Document:

Exhibit 10.02

 

THIRD AMENDED AND RESTATED FORBEARANCE AGREEMENT

 

This Third Amended and Restated Forbearance Agreement
is made, and is effective, as of October 15, 2007 (“Third Amended
Forbearance Agreement”), and amends and restates that certain Second Amended
Forbearance Agreement (defined below) by and among The Wornick Company (the “Company”),
Right Away Management Corporation, The Wornick Company Right Away Division and
The Wornick Company Right Away Division L.P. (each a “Subsidiary,” and
collectively, the “Subsidiaries”), the holders of the Company’s 10.875%
Senior Secured Notes due 2011 (the “Notes”) that were issued pursuant to
that certain Indenture, dated as of June 30, 2004 (as amended, modified,
supplemented or amended and restated from time to time, the “Indenture”),
that are signatories hereto (each a “Noteholder,” and collectively, the “Noteholders,”
and together with the Company, the “Parties”) and U.S. Bank National
Association, as indenture trustee (the “Indenture Trustee”) under the
Indenture, solely with respect to Sections 3(b)(i) and 14 hereof.

 

RECITALS

 

WHEREAS, the
Noteholders collectively hold not less than $100 million in aggregate principal
amount of the Notes, representing not less than 80% of the aggregate principal
amount of the Notes that are outstanding;

 

WHEREAS, each of the Noteholders (other than DDJ Total
Return Loan Fund, L.P.; B IV Capital Partners, L.P.; DDJ High Yield Fund; GMAM
Investment Funds Trust II, for the account of the Promark Alternative High
Yield Bond Fund 

 

 

(Account No. 7M2E); GMAM
Investment Funds Trust; General Motors Welfare Benefit Trust (VEBA); GMAM
Investment Funds Trust II, for the account of the Promark Alternative High
Yield Bond Fund (Account No. 7MWD); DDJ Capital Management Group Trust; Stichting
Pensioenfonds Hoogovens; The October Fund, Limited Partnership; DDJ/Ontario
Credit Opportunities Fund, L.P.; and Multi-Style, Multi-Manager Funds PLC The
Global High Yield Fund (collectively, “DDJ”)), is a member of the
unofficial group of holders of the Notes (the “Noteholder Group”), which
collectively holds a majority in principal amount of the Notes;

 

WHEREAS, the
Company, the Subsidiaries and DDJ Total Return Loan Fund, L.P. (as assignee of
Texas State Bank; in such capacity, “Lender”) are parties to that
certain Loan Agreement, dated as of June 30, 2004 (as amended by the First
Amendment dated as of March 16, 2007, and as further amended, modified,
supplemented or amended and restated from time to time, the “Loan Agreement”);

 

WHEREAS, (a) the
obligations of the Company and the Subsidiaries evidenced by the Notes and the
Guarantees (as defined in the Indenture) and (b) the obligations of the Company
and the Subsidiaries to Lender pursuant to the Loan Agreement and the other
Loan Documents (as defined in the Loan Agreement), are secured by a security
interest in and continuing lien on substantially all of the assets of the
Company and the Subsidiaries (the “Collateral”);

 

WHEREAS, Lender’s
and the Indenture Trustee’s rights with respect to the priority and enforcement
of their security interests in the Collateral are governed by 

 

2

 

that certain
Intercreditor Agreement, dated as of June 30, 2004, between the Indenture
Trustee and the Texas State Bank (as amended, modified, supplemented or amended
and restated from time to time, the “Intercreditor Agreement”);

 

WHEREAS, as
of the date hereof, the Events of Default referred to herein as the “Specified
Existing Defaults,” all of which are specified on schedule A
attached hereto, have occurred and are continuing;

 

WHEREAS, the Company, the
Subsidiaries, the Noteholders and the Indenture Trustee entered into an initial
forbearance agreement dated as of July 16, 2007 (the “Initial Forbearance
Agreement”) pursuant to which the Noteholders agreed to forbear, and agreed
to direct the Indenture Trustee to forbear, from exercising their rights and
remedies under the Indenture during the Forbearance Period (as defined in the
Initial Forbearance Agreement);

 

WHEREAS, the Company, the
Subsidiaries, the Noteholders and the Indenture Trustee entered into an amended
and restated forbearance agreement dated as of August 13, 2007 (the “First
Amended Forbearance Agreement”) pursuant to which the Noteholders agreed to
further forbear, and agreed to direct the Indenture Trustee to further forbear,
from exercising their rights and remedies under the Indenture during the
Forbearance Period (as defined in the First Amended Forbearance Agreement);

 

WHEREAS, the Company, the
Subsidiaries, the Noteholders and the Indenture Trustee entered into a further
amended and restated forbearance agreement dated as of September 12, 2007 (the “Second
Amended Forbearance Agreement”) 

 

3

 

pursuant to which
the Noteholders agreed to further forbear, and agreed to direct the Indenture
Trustee to further forbear, from exercising their rights and remedies under the
Indenture during the Forbearance Period (as defined in the Second Amended
Forbearance Agreement);

 

WHEREAS, the Forbearance
Period (as defined in the Second Amended Forbearance Agreement) under the
Second Amended Forbearance Agreement is set to expire on October 17, 2007 and
the Company and the Subsidiaries have asked the Noteholders to extend the
Forbearance Period through October 31, 2007;

 

