part of the Credit Facility Indebtedness.

 

Section
1.2                                  
Indenture
Definitions. 
Undefined capitalized terms have the meanings assigned to them in the
Indenture.

 

Section
1.3                                  
Miscellaneous.  All definitions herein (whether
set forth herein directly or by reference to definitions in other documents)
shall be equally applicable to both the singular and the plural forms of the
terms defined.  The words “hereof,” “herein” or “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.  The term
“including” (and similar terms) means “including without limitation.”

 

ARTICLE
II

LIEN PRIORITY

 

Section
2.1                                  
Agreement to
Subordinate Liens. 
The Trustee hereby agrees that the Liens of the Trustee for the benefit of
itself and the Holders in and to the Collateral are and shall be subordinate in
priority to the Liens of the Senior Creditor in and to the Collateral securing
the Credit Facility Indebtedness up to, but not in excess of, the Maximum
Amount; provided that, the rights
of the Senior Creditor under this Agreement shall be void and of no further
force and effect if, and only to the extent that, the Liens of the Senior
Creditor in and to the Collateral are avoided, disallowed, set aside or
otherwise invalidated in any action or proceeding by a court, tribunal or
administrative agency of competent jurisdiction.  The subordination of the
Liens of the Trustee for the benefit of itself and the Holders in and to the
Collateral in favor of the Senior Creditor provided for herein shall not be
deemed to (a) subordinate the Liens of the Trustee to the Liens of any other
Person, or (b) subordinate the Subordinated Lien Indebtedness to any
Indebtedness of the Issuer or any of the Guarantors, including the Credit
Facility Indebtedness.

 

Section
2.2                                  
No Contest;
Excluded Assets. 
Each Party agrees that it will not attack or contest the validity, perfection,
priority or enforceability of the Liens of the other Party (and the Trustee
agrees that it will not contest the Senior Creditor’s good faith reliance on
any certification referenced in the definition of “Maximum Amount” made by the
Issuer to the Senior Creditor), or finance or urge any other Person to do so; provided that, either Party may enforce
its rights and privileges hereunder without being deemed to have violated this
provision.  Any provision contained in this Agreement to the contrary
notwithstanding, the terms and conditions of this Agreement shall not apply to
any property or assets (including property or assets that do not constitute
Collateral) that one Party has a Lien on and the other Party does not.

 

4

 

Section
2.3                                  
Exercise of
Rights.

 

(a)                     
The Trustee may
exercise, and nothing herein shall constitute a waiver of, any right it may
have at law or in equity to receive notice of, or to commence or join with any
creditor in commencing any Insolvency Proceeding; provided that, the exercise of any such right by the Trustee
shall be (i) subject to the Lien Priority and the application of proceeds of
Collateral under Section 3.4, and (ii) subject to the provisions of Sections
3.1 and 3.2.

 

(b)                    
Notwithstanding any
other provision hereof, the Trustee may make such demands or file such claims
as may be necessary to prevent the waiver or bar of such claims under
applicable statutes of limitations or other statutes, court orders or rules of
procedure.

 

Section
2.4                                  
Priority of
Liens. 
Irrespective of the order of recording of mortgages, financing statements,
security agreements or other instruments, and irrespective of the descriptions
of Collateral contained in the Financing Documents, including any financing
statements, the Parties agree among themselves that their respective Liens in
the Collateral shall be governed by the Lien Priority, which shall be controlling
in the event of any conflict between this Agreement and any of the Financing
Documents.

 

ARTICLE
III

ACTIONS OF THE PARTIES

 

Section
3.1                                  
Limitation on
Certain Actions. 
Subject to Section 3.2, until the earlier of (a) the date on which all
Credit Facility Indebtedness is Fully Paid, and (b) the first date following
the date on which the Maximum Amount of Credit Facility Indebtedness is Fully
Paid, the Trustee will not, without the prior written consent of the Senior
Creditor, take any Enforcement Action.

 

Section
3.2                                  
Standstill
Period.

 

(a)                     
If an Enforcement
Event with respect to the Indenture Documents has occurred and is continuing,
the Trustee, on behalf of the Holders, will give the Senior Creditor written
notice thereof (an “Enforcement Event Notice”).

