Exhibit 99.2
FOURTH AMENDMENT TO SENIOR SECURED, SUPER-PRIORITY
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DEBTOR-IN-POSSESSION CREDIT AGREEMENT
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This FOURTH AMENDMENT, dated as of October 16, 2003 (this
"Amendment"), to the DIP Credit Agreement referred to below is by and among
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AGWAY, INC., a Delaware corporation, FEED COMMODITIES INTERNATIONAL LLC, a
Delaware limited liability company, XXXXXXXX AGRONOMIC CONSULTING SERVICE LLC, a
Delaware limited liability company, AGWAY GENERAL AGENCY, INC., a New York
corporation, COUNTRY BEST XXXXX, LLC, a Delaware limited liability company,
COUNTRY BEST-XXXXXXX LLC, a Delaware limited liability company, AGWAY ENERGY
PRODUCTS LLC, a Delaware limited liability company, AGWAY ENERGY SERVICES-PA,
INC. ("AESPA"), a Delaware corporation, and AGWAY ENERGY SERVICES, INC. ("AES"),
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a Delaware corporation, as Borrowers (the "Borrowers"), THE OTHER CREDIT PARTIES
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SIGNATORY THERETO (the "Credit Parties"), the lenders signatory thereto from
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time to time (the "Lenders"), and GENERAL ELECTRIC CAPITAL CORPORATION, as Agent
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("Agent") and as a Lender.
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W I T N E S S E T H
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WHEREAS, Borrowers, the Credit Parties, the Lenders and Agent are
parties to that certain Senior Secured, Super-Priority Debtor-in-Possession
Credit Agreement, dated as of October 4, 2002 (including all annexes, exhibits
and schedules thereto, and as amended, supplemented or otherwise modified from
time to time, the "DIP Credit Agreement"); and
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WHEREAS, the Agent and Requisite Lenders have agreed to amend the
DIP Credit Agreement, in the manner, and on the terms and conditions, provided
for herein.
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein
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shall have the meanings ascribed to them in the DIP Credit Agreement or Annex A
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thereto.
2. Waiver. (a) Agent and Requisite Lenders hereby waive, as of
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the Effective Date (as defined below), all Events of Default arising solely from
Borrowers' failure to (i) comply with the Financial Covenants referenced in
Section 6.10 of the DIP Credit Agreement and set forth in Annex G, clause (b)
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(Minimum EBITDA (Agway Operations)) thereof for the Fiscal Months ended June 30,
2003, July 31, 2003, August 31, 2003 and September 30, 2003, respectively, (ii)
deliver the reports and notices referenced in Section 4.1(a) of the DIP Credit
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Agreement and set forth in Annex E, clause (c)(i) (Operating Plans) thereof for
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the Fiscal Year ended June 30, 2003 and (iii) deliver the reports and notices
referenced in Section 4.1(a) of the DIP Credit Agreement and set forth in Annex
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E, clause (d) (Annual Audited Financials) thereof for the Fiscal Year ended June
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30, 2003 provided that Borrowers shall have delivered to Agent and Lenders such
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reports and notices for the Fiscal Year on or prior to October 30, 2003 and (b)
Borrowers have also notified the Agent that Borrowers will reduce the Revolving
Loan Commitment and the L/C Sublimit to an amount equal to $65,000,000 on the
Effective Date. Agent and Lenders hereby waive, as of the Effective Date, the
requirements that Borrowers (i) comply with Section 1.3(c)(ii) of the DIP Credit
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Agreement as a result of such reduction and (ii) pay to the Agent, for the
benefit of Lenders, the prepayment fee required pursuant to Section 1.9(c) of
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the DIP Credit Agreement for reducing the Revolving Loan Commitment.
3. Amendment to Section 1.3(c) of the DIP Credit Agreement.
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Section 1.3(c) of the DIP Credit Agreement is hereby amended as of the Effective
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Date by deleting such Section 1.3(c) in its entirety and substituting in lieu
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thereof the following new Section 1.3(c):
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"(c) Application of Certain Mandatory Prepayments.
