Document:

Exhibit
10.9

 

 

THE WORNICK
COMPANY

 

 

Assets Purchase
and Sale Contract

 

 

Table of Contacts

 

	
  PARTIES:

  	
  1

  
	
   

  	
   

  
	
  PREMISES:

  	
  1

  
	
   

  	
  1.

  	
   

  	
  SUBJECT.

  	
  1

  
	
   

  	
  2.

  	
   

  	
  DEFINITIONS.

  	
  1

  
	
   

  	
  3.

  	
   

  	
  EXHIBITS.

  	
  1

  
	
   

  	
  4.

  	
   

  	
  WORNICK.

  	
  2

  
	
  THIS CONTRACT:

  	
  2

  
	
   

  	
  1.

  	
   

  	
  EFFECTIVE DATE

  	
  2

  
	
   

  	
  2.

  	
   

  	
  SALE AND TRANSFER
  OF ASSETS; CLOSING

  	
  2

  
	
   

  	
   

  	
  2.1.

  	
  ASSETS TO BE SOLD

  	
  2

  
	
   

  	
   

  	
  2.2.

  	
  EXCLUDED ASSETS

  	
  4

  
	
   

  	
   

  	
  2.3.

  	
  CONSIDERATION

  	
  4

  
	
   

  	
   

  	
  2.4.

  	
  LIABILITIES

  	
  5

  
	
   

  	
   

  	
  2.5.

  	
  ALLOCATION

  	
  7

  
	
   

  	
   

  	
  2.6.

  	
  CLOSING

  	
  8

  
	
   

  	
   

  	
  2.7.

  	
  CLOSING OBLIGATIONS

  	
  8

  
	
   

  	
   

  	
  2.8.

  	
  ADJUSTMENT AMOUNT AND
  PAYMENT

  	
  10

  
	
   

  	
   

  	
  2.9.

  	
  ADJUSTMENT PROCEDURE

  	
  10

  
	
   

  	
   

  	
  2.10.

  	
  CONSENTS

  	
  11

  
	
   

  	
  3.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF SELLERS

  	
  12

  
	
   

  	
   

  	
  3.1.

  	
  ORGANIZATION AND GOOD
  STANDING

  	
  12

  
	
   

  	
   

  	
  3.2.

  	
  ENFORCEABILITY;
  AUTHORITY; NO CONFLICT

  	
  13

  
	
   

  	
   

  	
  3.3.

  	
  FINANCIAL STATEMENTS

  	
  14

  
	
   

  	
   

  	
  3.4.

  	
  BOOKS AND RECORDS

  	
  15

  
	
   

  	
   

  	
  3.5.

  	
  SUFFICIENCY OF ASSETS

  	
  15

  
	
   

  	
   

  	
  3.6.

  	
  DESCRIPTION OF
  LEASED REAL PROPERTY

  	
  15

  
	
   

  	
   

  	
  3.7.

  	
  TITLE TO ASSETS;
  ENCUMBRANCES

  	
  16

  
	
   

  	
   

  	
  3.8.

  	
  CONDITION OF FACILITIES

  	
  16

  
	
   

  	
   

  	
  3.9.

  	
  INVENTORIES

  	
  16

  
	
   

  	
   

  	
  3.10.

  	
  NO UNDISCLOSED LIABILITIES

  	
  17

  
	
   

  	
   

  	
  3.11.

  	
  NO MATERIAL ADVERSE CHANGE

  	
  17

  
	
   

  	
   

  	
  3.12.

  	
  EMPLOYEE BENEFITS

  	
  17

  
	
   

  	
   

  	
  3.13.

  	
  COMPLIANCE
  WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS

  	
  18

  
	
   

  	
   

  	
  3.14.

  	
  LEGAL PROCEEDINGS; ORDERS

  	
  20

  
	
   

  	
   

  	
  3.15.

  	
  ABSENCE OF
  CERTAIN CHANGES AND EVENTS

  	
  21

  
	
   

  	
   

  	
  3.16.

  	
  CONTRACTS; NO DEFAULTS

  	
  22

  
	
   

  	
   

  	
  3.17.

  	
  INSURANCE

  	
  24

  
	
   

  	
   

  	
  3.18.

  	
  ENVIRONMENTAL MATTERS

  	
  26

  
	
   

  	
   

  	
  3.19.

  	
  EMPLOYEES

  	
  27

  
	
   

  	
   

  	
  3.20.

  	
  LABOR DISPUTES; COMPLIANCE

  	
  28

  
	
   

  	
   

  	
  3.21.

  	
  INTELLECTUAL PROPERTY
  ASSETS

  	
  29

  
	
   

  	
   

  	
  3.22.

  	
  COMPLIANCE
  WITH THE FOREIGN CORRUPT PRACTICES ACT AND EXPORT CONTROL AND ANTIBOYCOTT
  LAWS

  	
  30

  
	
   

  	
   

  	
  3.23.

  	
  RELATIONSHIPS WITH
  RELATED PERSONS

  	
  31

  
	
   

  	
   

  	
  3.24.

  	
  BROKERS OR FINDERS

  	
  31

  
	
   

  	
   

  	
  3.25.

  	
  SOLVENCY

  	
  31

  
	
   

  	
   

  	
  3.26.

  	
  DISCLOSURE

  	
  32

  
						

 

i

 

	
   

  	
   

  	
  3.27.

  	
  S CORP STATUS

  	
  32

  
	
   

  	
  4.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF BUYER

  	
  32

  
	
   

  	
   

  	
  4.1.

  	
  ORGANIZATION AND GOOD STANDING

  	
  32

  
	
   

  	
   

  	
  4.2.

  	
  AUTHORITY; NO CONFLICT

  	
  32

  
	
   

  	
   

  	
  4.3.

  	
  CERTAIN PROCEEDINGS

  	
  33

  
	
   

  	
   

  	
  4.4.

  	
  BROKERS OR FINDERS

  	
  33

  
	
   

  	
   

  	
  4.5.

  	
  INSURANCE

  	
  33

  
	
   

  	
   

  	
  4.6.

  	
  BUYER’S DUE DILIGENCE

  	
  34

  
	
   

  	
  5.

  	
   

  	
  COVENANTS OF
  SELLERS PRIOR TO CLOSING

  	
  34

  
	
   

  	
   

  	
  5.1.

  	
  ACCESS AND INVESTIGATION

  	
  34

  
	
   

  	
   

  	
  5.2.

  	
  OPERATION OF THE
  BUSINESS OF SELLERS

  	
  34

  
	
   

  	
   

  	
  5.3.

  	
  NEGATIVE COVENANT

  	
  36

  
	
   

  	
   

  	
  5.4.

  	
  REQUIRED APPROVALS

  	
  36

  
	
   

  	
   

  	
  5.5.

  	
  NOTIFICATION

  	
  36

  
	
   

  	
   

  	
  5.6.

  	
  NO NEGOTIATION

  	
  36

  
	
   

  	
   

  	
  5.7.

  	
  BEST EFFORTS

  	
  37

  
	
   

  	
   

  	
  5.8.

  	
  INTERIM FINANCIAL
  STATEMENTS

  	
  37

  
	
   

  	
   

  	
  5.9.

  	
  CHANGE OF NAME

  	
  37

  
	
   

  	
   

  	
  5.10.

  	
  PAYMENT OF LIABILITIES

  	
  37

  
	
   

  	
   

  	
  5.11.

  	
  TRANSFERRING SUBSIDIARIES

  	
  37

  
	
   

  	
   

  	
  5.12.

  	
  S
  CORP STATUS

  	
  38

  
	
   

  	
   

  	
  5.13.

  	
  IDENTIFICATION OF TEXAS
  ASSET

  	
  38

  
	
   

  	
  6.

  	
   

  	
  COVENANTS OF BUYER
  PRIOR TO CLOSING

  	
  38

  
	
   

  	
   

  	
  6.1.

  	
  REQUIRED APPROVALS

  	
  38

  
	
   

  	
   

  	
  6.2.

  	
  BEST
  EFFORTS

  	
  38

  
	
   

  	
  7.

  	
   

  	
  CONDITIONS
  PRECEDENT TO BUYER’S OBLIGATION TO CLOSE

  	
  38

  
	
   

  	
   

  	
  7.1.

  	
  ACCURACY OF REPRESENTATIONS

  	
  38

  
	
   

  	
   

  	
  7.2.

  	
  SELLERS’ PERFORMANCE

  	
  39

  
	
   

  	
   

  	
  7.3.

  	
  CONSENTS

  	
  39

  
	
   

  	
   

  	
  7.4.

  	
  ADDITIONAL DOCUMENTS

  	
  39

  
	
   

  	
   

  	
  7.5.

  	
  GOVERNMENTAL AUTHORIZATIONS

  	
  40

  
	
   

  	
   

  	
  7.6.

  	
  ENVIRONMENTAL REPORT

  	
  40

  
	
   

  	
   

  	
  7.7.

  	
  WARN ACT NOTICE
  PERIODS AND EMPLOYEES

  	
  40

  
	
   

  	
   

  	
  7.8.

  	
  ESOT TRUSTEE APPROVAL

  	
  40

  
	
   

  	
   

  	
  7.9.

  	
  NON-COMPETITION AGREEMENTS

  	
  41

  
	
   

  	
   

  	
  7.10.

  	
  MATERIAL ADVERSE CHANGE

  	
  41

  
	
   

  	
   

  	
  7.11.

  	
  NO INJUNCTION

  	
  41

  
	
   

  	
   

  	
  7.12.

  	
  EQUITY CONTRIBUTION

  	
  41

  
	
   

  	
  8.

  	
   

  	
  CONDITIONS
  PRECEDENT TO SELLERS’ OBLIGATION TO CLOSE

  	
  41

  
	
   

  	
   

  	
  8.1.

  	
  ACCURACY OF REPRESENTATIONS

  	
  41

  
	
   

  	
   

  	
  8.2.

  	
  BUYER’S PERFORMANCE

  	
  41

  
	
   

  	
   

  	
  8.3.

  	
  CONSENTS

  	
  42

  
	
   

  	
   

  	
  8.4.

  	
  ADDITIONAL DOCUMENTS

  	
  42

  
	
   

  	
   

  	
  8.5.

  	
  NO INJUNCTION

  	
  42

  
	
   

  	
   

  	
  8.6.

  	
  ESOT TRUSTEE APPROVAL

  	
  42

  
	
   

  	
   

  	
  8.7.

  	
  WARN ACT COMPLIANCE

  	
  42

  
	
   

  	
  9.

  	
   

  	
  TERMINATION

  	
  42

  
	
   

  	
   

  	
  9.1.

  	
  TERMINATION EVENTS

  	
  42

  
	
   

  	
   

  	
  9.2.

  	
  EFFECT OF TERMINATION

  	
  43

  
	
   

  	
  10.

  	
   

  	
  ADDITIONAL
  COVENANTS

  	
  43

  
	
   

  	
   

  	
  10.1.

  	
  EMPLOYEES AND EMPLOYEE
  BENEFITS

  	
  43

  
	
   

  	
   

  	
  10.2.

  	
  PAYMENT
  OF ALL TAXES RESULTING FROM SALE OF ASSETS BY SELLERS

  	
  46

  
	
   

  	
   

  	
  10.3.

  	
  PAYMENT OF OTHER
  RETAINED LIABILITIES

  	
  46

  
	
   

  	
   

  	
  10.4.

  	
  RESTRICTIONS
  ON SELLER DISSOLUTION AND DISTRIBUTIONS

  	
  46

  
	
   

  	
   

  	
  10.5.

  	
  REMOVING EXCLUDED ASSETS

  	
  47

  
	
   

  	
   

  	
  10.6.

  	
  REPORTS AND RETURNS

  	
  47

  
						

 

ii

 

	
   

  	
   

  	
  10.7.

  	
  ASSISTANCE IN PROCEEDINGS

  	
  47

  
	
   

  	
   

  	
  10.8.

  	
  NONCOMPETITION,
  NONSOLICITATION AND NONDISPARAGEMENT

  	
  47

  
	
   

  	
   

  	
  10.9.

  	
  CUSTOMER AND
  OTHER BUSINESS RELATIONSHIPS

  	
  48

  
	
   

  	
   

  	
  10.10.

  	
  RETENTION OF AND
  ACCESS TO RECORDS

  	
  49

  
	
   

  	
   

  	
  10.11.

  	
  FURTHER ASSURANCES

  	
  49

  
	
   

  	
   

  	
  10.12.

  	
  NOTICES OF CERTAIN EVENTS

  	
  49

  
	
   

  	
  11.

  	
   

  	
  INDEMNIFICATION; REMEDIES

  	
  50

  
	
   

  	
   

  	
  11.1.

  	
  SURVIVAL

  	
  50

  
	
   

  	
   

  	
  11.2.

  	
  INDEMNIFICATION
  AND REIMBURSEMENT BY SELLER

  	
  50

  
	
   

  	
   

  	
  11.3.

  	
  INDEMNIFICATION AND
  REIMBURSEMENT BY SELLER—ENVIRONMENTAL MATTERS

  	
  51

  
	
   

  	
   

  	
  11.4.

  	
  INDEMNIFICATION
  AND REIMBURSEMENT BY BUYER

  	
  52

  
	
   

  	
   

  	
  11.5.

  	
  LIMITATIONS ON
  AMOUNT—SELLER

  	
  53

  
	
   

  	
   

  	
  11.6.

  	
  LIMITATIONS ON AMOUNT—BUYER

  	
  53

  
	
   

  	
   

  	
  11.7.

  	
  TIME AND OTHER
  LIMITATIONS ON LIABILITY

  	
  53

  
	
   

  	
   

  	
  11.8.

  	
  RIGHT OF SETOFF

  	
  54

  
	
   

  	
   

  	
  11.9.

  	
  THIRD-PARTY CLAIMS

  	
  54

  
	
   

  	
   

  	
  11.10.

  	
  OTHER CLAIMS

  	
  56

  
	
   

  	
   

  	
  11.11.

  	
  INDEMNIFICATION
  IN CASE OF STRICT LIABILITY

  	
  56

  
	
   

  	
  12.

  	
   

  	
  CONFIDENTIALITY

  	
  56

  
	
   

  	
   

  	
  12.1.

  	
  DEFINITION OF
  CONFIDENTIAL INFORMATION

  	
  56

  
	
   

  	
   

  	
  12.2.

  	
  RESTRICTED
  USE OF CONFIDENTIAL INFORMATION

  	
  57

  
	
   

  	
   

  	
  12.3.

  	
  EXCEPTIONS

  	
  58

  
	
   

  	
   

  	
  12.4.

  	
  LEGAL PROCEEDINGS

  	
  58

  
	
   

  	
   

  	
  12.5.

  	
  RETURN
  OR DESTRUCTION OF CONFIDENTIAL INFORMATION

  	
  59

  
	
   

  	
   

  	
  12.6.

  	
  ATTORNEY-CLIENT PRIVILEGE

  	
  59

  
	
   

  	
  13.

  	
   

  	
  GENERAL
  PROVISIONS

  	
  59

  
	
   

  	
   

  	
  13.1.

  	
  EXPENSES

  	
  59

  
	
   

  	
   

  	
  13.2.

  	
  PUBLIC ANNOUNCEMENTS

  	
  60

  
	
   

  	
   

  	
  13.3.

  	
  NOTICES

  	
  60

  
	
   

  	
   

  	
  13.4.

  	
  JURISDICTION; SERVICE
  OF PROCESS

  	
  61

  
	
   

  	
   

  	
  13.5.

  	
  ENFORCEMENT OF CONTRACT

  	
  62

  
	
   

  	
   

  	
  13.6.

  	
  WAIVER; REMEDIES CUMULATIVE

  	
  62

  
	
   

  	
   

  	
  13.7.

  	
  ENTIRE CONTRACT AND
  MODIFICATION

  	
  62

  
	
   

  	
   

  	
  13.8.

  	
  ASSIGNMENTS,
  SUCCESSORS AND NO THIRD-PARTY RIGHTS

  	
  62

  
	
   

  	
   

  	
  13.9.

  	
  SEVERABILITY

  	
  63

  
	
   

  	
   

  	
  13.10.

  	
  CONSTRUCTION; USAGE

  	
  63

  
	
   

  	
   

  	
  13.11.

  	
  TIME OF ESSENCE

  	
  64

  
	
   

  	
   

  	
  13.12.

  	
  GOVERNING LAW

  	
  64

  
	
   

  	
   

  	
  13.13.

  	
  EXECUTION OF CONTRACT

  	
  64

  
	
   

  	
   

  	
  13.14.

  	
  ATTORNEYS’ FEES

  	
  65

  
	
   

  	
   

  	
  13.15.

  	
  WAIVER OF JURY TRIAL

  	
  65

  
	
   

  	
   

  	
  13.16.

  	
  VERITAS

  	
  65

  
						

 

iii

 

Assets Purchase
and Sale Contract

 

PARTIES:

 

The parties to this
Contract (“this Contract”) are:

 

(i)                                     The
Wornick Company, a Nevada business corporation qualified to do business in Ohio
(herein called “Wornick”);

 

(ii)                                  The
Wornick Company Right Away Division, a Nevada corporation (herein called
“TWCRAD”);

 

(iii)                               The
Wornick Company Right Away Division, L.P., a Texas limited partnership (herein
called “TWCRADLP”);

 

(iv)                              Right
Away Management Corporation, a Texas business corporation (herein called
“RAMCO”);

 

(v)                                 The
Wornick Company, a Delaware corporation (herein called “Buyer”); and

 

(vi)                              Veritas
Capital Management II, LLC (“Veritas”), a Related Person of Buyer.

 

(Wornick, TWCRAD,
TWCRADLP and RAMCO shall each be individually referred to herein as a “Seller”
and shall be collectively referred to herein as “Sellers”.)

 

PREMISES:

 

1.                                       Subject.

 

The subject of this
Contract is the purchase by Buyer from Sellers, and the sale by Sellers to
Buyer, of Sellers’ business as a going concern including substantially all
operating assets of Sellers.

 

2.                                       Definitions.

 

Certain terms when
capitalized in this Contract shall have the meanings defined in the
“Schedule of Definitions” attached hereto as Schedule 1.

 

3.                                       Exhibits.

 

All Schedules and
Exhibits listed in the “Index of Schedules and Exhibits” attached hereto are a
part of this Contract.

 

1

 

 

4.                                       Wornick.

 

All of the issued and
outstanding capital stock of Wornick is owned by First Bankers Trust Company,
Trustee of The Wornick Company Employee Stock Ownership Trust (“ESOT”).  Wornick has elected “S Corp” status for
federal income tax purposes.  Wornick
has three subsidiaries, each of which has elected to be a “Qualified S Corp
Subsidiary” (“QSSS”) The existence of each subsidiary is disregarded for
federal income tax purposes.

 

THIS CONTRACT:

 

1.                                       Effective Date

 

The effective date of
this Contract is the date upon which all parties shall have executed this Contract,
as indicated by the later of the respective dates below the respective
signature blocks.

 

2.                                       Sale
and Transfer of Assets; Closing

 

2.1.                              ASSETS TO BE
SOLD

 

Upon
the terms and subject to the conditions set forth in this Contract, at the
Closing, but effective as of the Effective Time, Sellers shall sell, convey,
assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire
from Sellers, free and clear of any Encumbrances other than Permitted
Encumbrances, all of Sellers’ right, title and interest in and to all of
Sellers’ property and assets, real, personal or mixed, tangible and intangible,
of every kind and description, wherever located, which relate to the business
of Sellers as a going concern, including the following (but excluding the
Excluded Assets):

 

(a)                                  all Leasehold
Real Property, including the leasehold estates (i) of Wornick described in Schedule 3.6(a)
and (ii) of TWCRADLP described in Schedule 3.6(b);

 

(b)                                 all Tangible Personal Property, including
those items of Wornick and TWCRADLP respectively described in Schedule 2.1(b);

 

(c)                                  all Inventories;

 

(d)                                 all Seller Contracts, including those
listed in Schedule 3.16(a) and the Non-compete Contracts listed
in Schedule 3.19(a),
and all outstanding offers or solicitations made by or to Sellers to enter into
any Contract and all of the foregoing entered into by Sellers after the date
hereof and on or prior to the Closing Date;

 

(e)                                  all Governmental Authorizations and all
pending applications therefor or renewals thereof, in each case to the extent
transferable to Buyer, including those listed in Schedule 3.13(b);

 

(f)                                    all data and Records related to the
operations of Sellers, including client and customer lists and Records,
referral sources, research and development reports

 

2

 

and Records, production reports and Records, service
and warranty Records, equipment logs, operating guides and manuals, financial
and accounting Records, creative materials, advertising materials, promotional
materials, studies, reports, correspondence and other similar documents and
Records and, subject to Legal Requirements, copies of all personnel Records and
other Records described in Section 2.2(h);

 

(g)                                 all of the intangible rights and property
of Sellers, including Intellectual Property Assets, going concern value,
goodwill, telephone, telecopy and e-mail addresses and listings and those items
listed in Schedule 3.21(d);

 

(h)                                 all insurance benefits, including rights
and proceeds, arising from or relating to the Assets or the Assumed Liabilities
prior to the Effective Time, unless expended in accordance with this Contract;

 

(i)                                     all claims of Sellers against third
parties relating to the Assets, whether choate or inchoate, known or unknown,
contingent or noncontingent, including all such claims listed in Schedule 2.1(i),
except as excluded in Section 2.2(a), 2.2(b), 2.2(e) and 2.2(i);

 

(j)                                     all rights of Sellers relating to
deposits and prepaid expenses, claims for refunds and other economic benefits
and rights to offset in respect thereof that are not listed in Schedule 2.2(e)
and that are not excluded under Section 2.2(i);

 

(k)                                  all management information systems,
including hardware and software, research material, technical information,
trade secrets, technology, know-how, specifications, designs, drawings and
processes and quality control data;

 

(l)                                     all of the goodwill and going concern
value of Sellers’ business; and

 

(m)                               all other properties, tangible and
intangible, not otherwise referred to above, which are owned by Sellers or in
which Sellers have an interest or which are used or useful in the operation of
Sellers’ business or relate to the Assets, other than those, if any, which
constitute Excluded Assets or relate exclusively to the Excluded Assets.

 

All
of the property and assets to be transferred to Buyer hereunder are herein
referred to collectively as the “Assets.”

 

Notwithstanding
the foregoing, the transfer of the Assets pursuant to this Contract shall not
include the assumption of any Liability related to the Assets unless Buyer
expressly assumes that Liability pursuant to Section 2.4(a).

 

3

 

2.2.                              EXCLUDED ASSETS

 

Notwithstanding
anything to the contrary contained in Section 2.1 or elsewhere in this Contract,
the following assets of Sellers (collectively, the “Excluded Assets”) are not
part of the sale and purchase contemplated hereunder, are excluded from the
Assets, and shall remain the property of Sellers after the Closing:

 

(a)                                  all cash, cash bank
accounts, investment accounts, certificates of deposit, treasury notes and
bills, and other cash equivalents;

 

(b)                                 all Accounts
Receivable and notes receivable, together with any collateral securing the
repayment thereof;

 

(c)                                  all minute books,
stock Records and corporate seals and other corporate records and software
related to Sellers’ corporate affairs, the ESOT, and tax matters;

 

(d)                                 shares of capital
stock of Sellers held in treasury;

 

(e)                                  those rights
relating to deposits and prepaid expenses and claims for refunds and rights to
offset in respect thereof listed in Schedule 2.2(e);

 

(f)                                    all insurance
policies and rights thereunder (except to the extent specified in
Section 2.1(h) and 2.1(i));

 

(g)                                 all of the Seller
Contracts listed in Schedule 2.2(g));

 

(h)                                 all personnel
Records and other Records that each Seller is required by law to retain in its
possession;

 

(i)                                     all claims for
refund of Taxes and other governmental charges of whatever nature;

 

(j)                                     all rights in
connection with any assets of the Employee Benefit Plans;

 

(k)                                  all rights of
Sellers under this Contract, the Bill of Sale, and the Assignment and
Assumption Agreement;

 

(l)                                     the property and
assets expressly designated in Schedule 2.2(l); and.

 

(m)                               all of Sellers’
personal property, including office furnishings, furniture, equipment, and
Sellers’ corporate files and records, which is located in Suite 910, 3900 North
Tenth Street, McAllen, Texas 78501.

 

2.3.                              CONSIDERATION

 

(a)                                  The consideration
for the Assets (the “Purchase Price”) will be (a) One Hundred Fifty-Five
Million dollars ($155,000,000) plus or minus the Adjustment Amount and (b) the
assumption of the Assumed Liabilities.

 

4

 

(b)                                 In accordance with
Section 2.7(b), at the Closing, the Purchase Price, prior to adjustment on
account of the Adjustment Amount, shall be delivered by Buyer as follows: (i)
One Hundred Forty-Five Million Dollars ($145,000,000) by wire transfer to
Sellers; and (ii)  Ten Million Dollars
($10,000,000) by wire transfer to an Escrow Agent mutually satisfactory to
Sellers and Buyer (the “Escrow Agent”) to hold in accordance with the terms and
conditions of an escrow agreement in form and substance mutually satisfactory
to Sellers and Buyer (the “Escrow Agreement”), providing for, among other
things, termination of the Escrow Agreement on October 31, 2005.

