EXHIBIT 10(al)
SECOND AMENDMENT TO SENIOR SECURED, SUPER-PRIORITY
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DEBTOR-IN-POSSESSION CREDIT AGREEMENT
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SECOND AMENDMENT, dated as of January 23, 2003 (this
"Amendment"), to the DIP Credit Agreement referred to below among AGWAY, INC., a
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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
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corporation, and AGWAY ENERGY SERVICES, INC. ("AES"), a Delaware corporation, as
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Borrowers (the "Borrowers"), THE OTHER CREDIT PARTIES SIGNATORY THERETO (the
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"Credit Parties"), the lenders signatory thereto from time to time (the
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"Lenders"), and GENERAL ELECTRIC CAPITAL CORPORATION, as Agent ("Agent") and as
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a Lender.
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 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. Section 1.3(c)of the DIP Credit Agreement is hereby amended
as of the Amendment Effective Date by deleting such section in its entirety and
inserting in lieu thereof the following new section to read as follows:
"(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 applied
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as follows: first, to repay in full the 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 then due and payable pursuant to any of the Loan
Documents; third, to interest then due and payable on the
Swing Line Loan; fourth, to the principal balance of the
Swing Line Loan outstanding until the same has been repaid
in full; fifth, to interest then due and payable on Revolving
Credit Advances; sixth, to the principal balance of Revolving
Credit Advances outstanding until the same has been paid in
full, seventh, with respect to any sale of Borrowers'
assets resulting in net proceeds of at least $10 million,
to cash collateralize the Letter of Credit Obligations in
an amount equal to 105% of the maximum amount then available
to be drawn under each applicable Letter of Credit
outstanding, provided, that Borrowers shall only be
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required to cash collateralize the Letter of Credit
Obligations with such sale proceeds until such cash collateral
account contains at least: (x) Forty Million Dollars
($40,000,000) if the outstanding Letter of Credit Obligations
are greater than $55 million; (y) Thirty Million Dollars
($30,000,000) if the outstanding Letter of Credit Obligations
are equal to or greater than $40 million but less than $55
million; and (z) Fifteen Million Dollars ($15,000,000) if the
outstanding Letter of Credit Obligations are less than $40
million, provided further, that such cash collateralization
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amount shall be at all times reduced or increased in
accordance with clauses (x) through (z) above, and be in the
name of the Borrower Representative and pledged to, and
subject to the control of, the Agent, and last, to the 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."
3. Clause (f) in the definition of the term "Borrowing Base" in
Annex A of the DIP Credit Agreement is hereby amended as of the Amendment
Effective Date by deleting such clause in its entirety and inserting in lieu
thereof the following new clause (f) to read as follows:
"(f) up to 95% of the amount of net proceeds from the sale of
the Borrowers' assets which are deposited in a cash collateral
account maintained at a bank or financial institution
acceptable to Agent which cash collateral account shall be in
the name of Agway and shall be pledged to, and subject to the
control of, the Agent, and Borrowers shall have no right or
ability to control, access, withdraw or transfer funds from
such account;
in each case, less any obligations outstanding under the
Pre-Petition Loan Agreement and Reserves established by Agent
at such time. Notwithstanding the foregoing, in the event that
a sale of the Borrowers' Other Assets is not consummated on or
before: (a) December 31, 2002, Borrowing Availability with
respect to subparagraph (e) above shall be reduced by $10
million; (b) January 31, 2003, Borrowing Availability with
respect to subparagraph (e) above shall be reduced by an
additional $5 million; (c) February 28, 2003, Borrowing
Availability with respect to subparagraph (e) above shall be
reduced by an additional $5 million; and (d) March 31, 2003,
Borrowing Availability with respect to subparagraph (e) above
shall be reduced by an additional $5 million."
4. Subsection (c)(i) of Annex B of the DIP Credit Agreement is
hereby amended as of the Amendment Effective Date by deleting such subsection in
its entirety and inserting in lieu thereof the following new subsection to read
as follows:
"(c) Cash Collateral.
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(i) If Borrowers are required to provide cash collateral
for any Letter of Credit Obligations pursuant to the
Agreement prior to the Commitment Termination Date,
each Borrower will pay to Agent for the ratable benefit of
itself and Revolving Lenders cash or cash equivalents
acceptable to Agent ("Cash Equivalents") in an amount
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equal to 105% of the 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 a cash collateral
account (the "Cash Collateral Account") maintained at a
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bank or financial institution acceptable to Agent. The Cash
Collateral Account shall be in the name of the applicable
Borrower and shall be pledged to, and subject to the control
of, Agent, for the benefit of Agent and Lenders, in a
manner satisfactory to Agent. Each Borrower hereby
pledges and grants to Agent, on behalf of itself and
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.
The Agreement, including this Annex B, shall constitute a
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security agreement under applicable law."
5. Representations and Warranties. To induce Agent and Lenders to
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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 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
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sent 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
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notifications 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 Amendment 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.
6. 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.
7. Outstanding Indebtedness; Waiver of Claims. Each of Borrowers
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and other Credit Parties hereby acknowledges and agrees that as of January 23,
2003 the aggregate outstanding principal amount of the Revolving Loan is
$30,340,739.08 and that such principal amount is payable pursuant to the
DIP Credit Agreement without defense, offset, withholding, counterclaim
or deduction of any kind. Borrowers and each other Credit Party hereby
waive, release, remise and forever discharge 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 DIP
Credit Agreement (collectively, "Claims"), whether based in contract, tort,
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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 Amendment Effective Date (as hereinafter defined), provided, that
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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. Notwithstanding anything to the contrary contained in
section 7 of this Amendment, any waivers or releases by the Debtor Borrowers
do not waive or release any claims or causes of action of the Debtor
Borrowers or the estates arising out of or in connection with the DIP Loan
Agreement which arose prior to January 23, 2003, and all such claims and
causes of action are expressly preserved for the Committee (the "Preserved
Claims"). The Preserved Claims may be brought by the Committee up through
the date that is ten (10) days after February 18, 2003. The Preserved Claims
include any claims or causes of action that arose between October 4, 2002
and the effective date of this Amendment, and nothing in this Amendment
supersedes the Final Order.
8. Expenses. Borrowers hereby reconfirm their obligations
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pursuant to Sections 1.9 and 11.3 of the DIP Credit Agreement to pay and
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reimburse Agent and 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.
9. Effectiveness. This Amendment shall become effective as
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of January 23, 2003 (the "Amendment Effective Date") only upon satisfaction in
full in the judgment of Agent of each of the following conditions:
(a) Amendment. Agent shall have received six (6) original copies
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of this Amendment duly executed and delivered by Agent, the Requisite Lenders
and Borrowers.
(b) Payment of Expenses. Borrowers shall have paid to Agent all
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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).
(c) 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 Amendment Effective Date.
10. GOVERNING LAW. THIS AMENDMENT SHALL BE
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GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
11. 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/Xxxx XxXxxxx & W Xxxxxxx Xxxxxxx
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Name: Xxxx XxXxxxx & W Xxxxxxx Xxxxxxx
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Title: Vice-President & Managing Director
Senior Credit Officer
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GMAC BUSINESS CREDIT, LLC
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
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Title: First VP
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GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender
By: /s/ Xxx XxXxxxxx, SVP
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Name: Xxx XxXxxxxx, SVP
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Title: Its Duty Authorized Signatory