 

(b)                    
The Trustee may,
subject to the Lien Priority and the application of all proceeds of the
Collateral in accordance with Section 3.4, take one or more Enforcement
Actions so long as:

 

(i)            
(A) an Enforcement
Event is continuing for more than 45 consecutive days after the delivery of an
Enforcement Event Notice (the “Expiry Date”);
(B) the Senior Creditor has not, on or before the Expiry Date, commenced one or
more Enforcement Actions, and (C) the Issuer or the Guarantor against which the
Trustee’s proposed Enforcement Action is to be taken is not the subject of an
Insolvency Proceeding; or

 

(ii)          (A) the Senior Creditor has commenced any
Enforcement Action on or prior to the Expiry Date and, at any time after the
Expiry Date, is no longer pursuing any Enforcement Actions, (B) no Insolvency
Proceeding is pending against the Issuer or any Guarantor against which the Trustee’s
proposed Enforcement Action is to be taken, and (C) the Enforcement

 

5

 

Event that was the subject of, or existing on the date
of, the Enforcement Event Notice is then continuing.

 

(c)                     
Except as expressly
provided for in this Agreement, nothing in this Agreement shall prevent the
Parties hereto from exercising any other remedy, or taking any other action,
under any of the Financing Documents.

 

Section
3.3                                  
Foreclosure.  Any Party taking a permitted
Enforcement Action may enforce its Financing Documents independently as to the
Issuer and each Guarantor and independently of any other remedy or security
such Party at any time may have or hold in connection with the Secured
Liabilities owing to it, and it shall not be necessary for such Party to
marshal assets in favor of the other Party or any other Person or to proceed
upon or against or exhaust any other security or remedy before proceeding to
enforce the Financing Documents.  Each of the Trustee (for so long as the
Credit Facility Indebtedness is not Fully Paid) and the Senior Creditor (for so
long as the Trustee and the Holders are owed any Subordinated Lien
Indebtedness) expressly waives any right to require the other Party to marshal
assets in its favor or to proceed against any Collateral provided by the Issuer
or any Guarantor, or any other property, assets, or collateral provided by the
Issuer, any Guarantor, or any other Person, and agrees that the Party taking
such permitted Enforcement Action may proceed against the Issuer, any
Guarantor, any Collateral or other property, assets, or other collateral
provided by any of them or by any other Person, in such order as it shall
determine in its sole and absolute discretion.  The foregoing notwithstanding: 
(a) with respect to the sale or other disposition of any Collateral, the Party
conducting such sale or other disposition agrees in favor of the other Party
that such sale or other disposition shall be conducted in a commercially reasonable
manner in accordance with any applicable law, including Article 9 of the
Uniform Commercial Code, and (b) the Senior Creditor agrees that, at such time
as all Credit Facility Indebtedness is Fully Paid, it shall thereupon promptly
cease all further Enforcement Actions.

 

Section
3.4                                  
Distribution.  Each Party agrees that, upon any
distribution as a result of an Enforcement Action, or the receipt of any other
payment or distribution with respect to the Collateral, the proceeds thereof
shall be distributed in the order of, and in accordance with, the following
priorities:

 

(a)           
FIRST:

 

(i)            
if the Enforcement
Action is taken by the Senior Creditor, to the payment of all reasonable costs
and expenses, commissions and taxes of the Senior Creditor incurred in
connection with taking any such Enforcement Action or other realization,
including all reasonable expenses (including attorneys’ fees and expenses),
liabilities and advances made or incurred by the Senior Creditor in connection
therewith;

 

(ii)          if the Enforcement Action is taken by the
Trustee, to the payment of all reasonable costs and expenses, commissions and
taxes of the Trustee incurred in connection with taking any such Enforcement
Action or other realization, including all reasonable expenses (including
attorneys’ fees and expenses), liabilities and advances made or incurred by the
Trustee in connection therewith;

 

6

 

(b)                    
SECOND, to the Senior
Creditor, until the earlier of (i) the Credit Facility Indebtedness being Fully
Paid, and (ii) the first time following the date at which the Maximum Amount of
Credit Facility Indebtedness is Fully Paid;

 

(c)                     
THIRD, to the
Trustee, until all Subordinated Lien Indebtedness is Fully Paid;

 

(d)                    
FOURTH, to the Senior
Creditor until all outstanding Credit Facility Indebtedness in excess of the
Maximum Amount is Fully Paid; and

 

(e)                     
FIFTH, to the Issuer
or the Guarantors, as applicable, or as a court of competent jurisdiction may
otherwise direct.