 

(c)                                  In the event the Closing does not occur
within ten (10) business days of the receipt of the required approvals
described in Sections 7.8 and 8.6 of this Contract, Veritas shall cause Buyer
to deposit the sum of Five Million Dollars ($5,000,000) (the “Deposit”) in
escrow with an escrow agent mutually satisfactory to Sellers and Buyer to hold
in accordance with the terms and conditions of an escrow agreement in form and substance
mutually satisfactory to Sellers and Buyer. 
Unless this Contract shall be terminated pursuant to Section 9.1,
on the Closing Date the Deposit shall be released to Sellers as partial payment
of the Purchase Price and the amount payable by Buyer to Sellers at the Closing
pursuant to Section 2.3(b) shall be reduced by the amount of the
Deposit.  In the event the Closing does
not occur as a result of the Breach by Buyer of its obligations under this
Contract, Sellers shall be entitled to receive the Deposit as liquidated
damages.  Buyer and Sellers hereby
acknowledge that the amount of damages which would be incurred by Sellers as a
result of Buyer’s Breach of this Contract are difficult to ascertain and that
the amount of liquidated damages provided for by this Section 2.3(c) are
reasonable.  Notwithstanding anything to
the contrary contained in this Contract (including, without limitation,
Sections 9.2 and 13.5), Buyer shall have no other liability to Sellers in the
event the Closing does not occur.  In
the event the Closing does not occur other than as a result of the Breach by
Buyer of its obligations under this Contract, the Deposit shall be returned to
Buyer.

 

2.4.                              LIABILITIES

 

(a)                                  Assumed
Liabilities. On the Closing Date, but effective as of the Effective Time, Buyer
shall assume and agree to discharge only the following Liabilities of Sellers,
in each case, to the extent related exclusively or primarily to the business of
Sellers or the Assets and subject to the contrary provisions of Section 2.4(b)  (the “Assumed Liabilities”):

 

(i)                                     any Liability to Sellers’ customers
incurred by Sellers in the Ordinary Course of Business for nondelinquent orders
outstanding as of the Effective Time reflected on Sellers’ books (other than
any Liability arising out of or relating to a Breach that occurred prior to the
Effective Time);

 

(ii)                                  any Liability to Sellers’ customers under
written warranty agreements in the forms disclosed in Schedule 2.4(a)(ii)
given by Sellers to their customers in the Ordinary Course of Business prior to
the Effective Time

 

5

 

(other than any Liability
arising out of or relating to a Breach that occurred prior to the Effective
Time);

 

(iii)                               any Liability arising after the Effective Time under
the Seller Contracts (but not including the Seller Contracts in Items Nos. 25,
26 and 27 in Schedule 3.16(a) or any other Seller Contracts
relating exclusively to the Excluded Assets or the Retained Liabilities) and
the Seller Non-compete Contracts described in Schedule 3.19(a)
(other than any Liability arising out of or relating to a Breach that occurred
prior to the Effective Time);

 

(iv)                              any Liability of Sellers arising after
the Effective Time under any Seller Contract included in the Assets that is entered
into by Sellers after the date hereof in accordance with the provisions of this
Contract (other than any Liability arising out of or relating to a Breach that
occurred prior to the Effective Time); and

 

(v)                                 any Liability of Sellers described in Schedule 2.4(a)(v).

 

(b)                                 Retained
Liabilities. The Retained Liabilities shall remain the sole responsibility of
and shall be retained, paid, performed and discharged solely by Sellers.
“Retained Liabilities” shall mean every Liability of Sellers other than those
that expressly constitute Assumed Liabilities, including:

 

(i)                                     any Liability
arising out of or relating to products of Sellers to the extent manufactured or
sold prior to the Effective Time other than to the extent assumed under
Section 2.4(a)(i), (ii), (iii) or (iv);

 

(ii)                                  any Liability under
any Contract assumed by Buyer pursuant to Section 2.4(a) that arises after
the Effective Time but that arises out of or relates to any Breach that
occurred prior to the Effective Time;

 

(iii)                               any Liability for
Taxes, including (A) any Taxes arising as a result of Sellers’ operation of its
business or ownership of the Assets prior to the Effective Time, (B) any Taxes
that will arise as a result of the sale of the Assets pursuant to this Contract
and (C) any deferred Taxes of any nature;

 

(iv)                              any Liability under
any Contract not assumed by Buyer under Section 2.4(a), including any
Liability arising out of or relating to Sellers’ credit facilities or any
security interest related thereto;

 

(v)                                 any Environmental,
Health and Safety Liabilities arising out of or relating to the operation of
Sellers’ business or Sellers’ leasing, ownership or operation of real property;

 

(vi)                              any Liability under
the Employee Benefit Plans or relating to payroll, vacation, sick leave, workers’
compensation, unemployment benefits, pension benefits, employee stock option or
profit-sharing plans, health care plans or benefits or any other employee plans
or benefits of any kind for Sellers’ employees or former employees or both;

 

6

 

(vii)                           any Liability under
any employment, severance, retention or termination agreement with any employee
of Sellers or any of their Related Persons;

 

(viii)                        any Liability
arising out of or relating to any employee grievance asserted prior to Closing
whether or not the affected employees are hired by Buyer;

 

(ix)                                any Liability of
Sellers to any shareholder or Related Person of Sellers or any shareholder;

 

(x)                                   any Liability to
indemnify, reimburse or advance amounts to any officer, director, employee or
agent of Sellers;

 

(xi)                                any Liability to
distribute to any of Sellers’ shareholders or otherwise apply all or any part
of the consideration received hereunder;

 

(xii)                             any Liability
arising out of any Proceeding pending as of the Effective Time;

 

(xiii)                          any Liability
arising out of any Proceeding commenced after the Effective Time and arising
out of or relating to any occurrence or event happening, existing or arising
prior to the Effective Time;

 

(xiv)                         any Liability
arising out of or resulting from Sellers’ compliance or noncompliance with any
Legal Requirement or Order of any Governmental Body;

 

(xv)                            any Liability of
Sellers under this Contract or any other document executed in connection with
the Contemplated Transactions;

 

(xvi)                         any Liability of
Sellers based upon Sellers’ acts or omissions occurring after the Effective
Time;

 

(xvii)                      Liability for all
notes payable, Trade Accounts Payable, other accounts payable, and Accrued
Expenses;

 

(xviii)                   any Liability that
does not exclusively or primarily arise out of or is not exclusively or
primarily related to the business of Sellers or the Assets; and

 

(xix)                           any Liability which
is assumed by, or which is otherwise the responsibility of, Sellers pursuant to
this Contract or any other document executed in connection with the
Contemplated Transactions.

 

2.5.                              ALLOCATION

 

The
Purchase Price shall be allocated in accordance with Schedule 2.5.
After the Closing, the parties shall make consistent use of the allocation,
fair market value and useful lives specified in Schedule 2.5 for
all Tax purposes and in all filings, declarations and reports with the IRS in
respect thereof, including the reports required to be filed under
Section 1060 of the Code. Buyer shall prepare and deliver IRS Form 8594 to
Sellers within forty-five (45) days after the Closing

 

7

 

Date
to be filed with the IRS. In any Proceeding related to the determination of any
Tax, neither Buyer nor Sellers shall contend or represent that such allocation
is not a correct allocation.

 

2.6.                              CLOSING

 

The
purchase and sale provided for in this Contract (the “Closing”) will take place
at the offices of Winston & Strawn LLP, 200 Park Avenue, New York, New York
10166, commencing at 10:00 a.m. (local time) on the later of (a)
February 27, 2004, or (b) the date that is five (5) Business Days
following the termination of the applicable waiting period under the HSR Act,
unless Buyer and Sellers otherwise agree. Subject to the provisions of Article 9,
failure to consummate the purchase and sale provided for in this Contract on
the date and time and at the place determined pursuant to this Section 2.6
will not result in the termination of this Contract and will not relieve any
party of any obligation under this Contract. In such a situation, the Closing
will occur as soon as practicable, subject to Article 9.

 

2.7.                              CLOSING
OBLIGATIONS

 

In
addition to any other documents to be delivered under other provisions of this
Contract, at the Closing:

 

(a)                                  Sellers shall
deliver to Buyer, together with funds sufficient to pay all Taxes necessary for
the transfer, filing or recording thereof:

 

(i)                                     a bill of sale for
all of the Assets that are Tangible Personal Property in form and substance
mutually satisfactory to Sellers and Buyer (the “Bill of Sale”) executed by
Sellers;

 

(ii)                                  an assignment of
all of the Assets that are intangible personal property in form and substance
mutually satisfactory to Sellers and Buyer, which assignment shall also contain
Buyer’s undertaking and assumption of the Assumed Liabilities (the “Assignment
and Assumption Agreement”) executed by Sellers;

 

(iii)                               for each interest
in Leasehold Real Property identified on Schedule 3.6, an Assignment and
Assumption of Lease in form and substance mutually satisfactory to Sellers and
Buyer or such other appropriate document or instrument of transfer, as the case
may require, each in form and substance reasonably satisfactory to Buyer and
its counsel and executed by Sellers;

 

(iv)                              assignments of all
Intellectual Property Assets and separate assignments of all registered Marks
in form and substance mutually satisfactory to Sellers and Buyer executed by
Sellers;

 

(v)                                 such other deeds,
bills of sale, assignments, certificates of title, documents and other
instruments of transfer and conveyance as may reasonably be requested by Buyer,
each in form and substance reasonably satisfactory to Buyer and its legal
counsel and executed by Sellers;

 

8

 

(vi)                              a certificate
executed by each Seller as to the accuracy of its representations and
warranties as of the date of this Contract and as of the Closing in accordance
with Section 7.1 and as to its compliance with and performance of its
covenants and obligations to be performed or complied with at or before the
Closing in accordance with Section 7.2;

 

(vii)                           a certificate of
the Secretary of each Seller certifying, as complete and accurate as of the
Closing, attached copies of the Governing Documents of such Seller, certifying
and attaching all requisite resolutions or actions of such Seller’s board of
directors and shareholders approving the execution and delivery of this
Contract and the consummation of the Contemplated Transactions and the change
of name contemplated by Section 5.9 and certifying to the incumbency and
signatures of the officers of such Seller executing this Contract and any other
document relating to the Contemplated Transactions and accompanied by the
requisite documents for amending the relevant Governing Documents of such
Seller required to effect such change of name in form sufficient for filing
with the appropriate Governmental Body; and

 

(viii)                        the Escrow
Agreement executed by Sellers and the Escrow Agent.

 

(b)                                 Buyer shall deliver
to Sellers and the Escrow Agent, respectively, as hereinafter provided:

 

(i)                                     One Hundred
Forty-Five Million and No/100ths dollars ($145,000,000) by wire transfer to an
account specified by Sellers in a writing delivered to Buyer at least three (3)
business days prior to the Closing Date, and Ten Million and No/100ths dollars
($10,000,000) by wire transfer to the account of the Escrow Agent pursuant to
the Escrow Agreement;

 

(ii)                                  the Assignment and
Assumption Agreement executed by Buyer;

 

(iii)                               a certificate
executed by Buyer as to the accuracy of its representations and warranties as
of the date of this Contract and as of the Closing in accordance with
Section 8.1 and as to its compliance with and performance of its covenants
and obligations to be performed or complied with at or before the Closing in
accordance with Section 8.2;

 

(iv)                              a certificate of
the Secretary of Buyer certifying, as complete and accurate as of the Closing,
attached copies of the Governing Documents of Buyer and certifying and
attaching all requisite resolutions or actions of Buyer’s board of directors
approving the execution and delivery of this Contract and the consummation of
the Contemplated Transactions and certifying to the incumbency and signatures
of the officers of Buyer executing this Contract and any other document
relating to the Contemplated Transactions; and

 

(v)                                 the Escrow
Agreement, executed by Buyer and the Escrow Agent.

 

9

 

2.8.                              ADJUSTMENT
AMOUNT AND PAYMENT

 

The
“Adjustment Amount” (which may be a positive or negative number) will be equal
to the amount determined by subtracting the Closing Inventories and Fixed
Assets Capital from the Initial Inventories and Fixed Assets Capital. If the
Adjustment Amount is positive, the Adjustment Amount shall be paid by wire
transfer by Sellers to an account specified by Buyer. If the Adjustment Amount
is negative, the difference between the Closing Inventories and Fixed Assets
Capital and the Initial Inventories and Fixed Assets Capital shall be paid by wire
transfer by Buyer to an account specified by Sellers. All payments shall be
made together with interest at the rate of The Wall Street Journal “Prime
Rate”, as published in its “Money Rates” section, which interest shall begin
accruing on the Closing Date and end on the date that the payment is made.
Within three (3) business days after the calculation of the Closing Inventories
and Fixed Assets Capital becomes binding and conclusive on the parties pursuant
to Section 2.9, Sellers or Buyer, as the case may be, shall make the wire
transfer payment provided for in this Section 2.8.

 

2.9.                              ADJUSTMENT
PROCEDURE

 

(a)                                  “Inventories and
Fixed Assets Capital” as of a given date shall mean the combined value of all
Inventories and Fixed Assets of Sellers as of that date. For reference, the
Inventories of Sellers as of November 1, 2003 was Twenty-Seven Million
Five Hundred Twelve Thousand Eight Hundred dollars ($27,512,800) and the Fixed
Assets of Sellers as of November 1, 2003 was Twenty-One Million Seven
Hundred Seventy-Eight Thousand Four Hundred dollars ($21,778,400) for a total
of Forty-Nine Million Two Hundred Ninety-One Thousand Two Hundred dollars
($49,291,200) (the “Initial Inventories and Fixed Assets Capital”).

 

(b)                                 Sellers have
prepared and delivered to Buyer a consolidated statement of the Initial
Inventories and Fixed Assets Capital of Sellers as at November 1, 2003, on
the same basis and applying the same accounting principles, policies and
practices that were used in preparing the Balance Sheet, including the
principles, policies and practices set forth on Schedule 2.9(b).  Buyer shall determine the Inventories and
Fixed Assets Capital as of the Closing (the “Closing Inventories and Fixed
Assets Capital”)  using the same
methodology as was used to calculate the Initial Inventories and Fixed Assets
Capital, except that a sum equal to the deduction for depreciation for the
period November 1, 2003 through November 29, 2003 will be added back
to the Fixed Assets Capital account to determine Closing Inventories and Fixed
Assets Capital for purposes of the adjustment, if any, to be made pursuant to
Section 2.8 above. Buyer shall deliver its determination of the Closing
Inventories and Fixed Assets Capital to Sellers within sixty (60) days
following the Closing Date.

 

(c)                                  If within thirty
(30) days following delivery of the Closing Inventories and Fixed Assets
Capital calculation Sellers shall not have given Buyer written notice of its
objection as to the Closing Inventories and Fixed Assets Capital calculation (which
notice shall state the basis of Sellers’ objection), then the Closing
Inventories and Fixed Assets Capital calculated by Buyer shall be binding and
conclusive on the parties and be used in computing the Adjustment Amount.

 

10

 

(d)                                 If Sellers duly
shall give Buyer such notice of objection, and if Sellers and Buyer shall fail
to resolve the issues outstanding with respect to the calculation of the
Closing Inventories and Fixed Assets Capital within thirty (30) days of Buyer’s
receipt of Sellers’ objection notice, Sellers and Buyer shall submit the issues
remaining in dispute to a mutually acceptable nationally recognized independent
public accounting firm (the “Independent Accountants”) for resolution applying
the principles, policies and practices referred to in Section 2.9(b). If
issues are submitted to the Independent Accountants for resolution, (i) Sellers
and Buyer shall furnish or cause to be furnished to the Independent Accountants
such work papers and other documents and information relating to the disputed
issues as the Independent Accountants may request and are available to that
party or its agents and shall be afforded the opportunity to present to the
Independent Accountants any material relating to the disputed issues and to
discuss the issues with the Independent Accountants; (ii) the determination by
the Independent Accountants, as set forth in a notice to be delivered to both
Sellers and Buyer within sixty (60) days of the submission to the Independent
Accountants of the issues remaining in dispute, shall be final, binding and
conclusive on the parties and shall be used in the calculation of the Closing
Inventories and Fixed Assets Capital; and (iii) Sellers and Buyer will each
bear fifty percent (50%) of the fees and costs of the Independent Accountants
for such determination.

 

2.10.                        CONSENTS

 

(a)                                  If there are any
Material Consents that have not yet been obtained (or otherwise are not in full
force and effect) as of the Closing, in the case of each Seller Contract as to
which such Material Consents were not obtained (or otherwise are not in full
force and effect) (the “Restricted Material Contracts”), Buyer may waive the
closing conditions as to any such Material Consent and either:

 

(i)                                     elect to have
Sellers continue their efforts to obtain the Material Consents; or

 

(ii)                                  elect to have
Sellers retain that Restricted Material Contract and all Liabilities arising
therefrom or relating thereto.

 

If
Buyer elects to have Sellers continue their efforts to obtain any Material
Consents and the Closing occurs, notwithstanding Sections 2.1 and 2.4, neither
this Contract nor the Assignment and Assumption Agreement nor any other
document related to the consummation of the Contemplated Transactions shall constitute
a sale, assignment, assumption, transfer, conveyance or delivery or an
attempted sale, assignment, assumption, transfer, conveyance or delivery of the
Restricted Material Contracts, and following the Closing, Sellers shall use
Best Efforts (at their expense) to obtain the Material Consent relating to each
Restricted Material Contract as quickly as practicable. Pending the obtaining
of such Material Consents relating to any Restricted Material Contract, the
parties shall cooperate with each other in any reasonable and lawful
arrangements designed to provide to Buyer the economic and operational
equivalent of use of the Restricted Material Contract for its term (or any
right or benefit arising thereunder, including the enforcement for the benefit
of Buyer of any and all rights of Sellers against a third party thereunder).
Once a Material Consent for the sale,

 

11

 

assignment,
assumption, transfer, conveyance and delivery of a Restricted Material Contract
is obtained, Sellers shall promptly assign, transfer, convey and deliver such
Restricted Material Contract to Buyer, and Buyer shall assume the obligations
under such Restricted Material Contract assigned to Buyer from and after the
date of assignment to Buyer pursuant to a special-purpose assignment and
assumption agreement substantially similar in terms to those of the Assignment
and Assumption Agreement (which special-purpose agreement the parties shall
prepare, execute and deliver in good faith at the time of such transfer, all at
no additional cost to Buyer). 
Specifically, without limitation, the parties recognize that it will be
appropriate to seek and obtain novation of each Seller Contract with the United
States Government after Closing; and Sellers and Buyer will in good faith
cooperate in efforts to promptly obtain government approval of such novations.

 

(b)                                 If there are any
Consents not listed on Schedule 7.3 necessary for the
assignment and transfer of any Seller Contracts to Buyer (the “Nonmaterial
Consents”) which shall not yet have been obtained (or otherwise are not in full
force and effect) as of the Closing, Buyer shall elect at the Closing, in the
case of each of the Seller Contracts as to which such Nonmaterial Consents were
not obtained (or otherwise are not in full force and effect) (the “Restricted
Nonmaterial Contracts”), whether to:

 

(i)                                     accept the
assignment of such Restricted Nonmaterial Contract, in which case, as between
Buyer and Sellers, such Restricted Nonmaterial Contract shall, to the maximum
extent practicable and notwithstanding the failure to obtain the applicable
Nonmaterial Consent, be transferred at the Closing pursuant to the Assignment
and Assumption Agreement as elsewhere provided under this Contract; or

 

(ii)                                  reject the
assignment of such Restricted Nonmaterial Contract, in which case,
notwithstanding Sections 2.1 and 2.4, (A) neither this Contract nor the
Assignment and Assumption Agreement nor any other document related to the
consummation of the Contemplated Transactions shall constitute a sale,
assignment, assumption, conveyance or delivery or an attempted sale,
assignment, assumption, transfer, conveyance or delivery of such Restricted
Nonmaterial Contract, and (B) Sellers shall retain such Restricted Nonmaterial
Contract and all Liabilities arising therefrom or relating thereto.

 

3.                                       Representations and Warranties of Sellers

 

Sellers
jointly and severally represent and warrant to Buyer the following as of the
date hereof and as of the Closing Date.

 

3.1.                              ORGANIZATION
AND GOOD STANDING

 

(a)                                  Schedule 3.1(a) contains a
complete and accurate list of Wornick’s and its QSSS’s jurisdiction of
incorporation or other organization, as the case may be, and any other
jurisdictions in which it and they are qualified to do business.  Wornick,

 

12

 

TWCRAD
and RAMCO are corporations duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
incorporation.  TWCRADLP is a limited
partnership duly organized, validly existing and in good standing under the law
of its jurisdiction of organization. 
Each Seller has full power and authority to conduct its business as it
is now being conducted, to own or use the properties and assets that it purports
to own or use, and to perform all its obligations under this Contract and the
Seller Contracts, as applicable.  Each
Seller is duly qualified to do business and is in good standing under the laws
of each state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by
it, requires such qualification.

 

(b)                                 Complete and
accurate copies of the Governing Documents of Wornick, TWCRAD, RAMCO, and
TWCRADLP, as currently in effect, have been delivered to Buyer.

 

(c)                                  Wornick has no
Subsidiary other than the QSSSs and, except as disclosed in Schedule 3.1(c),
does not own any shares of capital stock or other securities of any other
Person.

 

3.2.                              ENFORCEABILITY; AUTHORITY; NO CONFLICT

 

(a)                                  Subject to the
required approvals described in Sections 7.8 and 8.6, (i) this Contract
constitutes the legal, valid and binding obligation of each Seller, enforceable
against it in accordance with its terms; (ii) upon the execution and delivery
by Sellers of each agreement to be executed or delivered by any or all of
Sellers at the Closing (collectively, the “Seller’s Closing Documents”), each
of Seller’s Closing Documents will constitute the legal, valid and binding
obligation of each of Sellers enforceable against each of them in accordance
with its terms; and (iii) each Seller has the absolute and unrestricted right,
power and authority to execute and deliver this Contract and the Seller’s
Closing Documents to which it is a party and to perform its obligations under
this Contract and the Seller’s Closing Documents, and such action has been duly
authorized by all necessary action by such Seller’s shareholders and board of
directors.

 

(b)                                 Except as set forth
in Schedule 3.2(b),
neither the execution and delivery of this Contract nor the consummation or
performance of any of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of time):

 

(i)                                     Breach (A) any
provision of any of the Governing Documents of Sellers or (B) any resolution
adopted by the board of directors or the shareholders of Wornick, TWCRAD or
RAMCO;

 

(ii)                                  Breach, or give any
Governmental Body or other Person the right to challenge, any of the
Contemplated Transactions or to exercise any remedy or obtain any relief under
any Legal Requirement or any Order to which Sellers, or any of the Assets, may
be subject;

 

13

 

(iii)                               contravene,
conflict with or result in a violation or breach of any of the terms or requirements
of, or give any Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate or modify, any Governmental Authorization that is held by
Sellers or that otherwise relates to the Assets or to the business of Sellers;

 

(iv)                              cause Buyer to
become subject to, or to become liable for the payment of, any Tax;

 

(v)                                 Breach any
provision of, or give any Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or payment
under, or to cancel, terminate or modify, any Seller Contract identified in
Section 3.16(a) of this Contract;

 

(vi)                              result in the
imposition or creation of any Encumbrance upon or with respect to any of the
Assets; or

 

(vii)                           result in any
shareholder or equity owner of Sellers having the right to exercise dissenters’
appraisal rights.

 

(c)                                  Except as set forth
in Schedule 3.2(c),
no Seller is required to give any notice to or obtain any Consent from any
Person in connection with the execution and delivery of this Contract or the
consummation or performance of any of the Contemplated Transactions, the
absence of which notice or Consent would have a material adverse effect on the
business, operations, assets, condition or prospects of such Seller or its
Assets.

 

3.3.                              FINANCIAL
STATEMENTS

 

Attached
hereto as Schedule 3.3 are: (a) an audited consolidated balance
sheet of Wornick as at December 31, 2002 (including the notes thereto, the
“Balance Sheet”), and the related audited statements of income, changes in
shareholders’ equity and cash flows for the fiscal year then ended, including
in each case the notes thereto, together with the report thereon of The Hanke
Group, independent certified public accountants; (b) audited consolidated
balance sheets of Wornick as at December 31 in each of the fiscal years
2000 through 2001, and the related audited statements of income, changes in
shareholders’ equity and cash flows for each of the fiscal years then ended,
including in each case the notes thereto together with the report thereon of
independent certified public accountants; (c) an unaudited consolidated balance
sheet of Wornick as at November 1, 2003 (the “Interim Balance Sheet”) and
the related unaudited statements of income for the ten (10) months then ended,
certified by Wornick’s chief executive officer; and (d) an unaudited
consolidated balance sheet of Wornick as at July 5, 2003 and the related
unaudited statements of income for the six (6) months then ended. Such
consolidated financial statements referred to in clauses (a), (b), (c) and (d)
above fairly present (and the financial statements delivered pursuant to
Section 5.8 will fairly present) the financial condition and the results
of operations, changes in shareholders’ equity and cash flows of Sellers as at
the respective dates of and for the periods referred to in such financial
statements, and reflect and provide adequate reserves in respect of all known
Liabilities of the business of Sellers, including all known contingent
Liabilities as of their respective dates, all in accordance with GAAP. The
financial statements referred to in clauses (a) (b), (c) and (d) above and
delivered pursuant to

 

14

 

Section 5.8
reflect and will reflect the consistent application of such accounting
principles throughout the periods involved, except as disclosed in the notes to
such financial statements. The financial statements referred to in clauses (a),
(b), (c) and (d) above and to be delivered pursuant to Section 5.8 have
been and will be prepared from and are in accordance with the accounting
Records of Sellers.  Each Seller has
also delivered to Buyer copies of all letters from such Seller’s auditors to
such Seller’s board of directors or the audit committee thereof during the
thirty-six (36) months preceding the execution of this Contract, together with
copies of all responses thereto.