WHEREAS, the Company and
the Subsidiaries entered into an initial forbearance agreement with the Lender
dated as of July 16, 2007 (the “DDJ Forbearance Agreement”) pursuant to
which the Lender agreed to forbear from exercising its rights and remedies
under the Loan Agreement and the other Loan Documents (as defined in the Loan
Agreement) until the expiration of the forbearance period set forth in the DDJ
Forbearance Agreement;

 

WHEREAS, the Company and
the Subsidiaries entered subsequently into an amended forbearance agreement
with the Lender dated as of August 13, 2007 (the “DDJ Amended Forbearance
Agreement”) pursuant to which the Lender agreed to further forbear from
exercising its rights and remedies under the Loan Agreement and the other Loan
Documents (as defined in the Loan Agreement) until the expiration of the
forbearance periods set forth therein;

 

4

 

WHEREAS, the Company and
the Subsidiaries entered into a further amended forbearance agreement with the
Lender dated as of September 12, 2007 (the “DDJ Second Amended Forbearance
Agreement”) pursuant to which the Lender agreed to further forbear from
exercising its rights and remedies under the Loan Agreement and the other Loan
Documents (as defined in the Loan Agreement) until the expiration of the
forbearance periods set forth in the DDJ Second Amended Forbearance Agreement
(the “DDJ Second Amended Forbearance Period”)

 

WHEREAS, the Company and the Subsidiaries have advised
the Noteholders that the Company, the Subsidiaries and Lender will,
simultaneously with the execution of this Third Amended Forbearance Agreement,
amend and restate the DDJ Second Amended Forbearance Agreement, pursuant to
which Lender shall agree to extend the DDJ Second Amended Forbearance Period
and continue to forbear from exercising the rights and remedies available to
Lender under the Loan Agreement and the other Loan Documents (as defined in the
Loan Agreement), all on the terms and conditions set forth in such separate
amended forbearance agreement through and including October 29, 2007 (as such
agreement may be amended, modified, supplemented or amended and restated from
time to time, the “DDJ Third Amended Forbearance Agreement”);

 

WHEREAS, at the
Company’s request, the Noteholders have agreed to continue forbearing from
exercising, and continue to instruct the Indenture Trustee not to exercise,
those of the rights and remedies available under the Indenture, the
Intercreditor Agreement, the Collateral Agreements and/or applicable law that
have or may have 

 

5

 

arisen, or may hereafter
arise, due to the occurrence and continuance of the Specified Existing Defaults
on the terms and conditions set forth herein; and

 

WHEREAS, capitalized terms used and not defined herein
shall have the meanings ascribed to them in the Indenture and the Second
Amended Forbearance Agreement.

 

NOW THEREFORE, in consideration of the premises and
the respective covenants and agreements set forth in this Third Amended
Forbearance Agreement, the Parties, each intending to be legally bound, agree
that the Second Amended Forbearance Agreement is amended and restated in its
entirety as follows:

 

1.             Forbearance.

 

(a)           Effective as of the
Third Amended Forbearance Effective Date (as defined below), the Noteholders
agree that, until the expiration of the Third Forbearance Period (as defined
below), they will forbear from exercising, and shall direct the Indenture
Trustee,  and by signature hereto so
direct the Indenture Trustee pursuant to Section 6.5 of the Indenture, not to
exercise, any rights and remedies against the Company or the Subsidiaries that
are available under the Indenture, the Intercreditor Agreement, the Collateral
Agreements and/or applicable law solely with respect to the Specified Existing
Defaults (excluding, however, the Noteholders’ right to charge default interest
on the Notes (including on all unpaid interest on the Notes to the extent
provided under the Indenture) during the Third Forbearance Period); provided,
however, that nothing herein shall restrict, impair or otherwise affect
the exercise of the Noteholders’

 

6

 

rights under this Third
Amended Forbearance Agreement, and provided  further that no such
forbearance shall constitute a waiver with respect to any such Specified
Existing Defaults or any other Events of Default under the Indenture.

 

(b)           As used
herein, the term “Third Forbearance Period” shall mean the period
beginning on the date hereof and ending upon the occurrence of a Termination
Event. As used herein, “Termination Event” shall mean the earlier to
occur of (i) November 1, 2007; and (ii) two business days after the delivery by
the Noteholder Group to the Company and Lender of a written notice terminating
the Third Forbearance Period (the “Termination Notice”), which notice
may be delivered at any time upon or after the occurrence of any Forbearance
Default (as defined below); provided, however, that
notwithstanding the foregoing, (x) this Third Amended Forbearance Agreement
shall immediately terminate two (2) business days after the occurrence of a
Forbearance Default under subsection (D) below without the need for delivery of
the Termination Notice or any other notice, and (y) this Third Amended
Forbearance Agreement shall immediately terminate upon the occurrence of a
Forbearance Default under subsection (J) below, without the need for delivery
of the Termination Notice or any other notice. As used herein, the term “Forbearance
Default” shall mean: (A) the failure of the Company to provide the
Noteholder Group and its financial advisors with reasonable access, as
determined by the Noteholder Group in its reasonable discretion, to its Chief Executive
Officer, other senior executives and outside advisors, including
representatives of Kroll Zolfo Cooper that are working with the Company, and to
provide the Noteholder Group and its legal and financial advisors with any and
all due diligence information they may 

 