 

Section
3.5                                  
Notice of
Certain Events. 
Each Party agrees that it will notify the other Party, in writing, (a) if it
receives actual notice of the occurrence of a Trigger Event or Enforcement
Event, not later than seven days after the date of any such occurrence, and (b)
prior to its first exercising any remedies with respect to any portion of the
Collateral in connection with one or more Events of Default, provided that, if all such Events of
Default are cured or waived, such notice under this clause (b) will be given on
each other occasion that remedies are first exercised with respect to one or
more other Events of Default.  Notwithstanding the foregoing, (x) the
Senior Creditor shall not be obligated to provide such prior written notice if
exigent circumstances require that it act immediately to preserve, protect, or
obtain possession or control over the Collateral; provided that, in such event the Senior Creditor agrees to
provide the Trustee with written notice as soon as practicable following the
Senior Creditor first exercising any remedies with respect to the Collateral;
and (y) no Party shall incur any liability to the other under this Section
3.5 as a result of the failure
of such Party to provide any such notice so long as the failure to so provide
such notice was not the result of willful misconduct, bad faith or gross
negligence.

 

ARTICLE
IV

ENFORCEMENT OF PRIORITIES

 

Section
4.1                                  
In Furtherance
of Lien Priorities. 
Each Party agrees as follows:

 

(a)                     
All payments or
distributions of or with respect to the Collateral that are received by any
Party contrary to the provisions of this Agreement shall be segregated from
other funds and property held by such Party and shall be held in trust for the
Party entitled thereto (the “Entitled Party”)
in accordance with the provisions of Section 3.4 and such Party shall
forthwith pay over such remaining proceeds to the Entitled Party in the same
form as so received (with any necessary endorsement) to be applied (in the case
of cash) or held as Collateral (in the case of noncash property or securities)
in accordance with the provisions hereof and the provisions of the applicable
Financing Documents.

 

(b)                    
After the earlier of
(i) the date on which all Credit Facility Indebtedness is Fully Paid, and (ii)
the first date following the Trigger Date on which the Maximum Amount of Credit
Facility Indebtedness is Fully Paid, the Senior Creditor will promptly execute
and deliver all further instruments and documents, and take all further actions
that may be necessary, or that the Trustee may reasonably request, to permit
the Trustee to evidence the termination of the Lien Priority hereunder, or in
furtherance thereof; provided that,
(x) the Senior Creditor shall not be required to pay over any payment or
distribution, execute any

 

7

 

instruments or documents, or take any other action
referred to in this Section 4.1(b) to the extent that such action would
contravene any law, order or other legal requirement, and in the event of a
controversy or dispute, the Senior Creditor may interplead any payment or
distribution in any court of competent jurisdiction; and (y) the Senior
Creditor shall not incur any liability to the Trustee for failure to provide
any such further instruments and documents or take any further acts, so long as
the failure to provide any such further instruments and documents or take any
such further act was not the result of malfeasance, willful misconduct or gross
negligence.

 

(c)                     
Each Party is hereby
authorized to demand specific performance of this Agreement, whether or not the
Issuer or any Guarantor shall have complied with any of the provisions hereof
applicable to it, at any time when either Party shall have failed to comply
with the provisions of this Agreement applicable to it.  Each Party hereby
irrevocably waives any defense based on the adequacy of a remedy at law, which
might be asserted as a bar to such remedy of specific performance.

 

(d)                    
This Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Secured Liabilities is, other than as a result of any
intentional fraud or gross negligence of the applicable Party, rescinded or
must otherwise be returned by the applicable Party upon the insolvency,
bankruptcy or reorganization of the Issuer or any Guarantor or otherwise, all
as though such payment had not been made.