 

3.4.                              BOOKS AND
RECORDS

 

The
books of account and other financial Records of Sellers, all of which have been
made available to Buyer, are complete and correct and represent actual, bona
fide transactions and have been maintained in accordance with sound business
practices and the requirements of Section 13(b)(2) of the Exchange Act
(regardless of whether Sellers are subject to that Section or not), including
the maintenance of an adequate system of internal controls. The minute books of
Wornick, TWCRAD and RAMCO, all of which have been made available to Buyer,
contain accurate and complete Records of all meetings held of, and corporate
action taken by, the shareholders, the board of directors and committees of the
board of directors of Wornick, TWCRAD and RAMCO, as the case may be, and no
meeting of any such shareholders, board of directors or committee has been held
for which minutes have not been prepared or are not contained in such minute
books.

 

3.5.                              SUFFICIENCY
OF ASSETS

 

Except
for the Excluded Assets and otherwise as set forth in Schedule 3.5, the
Assets (a) constitute all of the assets, tangible and intangible, of any nature
whatsoever, necessary to operate Sellers’ business in the manner presently
operated by Sellers and (b) include all of the operating assets of Sellers.

 

3.6.                              DESCRIPTION
OF LEASED REAL PROPERTY

 

(a)                                  Schedule 3.6(a)  contains a correct legal description and
street address of all tracts, parcels and subdivided lots in which Wornick has
a leasehold interest and an accurate description (by location, name of lessor,
date of Lease and term expiry date) of all Leasehold Real Property Leases of
Wornick.

 

(b)                                 Schedule 3.6(b) contains a correct
legal description, and street address of all tracts, parcels and subdivided
lots in which TWCRADLP has a leasehold interest and an accurate description (by
location, name of lessor, date of Lease and term expiry date) of all Leasehold
Real Property Leases of TWCRADLP.

 

(c)                                  Other than these
leasehold interests, no Sellers have any ownership interest in any real
property.  Sellers have made available
to Buyer true, correct and complete copies of the leases and subleases (as
amended to date), and other agreements for occupancy, including all amendments,
extensions and modifications thereto as of the date of this Contract, with
respect to each parcel of Leasehold Real Property.  Each Lease of Leasehold Real Property is a legal, valid and
binding obligation of

 

15

 

Sellers and is in full
force and effect.  Neither Sellers, nor
to Sellers’ Knowledge any other party to the Lease of Leasehold Real Property,
is in breach or default, and, to Sellers’ knowledge, no event has occurred
which, with notice or lapse of time, would constitute a breach or default or
permit termination, modification or acceleration thereunder.

 

3.7.                              TITLE
TO ASSETS; ENCUMBRANCES

 

Sellers
own good and transferable title to all of the Assets free and clear of any
Encumbrances other than those described in Schedule 3.7. Sellers warrant to
Buyer that, at the time of Closing, all Assets shall be free and clear of all
such Encumbrances other than those identified on Schedule 3.7
(“Permitted Encumbrances”).

 

3.8.                              CONDITION
OF FACILITIES

 

(a)                                  Use of the
Leasehold Real Property for the various purposes for which it is presently
being used is permitted as of right under all Leases. To Sellers’ knowledge:
(i) all Improvements are in compliance with all applicable Legal Requirements,
are in good repair and in good condition, ordinary wear and tear excepted, and
are free from latent and patent defects; (ii) no part of any Improvement
encroaches on any real property not included in the Leasehold Real Property,
and there are no buildings, structures, fixtures or other Improvements
primarily situated on adjoining property which encroach on any part of the
Land; and (iii) there is no existing or proposed eminent domain proceeding that
would result in the taking of all or any part of any Facility or that would
prevent or hinder the continued use of any Facility as heretofore used in the
conduct of the business of Sellers.  All
Leases of Leasehold Real Property with a Related Person of Sellers contain rent
and other terms that represent “fair market rental terms”.

 

(b)                                 Substantially all
items of Tangible Personal Property are in good repair and good operating
condition, ordinary wear and tear excepted, are suitable for immediate use in
the Ordinary Course of Business and are free from latent and patent defects. No
item of material Tangible Personal Property is in need of repair or replacement
other than as part of routine maintenance in the Ordinary Course of Business.
Except as disclosed in Schedule 3.8(b), all Tangible Personal
Property used in Sellers’ business is in the possession of Sellers.

 

3.9.                              INVENTORIES

 

All
items included in the Inventories consist of a quality and quantity usable and,
with respect to finished goods, saleable, in the Ordinary Course of Business of
Sellers except for obsolete items and items of below-standard quality, all of
which have been written off or written down to net realizable value in the
Balance Sheet or the Interim Balance Sheet or on the accounting Records of
Sellers as of the Closing Date, as the case may be. Except for Government
Furnished Materials, Sellers are not in possession of any inventory not owned
by Sellers, including goods already sold. All of the Inventories have been
valued at the lower of cost or market value on a first in, first out basis.
Inventories now on hand that were purchased after the date of the Balance Sheet
or the Interim Balance Sheet were purchased in the Ordinary Course of Business
of Sellers

 

16

 

at
a cost not exceeding market prices prevailing at the time of purchase. The
quantities of each item of Inventories (whether raw materials, work-in-process
or finished goods) are not excessive but are reasonable in the present
circumstances of Sellers. Work-in-process Inventories are now valued, and will
be valued on the Closing Date, according to GAAP.

 

3.10.                        NO
UNDISCLOSED LIABILITIES

 

Except
for the Retained Liabilities or otherwise as set forth in Schedule 3.10,
Sellers have no Liability except for Liabilities reflected or reserved against
in the Balance Sheet or the Interim Balance Sheet and current liabilities
incurred in the Ordinary Course of Business of Sellers since the date of the
Interim Balance Sheet which do not involve indebtedness for borrowed money.

 

3.11.                        NO
MATERIAL ADVERSE CHANGE

 

Since
July 5, 2003, except as indicated by the Interim Balance Sheet and on Schedule 3.15,
there has not been any material adverse change in the business, operations,
prospects, assets, results of operations or condition (financial or other) of
Sellers, and no event has occurred or circumstance exists that may result in
such a material adverse change; provided, however, that in no event shall any
of the following constitute a material adverse change in the business, operations,
prospects, assets, results of operations or condition of Sellers:  (i) any change resulting from conditions
affecting the industry in which Sellers operate or from changes in general
business or economic conditions; (ii) any change resulting from the announcement
or pendency of any of the transactions contemplated by this Contract; or (iii)
any change resulting from compliance by Sellers with the terms of, or the
taking of any action contemplated or permitted by, this Contract.

 

3.12.                        EMPLOYEE
BENEFITS

 

(a)                                  Set forth in Schedule 3.12(a)
is a complete and correct list of all “employee benefit plans” as defined by
Section 3(3) of ERISA, all specified fringe benefit plans as defined in
Section 6039D of the Code, and all other bonus, incentive-compensation, deferred-compensation,
profit-sharing, stock-option, stock-appreciation-right, stock-bonus,
stock-purchase, employee-stock-ownership, savings, severance,
change-in-control, supplemental-unemployment, layoff, salary-continuation,
retirement, pension, health, life-insurance, disability, accident,
group-insurance, vacation, holiday, sick-leave, fringe-benefit or welfare plan,
and any other employee compensation or benefit plan, agreement, policy,
practice, commitment, contract or understanding (whether qualified or
nonqualified, currently effective or terminated, written or unwritten) and any
trust, escrow or other agreement related thereto that (i) is maintained or
contributed to by Sellers or any other corporation or trade or business
controlled by, controlling or under common control with Sellers (within the
meaning of Section 414 of the Code or Section 4001(a)(14) or 4001(b)
of ERISA) (“ERISA Affiliate”) or has been maintained or contributed to in the
last six (6) years by Sellers or any ERISA Affiliate, or with respect to which
Sellers or any ERISA Affiliate has or may have any liability, and (ii) provides
benefits, or describes policies or procedures applicable to any current or
former director, officer, employee or service provider of Sellers or any ERISA Affiliate,
or the dependents of any thereof, regardless of how (or whether) liabilities
for the provision of

 

17

 

benefits
are accrued or assets are acquired or dedicated with respect to the funding
thereof (collectively the “Employee Benefit Plans”).  Schedule 3.12(a) identifies as such any Employee Plan
that is (w) a “Defined Benefit Plan” (as defined in Section 414(l) of the
Code); (x) a plan intended to meet the requirements of Section 401(a) of
the Code; (y) a “Multiemployer Plan” (as defined in Section 3(37) of
ERISA); or (z) a plan subject to Title IV of ERISA, other than a Multiemployer
Plan. Also set forth on Schedule 3.12(a) is a complete and
correct list of all ERISA Affiliates of Sellers during the last six (6) years.

 

(b)                                 Sellers have
delivered or made available to Buyer a true and complete copy of:

 

(i)                                     Each Employee Benefit Plan and any
related funding agreements (e.g., trust agreements or insurance contracts),
including all amendments (and Schedule 3.12(b) includes a
description of any such amendment that is not in writing);

 

(ii)                                  The current summary plan description of
each Employee Benefit Plan (if applicable); and

 

(iii)                               The most recent Internal Revenue Service determination
letter (if applicable) for each Employee Benefit Plan, which determination
letter, except as set for on Schedule 3.12(b), reflects all
amendments that have been made to the Employee Benefit Plan.

 

(c)                                  No Employee Benefit Plan or any trust established
thereunder has incurred any “accumulated funding deficiency,” as defined
in Section 302 of ERISA and Section 412 of the Code, whether or not
waived, as of the last day of the most recent fiscal year ended prior to the
Effective Time, and all contributions required to be made with respect thereto
(whether pursuant to the terms of any Employee Benefit Plan or otherwise) on or
prior to the Effective Time have been timely made.

 

3.13.                        COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS

 

(a)                                  Except as set forth
in Schedule 3.13(a),
to Sellers’ Knowledge:

 

(i)                                     Each Seller is, and
at all times since July 5, 2003, has been, in full compliance with each
material Legal Requirement that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its assets;

 

(ii)                                  no event has
occurred or circumstance exists that (with or without notice or lapse of time)
(A) may constitute or result in a violation by any Seller of, or a failure on
the part of any Seller to comply with, any Legal Requirement or (B) may give
rise to any obligation on the part of any Seller to undertake, or to bear all
or any portion of the cost of, any material remedial action of any nature; and

 

18

 

(iii)                               Each Seller has not
received, at any time since July 5, 2003, any notice or other
communication (whether oral or written) from any Governmental Body or any other
Person regarding (A) any actual, alleged, possible or potential violation of,
or failure to comply with, any material Legal Requirement or (B) any actual,
alleged, possible or potential obligation on the part of such Seller to
undertake, or to bear all or any portion of the cost of, any material remedial
action of any nature.

 

(b)                                 Schedule 3.13(b) contains a complete
and accurate list of each material Governmental Authorization that is held by
Sellers or that otherwise relates to Sellers’ business or the Assets. Each
Governmental Authorization listed or required to be listed in Schedule 3.13(b)
is valid and in full force and effect. Except as set forth in Schedule 3.13(b):

 

(i)                                     Each Seller is, and
at all times since July 5, 2003, has been, in full compliance with all of
the material terms and requirements of each Governmental Authorization
identified or required to be identified in Schedule 3.13(b);

 

(ii)                                  no event has
occurred or circumstance exists that may (with or without notice or lapse of
time) (A) constitute or result directly or indirectly in a violation of or a
failure to comply with any material term or requirement of any Governmental
Authorization listed or required to be listed in Schedule 3.13(b)
or (B) result directly or indirectly in the revocation, withdrawal, suspension,
cancellation or termination of, or any modification to, any Governmental
Authorization listed or required to be listed in Schedule 3.13(b);

 

(iii)                               No Seller has
received, at any time since July 5, 2003, any notice or other
communication (whether oral or written) from any Governmental Body or any other
Person regarding (A) any actual, alleged, possible or potential violation of or
failure to comply with any material term or requirement of any Governmental
Authorization or (B) any actual, proposed, possible or potential revocation,
withdrawal, suspension, cancellation, termination of or modification to any
material Governmental Authorization; and

 

(iv)                              all applications
required to have been filed for the renewal of the Governmental Authorizations
listed or required to be listed in Schedule 3.13(b) have been duly
filed on a timely basis with the appropriate Governmental Bodies, and all other
filings required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the appropriate
Governmental Bodies.

 

No
Seller shall be deemed to have breached any of the foregoing representations or
warranties as a consequence of the existence of any fact, event or circumstance
inconsistent with such representation or warranty, unless such fact, event or
circumstance could have a material adverse effect on the Assets or the business
of Sellers.

 

19

 

The
Governmental Authorizations listed in Schedule 3.13(b) collectively
constitute all of the material Governmental Authorizations necessary to permit
each Seller to lawfully conduct and operate its business in the manner in which
it currently conducts and operates such business and to permit each Seller to
own and use its assets in the manner in which it currently owns and uses such
assets.

 

3.14.                        LEGAL
PROCEEDINGS; ORDERS

 

(a)                                  Except as set forth
in Schedule 3.14(a),
there is no pending or, to Sellers’ Knowledge, threatened Proceeding:

 

(i)                                     by or against any
Seller or that otherwise relates to or may affect the business of, or any of
the assets owned or used by, any Seller; or

 

(ii)                                  that challenges, or
that may have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the Contemplated Transactions.

 

To
the Knowledge of Sellers, no event has occurred or circumstance exists that is
reasonably likely to give rise to or serve as a basis for the commencement of
any such Proceeding. Sellers have delivered to Buyer copies of all pleadings,
correspondence and other documents relating to each Proceeding listed in Schedule 3.14(a).
There are no Proceedings listed or required to be listed in Schedule 3.14(a)
that could have a material adverse effect on the business, operations, assets,
condition or prospects of Sellers or upon the Assets.

 

(b)                                 Except as set forth
in Schedule 3.14(b):

 

(i)                                     there is no Order
to which any Seller, its business or any of the Assets is subject, the
violation of which would have a material adverse effect on the business,
operations, assets, condition or prospects of Sellers or upon the Assets; and

 

(ii)                                  to the Knowledge of
Sellers, no officer, director, agent or employee of Sellers is subject to any
Order that prohibits such officer, director, agent or employee from engaging in
or continuing any conduct, activity or practice relating to the business of
Sellers.

 

(c)                                  Except as set forth
in Schedule 3.14(c):

 

(i)                                     Each Seller is, and
at all times since July 5, 2003, has been, in compliance with all of the
material terms and requirements of each Order to which it or any of the Assets
is or has been subject;

 

(ii)                                  no event has
occurred or circumstance exists that is reasonably likely to constitute or
result in (with or without notice or lapse of time) a violation of or failure
to comply with any material term or requirement of any Order to which any
Seller or any of the Assets is subject; and

 

20

 

(iii)                               No Seller has
received, at any time since July 5, 2003, any notice or other
communication (whether oral or written) from any Governmental Body or any other
Person regarding any actual, alleged, possible or potential violation of, or
failure to comply with, any material term or requirement of any Order to which
such Seller or any of the Assets is or has been subject.

 

3.15.                        ABSENCE
OF CERTAIN CHANGES AND EVENTS

 

Except
as set forth in Schedule 3.15, since July 5,
2003, each Seller has conducted its business only in the Ordinary Course of
Business and there has not been any:

 

(a)                                  amendment to the
Governing Documents of such Seller;

 

(b)                                 except in the
Ordinary Course of Business, payment or increase by such Seller of any bonuses,
salaries or other compensation to any shareholder, director, officer or
employee or entry into any employment, severance, profit sharing, bonus,
deferred compensation, savings, insurance, pension, retirement or similar
Contract with any director, officer or employee;

 

(c)                                  material damage to
or destruction or loss of any Asset, whether or not covered by insurance;

 

(d)                                 entry into,
termination of or receipt of notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit or similar
Contract to which such Seller is a party, or (ii) any Contract or transaction
involving a total remaining commitment by such Seller of at least $2,000,000;

 

(e)                                  sale (other than
sales of Inventories in the Ordinary Course of Business), lease or other
disposition of any material Asset or property of such Seller (including the
Intellectual Property Assets) or the creation of any material Encumbrance on
any Asset;

 

(f)                                    material change in
the accounting methods used by such Seller;

 

(g)                                 adoption of,
amendment to or increase in the payments to or benefits under, any Employee
Benefit Plan;

 

(h)                                 cancellation or
waiver of any claims or rights with a value to such Seller in excess of
$2,000,000;

 

(i)                                     indication by any
material customer or supplier of an intention to discontinue or change the
terms of its relationship with such Seller;

 

(j)                                     entry into any
settlement of any material pending or threatened litigation;

 

(k)                                  incurrence of any
indebtedness, liabilities, claims, commitments or obligations (including
indebtedness for borrowed money) in excess of $2,000,000, except for
liabilities for trade or business obligations incurred in connection with the
purchase of goods or services in the Ordinary Course of Business;

 

21

 

(l)                                     granting of credit
to any customer or distributor on terms or in amounts materially more favorable
than had been extended to that customer or distributor in the past;

 

(m)                               revaluation of any
Asset (including writing down the value of the Inventory or writing off notes
or accounts receivable), other than in the Ordinary Course of Business; or

 

(n)                                 any action or
omission to take any action that would result in the occurrence of any of the
foregoing.

 

3.16.                        CONTRACTS;
NO DEFAULTS

 

(a)                                  Schedule 3.16(a) contains an
accurate and complete list, and Sellers have delivered to Buyer accurate and
complete copies, of:

 

(i)                                     each Seller
Contract that involves performance of services or delivery of goods or
materials by Sellers of an amount or value in excess of Two Million dollars
($2,000,000);

 

(ii)                                  each Seller
Contract that involves performance of services or delivery of goods or
materials to Sellers of an amount or value in excess of Two Million dollars
($2,000,000);

 

(iii)                               each Seller
Contract that was not entered into in the Ordinary Course of Business and that
involves expenditures or receipts of any Seller in excess of Two Million
dollars ($2,000,000);

 

(iv)                              each Seller
Contract affecting the ownership of, leasing of, title to, use of or any
leasehold or other interest in any real or personal property (except personal
property leases and installment and conditional sales agreements having a value
per item or aggregate payments of less than One Million dollars ($1,000,000)
and with a term of less than one year);

 

(v)                                 each Seller
Contract with any labor union or other employee representative of a group of
employees relating to wages, hours and other conditions of employment;

 

(vi)                              each Seller Contract
(however named) involving a sharing of profits, losses, costs or liabilities by
any Seller with any other Person;

 

(vii)                           each Seller
Contract, identified in Section 3.16(a)(i) or (ii) above, containing
covenants that in any way purport to restrict Sellers’ business activity or
limit the freedom of any Seller to engage in any line of business or to compete
with any Person;

 

(viii)                        each Seller
Contract providing for payments to or by any Person based on sales, purchases
or profits, other than direct payments for goods;

 

(ix)                                each Seller
Contract, identified in Section 3.16(a)(i) or (ii) above, entered into
other than in the Ordinary Course of Business, that contains or

 

22

 

provides
for an express undertaking by any Seller to be responsible for consequential
damages;

 

(x)                                   each Seller
Contract for capital expenditures in excess of Two Million dollars
($2,000,000);

 

(xi)                                each Seller
Contract not denominated in U.S. dollars;

 

(xii)                             each Seller
Contract, identified in Section 3.16(a)(i) above, containing any written
warranty, guaranty and/or other similar undertaking with respect to contractual
performance extended by any Seller other than in the Ordinary Course of
Business;

 

(xiii)                          each power of
attorney of any Seller that is currently effective and outstanding; and

 

(xiv)                         each amendment,
supplement and modification (whether oral or written) in respect of any of the
foregoing.

 

Schedule 3.16(a) sets forth reasonably complete details
concerning such Contracts, including the parties to the Contracts and the
location of Sellers’ offices where details relating to the Contracts are
located.

 

(b)                                 Except as set forth
in Schedule 3.16(b),
no shareholder of any Seller has or may acquire any rights under, and no
shareholder of any Seller has or may become subject to any obligation or
liability under, any Contract that relates to the business of such Seller or
any of the Assets.

 

(c)                                  Except as provided
in Section 3.2(c):

 

(i)                                     each Contract
identified or required to be identified in Schedule 3.16(a) and which is to
be assigned to or assumed by Buyer under this Contract is in full force and
effect and is valid and enforceable in accordance with its terms;

 

(ii)                                  each Contract
identified or required to be identified in Schedule 3.16(a) and which is
being assigned to or assumed by Buyer is assignable by Sellers to Buyer without
the consent of any other Person; and

 

(iii)                               to the Knowledge of
Sellers, no Contract identified or required to be identified in Schedule 3.16(a)
and which is to be assigned to or assumed by Buyer under this Contract will
upon completion or performance thereof have, on the whole, a material adverse
effect on the business, assets or condition of Sellers or the business to be
conducted by Buyer with the Assets.

 

(d)                                 Except as set forth
in Schedule 3.16(d):

 

23

 

(i)                                     Each Seller is, and
at all times since July 5, 2003, has been, in compliance with all material
applicable terms and requirements of each Seller Contract set forth in Schedule 3.16(a)
which is being assumed by Buyer;

 

(ii)                                  each other Person
that has or had any obligation or liability under any Seller Contract set forth
in Schedule 3.16(a)
which is being assigned to Buyer is, and at all times since July 5, 2003,
has been, in full compliance with all material applicable terms and
requirements of such Contract;

 

(iii)                               no event has
occurred or circumstance exists that (with or without notice or lapse of time)
may contravene, conflict with or result in a Breach of, or give any Seller or
other Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or payment under, or to cancel,
terminate or modify, any Seller Contract set forth in Schedule 3.16(a)
that is being assigned to or assumed by Buyer;

 

(iv)                              no material event
has occurred or circumstance exists under or by virtue of any Contract set
forth in Schedule 3.16(a) that (with or without notice or
lapse of time) would cause the creation of any Encumbrance affecting any of the
Assets; and

 

(v)                                 Each Seller has not
given to or received from any other Person, at any time since July 5,
2003, any notice or other communication (whether oral or written) regarding any
actual, alleged, possible or potential material violation or Breach of, or
default under, any Contract set forth in Schedule 3.16(a) which is being
assigned to or assumed by Buyer.

 

(e)                                  There are no
renegotiations of, attempts to renegotiate or outstanding rights to renegotiate
any material amounts paid or payable to any Seller under current or completed
Contracts set forth in Schedule 3.16(a) with any Person
having the contractual or statutory right to demand or require such
renegotiation and no such Person has made written demand for such renegotiation.

 

(f)                                    Each Contract
relating to the sale, design, manufacture or provision of products or services
by each Seller has been entered into in the Ordinary Course of Business of such
Seller and has been entered into without the commission of any act alone or in
concert with any other Person, or any consideration having been paid or
promised, that is or would be in material violation of any Legal Requirement.

 

3.17.                        INSURANCE

 

(a)                                  Sellers have
delivered to Buyer:

 

(i)                                     accurate and
complete copies of all policies of insurance (and correspondence relating to
coverage thereunder) to which each Seller is a party or under which each Seller
is or has been covered at any time since July 5, 2003, a list of which is
included in Schedule 3.17(a);

 

24

 

(ii)                                  accurate and
complete copies of all pending applications by each Seller for policies of
insurance; and

 

(iii)                               any statement by
the auditor of Sellers’ financial statements or any consultant or risk
management advisor with regard to the adequacy of Sellers’ coverage or of the
reserves for claims.

 

(b)                                 Schedule 3.17(b) describes:

 

(i)                                     any self-insurance
arrangement by or affecting Sellers, including any reserves established
thereunder;

 

(ii)                                  any Contract or
arrangement identified in Section 3.16(a), other than a policy of
insurance, for the transfer or sharing of any risk to which any Seller is a
party or which involves the business of Sellers; and

 

(iii)                               all obligations of
Sellers to provide insurance coverage to Third Parties (for example, under
Leases or service agreements) and identifies the policy under which such
coverage is provided.

 

(c)                                  Except as set forth
in Schedule 3.17(c):

 

(i)                                     all policies of
insurance to which any Seller is a party or that provide coverage to any
Seller:

 

(A)                              are valid, outstanding and enforceable;

(B)                                are issued by an insurer that is financially
sound and reputable;

(C)                                taken together, provide adequate insurance
coverage for the Assets and the operations of Sellers for all risks to which
Sellers are normally exposed; and

(D)                               are sufficient for compliance with all material
Legal Requirements and Seller Contracts;

 

(ii)                                  No Seller has
received (A) any refusal of coverage or any notice that a defense will be
afforded with reservation of rights or (B) any notice of cancellation or any
other indication that any policy of insurance is no longer in full force or
effect or that the issuer of any policy of insurance is not willing or able to
perform its obligations thereunder;

 

(iii)                               Each Seller has
paid all premiums due, and has otherwise performed all of its material
obligations, under each policy of insurance to which it is a party or that
provides coverage to such Seller; and

 

(iv)                              Each Seller has
given notice to the insurer of all material claims that may be insured thereby.