7

 

reasonably
request, including, without limitation, the Company’s current 13-week cash flow
schedule, and all updates thereto as soon as reasonably practicable after they
are prepared, but in no event no later than two (2) business days thereafter;
(B) the failure of the Company to engage in good faith negotiations with the
Noteholder Group regarding a potential restructuring transaction, which
determination shall be made by the Noteholder Group in its reasonable
discretion; (C) the failure of the Company to promptly notify the Noteholder
Group of the occurrence of a Forbearance Default (as defined in the DDJ Third
Amended Forbearance Agreement) under the DDJ Third Amended Forbearance Agreement
or any amendment or modification to the DDJ Third Amended Forbearance
Agreement; (D) termination of the DDJ Third Amended Forbearance Agreement;
(E) the execution of any amendment or modification to the DDJ Third Amended
Forbearance Agreement, which amendment or modification has a material adverse
effect on the Noteholder Group as determined by the Noteholder Group in its
reasonable discretion; (F) termination by the Company of the Chanin Engagement
Letter or the failure of the Company to pay Chanin’s fees, expenses and
indemnity in accordance with the terms of the Chanin Engagement Letter;
(G) the occurrence of any Event of Default that is not a Specified
Existing Default; (H) the failure of the Company to comply with any term,
condition, covenant or agreement set forth in this Third Amended Forbearance
Agreement; (I) the failure of any representation or warranty made by the
Company under this Third Amended Forbearance Agreement to be true and correct
in all material respects as of the date when made; (J) the commencement by
or against the Company or any of the Subsidiaries of a case under title 11
of the United States Code; or (K) the 

 

8

 

commencement of
any action or proceeding by any creditor of the Company or any of the
Subsidiaries seeking to attach or take similar action against the assets of the
Company or the Subsidiaries. Any Forbearance Default shall constitute an
immediate Event of Default under the Indenture.

 

(c)           Upon the occurrence of
a Termination Event, the agreement of the Noteholders hereunder to forbear, and
to direct the Indenture Trustee to forbear, from exercising rights and remedies
in respect of the Specified Existing Defaults, shall immediately terminate
without the requirement of any demand, presentment, protest, or notice of any
kind (other than, where required, the Termination Notice), all of which the
Company and the Subsidiaries hereby waive. The Company and the Subsidiaries
agree that, upon the occurrence of, and at any time after, the occurrence of a
Termination Event, the Noteholders or the Indenture Trustee, as applicable, may
proceed, subject to the terms of the Indenture, the Intercreditor Agreement,
the Collateral Agreements and/or applicable law, to exercise any or all rights
and remedies under the Indenture, the Intercreditor Agreement, the Collateral
Agreements and/or applicable law, including, without limitation, the rights and
remedies on account of the Specified Existing Defaults and any other Events of
Default that may then exist. Without limiting the generality of the foregoing,
upon the occurrence of a Termination Event, subject to the terms of the
Intercreditor Agreement, the Collateral Agreements and any related documents,
the Noteholders or the Indenture Trustee, as applicable, may, upon such notice
or demand as is specified by the Indenture, the Intercreditor Agreement, the
Collateral Agreements or applicable law (x) collect and/or commence any legal
or other 

 

9

 

action to collect any or
all of the Company’s or the Subsidiaries’ obligations under the Indenture or
the Guarantees (collectively, the “Obligations”); (y) foreclose or
otherwise realize on any or all of the Collateral, and/or appropriate, setoff
or apply to the payment of any or all of the Obligations, any or all of the
Collateral or proceeds thereof; and (z) take any other enforcement action or
otherwise exercise any or all rights and remedies provided for under the
Indenture, the Intercreditor Agreement, the Collateral Agreements and/or
applicable law, all of which rights and remedies are fully reserved.

 

(d)           Any agreement by the
Noteholders to further extend the Third Forbearance Period or to enter into any
other forbearance or similar arrangement must be set forth in writing and
signed by all of the Noteholders. The Company and the Subsidiaries acknowledge
that the Noteholders have made no assurances whatsoever concerning any
possibility of any extension of the Third Forbearance Period, any other
forbearance or similar arrangement or any other limitations on the exercise of
their rights, remedies and privileges under or otherwise in connection with the
Indenture, the Intercreditor Agreement, the Collateral Agreements and/or
applicable law.

 

(e)           The Company and the
Subsidiaries acknowledge and agree that any forbearance, waiver or consent
which the Noteholders may make on or after the date hereof has been made by the
Noteholders in reliance upon, and in consideration for, among other things, the
general releases contained in Section 4 hereof and the other covenants,
agreements, representations and warranties of the Company and the Subsidiaries
hereunder.

 

10

 

2.             Effectiveness.
This Third Amended Forbearance Agreement shall become effective on the first
date (the “Third Amended Forbearance Effective Date”) on which each of
the following conditions is satisfied and evidence of its satisfaction has been
delivered to counsel to the Noteholder Group:

 

(a)           execution and delivery
by the Company and the Subsidiaries of the DDJ Third Amended Forbearance
Agreement having a Forbearance Period that (subject to earlier termination upon
the occurrence and continuation of a Forbearance Default as defined therein) is
through and including a date that is no earlier than October 29, 2007, and is otherwise reasonably satisfactory in form
and substance to the Noteholder Group; and

 

(b)           execution and delivery
of counterparts of this Third Amended Forbearance Agreement by the Noteholders,
the Indenture Trustee, the Company and the Subsidiaries.