 

Section
4.2                                  
Perfection of
Possessory Security Interests.  For the limited purpose of perfecting the
security interests of the Parties in those types or items of Collateral in
which a security interest only may be perfected by possession or control, each
Party hereby appoints the other as its representative for the limited purpose
of possessing on its behalf any such Collateral that may come into the possession
or control of such other Party from time to time, and each Party agrees to act
as the other’s representative for such limited purpose of perfecting the
other’s security interest by possession or control through a representative; provided that, neither Party shall incur
any liability to the other by virtue of acting as the other’s representative
hereunder.  In this regard, any Party that is in possession or control of
any such item of Collateral agrees that if it elects to relinquish possession
or control of such item of Collateral it shall deliver possession or control
thereof to the other Party; provided
that, no Party shall be required to deliver any such item of Collateral or take
any other action referred to in this Section 4.2 to the extent that such
action would contravene any law, order or other legal requirements, and in the
event of a controversy or dispute, such Party may interplead any item of
Collateral in any court of competent jurisdiction.

 

Section
4.3                                  
Control of
Dispositions of Collateral and Effect thereof on Junior Liens.

 

(a)                     
Each Party hereby
agrees that any collection, sale, or other disposition of Collateral (whether
under the applicable Uniform Commercial Code or otherwise) by the Senior
Creditor shall be free and clear of any Lien of the Trustee in such Collateral;
provided that, the Trustee shall
retain a Lien (having the same priority as the Lien it previously had on the
item of Collateral that was collected, sold or otherwise disposed of) on the
proceeds of such collection, sale, or other disposition (except to the extent
such proceeds are applied to the Credit Facility Indebtedness in accordance
with Section 3.4).

 

(b)                    
To the extent
reasonably requested by the Senior Creditor, the Trustee will cooperate in
providing any necessary or appropriate releases to permit a collection,

 

8

 

sale, or other disposition of Collateral, as provided
in Section 4.3(a), by the Senior Creditor therein free and clear of the
Trustee’s junior Lien.

 

ARTICLE
V

MISCELLANEOUS

 

Section
5.1                                  
Rights of
Subrogation. 
The Trustee agrees that no payment or distribution received by the Trustee on
account of the Subordinated Lien Indebtedness, which payment or distribution is
applied against the Subordinated Indebtedness and is paid over to the Senior
Creditor pursuant to Section 4.1, shall entitle the Trustee to exercise
any rights of subrogation in respect thereof until the earlier of (a) the date
on which all Credit Facility Indebtedness is Fully Paid, and (b) the date on
which the Maximum Amount of Credit Facility Indebtedness shall have been Fully
Paid.

 

Section
5.2                                  
Further
Assurances. 
The Parties will, at their own expense and at any time and from time to time,
promptly execute and deliver all further instruments and documents, and take
all further reasonable action (including the recordation of a subordination
agreement in the appropriate recorder’s office), that may be necessary or
desirable, or that either Party may reasonably request, to protect any right or
interest granted or purported to be granted hereby or to enable such Party to
exercise and enforce its rights and remedies hereunder; provided that, no Party shall be required
to pay over any payment or distribution, execute any instruments or documents,
or take any other action referred to in this Section 5.2 to the extent
that such action would contravene any law, order or other legal requirement
binding on such Party, and in the event of a controversy or dispute, any Party
may interplead any payment or distribution in any court of competent
jurisdiction, without further responsibility in respect of such payment or
distribution under this Section 5.2.

 

Section
5.3                                  
Defenses
Similar to Suretyship Defenses.  All rights, interests, agreements and
obligations of each of the Parties under this Agreement shall remain in full
force and effect irrespective of:

 

(a)                     
any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Secured Liabilities, or any other amendment or waiver of or any consent to
departure from the Financing Documents; provided
that, this Section 5.3(a) shall not apply to, and the
Trustee’s Liens on the Collateral shall not be subordinated in priority by
virtue of this Agreement to, the Senior Creditor’s Liens thereon if and to the
extent that the Credit Facility Indebtedness is increased, without the express
written consent of the Trustee, to an amount in excess of the Maximum Amount;

 

(b)                    
any exchange,
release, nonenforcement or nonperfection of any Party’s Liens with respect to
any Collateral, or any release, amendment or waiver of or consent to departure
from any guaranty, for all or any of the Secured Liabilities; or

 

(c)                     
any failure by any
Party to marshal assets in favor of any other Party or any other Person or to
proceed upon or against or exhaust any security or remedy before proceeding to
enforce the Financing Documents.