 

25

 

3.18.                        ENVIRONMENTAL
MATTERS

 

Except
as disclosed in Schedule 3.18:

 

(a)                                  Each Seller is, and
at all times has been, in full compliance with, and has not been and is not in
violation of or liable under, any Environmental Law that would have a material
adverse effect on the Assets or the business of Sellers. Each Seller has no
basis to expect, nor has any Seller or any other Person for whose conduct it is
or may be held to be responsible, received any actual or threatened order,
notice or other communication from (i) any Governmental Body or private citizen
acting in the public interest or (ii) the current or prior owner or operator of
any Facilities, of any actual or potential violation or failure to comply with
any Environmental Law, that would have a material adverse effect on the Assets
or the business of Sellers, or of any actual or threatened obligation to
undertake or bear the cost of any Environmental, Health and Safety Liabilities
with respect to any Facility or other property or asset (whether real, personal
or mixed) in which any Seller has or had an interest, or with respect to any
property or Facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used or processed by any Seller
or any other Person for whose conduct it is or may be held responsible, or from
which Hazardous Materials have been transported, treated, stored, handled,
transferred, disposed, recycled or received.

 

(b)                                 There are no
pending or, to the Knowledge of Sellers, threatened claims, Encumbrances, or
other restrictions of any nature resulting from any Environmental, Health and
Safety Liabilities or arising under or pursuant to any Environmental Law with
respect to or affecting any Facility or any other property or asset (whether
real, personal or mixed) in which any Seller has or had an interest, that would
have a material adverse effect on the Assets or the business of Sellers.

 

(c)                                  Each Seller has no
Knowledge of or any basis to expect, nor has it, or any other Person for whose
conduct it is or may be held responsible, received any citation, directive,
inquiry, notice, Order, summons, warning or other communication that relates to
Hazardous Activity, Hazardous Materials, or any alleged, actual, or potential
violation or failure to comply with any Environmental Law, that would have a
material adverse effect on the Assets or the business of Sellers, or of any
alleged, actual, or potential obligation to undertake or bear the cost of any
Environmental, Health and Safety Liabilities with respect to any Facility or
property or asset (whether real, personal or mixed) in which any Seller has or
had an interest, or with respect to any property or facility to which Hazardous
Materials generated, manufactured, refined, transferred, imported, used or
processed by any Seller or any other Person for whose conduct it is or may be
held responsible, have been transported, treated, stored, handled, transferred,
disposed, recycled or received.

 

(d)                                 Neither any of
Sellers nor any other Person for whose conduct it is or may be held responsible
has any Environmental, Health and Safety Liabilities with respect to any
Facility or, to the Knowledge of Sellers, with respect to any other property or

 

26

 

asset
(whether real, personal or mixed) in which Sellers (or any predecessor) have or
had an interest, that would have a material adverse effect on the Assets or the
business of Sellers.

 

(e)                                  There are no
Hazardous Materials present on or in the Environment at any Facility, including
any Hazardous Materials contained in barrels, aboveground or underground
storage tanks, landfills, land deposits, dumps, equipment (whether movable or
fixed) or other containers, either temporary or permanent, and deposited or
located in land, water, sumps, or any other part of the Facility, or
incorporated into any structure therein or thereon, that would have a material
adverse effect on the Assets or the business of Sellers. Neither any of Sellers
nor any Person for whose conduct it is or may be held responsible, or to the
Knowledge of Sellers, any other Person, has permitted or conducted, or is aware
of, any Hazardous Activity conducted with respect to any Facility or any other
property or assets (whether real, personal or mixed) in which Sellers have or
had an interest except in full compliance with all applicable Environmental
Laws.

 

(f)                                    There has been no
Release or, to the Knowledge of Sellers, Threat of Release, of any Hazardous
Materials at or from any Facility or at any other location where any Hazardous
Materials were generated, manufactured, refined, transferred, produced,
imported, used, or processed from or by any Facility, or from any other
property or asset (whether real, personal or mixed) in which Sellers have or
had an interest, whether by Sellers or any other Person, that would have a
material adverse effect on the Assets or the business of Sellers.

 

(g)                                 Each Seller has
delivered to Buyer true and complete copies and results of any reports,
studies, analyses, tests, or monitoring possessed or initiated by Sellers
pertaining to Hazardous Materials or Hazardous Activities in, on, or under the
Facilities, or concerning compliance, by Sellers or any other Person for whose
conduct it is or may be held responsible, with Environmental Laws.

 

3.19.                        EMPLOYEES

 

(a)                                  Schedule 3.19(a) contains a
complete and accurate list of each Active Employee (excluding employees
provided by employee leasing or similar companies), current director, and
current and regularly engaged independent contractor and consultant of Sellers
and information, including : employer; name; job title; date of hiring or
engagement; current compensation paid or payable and existence of employment, non-compete
and/or confidentiality agreement, if any (the “Non-compete Contracts”).

 

(b)                                 Schedule 3.19(b) contains a
complete and accurate list of the following information for each retired
employee or director of Sellers, or their dependents, receiving benefits or
scheduled to receive benefits in the future: name; pension benefits; pension
option election; retiree medical insurance coverage; retiree life insurance
coverage; and other benefits.

 

(c)                                  Schedule 3.19(c) states the number
of employees terminated by Sellers since July, 2002, and contains a complete
and accurate list of the following information

 

27

 

for
each employee of Sellers who has been terminated or laid off, or whose hours of
work have been reduced by more than fifty percent (50%) by Sellers, in the six
(6) months prior to the date of this Contract: (i) the date of such
termination, layoff or reduction in hours; (ii) the reason for such
termination, layoff or reduction in hours and (iii) the location to which the
employee was assigned.

 

(d)                                 Each Seller has not
violated the WARN Act or any similar state or local Legal Requirement.  During the ninety (90) day period prior to
the date of this Contract, Sellers have terminated forty-three (43) employees.

 

(e)                                  To the Knowledge of
Sellers, no officer, director, agent, employee, consultant, or contractor of
Sellers is bound by any Contract that purports to limit the ability of such
officer, director, agent, employee, consultant, or contractor (i) to engage in
or continue or perform any conduct, activity, duties or practice relating to
the business of Sellers or (ii) to assign to Sellers or to any other Person any
rights to any invention, improvement, or discovery. To the Knowledge of
Sellers, no former or current employee of Sellers is a party to, or is
otherwise bound by, any Contract that in any way adversely affected, affects,
or will affect the ability of Sellers or Buyer to conduct the business as
heretofore carried on by Sellers.

 

3.20.                        LABOR
DISPUTES; COMPLIANCE

 

(a)                                  Each Seller has
complied in all respects with all material Legal Requirements relating to
employment practices, terms and conditions of employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar Taxes and occupational
safety and health.  Each Seller is not
liable for the payment of any Taxes, fines, penalties, or other amounts,
however designated, for failure to comply with any of the foregoing Legal
Requirements.

 

(b)                                 Except as disclosed
in Schedule 3.20(b),
(i) no Seller has been, and is not now, a party to any collective bargaining
agreement or other labor contract; (ii) since July 5, 2003, there has not
been, there is not presently pending or existing, and to Sellers’ Knowledge
there is not threatened, any strike, slowdown, picketing, work stoppage or
employee grievance process involving Sellers; (iii) to Sellers’ Knowledge no
event has occurred or circumstance exists that could provide the basis for any
work stoppage or other labor dispute; (iv) there is not pending or, to Sellers’
Knowledge, threatened against or affecting any Sellers any Proceeding relating
to the alleged violation of any Legal Requirement pertaining to labor relations
or employment matters, including any charge or complaint filed with the
National Labor Relations Board or any comparable Governmental Body, and there
is no organizational activity or other labor dispute against or affecting
Sellers or the Facilities; (v) no application or petition for an election of or
for certification of a collective bargaining agent is pending; (vi) no
grievance or arbitration Proceeding exists that might have an adverse effect
upon any Sellers or the conduct of its business; (vii) there is no lockout of
any employees by any Sellers, and no such action is contemplated by any
Sellers; and (viii) to Sellers’ Knowledge there has been no charge of
discrimination filed against or threatened

 

28

 

against
any Sellers with the Equal Employment Opportunity Commission or similar
Governmental Body.

 

3.21.                        INTELLECTUAL
PROPERTY ASSETS

 

(a)                                  The term
“Intellectual Property Assets” means all intellectual property owned or
licensed (as licensor or licensee) by Sellers in which any Seller has a
proprietary interest, including:

 

(i)                                     Sellers’ names, all
assumed fictional business names, trade names, registered and unregistered
trademarks, service marks and applications (collectively, “Marks”);

 

(ii)                                  all patents, patent
applications and inventions and discoveries that may be patentable;

 

(iii)                               all registered and
unregistered copyrights in both published works and unpublished works;

 

(iv)                              all rights in
internet web sites and internet domain names presently used by any Sellers; and

 

(v)                                 all know-how, trade
secrets, confidential or proprietary information, customer lists, Software,
technical information, data, process technology, plans, drawings and blue
prints (collectively, “Trade Secrets”).

 

(b)                                 Schedule 3.21(b) contains a
complete and accurate list and summary description, including any royalties
paid or received by Sellers, and each Seller has delivered to Buyer accurate
and complete copies, of all Seller Contracts relating to the Intellectual
Property Assets, except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available Software programs with a
value of less than $2,000,000 under which such Seller is the licensee. There
are no outstanding and, to Sellers’ Knowledge, no threatened disputes or
disagreements with respect to any such Contract.

 

(c)

 

(i)                                     Except as set forth in Schedule 3.21(c)(i),
the Intellectual Property Assets are all those necessary for the operation of
Sellers’ business as it is currently conducted. Sellers are the owners or
licensees of all right, title and interest in and to each of the Intellectual
Property Assets, free and clear of all Encumbrances, and have the right to use
without payment to a Third Party all of the Intellectual Property Assets, other
than in respect of licenses listed in Schedule 3.21(c)(i).

 

(ii)                                  Set forth in Schedule 3.21(c)(ii)
is a list of all former and current employees of each Seller who have executed
written Contracts with such Seller that purport to preserve the confidentiality
of Sellers’ rights to any

 

29

 

inventions, improvements,
discoveries or information relating to the business of such Seller.

 

(d)

 

(i)                                     Schedule 3.21(d)(i)  contains a complete and accurate list and summary description of
all Marks.

 

(ii)                                  Except as set forth in Schedule 3.21(d)(i),
all Marks have been registered with the United States Patent and Trademark
Office, are currently in compliance with all formal Legal Requirements
(including the timely post-registration filing of affidavits of use and
incontestability and renewal applications), are valid and enforceable and are
not subject to any maintenance fees or taxes or actions falling due within
ninety (90) days after the Closing Date.

 

(iii)                               No Mark has been or is now involved in any opposition,
invalidation or cancellation Proceeding and, to Sellers’ Knowledge, no such
action is threatened with respect to any of the Marks.

 

(iv)                              To Sellers’ Knowledge, there is no
potentially interfering trademark or trademark application of any other Person.

 

(v)                                 No Mark is infringed or, to Sellers’
Knowledge, has been challenged or threatened in any way. None of the Marks used
by Sellers infringes or is alleged to infringe any trade name, trademark or
service mark of any other Person.

 

(vi)                              All products and materials containing a
Mark bear the proper federal registration notice where permitted by law.

 

3.22.                        COMPLIANCE WITH THE FOREIGN CORRUPT PRACTICES ACT AND EXPORT CONTROL
AND ANTIBOYCOTT LAWS

 

(a)                                  Sellers and their Representatives have
not, to obtain or retain business, directly or indirectly offered, paid or
promised to pay, or authorized the payment of, any money or other thing of
value or any commission payment in any amount, to any individual or entity, that would be in violation of the Foreign Corrupt
Practices Act.

 

(b)                                 Sellers have at all
times been in compliance with all material Legal Requirements relating to
export control and trade embargoes.  No
product sold or service provided by Sellers during the last five (5) years has
been, directly or indirectly, sold to or performed on behalf of Cuba, Iraq,
Iran, Libya or North Korea.

 

(c)                                  Sellers have not
violated the antiboycott prohibitions contained in 50 U.S.C. sect. 2401 et seq.
or taken any action that can be penalized under Section 999 of the
Code.  During the last five (5) years,
Sellers have not been a party to, are not beneficiaries under and have not
performed any service or sold any product under

 

30

 

any
Seller Contract (except for Seller Contracts with the United States Government)
under which a product has been sold to customers in Bahrain, Iraq, Jordan,
Kuwait, Lebanon, Libya, Oman, Quatar, Saudi Arabia, Sudan, Syria, United Arab
Emirates or the Republic of Yemen.

 

(d)                                 Each transaction of
each Seller is properly and accurately recorded on the books and Records of
such Seller, and each document upon which entries in such Seller’s books and
Records are based is complete and accurate in all material respects. Each
Seller maintains a system of internal accounting controls adequate to insure
that such Seller maintains no off-the-books accounts and that Sellers’ assets
are used only in accordance with such Seller’s management directives.

 

3.23.                        RELATIONSHIPS
WITH RELATED PERSONS

 

Except
as disclosed in Schedule 3.23, neither any Seller
nor its shareholders nor any Related Person of any of them has, or since
July 5, 2003, has had, any interest in any property (whether real,
personal or mixed and whether tangible or intangible) used in or pertaining to
Sellers’ business. Neither any Seller nor its shareholders nor any Related
Person of any of them owns, or since July 5, 2003, has owned, of record or
as a beneficial owner an equity interest or any other financial or profit
interest in any Person that has (a) had business dealings or a material
financial interest in any transaction with any Seller other than business
dealings or transactions disclosed in Schedule 3.23, each of which has
been conducted in the Ordinary Course of Business with such Seller at
substantially prevailing market prices and on substantially prevailing market
terms or (b) engaged in competition with any Seller with respect to any line of
the products or services of such Seller (a “Competing Business”) in any market
presently served by such Seller, except for ownership of less than one percent
(1%) of the outstanding capital stock of any Competing Business that is
publicly traded on any recognized exchange or in the over-the-counter market. Except
as set forth in Schedule 3.23, neither any Seller
nor any shareholder nor any Related Person of any of them is a party to any
Contract with, or has any claim or right against, any Seller.

 

3.24.                        BROKERS OR
FINDERS

 

Except
as disclosed in Schedule 3.24, neither Sellers nor
any of their Representatives have incurred any obligation or liability,
contingent or otherwise, for brokerage or finders’ fees or agents’ commissions
or other similar payments in connection with the sale of Sellers’ business and
Assets or the Contemplated Transactions.

 

3.25.                        SOLVENCY

 

(a)                                  Each Seller is not
now insolvent and will not be rendered insolvent by any of the Contemplated
Transactions. As used in this section, “insolvent” means that the sum of the
debts and other probable Liabilities of each Seller exceeds the present fair
saleable value of such Seller’s assets.

 

(b)                                 Immediately after
giving effect to the consummation of the Contemplated Transactions: (i) each
Seller will be able to pay its Liabilities as they become due in the usual
course of its business; (ii) each Seller will not have unreasonably 

 

31

 

small
capital with which to conduct its present or proposed business; (iii) each
Seller will have assets (calculated at fair market value) that exceed its
Liabilities; and (iv) taking into account all pending and threatened
litigation, final judgments against such Seller in actions for money damages
are not reasonably anticipated to be rendered at a time when, or in amounts such
that, each Seller will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum probable amount of
such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered) as well as all other obligations of such
Seller. The cash available to each Seller, after taking into account all other
anticipated uses of the cash, will be sufficient to pay all such debts and
judgments promptly in accordance with their terms.

 

3.26.                        DISCLOSURE

 

(a)                                  No representation
or warranty or other statement made by any Seller in this Contract, the
certificates delivered pursuant to Section 2.7(a) or otherwise in
connection with the Contemplated Transactions contains or will contain any
untrue statement or will omit any statement of a material fact necessary in
order to make the statement contained herein or therein, in light of
circumstances in which they were made, not misleading.

 

(b)                                 Each Seller does
not have Knowledge of any fact that has specific application to such Seller
(other than general economic or industry conditions) and that may materially
adversely affect the assets, business, prospects, financial condition or
results of operations of Sellers that has not been set forth in this Contract.

 

3.27.                        S CORP STATUS

 

At
all times since January 1, 1998, Sellers have been validly electing “S”
Corporations within the meaning of Section 1361 and 1362 of the Code and
will be S Corporations up to and including the Effective Time.

 

4.                                       Representations and Warranties of Buyer

 

Buyer
represents and warrants to Sellers as of the date hereof and as of the Closing
Date as follows:

 

4.1.                              ORGANIZATION
AND GOOD STANDING

 

Buyer
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, with full corporate power and authority to
conduct its business as it is now conducted.

 

4.2.                              AUTHORITY;
NO CONFLICT

 

(a)                                  This Contract
constitutes the legal, valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms. Upon the execution and delivery by Buyer of
the Assignment and Assumption Agreement, and each other

 

32

 

agreement
to be executed or delivered by Buyer at Closing (collectively, the “Buyer’s
Closing Documents”), each of the Buyer’s Closing Documents will constitute the
legal, valid and binding obligation of Buyer enforceable against Buyer in
accordance with its respective terms. Buyer has the absolute and unrestricted right,
power and authority to execute and deliver this Contract and the Buyer’s
Closing Documents and to perform its obligations under this Contract and the
Buyer’s Closing Documents, and such action has been duly authorized by all
necessary corporate action.

 

(b)                                 Neither the
execution and delivery of this Contract by Buyer nor the consummation or
performance of any of the Contemplated Transactions by Buyer will give any
Person the right to prevent, delay or otherwise interfere with any of the
Contemplated Transactions pursuant to:

 

(i)                                     any provision of
Buyer’s Governing Documents;

 

(ii)                                  any resolution
adopted by the board of directors or the shareholders of Buyer;

 

(iii)                               any Legal
Requirement or Order to which Buyer may be subject; or

 

(iv)                              any Contract to which
Buyer is a party or by which Buyer may be bound.

 

Buyer
is not and will not be required to obtain any Consent from any Person in
connection with the execution and delivery of this Contract or the consummation
or performance of any of the Contemplated Transactions.

 

4.3.                              CERTAIN
PROCEEDINGS

 

There
is no pending Proceeding that has been commenced against Buyer and that
challenges, or may have the effect of preventing, delaying, making illegal or
otherwise interfering with, any of the Contemplated Transactions. To Buyer’s
Knowledge, no such Proceeding has been threatened.

 

4.4.                              BROKERS OR FINDERS

 

Neither
Buyer nor any of its Representatives have incurred any obligation or liability,
contingent or otherwise, for brokerage or finders’ fees or agents’ commissions
or other similar payment in connection with the Contemplated Transactions.

 

4.5.                              INSURANCE

 

On
or before the Closing Date, Buyer will obtain and have in effect, for a period
of at least two (2) years from the Effective Time, with an insurer that is financially
sound and reputable, policies of insurance that, taken together, provide
adequate insurance coverage for the Assets and the operations of Sellers’ (or
Buyer’s after Closing) business for all risks to which a party operating
Sellers’ (or Buyer’s after Closing) business are normally exposed, naming
Sellers as additional insureds at Sellers’ expense for any incremental premium
charge solely attributable to naming Sellers as additional insureds.

 

33

 

4.6.                              BUYER’S DUE
DILIGENCE

 

Buyer
acknowledges that, except for the matters that are expressly covered by the
provisions of this Contract, Buyer is relying on its own investigation and
analysis in entering into the Contract and the Contemplated Transactions.  Buyer is an informed and sophisticated
participant in the Contemplated Transactions and has undertaken such
investigation, and has been provided with and has evaluated such documents and
information, as it has deemed necessary with the execution, delivery and
performance of this Contract.  Buyer
acknowledges that it is acquiring the Assets without any representation or
warranty, express or implied, by Sellers or any of its Related Parties except
as expressly set forth herein.  In
furtherance of the foregoing, and not in limitation thereof, Buyer acknowledges
that no representation or warranty, express or implied, of Sellers or any of
its advisors, including, without limitation, Quarterdeck Investment Partners,
LLC, or any of their representatives, with respect to the Assets, including,
without limitation, any financial projection or forecast delivered to Buyer
with respect to the revenues or profitability which may arise from the
operation of the Assets either before or after the Closing Date, shall form the
basis of any claim against Sellers or any of its advisors with respect thereto
or with respect to any related matter.

 

5.                                       Covenants
of Sellers Prior to Closing

 

5.1.                              ACCESS
AND INVESTIGATION

 

Between
the date of this Contract and the Closing Date, and upon reasonable advance
notice received from Buyer, Sellers shall (a) afford Buyer and its
Representatives and prospective lenders and their Representatives
(collectively, “Buyer Group”) full and free access, during regular business
hours, to Sellers’ personnel, properties (including subsurface testing),
Contracts, Governmental Authorizations, books and Records and other documents
and data, such rights of access to be exercised in a manner that does not
unreasonably interfere with the operations of Sellers; (b) furnish Buyer Group
with copies (at Buyer’s expense for all non-employee related copying costs) of
all such Contracts, Governmental Authorizations, books and Records and other
existing documents and data as Buyer may reasonably request; (c) furnish Buyer
Group with such additional financial, operating and other relevant data and
information as Buyer may reasonably request (at Buyer’s expense for all
non-employee related costs to comply with such request); and (d) otherwise
cooperate and assist, to the extent reasonably requested by Buyer, with Buyer’s
investigation of the properties, assets and financial condition related to
Sellers. In addition, Buyer shall have the right to have the Leasehold Real
Property and Tangible Personal Property inspected by Buyer Group, at Buyer’s
sole cost and expense, for purposes of determining the physical condition and
legal characteristics of the Leasehold Real Property and Tangible Personal
Property. In the event subsurface or other destructive testing is recommended by
any of Buyer Group, Buyer shall be permitted to have the same performed at
Buyer’s expense, and Buyer shall be liable for all damages resulting from such
testing.

 

5.2.                              OPERATION
OF THE BUSINESS OF SELLERS

 

Between
the date of this Contract and the Closing, each Seller shall :

 

(a)                                  conduct its
business only in the Ordinary Course of Business;

 

34

 

(b)                                 except as otherwise
directed by Buyer in writing, and without making any commitment on Buyer’s
behalf, use its Best Efforts to preserve intact its current business
organization, keep available the services of its officers, employees and agents
and maintain its relations and good will with suppliers, customers, landlords,
creditors, employees, agents and others having business relationships with it;

 

(c)                                  confer with Buyer
on a weekly basis about operational decisions of a material nature;

 

(d)                                 otherwise report
periodically to Buyer concerning the status of its business, operations and
finances;

 

(e)                                  make no material
changes in management personnel without prior consultation with Buyer;

 

(f)                                    maintain the Assets
in a state of repair and condition that complies with Legal Requirements and is
consistent with the requirements and normal conduct of such Seller’s business;

 

(g)                                 keep in full force
and effect, without amendment, all material rights relating to such Seller’s
business;

 

(h)                                 comply with all
Legal Requirements and contractual obligations applicable to the operations of
such Seller’s business;

 

(i)                                     continue in full
force and effect the insurance coverage under the policies set forth in Schedule 3.17
or substantially equivalent policies;

 

(j)                                     reasonably
cooperate with Buyer and assist Buyer in identifying the Governmental
Authorizations required by Buyer to operate the business from and after the
Closing Date and either transferring existing Governmental Authorizations of
such Seller to Buyer, where permissible, or obtaining new Governmental
Authorizations for Buyer;

 

(k)                                  upon request from
time to time, execute and deliver all documents, make all truthful oaths,
testify in any Proceedings and do all other acts that may be reasonably
necessary or desirable in the reasonable opinion of Buyer to consummate the
Contemplated Transactions, all without further consideration; and

 

(l)                                     maintain all books
and Records of such Seller relating to such Seller’s business in the Ordinary
Course of Business.

 

35

 

5.3.                              NEGATIVE
COVENANT

 

Except
as otherwise expressly permitted herein, between the date of this Contract and
the Closing Date, Sellers shall not, without the prior written Consent of
Buyer, (a) take any affirmative action, or fail to take any reasonable action
within its control, as a result of which any of the changes or events listed in
Sections 3.11, 3.13, 3.15 or 3.17 would be likely to occur; (b) make any
modification to any material Contract or Governmental Authorization without
disclosing same to Buyer; (c) allow the levels of raw materials, supplies or
other materials included in the Inventories to vary materially from the levels
customarily maintained; or (d) enter into any compromise or settlement of any
litigation, proceeding or governmental investigation relating to the Assets,
the business of Sellers or the Assumed Liabilities.

 

5.4.                              REQUIRED
APPROVALS

 

As
promptly as practicable after the date of this Contract, Sellers shall make all
filings required by Legal Requirements to be made by it in order to consummate
the Contemplated Transactions (including all filings under the HSR Act).
Sellers also shall cooperate with Buyer and its Representatives with respect to
all filings that Buyer elects to make or, pursuant to Legal Requirements, shall
be required to make in connection with the Contemplated Transactions. Sellers also
shall cooperate with Buyer and its Representatives in obtaining all Material
Consents (including taking all actions requested by Buyer to cause early
termination of any applicable waiting period under the HSR Act).