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Any prepayments made by any Borrower pursuant to
Sections 1.3(b)(ii) or (b)(iii) above shall be
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applied as follows: first, to repay in full the
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outstanding principal, accrued interest, and
accrued fees and expenses, if any, owing to Prior
Lenders under the Pre-Petition Loan Agreement;
second, to Fees and reimbursable expenses of Agent
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then due and payable pursuant to any of the Loan
Documents; third, to interest then due and payable
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on the Swing Line Loan; fourth, to the principal
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balance of the Swing Line Loan outstanding until
the same has been repaid in full; fifth, to
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interest then due and payable on Revolving Credit
Advances; sixth, to the principal balance of
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Revolving Credit Advances outstanding until the
same has been paid in full; and last, to the
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extent excess proceeds remain after application as
provided above, Borrowers shall retain such excess
proceeds for working capital and general corporate
purposes. Neither the Revolving Loan Commitment
nor the Swing Line Commitment shall be permanently
reduced by the amount of any such prepayments."
4. Amendment to Annex A of the DIP Credit Agreement. Annex A of
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the DIP Credit Agreement is hereby amended of as the Effective Date by adding
or, as the case may be, by deleting such definition in its entirety and
substituting in lieu thereof, the following new definition to such Annex A in
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appropriate alphabetical order:
""EBITDA" means, with respect to any Person for any
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fiscal period, without duplication, an amount
equal to (a) consolidated net income of such
Person for such period determined in accordance
with GAAP, minus (b) the sum of (i) income tax
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credits, (ii) interest income, (iii) gain from
extraordinary items for such period, (iv) any
aggregate net gain (but not any aggregate net
loss) during such period arising from the sale,
exchange or other disposition of capital assets by
such Person (including any fixed assets, whether
tangible or intangible, all inventory sold in
conjunction with the disposition of fixed assets
and all securities), and (v) any other non-cash
gains (including pension income) that have been
added in determining consolidated net income, in
each case to the extent included in the
calculation of consolidated net income of such
Person for such period in accordance with GAAP,
but without duplication, plus (c) for any period
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ending on or before (i) March 31, 2003, up to
$53,000,000 of non-cash charges and (ii) June 30,
2003, an additional amount of up to $34,000,000 of
non-cash charges, in each case solely for purposes
of calculating compliance with the financial
covenants set forth in Section 6.10 and Annex G,
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and (d) the sum of (i) any provision for income
taxes, (ii) Interest Expense, (iii) loss from
extraordinary items for such period, (iv) the
amount of depreciation and amortization for such
period, (v) amortized debt discount for such
period, (vi) the amount of any deduction to
consolidated net income as the result of any grant
to any members of the management of such Person of
any Stock, in each case to the extent included in
the calculation of consolidated net income of such
Person for such period in accordance with GAAP,
but without duplication and (vii) Restructuring
Charges for such period. For purposes of this
definition, the following items shall be excluded
in determining consolidated net income of a
Person: (1) the income (or deficit) of any other
Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into,
such Person or any of such Person's Subsidiaries;
(2) the income (or deficit) of any other Person
(other than a Subsidiary) in which such Person has
an ownership interest, except to the extent any
such income has actually been received by such
Person in the form of cash dividends or
distributions; (3) the undistributed earnings of
any Subsidiary of such Person to the extent that
the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the
time permitted by the terms of any contractual
obligation or requirement of law applicable to
such Subsidiary; (4) any restoration to income of
any contingency reserve, except to the extent that
provision for such reserve was made out of income
accrued during such period; (5) any write-up of
any asset; (6) any net gain from the collection of
the proceeds of life insurance policies; (7) any
net gain arising from the acquisition of any
securities, or the extinguishment, under GAAP, of
any Indebtedness, of such Person, (8) in the case
of a successor to such Person by consolidation or
merger or as a transferee of its assets, any
earnings of such successor prior to such
consolidation, merger or transfer of assets, and
(9) any deferred credit representing the excess of
equity in any Subsidiary of such Person at the
date of acquisition of such Subsidiary over the
cost to such Person of the investment in such
Subsidiary."
""Fourth Amendment Effective Date" means the date
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on which each of the conditions precedent to the
effectiveness of the Fourth Amendment to this
Agreement have been satisfied in accordance
therewith."
5. Amendment to Annex B of the DIP Credit Agreement. Annex B of
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the DIP Credit Agreement is hereby amended as of the Effective Date by deleting
clauses (c)(i),(ii) and (iv)of such Annex B in their entirety and substituting
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in lieu thereof the following new clauses (c)(i),(ii) and (iv):
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"(c) Cash Collateral.