 

Section
5.4                                  
Amendments,
Etc.  No
amendment or waiver of any provision of this Agreement and no consent to any
departure by any Party shall be effective unless the same is

 

9

 

in writing and signed by each Party, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

 

Section
5.5                                  
Addresses for
Notices. 
All demands, notices and other communications provided for hereunder shall be
in writing, and if to the Trustee, mailed, sent by facsimile or delivered to it
at the following address:

 

U.S. Bank National Association

60 Livingston Avenue

St. Paul, MN  55107

Facsimile:  (651) 495-8097

Attention:  Corporate Trust Department

 

and if to the Senior Creditor, mailed, sent by
facsimile or delivered to it at the following address:

 

Texas State Bank

3900 North 10th Street

McAllen, TX  78501

Facsimile:  (956) 926-7872

Attention:  Glen Roney

 

with copies to the Issuer, mailed, sent by facsimile
or delivered to it at the following addresses:

 

The Wornick Company

3900 North 10th Street, Suite 900

McAllen, TX  78501

Facsimile:  (958) 882-7816

Attention:  Chief Executive Officer

 

Veritas Capital Management II, L.L.C.

660 Madison Avenue

New York, New York  10022

Facsimile:  (212) 688-9411

Attention:  Robert B. McKeon

 

Schulte, Roth & Zabel LLP

919 Third Avenue

New York, New York  10022

Facsimile:  (212) 593-5955

Attention:  Benjamin M. Polk, Esq.

 

Winston & Strawn LLP

200 Park Avenue

New York, New York  10166

Facsimile:  (212) 294-4700

Attention:  David A. Sakowitz, Esq

 

or as to any Party at such other address designated by
such Party in a written notice to the other Party complying as to delivery with
the terms of this Section 5.5.  All such demands, notices and other
communications shall be effective:  (a) if mailed, two business days after
deposit in the mails, postage prepaid; (b) if sent by facsimile, when receipt
is acknowledged by the receiving facsimile equipment (or at the opening of the
next business day if receipt is after normal business hours); or (c) if by
other means, when delivered.

 

Section
5.6                                  
No Waiver of
Remedies. 
No failure on the part of any Party to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.  The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.

 

Section
5.7                                  
Termination of
Agreement. 
This Agreement shall (x) be binding on the Parties and their successors and
assigns; (y) inure to the benefit of and be enforceable by the Parties and
their respective successors, transferees and assigns; and (z) terminate upon
the Credit Facility Indebtedness or the Subordinated Lien Indebtedness being Fully
Paid; provided that, the
obligations of the Parties under Sections 4.1 and 5.2 shall
survive this Agreement.

 

Section
5.8                                  
Governing Law;
Entire Agreement. 
This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York. 
This Agreement constitutes the entire agreement and understanding among the
Parties with respect to

 

10

 

the subject matter hereof and supersedes any prior
agreements, written or oral, with respect thereto.

 

Section
5.9                                  
Counterparts.  This Agreement may be executed in
any number of counterparts, and it is not necessary that the signatures of all
Parties be contained on any one counterpart hereof, each counterpart (including
counterparts delivered by facsimile) will be deemed to be an original, and all
together shall constitute one and the same document.

 

Section
5.10                           
No Third Party
Beneficiary. 
This Agreement is solely for the benefit of the Parties (and their successors
and assigns) and the holders of the Secured Liabilities (including the lenders
under the Credit Agreement, the Senior Creditor, the Trustee and the
Holders).  No other Person (including the Issuer, any Guarantor or any
subsidiary or affiliate of the Issuer or any Guarantor) shall be deemed to be a
third party beneficiary of this Agreement or shall have any rights to enforce
any provisions hereof.

 

Section
5.11                           
Headings.  The headings of the articles and
sections of this Agreement are inserted for purposes of convenience only and
shall not be construed to affect the meaning or construction of any of the
provisions hereof.

 

Section
5.12                           
Severability.  If any of the provisions in this
Agreement shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement and shall not invalidate the Lien
Priority or any other priority set forth in this Agreement.