 

3.             Representations,
Warranties and Covenants.

 

(a)           The Company and the
Subsidiaries represent, warrant and covenant as follows:

 

(i)            Except for the
Specified Existing Defaults in this Third Amended Forbearance Agreement, the
Company is in compliance with all of the terms and provisions set forth in the
Indenture on its part to be observed or performed, and no other Event of
Default has occurred and is continuing.

 

(ii)           The execution, delivery
and performance by the Company and the Subsidiaries of this Third Amended
Forbearance Agreement:

 

(1)           are within their
corporate or limited partnership powers, as applicable;

 

11

 

(2)           have been duly
authorized by all necessary corporate or limited partnership action, as
applicable, including the consent of the holders of its equity interests where
required;

 

(3)           do not and will not (A)
contravene their certificate of incorporation or by-laws or limited partnership
or other constituent documents, (B) violate any applicable requirement of law
or any order or decree of any governmental authority or arbitrator applicable
to them, (C) conflict with or result in the breach of, or constitute a default
under, or result in or permit the termination or acceleration of, any
contractual obligation of the Company or the Subsidiaries, or (D) result in the
creation or imposition of any lien or encumbrance upon any of the property of
the Company or the Subsidiaries; and

 

(4)           do not and
will not require the consent of, authorization by, approval of, notice to, or
filing or registration with, any governmental authority or any other entity,
other than those which prior to the Third Amended Forbearance Effective Date
will have been obtained or made and copies of which prior to the Third Amended
Forbearance Effective Date will have been delivered to counsel to the
Noteholder Group and DDJ and each of which on the Third Amended Forbearance
Effective Date will be in full force and effect.

 

(iii)          The Company and the
Subsidiaries shall not make any payments either directly, or indirectly through
TWC Holding LLC, to The Veritas Capital Fund II, L.P. and its general partner,
Veritas Capital Management II, L.L.C.

 

(iv)          Within
five (5) business days after the Third Amended Forbearance Effective Date, the
Company shall file this Third Amended Forbearance Agreement and the DDJ Third
Amended Forbearance Agreement with the United States Securities and Exchange
Commission as an exhibit to a filing by the Company on Form 8-K pursuant to the
Securities and Exchange Act of 1934, as amended, which 8-K filing and any
accompanying press release shall be in form and substance reasonably
satisfactory to the Noteholders.

 

(v)           The
Company and the Subsidiaries shall immediately notify the Noteholders and the
Indenture Trustee upon its or their becoming aware of an Event of Default under
the Indenture or an Event of Default (as defined in the Loan Agreement) under
the Loan Agreement that is not a Specified Default (as defined in the DDJ Third
Amended Forbearance Agreement).

 

12

 

(b)           The Indenture Trustee
represents as follows:

 

(i)            Based solely on the
representations provided by counsel to the Noteholder Group and DDJ, the
Indenture Trustee represents that, as of the date hereof, the Noteholders, in
the aggregate, hold not less than $100 million in principal amount of the
Notes, representing not less than 80% of the aggregate principal amount of the
Notes outstanding.

 

(c)           The representations and
warranties set forth in this Section 3 shall survive the execution and
delivery of this Third Amended Forbearance Agreement and the Third Amended
Forbearance Effective Date.

 

4.             General Release.
In consideration of, among other things, the Noteholders’ execution and
delivery of this Third Amended Forbearance Agreement, the Company and the
Subsidiaries, on behalf of themselves and their successors and assigns
(collectively, the “Releasors”), hereby forever agree and covenant not
to sue or prosecute against the Releasees (as defined below) and hereby forever
waive, release and discharge to the fullest extent permitted by law, each
Releasee from, any and all claims (including, without limitation, crossclaims,
counterclaims, rights of set-off and recoupment), actions, causes of action,
suits, debts, accounts, interests, liens, promises, warranties, damages and
consequential and punitive damages, demands, agreements, bonds, bills,
specialties, covenants, controversies, variances, trespasses, judgments,
executions, costs, expenses or claims whatsoever (collectively, the “Claims”),
that such Releasor now has or hereafter may have, of whatsoever nature and
kind, whether known or unknown, whether now existing or hereafter arising,
whether arising at law or in equity, against the Noteholders in any capacity
and their affiliates, shareholders and “controlling persons” (within the
meaning of the federal securities law), and their respective successors and
assigns and 

 

13

 

each and all of the
officers, directors, employees, agents, attorneys, advisors, auditors,
consultants and other representative of each of the foregoing (collectively,
the “Releasees”), based in whole or in part on facts whether or not now
known, existing on or before the Third Amended Forbearance Effective Date, that
relate to, arise out of or otherwise are in connection with (i) any aspect
of the business, operations, assets, properties, affairs or any other aspect of
the Company or the Subsidiaries; (ii) any aspect of the dealings or
relationships between or among the Company and the Subsidiaries, on the one
hand, and the Noteholders, on the other hand, or (iii) the Indenture or any
transactions contemplated thereby or any acts or omissions in connection
therewith, provided, however, that the foregoing shall not
release the Noteholders from their express obligations under this Third Amended
Forbearance Agreement, the Indenture, the Intercreditor Agreement and the
Collateral Agreements. In entering into this Third Amended Forbearance
Agreement, the Company and the Subsidiaries consulted with, and have been
represented by, legal counsel and expressly disclaim any reliance on any
representations, acts or omissions by any of the Releasees and the Company and
the Subsidiaries hereby agree and acknowledge that the validity and
effectiveness of the releases set forth herein do not depend in any way on any
such representations, acts and/or omissions or the accuracy, completeness or
validity hereof. The provisions of this Section 4 shall survive the expiration
of the Third Forbearance Period and the termination of this Third Amended
Forbearance Agreement and payment in full of the Obligations.

