WAIVER UNDER
CREDIT AGREEMENT
----------------
THIS WAIVER (this "Waiver"), dated as of May 13, 2002, to the Credit
-------
Agreement referred to below among 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 ("AEP"), Agway Energy Services-PA, Inc., a Delaware corporation, and
-----
Agway Energy Services, Inc., a Delaware corporation, (the foregoing entities are
sometimes collectively referred to herein as the "Borrowers" and individually as
---------
a "Borrower"); the other Credit Parties signatory hereto; GENERAL ELECTRIC
--------
CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, "GE
--
Capital"), for itself, as Lender, and as Agent for Lenders, and the other
-------
Lenders signatory hereto from time to time.
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Borrowers, the other Credit Parties signatory thereto, Agent, and
Lenders signatory thereto are parties to that certain Credit Agreement, dated as
of March 28, 2001 (including all annexes, exhibits and schedules thereto, and as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"); and
----------------
WHEREAS, Agent and Lenders have agreed to waive certain violations of the
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 hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall
-----------
have the meanings ascribed to them in the Credit Agreement or Annex A thereto.
-------
2. Waiver. Agent and Lenders hereby waive as of the Waiver
------
Effective Date (as hereinafter defined) all Events of Default arising solely
from Borrowers' failure to comply with Section (d) of Annex G of the Credit
Agreement by their failure to meet the Minimum EBITDA (Agriculture) threshold in
the amount of $(500,000) for the Fiscal Quarter ended March 31, 2002 by the
amount of $1,800,000.
3. Representations and Warranties. To induce Agent and Lenders to enter
------------------------------
into this Waiver, Borrowers make the following representations and warranties to
Agent and Lenders:
(a) The execution, delivery and performance of this Waiver by
Borrowers: (a) are within each Borrower's organizational power; (b) have been
duly authorized by all necessary or proper corporate and shareholder action; (c)
do not contravene any provision of any Borrower's charter or bylaws or
equivalent organizational documents; (d) do not violate any law or regulation,
or any order or decree of any court or Governmental Authority; (e) do 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; (f) do not result in the creation or imposition of any Lien upon any of
the property of any Borrower other than those in favor of Agent pursuant to the
Loan Documents; and (g) do not require the consent or approval of any
Governmental Authority or any other Person.
(b) This Waiver has been duly executed and delivered by or on
behalf of Borrowers.
(c) This Waiver constitutes a legal, valid and binding obligation
of each Borrower and each of the other Credit Parties party thereto, enforceable
against each in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
(d) No Default (other than those waived pursuant hereto) has
occurred and is continuing after giving effect to this Waiver.
(e) No action, claim, lawsuit, demand, investigation or proceeding
is now pending or, to the knowledge of any Credit Party, threatened against any
Credit Party, at law, in equity or otherwise, before any court, board,
commission, agency or instrumentality of any Governmental Authority, or before
any arbitrator or panel of arbitrators, (i) which challenges any Borrower's or,
to the extent applicable, any other Credit Party's right, power, or competence
to enter into this Waiver or perform any of their respective obligations under
this Waiver, the Credit Agreement or any other Loan Document, or the validity or
enforceability of this Waiver, the Credit Agreement or any other Loan Document
or any action taken under this Waiver, the Credit Agreement or any other Loan
Document or (ii) except for items on Disclosure Schedule (3.13) or notifications
--------------------------
sent to Agent since the Closing Date, which if determined adversely, is
reasonably likely to have or result in a Material Adverse Effect Except for
items on Disclosure Schedule (3.13) or notifications sent to Agent since the
----------------------------
2
Closing Date, to the knowledge of each Borrower, there does not exist a state of
facts which is reasonably likely to give rise to such proceedings.
(f) The representations and warranties of each Borrower and the
other Credit Parties contained in the Credit Agreement and each other Loan
Document shall be true and correct on and as of the Waiver 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.
4. No Other Waivers. Except as expressly waived herein, the Credit
----------------
Agreement and the other Loan Documents shall be unmodified and shall continue to
be in full force and effect in accordance with their terms. In addition, except
as specifically provided herein, this Waiver 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 Agent, for itself and Lenders, 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.
5. Outstanding Indebtedness; Waiver of Claims. Each Borrower and the
------------------------------------------
other Credit Parties hereby acknowledges and agrees that as of May 13, 2002 the
aggregate outstanding principal amount of the Revolving Loan is $38,356,315.14
and that such principal amount is payable pursuant to the Credit Agreement
without defense, offset, withholding, counterclaim or deduction of any kind.
Borrowers and each other Credit Party hereby waives, releases, remises and
forever discharges Agent, Lenders and each other Indemnified Person from any and
all claims, suits, actions, investigations, proceedings or demands arising out
of or in connection with the Credit Agreement (collectively, "Claims"), whether
------
based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute or common law of any kind or character, known or unknown, which
any Borrower or any other Credit Party ever had, now has or might hereafter have
against Agent or Lenders which relates, directly or indirectly, to any acts or
omissions of Agent, Lenders or any other Indemnified Person on or prior to the
Waiver Effective Date, provided, that no Borrower nor any other Credit Party
--------
waives any Claim solely to the extent such Claim relates to the Agent's or any
Lender's gross negligence or willful misconduct.
6. Expenses. Each Borrower and the other Credit Parties hereby
--------
reconfirms its respective obligations pursuant to Sections 1.9 and 11.3 of the
------------ ----
Credit Agreement and pursuant to the GE Capital Fee Letter, to pay and reimburse
Agent, for itself and 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 Waiver and all other
documents and instruments delivered in connection herewith.
3
7. Effectiveness. This Waiver shall become effective as of May 13, 2002
-------------
(the "Waiver Effective Date") only upon satisfaction in full in the judgment
---------------------
of Agent of each of the following conditions:
(a) Waiver. Agent shall have received six (6) original copies of
------
this Waiver duly executed and delivered by Agent, the Requisite Lenders and
Borrowers.
(b) Payment of Expenses. Borrowers shall have paid to Agent all
-------------------
costs, fees and expenses owing in connection with this Waiver and the other Loan
Documents and due to Agent (including, without limitation, reasonable legal fees
and expenses).
(c) Representations and Warranties. The representations and
----------------------------------
warranties of or on behalf of the Credit Parties in this Waiver shall be shall
be true and correct on and as of the Waiver Effective Date.
8. GOVERNING LAW. THIS WAIVER SHALL BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9. Counterparts. This Waiver may be executed by the parties 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 PAGES FOLLOW]
4
IN WITNESS WHEREOF, the parties hereto have caused this Waiver 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
By: /s/ Xxxxx X. Xxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxx
----------------------
Title: Treasurer
----------------------
AGWAY GENERAL AGENCY, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxx
----------------------
Title: Asst. Treasurer
----------------------
LENDERS
COBANK, ACB
By: /s/ Xxxxxxx X. Hide
----------------------
Name: Xxxxxxx X. Hide
----------------------
Title: Vice-President
----------------------
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEN BANK B.A., "Rabobank Nederland"
New York Branch
By:
----------------------
Name:
----------------------
Title:
----------------------
GMAC BUSINESS CREDIT, LLC
By:
----------------------
Name:
----------------------
Title:
----------------------
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
By: /s/ Xxxxxx X. Xxxx
----------------------
Name: Xxxxxx X. Xxxx
----------------------
Title: Its Duty Authorized Signatory
