AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
SEPTEMBER 2, 1997 REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT under THE SECURITIES ACT OF 1933
------------------
AGWAY
AGWAY INC. FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT (EXACT NAME OF REGISTRANT
AS SPECIFIED IN ITS CHARTER) AS SPECIFIED IN ITS CHARTER)
DELAWARE DELAWARE
(STATE OF INCORPORATION) (STATE OF INCORPORATION)
15-0277720 06-1174232
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
333 BUTTERNUT DRIVE, 1105 NORTH MARKET STREET,
DEWITT, NEW YORK 13214 WILMINGTON, DELAWARE 19801
(ADDRESS OF PRINCIPAL (ADDRESS OF PRINCIPAL
EXECUTIVE OFFICES) EXECUTIVE OFFICES)
315-449-6431 302-654-8371
DAVID M. HAYES, Esq.
AGWAY INC.
BOX 4933
Syracuse, New York 13221-4933
315-449-6436
(NAME AND ADDRESS OF AGENT FOR SERVICE)
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable on or after the effective date of this
Registration Statement.
If the only securities being registered on the Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
---
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. X
---
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement number of the earlier effective registration
statement for the same offering.
---
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
---
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
---
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
AGWAY INC.
Guarantee of the Debt Securities............ (1) (1) None
8% Cumulative Preferred Stock, Series B..... 10,000 shs $100 $ 1,000,000 $ 303.03
Series HM Preferred Stock................... 4,000 shs $ 25 $ 100,000 $ 30.30
Membership Common Stock..................... 4,000 shs $ 25 $ 100,000 $ 30.30
AGWAY FINANCIAL CORPORATION
Guaranteed, Subordinated Member and
Subordinated Money Market Certificates.... $ 75,000,000 100% $ 75,000,000 $ 22,727.27
Guaranteed, Subordinated Member and
Subordinated Money Market Certificates
under the Interest Reinvestment Option.... $ 19,140,000 100% $ 19,140,000 $ 5,800.00
------------
$ 28,890.90
============
</TABLE>
(1) No consideration will be received by Agway Inc. for the Guarantee.
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The registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PAGE 1 OF 105. EXHIBIT INDEX APPEARS ON SEQUENTIALLY NUMBERED PAGE 24.
<PAGE>
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SUBJECT TO COMPLETION DATED SEPTEMBER 2, 1997
PROSPECTUS
[logo]
AGWAY INC.
AND
AGWAY FINANCIAL CORPORATION
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
Price to Underwriting Discounts Proceeds to
Title of Class (1) Public or Commissions (2) Companies (3)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AGWAY INC.
Guarantee of Debt Securities -- None --
8% Cumulative Preferred Stock, Series B
Per Unit $ 100 None $ 100
Total $ 1,000,000 None $ 1,000,000
Series HM Preferred Stock (4)
Per Unit $ 25 None $ 25
Total $ 100,000 None $ 100,000
Membership Common Stock (5)
Per Unit $ 25 None $ 25
Total $ 100,000 None $ 100,000
AGWAY FINANCIAL CORPORATION
Guaranteed, Subordinated Money Market Certificates
(minimums 7.5% per annum and 7.75% per annum) due
October 31, 2007
Per Unit (6) 100% None $ 100/5,000
Total $ 15,000,000 None $ 15,000,000
Guaranteed, Subordinated Member Money Market
Certificates (minimums 8.0% per annum and 8.25%
per annum) due October 31, 2007
Per Unit (6) 100% None $ 100/5,000
Total $ 30,000,000 None $ 30,000,000
Guaranteed, Subordinated Money Market Certificates
(minimum 8.25% per annum) due October 31, 2001
Per Unit 100% None $ 2,000
Total $ 10,000,000 None $ 10,000,000
Guaranteed, Subordinated Money Market Certificates
(minimum 8.5% per annum) due October 31, 2003
Per Unit 100% None $ 2,000
Total $ 20,000,000 None $ 20,000,000
Guaranteed, Subordinated Member and Subordinated
Money Market Certificates under the Interest
Reinvestment Option (ranging from minimum
of 4.5% to 9.5% per annum) due from October 31,
1997 through October 31, 2008
Per Unit 100% None
Total $ 19,140,000 None $ 19,140,000
------------------
</TABLE>
The Certificates bear interest payable semiannually in arrears on January
1 and July 1 of each year. The Certificates are redeemable at the option of the
Company. A complete description of the securities offered by Agway Financial
Corporation ("AFC") is set forth on pages 9 through 18 herein.
There is no market for any of the offered securities other than that
provided by Agway Inc. (Agway) and AFC (together the "Companies") through their
practice of repurchasing certain outstanding securities whenever registered
holders elect to tender them for repurchase. The Companies do not intend to
follow this practice with respect to the 8.25% and 8.5% Subordinated Money
Market Certificates due October 31, 2001 and 2003, respectively, described
herein. For a discussion of certain factors to be considered in connection with
an investment in the securities offered hereby, see the "Risk Factors" section
of this Prospectus set forth on page 4.
FOOTNOTES ARE LOCATED ON PAGE 2
THE DATE OF THIS PROSPECTUS IS
1
<PAGE>
FOOTNOTES:
(1) See pages 9 through 18 for a description of the securities being offered
and qualifications of the purchaser.
(2) The securities offered by this Prospectus are being offered by the
Companies through their employees. No commission or other remuneration is
being paid directly or indirectly to such persons in connection with the
offer and sale of the securities.
(3) It is assumed that all securities offered are sold and the amount of
proceeds is before deduction of estimated expenses of $127,000. Because
there is no underwriting of the securities offered, there is no assurance
that all or any part of the indicated proceeds will be received by the
Companies from the offering of the securities.
(4) The Series HM Preferred Stock may be purchased only by former members
of Agway Inc. (5) The Membership Common Stock may be purchased only by
persons entitled to membership in Agway Inc. (6) Certificates with the
same maturity date bearing lower interest rates will be issued in minimum
denominations of $100, while Certificates bearing a higher interest rate
will be issued in minimum denominations of $5,000.
-------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS; ANY
INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANIES. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY, ANY SECURITIES OTHER THAN
THE SECURITIES COVERED BY THIS PROSPECTUS; NOR DOES IT CONSTITUTE AN OFFER TO
SELL, IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE COMPANIES TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANIES SINCE THE DATE HEREOF.
AVAILABLE INFORMATION
Agway is a cooperative association as defined in the Agricultural Marketing Act
of 1929 and as such is exempt from certain registration, proxy and insider
trading provisions of the Securities Exchange Act of 1934. AFC is a wholly owned
subsidiary of Agway. All holders of Membership Common Stock and/or securities
receive an Annual Report in November of each year which contains the information
called for by Rule 14A-3(b). A Prospectus is also sent in January of each year
to all holders of securities who have elected the interest reinvestment option.
The Annual Report contains financial information that has been audited and
reported upon, with an opinion expressed by certified public accountants. Other
holders of securities may obtain an Annual Report or Prospectus upon request
from: Patricia Edwards, Assistant Secretary, P. O. Box 4761, Syracuse, New York
13221; Telephone: 315-449-6311. Agway shall file with the Securities and
Exchange Commission supplementary and periodic information, documents and
reports required of issuers under Sections 13(a) and 15(d) of the Securities
Exchange Act of 1934. Reports and other information filed with the Commission
can be inspected and copied at the public reference facilities of the SEC,
Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549 as well as the
following Regional Offices: 7 World Trade Center, Suite 1300, New York, New York
10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661-2511. Copies of such materials can be obtained by mail from the Commission
at prescribed rates. Requests should be directed to the SEC's Public Reference
Section. The Securities and Exchange Commission also maintains a web site which
contains information regarding registrants who file electronically, the "EDGAR"
data base. The web site address for the EDGAR data base is
http://www.sec.gov/edgarhp.htm. In addition, materials may be inspected or
obtained at 333 Butternut Drive, DeWitt, New York 13214 (P. O. Box 4933,
Syracuse, New York, 13221; Telephone: 315-449-6436).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Companies hereby incorporate by reference into this Prospectus the Annual
Report of Agway on Form 10-K filed on August 27, 1997, for the fiscal year ended
June 30, 1997, pursuant to Section 13 of the Securities Exchange Act of 1934
(File Number 2-22791). In an exemptive release granted pursuant to a "no action
letter" by the staff of the Securities and Exchange Commission, AFC, as a
separate company, is not required to file periodic reports with respect to these
debt securities but does report summarized AFC financial information in Agway's
financial statement footnotes.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE - CONTINUED
All reports and other documents filed by Agway pursuant to Sections 13(a),
13(c), 14 and 15(d) of the 1934 Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Certificates hereunder shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of the filing of such reports and documents.
The Companies will provide a copy of any of the foregoing documents incorporated
herein by reference (other than exhibits to such documents), without charge to
each person to whom a copy of this Prospectus is delivered, upon the written or
oral request of any such person to: Patricia Edwards, Assistant Secretary, P.O.
Box 4761, Syracuse, New York 13221, Telephone: 315-449-6311.
TABLE OF CONTENTS
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- --------------------------------------------------------------------------------
The Companies..................................................................3
Risk Factors...................................................................4
Selected Financial Data and Ratio of Margins...................................6
Use of Proceeds................................................................8
Description of Securities to be Registered.....................................9
Legal Opinion.................................................................19
Experts.......................................................................19
Distribution and Redemption of Securities Offered.............................19
Absence of Public Market, Redemption and Market Risk..........................19
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THE COMPANIES
Agway Inc., incorporated under the Delaware General Corporation Law in 1964 and
headquartered at 333 Butternut Drive, DeWitt, New York, 13214 (Telephone Number
315-449-6431), is an agricultural cooperative directly engaged in product
manufacturing, processing and distribution, wholesale purchasing and marketing
of agricultural related products for its members and other patrons principally
in twelve northeastern states.
AFC, a wholly owned subsidiary of Agway, is a Delaware corporation incorporated
in 1986 with principal executive offices at 1105 North Market Street,
Wilmington, Delaware 19801 (Telephone Number 302-654-8371). AFC's business
activities consist primarily of securing financing through bank borrowings and
issuance of corporate debt instruments to provide funds to its sole stockholder,
Agway, and AFC's wholly owned subsidiary, Agway Holdings, Inc. (AHI) and its
subsidiaries, for general corporate purposes. The payment of principal and
interest on bank borrowings and on the debt securities offered by this
Prospectus is unconditionally guaranteed by Agway. AFC, through certain
subsidiaries of AHI, is involved in retail and wholesale sales of farm supplies,
yard and garden products, pet food and pet supplies; the distribution of
petroleum products; repackaging and marketing of vegetables; processing and
marketing sunflower seeds; the underwriting and sale of certain types of
property and casualty insurance; the sale of health insurance; and lease
financing.
3
<PAGE>
RISK FACTORS
SUBORDINATION. The Money Market Certificates ("the Certificates") offered by
this Prospectus are unsecured obligations of the Company and are subordinated to
all Senior Debt (as defined in "Description of the Certificates Subordination
Provisions") of the Company. Therefore, in the event of bankruptcy, liquidation
or reorganization of the Company, its assets will be available to pay
obligations under the Certificates only after all Senior Debt has been paid in
full, and there may not be sufficient assets remaining to pay amounts due on any
or all of the Certificates then outstanding. As of August 29, 1997, Senior Debt
of $33,500,000 was outstanding. See "Description of the Certificates -
Subordination Provisions."
LIMITATIONS ON TRANSFER. The Series HM Preferred Stock, the Membership Common
Stock, the 8.0% Member Certificates and the 8.25% Member Certificates may not be
transferred, except in certain very limited circumstances. The Series HM
Preferred Stock and the Membership Common Stock may not be transferred other
than to Agway, except with Agway's written consent endorsed on the relevant
certificate. Pursuant to its By-laws, Agway will permit transfers of such stock
only to persons who were Agway members. See "Description of Honorary Member
Preferred Stock, Series HM - Limitations on Ownership and Transfer" and
"Description of Membership Common Stock Limitations on Ownership and Transfer."
The 8.0% and 8.25% Member Certificates may not be transferred, except by will or
operation of law. The 7.5%, 7.75%, 8.25% and 8.5% Certificates are freely
transferable. See "Description of Certificates - Limitations on Ownership and
Transfer."
ABSENCE OF PUBLIC MARKET, REDEMPTION AND MARKET RISK. As noted above, there are
substantial restrictions on the transfer of the Membership Common Stock, Series
HM Preferred Stock and the Member Certificates. With respect to Certificates
that are freely transferable, there is no market for such Certificates and there
is no intention on the part of the Companies to create or encourage a trading
mechanism for those Certificates. The Companies do not intend to apply for a
listing of the Certificates on any securities exchange. The secondary market
for, and the market value of, the Certificates will be affected by a number of
factors independent of the creditworthiness of Agway and AFC, including the
level and direction of interest rates, the remaining period to maturity of the
Certificates, the right of the Companies to redeem the Certificates, the
aggregate principal amount of the Certificates and the availability of
comparable investments. In addition, the market value of the Certificates may be
affected by numerous other interrelated factors, including factors that affect
the U.S. corporate debt market generally and Agway and AFC specifically. There
is no assurance that in the event of redemption the investor will be able to
reinvest the proceeds in comparable securities at an effective interest rate as
high as that of the Certificates. Certificate holders should rely solely on the
Companies' ability to repay principal at maturity of the offered Certificates as
the source for liquidity in this investment. See "Description of Certificates -
Interest Rates," "Redemption Provisions" and "Repurchase Practice."
MARKET PRICE OF AND DIVIDENDS ON AGWAY'S EQUITY. The incidents of ownership of
Agway's Membership Common Stock and Series HM Preferred Stock differ
considerably from those of common stock and preferred stock ownership in a
typical business corporation. The Membership Common Stock may be purchased only
by persons entitled to membership in the Company. Only farmers and cooperative
organizations of farmers who purchase farm supplies or services or market farm
products through Agway may be members. Series HM Preferred Stock can only be
purchased by former Agway members. By reason of the fact that Agway is an
agricultural cooperative, its Membership Common Stock primarily serves the
purpose of evidencing membership in Agway (or, in the case of Series HM
Preferred Stock, former membership) rather than of evidencing an equity interest
in Agway. The equity claim of Membership Common stockholders and Series HM
Preferred stockholders to the assets of Agway is measured by, and restricted to,
the $25 par value of the share, plus dividends declared and unpaid, if any, for
the current year. See "Description of Membership Common Stock" and "Description
of Honorary Member Preferred Stock, Series HM."
AGRICULTURAL ECONOMY AND OTHER FACTORS. The financial condition of the Company
can be directly affected by factors affecting the agricultural economy, since
these factors impact the demand for the Company's products and the ability of
its customers to make payments for products already purchased through credit
extended by the Company. These factors include: (i) changes in government
agricultural programs (e.g., milk marketing orders and acreage reduction
programs) that may adversely affect the level of income of customers of the
Company; (ii) weather-related conditions which periodically occur that can
impact the agricultural productivity and income of the customers of the Company;
and (iii) the relationship of demand relative to supply of agricultural
commodities produced by customers of the Company.
4
<PAGE>
RISK FACTORS (CONTINUED)
Federal agricultural legislation, formally known as The Federal Agriculture
Improvement and Reform Act of 1996, was signed into law on April 4, 1996. This
legislation replaced the former program of variable price-linked deficiency
payments with fixed payments to farmers which decline over a seven-year period.
This legislation also eliminated federal planting restrictions and acreage
controls allowing farmers more flexibility to plant for the market. The impact
of this legislation on the agricultural economy, and on the financial condition
of the Company, is not expected to be significant in the short-term. The
longer-term impact on the financial condition of the Company of such a major
change in the federal government's role in agriculture cannot be predicted at
this time.
The Company's energy business is impacted by factors such as weather conditions
in the Northeast and the relationship of supply and demand for petroleum
products worldwide as well as within Agway's market. Agway's retail and
insurance businesses can be impacted by weather conditions as well as from
fluctuations in the economy in the northeastern United States that, in general,
affect consumer demand for products. To the extent that these factors adversely
affect the customers of the Company, the financial condition of the Company
could be adversely affected.
The Company's endeavors to limit the effects of changes in interest rates by
matching as closely as possible, on an ongoing basis, the maturity and repricing
characteristics of funds borrowed to finance its leasing activities with the
maturity and repricing characteristics of its lease portfolio. However, a rise
in interest rates would increase the cost of funds borrowed by the Company to
finance its leasing business and could lower the value of the Company's
outstanding leases in the secondary market. In addition, higher interest rates,
inasmuch as they would increase the cost of funds borrowed by the Company, would
also increase the cost of leases and could decrease demand for leases.
5
<PAGE>
SELECTED FINANCIAL DATA OF AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
AND RATIO OF MARGINS (EARNINGS)
(Thousands of Dollars Except Per Share and Ratio Amounts)
The following Selected Financial Data of the Company and Consolidated
Subsidiaries has been derived from consolidated financial statements audited by
Coopers & Lybrand L.L.P., whose report for the years ended June 30, 1997, 1996
and 1995 is included in the Annual Report on Form 10-K, and should be read in
conjunction with the full consolidated financial statements of the Company and
Notes thereto.