 

5.             Ratification of
Liability. The Company and the Subsidiaries each hereby ratifies and
reaffirms all of its Obligations  and
its grant of liens on or security 

 

14

 

interests in its
properties pursuant to the Collateral Agreements to which it is party as security
for the Obligations, and confirms and agrees that such liens and security
interests hereafter secure all the Obligations.

 

6.             Complete
Integration; Amendments. This Third Amended Forbearance Agreement
constitutes the full and final agreement between the Parties with respect to
the subject matter hereof, and this Third Amended Forbearance Agreement may not
be modified or amended except by a written instrument, signed by each of the
Parties, expressing such amendment or modification. The Parties warrant, promise
and represent that in executing this Third Amended Forbearance Agreement, each
Party is not relying upon any oral representation, promise or statement made by
any other Party hereto and that each Party is not relying upon any promise,
statement or representation contained in any other written instrument.

 

7.             No Other
Amendments; Reservation of Rights, No Waiver. Other than as otherwise
expressly provided herein, this Third Amended Forbearance Agreement shall not
be deemed to operate as an amendment or waiver of, or to prejudice, any right,
power, privilege or remedy of the Noteholders or the Indenture Trustee, as
applicable, under the Indenture, the Intercreditor Agreement, the Collateral
Agreements or applicable law, nor shall the entering into this Third Amended
Forbearance Agreement preclude the Noteholders from refusing to enter into any
further amendments or forbearances with respect to the Indenture. Other than as
expressly provided herein, this Third Amended Forbearance Agreement shall not
constitute a forbearance with respect to (i) any failure 

 

15

 

by the Company to comply
with any covenant or other provision in the Indenture or (ii) the occurrence or
continuance of any present or future Event of Default.

 

8.             No Impairment of
Lender’s Rights. The Noteholder Group, the Company and the Subsidiaries
acknowledge and agree that nothing contained in this Third Amended Forbearance
Agreement nor the execution of this Third Amended Forbearance Agreement by DDJ
shall impair in any way nor shall be deemed to impair in any way any rights of
Lender or any affiliates of Lender arising under or related to the Loan
Agreement, the other Loan Documents (as defined in the Loan Agreement), the DDJ
Third Amended Forbearance Agreement, the Intercreditor Agreement or otherwise. All
rights of Lender or any affiliate of Lender arising under or related to the
Loan Agreement, the other Loan Documents (as defined in the Loan Agreement),
the DDJ Third Amended Forbearance Agreement, the Intercreditor Agreement or
otherwise are expressly reserved.

 

9.             Counterparts/Facsimile
Transmission. This Third Amended Forbearance Agreement may be signed in
counterparts, each of which, when taken together, shall be deemed an original. Execution
of this Third Amended Forbearance Agreement is effective if a signature is
delivered by facsimile transmission.

 

10.           Successors and
Assigns. This Third Amended Forbearance Agreement shall be binding upon and
inure to the benefit of the Parties hereto and each of their respective
successors, assigns, heirs and personal representatives.

 

11.           Authority. Any
person signing this Third Amended Forbearance Agreement in a representative
capacity (i) represents and warrants that he/she is

 

16

 

authorized to sign this
Third Amended Forbearance Agreement on behalf of the Party he/she represents
and that his/her signature upon this Third Amended Forbearance Agreement will
bind the represented Party to the terms of this Third Amended Forbearance
Agreement, and (ii) acknowledges that the other Party to this Third
Amended Forbearance Agreement has relied upon such representation and warranty.

 

12.           Governing Law. This
Third Amended Forbearance Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its choice
of law provisions.

 

13.           Remedies. All
Parties hereto agree that irreparable damage would result from any Party’s
breach of this Third Amended Forbearance Agreement, and further agree that a
non-breaching Party would have no adequate remedy at law to redress such breach.
Therefore, the Parties hereto agree that, in the event of a breach of this
Third Amended Forbearance Agreement, specific performance and/or injunctive
relief is appropriate to remedy such breach. Notwithstanding the foregoing,
nothing contained in this Section 13 shall be deemed a waiver by any
non-breaching Party hereto of any other remedies available at law to redress
any other Party’s breach of this Third Amended Forbearance Agreement. Each of
the rights and powers provided pursuant to this Third Amended Forbearance
Agreement shall be cumulative and in addition to and not in derogation of the
rights and powers otherwise available under applicable law to the Parties.

 

14.           Direction to
Indenture Trustee. The Noteholders’ agreement to forbear as provided herein
shall constitute a direction from such Noteholders to the 

 

17

 

Indenture Trustee
to similarly forbear during the Third Forbearance Period. In order to induce
the Indenture Trustee to accept such direction, the Company and the
Subsidiaries agree (a) that the Indenture Trustee, as an ex  officio
participant of the Noteholder Group, may receive the copies of all information
and participate in the negotiations referenced in subsections (A) and (B) of
the definition of Forbearance Default in Section 1 of the Third Amended
Forbearance Agreement, and (b) to pay, in accordance with the terms of the Indenture,
the reasonable fees and expenses of the Indenture Trustee incurred during the
Third Forbearance Period, as well as previous Forbearance Periods promptly on a
monthly basis.