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(i) Commencing on the Fourth Amendment Effective
Date, Borrowers shall provide to Agent, for the
ratable benefit of itself and Revolving Lenders,
cash collateral for all outstanding Letter of
Credit Obligations consisting of cash or cash
equivalents acceptable to Agent ("Cash
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Equivalents") in an amount equal to 108% of the
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maximum amount then available to be drawn under
each applicable Letter of Credit outstanding for
the benefit of such Borrower. Such funds or Cash
Equivalents shall be held by Agent in that certain
cash collateral account maintained at JPMorgan
Chase Bank, Account No. 550142622 (the "Cash
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Collateral Account") which Cash Collateral Account
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is subject to that certain Blocked Account Control
Agreement, dated as of November 29, 2002 ("Blocked
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Control Account Agreement"), by and among Agway,
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Inc., General Electric Capital Corporation, as
agent for itself and lenders and JPMorgan Chase
Bank (the "Depositary"). To the extent the
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Depositary does not deliver the regular monthly
bank statements to Agent as required by the
Blocked Control Account Agreement, Borrowers
shall, within five (5) business days after receipt
thereof by any Borrower, deliver such monthly bank
statements to Agent. The Cash Collateral Account
shall be pledged to, and subject to the control
of, Agent, for the benefit of Agent and the
Revolving Lenders, in a manner satisfactory to
Agent. Each Borrower hereby pledges and grants to
Agent, on behalf of itself and the Lenders, a
security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account
from time to time and all proceeds thereof, as
security for the payment of all amounts due in
respect of the Letter of Credit Obligations and
other Obligations, whether or not then due. This
Agreement, including this Annex B, shall
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constitute a security agreement under applicable
law. Each of the Agent and the Lenders agree that
promptly following the expiration, termination or
cancellation of any Letter of Credit which has
been cash collateralized in accordance with this
Agreement, Agent shall release to the applicable
Borrower funds from the Cash Collateral Account in
an amount equal to 108% of the maximum amount then
available to be drawn under such Letter of Credit.
(ii) If any Letter of Credit Obligations, whether
or not then due and payable, shall for any reason
be outstanding on the Commitment Termination Date,
Borrowers shall either (A) provide cash collateral
therefor in the manner described above, or (B)
cause all such Letters of Credit and guaranties
thereof, if any, to be canceled and returned, or
(C) deliver a stand-by letter (or letters) of
credit in guaranty of such Letter of Credit
Obligations, which stand-by letter (or letters) of
credit shall be of like tenor and duration (plus
30 additional days) as, and in an amount equal to
108% of, the aggregate maximum amount then
available to be drawn under, the Letters of Credit
to which such outstanding Letter of Credit
Obligations relate and shall be issued by a
Person, and shall be subject to such terms and
conditions, as are satisfactory to Agent in its
sole discretion.
(iv) No Borrower nor any Person claiming on behalf
of or through any Borrower shall have any right to
withdraw any of the funds or Cash Equivalents held
in the Cash Collateral Account, except that upon
the termination of all Letter of Credit
Obligations and the payment of all amounts payable
by Borrowers to Agent and Lenders in respect
thereof, any funds remaining in the Cash
Collateral Account shall be applied to other
Obligations then due and owing and upon payment in
full of such Obligations, any remaining amount
shall be paid to Borrowers or as otherwise
required by law. Interest, if any, earned on
deposits in the Cash Collateral Account shall be
for the account of Borrowers, and any such
interest shall be returned to Borrowers on a
monthly basis."
6. Amendment to Annex E of the DIP Credit Agreement. Annex E of
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the DIP Credit Agreement is hereby amended of as the Effective Date by deleting
clause (c) of such Annex E in its entirety and substituting in lieu thereof, the
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following new clause (c):
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"(c) Intentionally Omitted."
7. Amendment to Annex F of the DIP Credit Agreement. Annex F of
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the DIP Credit Agreement is hereby amended as of the Effective Date by deleting
clauses (b),(c),(d), (e) and (f) of such Annex F in their entirely and
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substituting in lieu thereof the following new clauses (b), (c), (d), (e) and
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(f):
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"(b) With respect to the Agway Country Products
Group Business Unit (as designated on the Agway
financial statements), the Agronomy business,
Agway Energy Business Unit (as designated on the
Agway financial statements) and the Feed business,
to Agent, upon its request, and in any event no
less frequently than 10 Business Days after the
end of each calendar Month, beginning on October
31, 2003, a Borrowing Base Certificate, in each
case accompanied by such supporting detail and
documentation as shall be requested by Agent in
its reasonable discretion.