<TABLE>
<CAPTION>
(In Thousands of Dollars Except Per Share Amounts)
------------------------------------------------------------------------------------
Years Ended June 30
1997 1996 1995 1994 1993
------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Net sales and revenues (1)... $ 1,671,122 $ 1,662,500 $ 1,592,053 $ 1,694,274 $ 1,719,890
Margin (loss) from
continuing operations (2)(3) $ 10,670 $ 11,147 $ (7,800) $ 555 $ 24,969
Net margin (loss) (2)(3)..... $ 10,670 $ 12,662 $ (15,730) $ (3,445) $ 18,992
Total assets (1)(2).......... $ 1,300,261 $ 1,245,891 $ 1,225,193 $ 1,273,958 $ 1,223,758
Total long-term debt ........ $ 329,695 $ 291,666 $ 268,310 $ 253,104 $ 216,146
Total long-term subordinated
debt...................... $ 438,127 $ 414,927 $ 399,064 $ 407,144 $ 379,619
Cash dividends per share
of common stock .......... $ 1.50 $ 1.50 $ 1.50 $ 1.50 $ 1.50
</TABLE>
(1) Certain amounts reported in fiscal years ended June 30, 1993-1996, have been
reclassified to conform to current year presentation.
(2) The Company changed its method of accounting for certain inventory in the
second quarter of fiscal 1997. As required, the Company has retroactively
adjusted prior years' net margin (loss) for this change. The effect on
margin (loss) from continuing operations and on net margin (loss) for fiscal
years ended June 30, 1993-1996, was $(758), $(141), $178 and $1,062,
respectively.
(3) The 1994 data reflect a $6,065 credit before taxes from business
restructuring and an after-tax operating loss of $4,000 from discontinued
operations; 1995 data reflect an after-tax loss of $12,360 in discontinued
operations related to Hood, an after-tax gain on the sale of Curtice Burns
of $4,430, and a credit before taxes from business restructuring of $3,248;
1996 data reflect a $1,943 credit before taxes from business restructuring
and an after-tax gain on the sale of Hood of $1,515, net of operating losses
until the time of sale.
6
<PAGE>
SELECTED FINANCIAL DATA OF AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
AND RATIO OF MARGINS (EARNINGS)
(Thousands of Dollars Except Per Share and Ratio Amounts)
RATIO OF MARGINS (EARNINGS)
For purposes of this ratio, margins from continuing operations represent margins
before (i) income taxes and discontinued operations and (ii) fixed charges and
preferred dividend requirements. Fixed charges include interest on debt and the
interest factor of rent. The pro-forma ratio of adjusted margins to fixed
charges and adjusted margins to fixed charges and preferred dividends combined,
of Agway Inc. (parent) as of June 30, 1997, after giving effect to the issuance
of the Certificates offered hereby, would be 1.4 and 1.2, respectively.
<TABLE>
<CAPTION>
June 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of adjusted margins to fixed charges:
Agway Inc. and Consolidated Subsidiaries 1.2 1.3 * 1.1 1.3
========= ========= ======== ======== ========
Agway Inc. (1) 1.4 3.8 1.6 * 1.5
========= ========= ======== ======== ========
Ratio of adjusted margins to fixed charges
and preferred dividends combined:
Agway Inc. and Consolidated Subsidiaries 1.1 1.2 * * 1.3
========= ========= ======== ======== ========
Agway Inc. (1) 1.2 2.5 2.0 * 1.3
========= ========= ======== ======== ========
<CAPTION>
*Adjusted net margin is inadequate to cover fixed charges or fixed charges and
preferred dividends combined. See below for amount deficient.
June 30,
----------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Deficiency of adjusted net margins to total fixed charges:
Agway Inc. and Consolidated Subsidiaries N/D N/D $ 6,053 N/D N/D
========= ========= ======== ======== ========
Agway Inc. (1) N/D N/D N/D $ 17,330 N/D
========= ========= ======== ======== ========
Deficiency of adjusted net margins to total fixed
charges and preferred dividends combined:
Agway Inc. and Consolidated Subsidiaries N/D N/D $ 12,599 $ 31,530 N/D
========= ========= ======== ======== ========
Agway Inc. (1) N/D N/D N/D $ 19,619 N/D
========= ========= ======== ======== ========
</TABLE>
(1) Parent-company ratios are presented since all of AFC's debt is
unconditionally guaranteed by Agway Inc.
N/D No deficiency.
7
<PAGE>
USE OF PROCEEDS
There is no underwriting of the securities offered; thus there is no assurance
that all or any of the proceeds will be received. The net proceeds of the sale
of the offered securities will be no greater than $94,140,000. The funds
received will be applied by the Companies approximately in the relative order
that follows:
<TABLE>
<CAPTION>
AGWAY AFC TOTAL %
---------------- ----------------- ---------------- ----------
<S> <C> <C> <C> <C>
Offering expenses $ 1,000 $ 126,000 $ 127,000 .1
Repurchase of outstanding securities 8,100,000 75,700,000 83,800,000 89.0
Redemption of short- and long-term debt 10,213,000 10,213,000 10.9
---------------- ----------------- ---------------- ----------
$ 8,101,000 $ 86,039,000 $ 94,140,000 100.0%
================ ================= ================ ==========
</TABLE>
Although the exact amount is presently indeterminable, it is anticipated,
assuming that all securities hereby offered are sold, that approximately
$83,800,000 of the proceeds of this offering will be used for the repurchase of
outstanding securities, which is a continuation of a practice of providing a
market for the securities by repurchasing such securities (at par value in the
case of preferred and common stock, and at the principal plus accrued interest
in the case of debentures and money market certificates) as the holders (members
or other investors) elect to tender the securities for repurchase. Proceeds from
the offering pending its actual use will be used to pay down short-term debt. As
of August 29, 1997, the range of interest rates and maturities of short-term
debt that will be paid down was 5.50% - 5.60% and September 2, 1997 -
September 15, 1997, respectively. The practice of repurchasing securities will
not be followed with respect to the 8.25% and 8.5% Subordinated Money Market
Certificates described herein. To the extent proceeds are available, the
amounts of each type of security estimated to be repurchased within the next
year are as follows:
Money Market Certificates $ 74,200,000
Subordinated Debentures 1,500,000
Preferred Stock 8,000,000
Common Stock 100,000
--------------
$ 83,800,000
==============
Approximately $53,200,000 of the above money market securities, at rates of
7.75%-9.5%, mature on October 31, 1997. Because the remaining securities
estimated to be repurchased are those presented by the holders, the Companies
cannot determine at this time the interest rates or maturities of the debt
securities which may be repurchased. However, as described in detail under the
heading "Description of the Interest Reinvestment Option" on page 17, the
possible range of interest rates and maturities are 4.5% - 9.5% and 1997 - 2008,
respectively. If the proceeds of this offering are not sufficient to provide
funds for the repurchase of all securities tendered for repurchase, Agway
intends to utilize available cash from other sources for additional repurchases.
Long-term debt which may be paid consists of capital leases and non-compete
payments.
8
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED
AGWAY INC.
DESCRIPTION OF 8% CUMULATIVE PREFERRED STOCK, SERIES B ($100 PAR VALUE)
Agway is authorized to issue 250,000 shares of 8% cumulative preferred stock,
Series B, having a par value of $100 per share (the "Series B Preferred Stock").
As of August 29, 1999, 236,858 shares of Series B Preferred Stock, with total
par value of $23,685,800, were outstanding. The following summary of the Series
B Preferred Stock is subject in all respects to the provisions of the amended
Certificate of Incorporation and By-laws of Agway, which are incorporated by
reference to this Registration Statement. The exhibits incorporated by reference
thereto may be obtained from the Commission or from Agway in the same manner as
the documents described under "Available Information" on page 2 of this
Prospectus.
DIVIDEND RIGHTS. The holders of shares of Series B Preferred Stock are entitled
to cumulative dividends at the rate of 8% per annum. The 6% Series A Preferred
Stock has priority with respect to the payment of dividends over the Series B
Preferred Stock, 8% cumulative preferred stock, Series B-1 (the "Series B-1
Preferred Stock"), 7% cumulative preferred stock, Series C (the "Series C
Preferred Stock"), and Series HM Preferred Stock (as defined below). There are
no restrictions in any indenture or other agreement respecting the payment of
dividends on cumulative preferred stock.
VOTING RIGHTS. The holders of Series B Preferred Stock are not entitled to vote
for directors, to participate in meetings or management of Agway, or to vote in
any proceedings except in such statutory proceedings as to which their votes are
required by law.
LIQUIDATION RIGHTS. In the event of any distribution of assets in liquidation or
dissolution of Agway, all debts of Agway shall be paid before the holders of any
class or series of preferred stock or common stock are entitled to any
distribution of assets. If assets remain after all debts are paid, the holders
of the Series A Preferred Stock shall receive the full par value thereof,
together with all cumulative dividends declared, accrued, and unpaid to date of
distribution, before any funds shall be distributed to holders of Series B
Preferred Stock, Series B-1 Preferred Stock, Series C Preferred Stock or Series
HM Preferred Stock. The holders of Series B Preferred Stock, Series B-1
Preferred Stock, Series C Preferred Stock and Series HM Preferred Stock shall
first receive the full par value thereof, together with all cumulative dividends
accrued and unpaid to date of distribution, before any funds shall be
distributed to holders of common stock of Agway, or credited to retained margins
of Agway.
GENERAL. The Series B Preferred Stock has no pre-emptive or conversion rights.
The shares of Series B Preferred Stock will be, when issued, duly authorized,
validly issued and fully paid and non-assessable and the holders thereof will
not be liable for any payment of Agway's debts.
TRANSFER. Shares of Series B Preferred Stock are freely transferable.
REDEMPTION PROVISIONS. The Series B Preferred Stock is subject, at the option of
the Board of Directors, to redemption, as a whole or in part, upon payment of
the par value thereof ($100 per share) with all accrued dividends to the date
fixed for redemption. In case of partial redemption, shares to be redeemed shall
be drawn by lot. There are no restrictions in any indenture or other document
respecting the redemption or purchase of shares by Agway.
REPURCHASE PRACTICE. While there is no guarantee of repurchase, it is the
present practice of Agway to repurchase, at par, the share of any holder of
Series B Preferred Stock when presented for repurchase, and it is the present
intention of Agway to follow such practice in the future.
9
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED (CONTINUED)
AGWAY INC. - (CONTINUED)
DESCRIPTION OF HONORARY MEMBER PREFERRED STOCK, SERIES HM ($25 PAR VALUE)
Agway is authorized to issue 80,000 shares of Honorary Member preferred stock
having a par value of $25 per share (the "Series HM Preferred Stock"). As of
August 29, 1997, 2,565 shares of Series HM Preferred Stock, with total par value
of $64,125, were outstanding. The summary description of the Series HM Preferred
Stock which follows is subject in all respects to the provisions of the amended
Certificate of Incorporation and By-laws of Agway, which are incorporated by
reference in this Registration Statement.
LIMITATIONS ON OWNERSHIP AND TRANSFER. Series HM Preferred Stock may be issued
only to individuals who have previously held Agway Membership Common Stock. No
more than one share of such stock may be issued to any one person, and Agway,
acting in its capacity as transfer agent, prevents two shares being issued to
the same person. No subscription for this stock will be accepted unless the
subscriber was a member of Agway. Series HM Preferred Stock may not be
transferred other than to Agway except with its written consent endorsed on the
certificate. Pursuant to its By-laws, Agway will permit transfer of such stock
only to persons who were members in Agway and will limit ownership of the stock
to one share per person.
DIVIDEND RIGHTS. The holders of the Series HM Preferred Stock are entitled to
receive annual dividends, when, as and if declared by the Board of Directors.
Dividends are non-cumulative. There are no restrictions in any indenture or
other agreement respecting the payment of dividends on Series HM Preferred
Stock.
VOTING RIGHTS. The holders of Series HM Preferred Stock have no voting rights.
LIQUIDATION RIGHTS. In the event of any distribution of assets in liquidation or
dissolution of Agway, all debts of Agway shall be paid before the holders of any
class or series of preferred stock or common stock are entitled to any
distribution of assets. If assets remain after all debts are paid, the holders
of the Series HM Preferred Stock would be entitled, subject to the liquidation
rights of the Series A Preferred Stock, Series B Preferred Stock, Series B-1
Preferred Stock and Series C Preferred Stock, to receive only the par value
thereof ($25 per share) plus accrued dividends, if any. Any net assets of Agway
remaining after payment of the par value and accrued dividends on the Series HM
Preferred Stock would be distributed to the holders of the common stock of Agway
and any net assets remaining after the rights of such holders had been satisfied
would be distributed to the members and/or patrons of Agway to whom its retained
margin would be credited.
GENERAL. The Series HM Preferred Stock has no pre-emptive or conversion rights.
The shares of Series HM Preferred Stock will be, when issued, duly authorized,
validly issued and fully paid and non-assessable and the holders thereof will
not be liable for any payment of Agway's debts.
REDEMPTION PROVISIONS. The Series HM Preferred Stock is subject, at the option
of the Board of Directors, to redemption, as a whole or in part, upon payment of
the par value thereof ($25 per share) with all accrued dividends to the date
fixed for redemption. In case of partial redemption, shares to be redeemed shall
be drawn by lot. There are no restrictions in any indenture or other document
respecting the redemption or purchase of shares by Agway.
REPURCHASE PRACTICE. While there is no guarantee of repurchase, it is the
present practice of Agway to repurchase, at par, the share of any holder of
Series HM Preferred Stock when presented for repurchase, and it is the present
intention of Agway to follow such practice in the future.
10
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED (CONTINUED)
AGWAY INC. - (CONTINUED)
DESCRIPTION OF MEMBERSHIP COMMON STOCK ($25 PAR VALUE)
Agway is authorized to issue 300,000 shares of membership common stock having a
par value of $25 per share (the "Membership Common Stock"). As of August 29,
1997, 104,826 shares of Membership Common Stock (80,172 shares active and 24,654
shares called by the Company but not surrendered by the holder), with total par
value of $2,620,650, were outstanding. The summary description of the Membership
Common Stock which follows is subject in all respects to the provisions of the
amended Certificate of Incorporation and By-laws of Agway, which are
incorporated by reference in this Registration Statement.
LIMITATIONS ON OWNERSHIP AND TRANSFER. Membership Common Stock may be issued
only to persons entitled to membership in Agway. No more than one share of such
stock may be issued to any one person, and Agway, acting in its capacity as
transfer agent, prevents two shares from being issued to the same person either
through new application or transfer. No subscription for Membership Common Stock
will be accepted unless the subscriber is qualified for membership in Agway, as
determined by a local geographic committee applying criteria set forth in
Agway's By-Laws. Membership in Agway consists of farmers or cooperative
organizations of farmers who are record holders of one share of Membership
Common Stock of Agway and who purchase farm supplies or farm services or market
farm products through Agway or franchised representatives. Membership Common
Stock may not be transferred other than to Agway except with its written consent
endorsed on the certificate. Pursuant to its By-laws, Agway will permit transfer
of such stock only to persons entitled to membership in Agway and will limit
ownership of the stock to one share per person. If any holder of Membership
Common Stock has ceased to be a member of Agway because the member has ceased to
be a farmer, or because the member has done no business with Agway since the
beginning of its preceding fiscal year, such stock held by the member may be
called for repurchase at the par value thereof, plus accrued dividends, if any.
It is the present intention of Agway to call such stock for repurchase under
such circumstances. Stock not being called for repurchase would allow the
continued rights and privileges of membership.
DIVIDEND RIGHTS. The holders of the Membership Common Stock are entitled to
receive annual dividends, when, as and if declared by the Board of Directors.
Dividends are non-cumulative. The holders of preferred stock are entitled to
receive, when, as and if declared by the Board of Directors, preferential
dividends before any dividends shall be declared or paid or set aside for the
Membership Common Stock. Such dividends are cumulative except in the case of HM
Preferred Stock. There are no other restrictions in any indenture or other
agreement respecting the payment of dividends on Membership Common Stock.
VOTING RIGHTS. The Membership Common Stock carries the exclusive voting rights
of Agway, on the basis of one vote for each share of such stock.
LIQUIDATION RIGHTS. In the event of any liquidation of Agway or other
disposition of its assets, the holders of the Membership Common Stock would be
entitled, after all debts of Agway are paid, subject to the liquidation rights
of the Series A Preferred Stock, the Series B Preferred Stock, the Series B-1
Preferred Stock, the Series C Preferred Stock and the Series HM Preferred Stock
to receive only the par value thereof ($25 per share) plus dividends declared
and unpaid, if any, for the current year. Any net assets of Agway remaining
after payment of the par value and accrued dividends on the Membership Common
Stock would be distributed to the members and/or patrons of Agway to whom its
retained margin would be credited. No person is entitled to any distribution of
assets with respect to the retained margin or otherwise prior to the dissolution
of Agway.
GENERAL. The Membership Common Stock has no pre-emptive or conversion rights.
The shares of Membership Common Stock will be, when issued, duly authorized,
validly issued and fully-paid and non-assessable and the holders thereof will
not be liable for any payment of Agway's debts.