 

5.5.                              NOTIFICATION

 

Between
the date of this Contract and the Closing, Sellers shall promptly notify Buyer
in writing if it becomes aware of (a) any fact or condition that causes or
constitutes a Breach of any of Sellers’ representations and warranties made as
of the date of this Contract or (b) the occurrence after the date of this
Contract of any fact or condition that Sellers reasonably believe would or be
reasonably likely to (except as expressly contemplated by this Contract) cause
or constitute a Breach of any such representation or warranty had that
representation or warranty been made as of the time of the occurrence of, or
Sellers’ discovery of, such fact or condition. 
During the same period, Sellers also shall promptly notify Buyer of the
occurrence of any Breach of any covenant of Sellers in this Article 5 or
of the occurrence of any event that Sellers reasonably believe may make the
satisfaction of the conditions in Article 7 impossible or unlikely.

 

5.6.                              NO NEGOTIATION

 

Between
the date of this Contract and the Closing or until such time as this Contract
shall be terminated pursuant to Section 9.1, Sellers shall not authorize
or permit their Representatives to, directly or indirectly (i) solicit,
initiate or encourage the submission of inquiries, proposals or offers from any
Person or a group of Persons relating to any acquisition or purchase of any
assets of, or any equity interest in, any Seller, or any tender or exchange
offer, merger, consolidation, business combination, recapitalization,
restructuring, spin-off, liquidation, dissolution or similar transaction
involving, directly or indirectly, any Seller, or any of their respective
assets, other than transactions contemplated by this Contract (each a
“Transaction Proposal”), (ii) participate in any discussions or negotiations regarding
any Transaction Proposal or furnish information about any Seller to any Person
except to (x) lenders or other parties to agreements with any of

 

36

 

Sellers
(for the specific purpose set forth in such agreements, which in no event shall
include a Transaction Proposal) and (y) buyer or its Representatives, (iii)
otherwise cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other Person to make or enter into a
Transaction Proposal, or (iv) accept, approve or authorize, or enter into any
agreement concerning any Transaction Proposal or dispose of any equity interest
in any of Sellers.  Sellers shall use
Best Efforts to cause their affiliates, agents, officers, directors, investment
bankers, advisors and representatives to abide by the terms of this
Section 5.6.  In the event that any
Seller receives or becomes aware of any Transaction Proposal, it shall promptly
notify Buyer in writing of such communication and keep Buyer informed of any
subsequent developments in connection therewith.

 

5.7.                              BEST EFFORTS

 

Each
Seller shall use its Best Efforts to cause the conditions in Article 7 and
Section 8.3 to be satisfied.

 

5.8.                              INTERIM
FINANCIAL STATEMENTS

 

Until
the Closing Date, Sellers shall deliver to Buyer within forty-five (45) days
after the end of each month a copy of the operating statements of Sellers,
internally prepared for the use of management consistent with Sellers historic
practice, for such month prepared in a manner and containing information
consistent with Sellers’ current practices and certified by Sellers’ chief
executive officer as to compliance with Section 3.3.

 

5.9.                              CHANGE OF NAME

 

On
or before the Closing Date, each Seller shall (a) amend its Governing Documents
and take all other actions necessary to change its name to one sufficiently
dissimilar to such Seller’s present name, in Buyer’s judgment, to avoid
confusion and (b) take all actions reasonably requested by Buyer to enable Buyer
to change its name to such Seller’s present name.

 

5.10.                        PAYMENT
OF LIABILITIES

 

Each
Seller shall pay or otherwise satisfy in the Ordinary Course of Business all of
its Liabilities and obligations. Buyer and each Seller hereby waive compliance
with the bulk-transfer provisions of the Uniform Commercial Code (or any
similar law) (“Bulk Sales Laws”) in connection with the Contemplated
Transactions.

 

5.11.                        TRANSFERRING
SUBSIDIARIES

 

To the extent any of the
Assets are owned by Subsidiaries of any Seller, such Seller shall cause such
Subsidiaries to sell, convey, transfer, assign and deliver all of such
Subsidiaries’ right, title and interest to such Assets to Buyer at the
Closing.  Each such Subsidiary shall be
deemed a “Seller” for purposes of this Contract.

 

37

 

5.12.                        S CORP STATUS

 

Until the Closing Date,
Sellers will not revoke their elections to be taxed as S corporations within
the meaning of Code Sections 1361 and 1362, and will not take or allow any
action that would result in the termination of their status as validly electing
S corporations within the meaning of Code Sections 1361 and 1362.

 

5.13.                        IDENTIFICATION
OF TEXAS ASSET

 

On or before the Closing
Date, Sellers shall identify all assets of TWCRADLP to the extent Sellers have
not already done so.

 

6.                                       Covenants
of Buyer Prior to Closing

 

6.1.                              REQUIRED APPROVALS

 

As
promptly as practicable after the date of this Contract, Buyer shall make, or
cause to be made, all filings required by Legal Requirements (including all
filings under the HSR Act) to be made by it to consummate the Contemplated
Transactions. Buyer also shall cooperate, and cause its Related Persons to
cooperate, with Sellers (a) with respect to all filings Sellers shall be
required by Legal Requirements to make and (b) in obtaining all Consents
identified in Schedule 3.2(c), provided, however, that Buyer shall
not be required to dispose of or make any change to its business, expend any
material funds or incur any other burden in order to comply with this
Section 6.1.

 

6.2.                              BEST EFFORTS

 

Buyer
shall use its Best Efforts to cause the conditions in Article 8 and
Section 7.3 to be satisfied; provided however, Buyer shall not be required
to expend any funds in connection with obtaining the consents or approvals
required in Section 7.3.

 

7.                                       Conditions Precedent to Buyer’s Obligation to Close

 

Buyer’s
obligation to purchase the Assets and to take the other actions required to be
taken by Buyer at the Closing is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be waived by
Buyer, in whole or in part):

 

7.1.                              ACCURACY
OF REPRESENTATIONS

 

(a)                                  All of Sellers’
representations and warranties in this Contract (considered collectively), and
each of these representations and warranties (considered individually), shall
have been accurate in all material respects as of the date of this Contract,
and shall be accurate in all material respects as of the time of the Closing as
if then made.

 

(b)                                 Each of the
representations and warranties in Sections 3.2(a), 3.3 and 3.4, and each of the
representations and warranties in this Contract that contains an express
materiality qualification, shall have been accurate in all respects as of the
date of

 

38

 

this
Contract, and shall be accurate in all respects as of the time of the Closing
as if then made.

 

7.2.                              SELLERS’
PERFORMANCE

 

All
of the covenants and obligations that each Seller is required to perform or to
comply with pursuant to this Contract at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), shall have been duly performed and complied with in all material
respects.

 

7.3.                              CONSENTS

 

Each
of the Consents identified in Schedule 7.3 (the “Material
Consents”) shall have been obtained and shall be in full force and effect.

 

7.4.                              ADDITIONAL
DOCUMENTS

 

Sellers
shall have caused the documents and instruments required by Section 2.7(a)
and the following documents to be delivered (or tendered subject only to
Closing) to Buyer:

 

(a)                                  an opinion of Gary,
Thomasson, Hall & Marks Professional Corporation, dated the Closing Date,
in form and substance mutually satisfactory to Sellers and Buyer;

 

(b)                                 The organizational
documents of each Seller and all amendments thereto, duly certified as of a
recent date by the Secretary of State of the jurisdiction of such Seller’s
organization ;

 

(c)                                  If requested by
Buyer, any Consents or other instruments that may be required to permit Buyer’s
qualification in each jurisdiction in which any of Sellers are licensed or
qualified to do business under the name “The Wornick Company” or “The Wornick
Company Right Away Division” or “The Wornick Company Right Away Division, L.P.”
or “Right Away Management Corporation” or any derivative thereof;

 

(d)                                 A statement from
the holder of each note and mortgage listed on Schedule 2.4(a)(v),
if any, dated the Closing Date, setting forth the principal amount then
outstanding on the indebtedness represented by such note or secured by such
mortgage, the interest rate thereon and a statement to the effect that the
applicable Seller, as obligor under such note or mortgage, is not in default
under any of the provisions thereof;

 

(e)                                  Releases of all Encumbrances
on the Assets, other than Permitted Encumbrances, including releases of each
mortgage of record and reconveyances of each deed of trust with respect to each
parcel of real property included in the Assets;

 

(f)                                    Certificates dated
as of a date not earlier than the fifteenth business day prior to the Closing
as to the good standing of each Seller and payment of all applicable state
Taxes by such Seller, executed by the appropriate officials of the States of

 

39

 

Nevada
and Texas and each jurisdiction in which such Seller is licensed or qualified
to do business as a foreign corporation as specified in Schedule 3.1(a);

 

(g)                                 Any documents that may exist pertaining to
the manufacturing, processing, packaging and assembly of food products (whether
novel or not), invention disclosures, Trade Secrets, and lists of personnel who
develop food processing packages and techniques, including the design of
packages, the development of assembly techniques, the development of filling
methods, and the development of methods for sealing packages; and

 

(h)                                 Such other
documents as Buyer may reasonably request for the purpose of:

 

(i)                                     evidencing the
accuracy of any of Sellers’ representations and warranties;

 

(ii)                                  evidencing the
performance by Sellers of, or the compliance by Sellers with, any covenant or
obligation required to be performed or complied with by Sellers;

 

(iii)                               evidencing the
satisfaction of any condition referred to in this Article 7; or

 

(iv)                              otherwise facilitating
the consummation or performance of any of the Contemplated Transactions.

 

7.5.                              GOVERNMENTAL
AUTHORIZATIONS

 

Except
for post-Closing novations referred to in Section 2.10(a), Buyer shall
have received such Governmental Authorizations as are necessary to allow Buyer
to operate the Assets from and after the Closing and the applicable waiting
period under the HSR Act in connection with the Contemplated Transactions shall
have expired.

 

7.6.                              ENVIRONMENTAL
REPORT

 

Buyer
shall have obtained, at its expense, within sixty (60) days from the Effective
Date of this Contract, an environmental site assessment report with respect to
Sellers’ Facilities, which report shall be reasonably acceptable in form and
substance to Buyer.

 

7.7.                              WARN
ACT NOTICE PERIODS AND EMPLOYEES

 

(a)                                  All requisite
notice periods under the Warn Act shall have expired.

 

(b)                                 Substantially all
employees of Sellers shall be available for hiring by Buyer, in its sole
discretion, on and as of the Closing Date, and Buyer shall have hired or
continued the employment of a sufficient number of such employees to prevent
the applicability of the WARN Act to the Contemplated Transactions.

 

7.8.                              ESOT
TRUSTEE APPROVAL

 

This
Contract shall have been approved by the ESOT Trustee as shareholder of Wornick
after receipt of a “fairness opinion” from an investment advisor acceptable to
the ESOT Trustee.

 

40

 

7.9.                              NON-COMPETITION
AGREEMENTS

 

The employees of Sellers
listed on Schedule 7.9 shall have entered into non-competition
agreements with Buyer, and/or Buyer’s Related Persons who purchase Assets from
any Seller, reflecting essentially the terms set forth in Section 10.8 and
otherwise in form and substance reasonably acceptable to Buyer and such
employees.

 

7.10.                        MATERIAL
ADVERSE CHANGE

 

Since July 5, 2003,
except as indicated by the Interim Balance Sheet, there has not been any
material adverse change in the business, operations, prospects, assets, results
of operations or condition (financial or other) of Sellers, and no event has
occurred or circumstance exists that may result in such a material adverse
change.

 

7.11.                        NO INJUNCTION

 

There
shall not be in effect any Legal Requirement or any injunction or other Order
that (a) prohibits the consummation of the Contemplated Transactions and (b)
has been adopted or issued, or has otherwise become effective, since the date
of this Contract.

 

7.12.                        EQUITY
CONTRIBUTION

 

The
five employee-directors of Sellers shall have agreed to make an equity
contribution in Buyer or Buyer’s holding company of not less than Two Million
Dollars ($2,000,000) in the aggregate.

 

8.                                       Conditions Precedent to Sellers’ Obligation to Close

 

Sellers’
obligation to sell the Assets and to take the other actions required to be
taken by Sellers at the Closing is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be waived by
Sellers in whole or in part):

 

8.1.                              ACCURACY
OF REPRESENTATIONS

 

All
of Buyer’s representations and warranties in this Contract (considered
collectively), and each of these representations and warranties (considered
individually), shall have been accurate in all material respects as of the date
of this Contract and shall be accurate in all material respects as of the time
of the Closing as if then made.

 

8.2.                              BUYER’S
PERFORMANCE

 

All
of the covenants and obligations that Buyer is required to perform or to comply
with pursuant to this Contract at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), shall have been performed and complied with in all material
respects.

 

41

 

8.3.                              CONSENTS

 

Each
of the Consents identified in Schedule 8.3 shall have been
obtained and shall be in full force and effect.  Notwithstanding the foregoing, if any such Consent shall not be
obtained by the Closing Date, Buyer may waive this condition precedent to
Closing, provided Buyer also waives any and all claims it might have against
Sellers for breach of this Contract for failing to obtain any such Consent, and
proceed to close the Contemplated Transactions in the absence of such Consent.

 

8.4.                              ADDITIONAL
DOCUMENTS

 

Buyer
shall have caused the documents and instruments required by Section 2.7(b)
and the following documents to be delivered (or tendered subject only to
Closing) to Sellers:

 

(a)                                  an opinion of
Winston & Strawn LLP, dated the Closing Date, in form and substance
mutually satisfactory to Sellers and Buyer; and

 

(b)                                 such other documents
as Sellers may reasonably request for the purpose of

 

(i)                                     evidencing the
accuracy of any representation or warranty of Buyer,

 

(ii)                                  evidencing the
performance by Buyer of, or the compliance by Buyer with, any covenant or
obligation required to be performed or complied with by Buyer, or

 

(iii)                               evidencing the
satisfaction of any condition referred to in this Article 8.

 

8.5.                              NO INJUNCTION

 

There
shall not be in effect any Legal Requirement or any injunction or other Order
that (a) prohibits the consummation of the Contemplated Transactions and (b)
has been adopted or issued, or has otherwise become effective, since the date
of this Contract.

 

8.6.                              ESOT
TRUSTEE APPROVAL

 

This
Contract shall have been approved by the ESOT Trustee as shareholder of Wornick
after receipt of a “fairness opinion” from an investment advisor acceptable to
the ESOT Trustee.

 

8.7.                              WARN ACT
COMPLIANCE

 

Buyer shall have hired or
continued the employment of a sufficient number of Sellers’ former employees to
prevent the applicability of the WARN Act to the Contemplated Transactions.

 

9.                                       Termination

 

9.1.                              TERMINATION
EVENTS

 

By
notice given prior to or at the Closing, subject to Section 9.2, this
Contract may be terminated as follows:

 

42

 

(a)                                  by Buyer if a
material Breach of any provision of this Contract shall have been committed by
any Seller and such Breach shall not have been waived by Buyer;

 

(b)                                 by Sellers if a
material Breach of any provision of this Contract shall have been committed by
Buyer and such Breach shall not have been waived by Sellers;

 

(c)                                  by Buyer if any
condition in Article 7 shall not have been satisfied as of the date
specified for Closing in the first sentence of Section 2.6 or if
satisfaction of such a condition by such date is or shall have become
impossible (other than through the failure of Buyer to comply with its
obligations under this Contract), and Buyer shall have not waived such
condition on or before such date;

 

(d)                                 by Sellers if any
condition in Article 8 shall not have been satisfied as of the date
specified for Closing in the first sentence of Section 2.6 or if
satisfaction of such a condition by such date is or shall have become
impossible (other than through the failure of Sellers to comply with their
obligations under this Contract), and Sellers shall not have waived such
condition on or before such date;

 

(e)                                  by mutual consent
of Buyer and Sellers;

 

(f)                                    by Buyer if the
Closing shall not have occurred on or before March 31, 2004, or such later
date as the parties may agree upon, unless Buyer is in material Breach of this
Contract; or

 

(g)                                 by Sellers if the
Closing shall not have occurred on or before March 31, 2004, or such later
date as the parties may agree upon, unless the Sellers are in material Breach
of this Contract.

 

9.2.                              EFFECT OF
TERMINATION

 

Each
party’s right of termination under Section 9.1 is in addition to any other
rights it may have under this Contract or otherwise, and the exercise of such
right of termination will not be an election of remedies. If this Contract is
terminated pursuant to Section 9.1, all obligations of the parties under
this Contract will terminate, except that the obligations of the parties in
this Section 9.2 and Articles 12 and 13 (except for those in Section 13.5)
will survive, provided, however, that, if this Contract is terminated because
of a Breach of this Contract by the nonterminating party or because one or more
of the conditions to the terminating party’s obligations under this Contract is
not satisfied as a result of the party’s failure to comply with its obligations
under this Contract, the terminating party’s right to pursue all legal remedies
will survive such termination unimpaired.

 

10.                                 Additional
Covenants

 

10.1.                        EMPLOYEES
AND EMPLOYEE BENEFITS

 

(a)                                  Information on
Active Employees. For the purpose of this Contract, the term “Active Employees”
shall mean all employees employed on the Closing Date by Sellers for their
business who are employed exclusively in Sellers’ business as

 

43

 

currently
conducted, including employees on temporary leave of absence, including family
medical leave, military leave, temporary disability or sick leave, but
excluding employees on long-term disability leave.

 

(b)                                 Employment of
Active Employees by Buyer.

 

(i)                                     Buyer is not
obligated to hire any Active Employee but may interview all Active Employees.
Buyer will provide Sellers with a list of Active Employees to whom Buyer has
made an offer of employment that has been accepted to be effective on the
Closing Date (the “Hired Active Employees”). Subject to Legal Requirements,
Buyer will have reasonable access to the Facilities and personnel Records
(including performance appraisals, disciplinary actions, grievances and medical
Records) of Sellers for the purpose of preparing for and conducting employment
interviews with all Active Employees and will conduct the interviews as
expeditiously as possible prior to the Closing Date. Access will be provided by
Sellers upon reasonable prior notice during normal business hours. Effective
immediately before the Closing, Sellers will terminate the employment of all of
their Hired Active Employees.

 

(ii)                                  Neither Sellers nor
their Related Persons shall solicit the continued employment of any Active
Employee (unless and until Buyer has informed Sellers in writing that the
particular Active Employee will not receive any employment offer from Buyer) or
the employment of any Hired Active Employee after the Closing. Buyer shall
inform Sellers promptly of the identities of those Active Employees to whom it
will not make employment offers, and Buyer shall assist Sellers in complying
with the WARN Act, to the extent applicable, as to those Active Employees.

 

(iii)                               It is understood
and agreed that (A) Buyer’s expressed intention to extend offers of employment
as set forth in this Section 10.1 shall not constitute any commitment,
contract or understanding (expressed or implied) of any obligation on the part
of Buyer to a post-Closing employment relationship of any fixed term or
duration or upon any terms or conditions other than those that Buyer may
establish pursuant to individual offers of employment, and (B) employment
offered by Buyer is “at will” and may be terminated by Buyer or by an employee
at any time for any reason (subject to any written commitments to the contrary
made by Buyer or an employee and Legal Requirements). Nothing in this Contract
shall be deemed to prevent or restrict in any way the right of Buyer to
terminate, reassign, promote or demote any of the Hired Active Employees after
the Closing or to change adversely or favorably the title, powers, duties,
responsibilities, functions, locations, salaries, other compensation or terms
or conditions of employment of such employees.

 

(c)                                  Salaries and
Benefits.

 

(i)                                     Sellers shall be
responsible for (A) the payment of all wages and other remuneration due to
Active Employees with respect to their services as

 

44

 

employees
of Sellers through the close of business on the Closing Date, including pro
rata bonus payments and all vacation pay earned prior to the Closing Date; (B)
the payment of any termination or severance payments and the provision of
health plan continuation coverage in accordance with the requirements of COBRA
and Sections 601 through 608 of ERISA; and (C) any and all payments to
employees required under the WARN Act.

 

(ii)                                  Sellers shall be
liable for any claims made or incurred by Active Employees and their
beneficiaries through the Closing Date under the Employee Benefit Plans. For
purposes of the immediately preceding sentence, a charge will be deemed
incurred, in the case of hospital, medical or dental benefits, when the
services that are the subject of the charge are performed and, in the case of
other benefits (such as disability or life insurance), when an event has
occurred or when a condition has been diagnosed that entitles the employee to
the benefit.

 

(d)                                 Sellers’ Retirement
and Savings Plans. All Hired Active Employees who are participants in Sellers’
retirement plans shall retain their accrued benefits under Sellers’ retirement
plans as of the Closing Date, and Sellers (or Sellers’ retirement plans) shall
retain sole liability for the payment of such benefits which have accrued on or
before the Closing Date as and when such Hired Active Employees become eligible
therefor under such plans.  Sellers
shall cause the assets of each Employee Benefit Plan to equal or exceed the
benefit liabilities of such Employee Benefit Plan on a plan-termination basis
as of the Effective Time.

 

(e)                                  No Transfer of
Assets. Neither Sellers nor their respective Related Persons will make any
transfer of pension or other Employee Benefit Plan assets to Buyer.

 

(f)                                    Collective
Bargaining Matters. Buyer will set its own initial terms and conditions of
employment for the Hired Active Employees and others it may hire, including
work rules, benefits and salary and wage structure, all as permitted by law.
Buyer is not obligated to assume any collective bargaining agreements under
this Contract.  Sellers shall be solely
liable for any severance payment required to be made to its employees due to
the Contemplated Transactions.  No
Sellers have entered into or will enter into any collective bargaining
agreements prior to Closing under this Contract. Any bargaining obligations of
Buyer with any union with respect to bargaining unit employees subsequent to
the Closing, whether such obligations arise before or after the Closing, shall
be the sole responsibility of Buyer.

 

(g)                                 General Employee
Provisions.

 

(i)                                     Sellers and Buyer
shall give any notices required by Legal Requirements and take whatever other
actions with respect to the plans, programs and policies described in this
Section 10.1 as may be necessary to carry out the arrangements described
in this Section 10.1.

 

(ii)                                  Sellers and Buyer
shall provide each other with such plan documents and summary plan
descriptions, employee data or other information as may be

 

45

 

reasonably
required to carry out the arrangements described in this Section 10.1.

 

(iii)                               If any of the
arrangements described in this Section 10.1 are determined by the IRS or
other Governmental Body to be prohibited by law, Sellers and Buyer shall modify
such arrangements to as closely as possible reflect their expressed intent and
retain the allocation of economic benefits and burdens to the parties
contemplated herein in a manner that is not prohibited by law.

 

(iv)                              Sellers shall
provide Buyer with completed I-9 forms and attachments with respect to all
Hired Active Employees, except for such employees Sellers certify in writing to
Buyer are exempt from such requirement.

 

(v)                                 Buyer shall not
have any responsibility, liability or obligation, whether to Active Employees,
former employees, their beneficiaries or to any other Person, with respect to
any Employee Benefit Plans, practices, programs or arrangements (including the
establishment, operation or termination thereof and the notification and
provision of COBRA coverage extension) maintained by Sellers.

 

(h)                                 ESOP.  In accord with this Section 10.1 and
the Escrow Agreement, and notwithstanding any other provision of this Contract
to the contrary, the parties acknowledge that Sellers intend to terminate the
ESOP after closing and distribute their assets and benefits to ESOP
participant-beneficiaries thereof in accordance with all applicable law.

 

10.2.                        PAYMENT OF ALL TAXES RESULTING FROM SALE OF ASSETS BY SELLERS

 

Sellers
shall pay in a timely manner all Taxes resulting from or payable in connection
with the sale of the Assets pursuant to this Contract, regardless of the Person
on whom such Taxes are imposed by Legal Requirements.

 

10.3.                        PAYMENT OF OTHER RETAINED LIABILITIES

 

In
addition to payment of Taxes pursuant to Section 10.2, Sellers shall pay,
or make adequate provision for the payment, in full all of the Retained
Liabilities and other Liabilities of Sellers under this Contract. If any such
Liabilities are not so paid or provided for, or if Buyer reasonably determines
that failure to make any payments will impair Buyer’s use or enjoyment of the
Assets or conduct of the business previously conducted by Sellers with the
Assets, Buyer may, at any time after the Closing Date, elect to make all such
payments directly (but shall have no obligation to do so).

 

10.4.                        RESTRICTIONS ON SELLER DISSOLUTION AND DISTRIBUTIONS

 

Sellers
shall not dissolve, or make any distribution of the proceeds received pursuant
to this Contract, until the later of (a) thirty (30) days after the completion
of all adjustment procedures contemplated by Sections 2.8 and 2.9; and (b) ten
(10) days after Sellers’ submission of proof to

 

46

 

Buyer,
to Buyer’s reasonable satisfaction, of Sellers’ payment, or adequate provision
for the payment, of all of its obligations pursuant to Sections 10.2 and 10.3.

 

10.5.                        REMOVING
EXCLUDED ASSETS

 

On
or before the Closing Date, Sellers shall remove all Excluded Assets from all
Facilities and other Leasehold Real Property to be occupied by Buyer. Such
removal shall be done in such manner as to avoid any damage to the Facilities
and other properties to be occupied by Buyer and any disruption of the business
operations to be conducted by Buyer after the Closing. Any damage to the Assets
or to the Facilities resulting from such removal shall be paid by Sellers at
the Closing. Should Sellers fail to remove the Excluded Assets as required by
this Section, Buyer shall have the right, but not the obligation, (a) to remove
the Excluded Assets at Sellers’ sole cost and expense; (b) to store the
Excluded Assets and to charge Sellers all storage costs associated therewith;
(c) to treat the Excluded Assets as unclaimed and to proceed to dispose of the
same under the laws governing unclaimed property; or (d) to exercise any other
right or remedy conferred by this Contract or otherwise available at law or in
equity. Sellers shall promptly reimburse Buyer for all costs and expenses
incurred by Buyer in connection with any Excluded Assets not removed by Sellers
on or before the Closing Date.