(c) Intentionally Omitted.
(d) Intentionally Omitted.
(e) Intentionally Omitted.
(f) Intentionally Omitted."
8. Amendment to Annex G of the DIP Credit Agreement. Annex G of
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the DIP Credit Agreement is hereby amended as of the Effective Date by deleting
clauses (b),(c) and (d) of such Annex G in their entirely and substituting in
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lieu thereof the following new clauses (b), (c) and (d):
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"(b) Minimum EBITDA (Agway Operations). Borrowers
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and their Subsidiaries (excluding all Telmark
Entities) on a consolidated basis shall have, at
the end of each Fiscal Month set forth below,
EBITDA for the 12-month period then ended of not
less than the following:
Period EBITDA
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October 31, 2002 12,100,000
November 30, 2002 12,100,000
December 31, 2002 12,600,000
January 31, 2003 15,400,000
February 28, 2003 16,900,000
March 31, 2003 20,400,000
April 30, 2003 19,100,000
May 31, 2003 18,600,000
June 30, 2003 21,700,000
July 31, 2003 22,200,000
August 31, 2003 22,900,000
September 30, 2003 23,800,000
(c) Minimum EBITDA (Energy). The Agway Energy Business Unit
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(as designated on the Agway financial statements) on a
consolidated basis shall have, at the end of each Fiscal Month
set forth below, EBITDA for the 12-month period then ended of
not less than the following:
Period EBITDA
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October 31, 2002 18,000,000
November 30, 2002 17,800,000
December 31, 2002 19,100,000
January 31, 2003 21,700,000
February 28, 2003 23,000,000
March 31, 2003 24,200,000
April 30, 2003 23,100,000
May 31, 2003 22,000,000
June 30, 2003 24,100,000
July 31, 2003 24,000,000
August 31, 2003 23,800,000
September 30, 2003 23,700,000
(d) Intentionally Omitted."
9. Amendment to Annex J of the DIP Credit Agreement. Annex J of
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the DIP Credit Agreement is hereby amended of as the Effective Date by deleting
Annex J in its entirety and substituting in lieu thereof Annex J attached
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hereto.
10. Representations and Warranties. To induce Agent and Lenders
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to enter into this Amendment, Borrowers hereby represent and warrant that:
(a) The execution, delivery and performance by Borrowers of
this Amendment (i) are within Borrowers' respective corporate powers, (ii) has
been duly authorized by all necessary corporate and shareholder action, (iii)
is not in contravention of any provision of any Borrower's charter or bylaws or
equivalent organizational documents, (iv) does not violate any law or
regulation, or any order or decree of any court or Governmental Authority, (v)
does not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which any Borrower is a party or by which any Borrower or any of
its property is bound; and (vi) does not require the consent or approval of any
Governmental Authority or any other Person.
(b) This Amendment has been duly executed and delivered by or
on behalf of Borrowers.
(c) This Amendment constitutes a legal, valid and binding
obligation of Borrowers, enforceable against each of them in accordance with its
terms.
(d) No Default or Event of Default has occurred and is
continuing after giving effect to this Amendment.
(e) No action, claim or proceeding is now pending or, to the
knowledge of Borrowers, threatened against Borrowers, at law, in equity or
otherwise, before any court, board, commission, agency or instrumentality of any
federal, state, or local government or of any agency or subdivision thereof, or
before any arbitrator or panel of arbitrators, which challenges Borrowers'
right, power, or competence to enter into this Amendment or, to the extent
applicable, perform any of their obligations under this Amendment, the DIP
Credit Agreement or any other Loan Document, or the validity or enforceability
of this Amendment, the DIP Credit Agreement or any other Loan Document or an
action taken under this Amendment, the DIP Credit Agreement or any other Loan
Document or except for items on Disclosure Schedule (3.13) or notifications sent
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to Agent since the Closing Date, which if determined adversely, is reasonably
likely to have or result in a Material Adverse Effect after giving effect to
this Amendment. Except for items on Disclosure Schedule (3.13) or notifications
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sent to Agent since the Closing Date, to the knowledge of Borrowers, there does
not exist a state of facts which is reasonably likely to give rise to such
proceedings.
(f) The representations and warranties of the Borrowers
contained in the DIP Credit Agreement and each other Loan Document shall be true
and correct on and as of the Effective Date (as hereinafter defined) with the
same effect as if such representations and warranties had been made on and as of
such date, except that any such representation or warranty which is expressly
made only as of a specified date need be true only as of such date.