REDEMPTION PROVISIONS. The Membership Common Stock is subject to redemption if
any holder ceases to be a member of Agway.
REPURCHASE PRACTICE. While there is no guarantee of repurchase, it is the
present practice of Agway to repurchase, at par, the share of any holder of
Membership Common Stock when presented for repurchase, and it is the present
intention of Agway to follow such practice in the future.
11
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED (CONTINUED)
AGWAY FINANCIAL CORPORATION
The following are the securities currently being issued by AFC, which are
unconditionally guaranteed by Agway (such securities being referred to herein as
the "Certificates"). AFC may change the minimum rate of interest offered or the
maturity date for Certificates sold after the date of such change by filing a
supplement to this Prospectus with the Securities and Exchange Commission
setting forth the new terms. Any change in the interest rate or maturity date
offered will not affect the rate of interest on or maturity date of any
Certificates theretofore issued.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
TITLE OF CLASS PUBLIC OR COMMISSIONS AFC
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CERTIFICATES:
Subordinated Money Market Certificates
(minimum 7.5% per annum) due October 31,
2007 (the "7.5% Certificates")
Per Unit 100% None $ 100
Total $ 5,000,000 None $ 5,000,000
Subordinated Member Money Market Certificates
(minimum 8.0% per annum) due
October 31, 2007 (the "8.0% Member Certificates")
Per Unit 100% None $ 100
Total $ 5,000,000 None $ 5,000,000
Subordinated Money Market Certificates
(minimum 7.75% per annum) due October 31,
2007 (the "7.75% Certificates")
Per Unit 100% None $ 5,000
Total $ 10,000,000 None $ 10,000,000
Subordinated Member Money Market Certificates
(minimum 8.25% per annum) due
October 31, 2007 (the "8.25% Member Certificates")
Per Unit 100% None $ 5,000
Total $ 25,000,000 None $ 25,000,000
Subordinated Money Market Certificates
(minimum 8.25% per annum) due October 31,
2001 (the "8.25% Certificates")
Per Unit 100% None $ 2,000
Total $ 10,000,000 None $ 10,000,000
Subordinated Money Market Certificates
(minimum 8.5% per annum) due October 31,
2003 (the "8.5% Certificates")
Per Unit 100% None $ 2,000
Total $ 20,000,000 None $ 20,000,000
Subordinated Member and Subordinated
Money Market Certificates under the
Interest Reinvestment Option (ranging from
minimum of 4.5% to 9.5% per annum) due from
October 31, 1997 through October 31, 2008
Per Unit 100% None
Total $ 19,140,000 None $ 19,140,000
</TABLE>
12
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED (CONTINUED)
AGWAY FINANCIAL CORPORATION - (CONTINUED)
DESCRIPTION OF THE CERTIFICATES
INTEREST RATES. Interest on the 7.5% Certificates and 8.0% Member Certificates,
issued in $100 denominations, is payable semiannually on January 1 and July 1,
and at maturity, at a rate per annum for each semiannual period equal to the
greater of (1) the Certificates' "stated rate" (the "stated rate" is 7.5% for
the 7.5% Certificates and 8.0% for the 8.0% Member Certificates); and (2)
one-half percent (.5%) below the "Treasury Bill Rate" (as defined below).
Interest on the 7.75% Certificates and 8.25% Member Certificates, issued in
$5,000 denominations, is payable semiannually on January 1 and July 1, and at
maturity, at a rate per annum for each semiannual period equal to the greater of
(1) the Certificates' "stated rate" (the "stated rate" is 7.75% for the 7.75%
Certificates and 8.25% for the 8.25% Member Certificates); and (2) the "Treasury
Bill Rate" (as defined below).
Interest on the 8.25% and 8.5% Certificates, issued in $2,000 denominations, is
payable semiannually on January 1 and July 1, and at maturity, at a rate per
annum for each semiannual period equal to the greater of (1) the Certificates'
"stated rate" of 8.25% for the 8.25% Certificates and 8.5% for the 8.5%
Certificates; and (2) the "Treasury Bill Rate" (as defined below).
U.S. Treasury bills are issued and traded on a discount basis, the amount of the
discount being the difference between their face value at maturity and their
sales price. The per annum discount rate on a U.S. Treasury bill is the
percentage obtained by dividing the amount of the discount on such U.S. Treasury
bill by its face value at maturity and annualizing such percentage on the basis
of a 360-day year. The Federal Reserve Board currently publishes such rates
weekly in its Statistical Release H.15 (519). Unlike the interest on U.S.
Treasury bills, interest on the Certificates will not be exempt from state and
local income taxation.
The "Treasury Bill Rate" for each semiannual interest payment date is the
arithmetic average of the weekly per annum auction average discount rates at
issue date for U.S. Treasury bills with maturities of 26 weeks (which may vary
from the market discount rates for the same weeks), as published for each week
by the Federal Reserve Board, during the period June 1 to November 30,
inclusive, for the January 1 interest payment date or during the period December
1 to May 31, inclusive, for the July 1 interest payment date or during the
period June 1 to September 30 for interest payable on the maturity date (each
such period, an "Interest Determination Period"). In the event that the Federal
Reserve Board does not publish the weekly per annum auction average discount
rate for a particular week, AFC shall select a publication of such rate by any
Federal Reserve Bank or any U.S. Government department or agency to be used in
computing the arithmetic average. The Treasury Bill Rate will be rounded to the
nearest one hundredth of a percentage point.
In the event that AFC in good faith determines that for any reason a Treasury
Bill Rate is not published for a particular week in an Interest Determination
Period with respect to a particular interest payment date or the maturity date,
as applicable, an "Alternate Rate" will be substituted for the Treasury Bill
Rate for such period and date. The Alternate Rate will be the arithmetic average
of the weekly per annum auction average discount rates for those weeks in the
relevant Interest Determination Period for which rates are published as
described above, if any, and the weekly per annum auction average discount rates
or market discount rates or stated interest rates for comparable issue(s) of
securities as is selected by AFC, with the concurrence of the Trustee, for those
weeks in the Interest Determination Period for which no rate is published as
described above. The Alternate Rate will be rounded to the nearest one hundredth
of a percentage point.
In the further event that AFC in good faith determines that neither the Treasury
Bill Rate nor Alternate Rate can be computed for the period June 1 to November
30, inclusive, for the January 1 interest payment date or for the period
December 1 to May 31, inclusive, for the July 1 interest payment date, the rate
of interest payable with respect to any Certificate will be the rate stated
thereon.
The last interest payment date for the Certificates is the date of maturity.
Interest payable on the Certificates at maturity shall be calculated as
described above, during the period June 1 to September 30 in the year of
maturity.
13
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED (CONTINUED)
AGWAY FINANCIAL CORPORATION - (CONTINUED)
DESCRIPTION OF THE CERTIFICATES (CONTINUED)
The following chart sets forth for the periods indicated:
(1) The "Treasury Bill Rate," as defined above.
(2) The highest per annum discount rate on six month U.S. Treasury Bills at
one of the 26 auctions during the period used to calculate the "Treasury
Bill Rate."
(3) The lowest per annum discount rate on six month U.S. Treasury Bills at one
of the 26 auctions during the period used to calculate the "Treasury Bill
Rate."
Payment Average
Date "Treasury Bill Rate" High Low
- --------------------------------------------------------------------------------
Jan.-93 3.28% 3.90% 2.78%
Jul.-93 3.14% 3.46% 2.95%
Jan.-94 3.16% 3.30% 3.02%
Jul.-94 3.71% 4.81% 3.14%
Jan.-95 5.04% 5.85% 4.53%
Jul.-95 6.01% 6.42% 5.65%
Jan.-96 5.37% 5.61% 5.22%
Jul.-96 5.01% 5.25% 4.71%
Jan.-97 5.20% 5.38% 5.07%
Jul.-97 5.18% 5.45% 4.97%
If the Certificates currently being offered had been outstanding on July 1,
1997, the stated interest rates would have been paid. Although the period June
1, 1997 to November 30, 1997, is not complete as of the date of this Prospectus
(and hence the Treasury Bill Rate for the July 1, 1998 interest payment date
cannot yet be determined), the average Treasury Bill Rate as of August 29, 1997
was 5.16%.
The six-month U.S. Treasury Bill Rate has fluctuated widely during the periods
shown in the chart. This rate can be expected to fluctuate in the future. These
fluctuations will cause the rate of interest payable on the Certificates issued
in $5,000 and $2,000 denominations to exceed the stated rate whenever the
Treasury Bill Rate exceeds the stated rate. Interest payable on the Certificates
issued in $100 denominations will exceed the stated rate when the Treasury Bill
Rate exceeds the stated rate by more than one-half percent (.5%).
GENERAL. Mellon Bank, F.S.B. assumed Trustee responsibilities pursuant to an
Agreement of Resignation, Appointment and Acceptance dated September 3, 1996 by
and among KeyCorp, Key Bank of New York, Agway Financial Corporation and Mellon
Bank. AFC is authorized to issue the Certificates pursuant to the indenture
dated as of August 23, 1989, between AFC and the Key Bank of New York, as
Trustee at that time, as supplemented by the supplemental indenture dated August
24, 1992. The indenture and supplemental indenture are filed as exhibits to the
Registration Statement and reference is made thereto for a complete statement of
the terms and provisions of these Certificates.
The Certificates bear interest payable semiannually on January 1 and July 1 of
each year and at maturity at the rates quoted herein. Principal and interest on
the Certificates will be payable at the office of the transfer agent, Agway, in
DeWitt, New York. Additional amounts may be added to the principal of any
Certificate pursuant to an election by the holder thereof to have the semiannual
interest payments added to and increase the principal amount of the Certificate.
The 7.5% Certificates and 8.0% Member Certificates are to be issued in
registered form only in denominations of $100 and multiples thereof. The 7.75%
Certificates and 8.25% Member Certificates are to be issued in registered form
only in denominations of $5,000 and multiples thereof. The 8.25% and 8.5%
Certificates (not eligible for the Company's normal repurchase practice) are to
be issued in registered form only in denominations of $2,000 and multiples
thereof.
14
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED (CONTINUED)
AGWAY FINANCIAL CORPORATION - (CONTINUED)
DESCRIPTION OF THE CERTIFICATES (CONTINUED)
The Certificates are unsecured obligations of AFC, and the payment thereof is to
be subordinated to other debt (except debts similarly subordinated) as
hereinafter described. There is no provision in the indentures that would
prevent AFC or Agway from incurring additional debt or which would restrict the
interest rate or other terms of such other debt.
LIMITATIONS ON OWNERSHIP AND TRANSFER. The 8.0% Member Certificates and 8.25%
Member Certificates may be purchased only by members of Agway. The 7.5% and
7.75% Certificates may be sold to the general public and are generally purchased
by non-member patrons of Agway, Agway employees and former employees. The 8.25%
and 8.5% Certificates (not subject to repurchase practice) may be purchased by
both members of Agway and the general public.
Agway, acting as transfer agent, is able to prevent issuing or reissuing a
Member Money Market Certificate to other than holders of the Membership Common
and Honorary Member Preferred Stock.
REDEMPTION PROVISIONS. Upon not less than 30 days' written notice, AFC may, at
its option, redeem all, or by lot, from time to time any part of the
Certificates at the principal amount thereof, together with accrued interest
from the last interest payment date to the date fixed for redemption at the
stated rate. Should the Certificates be redeemed by lot, all Certificates not
redeemed will be accorded equal treatment in any subsequent redemption.
REPURCHASE PRACTICE. While there is no guarantee of repurchase, it is the
present practice of AFC to repurchase at face value, plus interest accrued at
the stated rate, the Certificates of any holder whenever presented for
repurchase. It is the intention of AFC to follow such practice in the future
with respect to all of the Certificates offered in this Prospectus except the
8.25% and 8.5% Certificates, which AFC does not intend to repurchase.
INTEREST REINVESTMENT OPTION. At the time of application for purchase of the
Certificates, or at any time thereafter, the holder may elect to have all
interest paid on the Certificate reinvested automatically. In the event that the
automatic reinvestment option is elected, the interest due on each semiannual
interest payment date will be added to the principal amount of the Certificate
and will earn interest thereafter on the same basis as the original principal
amount. This election may be revoked only as to future interest payments at any
time by written notice to AFC, effective on the date when the revocation notice
is duly received by AFC. Interest reinvested will be subject to federal income
tax as if it had been received by the certificate holder at the time reinvested.
SUBORDINATION PROVISIONS. The payment of the principal and interest on the
Certificates is subordinated in right of payment, to the extent set forth in the
indenture, to the prior payment in full of all "Senior Debt." Senior Debt is
defined as the principal of, and interest on (a) indebtedness (other than the
indebtedness of AFC with respect to its debentures and Certificates issued under
indentures dated as of October 1, 1974, September 1, 1976, September 1, 1978,
August 25, 1982, September 1, 1985, September 1, 1986, August 24, 1987, August
23, 1988 and August 23, 1989 and supplemental indenture dated August 24, 1992)
of AFC for money borrowed from or guaranteed to banks, trust companies,
insurance companies, and other financial institutions, including dealers in
commercial paper, charitable trusts, pension trusts, and other investing
organizations, evidenced by notes or similar obligations, or (b) indebtedness
(other than with respect to the indentures noted in clause (a) above) of AFC
evidenced by notes, debentures or certificates issued under the provisions of an
indenture or similar instrument between AFC and a bank trust company, unless in
any case covered by clause (a) or (b) the instrument creating or evidencing the
indebtedness provides that such indebtedness is not superior or is subordinate
in right of payment to the certificates. Senior Debt, as thus defined, includes
all debt presently outstanding except indebtedness with respect to the
debentures described in clause (a) above. As of August 29, 1997, Senior Debt of
$33,500,000 was outstanding.
15
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED (CONTINUED)
AGWAY FINANCIAL CORPORATION - (CONTINUED)
DESCRIPTION OF THE CERTIFICATES (CONTINUED)
In the event of any distribution of assets of AFC under any total liquidation or
reorganization of AFC, the holders of all Senior Debt shall be entitled to
receive payment in full before the holders of the Certificates are entitled to
receive any payment. After payment in full of the Senior Debt, the holders of
the Certificates will be entitled to participate in any distribution of assets,
both as such holders and by virtue of subrogation to the rights of the holders
of Senior Debt, to the extent that the Senior Debt was benefited by the receipt
of distributions to which the holders of the Certificates would have been
entitled if there had been no subordination. By reason of such subordination, in
the event of AFC's insolvency, holders of Senior Debt may receive more, ratably,
and holders of the certificates may receive less, ratably, than other creditors
of AFC. The subordinated debentures and Certificates rank pari passu with each
other.
MODIFICATION OF INDENTURES. The indentures permit modification or amendment
thereof, but no modification of the terms of payment or reduction of the
percentage required for modification will be effective against any certificate
holder without his consent.
EVENTS OF DEFAULT AND WITHHOLDING OF NOTICE THEREOF TO CERTIFICATE HOLDERS. The
indentures provide for the following Events of Default: (i) failure to pay
interest upon any of the Certificates when due, continued for a period of 30
days; (ii) failure to pay principal of the Certificates or Senior Debt when due;
(iii) failure to perform any other covenant of AFC as set forth in the
indentures, continued for 90 days after written notice by the Trustee or the
holders of at least 25% in principal amount of the Certificates then
outstanding.
The Trustee, within 90 days after the occurrence of the default, is to give the
certificate holders notice of all defaults known to Trustee, unless cured prior
to the giving of such notice, provided that, except in the case of default in
the payment of principal or interest on any of the Certificates, the Trustee may
withhold such notice if and so long as it in good faith determines that the
withholding of such notice is in the interest of the certificate holders.
Upon the happening and during the continuance of a default, the Trustee or the
holders of 25% in aggregate principal amount of the Certificates may declare the
principal of all the Certificates and the interest accrued thereon due and
payable, but the holders of a majority of the Certificates may waive all
defaults and rescind such declaration if the default is cured. Subject to the
provisions of the indenture relating to the duties of the Trustee in case any
such default shall have occurred and be continuing, the Trustee will be under no
obligation to exercise any of its rights or powers at the request, order or
direction of any of the certificate holders unless they shall have offered to
the Trustee reasonable security or indemnity. Subject to such provisions for
security or indemnity, a majority of the holders of outstanding Certificates
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee.
GUARANTEE BY AGWAY. If AFC or any of its successors fails punctually to pay any
such principal and interest, Agway has unconditionally agreed to cause any such
payment to be punctually made when and as such payment becomes due and payable,
whether at maturity, upon acceleration or mandatory redemption or otherwise. To
the extent that Agway has unconditionally guaranteed payments due under the
Certificates, its failure to make payment under its guarantee shall constitute
an Event of Default under the indenture, and Certificate holders may proceed
against Agway to the same extent, and in the same manner, as described above
under "Events of Default and Withholding Notice Thereof to Certificate Holders."