 

10.6.                        REPORTS AND
RETURNS

 

Sellers
shall promptly after the Closing prepare and file all reports and returns
required by Legal Requirements relating to the business of Sellers as conducted
using the Assets, to and including the Effective Time.

 

10.7.                        ASSISTANCE
IN PROCEEDINGS

 

Sellers
will reasonably cooperate with Buyer and its counsel in the contest or defense
of, and make available their personnel, if any, and provide their personnel, if
any, for testimony, and provide access to their books and Records in connection
with, any Proceeding involving or relating to (a) any Contemplated Transaction
or (b) any action, activity, circumstance, condition, conduct, event, fact,
failure to act, incident, occurrence, plan, practice, situation, status or
transaction on or before the Closing Date involving Sellers or their business.

 

10.8.                        NONCOMPETITION, NONSOLICITATION AND NONDISPARAGEMENT

 

(a)                                  Noncompetition. For
a period of three (3) years after the Closing Date, Sellers shall not, anywhere
directly or indirectly invest in, own, manage, operate, finance, control,
advise, render services to or guarantee the obligations of any Person engaged
in or planning to become engaged in a business similar to the business
conducted by Sellers on and before the Closing Date (“Competing Business”),
provided, however, that Sellers may purchase or otherwise acquire up to (but
not more than) one percent (1%) of any class of the securities of any Person
(but may not otherwise participate in the activities of such Person) if such
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Exchange Act.  Sellers acknowledge and agree that the
remedy at law for any breach of this Section 10.8(a) will be inadequate
and that Buyer, in addition to any other relief available to it, shall be

 

47

 

entitled
to temporary and permanent injunctive relief without the necessity of proving
actual damage.

 

(b)                                 Nonsolicitation.
For a period of three (3) years after the Closing Date, Sellers shall not,
directly or indirectly:

 

(i)                                     solicit the
business of any Person who is a customer of Buyer;

 

(ii)                                  cause, induce or
attempt to cause or induce any customer, supplier, licensee, licensor,
franchisee, employee, consultant or other business relation of Buyer to cease
doing business with Buyer, to deal with any competitor of Buyer or in any way
interfere with its relationship with Buyer;

 

(iii)                               cause, induce or
attempt to cause or induce any customer, supplier, licensee, licensor,
franchisee, employee, consultant or other business relation of Sellers on the
Closing Date or within the year preceding the Closing Date to cease doing
business with Buyer, to deal with any competitor of Buyer or in any way
interfere with its relationship with Buyer; or

 

(iv)                              hire, retain or
attempt to hire or retain any employee or independent contractor of Buyer or in
any way interfere with the relationship between Buyer and any of its employees
or independent contractors.

 

(c)                                  Nondisparagement.
After the Closing Date, Sellers will not disparage Buyer or any of Buyer’s
shareholders, directors, officers, employees or agents.

 

(d)                                 Modification of
Covenant. If a final judgment of a court or tribunal of competent jurisdiction
determines that any term or provision contained in Section 10.8(a) through
(c) is invalid or unenforceable, then the parties agree that the court or
tribunal will have the power to reduce the scope, duration or geographic area
of the term or provision, to delete specific words or phrases or to replace any
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision. This Section 10.8 will be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed. This Section 10.8 is reasonable and necessary to
protect and preserve Buyer’s legitimate business interests and the value of the
Assets and to prevent any unfair advantage conferred on Sellers.

 

10.9.                        CUSTOMER AND OTHER BUSINESS RELATIONSHIPS

 

After
the Closing, Sellers will reasonably cooperate with Buyer in its efforts to
continue and maintain for the benefit of Buyer those business relationships of
Sellers existing prior to the Closing and relating to the business to be
operated by Buyer after the Closing, including relationships with lessors,
employees, regulatory authorities, licensors, customers, suppliers and others,
and Sellers will satisfy the Retained Liabilities in a manner that is not
detrimental to any of such relationships. Sellers will refer to Buyer all
inquiries relating to such business. Neither

 

48

 

Sellers
nor any of their shareholders or their Representatives shall take any action
that would tend to diminish the value of the Assets after the Closing or that
would interfere with the business of Buyer to be engaged in after the Closing,
including disparaging the name or business of Buyer.

 

10.10.                  RETENTION
OF AND ACCESS TO RECORDS

 

After
the Closing Date, Buyer shall retain for a period consistent with Buyer’s
record-retention policies and practices, or for so long as Sellers reasonably
request, those Records of Sellers delivered to Buyer. Buyer also shall provide
Sellers and their shareholders and their Representatives reasonable access
thereto, during normal business hours and on reasonable prior written notice,
to enable them to prepare financial statements or tax returns or deal with tax
audits, wind up the affairs of Sellers, the ESOP and the ESOT, or for any other
reasonable purpose. After the Closing Date, Sellers shall provide Buyer and its
Representatives reasonable access to Records that are Excluded Assets, during
normal business hours and on at least three days’ prior written notice, for any
reasonable business purpose specified by Buyer in such notice.

 

10.11.                  FURTHER
ASSURANCES

 

The
parties shall cooperate reasonably with each other and with their respective
Representatives in connection with any steps required to be taken as part of
their respective obligations under this Contract, and shall (a) furnish upon
request to each other such further information; (b) execute and deliver to each
other such other documents; and (c) do such other acts and things, all as the
other party may reasonably request for the purpose of carrying out the intent
of this Contract and the Contemplated Transactions, provided, however, that
neither party shall be required to dispose of or make any change to its
business, expend any material funds or incur any other burden in order to
comply with this Section 10.11.

 

10.12.                  NOTICES
OF CERTAIN EVENTS

 

Prior
to or after the Closing, Sellers shall notify Buyer promptly upon becoming
aware of:

 

(i)                                     any notice or other written communication
from any person alleging that the consent of such person is or may be required
in connection with the Contemplated Transactions;

 

(ii)                                  any notice or other written communication
from any person alleging that the consent of such person is or may be required
in connection with the transactions contemplated by this Contract which relates
to the consummation of the Contemplated Transaction or that would have a material
adverse effect on Buyer’s business;

 

(iii)                               any actions, suits, charges, complaints, claims,
investigations or proceedings commenced or threatened against, relating to,
involving or otherwise affecting Sellers or the business of Sellers or any of
their respective assets or properties, which relate to the consummation of the
Contemplated Transactions; and

 

49

 

(iv)                              any change that (A) has had or would
reasonably be expected to have a material adverse effect on the business,
operations, assets, condition or prospects or Sellers or upon the Assets, or
(B) materially impairs or delays the ability of Sellers to effect the Closing.

 

Sellers’
notification of Buyer of any of the events set forth above in accordance with
this Section 10.12 shall not be deemed to cure any related breaches of the
representations, warranties, covenants or agreements contained in this
Contract, nor shall the failure of Buyer to take any action with respect to
such notice be deemed a waiver of any such breach or breaches.

 

11.                                 Indemnification;
Remedies

 

11.1.                        SURVIVAL

 

All
representations, warranties, covenants and obligations in this Contract, the
certificates delivered pursuant to Section 2.7 and any other certificate
or document delivered pursuant to this Contract shall survive the Closing and
the consummation of the Contemplated Transactions, subject to
Section 11.7. The right to indemnification, reimbursement or other remedy
based upon such representations, warranties, covenants and obligations shall
not be affected by any investigation (including any environmental investigation
or assessment) conducted with respect to, or any Knowledge acquired (or capable
of being acquired) at any time, whether before or after the execution and delivery
of this Contract or the Closing Date, with respect to the accuracy or
inaccuracy of or compliance with any such representation, warranty, covenant or
obligation. The waiver of any condition based upon the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification,
reimbursement or other remedy based upon such representations, warranties,
covenants and obligations.

 

11.2.                        INDEMNIFICATION AND REIMBURSEMENT BY SELLER

 

From
and after the Closing Date, Sellers will, jointly and severally, indemnify and
hold harmless Buyer, and its Representatives, shareholders, subsidiaries and
Related Persons (collectively, the “Buyer Indemnified Persons”), and will
reimburse the Buyer Indemnified Persons for any loss, liability, claim, damage,
expense (including costs of investigation and defense and reasonable attorneys’
fees and expenses) or diminution of value, whether or not involving a
Third-Party Claim (collectively, “Damages”), arising from or in connection
with:

 

(a)                                  any Breach of any
representation or warranty made by Sellers in (i) this Contract, (ii) the
certificates delivered pursuant to Section 2.7 (for this purpose, each
such certificate will be deemed to have stated that Sellers’  representations and warranties in this
Contract fulfill the requirements of Section 7.1 as of the Closing Date as
if made on the Closing Date, unless the certificate expressly states that the
matters disclosed in a supplement certificate have caused a condition specified
in Section 7.1 not to be satisfied), (iii) any transfer instrument or (iv)
any other certificate, document, writing or instrument delivered by Sellers
pursuant to this Contract;

 

50

 

(b)                                 any Breach of any
covenant or obligation of Sellers in this Contract or in any other certificate,
document, writing or instrument delivered by Sellers pursuant to this Contract;

 

(c)                                  any Liability
arising out of the ownership or operation of the Assets prior to the Effective
Time other than the Assumed Liabilities;

 

(d)                                 any brokerage or
finder’s fees or commissions or similar payments based upon any agreement or
understanding made, or alleged to have been made, by any Person with Sellers
(or any Person acting on their behalf) in connection with any of the
Contemplated Transactions;

 

(e)                                  any product or
component thereof manufactured by or shipped, or any services provided by,
Sellers, in whole or in part, prior to the Closing Date;

 

(f)                                    any liability under
the WARN Act or any similar state or local Legal Requirement that may result
from an “Employment Loss”, as defined by 29 U.S.C. sect. 2101(a)(6), caused by
any action of Sellers prior to the Closing;

 

(g)                                 any noncompliance
with the Bulk Sales Laws or fraudulent transfer law in respect of the
Contemplated Transactions;

 

(h)                                 any Employee Plan
established or maintained by Seller; or

 

(i)                                     any Retained
Liabilities.

 

11.3.                        INDEMNIFICATION AND REIMBURSEMENT BY SELLER—ENVIRONMENTAL MATTERS

 

In
addition to the other indemnification provisions in this Article 11, from
and after the Closing Date Sellers will indemnify and hold harmless Buyer and
the other Buyer Indemnified Persons, and will reimburse Buyer and the other
Buyer Indemnified Persons, for any Damages (including costs of cleanup,
containment or other remediation) arising from or in connection with:

 

(a)                                  any Environmental,
Health and Safety Liabilities arising out of or relating to: (i) the ownership
or operation by any Person at any time on or prior to the Closing Date of any
of the Facilities, Assets or the business of Sellers, or (ii) any Hazardous
Materials or other contaminants that were present on the Facilities or Assets
at any time on or prior to the Closing Date; or

 

(b)                                 any bodily injury
(including illness, disability and death, regardless of when any such bodily
injury occurred, was incurred or manifested itself), personal injury, property
damage (including trespass, nuisance, wrongful eviction and deprivation of the
use of real property) or other damage of or to any Person or any Assets in any
way arising from or allegedly arising from any Hazardous Activity conducted by
any Person with respect to the business of Sellers or the Assets prior to the
Closing Date or from any Hazardous Material that was (i) present on or before
the Closing Date on or at the Facilities (or present on any other property if
such Hazardous Material emanated from any Facility and was present on any
Facility

 

51

 

on or
prior to the Closing Date) or (ii) Released or allegedly Released by any Person
on or at any Facilities or Assets at any time on or prior to the Closing Date.

 

Buyer
will be entitled to control any Remedial Action, any Proceeding relating to an
Environmental Claim and, except as provided in the following sentence, any
other Proceeding with respect to which indemnity may be sought under this
Section 11.3. The procedure described in Section 11.9 will apply to
any claim solely for monetary damages relating to a matter covered by this
Section 11.3.

 

11.4.                        INDEMNIFICATION AND REIMBURSEMENT BY BUYER

 

From
and after the Closing Date, Buyer will indemnify and hold harmless Sellers and
their representatives, shareholders, subsidiaries, and related persons (collectively,
the “Seller Indemnified Persons”), and will reimburse Sellers and the Seller
Indemnified Persons, for any Damages arising from or in connection with:

 

(a)                                  any Breach of any
representation or warranty made by Buyer in this Contract or in any certificate,
document, writing or instrument delivered by Buyer pursuant to this Contract;

 

(b)                                 any Breach of any
covenant or obligation of Buyer in this Contract or in any other certificate,
document, writing or instrument delivered by Buyer pursuant to this Contract;

 

(c)                                  any claim by any
Person for brokerage or finder’s fees or commissions or similar payments based
upon any agreement or understanding alleged to have been made by such Person
with Buyer (or any Person acting on Buyer’s behalf) in connection with any of
the Contemplated Transactions;

 

(d)                                 any obligations of
Buyer with respect to bargaining with the collective bargaining representatives
of Active Hired Employees subsequent to the Closing;

 

(e)                                  any Assumed
Liabilities;

 

(f)                                    any Liability
arising out of the ownership or operation of the Assets after the Effective
Time other than the Retained Liabilities;

 

(g)                                 any product or
component thereof manufactured and shipped by, or any services provided by,
Buyer, in whole or in part, after the Closing Date;

 

(h)                                 any Liability under
the WARN Act or any similar state or local Legal Requirement that may result
from an “Employment Loss”, as defined by 29 U.S.C. sect. 2101(a) (6), caused by
any action of Buyer after the Closing or by Buyer’s decision not to hire previous
employees of Sellers prior to the Closing;

 

(i)                                     any Environmental,
Health and Safety Liabilities not in existence as of the Closing Date arising
out of or relating to: (i) the ownership or operation by any Person at any time
after the Closing Date of any of the Facilities, Assets or the

 

52

 

business
of Buyer, or (ii) any Hazardous Materials or other contaminants that were
present on the Facilities or Assets at any time after the Closing Date; or

 

(j)                                     any Liability of
Sellers arising out of Closing the Contemplated Transactions in the absence of
Consents pursuant to Buyer’s exercise of rights provided in Section 8.3.

 

11.5.                        LIMITATIONS
ON AMOUNT—SELLER

 

Sellers
shall have no liability (for indemnification or otherwise) with respect to
claims under Section 11.2(a) until the total of all Damages with respect
to such matters exceeds One Million Five Hundred Thousand dollars ($1,500,000),
and then only for the amount by which such Damages exceed One Million Five
Hundred Thousand dollars ($1,500,000). However, this Section 11.5 will not
apply to claims under Section 11.2(b) through (i) or to matters arising in
respect of Sections 3.1, 3.2, 3.7, 3.8, 3.10, 3.12, 3.18, 3.20, 3.23, 3.24,
3.25, or 3.26 or to any Breach of any of Sellers’ representations and
warranties of which the Sellers had Knowledge at any time prior to the date on
which such representation and warranty is made or any intentional Breach by
Sellers of any covenant or obligation, and Sellers will be jointly and
severally liable for all damages with respect to such Breaches.  Notwithstanding the foregoing, Sellers’
aggregate liability under Sections 11.2 and 11.3 shall in no event exceed Ten
Million Dollars ($10,000,000), except in the case of claims based on Sellers’
failure to pay or make adequate provision for the payment of Retained
Liabilities for which there shall be no limit to Sellers’ Liability.

 

11.6.                        LIMITATIONS
ON AMOUNT—BUYER

 

Buyer
will have no liability (for indemnification or otherwise) with respect to
claims under Section 11.4(a) until the total of all Damages with respect
to such matters exceeds One Million Five Hundred Thousand dollars ($1,500,000)
and then only for the amount by which such Damages exceed One Million Five
Hundred Thousand dollars ($1,500,000). However, this Section 11.6 will not
apply to claims under Section 11.4(b) through (i) or matters arising in
respect of Section 4.4 or to any Breach of any of Buyer’s representations
and warranties of which Buyer had Knowledge at any time prior to the date on
which such representation and warranty is made or any intentional Breach by
Buyer of any covenant or obligation, and Buyer will be liable for all Damages
with respect to such Breaches. 
Notwithstanding the foregoing, Buyer’s aggregate liability under
Section 11.4 shall in no event exceed Ten Million Dollars ($10,000,000).

 

11.7.                        TIME AND OTHER LIMITATIONS ON LIABILITY

 

(a)                                  If the Closing
occurs, Sellers will have liability (for indemnification or otherwise) with
respect to any Breach of (i) a covenant or obligation to be performed or
complied with prior to or after the Closing Date or (ii) a representation or
warranty, only if on or before the termination of the Escrow Agreement Buyer
notifies Sellers of a claim specifying the factual basis of the claim in
reasonable detail to the extent then known by Buyer.  The amount of any Damages for which Sellers will have liability
(for indemnification or otherwise) shall be net of any amounts (i) actually
recovered by the Buyer or Buyer Indemnified Persons under

 

53

 

insurance
policies in effect and applicable to such Damages; and, in this regard, the
Buyer or Buyer Indemnified Persons shall use its or their Best Efforts to seek
to obtain recovery under such insurance policies.

 

(b)                                 If the Closing
occurs, Buyer will have liability (for indemnification or otherwise) with
respect to any Breach of (i) a covenant or obligation to be performed or
complied with prior to or after the Closing Date or (ii) a representation or
warranty, only if on or before the termination of the Escrow Agreement Sellers
notify Buyer of a claim specifying the factual basis of the claim in reasonable
detail to the extent then known by Sellers.

 

(c)                                  Each party agrees
that it will not seek punitive damages as to any matter under, relating to or
arising out of the Contemplated Transactions unless the party’s claim is based,
in whole or in part, on the fraudulent acts of the other party.

 

(d)                                 No party shall be
entitled to indemnification under this Contract with respect to any Damage that
is attributable to any Breach of this Contract by such party.  Buyer and Sellers shall cooperate with each
other with respect to resolving any claim or liability with respect to which
one party is obligated to indemnify the other party hereunder, including by
making Best Efforts to mitigate or resolve any such claim or liability.  In the event that Buyer or Sellers shall
fail so to cooperate and make such efforts to mitigate or resolve any such
claim or liability, then notwithstanding anything else to the contrary
contained herein, the other party shall not be required to indemnify any Person
for any Damage that could reasonably be expected to have been avoided if Buyer
or Sellers, as the case may be, had made such efforts.

 

(e)                                  The parties hereto
agree that the indemnification provisions in this Contract are intended to
provide the exclusive remedy following the Closing as to all Damages either may
incur arising from or relating to the Contemplated Transactions, and each party
hereby waives, to the full extent they may do so, any other rights or remedies
that may arise under any applicable statute, rule or regulation, provided,
however, claims for fraud or intentional misrepresentation shall not be limited
by the provisions of this Section 11.7.

 

11.8.                        RIGHT OF SETOFF

 

Upon
notice to Sellers or Buyer, as the case may be, specifying in reasonable detail
the basis therefor, either Sellers or Buyer may set off any amount to which it
may be entitled under this Article 11 against amounts otherwise payable to
the other party. Neither the exercise of nor the failure to exercise such right
of setoff will constitute an election of remedies or limit either Sellers or
Buyer in any manner in the enforcement of any other remedies that may be
available to it.

 

11.9.                        THIRD-PARTY
CLAIMS

 

(a)                                  Promptly after
receipt by a Person entitled to indemnity under Sections 11.2, 11.3 (to the
extent provided in the last sentence of Section 11.3) or 11.4 (an
“Indemnified Person”) of notice of the assertion of a Third-Party Claim against
it,

 

54

 

such
Indemnified Person shall give notice to the Person obligated to indemnify under
such Section (an “Indemnifying Person”) of the assertion of such
Third-Party Claim, provided that the failure to notify the Indemnifying Person
will not relieve the Indemnifying Person of any liability that it may have to
any Indemnified Person, except to the extent that the Indemnifying Person
demonstrates that the defense of such Third-Party Claim is materially
prejudiced by the Indemnified Person’s failure to give such notice.

 

(b)                                 If an Indemnified
Person gives notice to the Indemnifying Person pursuant to Section 11.9(a)
of the assertion of a Third Party Claim, the Indemnifying Person, at its
option, shall have the right to and, if requested by any Indemnified Person
shall, assume the defense of the Third-Party Claim including the employment of
counsel reasonably satisfactory to the Indemnified Person.  The Indemnified Person shall have the right
to employ separate counsel in connection with such Third-Party Claim and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Indemnified Persons, unless:  (i) the Indemnifying Person has failed
promptly to assume the defense and employ counsel; or (ii) any Indemnified
Person in good faith shall determine that such Indemnified Person may have
available to it one or more defenses or counterclaims that are inconsistent
with one or more of those that may be available to the Indemnifying Person in
respect of such Third-Party Claim; provided that the Indemnifying Person shall
not in such event be responsible hereunder for fees and expenses of more than
one firm of separate counsel hired by the Indemnified Persons in connection
with any such Third-Party Claim in the same jurisdiction, in addition to any
local counsel.

 

(c)                                  The Indemnifying
Person shall not be liable for any settlement or compromise of any Third-Party
Claim effected without its written consent unless the Indemnifying Person has
failed promptly to assume the defense and employ counsel after having notified
the Indemnified Persons of its intent to do so or shall have failed to assume
the defense after being requested to do so by any Indemnified Person.  The Indemnifying Person shall not, without
the prior written consent of the Indemnified Persons, which consent shall not
be unreasonably withheld, settle or compromise any claim, or permit a default
of consent to the entry of any judgment in respect thereof, unless (A) such
settlement, compromise or consent includes, as an unconditional term thereof,
the giving by the claimant to the Indemnified Persons of an unconditional
release from all liability in respect of such claim, and (B) such settlement,
compromise or consent does not impose any liability or obligation on (or
provide for injunctive or other non-monetary relief affecting) any of the
Indemnified Persons.

 

(d)                                 Notwithstanding the
provisions of Section 13.4, both Sellers and Buyer hereby consent to the
nonexclusive jurisdiction of any court in which a Proceeding in respect of a
Third-Party Claim is brought against any Buyer Indemnified Person or Seller
Indemnified Person, as the case may be, for purposes of any claim that a Buyer
Indemnified Person or Seller Indemnified Person, as the case may be, may have
under this Contract with respect to such Proceeding or the matters alleged

 

55

 

therein
and agree that process may be served on Sellers or Buyer, as the case may be,
with respect to such a claim anywhere in the world.

 

(e)                                  With respect to any
Third-Party Claim subject to indemnification under this Article 11, (i)
both the Indemnified Person and the Indemnifying Person, as the case may be,
shall keep the other Person fully informed of the status of such Third-Party
Claim and any related Proceedings at all stages thereof where such Person is
not represented by its own counsel, and (ii) the parties agree (each at its own
expense) to render to each other such assistance as they may reasonably require
of each other and to cooperate in good faith with each other in order to ensure
the proper and adequate defense of any Third-Party Claim.

 

(f)                                    With respect to any
Third-Party Claim subject to indemnification under this Article 11, the
parties agree to cooperate in such a manner as to preserve in full (to the
extent possible) the confidentiality of all Confidential Information and the
attorney-client and work-product privileges. In connection therewith, each
party agrees that: (i) it will use its Best Efforts, in respect of any
Third-Party Claim in which it has assumed or participated in the defense, to
avoid production of Confidential Information (consistent with applicable law
and rules of procedure), and (ii) all communications between any party hereto
and counsel responsible for or participating in the defense of any Third-Party
Claim shall, to the extent possible, be made so as to preserve any applicable
attorney-client or work-product privilege.

 

11.10.                  OTHER CLAIMS

 

A
claim for indemnification for any matter not involving a Third-Party Claim may
be asserted by notice to the party from whom indemnification is sought and
shall be paid promptly after such notice.

 

11.11.                  INDEMNIFICATION IN CASE OF STRICT LIABILITY

 

THE
INDEMNIFICATION PROVISIONS IN THIS ARTICLE 11 SHALL BE ENFORCEABLE,
REGARDLESS OF WHETHER THE LIABILITY IS BASED UPON PAST, PRESENT OR FUTURE ACTS,
CLAIMS OR LEGAL REQUIREMENTS (INCLUDING ANY PAST, PRESENT OR FUTURE BULK SALES
LAW, ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT, OCCUPATIONAL SAFETY AND HEALTH
LAW OR PRODUCTS LIABILITY, SECURITIES OR OTHER LEGAL REQUIREMENT).

 

12.                                 Confidentiality

 

12.1.                        DEFINITION OF CONFIDENTIAL INFORMATION

 

(a)                                  As used in this
Article 12, the term “Confidential Information” includes any and all of
the following information of Sellers or Buyer that has been or may hereafter be
disclosed in any form, whether in writing, orally, electronically or otherwise,
or otherwise made available by observation, inspection or otherwise by any
party (Buyer on the one hand or Sellers on the other hand) or their
Representatives

 

56

 

(collectively,
a “Disclosing Party”) to the other party or their Representatives
(collectively, a “Receiving Party”):

 

(i)                                     all information
that is a trade secret under applicable trade secret or other law;

 

(ii)                                  all information
concerning product specifications, data, know-how, formulae, compositions,
processes, designs, sketches, photographs, graphs, drawings, samples,
inventions and ideas, past, current and planned research and development,
current and planned manufacturing or distribution methods and processes,
customer lists, current and anticipated customer requirements, price lists,
market studies, business plans, computer hardware, Software and computer
software and database technologies, systems, structures and architectures;

 

(iii)                               all information
concerning the business and affairs of the Disclosing Party (which includes
historical and current financial statements, financial projections and budgets,
tax returns and accountants’ materials, historical, current and projected
sales, capital spending budgets and plans, business plans, strategic plans,
marketing and advertising plans, publications, client and customer lists and
files, contracts, the names and backgrounds of key personnel and personnel
training techniques and materials, however documented), and all information
obtained from review of the Disclosing Party’s documents or property or
discussions with the Disclosing Party regardless of the form of the
communication; and

 

(iv)                              all notes, emails,
analyses, databases, compilations, studies, summaries and other material
prepared by the Receiving Party to the extent containing or based, in whole or
in part, upon any information included in the foregoing.