 

18

 

IN WITNESS WHEREOF, each of the Parties hereto has caused this
Third Amended Forbearance Agreement to be duly executed and delivered as of the
date first above written.

 

 

	
   

  	
  THE WORNICK
  COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jon Geisler

  	
   

  
	
   

  	
  Name:

  	
  Jon
  Geisler

  
	
   

  	
  Title:

  	
  President
  & CEO

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBSIDIARIES

  
	
   

  	
   

  	
   

  
	
   

  	
  RIGHT AWAY
  MANAGEMENT CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jon Geisler

  	
   

  
	
   

  	
  Name:

  	
  Jon
  Geisler

  
	
   

  	
  Title:

  	
  President
  & CEO

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE WORNICK
  COMPANY RIGHT AWAY

  
	
   

  	
  DIVISION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jon Geisler

  	
   

  
	
   

  	
  Name:

  	
  Jon
  Geisler

  
	
   

  	
  Title:

  	
  President
  & CEO

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE WORNICK
  COMPANY RIGHT AWAY 

  DIVISION L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jon Geisler

  	
   

  
	
   

  	
  Name:

  	
  Jon
  Geisler

  
	
   

  	
  Title:

  	
  President
  & CEO

  
	
   

  	
  Fax:

  	
   

  

 

 

	
   

  	
  THE NOTEHOLDERS

  
	
   

  	
   

  	
   

  
	
   

  	
  AIG GLOBAL INVESTMENT
  CORP.

  
	
   

  	
  as investment adviser
  and/or subadviser

  
	
   

  	
  for various funds and
  accounts

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dan Purser

  	
   

  
	
   

  	
  Name:

  	
  Dan
  Purser

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  QDRF
  Master Ltd

  
	
   

  	
  Quadrangle
  Debt Opportunities Fund Master Ltd

  
	
   

  	
  Quadrangle
  Debt Recovery Income Fund Master Ltd

  
	
   

  	
   

  	
   

  
	
   

  	
  By: Quadrangle Debt
  Recovery Advisors LP, their 

  advisor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher Santana

  	
   

  
	
   

  	
  Name:

  	
  Christopher
  Santana

  
	
   

  	
  Title:

  	
  Managing
  Principal

  
	
   

  	
  Fax:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CSAM Funding I

  
	
   

  	
  CSAM Funding II

  
	
   

  	
  CSAM Funding III

  
	
   

  	
  CSAM Funding IV

  
	
   

  	
  Atrium CDO

  
	
   

  	
  Atrium II

  
	
   

  	
  Atrium III

  
	
   

  	
  Atrium IV

  
	
   

  	
  Castle Garden Funding

  
	
   

  	
  Credit Suisse
  Syndicated Loan Fund

  
	
   

  	
  Madison Park Funding I,
  Ltd.

  
	
   

  	
  CS High Yield Focus
  CBS, Ltd.

  
	
   

  	
  Atrium V

  
	
   

  	
  By: Credit Suisse
  Alternative Capital, Inc., as 

  collateral manager

  
	
   

  	
  Madison Park Funding
  II, Ltd.

  
	
   

  	
  By: Credit Suisse
  Alternative Capital, Inc., as 

  collateral manager

  
	
   

  	
  Madison Park Funding
  III, Ltd.

  
	
   

  	
  By: Credit Suisse
  Alternative Capital, Inc., as 

  collateral manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Flannery

  	
   

  
	
   

  	
  Name:

  	
  Thomas
  Flannery

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
  Fax:

  	
  (212)
  538-8290

  

 

 

	
   

  	
  B IV CAPITAL PARTNERS,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: GP Capital IV, LLC,
  its General Partner

  
	
   

  	
  By: DDJ Capital
  Management, LLC, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DDJ HIGH YIELD FUND

  
	
   

  	
   

  	
   

  
	
   

  	
  By: DDJ Capital
  Management, LLC,

  
	
   

  	
  its attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GMAM INVESTMENT FUNDS
  TRUST II, for the 

  account of the Promark Alternative High Yield Bond 

  Fund (Account No. 7M2E)

  
	
   

  	
   

  	
   

  
	
   

  	
  By: DDJ Capital
  Management, LLC, on behalf

  
	
   

  	
  of GMAM Investment
  Funds Trust II, for the

  
	
   

  	
  account of the Promark
  Alternative High Yield

  
	
   

  	
  Bond Fund, in its
  capacity as investment manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  
					

 

 

	
   

  	
  GMAM INVESTMENT FUNDS
  TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By: DDJ Capital
  Management, LLC,

  
	
   

  	
  on behalf of GMAM
  Investment

  
	
   

  	
  Funds Trust, in its
  capacity as

  
	
   

  	
  investment manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  
	
   

  	
   

  	
   

  
	
   

  	
  GENERAL MOTORS WELFARE
  BENEFIT TRUST 

  (VEBA)

  
	
   

  	
   

  	
   

  
	
   

  	
  By: State Street Bank
  and Trust Company, solely in its 

  capacity as Trustee for General Motors Welfare 

  Benefit Trust (VEBA) as directed by DDJ Capital 

  Management, LLC, and not in its individual capacity

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jason R. Butler

  	
   

  
	
   

  	
  Name:

  	
  Jason
  R. Butler

  
	