THE TRUSTEE. Mellon Bank, F.S.B. assumed Trustee responsibilities pursuant to an
Agreement of Resignation, Appointment and Acceptance dated September 3, 1996 by
and among KeyCorp, Key Bank of New York, Agway Financial Corporation and Mellon
Bank. Key Bank of New York was the Trustee under a supplemental indenture dated
as of October 1, 1986, between Key Bank, Agway and AFC, which amends the
indentures between the Key Bank and Agway dated as of October 1, 1974, September
1, 1976, September 1, 1978, August 25, 1982, September 1, 1985, and September 1,
1986. The debentures and certificates issued under the October 1, 1974,
September 1, 1976, September 1, 1978, August 25, 1982, September 1, 1985,
September 1, 1986, August 24, 1987, and August 23, 1988 indentures and the
supplemental indenture dated August 24, 1992 rank equally as debt instruments of
AFC with the certificates covered by the indenture dated August 23, 1989 being
described herewith.
16
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED (CONTINUED)
AGWAY FINANCIAL CORPORATION - (CONTINUED)
DESCRIPTION OF THE CERTIFICATES (CONTINUED)
The indentures contain certain limitations on the right of the Trustee, as a
creditor of AFC, to obtain payment of claims in certain cases, or to realize on
certain property received in respect of any such claim as security or otherwise.
AUTHENTICATION AND DELIVERY. The Certificates may be authenticated and delivered
upon the written order of AFC without any further corporate action.
SATISFACTION AND DISCHARGE OF INDENTURES. The indentures may be discharged upon
payment or redemption of all Certificates or upon deposit with the Trustee of
funds sufficient therefor.
EVIDENCE AS TO COMPLIANCE WITH CONDITIONS AND COVENANTS. As evidence of
compliance with the covenants and conditions provided for in the indentures, AFC
is to furnish to the Trustee Officer's Certificates each year stating that such
covenants and conditions have been complied with.
On October 1, 1986, AFC assumed Agway's obligations under the indentures between
the Trustee and Agway. A supplemental indenture was filed as an exhibit to the
Registration Statement No. 33-8676, dated September 11, 1986, and reference is
made thereto for a complete statement of the terms and provisions of such
obligations.
DESCRIPTION OF THE INTEREST REINVESTMENT OPTION
GENERAL. If the Certificate holder has elected to have all interest paid on the
Certificate reinvested automatically, the interest due on each semiannual
interest payment date will be added to the principal amount of the certificate
and will earn interest thereafter on the same basis as the original principal
amount. This election may be revoked - as to future interest payments only - by
written notice to AFC, effective on the date when the revocation notice is duly
received by AFC. Interest reinvested will be subject to federal income tax as if
it had been received by the certificate holder at the time reinvested.
RATES ON PREVIOUSLY ISSUED CERTIFICATES. The stated rates of interest on
Certificates previously issued by AFC that remain outstanding (and upon which
the interest reinvestment option might be exercised by any holder thereof) are
as follows:
Certificates having minimum face amounts of $100:
<TABLE>
<CAPTION>
Stated Rate of Interest Due October 31, Stated Rate of Interest Due October 31,
----------------------- --------------- ----------------------- ---------------
<S> <C> <C> <C>
9.0% 1997 8.0% 2005
9.5% 1997 8.5% 2005
4.5% 2001 5.5% 2006
5.0% 2001 6.0% 2006
6.5% 2001 6.25% 2006
7.0% 2001 6.75% 2006
7.0% 2002 7.25% 2006
7.5% 2002 7.75% 2006
6.75% 2003 7.50% 2007
7.25% 2003 8.00% 2007
8.0% 2004 6.0% 2008
8.5% 2004 6.5% 2008
7.5% 2005 8.5% 2008
9.0% 2008
</TABLE>
Interest on these outstanding Certificates is payable semiannually on January 1
and July 1, and at maturity, at the rate per annum for each semiannual period
equal to the greater of (1) the Certificates' "stated rate"; and (2) one-half
percent (.5%) below the "Treasury Bill Rate" (as defined above).
17
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED (CONTINUED)
AGWAY FINANCIAL CORPORATION - (CONTINUED)
DESCRIPTION OF THE INTEREST REINVESTMENT OPTION (CONTINUED)
Certificates having minimum face amounts of $5,000:
<TABLE>
<CAPTION>
Stated Rate of Interest Due October 31, Stated Rate of Interest Due October 31,
----------------------- --------------- ----------------------- ---------------
<S> <C> <C> <C>
6.5% 1998 8.5% 2001
7.0% 1998 9.0% 2001
8.5% 1998 5.5% 2002
9.0% 1998 6.0% 2002
7.5% 1999 7.0% 2003
8.0% 1999 7.5% 2003
9.0% 2000 6.5% 2006
9.5% 2000 7.0% 2006
4.75% 2001 7.5% 2006
5.25% 2001 8.0% 2006
6.75% 2001 7.75% 2007
7.25% 2001 8.25% 2007
</TABLE>
Interest on these outstanding Certificates is payable semiannually on January 1
and July 1, and at maturity, at the rate per annum for each semiannual period
equal to the greater of (1) the Certificates' "stated rate"; and (2) the
"Treasury Bill Rate" (as defined above).
Certificates having minimum face amounts of $2,000:
Stated Rate of Interest Due October 31,
----------------------- ---------------
7.75% 1997
8.0% 1998
7.25% 2000
7.75% 2000
8.25% 2001
7.5% 2002
8.0% 2002
8.5% 2003
Interest on these outstanding Certificates is payable semiannually on January 1
and July 1, and at maturity, at the rate per annum for each semiannual period
equal to the greater of (1) the Certificates' "stated rate"; and (2) the
"Treasury Bill Rate" (as defined above).
18
<PAGE>
LEGAL OPINION
Legal matters in connection with the securities offered hereby have been passed
upon for the Companies by David M. Hayes, Esq., Senior Vice President, General
Counsel and Secretary of Agway. Mr. Hayes is a Director and the General Counsel
EXPERTS
The audited financial statements incorporated by reference in this Prospectus
have been audited by Coopers & Lybrand L.L.P. and Price Waterhouse L.L.P. The
companies and periods covered by these examinations are indicated in their
respective reports. Such financial statements have been so included in reliance
upon the reports of the various independent accountants given on the authority
of each firm as an expert in accounting and auditing.
DISTRIBUTION AND REDEMPTION OF SECURITIES OFFERED
Sale of the securities offered hereby will be solicited through direct mailings
and/or personal contact by certain designated employees of Agway. No salesmen
will be employed to solicit the sale of these securities, and no commission or
discount will be paid or allowed to anyone in connection with their sale. The
individual Agway employees who participate in the sale of these securities may
be deemed to be underwriters of this offering within the meaning of that term as
defined in Section 2(11) of the Securities Act of 1933, as amended.
While there is no guarantee of repurchase, the Companies intend to continue
their practice of repurchasing, when presented for redemption, any security
being offered in this Prospectus, other than the 8.25% and 8.5% Subordinated
Money Market Certificates described herein.
ABSENCE OF PUBLIC MARKET, REDEMPTION AND MARKET RISK
There is no market for the debentures and Certificates and there is no intent on
the part of the Companies to create or encourage a trading mechanism for these
debentures and Certificates. The Companies do not intend to apply for listing of
the debentures and Certificates on any securities exchange. Any secondary market
for, and the market value of, the debentures and Certificates will be affected
by a number of factors independent of the creditworthiness of Agway and AFC,
including the level and direction of interest rates, the remaining period to
maturity of the debentures and Certificates, the right of the Companies to
redeem the debentures and Certificates, the aggregate principal amount of the
debentures and Certificates and the availability of comparable investments. In
addition, the market value of the debentures and Certificates may be affected by
numerous other interrelated factors, including factors that affect the U.S.
corporate debt market generally, and Agway and AFC specifically.
19
<PAGE>
AGWAY INC.
AGWAY
FINANCIAL
CORPORATION
[logo]
PROSPECTUS
Until _____, 1997, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a Prospectus. This is in addition to the obligations of dealers to
deliver a Prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*:
Registration Fee...................................... $ 29,000
Printing and Engraving................................ 25,000
Registration Service and Trustee Expense.............. 32,000
Accounting Fees and Expenses.......................... 4,000
"Blue Sky" Fees and Expenses.......................... 24,000
Mailing Costs ....................................... 7,000
Miscellaneous Expenses................................ 6,000
---------
$127,000
=========
*Approximate
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
(a) Article 12 of Agway's By-Laws states as follows:
12.1 RIGHT TO INDEMNIFICATION - The corporation shall
indemnify to the fullest extent possible under applicable law as
it presently exists or may hereafter be amended, any person (an
"Indemnitee") who was or is made or is threatened to be made a
party or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a
"proceeding"), by reason of the fact that he, or a person for whom
he is the legal representative, is or was a director, officer,
employee or agent of the corporation or, while a director or
officer of the corporation, is or was serving at the request of
the corporation as a director, officer, employee or agent of
another corporation `or of a partnership, limited liability
company, joint venture, trust, enterprise or nonprofit entity,
including service with respect to employee benefit plans, against
all liability and loss suffered and expenses (including attorneys'
fees) reasonably incurred by such Indemnitee. Notwithstanding the
preceding sentence, except as otherwise provided in section 12.3,
the corporation shall be required to indemnify an Indemnitee in
connection with a proceeding (or part thereof) commenced by such
Indemnitee only if the commencement of such proceeding (or part
thereof) by the Indemnitee was authorized by the Board of
Directors of the corporation.
12.2 PREPAYMENT OF EXPENSES - The corporation shall pay the
expenses (including attorneys' fees) incurred by a current or
former director or officer of the corporation in defending any
proceeding in advance of its final disposition, provided, however,
that, to the extent required by law, such payment of expenses in
advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Indemnitee to repay all
amounts advanced if it should be ultimately determined that the
Indemnitee is not entitled to be indemnified under sections
12.1-12.7 of these by-laws or otherwise.
12.3 CLAIMS - If a claim for indemnification or advancement
of expenses under sections 12.1- 12.7 of these by-laws is not paid
in full within sixty days after a written claim therefor by the
Indemnitee has been received by the corporation, the Indemnitee
may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the
reasonable expense of prosecuting such claim. In any such action
the corporation shall have the burden of proving that the
Indemnitee is not entitled to the requested indemnification or
advancement of expenses under applicable law.
12.4 NONEXCLUSIVITY OF RIGHTS - The rights conferred on any
Indemnitee by sections 12.1-12.7 of these by-laws shall not be
exclusive of any other rights which such Indemnitee may have or
hereafter acquire under any statute, provision of the certificate
of incorporation, these by-laws, agreement, vote of stockholders
or disinterested directors or otherwise.
21
<PAGE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS (CONTINUED).
12.5 OTHER SOURCES - The corporation's obligation, if any, to
indemnify or to advance expenses to any Indemnitee who was or is
serving at its request as a director, officer, employee or agent
of another corporation, partnership, limited liability company,
joint venture, trust, enterprise or nonprofit entity shall be
reduced by any amount such Indemnitee may collect as
indemnification or advancement of expenses from such other
corporation, partnership, limited liability company, joint
venture, trust, enterprise or non-profit enterprise.
12.6 AMENDMENT OR REPEAL - Any repeal or modification of the
foregoing provisions of sections 12.1-12.5 of these by-laws shall
not adversely affect any right or protection hereunder of any
Indemnitee in respect of any act or omission occurring prior to
the time of such repeal or modification.
12.7 OTHER INDEMNIFICATION AND PREPAYMENT OF EXPENSES -
Sections 12.1-12.6 of these by-laws shall not limit the right of
the corporation, to the extent and in the manner permitted by law,
to indemnify or to advance expenses to persons other than
Indemnitees when and as authorized by appropriate corporate
action.
(b) Section 6.4 of AFC's By-Laws states as follows:
6.4.1 INDEMNIFICATION. RIGHT TO INDEMNIFICATION - The
corporation shall indemnify to the fullest extent possible under
applicable law as it presently exists or may hereafter be amended,
any person (an "Indemnitee") who was or is made or is threatened
to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that he, or
a person for whom he is the legal representative, is or was a
director, officer, employee or agent of the corporation or, while
a director or officer of the corporation, is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation `or of a partnership, limited
liability company, joint venture, trust, enterprise or nonprofit
entity, including service with respect to employee benefit plans,
against all liability and loss suffered and expenses (including
attorneys' fees) reasonably incurred by such Indemnitee.
Notwithstanding the preceding sentence, except as otherwise
provided in section 6.4.3, the corporation shall be required to
indemnify an Indemnitee in connection with a proceeding (or part
thereof) commenced by such Indemnitee only if the commencement of
such proceeding (or part thereof) by the Indemnitee was authorized
by the Board of Directors of the corporation.
6.4.2 PREPAYMENT OF EXPENSES - The corporation shall pay the
expenses (including attorneys' fees) incurred by a current or
former director or officer of the corporation in defending any
proceeding in advance of its final disposition, provided, however,
that, to the extent required by law, such payment of expenses in
advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Indemnitee to repay all
amounts advanced if it should be ultimately determined that the
Indemnitee is not entitled to be indemnified under sections
6.4.1-6.4.7 of these by-laws or otherwise.
6.4.3 CLAIMS - If a claim for indemnification or advancement
of expenses under sections 6.4.1- 6.4.7 of these by-laws is not
paid in full within sixty days after a written claim therefor by
the Indemnitee has been received by the corporation, the
Indemnitee may file suit to recover the unpaid amount of such
claim and, if successful in whole or in part, shall be entitled to
be paid the reasonable expense of prosecuting such claim. In any
such action the corporation shall have the burden of proving that
the Indemnitee is not entitled to the requested indemnification or
advancement of expenses under applicable law.
6.4.4 NONEXCLUSIVITY OF RIGHTS - The rights conferred on any
Indemnitee by sections 6.4.1-6.4.7 of these by-laws shall not be
exclusive of any other rights which such Indemnitee may have or
hereafter acquire under any statute, provision of the certificate
of incorporation, these by-laws, agreement, vote of stockholders
or disinterested directors or otherwise.
22
<PAGE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS (CONTINUED).
6.4.5 OTHER SOURCES - The corporation's obligation, if any,
to indemnify or to advance expenses to any Indemnitee who was or
is serving at its request as a director, officer, employee or
agent of another corporation, partnership, limited liability
company, joint venture, trust, enterprise or nonprofit entity
shall be reduced by any amount such Indemnitee may collect as
indemnification or advancement of expenses from such other
corporation, partnership, limited liability company, joint
venture, trust, enterprise or non-profit enterprise.
6.4.6 AMENDMENT OR REPEAL - Any repeal or modification of the
foregoing provisions of sections 6.4.1-6.4.5 of these by-laws
shall not adversely affect any right or protection hereunder of
any Indemnitee in respect of any act or omission occurring prior
to the time of such repeal or modification.
6.4.7 OTHER IDEMNIFICATION AND PREPAYMENT OF EXPENSES -
Sections 6.4.1-6.4.6 of these by-laws shall not limit the right of
the corporation, to the extent and in the manner permitted by law,
to indemnify or to advance expenses to persons other than
Indemnitees when and as authorized by appropriate corporate
action.
Section 145 of the Delaware General Corporation Law permits a
corporation to indemnify its officers and directors against
liabilities as provided for in the By-Laws of Agway and AFC. Under
the terms of a Directors and Officers Liability and Corporation
Reimbursement Policy purchased by Agway and AFC, each of the
directors and officers of Agway and AFC is insured against loss
arising from any claim or claims which may be made during the
policy period by reason of any wrongful act (as defined in the
policy) in their capacities as directors or officers. In addition,
Agway and AFC are insured against loss arising from any claim or
claims which may be made during the policy period against any
director or officer of Agway and AFC by reason of any wrongful act
(as defined in the policy) in their capacities as directors or
officers, but only when the directors or officers shall have been
entitled to indemnification by Agway and AFC.
23
<PAGE>
ITEM 16. EXHIBITS:
(A) EXHIBITS:
4(a) - The Indenture dated as of October 1, 1974 between
Agway Inc. and First Trust and Deposit Company of
Syracuse, New York, Trustee, including forms of
Subordinated Debentures (Minimum 8% per annum) due
July 1, 1999, and Subordinated Debentures (Minimum
8.5% per annum) due July 1, 1999, filed by
reference to Exhibit 4 of the Registration
Statement (Form S-7), File No. 2-52179 dated
November 21, 1974.
4(b) - The Indenture dated as of September 1, 1976 between
Agway Inc. and First Trust and Deposit Company of
Syracuse, New York, Trustee, including forms of
Subordinated Debentures (Minimum 7% per annum) due
July 1, 2001, and Subordinated Debentures (Minimum
7.5% per annum) due July 1, 2001, filed by
reference to Exhibit 4 of the Registration
Statement (Form S-1), File No. 2-57227, dated
September 21, 1976.
4(c) - The Indenture dated as of September 1, 1978 between
Agway Inc. and First Trust and Deposit Company of
Syracuse, New York, Trustee, including forms of
Subordinated Debentures (Minimum 7.5% per annum)
due July 1, 2003, and Subordinated Debentures
(Minimum 8% per annum) due July 1, 2003, filed by
reference to Exhibit 4 of the Registration
Statement (Form S-1), File No. 2-62549 dated
September 8, 1978.