 

(b)                                 Any trade secrets
of a Disclosing Party shall also be entitled to all of the protections and
benefits under applicable trade secret law and any other applicable law. If any
information that a Disclosing Party deems to be a trade secret is found by a
court of competent jurisdiction not to be a trade secret for purposes of this
Article 12, such information shall still be considered Confidential Information
of that Disclosing Party for purposes of this Article 12 to the extent
included within the definition. In the case of trade secrets, each of Buyer and
Sellers hereby waives any requirement that the other party submit proof of the
economic value of any trade secret or post a bond or other security.

 

12.2.                        RESTRICTED USE OF CONFIDENTIAL INFORMATION

 

(a)                                  Each Receiving
Party acknowledges the confidential and proprietary nature of the Confidential
Information of the Disclosing Party and agrees that such Confidential
Information (i) shall be kept confidential by the Receiving Party; (ii) shall
not be used for any reason or purpose other than to evaluate and consummate the
Contemplated Transactions; and (iii) without limiting the foregoing, shall not
be disclosed by the Receiving Party to any Person, except in

 

57

 

each
case as otherwise expressly permitted by the terms of this Contract or with the
prior written consent of an authorized representative of Sellers with respect
to Confidential Information of Sellers (each, a “Sellers Contact”) or an
authorized representative of Buyer with respect to Confidential Information of
Buyer (each, a “Buyer Contact”). Each of Buyer and Sellers shall disclose the
Confidential Information of the other party only to its Representatives who
require such material for the purpose of evaluating the Contemplated
Transactions and are informed by Buyer or Sellers, as the case may be, of the
obligations of this Article 12 with respect to such information. Each of
Buyer or Sellers shall (iv) enforce the terms of this Article 12 as to its
respective Representatives; (v) take such action to the extent necessary to
cause its Representatives to comply with the terms and conditions of this Article 12;
and (vi) be responsible and liable for any breach of the provisions of this
Article 12 by it or its Representatives.

 

(b)                                 Unless and until
this Contract is terminated, Sellers shall maintain as confidential any
Confidential Information (including for this purpose any information of Sellers
of the type referred to in Sections 12.1(a)(i), (ii) and (iii), whether or not
disclosed to Buyer) of the Sellers relating to any of the Assets or the Assumed
Liabilities. Notwithstanding the preceding sentence, Sellers may use any
Confidential Information of Sellers before the Closing in the Ordinary Course
of Business in connection with the transactions permitted by Section 5.2.

 

(c)                                  From and after the
Closing, the provisions of Section 12.2(a) above shall not apply to or
restrict in any manner Buyer’s use of any Confidential Information of the
Sellers relating to any of the Assets or the Assumed Liabilities.

 

12.3.                        EXCEPTIONS

 

Sections
12.2(a) and (b) do not apply to that part of the Confidential Information of a
Disclosing Party that a Receiving Party demonstrates (a) was, is or becomes
generally available to the public other than as a result of a breach of this
Article 12 or the Confidentiality Agreement by the Receiving Party or its
Representatives; (b) was or is developed by the Receiving Party independently
of and without reference to any Confidential Information of the Disclosing
Party; or (c) was, is or becomes available to the Receiving Party on a
nonconfidential basis from a Third Party not bound by a confidentiality
agreement or any legal, fiduciary or other obligation restricting disclosure.
Sellers shall not disclose any Confidential Information of Sellers relating to
any of the Assets or the Assumed Liabilities in reliance on the exceptions in
clauses (b) or (c) above.

 

12.4.                        LEGAL
PROCEEDINGS

 

If
a Receiving Party becomes compelled in any Proceeding or is requested by a
Governmental Body having regulatory jurisdiction over the Contemplated
Transactions to make any disclosure that is prohibited or otherwise constrained
by this Article 12, that Receiving Party shall provide the Disclosing
Party with prompt notice of such compulsion or request so that it may seek an
appropriate protective order or other appropriate remedy or waive compliance
with the provisions of this Article 12. In the absence of a protective
order or other remedy, the Receiving Party may disclose that portion (and only
that portion) of the Confidential Information of the

 

58

 

Disclosing
Party that, based upon advice of the Receiving Party’s counsel, the Receiving
Party is legally compelled to disclose or that has been requested by such
Governmental Body, provided, however, that the Receiving Party shall use
reasonable efforts to obtain reliable assurance that confidential treatment
will be accorded by any Person to whom any Confidential Information is so
disclosed. The provisions of this Section 12.4 do not apply to any
Proceedings between the parties to this Contract.

 

12.5.                        RETURN OR DESTRUCTION OF CONFIDENTIAL INFORMATION

 

If
this Contract is terminated, each Receiving Party shall (a) destroy all
Confidential Information of the Disclosing Party prepared or generated by the
Receiving Party without retaining a copy of any such material; (b) promptly
deliver to the Disclosing Party all other Confidential Information of the
Disclosing Party, together with all copies thereof, in the possession, custody
or control of the Receiving Party or, alternatively, with the written consent
of a Sellers Contact or a Buyer Contact (whichever represents the Disclosing
Party) destroy all such Confidential Information; and (c) certify all such
destruction in writing to the Disclosing Party, provided, however, that the
Receiving Party may retain a list that contains general descriptions of the
information it has returned or destroyed to facilitate the resolution of any
controversies after the Disclosing Party’s Confidential Information is
returned.

 

12.6.                        ATTORNEY-CLIENT
PRIVILEGE

 

The
Disclosing Party is not waiving, and will not be deemed to have waived or
diminished, any of its attorney work product protections, attorney-client
privileges or similar protections and privileges as a result of disclosing its
Confidential Information (including Confidential Information related to pending
or threatened litigation) to the Receiving Party, regardless of whether the
Disclosing Party has asserted, or is or may be entitled to assert, such
privileges and protections. The parties (a) share a common legal and commercial
interest in all of the Disclosing Party’s Confidential Information that is
subject to such privileges and protections; (b) are or may become joint
defendants in Proceedings to which the Disclosing Party’s Confidential
Information covered by such protections and privileges relates; (c) intend that
such privileges and protections remain intact should either party become
subject to any actual or threatened Proceeding to which the Disclosing Party’s
Confidential Information covered by such protections and privileges relates;
and (d) intend that after the Closing the Receiving Party shall have the right
to assert such protections and privileges. No Receiving Party shall admit,
claim or contend, in Proceedings involving either party or otherwise, that any
Disclosing Party waived any of its attorney work-product protections,
attorney-client privileges or similar protections and privileges with respect
to any information, documents or other material not disclosed to a Receiving
Party due to the Disclosing Party disclosing its Confidential Information
(including Confidential Information related to pending or threatened
litigation) to the Receiving Party.

 

13.                                 General
Provisions

 

13.1.                        EXPENSES

 

Except
as otherwise provided in this Contract, each party to this Contract will bear its
respective fees and expenses incurred in connection with the preparation,
negotiation, execution and performance of this Contract and the Contemplated
Transactions, including all fees and expense

 

59

 

of
its Representatives.  If this Contract
is terminated, the obligation of each party to pay its own fees and expenses
will be subject to any rights of such party arising from a Breach of this
Contract by another party.

 

13.2.                        PUBLIC
ANNOUNCEMENTS

 

Any
public announcement, press release or similar publicity with respect to this
Contract or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer and Sellers agree in their reasonable
judgment. Except with the prior consent of the other party or as permitted by
this Contract, neither Sellers, Buyer nor any of their Representatives shall
disclose to any Person (a) the fact that any Confidential Information of
Sellers have been disclosed to Buyer or its Representatives, that Buyer or
their Representatives have inspected any portion of the Confidential
Information of Sellers, that any Confidential Information of Buyer has been
disclosed to Sellers or their Representatives or that Sellers or their
Representatives have inspected any portion of the Confidential Information of
Buyer or (b) any information about the Contemplated Transactions, including the
status of such discussions or negotiations, the execution of any documents
(including this Contract) or any of the terms of the Contemplated Transactions
or the related documents (including this Contract). Sellers and Buyer will
consult with each other concerning the means by which Sellers’ employees,
customers, suppliers and others having dealings with Sellers will be informed of
the Contemplated Transactions, and Buyer will have the right to be present for
any such communication.  Notwithstanding
the foregoing, Buyer acknowledges that Sellers have disclosed certain
information about the Contemplated Transactions to ESOP participant-beneficiaries
having the right to direct the ESOT Trustee concerning its approval of the
Contemplated Transactions, and Buyer agrees that Sellers may continue to make
such disclosures of the Contemplated Transactions as the Sellers deem
necessary, in their reasonable discretion, to effect such approval.

 

13.3.                        NOTICES

 

All
notices, Consents, waivers and other communications required or permitted by
this Contract shall be in writing and shall be deemed given to a party when (a)
delivered to the appropriate address by hand or by nationally recognized
overnight courier service (costs prepaid); (b) sent by facsimile or e-mail with
confirmation of transmission by the transmitting equipment; or (c) received or
rejected by the addressee, if sent by certified mail, return receipt requested,
in each case to the following addresses, facsimile numbers or e-mail addresses
and marked to the attention of the person (by name or title) designated below
(or to such other address, facsimile number, e-mail address or person as a
party may designate by notice to the other parties):

 

Sellers
(before the Closing): The Wornick Company

Attention:
Mr. Larry L. Rose

President
and Chief Executive Officer

10825 Kenwood Road

Cincinnati, Ohio 45242

Fax no.: 513/791-4148

E-mail address: lrose@larrylr.com

 

60

 

Sellers
(after the Closing): 

Attention:
Mr. Larry L. Rose

Fax
no.: 513/791-4148

E-mail
address: lrose@larrylr.com

 

The
Wornick Company Right Away Division, L.P.

Attention:
Keith Frase

President

P.O. Box 55

McAllen, Texas 78505-0055

Fax no.: (956) 631-0857

E-mail
address: kfrase@wornick.com

 

Right
Away Management Corporation

Attention:
Keith Frase

President

P.O. Box 55

McAllen, Texas 78505-0055

Fax no.: (956) 631-0857

E-mail
address: kfrase@wornick.com

 

Buyer
or Veritas:  The Wornick Company c/o
Veritas Capital Management, L.L.C.

Attention:  Robert B. McKeon and Thomas J. Campbell

660
Madison Avenue

New
York, NY 10021

Fax no.:  (212) 688-9411

E-mail address:                rmckeon@veritascapital.com

tcampbell@veritascapital.com

 

with
a copy to:

Winston
& Strawn LLP

Attention:  Benjamin M. Polk

200
Park Avenue

New
York, NY 10166-4193

Fax
no. (212) 294-4700

E-mail
address: bpolk@winston.com

 

13.4.                        JURISDICTION;
SERVICE OF PROCESS

 

Any
Proceeding arising out of or relating to this Contract or any Contemplated
Transaction shall be brought in the courts of the State of Delaware and each of
the parties irrevocably submits to the exclusive jurisdiction of each such
court in any such Proceeding, waives any objection it may now or hereafter have
to venue or to convenience of forum, agrees that all claims in respect of the
Proceeding shall be heard and determined only in any such court and agrees not
to bring any Proceeding arising out of or relating to this Contract or any
Contemplated Transaction in any other court. The parties agree that either or
both of them may file a copy of this paragraph with any court as written
evidence of the knowing, voluntary and bargained agreement between the

 

61

 

parties
irrevocably to waive any objections to venue or to convenience of forum.
Process in any Proceeding referred to in the first sentence of this
section may be served on any party anywhere in the world.

 

13.5.                        ENFORCEMENT
OF CONTRACT

 

Sellers
and Buyer acknowledge and agree that both Sellers and Buyer would be
irreparably damaged if any of the provisions of this Contract are not performed
in accordance with their specific terms and that any Breach of this Contract by
Sellers or Buyer, as the case may be, could not be adequately compensated in
all cases by monetary damages alone. Accordingly, in addition to any other
right or remedy to which the parties may be entitled, at law or in equity, each
party shall be entitled to enforce any provision of this Contract by a decree
of specific performance and to temporary, preliminary and permanent injunctive
relief to prevent Breaches or threatened Breaches of any of the provisions of
this Contract, without posting any bond or other undertaking.

 

13.6.                        WAIVER;
REMEDIES CUMULATIVE

 

The
rights and remedies of the parties to this Contract are cumulative and not
alternative. Neither any failure nor any delay by any party in exercising any
right, power or privilege under this Contract or any of the documents referred
to in this Contract will operate as a waiver of such right, power or privilege,
and no single or partial exercise of any such right, power or privilege will
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this Contract
or any of the documents referred to in this Contract can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of that party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Contract or the documents referred to in this Contract.

 

13.7.                        ENTIRE
CONTRACT AND MODIFICATION

 

This
Contract supersedes all prior agreements, whether written or oral, between the
parties with respect to its subject matter (including any letter of intent and
any confidentiality agreement between Buyer and Sellers) and constitutes (along
with the Exhibits and other documents delivered pursuant to this Contract) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Contract may not be amended, supplemented,
or otherwise modified except by a written agreement executed by the party to be
charged with the amendment.

 

13.8.                        ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS

 

No
party may assign any of its rights or delegate any of its obligations under
this Contract without the prior written consent of the other parties, except
that Buyer may assign any of its rights and delegate any of its obligations
under this Contract to any Subsidiary or other Related Person of Buyer and may
collaterally assign its rights hereunder to any financial institution

 

62

 

providing
financing in connection with the Contemplated Transactions. Subject to the
preceding sentence, this Contract will apply to, be binding in all respects
upon and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Contract will be construed to
give any Person other than the parties to this Contract any legal or equitable
right, remedy or claim under or with respect to this Contract or any provision
of this Contract, except such rights as shall inure to a successor or permitted
assignee pursuant to this Section 13.8 and except as provided in
Article 11 with respect to indemnification of Buyer Indemnified Persons
and Seller Indemnified Persons.

 

13.9.                        SEVERABILITY

 

If
any provision of this Contract is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Contract will remain in
full force and effect. Any provision of this Contract held invalid or
unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable.

 

13.10.                  CONSTRUCTION;
USAGE

 

(a)                                  The headings of
Articles and Sections in this Contract are provided for convenience only and
will not affect its construction or interpretation. All references to
“Articles,” “Sections” and “Schedules” refer to the corresponding Articles,
Sections and Schedules of this Contract.

 

(b)                                 Interpretation.  In this Contract, unless a clear contrary
intention appears:

 

(i)                                     the singular number
includes the plural number and vice versa;

 

(ii)                                  reference to any
Person includes such person’s successors and assigns but, if applicable, only
if such successors and assigns are not prohibited by this Contract, and
reference to a Person in a particular capacity excludes such Person in any
other capacity or individually;

 

(iii)                               reference to any
gender includes each other gender;

 

(iv)                              reference to any
agreement, document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof;

 

(v)                                 reference to any
Legal Requirement means such Legal Requirement as amended, modified, codified,
replaced or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder, and reference to any
section or other provision of any Legal Requirement means that provision
of such Legal Requirement from time to time in effect and constituting the
substantive amendment, modification, codification, replacement or reenactment
of such section or other provision;

 

63

 

(vi)                              “hereunder,”
“hereof,” “hereto”, and words of similar import shall be deemed references to
this Contract as a whole and not to any particular Article, Section or
other provision hereof;

 

(vii)                           “including” (and
with correlative meaning “include”) means including without limiting the
generality of any description preceding such term;

 

(viii)                        “or” is used in the
inclusive sense of “and/or”;

 

(ix)                                with respect to the
determination of any period of time, “from” means “from and including” and “to”
means “to but excluding”; and

 

(x)                                   references to
documents, instruments or agreements shall be deemed to refer as well to all
addenda, exhibits, schedules or amendments thereto.

 

(c)                                  Accounting Terms
and Determinations.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted and all
accounting determinations hereunder shall be made in accordance with GAAP.

 

(d)                                 Legal
Representation of the Parties.  This
Contract was negotiated by the parties with the benefit of legal
representation, and any rule of construction or interpretation otherwise
requiring this Contract to be construed or interpreted against any party shall
not apply to any construction or interpretation hereof.

 

(e)                                  The schedules
attached hereto referenced in Article 3 (the “Disclosure Schedules”) shall
be arranged in sections corresponding to the sections contained in
Article 3, and the disclosures in any section of the Disclosure
Schedule shall qualify the corresponding section of Article 3
and any other section of Article 3 to which the Disclosure
Schedule is reasonably applicable. 
The information in the Disclosure Schedules constitutes (i) exceptions
to particular representations, warranties, covenants and obligations of Sellers
as set forth in this Contract or (ii) descriptions or lists of assets and
liabilities and other items referred to in this Contract.

 

13.11.                  TIME OF ESSENCE

 

With
regard to all dates and time periods set forth or referred to in this Contract,
time is of the essence.

 

13.12.                  GOVERNING LAW

 

This
Contract will be governed by and construed under the laws of the State of
Delaware without regard to conflicts-of-laws principles that would require the
application of any other law.

 

13.13.                  EXECUTION
OF CONTRACT

 

This
Contract may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Contract and all of which, when taken
together, will be deemed to constitute one and the same agreement. The exchange
of copies of this Contract and of signature

 

64

 

pages
by facsimile transmission shall constitute effective execution and delivery of
this Contract as to the parties and may be used in lieu of the original
Contract for all purposes. Signatures of the parties transmitted by facsimile
shall be deemed to be their original signatures for all purposes.

 

13.14.                  ATTORNEYS’ FEES

 

If
any party to this Contract initiates any legal action arising out of or in
connection with this Contract, the prevailing party in such legal action shall
be entitled to recover from the other party all reasonable attorneys’ fees,
expert witness fees and expenses incurred by the prevailing party in connection
with any claim upon which such party prevails.

 

13.15.                  WAIVER OF
JURY TRIAL

 

THE
PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT
OF OR RELATING TO THIS CONTRACT OR ANY OF THE CONTEMPLATED TRANSACTIONS,
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE.  THE PARTIES AGREE
THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN
EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE
PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY PROCEEDING WHATSOEVER
BETWEEN THEM RELATING TO THIS CONTRACT OR ANY OF THE CONTEMPLATED TRANSACTIONS
SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING
WITHOUT A JURY.

 

13.16.                  VERITAS

 

Veritas
is a limited liability company duly organized, validly existing and in good
standing under the laws of Delaware. 
Veritas has all requisite power and authority to conduct its business as
it has been and is currently being conducted and to execute this Contract for
the purposes stated herein, and the execution and delivery of this Contract by
Veritas and the performance by it of its obligations hereunder have been duly
and validly authorized by all necessary action on the part of Veritas.  Veritas represents and warrants that it has,
and will maintain until the Closing or other termination of this Contract, cash
in the amount of Five Million Dollars ($5,000,000) to perform its obligations
under this Contract.

 

IN
WITNESS WHEREOF, the parties have executed this Contract as of the dates
written below.

 

Buyer:

The
Wornick Company, a Delaware corporation

 

	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  
	
   

  	
  Name:

  	
  Robert B. McKeon

  	
   

  
	
   

  	
  Title:

  	
   

  	
  President

  	
   

  
	
   

  	
  Date:
  December 3, 2003

  
					

 

65

 

Solely
for purposes of Sections 2.3(c) and 13.16:

Veritas:

Veritas
Capital Management II, L.L.C.

 

	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  
	
   

  	
  Robert B. McKeon

  	
   

  
	
   

  	
  Title:

  	
   

  	
  President

  	
   

  
	
   

  	
  Date:
  December 3, 2003

  
					

 

	
   

  	
  Sellers:

  
	
   

  	
   

  
	
   

  	
  The
  Wornick Company, a Nevada corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry L. Rose

  	
   

  
	
   

  	
   

  	
  Larry
  L. Rose, President and Chief Executive

  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:
  December 3, 2003

  
	
   

  	
   

  
	
   

  	
  The
  Wornick Company Right Away Division, a

  Nevada corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry L. Rose

  	
   

  
	
   

  	
   

  	
  Larry
  L. Rose, President and Chief Executive

  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:
  December 3, 2003

  
	
   

  	
   

  
	
   

  	
  The
  Wornick Company Right Away Division, L.P.,

  a Texas limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Right
  Away Management

  Corporation, its General Partner

  
	
   

  	
   

  	
  By:

  	
  /s/ Keith Frase

  	
   

  
	
   

  	
   

  	
   

  	
  Keith
  Frase, President

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:
  December 3, 2003

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Right
  Away Management Corporation, a Texas

  business corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith Frase

  	
   

  
	
   

  	
   

  	
  Keith
  Frase, President

  	
   

  
	
   

  	
  Date:
  December 3, 2003

  

 

66

 

Schedule 1 

SCHEDULE OF DEFINITIONS

 

For
purposes of this Contract, the following terms and variations thereof have the
meanings specified or referred to in this Schedule 1:

 

“Accounts
Receivable”—(a) all trade accounts receivable and other rights to payment from
customers of Sellers and the full benefit of all security for such accounts or
rights to payment, including all trade accounts receivable representing amounts
receivable in respect of goods shipped or products sold or services rendered to
customers of Sellers, (b) all other accounts or notes receivable of Sellers and
the full benefit of all security for such accounts or notes and (c) any claim,
remedy or other right related to any of the foregoing.

 

“Accrued
Expenses” — any expenses of Sellers accrued on the books of the company as of
the Closing Date.

 

“Active
Employee”  — as defined in
Section 10.1.

 

“Adjustment
Amount”—as defined in Section 2.8.

 

“Appurtenances”—all
privileges, rights, easements, hereditaments and appurtenances belonging to or
for the benefit of the Land, including all easements appurtenant to and for the
benefit of any Land (a “Dominant Parcel”) for, and as the primary means of
access between, the Dominant Parcel and a public way, or for any other use upon
which lawful use of the Dominant Parcel for the purposes for which it is
presently being used is dependent, and all rights existing in and to any
streets, alleys, passages and other rights-of-way included thereon or adjacent
thereto (before or after vacation thereof) and vaults beneath any such streets.

 

“Assets”—as
defined in Section 2.1.

 

“Assignment
and Assumption Agreement”—as defined in Section 2.7(a)(ii).

 

“Assumed
Liabilities”—as defined in Section 2.4(a).

 

“Balance
Sheet”—as defined in Section 3.3.

 

“Best
Efforts”—the efforts that a prudent Person desirous of achieving a result would
use in similar circumstances to achieve that result as expeditiously as
possible, provided, however, that a Person required to use Best Efforts under
this Contract will not be thereby required to take actions that would result in
a material adverse change in the benefits to such Person of this Contract and
the Contemplated Transactions or to dispose of or make any change to its
business, expend any material funds or incur any other material burden.

 

“Bill
of Sale”—as defined in Section 2.7(a)(i).

 

67

 

“Breach”—any
breach of, or any inaccuracy in, any representation or warranty or any breach of,
or failure to perform or comply with, any covenant or obligation, in or of this
Contract or any other Contract, or any event which with the passing of time or
the giving of notice, or both, would constitute such a breach, inaccuracy or
failure.

 

“Bulk
Sales Laws”—as defined in Section 5.10.

 

“Business
Day”—any day other than (a) Saturday or Sunday or (b) any other day on which
banks in Ohio are permitted or required to be closed.

 

“Buyer”—as
defined in the first paragraph of this Contract.

 

“Buyer
Indemnified Persons”—as defined in Section 11.2.

 

“Closing”—as
defined in Section 2.6.

 

“Closing
Date”—the date on which the Closing actually takes place.

 

“Closing
Inventories and Fixed Assets Capital”—as defined in Section 2.9(b).

 

“COBRA”—Section 4980B
of the Code (as well as its predecessor provision, Section 162(k) of the
Code) and Sections 601 through 608, inclusive, of ERISA.

 

“Code”—the
Internal Revenue Code of 1986.

 

“Confidential
Information”—as defined in Section 12.1.

 

“Consent”—any
approval, consent, ratification, waiver or other authorization.

 

“Contemplated
Transactions”—all of the transactions contemplated by this Contract.

 

“Contract”—any
agreement, contract, Lease, consensual obligation, promise or undertaking
(whether written or oral and whether express or implied), whether or not
legally binding.

 

“Damages”—as
defined in Section 11.2.

 

“Effective
Time”—  11:59 p.m. on the Closing Date.

 

“Employee
Benefit Plans”—as defined in Section 3.12.

 

“Encumbrance”—any
charge, claim, community or other marital property interest, condition,
equitable interest, lien, encumbrance, hypothecation, option, pledge, security
interest, mortgage, right of way, easement, encroachment, servitude, right of
first option, proxies, title retention agreement, title defect, securityholder
agreement, right of first refusal or similar restriction, including any
restriction on use, voting (in the case of any security or equity interest),
transfer, receipt of income or exercise of any other attribute of ownership.