   

  	
  Title:

  	
  Vice
  President State Street Bank & Trust Co.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GMAM INVESTMENT FUNDS
  TRUST II, for the 

  account of the Promark Alternative High Yield Bond 

  Fund (Account No. 7MWD)

  
	
   

  	
   

  	
   

  
	
   

  	
  By: DDJ Capital
  Management, LLC,

  
	
   

  	
  on behalf of GMAM
  Investment Funds Trust II for the 

  account of the Promark Alternative High Yield Bond 

  Fund, in its capacity as investment manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  

 

 

	
   

  	
  DDJ CAPITAL MANAGEMENT
  GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By: DDJ Capital
  Management, LLC, Investment 

  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STICHTING PENSIOENFONDS
  HOOGOVENS

  
	
   

  	
   

  	
   

  
	
   

  	
  By: DDJ Capital
  Management, LLC, on

  
	
   

  	
  behalf of Stichting
  Pensioenfonds Hoogovens,

  
	
   

  	
  in its capacity as
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  OCTOBER FUND, LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  October G.P., LLC, its General Partner

  
	
   

  	
  By:
  DDJ Capital Management, LLC, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  

 

 

	
   

  	
  DDJ/ONTARIO CREDIT
  OPPORTUNITIES FUND,

  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: GP DDJ/Ontario
  Credit Opportunities, L.P., its 

  General Partner

  
	
   

  	
  By: GP Credit
  Opportunities, Ltd., its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  
	
   

  	
   

  	
   

  
	
   

  	
  MULTI-STYLE,
  MULTI-MANAGER FUNDS PLC

  
	
   

  	
  THE GLOBAL HIGH YIELD
  FUND

  
	
   

  	
   

  	
   

  
	
   

  	
  By: DDJ Capital
  Management, LLC, on

  
	
   

  	
  behalf of Multi-Style,
  Multi-Manager Funds PLC,

  
	
   

  	
  The Global High Yield
  Fund, in its capacity as

  
	
   

  	
  Money Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DDJ TOTAL RETURN LOAN
  FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: GP Total Return,
  LP, its General Partner

  
	
   

  	
  By: GP Total Return,
  LLC, its General Partner

  
	
   

  	
  By: DDJ Capital
  Management, LLC, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David
  J. Breazzano

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  Fax:

  	
  (781)
  283-8541

  

 

 

	
  AGREED TO AND ACKNOWLEDGED

  	
   

  	
   

  
	
  BY THE INDENTURE TRUSTEE

  	
   

  	
   

  
	
  (SOLELY WITH RESPECT TO

  	
   

  	
   

  
	
  SECTIONS 3(B)(1)

  	
   

  	
   

  
	
  REPRESENTATION, WARRANTIES

  	
   

  	
   

  
	
  AND COVENANTS) AND SECTION 14

  	
   

  	
   

  
	
  (DIRECTION TO

  	
   

  	
   

  
	
  INDENTURE TRUSTEE)):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Lawrence J. Bell

  	
   

  
	
  Name:

  	
  Lawrence J. Bell

  
	
  Title:

  	
  Vice President

  
	
  Fax:

  	
  503-275-5738

  
					

 

 

Schedule A

 

SPECIFIED EXISTING DEFAULTS

 

The Events of Default:

 

1.             Under
Section 6.1(3) of the Indenture as a result of Issuer’s failure to make an
Excess Cash Flow Offer as required by Section 4.22 of the Indenture for the
fiscal years ended December 31, 2004, and December 31, 2005.

 

2.             Under
Section 6.1(3) of the Indenture as a result of the Issuer’s failure to deliver
certain annual financial statements as required by Section 4.3 of the Indenture
for the fiscal year ended December 31, 2006.

 

3.             Under
Section 6.1(3) of the Indenture as a result of the Issuer’s failure to deliver
the compliance certificate required by Section 4.4(a) of the Indenture in
respect of the Company’s fiscal year ended December 31, 2006.

 

4.             Under
Section 6.1(3) of the Indenture as a result of the Issuer’s failure to deliver
any compliance certificate required by Section 4.4(b) of the Indenture in
respect of any other Specified Existing Default.

 

5.             Under
Section 6.1(1) of the Indenture as a result of the Issuer’s failure to make the
scheduled interest payment due under the Notes on July 15, 2007.

 

6.             Under
Section 6.1(3) of the Indenture as a result of the Issuer’s failure to deliver
certain quarterly financial statements for the fiscal quarters ended March 31,
2007 and June 30, 2007.

 

27EXHIBIT 10.1

 

FIRSTCITY FINANCIAL CORPORATION

2006
Stock Option and Award Plan

 

AWARD
AGREEMENT

 

[Date]

 

[Name]

[Title]

FirstCity
Financial Corporation

P. O. Box 8216

6400 Imperial
Drive

Waco, TX  76714-8216

 

Re:          Grant of Stock
Option- Non-Employee Director

 

Dear                      :

 

You have been granted an option to purchase common
stock of FirstCity Financial Corporation, a Delaware corporation (the “Company”),
pursuant to the Company’s 2006 Stock Option and Award Plan (the “Plan”) for
certain individuals, Directors and key employees of the Company and its
Subsidiaries. A copy of the Plan is being furnished to you concurrently with
the execution of this Award Agreement and shall be deemed a part of this Award
Agreement as if fully set forth herein. Unless the context otherwise requires,
all terms defined in the Plan shall have the same meaning when used herein.