4(d) - The Indenture dated as of August 25, 1982 between
Agway and Key Bank of Central New York of Syracuse,
New York, Trustee, including forms of Subordinated
Money Market Certificates (Minimum 9% per annum)
due October 31, 1997, and Subordinated Money Market
Certificates (Minimum 9.5% per annum) due October
31, 1997, filed by reference to Exhibit 4 of the
Registration Statement (Form S-1), File No.
2-79047, dated August 27, 1982.
4(e) - The Indenture dated as of September 1, 1985
between Agway and Key Bank of Central New York of
Syracuse, New York, Trustee, including forms of
Subordinated Money Market Certificate (Minimum 7.5%
per annum) due October 31, 2005, and Subordinated
Member Money Market Certificate (Minimum 8% per
annum) due October 31, 2005, filed by reference to
Exhibit 4 of the Registration Statement (Form S-2),
File No. 2-99905, dated August 27, 1985.
4(f) - The Indenture dated as of September 1, 1986
between AFC and Key Bank of Central New York of
Syracuse, New York, Trustee, including forms of
Subordinated Member Money Market Certificate
(Minimum 6% per annum) due October 31, 2006, and
Subordinated Money Market Certificate (Minimum 5.5%
per annum) due October 31, 2006, filed by reference
to Exhibit 4 of the Registration Statement (Form
S-3), File No.
33-8676, dated September 11, 1986.
4(g) - The Supplemental Indenture dated as of October 1,
1986 among AFC, Agway Inc. and Key Bank of Central
New York of Syracuse, New York, Trustee, including
forms of subordinated debt securities filed by
reference to Exhibit 4 or Registration statement on
Form S-3 File No. 33-8676, dated September 11,
1986.
4(h) - The Indenture dated as of August 24, 1987 between
AFC and Key Bank of Central New York of Syracuse,
New York, Trustee, including forms of Subordinated
Member Money Market Certificates (Minimum 7% per
annum) due October 31, 1998, and Subordinated
Member Money Market Certificates (Minimum 6.5% per
annum) due October 31, 2008, and Subordinated Money
Market Certificates (Minimum 6.5% per annum) due
October 31, 1998, and Subordinated Money Market
Certificates (Minimum 6% per annum) due October 31,
2008, filed by reference to Exhibit 4 of
Registration Statement on Form S-3, File No.
33-16734, dated August 31, 1987.
24
<PAGE>
ITEM 16(A) EXHIBITS- (CONTINUED)
4(i) - The Indenture dated as of August 23, 1988 between
AFC and Key Bank of Central New York of Syracuse,
New York, Trustee, including forms of Subordinated
Member Money Market Certificates (Minimum 9.5% per
annum) due October 31, 2000, and Subordinated
Member Money Market Certificates (Minimum 9% per
annum) due October 31, 2008, and Subordinated Money
Market Certificates (Minimum 9% per annum) due
October 31, 2000, and Subordinated Money Market
Certificates (Minimum 8.5% per annum) due October
31, 2008, filed by reference to Exhibit 4 of
Registration Statement on Form S-3, File No.
33-24093, dated August 31, 1988.
4(j) - The Supplemental Indenture dated as of October
14, 1988 among AFC, Agway Inc. and Key Bank of
Central New York, National Association, Trustee,
amending the Indentures dated as of August 23, 1988
and August 24, 1988 filed on October 18, 1988.
4(k) - The Indenture dated as of August 23, 1989, among
AFC, Agway Inc. and Key Bank of Central New York of
Syracuse, New York, Trustee, including forms of
Subordinated Money Market Certificates and
Subordinated Member Money Market Certificates,
filed by reference to Exhibit 4 of Registration
Statement on Form S-3, File No. 33-30808, dated
August 30, 1989.
4(l) - Agway Board of Directors resolutions authorizing
the issuance of Honorary Member Preferred Stock,
Series HM and Membership Common Stock and
authorizing AFC to issue Money Market Certificates
under Indentures dated as of August 23, 1989, filed
herein.
4(m) - AFC Board of Directors resolutions authorizing the
issuance of Money Market Certificates under
indentures dated as of August 23, 1989, filed
herein.
4(n) - The Supplemental Indenture dated as of August 24,
1992 among AFC, Agway Inc. and Key Bank of New
York, Trustee, amending the Indenture dated as of
August 23, 1989 filed by reference to Exhibit 4 of
Registration Statement on Form S-3 File No. 33-
52418, dated September 25, 1992.
4(o) - Agreement of Resignation, Appointment and
Acceptance among KeyCorp, Key Bank of New York, AFC
and Mellon Bank, F.S.B., dated as of September 3,
1996, five agreements, filed herein.
4(p) - Agway Inc. By-laws as amended June 18, 1997,
filed by reference to Exhibit 3 of Annual Report on
Form 10-K, dated August 27, 1997.
5 - Opinions of David M. Hayes, Esq., dated August 27,
1997, filed herein.
12 - Statements regarding computation of ratios, filed
herein.
23 - Consents of experts and counsel, filed herein.
25 - Statements of Eligibility and Qualification of
Trustee on Form T-1, filed herein.
Exhibit numbers 1, 2, 8, 15, 24, 26 through 28 and 99 are
inapplicable and exhibit numbers 3, 6, 7, 9, 10, 11, 13, 14,
and 16 through 22 are not required.
25
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
A. 1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
a. To include any Prospectus required by Section 10(a)
(3) of the Securities Act of 1933;
b. To reflect in the Prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement;
c. To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement, including
(but not limited to) any addition or deletion of a
managing underwriter;
2. That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
B. That, for purposes of determining liability under the
Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be
a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrants pursuant
to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by either of
the registrants of expenses incurred or paid by a director,
officer or controlling person of such registrant in the
successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person
in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the questions whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
26
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of DeWitt, State of New York, on August
29, 1997.
AGWAY INC.
(Registrant)
By /s/ Donald P. Cardarelli
DONALD P. CARDARELLI
PRESIDENT, CEO AND
GENERAL MANAGER
(PRINCIPAL EXECUTIVE OFFICER)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Cardarelli President, CEO and August 29, 1997
(DONALD P. CARDARELLI) General Manager
(Principal Executive Officer)
/s/ Peter J. O'Neill Senior Vice President, August 29, 1997
(PETER J. O'NEILL) Finance & Control,
Treasurer and Controller
(Principal Financial Officer
& Principal Accounting Officer)
/s/ Ralph H. Heffner Chairman of the August 29, 1997
(RALPH H. HEFFNER) Board and Director
/s/ Robert L. Marshman Vice Chairman of the August 29, 1997
(ROBERT L. MARSHMAN) Board and Director
/s/ Kevin B. Barrett Director August 29, 1997
(KEVIN B. BARRETT)
/s/ Keith H. Carlisle Director August 29, 1997
(KEITH H. CARLISLE)
/s/ Vyron M. Chapman Director August 29, 1997
(VYRON M. CHAPMAN)
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ D. Gilbert Couser Director August 29, 1997
(D. GILBERT COUSER)
/s/ Andrew J. Gilbert Director August 29, 1997
(ANDREW J. GILBERT)
/s/ Peter D. Hanks Director August 29, 1997
(PETER D. HANKS)
/s/ Frederick A. Hough Director August 29, 1997
(FREDERICK A. HOUGH)
/s/ Samuel F. Minor Director August 29, 1997
(SAMUEL F. MINOR)
/s/ Carl D. Smith Director August 29, 1997
(CARL D. SMITH)
/s/ Thomas E. Smith Director August 29, 1997
(THOMAS E. SMITH)
/s/ Gary K. Van Slyke Director August 29, 1997
(GARY K. VAN SLYKE)
/s/ Joel L. Wenger Director August 29, 1997
(JOEL L. WENGER)
/s/ Edwin C. Whitehead Director August 29, 1997
(EDWIN C. WHITEHEAD)
/s/ Christian F. Wolff, Jr. Director August 29, 1997
(CHRISTIAN F. WOLFF, JR.)
/s/ William W. Young Director August 29, 1997
(WILLIAM W. YOUNG)
</TABLE>
28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of DeWitt, State of New York, on August
29, 1997.
AGWAY FINANCIAL CORPORATION
(Registrant)
By /s/ Donald P. Cardarelli
DONALD P. CARDARELLI
CHAIRMAN OF THE BOARD, PRESIDENT, AND DIRECTOR
(PRINCIPAL EXECUTIVE OFFICER)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Donald P. Cardarelli Chairman of the Board, August 29, 1997
(DONALD P. CARDARELLI) President and Director
(Principal Executive Officer)
/s/ Peter J. O'Neill Vice President, Treasurer and Director August 29, 1997
(PETER J. O'NEILL) (Principal Financial Officer and
Principal Accounting Officer)
/s/ David M. Hayes Director August 29, 1997
(DAVID M. HAYES)
</TABLE>
29
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER
- --------------
4. Instruments defining the rights of security holders
4(l) Agway Board of Directors resolutions authorizing the issuance
of Honorary Member Preferred Stock, Series HM and Membership
Common Stock and authorizing AFC to issue Money Market
Certificates under Indentures dated as of August 23, 1989.
4(m) AFC Board of Directors resolutions authorizing the issuance of
Money Market Certificates under indentures dated as of August
23, 1989.
4(o) Agreement of Resignation, Appointment and Acceptance among
KeyCorp, Key Bank of New York, AFC and Mellon Bank, F.S.B.,
dated as of September 3, 1996, five agreements.
5. Opinions of David M. Hayes, Esq., dated August 27, 1997
12. Statements regarding computation of ratios
23. Consents of experts and counsel
25. Statement of Eligibility and Qualification of Trustee on Form T-1
EXHIBIT 4
<PAGE>
RESOLUTIONS
-----------
The following resolutions were approved and adopted by the Board
of Directors of AGWAY, INC.:
RESOLVED, That the Company offer for sale to its
members, potential members, other interested parties, and to
the Trustee of the Agway, Inc. Employees Thrift Investment Plan,
the following securities at the prices indicated:
TITLE AMOUNT PRICE
----- ------ -----
Preferred Stock, Series B $100 par value 1,000 $100
shares
Honorary Member Preferred Stock 4,000 $ 25
$25 par value shares
Common Stock $25 par value 4,000 $ 25
shares
pursuant to the By-Laws of the Company through designated
employees, provided that no commission or other remuneration shall
be paid to any person with respect to the sale of such securities;
and be it
FURTHER RESOLVED, That the Company
approves Agway Financial Corporation, a wholly-owned
subsidiary, offering for sale to Agway members, other
interested parties, and to the Trustee of the Agway, Inc.
Employees Thrift Investment Plan, the following securities
at the prices indicated:
Subordinated Money Market Certificates $ 26,000,000 100%
due October 31, 2007 (Minimum 8.25% per
annum; Member; denomination of $5,000)
Subordinated Money Market Certificates $ 10,500,000 100%
due October 31, 2007 (Minimum 7.75% per
annum; General; denomination of $5,000)
Subordinated Money Market Certificates $ 5,250,000 100%
due October 31, 2007 (Minimum 8.00% per
annum; Member; denomination of $100)
Subordinated Money Market Certificates $ 5,250,000 100%
due October 31, 2007 (Minimum 7.50% per
annum; General; denomination of $100)
<PAGE>
Subordinated Money Market Certificates $ 26,225,000 100%
due October 31, 2003 (Minimum 8.50% per
annum; General; denomination of $2,000)
Subordinated Money Market Certificates $ 13,825,000 100%
due October 31, 2001 (Minimum 8.25% per
annum; General; denomination of $2,000)
; and be it
FURTHER RESOLVED, That the Company approves Agway
Financial Corporation, a wholly-owned subsidiary, offering for sale
to Agway members, other interested parties, and to the Trustee of
the Agway, Inc. Employees Thrift Investment Plan, the following
previously offered securities now registered under the reinvestment
option at the prices indicated:
Subordinated Money Market Certificates $ 120,000 100%
due October 31, 2006 (Minimum 8.00% per
annum; Member)
Subordinated Money Market Certificates $ 100,000 100%
due October 31, 2006 (Minimum 7.50% per
annum; General)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2006 (Minimum 7.75% per
annum; Member)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2006 (Minimum 7.25% per
annum; General)
Subordinated Money Market Certificates $ 150,000 100%
due October 31, 2002 (Minimum 8.00% per
annum; General)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2000 (Minimum 7.75% per
annum; General)
Subordinated Money Market Certificates $ 210,000 100%
due October 31, 2006 (Minimum 7.00% per
annum; Member)
Subordinated Money Market Certificates $ 130,000 100%
due October 31, 2006 (Minimum 6.50% per
annum; General)
<PAGE>
Subordinated Money Market Certificates $ 25,000 100%
due October 31, 2006 (Minimum 6.75% per
annum; Member)
Subordinated Money Market Certificates $ 20,000 100%
due October 31, 2006 (Minimum 6.25% per
annum; General)
Subordinated Money Market Certificates $ 350,000 100%
due October 31, 2002 (Minimum 7.50% per
annum; General)
Subordinated Money Market Certificates $ 150,000 100%
due October 31, 2000 (Minimum 7.25% per
annum; General)
Subordinated Money Market Certificates $ 475,000 100%
due October 31, 2003 (Minimum 7.50% per
annum; Member)
Subordinated Money Market Certificates $ 205,000 100%
due October 31, 2003 (Minimum 7.00% per
annum; General)
Subordinated Money Market Certificates $ 50,000 100%
due October 31, 2003 (Minimum 7.25% per
annum; Member)
Subordinated Money Market Certificates $ 55,000 100%
due October 31, 2003 (Minimum 6.75% per
annum; General)
Subordinated Money Market Certificates $ 975,000 100%
due October 31, 1998 (Minimum 8.00% per
annum; General)
Subordinated Money Market Certificates $ 350,000 100%
due October 31, 2001 (Minimum 7.25% per
annum; Member)
Subordinated Money Market Certificates $ 85,000 100%
due October 31, 2001 (Minimum 6.75% per
annum; General)
Subordinated Money Market Certificates $ 80,000 100%
due October 31, 2001 (Minimum 7.0% per
annum; Member)
<PAGE>
Subordinated Money Market Certificates $ 30,000 100%
due October 31, 2001 (Minimum 6.50% per
annum; General)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2001 (Minimum 5.25% per
annum; Member)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 2001 (Minimum 4.75% per
annum; General)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 2001 (Minimum 5.0% per
annum; Member)
Subordinated Money Market Certificates $ 10,000 100%
due October 31, 2001 (Minimum 4.5% per
annum; General)
Subordinated Money Market Certificates $ 375,000 100%
due October 31, 2002 (Minimum 6.0% per
annum; Member)
Subordinated Money Market Certificates $ 125,000 100%
due October 31, 2002 (Minimum 5.5% per
annum; General)
Subordinated Money Market Certificates $ 1,600,000 100%
due October 31, 1999 (Minimum 8.0% per
annum; Member)
Subordinated Money Market Certificates $ 710,000 100%
due October 31, 1999 (Minimum 7.5% per
annum; General)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2002 (Minimum 7.5% per
annum; Member)
Subordinated Money Market Certificates $ 350,000 100%
due October 31, 2002 (Minimum 7.0% per
annum; General)
<PAGE>
Subordinated Money Market Certificates $ 975,000 100%
due October 31, 2001 (Minimum 9.0% per
annum; Member)
Subordinated Money Market Certificates $ 585,000 100%
due October 31, 2001 (Minimum 8.5% per
annum; General)
Subordinated Money Market Certificates $ 675,000 100%
due October 31, 2005 (Minimum 8.5% per
annum; Member)
Subordinated Money Market Certificates $ 1,090,000 100%
due October 31, 2005 (Minimum 8.0% per
annum; General)
Subordinated Money Market Certificates $ 2,150,000 100%
due October 31, 1998 (Minimum 9.0% per
annum; Member)
Subordinated Money Market Certificates $ 385,000 100%
due October 31, 1998 (Minimum 8.5% per
annum; General)
Subordinated Money Market Certificates $ 85,000 100%
due October 31, 2004 (Minimum 8.5% per
annum; Member)
Subordinated Money Market Certificates $ 50,000 100%
due October 31, 2004 (Minimum 8.0% per
annum; General)
Subordinated Money Market Certificates $ 1,700,000 100%
due October 31, 2000 (Minimum 9.5% per
annum; Member)
Subordinated Money Market Certificates $ 1,050,000 100%
due October 31, 2000 (Minimum 9% per
annum; General)
Subordinated Money Market Certificates $ 480,000 100%
due October 31, 2008 (Minimum 9% per
annum; Member)
Subordinated Money Market Certificates $ 125,000 100%
due October 31, 2008 (Minimum 8.5% per
annum; General)
<PAGE>
Subordinated Money Market Certificates $ 50,000 100%
due October 31, 1998 (Minimum 7% per
annum; Member)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 1998 (Minimum 6.5% per
annum; General)
Subordinated Money Market Certificates $ 25,000 100%
due October 31, 2008 (Minimum 6.5% per
annum; Member)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 2008 (Minimum 6% per
annum; General)
Subordinated Money Market Certificates $ 25,000 100%
due October 31, 2006 (Minimum 6% per
annum; Member)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 2006 (Minimum 5.5% per
annum; General)
Subordinated Money Market Certificates $ 375,000 100%
due October 31, 2005 (Minimum 8% per
annum; Member)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2005 (Minimum 7.5% per
annum; General)
; and be it
FURTHER RESOLVED, That the Agway Financial
Corporation Board of Directors is hereby authorized to revise the
minimum interest rate on certificates of any class or series to be
issued. In the event that the minimum interest rate is so revised,
an officer's certificate with a copy of the resolution of the Board
certified by the President or any Vice President and by the
Treasurer, the Secretary or any Assistant Treasurer or Assistant
Secretary shall be delivered to the Trustee under the Indenture for
such certificate. A prospectus supplement may be filed with the
Securities and Exchange Commission and a copy of the resolution may
be filed under Form 8-K; and be it
FURTHER RESOLVED, That the appropriate officers
and employees of the Company with the assistance of its accountants
and attorneys be, and they hereby are, authorized and directed to
prepare, execute and file with the Securities and Exchange
<PAGE>
Commission on behalf of the Company Registration
Statements including any and all documents and exhibits
related thereto for registration under the Securities Act
of 1933 of the Common Stock and Preferred Stock as well as
any and all amendments to said Registration Statements in
such form as the officers executing same on advice of
counsel may deem necessary and appropriate so as to secure
and maintain the effectiveness of said Registration
Statements; and be it
FURTHER RESOLVED, That David M. Hayes,
Esq., Senior Vice President, General Counsel and Secretary
of the Company, Nels G. Magnuson, Esq., Associate General
Counsel and Assistant Secretary of the Company and Theresa
A. Szuba, Esq., Attorney and Assistant Secretary of the
Company, be, and they hereby are, each of them appointed
and designated as persons duly authorized to receive
communications and notices from the Securities and
Exchange Commission with respect to the aforesaid
Registration Statements; and be it
FURTHER RESOLVED, That the Common Stock
and Preferred Stock when issued and sold for cash as
provided here and above shall be fully paid and
nonassessable; and be it
FURTHER RESOLVED, That the President or
any Vice President, the Secretary or any Assistant
Secretary, and the Treasurer of this Company be, and each
of them hereby is, authorized to take, on behalf of and in
the name of this Company, any and all actions, which, in
the judgment of the officer taking the action, is
necessary, useful or appropriate in order to render Common
Stock or Preferred Stock of this Company, to be issued and
sold pursuant to resolutions adopted by this Board at this
meeting, to be eligible for offering and sale within or
from any state of the United States under the securities
regulation laws of such state, and to qualify the Company
as a securities dealer under any such laws, including, but
without limiting the generality of the foregoing, making
or filing applications for any and all licenses, permits,
orders or other approvals or clearances under such laws,
and in that connection, executing and filing any and all
documents, including but without limiting the generality
of the foregoing, consents to service of process and
appointment of agents to accept service of process on
behalf of this Company with respect to any matter as to
which such consent or appointment may be required by such
securities laws and making such agreements, covenants and
undertakings as may be necessary, useful or appropriate,
and all such consents, appointments, agreements, covenants
and undertakings heretofore or hereinafter given or
entered into pursuant to the authority of this resolution
shall be binding upon this Company with the same effect as
though set forth in full herein and expressly authorized
hereby.