 

68

 

“Environment”—soil,
land surface or subsurface strata, surface waters (including navigable waters
and ocean waters), groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal life and any other
environmental medium or natural resource.

 

“Environmental,
Health and Safety Liabilities”—any cost, damages, expense, liability,
obligation or other responsibility arising from or under any Environmental Law
or Occupational Safety and Health Law, including those consisting of or
relating to:

 

(a)                                  any environmental, health or safety matter or
condition (including on-site or off-site contamination, occupational safety and
health and regulation of any chemical substance or product);

(b)                                 any fine, penalty, judgment, award, settlement,
legal or administrative proceeding, damages, loss, claim, demand or response,
remedial or inspection cost or expense arising under any Environmental Law or
Occupational Safety and Health Law;

(c)                                  financial responsibility under any Environmental
Law or Occupational Safety and Health Law for cleanup costs or corrective
action, including any cleanup, removal, containment or other remediation or
response actions (“Cleanup”) required by any Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or

(d)                                 any other compliance, corrective or remedial
measure required under any Environmental Law or Occupational Safety and Health
Law.

 

The
terms “removal,” “remedial” and “response action” include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA).

 

“Environmental
Law”—any Legal Requirement that requires or relates to:

 

(a)                                  advising appropriate authorities, employees or
the public of intended or actual Releases of pollutants or hazardous substances
or materials, violations of discharge limits or other prohibitions and the
commencement of activities, such as resource extraction or construction, that
could have significant impact on the Environment;

(b)                                 preventing or reducing to acceptable levels the
Release of pollutants or hazardous substances or materials into the
Environment;

(c)                                  reducing the quantities, preventing the Release
or minimizing the hazardous characteristics of wastes that are generated;

(d)                                 assuring that products are designed, formulated,
packaged and used so that they do not present unreasonable risks to human
health or the Environment when used or disposed of;

(e)                                  protecting resources, species or ecological
amenities;

(f)                                    reducing to acceptable levels the risks inherent
in the transportation of hazardous substances, pollutants, oil or other
potentially harmful substances;

(g)                                 cleaning up pollutants that have been Released,
preventing the Threat of Release or paying the costs of such clean up or
prevention; or

(h)                                 making responsible parties pay private parties,
or groups of them, for damages done to their health or the Environment or
permitting self-appointed representatives of the public interest to recover for
injuries done to public assets.

 

69

 

“ERISA”—the
Employee Retirement Income Security Act of 1974.

 

“ESOP”
— The Wornick Company Employee Stock Ownership Plan.

 

“ESOT”
— The Wornick Company Employee Stock Ownership Trust established pursuant to
the ESOP.

 

“ESOT
Trustee” — First Bankers Trust Company, 2321 Koch’s Lane, P.O. Box 3566,
Quincy, IL 62305-3566.

 

“Exchange
Act”—the Securities Exchange Act of 1934.

 

“Excluded
Assets”—as defined in Section 2.2.

 

“Facilities”—any
leasehold interest in real property currently operated by Sellers, including
the Tangible Personal Property used or operated by Sellers at the respective
locations of the Leasehold Real Property specified in Section 3.6.

 

“Fixed
Assets”  — the Tangible Personal
Property of Seller described in Schedule 2.1(b) determined on a
net basis after depreciation.

 

“GAAP”—generally
accepted accounting principles for financial reporting in the United States,
applied on a basis consistent with the basis on which the Balance Sheet and the
other financial statements referred to in Section 3.3 were prepared.

 

“Governing
Documents”—with respect to any particular entity, (a) if a corporation, the
articles or certificate of incorporation and the bylaws; (b) if a general
partnership, the partnership agreement and any statement of partnership; (c) if
a limited partnership, the limited partnership agreement and the certificate of
limited partnership; (d) if a limited liability company, the articles of
organization and operating agreement; (e) if another type of Person, any other
charter or similar document adopted or filed in connection with the creation,
formation or organization of the Person; (f) all equityholders’ agreements,
voting agreements, voting trust agreements, joint venture agreements,
registration rights agreements or other agreements or documents relating to the
organization, management or operation of any Person or relating to the rights,
duties and obligations of the equityholders of any Person; and (g) any
amendment or supplement to any of the foregoing.

 

“Governmental
Authorization”—any Consent, license, registration or permit issued, granted,
given or otherwise made available by or under the authority of any Governmental
Body or pursuant to any Legal Requirement.

 

“Government
Furnished Materials” — Materials furnished to the Sellers by Defense Supply
Center Philadelphia at no cost to Sellers. 
These are not recorded in Sellers’ financial statements but are
separately accounted for in Sellers’ Records.

 

“Governmental
Body”—any:

 

70

 

(a)                                  nation, state, county, city, town, borough,
village, district or other jurisdiction;

(b)                                 federal, state, local, municipal, foreign or
other government;

(c)                                  governmental or quasi-governmental authority of
any nature (including any agency, branch, department, board, commission, court,
tribunal or other entity exercising governmental or quasi-governmental powers);

(d)                                 multinational organization or body;

(e)                                  body exercising, or entitled or purporting to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power; or

(f)                                    official of any of the foregoing.

 

“Ground
Lease”—any long-term lease of land in which most of the rights and benefits
comprising ownership of the land and the improvements thereon or to be
constructed thereon, if any, are transferred to the tenant for the term
thereof.

 

“Ground
Lease Property”—any land, improvements and appurtenances subject to a Ground
Lease in favor of Sellers.

 

“Hazardous
Activity”—the distribution, generation, handling, importing, management,
manufacturing, processing, production, refinement, Release, storage, transfer,
transportation, treatment or use (including any withdrawal or other use of
groundwater) of Hazardous Material in, on, under, about or from any of the
Facilities or any part thereof into the Environment and any other act,
business, operation or thing that increases the danger, or risk of danger, or
poses an unreasonable risk of harm, to persons or property on or off the
Facilities.

 

“Hazardous
Material”—any substance, material or waste which is or will foreseeably be
regulated by any Governmental Body, including any material, substance or waste
which is defined as a “hazardous waste,” “hazardous material,” “hazardous
substance,” “extremely hazardous waste,” “restricted hazardous waste,”
“contaminant,” “toxic waste” or “toxic substance” under any provision of
Environmental Law, and including petroleum, petroleum products, asbestos,
presumed asbestos-containing material or asbestos-containing material, urea
formaldehyde and polychlorinated biphenyls.

 

“HSR
Act”—the Hart-Scott-Rodino Antitrust Improvements Act.

 

“Improvements”—all
buildings, structures, fixtures and improvements located on the Land or
included in the Assets, including those under construction.

 

“Indemnified
Person”—as defined in Section 11.9.

 

“Indemnifying
Person”—as defined in Section 11.9.

 

“Initial
Inventories and Fixed Assets Capital”—as defined in Section 2.9(a).

 

“Intellectual
Property Assets”—as defined in Section 3.21(a).

 

“Interim
Balance Sheet”—as defined in Section 3.3.

 

71

 

“Inventories”—all
inventories of Sellers, wherever located, including all finished goods, work in
process, raw materials, spare parts and all other materials and supplies to be
used or consumed by Sellers in the production of finished goods.

 

“IRS”—the
United States Internal Revenue Service and, to the extent relevant, the United
States Department of the Treasury.

 

“Knowledge”—an
individual will be deemed to have Knowledge of a particular fact or other
matter if (a) that individual is actually aware of that fact or matter or (b) a
prudent individual could be expected to discover or otherwise become aware of
that fact or matter in course of conducting a reasonably comprehensive
investigation regarding the accuracy of any representation or warranty
contained in this Contract.

 

A
Person (other than an individual) will be deemed to have Knowledge of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director, officer, partner, executor or trustee of that
Person (or in any similar capacity) has, or at any time had, Knowledge of that
fact or other matter (as set forth in (a) and (b) above).

 

“Land”—all
parcels and tracts of land in which Sellers have a leasehold ownership
interest.

 

“Lease”—any
Leasehold Real Property Lease or any lease or rental agreement, license, right
to use or installment and conditional sale agreement to which each Seller is a
party and any other Seller Contract pertaining to the leasing or use of any
Tangible Personal Property.

 

“Leasehold
Real Property”—the Land and Improvements and all Appurtenances thereto and any
Ground Lease Property.

 

“Legal
Requirement”—any federal, state, local, municipal, foreign, international,
multinational or other constitution, law, ordinance, principle of common law,
code, regulation, statute or treaty.

 

“Liability”—with
respect to any Person, any liability or obligation of such Person of any kind,
character or description, whether known or unknown, absolute or contingent,
accrued or unaccrued, disputed or undisputed, liquidated or unliquidated,
secured or unsecured, joint or several, due or to become due, vested or
unvested, executory, determined, determinable or otherwise, and whether or not
the same is required to be accrued on the financial statements of such Person.

 

“Marks”—as
defined in Section 3.21(a)(i).

 

“Material
Consents”—as defined in Section 7.3.

 

“Occupational
Safety and Health Law”—any Legal Requirement designed to provide safe and
healthful working conditions and to reduce occupational safety and health
hazards, including the Occupational Safety and Health Act, and any program,
whether governmental or private (such as those promulgated or sponsored by
industry associations and insurance companies), designed to provide safe and
healthful working conditions.

 

72

 

“Order”—any
order, injunction, judgment, decree, ruling, assessment or arbitration award of
any Governmental Body or arbitrator.

 

“Ordinary
Course of Business”—an action taken by a Person will be deemed to have been
taken in the Ordinary Course of Business only if that action:

 

(a)                                  is consistent in nature, scope and magnitude with
the past practices of such Person and is taken in the ordinary course of the
normal, day-to-day operations of such Person;

(b)                                 does not require authorization by the board of
directors or shareholders of such Person (or by any Person or group of Persons
exercising similar authority) and does not require any other separate or special
authorization of any nature, or if any such authorization is required, such
authorization has been so obtained; and

(c)                                  is similar in nature, scope and magnitude to
actions customarily taken, without any separate or special authorization, in
the ordinary course of the normal, day-to-day operations of other Persons that
are in the same line of business as such Person.

 

“Permitted
Encumbrances”—as defined in Section 3.7.

 

“Person”—an
individual, partnership, corporation, business trust, limited liability
company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity or a Governmental
Body.

 

“Proceeding”—any
action, arbitration, audit, hearing, investigation, litigation or suit (whether
civil, criminal, administrative, judicial or investigative, whether formal or
informal, whether public or private) commenced, brought, conducted or heard by
or before, or otherwise involving, any Governmental Body or arbitrator.

 

“Purchase
Price”—as defined in Section 2.3.

 

“QSSS”
— as defined in Section 2.1(k).

 

“Real
Property Lease”—any Ground Lease or Space Lease.

 

“Record”—information
that is inscribed on a tangible medium or that is stored in an electronic or
other medium and is retrievable in perceivable form.

 

“Related
Person”—

 

With
respect to a particular individual:

 

(a)                                  each other member of such individual’s Family;

(b)                                 any Person that is directly or indirectly
controlled by any one or more members of such individual’s Family;

(c)                                  any Person in which members of such individual’s
Family hold (individually or in the aggregate) a Material Interest; and

(d)                                 any Person with respect to which one or more
members of such individual’s Family serves as a director, officer, partner,
executor or trustee (or in a similar capacity).

 

With
respect to a specified Person other than an individual:

 

73

 

(a)                                  any Person that directly or indirectly controls,
is directly or indirectly controlled by or is directly or indirectly under
common control with such specified Person;

(b)                                 any Person that holds a Material Interest in such
specified Person;

(c)                                  each Person that serves as a director, officer,
partner, executor or trustee of such specified Person (or in a similar
capacity);

(d)                                 any Person in which such specified Person holds a
Material Interest; and

(e)                                  any Person with respect to which such specified
Person serves as a general partner or a trustee (or in a similar capacity).

 

For
purposes of this definition, (a) “control” (including “controlling,”
“controlled by,” and “under common control with”) means the possession, direct
or indirect, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and shall be construed as such term is used in the rules
promulgated under the Securities Act; (b) the “Family” of an individual
includes (i) the individual, (ii) the individual’s spouse, (iii) any other
natural person who is related to the individual or the individual’s spouse
within the second degree and (iv) any other natural person who resides with
such individual; and (c) “Material Interest” means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of
voting securities or other voting interests representing at least ten percent
(10%) of the outstanding voting power of a Person or equity securities or other
equity interests representing at least ten percent (10%) of the outstanding
equity securities or equity interests in a Person.

 

“Release”—any
release, spill, emission, leaking, pumping, pouring, dumping, emptying,
injection, deposit, disposal, discharge, dispersal, leaching or migration on or
into the Environment or into or out of any property.

 

“Remedial
Action”—all actions, including any capital expenditures, required or
voluntarily undertaken (a) to clean up, remove, treat or in any other way
address any Hazardous Material or other substance; (b) to prevent the Release
or Threat of Release or to minimize the further Release of any Hazardous
Material or other substance so it does not migrate or endanger or threaten to
endanger public health or welfare or the Environment; (c) to perform
pre-remedial studies and investigations or post-remedial monitoring and care;
or (d) to bring all Facilities and the operations conducted thereon into
compliance with Environmental Laws and environmental Governmental
Authorizations.

 

“Representative”—with
respect to a particular Person, any director, officer, manager, employee,
agent, consultant, advisor, accountant, financial advisor, legal counsel or
other representative of that Person.

 

“Retained
Liabilities”—as defined in Section 2.4(b).

 

“SEC”—the
United States Securities and Exchange Commission.

 

“Securities
Act”—the Securities Act of 1933, as amended.

 

“Sellers”—as
defined in the first paragraph of this Contract.

 

74

 

“Seller
Contract”—any Contract (a) under which Sellers have or may acquire any rights
or benefits; (b) under which Sellers have or may become subject to any
obligation or liability; or (c) by which Sellers or any of the assets owned or
used by Sellers is or may become bound.

 

“Software”—all
computer software and subsequent versions thereof, including source code,
object, executable or binary code, objects, comments, screens, user interfaces,
report formats, templates, menus, buttons and icons and all files, data,
materials, manuals, design notes and other items and documentation related
thereto or associated therewith.

 

“Space
Lease”—any lease or rental agreement pertaining to the occupancy of any
improved space on any Land.

 

“Subsidiary”—with
respect to any Person (the “Owner”), any corporation or other Person of which
securities or other interests having the power to elect a majority of that
corporation’s or other Person’s board of directors or similar governing body,
or otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having
such power only upon the happening of a contingency that has not occurred), are
held by the Owner or one or more of its Subsidiaries.

 

“Tangible
Personal Property”—all machinery, equipment, tools, furniture, office
equipment, computer hardware, supplies, materials, vehicles and other items of
tangible personal property (other than Inventories) of every kind owned or
leased by Sellers (wherever located and whether or not carried on Sellers’
books), together with any express or implied warranty by the manufacturers or
sellers or lessors of any item or component part thereof and all maintenance
records and other documents relating thereto.

 

“Tax”—any
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, property, environmental, windfall profit, customs,
vehicle, airplane, boat, vessel or other title or registration, capital stock,
franchise, employees’ income withholding, foreign or domestic withholding,
social security, unemployment, disability, real property, personal property,
sales, use, transfer, value added, alternative, add-on minimum and other tax,
fee, assessment, levy, tariff, charge or duty of any kind whatsoever and any
interest, penalty, addition or additional amount thereon imposed, assessed or
collected by or under the authority of any Governmental Body or payable under
any tax-sharing agreement or any other Contract.

 

“Tax
Return”—any return (including any information return), report, statement,
schedule, notice, form, declaration, claim for refund or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance with any Legal Requirement
relating to any Tax.

 

“Third
Party”—a Person that is not a party to this Contract.

 

“Third-Party
Claim”—any claim against any Indemnified Person by a Third Party, whether or
not involving a Proceeding.

 

75

 

“Threat
of Release”—a reasonable likelihood of a Release that may require action in
order to prevent or mitigate damage to the Environment that may result from
such Release.

 

“Trade
Accounts Payable” — unsettled contractual payment obligations, incurred in the
Ordinary Course of Business, owing by Sellers to Third Parties.

 

“WARN
Act”— Worker Adjustment and Retraining Notification Act.

 

76Exhibit
10.10

 

Amendment
No. 1 to Assets Purchase and Sale Contract

 

This Amendment No. 1 to
Assets Purchase and Sale Contract (this “Amendment”) is made as of May 4, 2004
by and among The Wornick Company, a Nevada corporation (“Wornick”), The Wornick
Company Right Away Division, a Nevada corporation (“TWCRAD”), The Wornick
Company Right Away Division, L.P., a Texas limited partnership (“TWCRADLP”),
Right Away Management Corporation, a Texas corporation (“RAMCO” and
collectively with Wornick, TWCRAD and TWCRADLP, the “Sellers” and individually,
a “Seller”), The Wornick Company, a Delaware corporation (“Buyer”), and Veritas
Capital Management II, LLC (“Veritas”). 
Sellers, Buyer and Veritas are sometimes individually referred to herein
as a “Party” and collectively as the “Parties”.

 

WHEREAS, the Parties have
previously entered into that certain Assets Purchase and Sale Contract dated
December 3, 2003 (the “Purchase Contract”); and

 

WHEREAS, the Parties
desire to amend the Purchase Contract upon the terms and conditions set forth
in this Amendment;

 

NOW, THEREFORE, for and
in consideration of the mutual covenants and agreements herein set forth, the
Parties agree as follows:

 

A.                                   Unless
otherwise defined, all capitalized terms in this Amendment shall have the meanings
ascribed to such terms in the Purchase Contract.

 

B.                                     Section 2.3
of the Purchase Contract is hereby deleted in its entirety and the following
Section 2.3 is adopted by this Amendment in its place:

 

2.3.                              CONSIDERATION

 

(a)                                  The
consideration for the Assets (the “Purchase Price”) will be (a) One Hundred
Fifty Five Million Dollars 
($155,000,000) plus or minus the Adjustment Amount and (b) the
assumption of the Assumed Liabilities.

 

(b)                                 In
accordance with Section 2.7(b), at the Closing, the Purchase Price, prior
to adjustment on account of the Adjustment Amount, shall be delivered by Buyer
as follows: (i) One Hundred Fifty Million Dollars ($150,000,000) by wire
transfer to Sellers; and (ii) Five Million Dollars ($5,000,000) by wire
transfer to an Escrow Agent mutually satisfactory to Sellers and Buyer (the
“Escrow Agent”) to hold in accordance with the terms and conditions of an
escrow agreement in form and substance mutually satisfactory to Sellers and
Buyer (the “Escrow Agreement”), providing for, among other things, termination
of the Escrow Agreement on September 30, 2005.

 

 

(c)                                  Within
ten (10) Business Days after the execution of this Amendment, Veritas shall
cause Buyer to deposit the sum of Five Million Dollars ($5,000,000) (the
“Deposit”) in escrow in accordance with the terms and conditions of the Deposit
Escrow Agreement in the form of Exhibit A attached hereto.  Unless this Contract shall be terminated
pursuant to Section 9.1, on the Closing Date the Deposit (together with
all interest and other distributions or gains, hereinafter referred to as
“Earnings”) shall be released to Sellers as partial payment  of the Purchase Price and the amount payable
by Buyer to Sellers at the Closing pursuant to Section 2.3(b) shall be
reduced by the amount of the Deposit and Earnings.  In the event the Closing does not occur as a
result of the Breach by Buyer of its obligations under this Contract, Sellers
shall be entitled to receive the Deposit and Earnings as liquidated
damages.  Buyer and Sellers hereby acknowledge
that the amount of damages which would be incurred by Sellers as a result of
Buyer’s Breach of this Contract for not Closing are difficult to ascertain and
that the amount of liquidated damages provided for by this Section 2.3(c)
are reasonable.  Notwithstanding anything
to the contrary contained in this Contract (including, without limitation,
Sections 9.2 and 13.5), Buyer shall have no other liability to Sellers in the
event the Closing does not occur.  In the
event the Closing does not occur other than as a result of the Breach by Buyer
of its obligations under this Contract, the Deposit and Earnings shall be
returned to Buyer.

 

C.                                     Section 2.6
of the Purchase Contract is hereby amended to read in its entirety as follows:

 

2.6.                              CLOSING

 

The purchase and sale
provided for in this Contract (the “Closing”) will take place at the offices of
Winston & Strawn LLP, 200 Park Avenue, New York, New York 10166, commencing
at 10:00 a.m. (local time) on a date on or before June 30, 2004, agreed
upon by Buyer and Sellers.  Subject to
the provisions of Article 9, failure to consummate the purchase and sale
provided for in this Contract on the date and time and at the place determined
pursuant to this Section 2.6 will not result in the termination of this
Contract and will not relieve any Party of its obligation under this
Contract.  In such a situation, the
Closing will occur as soon as practicable, subject to Article 9.

 

D.                                    Section 2.7(b)(i)
of the Purchase Contract is hereby amended to read in its entirety as follows:

 

2

 

(i)                                     One
Hundred Fifty Million Dollars ($150,000,000) (less the amount of the Deposit
and Earnings) by wire transfer to an account specified by Sellers in a writing
delivered to Buyer at least three (3) Business Days prior to the Closing Date,
and Five Million Dollars ($5,000,000) by wire transfer to the account of the
Escrow Agent pursuant to the Escrow Agreement;

 

E.                                      Section 9.1(f)
of the Purchase Contract is hereby amended by deleting the reference to
“March 31, 2004” in such section and substituting the date “
June 30, 2004” in lieu thereof.

 

F.                                      Section 9.1(g)
of the Purchase Contract is hereby amended by deleting the reference to
“March 31, 2004” in such section and substituting the date
“June 30, 2004” in lieu thereof.

 

G.                                     For
the avoidance of doubt, all references in the Purchase Contract to the approval
of the Purchase Contract by the ESOT Trustee (including, without limitation,
those references contained in Sections 7.8 and 8.6) shall mean the approval of
the Purchase Contract, as amended by this Amendment, by the ESOT Trustee.  Additionally, all references in the Purchase
Contract to the ESOT Trustee (including, without limitation, paragraph 4 under
“PREMISES” and Schedule 1) shall mean Susan M. Ledingham, who replaced
First Bankers Trust Company as the ESOT Trustee effective December 23,
2003.

 

H.                                    Except
as herein and hereby amended, modified or changed, all terms and provisions of
the Purchase Contract shall remain in full force and effect.

 

I.                                         This
Amendment may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Amendment and all of which, when taken
together, will be deemed to constitute one and the same agreement.  The exchange of copies of this Amendment and
of signature pages by facsimile transmission shall constitute effective
execution and delivery of this Amendment as to the Parties and may be used in
lieu of the original Amendment for all purposes.  Signatures of the Parties transmitted by
facsimile shall be deemed to be the original signatures for all purposes.

 

J.                                        Attached
hereto are supplements to Schedules 3.6(a), 3.6(b), 3.13(a), 3.15 and 3.16(a)
to update the information and representations previously stated therein.  Additionally, to supplement
Schedule 3.19(a), Don Leifer, Vice President of Sales and Marketing for
Wornick, has become an Active Employee. 
Additionally, to supplement Schedule 3.3, Sellers have delivered to
Buyer the audited financial statements of Sellers as of December 31, 2003,
which include certain restatements related to prior periods and certain changes
in accounting materials, all as set forth therein.

 

K.                                    Buyer
hereby waives the right to assert a claim for damages for Breach of any
representation or warranty as to any matter disclosed in the Schedules attached
to the Purchase Contract or supplemented hereby.  In addition, in the event that prior to the
Closing Sellers notify Buyer in writing of any other supplements to the
Schedules, Buyer waives its right

 

3

 

to assert a claim against
Sellers for damages in connection with any representation or warranty relating
to such notification; provided, however, that Buyer shall be
entitled to exercise its rights under Section 9.1 of the Purchase Contract
in connection with any such notification.

 

L.                                      For
purposes of satisfying the requirements of Section 2.3(b) of the Purchase
Contract concerning the Escrow Agreement, the parties agree that the Escrow
Agreement shall be in substantially the form of Exhibit B hereto,
subject to any changes required by the Escrow Agent.

 

4

 

IN WITNESS
WHEREOF, the Parties have executed this Amendment as of the date first above
written.

 

 

	
  Buyer:

  	
   

  	
  Sellers:

  
	
   

  	
   

  	
   

  
	
  The Wornick Company, a
  Delaware corporation

  	
   

  	
  The Wornick Company, a
  Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Robert
  B. McKeon

  	
   

  	
  By:

  	
     /s/
  Larry L. Rose

  
	
   

  	
  Robert B. McKeon

  	
   

  	
   

  	
  Larry L. Rose

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  	
  President and Chief
  Executive

  Officer

  

 

 

Solely for purposes of Section 2.3(c) and Section 13.16:

 

	
  Veritas Capital
  Management II, L.L.C.

  	
   

  	
  The Wornick Company
  Right

  Away Division, a Nevada

  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  	
  By:

  	
     /s/
  Larry L. Rose

  
	
   

  	
  Robert B. McKeon

  	
   

  	
   

  	
  Larry L. Rose

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  	
  President and Chief
  Executive

  
	
   

  	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Wornick Company
  Right Away

  
	
   

  	
   

  	
  Division, L.P., a Texas
  limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Right Away Management
  Corporation,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Keith
  Frase

  
	
   

  	
   

  	
   

  	
  Keith Frase, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Right Away Management
  Corporation,

  
	
   

  	
   

  	
  a Texas corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Keith
  Frase

  
	
   

  	
   

  	
   

  	
  Keith Frase, President

  

 

5

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