 

1.             Grant

 

Subject to the conditions set forth below, the Company
hereby grants to you, effective as of                           ,
         (the “Grant Date”), as a
matter of separate inducement and not in lieu of any other compensation for
your services, the right and option to purchase (the “Option”), in accordance
with the terms and conditions set forth herein and in the Plan, an aggregate of
              
Shares (the “Option Shares”), at a price equal to $          
per Share, subject to the adjustments and limitations set forth herein and in
the Plan (the “Option Price”). The Option granted hereunder is a Nonqualified
Stock Option within the meaning of the Plan. You should consult with your tax
advisor concerning the proper reporting of any federal or state tax liability
that may arise as a result of the grant or exercise of the Option.

 

2.             Exercise

 

(a)           For
purposes of this Award Agreement, the Option Shares shall be deemed “Non-vested
Shares” unless and until they have become “Vested Shares.”  The Option Shares shall become “Vested Shares”
on (a)                               ,
               ,
or (b) in                
equal, consecutive annual installments, commencing on the first anniversary of                     ,
          , provided that
vesting shall cease upon your ceasing to be a Director of the Company as and to
the extent provided in Section 3 hereof.

 

(b)           Subject
to the relevant provisions and limitations contained herein and in the Plan,
you may exercise the Option to purchase all or any portion of the Vested Shares
at any time prior to the termination of the Option pursuant to this Award
Agreement. In no event shall you be entitled to exercise the Option for any
Non-Vested Shares or for a fraction of any Vested Share.

 

(c)           The
unexercised portion of the Option, if any, will automatically, and without
notice, terminate and become null and void upon the expiration of                     
(    ) years from the Grant Date.

 

 

(d)           Any
exercise by you of the Option shall be in writing addressed to the Secretary of
the Company at its principal place of business (a copy of the form of exercise
notice to be used will be available upon written request to the Secretary), and
shall be accompanied by a certified or bank check payable to the order of the
Company in the full amount of the Option Price of the shares so purchased, or
in such other manner as described in the Plan and approved by the Committee.

 

3.             Termination
of Position

 

Upon your ceasing to be a Director of the Company, the
Option shall terminate and/or be exercisable pursuant to Section 6.7 of the
Plan.

 

4.             Transferability

 

The Option and any rights or interests therein are not
assignable or transferable by you except by will or the laws of descent and
distribution or as allowed under Section 6.8 of the Plan to members of your
Immediate Family (as such term is defined in the Plan), to one or more trusts
for the benefit of such Immediate Family members, or to one or more
partnerships where such Immediate Family members are the only partners,
provided that you do not receive any consideration in any form whatsoever for
said transfer. During your lifetime, the Option shall be exercisable only by
you, any transferee as allowed in this Section 4 and pursuant to the terms of
the Plan, or, in the event that a legal representative has been appointed in
connection with your Disability (as such term is defined in the Plan), such
legal representative. Any Options so transferred shall continue to be subject
to the same terms and conditions in the hands of the transferee as were
applicable to said Option immediately prior the transfer thereof. Any reference
in herein to your ceasing to serve as a Director of the Company shall continue
to refer to your ceasing to serve as a Director of the Company.

 

5.             Withholding
Taxes

 

By acceptance hereof, you hereby (1) agree to
reimburse the Company for any federal, state or local taxes required by any
government to be withheld or otherwise deducted by such entity in respect of
your exercise of all or a portion of the Option; (2) authorize the Company to
withhold from any cash compensation paid to you or on your behalf, an amount
sufficient to discharge any federal, state and local taxes imposed on the
Company, in respect of your exercise of all or a portion of the Option, which
otherwise has not been reimbursed by you, in respect of your exercise of all or
a portion of the Option; and (3) agree that the Company may, in its discretion,
hold the stock certificate to which you are entitled upon exercise of the
Option as security for the payment of the aforementioned withholding tax
liability, until cash sufficient to pay that liability has been accumulated,
and may, in its discretion, effect such withholding by retaining shares
issuable upon the exercise of the Option having a Fair Market Value on the date
of exercise which is equal to the amount to be withheld.

 

6.             Miscellaneous

 

(a)           This
Award Agreement is subject to all the terms, conditions, limitations and
restrictions contained in the Plan. In the event of any conflict or
inconsistency between the terms hereof and the terms of the Plan, the terms of
the Plan shall be controlling.

 

(b)           This
Award Agreement is not a contract of employment and the terms of your service
and compensation as a Director shall not be affected by, or construed to be
affected by, this Award Agreement, except to the extent specifically provide
herein. Nothing herein shall impose, or be construed as imposing any obligation
(1) on the part of the Company to continue you in your position as a Director
of the Company, or (2) on your part to remain in your position as a Director of
the Company.

 

 

By your signature and the signature of the Company’s representative below, you and the Company agree that this option is granted under and governed by the terms and conditions of the Company’s 2006 Stock Option and Award Plan and this Award Agreement. Please indicate your acceptance of all the terms and conditions of the Option and the Plan by signing and returning a copy of this Award Agreement.
 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  FIRSTCITY
  FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

ACCEPTED:

 

 

	
   

  	
   

  
	
  Signature of Optionee

  
	
   

  
	
   

  	
   

  
	
  Print Name of
  Optionee

  
	
   

  
	
  Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00130-of-00352.parquet"}]]