<PAGE>
I, Barbara S. Woolard, Assistant Secretary of AGWAY, INC., hereby
certify that the foregoing is a true and complete copy of the resolutions
approved and adopted by the Board of Directors of this Corporation at a meeting
held on the 25th day of July, 1997, at which a quorum was present and more than
a majority of the Directors voted in the affirmative. The foregoing resolutions
have not been amended, modified, rescinded or revoked.
WITNESS my signature and seal of this Corporation this 28th day of
July, 1997.
/s/ BARBARA S. WOOLARD
------------------
Barbara S. Woolard
Assistant Secretary
<PAGE>
CERTIFICATION
-------------
I, Barbara S. Woolard, Secretary of AGWAY FINANCIAL
CORPORATION, do hereby certify that the attached is a true and complete copy of
the resolutions approved and adopted by unanimous written consent of the
Directors of AGWAY FINANCIAL CORPORATION as of the 25th day of July, 1997. The
attached resolutions have not been amended, modified, rescinded or revoked.
WITNESS my signature and the seal of this Corporation
this 28th day of July, 1997.
/s/ BARBARA S. WOOLARD
-------------------
Barbara S. Woolard
Secretary
<PAGE>
UNANIMOUS WRITTEN CONSENT OF THE
BOARD OF DIRECTORS OF AGWAY FINANCIAL CORPORATION
The undersigned, being all of the directors of Agway
Financial Corporation, a Delaware corporation, acting by
written consent without a meeting pursuant to Section
141(f) of the Delaware General Corporation Law do hereby
adopt the following resolutions:
SECURITIES RESOLVED, That the Company approves Agway offering for
REGISTRA- sale to Agway members, other interested parties, and the
TION Trustee of the Agway, Inc. Employees Thrift Investment
1997-98 Plan, the following securities at the prices indicated:
FURTHER RESOLVED, That the Company
approves Agway offering for sale to Agway members, other
interested parties, and to the Trustee of the Agway, Inc.
Employees Thrift Investment Plan, the following securities
at the prices indicated:
Subordinated Money Market Certificates $ 26,000,000 100%
due October 31, 2007 (Minimum 8.25% per
annum; Member; denomination of $5,000)
Subordinated Money Market Certificates $ 10,500,000 100%
due October 31, 2007 (Minimum 7.75% per
annum; General; denomination of $5,000)
Subordinated Money Market Certificates $ 5,250,000 100%
due October 31, 2007 (Minimum 8.00% per
annum; Member; denomination of $100)
Subordinated Money Market Certificates $ 5,250,000 100%
due October 31, 2007 (Minimum 7.50% per
annum; General; denomination of $100)
Subordinated Money Market Certificates $ 26,225,000 100%
due October 31, 2003 (Minimum 8.50% per
annum; General; denomination of $2,000)
Subordinated Money Market Certificates $ 13,825,000 100%
due October 31, 2001 (Minimum 8.25% per
annum; General; denomination of $2,000)
; and be it
<PAGE>
REINVEST- FURTHER RESOLVED, That the Company approves Agway
MENT offering for sale to Agway members, other interested parties,
OPTION and to the Trustee of the Agway, Inc. Employees Thrift
Investment Plan, the following previously offered
securities now registered under the reinvestment option at
the prices indicated:
Subordinated Money Market Certificates $ 120,000 100%
due October 31, 2006 (Minimum 8.00% per
annum; Member)
Subordinated Money Market Certificates $ 100,000 100%
due October 31, 2006 (Minimum 7.50% per
annum; General)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2006 (Minimum 7.75% per
annum; Member)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2006 (Minimum 7.25% per
annum; General)
Subordinated Money Market Certificates $ 150,000 100%
due October 31, 2002 (Minimum 8.00% per
annum; General)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2000 (Minimum 7.75% per
annum; General)
Subordinated Money Market Certificates $ 210,000 100%
due October 31, 2006 (Minimum 7.00% per
annum; Member)
Subordinated Money Market Certificates $ 130,000 100%
due October 31, 2006 (Minimum 6.50% per
annum; General)
Subordinated Money Market Certificates $ 25,000 100%
due October 31, 2006 (Minimum 6.75% per
annum; Member)
Subordinated Money Market Certificates $ 20,000 100%
due October 31, 2006 (Minimum 6.25% per
annum; General)
Subordinated Money Market Certificates $ 350,000 100%
due October 31, 2002 (Minimum 7.50% per
annum; General)
<PAGE>
Subordinated Money Market Certificates $ 150,000 100%
due October 31, 2000 (Minimum 7.25% per
annum; General)
Subordinated Money Market Certificates $ 475,000 100%
due October 31, 2003 (Minimum 7.50% per
annum; Member)
Subordinated Money Market Certificates $ 205,000 100%
due October 31, 2003 (Minimum 7.00% per
annum; General)
Subordinated Money Market Certificates $ 50,000 100%
due October 31, 2003 (Minimum 7.25% per
annum; Member)
Subordinated Money Market Certificates $ 55,000 100%
due October 31, 2003 (Minimum 6.75% per
annum; General)
Subordinated Money Market Certificates $ 975,000 100%
due October 31, 1998 (Minimum 8.00% per
annum; General)
Subordinated Money Market Certificates $ 350,000 100%
due October 31, 2001 (Minimum 7.25% per
annum; Member)
Subordinated Money Market Certificates $ 85,000 100%
due October 31, 2001 (Minimum 6.75% per
annum; General)
Subordinated Money Market Certificates $ 80,000 100%
due October 31, 2001 (Minimum 7.0% per
annum; Member)
Subordinated Money Market Certificates $ 30,000 100%
due October 31, 2001 (Minimum 6.50% per
annum; General)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2001 (Minimum 5.25% per
annum; Member)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 2001 (Minimum 4.75% per
annum; General)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 2001 (Minimum 5.0% per
annum; Member)
<PAGE>
Subordinated Money Market Certificates $ 10,000 100%
due October 31, 2001 (Minimum 4.5% per
annum; General)
Subordinated Money Market Certificates $ 375,000 100%
due October 31, 2002 (Minimum 6.0% per
annum; Member)
Subordinated Money Market Certificates $ 125,000 100%
due October 31, 2002 (Minimum 5.5% per
annum; General)
Subordinated Money Market Certificates $ 1,600,000 100%
due October 31, 1999 (Minimum 8.0% per
annum; Member)
Subordinated Money Market Certificates $ 710,000 100%
due October 31, 1999 (Minimum 7.5% per
annum; General)
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2002 (Minimum 7.5% per
annum; Member)
Subordinated Money Market Certificates $ 350,000 100%
due October 31, 2002 (Minimum 7.0% per
annum; General)
Subordinated Money Market Certificates $ 975,000 100%
due October 31, 2001 (Minimum 9.0% per
annum; Member)
Subordinated Money Market Certificates $ 585,000 100%
due October 31, 2001 (Minimum 8.5% per
annum; General)
Subordinated Money Market Certificates $ 675,000 100%
due October 31, 2005 (Minimum 8.5% per
annum; Member)
Subordinated Money Market Certificates $ 1,090,000 100%
due October 31, 2005 (Minimum 8.0% per
annum; General)
Subordinated Money Market Certificates $ 2,150,000 100%
due October 31, 1998 (Minimum 9.0% per
annum; Member)
Subordinated Money Market Certificates $ 385,000 100%
due October 31, 1998 (Minimum 8.5% per
annum; General)
<PAGE>
Subordinated Money Market Certificates $ 85,000 100%
due October 31, 2004 (Minimum 8.5% per
annum; Member)
Subordinated Money Market Certificates $ 50,000 100%
due October 31, 2004 (Minimum 8.0% per
annum; General)
Subordinated Money Market Certificates $ 1,700,000 100%
due October 31, 2000 (Minimum 9.5% per
annum; Member)
Subordinated Money Market Certificates $ 1,050,000 100%
due October 31, 2000 (Minimum 9% per
annum; General)
Subordinated Money Market Certificates $ 480,000 100%
due October 31, 2008 (Minimum 9% per
annum; Member)
Subordinated Money Market Certificates $ 125,000 100%
due October 31, 2008 (Minimum 8.5% per
annum; General)
Subordinated Money Market Certificates $ 50,000 100%
due October 31, 1998 (Minimum 7% per
annum; Member)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 1998 (Minimum 6.5% per
annum; General)
Subordinated Money Market Certificates $ 25,000 100%
due October 31, 2008 (Minimum 6.5% per
annum; Member)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 2008 (Minimum 6% per
annum; General)
Subordinated Money Market Certificates $ 25,000 100%
due October 31, 2006 (Minimum 6% per
annum; Member)
Subordinated Money Market Certificates $ 15,000 100%
due October 31, 2006 (Minimum 5.5% per
annum; General)
Subordinated Money Market Certificates $ 375,000 100%
due October 31, 2005 (Minimum 8% per
annum; Member)
<PAGE>
Subordinated Money Market Certificates $ 75,000 100%
due October 31, 2005 (Minimum 7.5% per
annum; General)
through designated persons, provided that no commission or
other remuneration shall be paid to any person with
respect to the sale of such securities; and be it
FURTHER RESOLVED, That the Board of
Directors of this Corporation is hereby authorized to
revise the minimum interest rate on certificates of any
class or series to be issued. In the event that the
minimum interest rate is so revised, an officer's
certificate with a copy of the resolution of the Board
certified by the President or any Vice President and by
the Treasurer, the Secretary or any Assistant Treasurer or
Assistant Secretary shall be delivered to the Trustee
under the Indenture for such certificate. A prospectus
supplement may be filed with the Securities and Exchange
Commission and a copy of the resolution may be filed under
Form 8-K; and be it
FURTHER RESOLVED, That the appropriate
officers and employees of the Company with the assistance
of its accountants and attorneys be, and they hereby are,
authorized and directed to prepare, execute and file with
the Securities and Exchange Commission on behalf of the
Company Registration Statements including any and all
documents and exhibits related thereto for registration
under the Securities Act of 1933 of the Common Stock and
Preferred Stock as well as any and all amendments to said
Registration Statements in such form as the officers
executing same on advice of counsel may deem necessary and
appropriate so as to secure and maintain the effectiveness
of said Registration Statements; and be it
FURTHER RESOLVED, That David M. Hayes,
Esq., General Counsel of the Company and Nels G. Magnuson,
Esq., Associate General Counsel and Assistant Secretary of
the Company and Theresa A. Szuba, Attorney and Assistant
Secretary of the Company be, and they hereby are, each of
them appointed and designated as persons duly authorized
to receive communications and notices from the Securities
and Exchange Commission with respect to the aforesaid
Registration Statements; and be it
FURTHER RESOLVED, That the Subordinated
Money Market Certificates, the sale of which has been
authorized here and above, shall be issued and sold
pursuant to and subject to the Trust Indenture dated as of
March 27, 1981, and Amendments thereto dated as of August
25, 1982 and the Trust Indentures dated as of September 1,
1985, September 1, 1986, August 24, 1987, August 23, 1988,
and August 23, 1989 with the Key Bank of New York, N.A.,
Albany, New York, as Trustee, and that said
<PAGE>
certificates when issued and sold for cash or sold
pursuant to the interest reinvestment program as provided
here and above shall be binding obligations of the
Company; and be it
FURTHER RESOLVED, That the President or
any Vice President, the Secretary or any Assistant
Secretary, and the Treasurer of this Company be, and each
of them hereby is, authorized to take, on behalf of and in
the name of this Company, any and all actions, which, in
the judgment of the officer taking the action, is
necessary, useful or appropriate in order to render the
Securities of this Company, to be issued and sold pursuant
to resolutions adopted by this Board, to be eligible for
offering and sale within or from any state of the United
States under the securities regulation laws of such state,
and to qualify the Company as a securities dealer under
any such laws, including, but without limiting the
generality of the foregoing, making or filing applications
for any and all licenses, permits, orders or other
approvals or clearances under such laws, and in that
connection, executing and filing any and all documents,
including but without limiting the generality of the
foregoing, consents to service of process and appointment
of agents to accept service of process on behalf of this
Company with respect to any matter as to which such
consent or appointment may be required by such securities
laws and making such agreements, covenants and
undertakings as may be necessary, useful or appropriate,
and all such consents, appointments, agreements, covenants
and undertakings heretofore or hereinafter given or
entered into pursuant to the authority of this resolution
shall be binding upon this Company with the same effect as
though set forth in full herein and expressly authorized
hereby.
Dated as of: July 25, 1997
/s/ DONALD P CARDARELLI
------------------------
Donald P. Cardarelli
/s/ DAVID M. HAYES
------------------------
David M. Hayes
/s/ PETER J. O'NEILL
-------------------------
Peter J. O'Neill
<PAGE>
AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
----------------------------------------------------
THIS AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE (this
"Agreement") dated as of September 3, 1996, by and among KeyCorp, an Ohio
Corporation ("KeyCorp"), Key Bank of New York a state chartered banking
corporation, successor to Key Bank of Central New York ("Resigning Trustee"),
Agway Financial Corporation, as successor to Agway, Inc. (the "Guarantor") under
Supplemental Indenture dated as of October 1, 1986, (the "Company"), and Mellon
Bank, F.S.B. a federal savings bank organized under the laws of the United
States of America ("Successor").
WHEREAS, Resigning Trustee and the Company entered into an Indenture
dated as of October 1, 1974, (the "Indenture"), pursuant to which the 8 1/2 %
Subordinated Debentures due July 1, 1999 and the 8% Subordinated Debentures due
July 1, 1999 (the "Securities") were issued; and
WHEREAS, Resigning Trustee has been acting as Trustee under the
Indenture; and
WHEREAS, the Indenture provides that the Trustee may resign and a
successor trustee be appointed; and
WHEREAS, Resigning Trustee desires to resign as Trustee and the Company
desires to appoint Successor as successor trustee under the Indenture, and
Successor desires to serve as successor trustee subject to the terms and
conditions of the Indenture and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
ARTICLE I
RESIGNATION
SECTION 1.01. RESIGNATION OF RESIGNING TRUSTEE. Resigning Trustee
hereby resigns as Trustee under the Indenture, effective immediately prior to
the opening of business on the Effective Date (as hereinafter defined).