11. No Other Amendments/Waivers. Except as expressly provided
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herein, (i) the DIP Credit Agreement shall be unmodified and shall continue to
be in full force and effect in accordance with its terms and (ii) this Amendment
shall not be deemed a waiver of any term or condition of any Loan Document and
shall not be deemed to prejudice any right or rights which the Agent or any
Lender may now have or may have in the future under or in connection with any
Loan Document or any of the instruments or agreements referred to therein, as
the same may be amended from time to time.
12. Outstanding Indebtedness. Each of the Borrowers and other
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Credit Parties hereby acknowledges and agrees that as of October 8, 2003 the
aggregate outstanding principal amount of the Revolving Loan is $35,813,781.08
and that such principal amount is payable pursuant to the DIP Credit Agreement
without defense, offset, withholding, counterclaim or deduction of any kind.
13. Expenses. Except to the extent specifically waived in Section
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2(b) of this Amendment, Borrowers hereby reconfirm their obligations pursuant to
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Sections 1.9 and 11.3 of the DIP Credit Agreement to pay and reimburse Agent and
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the Lenders for all reasonable costs and expenses (including, without
limitation, reasonable fees of counsel) incurred in connection with the
negotiation, preparation, execution and delivery of this Amendment and all other
documents and instruments delivered in connection herewith.
14. Effectiveness. This Amendment shall become effective as of
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the date hereof (the "Effective Date") only upon satisfaction in full in the
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judgment of Agent of each of the following conditions:
(a) Amendment. Agent shall have received six (6) original
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copies of this Amendment duly executed and delivered by Agent, the Requisite
Lenders and Borrowers.
(b) Cash Collateral. Borrowers shall have cash
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collateralized all Letter of Credit Obligations outstanding as of the date
hereof in accordance with Annex B, clause (c)(i) of the DIP Credit Agreement
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(as amended by this Amendment) and shall have deposited all such amounts into
the Cash Collateral Account as required by Annex B, clause (c)(i) of the DIP
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Credit Agreement (as amended by this Amendment).
(c) Payment of Amendment Fee and Expenses. (a)
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a non-refundable amendment fee in an amount equal to $40,000 to Agent for the
benefit of Lenders on the Effective Date and (b) Borrowers shall have paid to
Agent all costs, fees and expenses invoiced and owing in connection with this
Amendment and the other Loan Documents and due to Agent (including, without
limitation, reasonable legal fees and expenses).
(d) Representations and Warranties. The representations and
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warranties of or on behalf of the Borrowers in this Amendment shall be true and
correct on and as of the Effective Date.
15. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
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INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
16. Counterparts. This Amendment may be executed by the parties
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hereto on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
(SIGNATURE PAGE FOLLOWS)
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered as of the day and year first above written.
BORROWERS
AGWAY, INC.
FEED COMMODITIES INTERNATIONAL LLC
XXXXXXXX AGRONOMIC CONSULTING SERVICE LLC
COUNTRY BEST-XXXXXXX LLC
AGWAY ENERGY PRODUCTS LLC
AGWAY ENERGY SERVICES-PA, INC.
AGWAY ENERGY SERVICES, INC.
COUNTRY BEST XXXXX, LLC
AGWAY GENERAL AGENCY, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Treasurer
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LENDERS
COBANK, ACB
By: /s/ Xxxxxxx X. Hide
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Name: Xxxxxxx X. Hide
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Title: Vice President
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COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "Rabobank Nederland" New York
Branch
By: /s/ Xxx Xxxxx /s/ Xxxx XxXxxxx
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Name: Xxx Xxxxx Xxxx XxXxxxx
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Title: Managing Director Executive Director
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GMAC BUSINESS CREDIT, LLC
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
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Title: Senior Vice President
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GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
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Title: Its Duty Authorized Signatory
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
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TO
DIP CREDIT AGREEMENT
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"Lender(s)
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Revolving Loan Commitment
(including a Swing Line Commitment
of $10,000,000)
$27,857,142.86 General Electric Capital Corporation
Revolving Loan Commitment
$19,314,285.71 CoBank, ACB
Revolving Loan Commitment
$8,542,857.14 Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A., "Rabobank
Nederland", New York Branch
Revolving Loan Commitment
$9,285,714.29 GMAC Business Credit, LLC"