 

Section
5.13                           
Trustee Status.  Notwithstanding any term herein
to the contrary, it is hereby expressly agreed and acknowledged that the
subordination and related agreements set forth herein by the Trustee are made
solely in its capacity as trustee and secured party under the Indenture
Documents and with respect to the Notes (and not in its individual commercial
capacity, except to the extent that it is or becomes a Holder).  The
Trustee shall not have any duties, obligations, or responsibilities to the
Senior Creditor under this Agreement except as expressly set forth
herein.  Nothing in this Agreement shall be construed to operate as a
waiver by the Trustee, with respect to the Issuer or any holder of any
Subordinated Lien Indebtedness, of the benefit of any exculpatory provisions,
presumptions, indemnities, protections, benefits, immunities or reliance rights
contained in the Indenture, and, by their acknowledgment hereof, the Issuer
expressly agrees that as between it and the Trustee, the Trustee shall have
such benefit with respect to all actions or omissions by the Trustee pursuant
to this Agreement.  For all purposes of this Agreement, the Trustee may
(a) rely in good faith, as to matters of fact, on any representation of fact
believed by Trustee to be true (without any duty of investigation) and that is
contained in a written certificate of any authorized representative of the
Issuer or of the Senior Creditor; (b) rely in good faith, as to matters of law,
on any advice received from its legal counsel or an opinion of its counsel,
counsel to the Issuer or counsel to the Senior Creditor, and shall have no
liability for any action or omission taken in reliance thereon; and (c) assume
in good faith (without any duty of investigation), and rely upon, the
genuineness, due authority, validity, and accuracy of any certificate,
instrument, notice, or other document believed by it in good faith to be
genuine and presented by the proper person.

 

[signature page follows]

 

11

 

IN WITNESS WHEREOF, each
Party has caused this Agreement to be duly executed and delivered as of the
date first above written.

 

 

	
   

  	
  Senior Creditor:

  
	
   

  	
   

  	
   

  
	
   

  	
  TEXAS STATE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas G. Bready

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Douglas G. Bready

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Trustee:

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard H. Prokosch

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard H. Prokosch

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

ACKNOWLEDGMENT

 

Each of the undersigned
hereby acknowledges that (a) it has received a copy of the foregoing
Intercreditor Agreement and consents thereto, and agrees to recognize all
rights granted hereby to the parties thereto, and will not do any act or
perform any obligation which is not in accordance with the agreements set forth
in such Intercreditor Agreement, and (b) it is not an intended beneficiary or
third-party beneficiary under the Intercreditor Agreement.

 

Dated as of June 30, 2004.

 

 

	
   

  	
  Issuer:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE WORNICK COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert B. McKeon

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
  Guarantors:

  
	
   

  	
   

  	
   

  
	
   

  	
  RIGHT AWAY MANAGEMENT

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Robert B. McKeon

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
  THE WORNICK COMPANY
  RIGHT AWAY

  DIVISION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Robert B. McKeon

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
  THE WORNICK COMPANY
  RIGHT AWAY

  DIVISION, L.P.

  
	
   

  	
  By:

  	
  Right Away Management
  Corporation,

  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert B. McKeon

  
	
   

  	
   

  	
  Title:

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

ACKNOWLEDGMENT

 

Each of the undersigned
hereby acknowledges that (a) it has received a copy of the foregoing
Intercreditor Agreement and consents thereto, and agrees to recognize all
rights granted hereby to the parties thereto, and will not do any act or
perform any obligation which is not in accordance with the agreements set forth
in such Intercreditor Agreement, and (b) it is not an intended beneficiary or
third-party beneficiary under the Intercreditor Agreement.

 

	
  Dated as of June
  30, 2004.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  ISSUER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  WORNICK COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Robert B.
  McKeon

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Robert B.
  McKeon

  
	
   

  	
   

  	
   

  	
  Title:  
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RIGHT
  AWAY MANAGEMENT CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert B.
  McKeon

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Robert B.
  McKeon

  
	
   

  	
   

  	
   

  	
  Title:  
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  WORNICK COMPANY RIGHT AWAY DIVISION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert B.
  McKeon

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Robert B.
  McKeon

  
	
   

  	
   

  	
   

  	
  Title:  
  Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  WORNICK COMPANY RIGHT AWAY DIVISION, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Right Away
  Management Corporation, its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Robert B.
  McKeon

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Robert B.
  McKeon

  
	
   

  	
   

  	
   

  	
   

  	
  Title:  
  Chairman of the Board

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}]]