<PAGE>
ARTICLE II
APPOINTMENT OF SUCCESSOR TRUSTEE
SECTION 2.01. APPOINTMENT. The Company hereby appoints Successor to
serve as successor Trustee with all the authority, rights and powers which are
vested in, and all duties and obligations which are binding on, the Trustee
under the Indenture, effective as of the opening of business on the first
Business Day following the date of execution by the last party to execute this
Agreement (the "Effective Date"). As used herein, Business Day means a day on
which banks in the city of Pittsburgh, Pennsylvania, or in the city where the
principal corporate trust office of the Successor is located, are not required
or authorized to remain closed and on which the New York Stock Exchange is not
closed.
SECTION 2.02. ACCEPTANCE. Successor hereby accepts the appointment by
the Company and agrees to serve as successor Trustee under the Indenture and to
perform the duties and obligations of the Trustee under the Indenture, effective
as of the opening of business on the Effective Date.
SECTION 2.03. VESTING OF RIGHTS, POWERS AND DUTIES. In accordance with
the provisions of the Indenture, all rights, powers and duties of the Trustee
under the Indenture shall be vested in and undertaken by Successor, effective as
of the opening of business on the Effective Date.
SECTION 2.04. NOTICE TO SECURITYHOLDERS. The Company agrees to provide
notice of the resignation of Resigning Trustee and the appointment of Successor
in accordance with the terms of Section 8.11 of the Indenture.
SECTION 2.05. ASSIGNMENT OF POWERS AND PROPERTY. Resigning Trustee
hereby confirms and assigns to Successor, in trust under the Indenture, all
property, rights, powers, duties, trusts, immunities and obligations of
Resigning Trustee as Trustee. Resigning Trustee confirms that it has transferred
to Successor in its capacity as Servicer (a) all moneys, securities and other
assets held under the Indenture and (b) all documents relating to the trust
created by the Indenture and all other information in its possession relating to
the administration and status thereof pursuant to the terms of the Purchase
Agreement (as hereinafter defined) and the Services Agreement dated October 18,
1995, as amended, by and among Mellon Bank Corporation and KeyCorp.
SECTION 2.06. FURTHER ASSURANCES. Resigning Trustee hereby agrees, upon
reasonable request of Successor, to execute, acknowledge and deliver such
further instruments of transfer and further assurances and to do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in Successor all the property, rights, powers, duties, trusts,
immunities and obligations of Resigning Trustee as Trustee under the Indenture.
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Successor as follows:
(a) The Company is a corporation duly organized and existing under
the laws of the State of Delaware;
(b) The Indenture as supplemented was validly and lawfully
executed and delivered by the Company and the Securities were validly and
lawfully issued by the Company;
(c) The Company has performed or fulfilled each covenant,
agreement and condition on its part to be performed or fulfilled under the
Indenture on or prior to the date hereof; and
(d) No default or Event of Default of which the Company has
notices or is required to take notice has occurred and is continuing;
(e) All payments of principal, premium, if any, and interest on
the Securities due and payable prior to the Effective Date have been made as
required in the Indenture; and
(f) The outstanding principal balance of the 8 1/2 % Subordinated
Debentures due July 1, 1999 is $ 8,831,700.00 as of June 30, 1996 and interest
thereon has been paid through and including July 1, 1996. The outstanding
principal balance of the 8% Subordinated Debentures due July 1, 1999 is
$4,076,700.00 as of June 30, 1996 and interest thereon has been paid through
and including July 1, 1996.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF RESIGNING TRUSTEE.
Resigning Trustee hereby represents and warrants to Successor as follows:
(a) Resigning Trustee is a banking corporation organized and
existing under the laws of the state of New York;
(b) To the best knowledge of Resigning Trustee and without further
verification, the Indenture is in full force and effect and since the date of
the Purchase Agreement dated as of October 18, 1995 between KeyCorp and Mellon
Bank Corporation, as amended (the "Purchase Agreement"), has not been amended or
further supplemented;
<PAGE>
(c) Since the date of the Purchase Agreement, Resigning Trustee has
received no notice of any default or Event of Default under the terms of the
Indenture. Any default or Event of Default occurring prior to such date and
continuing as of the date of the Purchase Agreement is referenced on Schedule
5.05(b) to the Purchase Agreement;
(d) To the best knowledge of Resigning Trustee and without further
verification, except as disclosed on Schedules 3.07 and 5.05(b) to the Purchase
Agreement, there is no suit, action, claim or proceeding pending or threatened
against Resigning Trustee related to the Securities, the Indenture, or Resigning
Trustee's administration of the trusts created under the Indenture.
Other than as expressly set forth above, the Resigning Trustee makes no
representations or warranty regarding the financial condition of the Company or
the Guarantor or their ability to fulfill their obligations under the Indenture.
The Successor hereby acknowledges that Successor has been the Servicer
of the accounts that are the subject of the Indenture under a Services Agreement
dated as of October 18, 1995, by and among Mellon Bank Corporation and KeyCorp,
as amended (the "Services Agreement") and that, in that capacity, the Successor
has no notice of any event or circumstance that has not been previously conveyed
to the Resigning Trustee in writing that would make the representations made by
the Resigning Trustee in (b) through (d) above, untrue.
SECTION 3.03. REPRESENTATIONS OF SUCCESSOR. Successor hereby represents
and warrants to Resigning Trustee and the Company as follows:
(a) Successor is a federal savings bank organized and existing
under the laws of the United States of America; and
(b) Successor is qualified and eligible to serve as Trustee under
the Indenture.
ARTICLE IV
INDEMNIFICATION
SECTION 4.01. RIGHTS OF INDEMNIFICATION. KeyCorp acknowledges and
affirms that Successor is entitled to all such rights and remedies, including
any rights of indemnification, as may be available to Successor as a "Buyer"
under (a) the Purchase Agreement and (b) the Services Agreement, the terms of
which are incorporated herein by reference.
<PAGE>
ARTICLE V
MISCELLANEOUS
SECTION 5.01. DEFINITIONS. Terms not otherwise defined in this
Agreement shall have the respective meanings assigned in the Indenture.
SECTION 5.02. COUNTERPARTS. This Agreement may be executed in a number
of counterparts,each of which shall constitute an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 5.03. PRESERVATION OF RIGHTS. Except as expressly provided
herein, nothing contained in this Agreement shall in any way affect (a) the
obligations or rights of the Company, the Resigning Trustee, the Successor or
any Securityholder under the Indenture or (b) the obligations or rights of the
Resigning Trustee and Successor under the Purchase Agreement or the Services
Agreement.
SECTION 5.04. SEVERABILITY. In the event any provisions of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
SECTION 5.05. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of KeyCorp, Resigning Trustee, Successor, and the
Company and their respective successors and assigns.
Intending to be legally bound, the parties hereto have executed this
Agreement by their duly authorized corporate officers as of the date first above
written.
<PAGE>
ADDRESS FOR NOTICES:
RESIGNING TRUSTEE:
KEY BANK OF NEW YORK KEY BANK OF NEW YORK
c/o KeyBank National Association
Law Group /s/ EDWARD TOGNETTI
17th Floor --------------------
127 Public Square By: Edward Tognetti
Cleveland, OH 44114 Title: Authorized Officer
Attn: Edward Tognetti Date: September 3, 1996
ADDRESS FOR NOTICES:
KEYCORP:
KEYCORP KEYCORP
127 Public Square
Cleveland, Ohion 44114 /s/ DANIEL STOLZER
Attn: Daniel Stolzer --------------------
By: Daniel Stolzer
Title: Authorized Officer
Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
SUCCESSOR:
MELLON BANK, F.S.B. MELLON BANK, F.S.B.
80 State Street /s/ STEPHEN GORZYNSKI
6th Floor ---------------------
Albany, NY 12207 By: Stephen Gorzynski
Attn: Stephen Gorzynski Title: Vice-President
Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
THE COMPANY:
AGWAY FINANCIAL CORPORATION AGWAY FINANCIAL CORPORATION
Suite 780
Wilmington Trust Center /s/ PETER J. O'NEILL
1100 North Market Street --------------------
Wilmington, DE 19801 By: Peter J. O'Neill
Title: Vice-President
Date: September 3, 1996
ACKNOWLEDGED BY:
THE GUARANTOR:
AGWAY, INC. AGWAY, INC.
/s/ PETER J. O'NEILL
----------------------
By: Peter J. O'Neill
Title: Senior Vice President
Date: September 3, 1996
<PAGE>
AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
----------------------------------------------------
THIS AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE (this
"Agreement") dated as of September 3, 1996, by and among KeyCorp, an Ohio
Corporation ("KeyCorp"), Key Bank of New York a state chartered banking
corporation, successor to Key Bank of Central New York ("Resigning Trustee"),
Agway Financial Corporation, as successor to Agway, Inc. (the "Guarantor") under
Supplemental Indenture dated as of October 1, 1986, (the "Company"), and Mellon
Bank, F.S.B. a federal savings bank organized under the laws of the United
States of America ("Successor").
WHEREAS, Resigning Trustee and the Company entered into an Indenture
dated as of August 25, 1982, (the "Indenture"), pursuant to which the
Subordinated Money market Certificates (Minimum 9% per annum) due October 31,
1997 and the Subordinated Member Money Market Certificates (Minimum 9 1/2% per
annum) due October 31, 1997 (the "Securities") were issued; and
WHEREAS, Resigning Trustee has been acting as Trustee under the
Indenture; and
WHEREAS, the Indenture provides that the Trustee may resign and a
successor trustee be appointed; and
WHEREAS, Resigning Trustee desires to resign as Trustee and the Company
desires to appoint Successor as successor trustee under the Indenture, and
Successor desires to serve as successor trustee subject to the terms and
conditions of the Indenture and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
ARTICLE I
RESIGNATION
SECTION 1.01. RESIGNATION OF RESIGNING TRUSTEE. Resigning Trustee
hereby resigns as Trustee under the Indenture, effective immediately prior to
the opening of business on the Effective Date (as hereinafter defined).
<PAGE>
ARTICLE II
APPOINTMENT OF SUCCESSOR TRUSTEE
SECTION 2.01. APPOINTMENT. The Company hereby appoints Successor to
serve as successor Trustee with all the authority, rights and powers which are
vested in, and all duties and obligations which are binding on, the Trustee
under the Indenture, effective as of the opening of business on the first
Business Day following the date of execution by the last party to execute this
Agreement (the "Effective Date"). As used herein, Business Day means a day on
which banks in the city of Pittsburgh, Pennsylvania, or in the city where the
principal corporate trust office of the Successor is located, are not required
or authorized to remain closed and on which the New York Stock Exchange is not
closed.
SECTION 2.02. ACCEPTANCE. Successor hereby accepts the appointment by
the Company and agrees to serve as successor Trustee under the Indenture and to
perform the duties and obligations of the Trustee under the Indenture,effective
as of the opening of business on the Effective Date.
SECTION 2.03. VESTING OF RIGHTS, POWERS AND DUTIES. In accordance
with the provisions of the Indenture, all rights, powers and duties of the
Trustee under the Indenture shall be vested in and undertaken by Successor,
effective as of the opening of business on the Effective Date.
SECTION 2.04. NOTICE TO SECURITYHOLDERS. The Company agrees to provide
notice of the resignation of Resigning Trustee and the appointment of Successor
in accordance with the terms of Section 8.11 of the Indenture.
SECTION 2.05. ASSIGNMENT OF POWERS AND PROPERTY. Resigning Trustee
hereby confirms and assigns to Successor, in trust under the Indenture, all
property, rights, powers, duties, trusts, immunities and obligations of
Resigning Trustee as Trustee. Resigning Trustee confirms that it has transferred
to Successor in its capacity as Servicer (a) all moneys, securities and other
assets held under the Indenture and (b) all documents relating to the trust
created by the Indenture and all other information in its possession relating to
the administration and status thereof pursuant to the terms of the Purchase
Agreement (as hereinafter defined) and the Services Agreement dated October 18,
1995, as amended, by and among Mellon Bank Corporation and KeyCorp.
SECTION 2.06. FURTHER ASSURANCES. Resigning Trustee hereby agrees, upon
reasonable request of Successor, to execute, acknowledge and deliver such
further instruments of transfer and further assurances and to do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in Successor all the property, rights, powers, duties, trusts,
immunities and obligations of Resigning Trustee as Trustee under the Indenture.
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Successor as follows:
(a) The Company is a corporation duly organized and existing under
the laws of the State of Delaware;
(b) The Indenture as supplemented was validly and lawfully executed
and delivered by the Company and the Securities were validly and lawfully issued
by the Company;
(c) The Company has performed or fulfilled each covenant, agreement
and condition on its part to be performed or fulfilled under the Indenture on or
prior to the date hereof; and
(d) No default or Event of Default of which the Company has notices
or is required to take notice has occurred and is continuing;
(e) All payments of principal, premium, if any, and interest on the
Securities due and payable prior to the Effective Date have been made as
required in the Indenture; and
(f) The outstanding principal balance of the Subordinated Money
Market Certificates (Minimum 9% per annum) due October 31, 1997 is $4,301,204.16
as of June 30, 1996 and interest thereon has been paid through and including
July 1, 1996. The outstanding principal balance of the Subordinated Money
Market Certificates (Minimum 9 1/2% per annum) due October 31, 1997 is
$18,407,723.31 as of June 30,1996 and interest thereon has been paid through and
including July 1, 1996.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF RESIGNING TRUSTEE.
Resigning Trustee hereby represents and warrants to Successor as follows:
(a) Resigning Trustee is a banking corporation organized and
existing under the laws of the state of New York;
(b) To the best knowledge of Resigning Trustee and without
further verification, the Indenture is in full force and effect and since the
date of the Purchase Agreement dated as of October 18, 1995 between KeyCorp
and Mellon Bank Corporation, as amended (the "Purchase Agreement"), has not been
amended or further supplemented;
<PAGE>
(c) Since the date of the Purchase Agreement, Resigning Trustee
has received no notice of any default or Event of Default under the terms of the
Indenture. Any default or Event of Default occurring prior to such date and
continuing as of the date of the Purchase Agreement is referenced on Schedule
5.05(b) to the Purchase Agreement;
(d) To the best knowledge of Resigning Trustee and without
further verification, except as disclosed on Schedules 3.07 and 5.05(b) to the
Purchase Agreement, there is no suit, action, claim or proceeding pending or
threatened against Resigning Trustee related to the Securities, the Indenture,
or Resigning Trustee's administration of the trusts created under the Indenture.
Other than as expressly set forth above, the Resigning Trustee makes no
representations or warranty regarding the financial condition of the Company or
the Guarantor or their ability to fulfill their obligations under the Indenture.
The Successor hereby acknowledges that Successor has been the Servicer
of the accounts that are the subject of the Indenture under a Services Agreement
dated as of October 18, 1995, by and among Mellon Bank Corporation and KeyCorp,
as amended (the "Services Agreement") and that, in that capacity, the Successor
has no notice of any event or circumstance that has not been previously conveyed
to the Resigning Trustee in writing that would make the representations made by
the Resigning Trustee in (b) through (d) above, untrue.
SECTION 3.03. REPRESENTATIONS OF SUCCESSOR. Successor hereby
represents and warrants to Resigning Trustee and the Company as follows:
(a) Successor is a federal savings bank organized and existing
under the laws of the United States of America; and
(b) Successor is qualified and eligible to serve as Trustee under
the Indenture.
ARTICLE IV
INDEMNIFICATION
SECTION 4.01. RIGHTS OF INDEMNIFICATION. KeyCorp acknowledges and
affirms that Successor is entitled to all such rights and remedies, including
any rights of indemnification, as may be available to Successor as a "Buyer"
under (a) the Purchase Agreement and (b) the Services Agreement, the terms of
which are incorporated herein by reference.
<PAGE>
ARTICLE V
MISCELLANEOUS
SECTION 5.01. DEFINITIONS. Terms not otherwise defined in this
Agreement shall have the respective meanings assigned in the Indenture.
SECTION 5.02. COUNTERPARTS. This Agreement may be executed in a number
of counterparts, each of which shall constitute an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 5.03. PRESERVATION OF RIGHTS. Except as expressly provided
herein, nothing contained in this Agreement shall in any way affect (a) the
obligations or rights of the Company, the Resigning Trustee, the Successor or
any Securityholder under the Indenture or (b) the obligations or rights of the
Resigning Trustee and Successor under the Purchase Agreement or the Services
Agreement.
SECTION 5.04. SEVERABILITY. In the event any provisions of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction,such holding shall not invalidate or render unenforceable any other
provision hereof.
SECTION 5.05. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of KeyCorp, Resigning Trustee, Successor, and the
Company and their respective successors and assigns.
Intending to be legally bound, the parties hereto have executed this
Agreement by their duly authorized corporate officers as of the date first above
written.
<PAGE>
ADDRESS FOR NOTICES:
RESIGNING TRUSTEE:
KEY BANK OF NEW YORK KEY BANK OF NEW YORK
c/o KeyBank National Association
Law Group /s/ EDWARD TOGNETTI
17th Floor -------------------
127 Public Square
Cleveland, OH 44114 By: Edward Tognetti
Attn: Edward Tognetti Title :Authorized Officer
Date: September 3, 1996
ADDRESS FOR NOTICES:
KEYCORP:
KEYCORP
KEYCORP /s/ DANIEL STOLZER
127 Public Square ------------------
Cleveland, Ohio 44114 By: Daniel Stolzer
Attn: Daniel Stolzer Title: Authorized Office
Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
SUCCESSOR:
MELLON BANK, F.S.B. MELLON BANK, F.S.B.
Corporate Trust Group
80 State Street /s/ STEPHEN GORZYNSKI
6th Floor ---------------------
Albany, NY 12207 By: Stephen Gorzynski
Attn: Stephen Gorzynski Title: Vice-President
Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
THE COMPANY:
AGWAY FINANCIAL CORPORATION AGWAY FINANCIAL CORPORATION
Suite 780
Wilmington Trust Center /s/ PETER J. O'NEILL
1100 North Market Street --------------------
Wilmington, DE 19801 By: Peter J. O'Neill
Title: Vice-President
Date: September 3, 1996
ACKNOWLEDGED BY:
THE GUARANTOR:
AGWAY, INC. AGWAY, INC.
/s/ PETER J. O'NEILL
---------------------
By: Peter J. O'Neill
Title: Senior Vice President
Date: September 3, 1996
<PAGE>
AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
----------------------------------------------------
THIS AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE (this
"Agreement") dated as of September 3, 1996, by and among KeyCorp, an Ohio
Corporation ("KeyCorp"), Key Bank of New York a state chartered banking
corporation, successor to Key Bank of Central New York ("Resigning Trustee"),
Agway Financial Corporation, as successor to Agway, Inc. (the "Guarantor") under
Supplemental Indenture dated as of October 1, 1986, (the "Company"), and Mellon
Bank, F.S.B. a federal savings bank organized under the laws of the United
States of America ("Successor").
WHEREAS, Resigning Trustee and the Company entered into an Indenture
dated as of September 1, 1985, (the "Indenture"), pursuant to which the
Subordinated Money Market Certificates (Minimum 7 1/2% per annum) due October
31, 2005 and the Subordinated Member Money Market Certificates (Minimum 8% per
annum) due October 31, 2005 (the "Securities") were issued; and
WHEREAS, Resigning Trustee has been acting as Trustee under the
Indenture; and
WHEREAS, the Indenture provides that the Trustee may resign and a
successor trustee be appointed; and
WHEREAS, Resigning Trustee desires to resign as Trustee and the Company
desires to appoint Successor as successor trustee under the Indenture, and
Successor desires to serve as successor trustee subject to the terms and
conditions of the Indenture and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
ARTICLE I
RESIGNATION
SECTION 1.01. RESIGNATION OF RESIGNING TRUSTEE. Resigning Trustee
hereby resigns as Trustee under the Indenture, effective immediately prior to
the opening of business on the Effective Date (as hereinafter defined).
<PAGE>
ARTICLE II
APPOINTMENT OF SUCCESSOR TRUSTEE
SECTION 2.01. APPOINTMENT. The Company hereby appoints Successor to
serve as successor Trustee with all the authority, rights and powers which are
vested in, and all duties and obligations which are binding on, the Trustee
under the Indenture, effective as of the opening of business on the first
Business Day following the date of execution by the last party to execute this
Agreement (the "Effective Date"). As used herein, Business Day means a day on
which banks in the city of Pittsburgh, Pennsylvania, or in the city where the
principal corporate trust office of the Successor is located, are not required
or authorized to remain closed and on which the New York Stock Exchange is not
closed.
SECTION 2.02. ACCEPTANCE. Successor hereby accepts the appointment by
the Company and agrees to serve as successor Trustee under the Indenture and to
perform the duties and obligations of the Trustee under the Indenture, effective
as of the opening of business on the Effective Date.
SECTION 2.03. VESTING OF RIGHTS, POWERS AND DUTIES. In accordance with
the provisions of the Indenture, all rights, powers and duties of the Trustee
under the Indenture shall be vested in and undertaken by Successor, effective as
of the opening of business on the Effective Date.
SECTION 2.04. NOTICE TO SECURITYHOLDERS. The Company agrees to provide
notice of the resignation of Resigning Trustee and the appointment of Successor
in accordance with the terms of Section 8.11 of the Indenture.
SECTION 2.05. ASSIGNMENT OF POWERS AND PROPERTY. Resigning Trustee
hereby confirms and assigns to Successor, in trust under the Indenture, all
property, rights, powers, duties, trusts, immunities and obligations of
Resigning Trustee as Trustee. Resigning Trustee confirms that it has transferred
to Successor in its capacity as Servicer (a) all moneys, securities and other
assets held under the Indenture and (b) all documents relating to the trust
created by the Indenture and all other information in its possession relating to
the administration and status thereof pursuant to the terms of the Purchase
Agreement (as hereinafter defined) and the Services Agreement dated October 18,
1995, as amended, by and among Mellon Bank Corporation and KeyCorp.
SECTION 2.06. FURTHER ASSURANCES. Resigning Trustee hereby agrees, upon
reasonable request of Successor, to execute, acknowledge and deliver such
further instruments of transfer and further assurances and to do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in Successor all the property, rights, powers, duties, trusts,
immunities and obligations of Resigning Trustee as Trustee under the Indenture.
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Successor as follows:
(a) The Company is a corporation duly organized and existing under
the laws of the State of Delaware;
(b) The Indenture as supplemented was validly and lawfully executed
and delivered by the Company and the Securities were validly and lawfully issued
by the Company;
(c) The Company has performed or fulfilled each covenant, agreement
and condition on its part to be performed or fulfilled under the Indenture on or
prior to the date hereof; and
(d) No default or Event of Default of which the Company has notices
or is required to take notice has occurred and is continuing;
(e) All payments of principal, premium, if any, and interest on the
Securities due and payable prior to the Effective Date have been made as
required in the Indenture; and
(f) The outstanding principal balance of the Subordinated Money
Market Certificates (Minimum 7 1/2% per annum) due October 31, 2005 is
$1,344,969.22 as of June 30, 1996 and interest thereon has been paid through and
including July 1, 1996. The outstanding principal balance of the Subordinated
Money Market Certificates (8% per annum) due October 31, 2005 is $7,778,423.11
as of June 30,1996 and interest thereon has been paid through and including
July 1, 1996.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF RESIGNING TRUSTEE.
Resigning Trustee hereby represents and warrants to Successor as follows:
(a) Resigning Trustee is a banking corporation organized and
existing under the laws of the state of New York;
(b) To the best knowledge of Resigning Trustee and without
further verification, the Indenture is in full force and effect and since the
date of the Purchase Agreement dated as of October 18, 1995 between KeyCorp and
Mellon Bank Corporation, as amended (the "Purchase Agreement"), has not been
amended or further supplemented;
<PAGE>
(c) Since the date of the Purchase Agreement, Resigning Trustee
has received no notice of any default or Event of Default under the terms of the
Indenture. Any default or Event of Default occurring prior to such date and
continuing as of the date of the Purchase Agreement is referenced on Schedule
5.05(b) to the Purchase Agreement;
(d) To the best knowledge of Resigning Trustee and without
further verification, except as disclosed on Schedules 3.07 and 5.05(b) to the
Purchase Agreement, there is no suit, action, claim or proceeding pending or
threatened against Resigning Trustee related to the Securities, the Indenture,
or Resigning Trustee's administration of the trusts created under the Indenture.
Other than as expressly set forth above, the Resigning Trustee makes no
representations or warranty regarding the financial condition of the Company or
the Guarantor or their ability to fulfill their obligations under the Indenture.
The Successor hereby acknowledges that Successor has been the Servicer
of the accounts that are the subject of the Indenture under a Services Agreement
dated as of October 18, 1995, by and among Mellon Bank Corporation and KeyCorp,
as amended (the "Services Agreement") and that, in that capacity, the Successor
has no notice of any event or circumstance that has not been previously conveyed
to the Resigning Trustee in writing that would make the representations made by
the Resigning Trustee in (b) through (d) above, untrue.
SECTION 3.03. REPRESENTATIONS OF SUCCESSOR. Successor hereby represents
and warrants to Resigning Trustee and the Company as follows:
(a) Successor is a federal savings bank organized and existing
under the laws of the United States of America; and
(b) Successor is qualified and eligible to serve as Trustee under
the Indenture.
ARTICLE IV
INDEMNIFICATION
SECTION 4.01. RIGHTS OF INDEMNIFICATION. KeyCorp acknowledges and
affirms that Successor is entitled to all such rights and remedies, including
any rights of indemnification, as may be available to Successor as a "Buyer"
under (a) the Purchase Agreement and (b) the Services Agreement, the terms of
which are incorporated herein by reference.
<PAGE>
ARTICLE V
MISCELLANEOUS
SECTION 5.01. DEFINITIONS. Terms not otherwise defined in this
Agreement shall have the respective meanings assigned in the Indenture.
SECTION 5.02. COUNTERPARTS. This Agreement may be executed in a number
of counterparts, each of which shall constitute an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 5.03. PRESERVATION OF RIGHTS. Except as expressly provided
herein, nothing contained in this Agreement shall in any way affect (a) the
obligations or rights of the Company, the Resigning Trustee, the Successor or
any Securityholder under the Indenture or (b) the obligations or rights of the
Resigning Trustee and Successor under the Purchase Agreement or the Services
Agreement.
SECTION 5.04. SEVERABILITY. In the event any provisions of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction,such holding shall not invalidate or render unenforceable any other
provision hereof.
SECTION 5.05. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of KeyCorp, Resigning Trustee, Successor, and the
Company and their respective successors and assigns.
Intending to be legally bound, the parties hereto have executed this
Agreement by their duly authorized corporate officers as of the date first above
written.
<PAGE>
ADDRESS FOR NOTICES:
RESIGNING TRUSTEE:
KEY BANK OF NEW YORK
KEY BANK OF NEW YORK
c/o Keybank National Association /s/ EDWARD TOGNETTI
Law Group -----------------
17th Floor By: Edward Tognetti
127 Public Square Title :Authorized Officer
Cleveland, OH 44114 Date: September 3, 1996
Attn: Edward Tognetti
ADDRESS FOR NOTICES:
KEYCORP:
KEYCORP
KEYCORP /s/ DANIEL STOLZER
127 Public Square ----------------
Cleveland, Ohio 44114 By: Daniel Stolzer
Attn: Daniel Stolzer Title: Authorized Officer
Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
SUCCESSOR:
MELLON BANK, F.S.B.
MELLON BANK, F.S.B.
Corporate Trust Group /s/ STEPHEN GORZYNSKI
80 State Street -----------------
6th Floor By: Stephen Gorzynski
Albany, NY 12207 Title: Vice President
Attn: Stephen Gorzynski Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
THE COMPANY:
AGWAY FINANCIAL CORPORATION
AGWAY FINANCIAL CORPORATION
Suite 780 /s/ PETER J. O'NEILL
Wilmington Trust Center -----------------
1100 North Market Street By: Peter J. O'Neill
Wilmington, DE 19801 Title: Vice President
Date: September 3, 1996
ACKNOWLEDGED BY:
THE GUARANTOR:
AGWAY, INC. AGWAY, INC.
/s/ PETER J. O'NEILL
-----------------
By: Peter J. O'Neill
Title: Senior Vice President
Date: September 3, 1996
<PAGE>
AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
----------------------------------------------------
THIS AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE (this
"Agreement") dated as of September 3, 1996, by and among KeyCorp, an Ohio
Corporation ("KeyCorp"), Key Bank of New York a state chartered banking
corporation, as successor to First Trust & Deposit Company ("Resigning
Trustee"), Agway Financial Corporation, as successor to Agway, Inc., (the
"Guarantor"), under Supplemental Indenture dated as of October 1, 1986, (the
"Company"), and Mellon Bank, F.S.B. a federal savings bank organized under the
laws of the United States of America ("Successor").
WHEREAS, Resigning Trustee and the Company entered into an Indenture
dated as of September 1, 1978, (the "Indenture"), pursuant to which the 8 %
Subordinated Debentures due July 1, 2003 and the 7 1/2% Subordinated Debentures
due July 1, 2003 (the "Securities") were issued; and
WHEREAS, Resigning Trustee has been acting as Trustee under the
Indenture; and
WHEREAS, the Indenture provides that the Trustee may resign and a
successor trustee be appointed; and
WHEREAS, Resigning Trustee desires to resign as Trustee and the Company
desires to appoint Successor as successor trustee under the Indenture, and
Successor desires to serve as successor trustee subject to the terms and
conditions of the Indenture and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
ARTICLE I
RESIGNATION
SECTION 1.01. RESIGNATION OF RESIGNING TRUSTEE. Resigning Trustee
hereby resigns as Trustee under the Indenture, effective immediately prior to
the opening of business on the Effective Date (as hereinafter defined).
<PAGE>
ARTICLE II
APPOINTMENT OF SUCCESSOR TRUSTEE
SECTION 2.01. APPOINTMENT. The Company hereby appoints Successor to
serve as successor Trustee with all the authority, rights and powers which are
vested in, and all duties and obligations which are binding on, the Trustee
under the Indenture, effective as of the opening of business on the first
Business Day following the date of execution by the last party to execute this
Agreement (the "Effective Date"). As used herein, Business Day means a day on
which banks in the city of Pittsburgh, Pennsylvania, or in the city where the
principal corporate trust office of the Successor is located, are not required
or authorized to remain closed and on which the New York Stock Exchange is not
closed.
SECTION 2.02. ACCEPTANCE. Successor hereby accepts the appointment by
the Company and agrees to serve as successor Trustee under the Indenture and
to perform the duties and obligations of the Trustee under the Indenture,
effective as of the opening of business on the Effective Date.
SECTION 2.03. VESTING OF RIGHTS, POWERS AND DUTIES. In accordance
with the provisions of the Indenture, all rights, powers and duties of the
Trustee under the Indenture shall be vested in and undertaken by Successor,
effective as of the opening of business on the Effective Date.
SECTION 2.04. NOTICE TO SECURITYHOLDERS. The Company agrees to provide
notice of the resignation of Resigning Trustee and the appointment of Successor
in accordance with the terms of Section 8.11 of the Indenture.
SECTION 2.05. ASSIGNMENT OF POWERS AND PROPERTY. Resigning Trustee
hereby confirms and assigns to Successor, in trust under the Indenture, all
property, rights, powers, duties, trusts, immunities and obligations of
Resigning Trustee as Trustee. Resigning Trustee confirms that it has transferred
to Successor in its capacity as Servicer (a) all moneys, securities and other
assets held under the Indenture and (b) all documents relating to the trust
created by the Indenture and all other information in its possession relating to
the administration and status thereof pursuant to the terms of the Purchase
Agreement (as hereinafter defined) and the Services Agreement dated October 18,
1995, as amended, by and among Mellon Bank Corporation and KeyCorp.
SECTION 2.06. FURTHER ASSURANCES. Resigning Trustee hereby agrees, upon
reasonable request of Successor, to execute, acknowledge and deliver such
further instruments of transfer and further assurances and to do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in Successor all the property, rights, powers, duties, trusts,
immunities and obligations of Resigning Trustee as Trustee under the Indenture.
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Successor as follows:
(a) The Company is a corporation duly organized and existing under
the laws of the State of Delaware;
(b) The Indenture as supplemented was validly and lawfully executed
and delivered by the Company and the Securities were validly and lawfully issued
by the Company;
(c) The Company has performed or fulfilled each covenant, agreement
and condition on its part to be performed or fulfilled under the Indenture on or
prior to the date hereof; and
(d) No default or Event of Default of which the Company has notices
or is required to take notice has occurred and is continuing;
(e) All payments of principal, premium, if any, and interest on the
Securities due and payable prior to the Effective Date have been made as
required in the Indenture; and
(f) The outstanding principal balance of the 8 % Subordinated
Debentures due July 1, 2003 is $4,234,600.00 as of June 30, 1996 and interest
thereon has been paid through and including July 1, 1996. The outstanding
principal balance of the 7 1/2% Subordinated Debentures due July 1, 2003 is
$ 2,349,900.00 as of June 30, 1996 and interest thereon has been paid through
and including July 1, 1996.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF RESIGNING TRUSTEE.
Resigning Trustee hereby represents and warrants to Successor as follows:
(a) Resigning Trustee is a banking corporation organized and
existing under the laws of the state of New York;
(b) To the best knowledge of Resigning Trustee and without
further verification, the Indenture is in full force and effect and since the
date of the Purchase Agreement dated as of October 18, 1995 between KeyCorp
and Mellon Bank Corporation, as amended (the "Purchase Agreement"), has not been
amended or further supplemented;
<PAGE>
(c) Since the date of the Purchase Agreement, Resigning Trustee
has received no notice of any default or Event of Default under the terms of the
Indenture. Any default or Event of Default occurring prior to such date and
continuing as of the date of the Purchase Agreement is referenced on Schedule
5.05(b) to the Purchase Agreement;
(d) To the best knowledge of Resigning Trustee and without further
verification, except as disclosed on Schedules 3.07 and 5.05(b) to the Purchase
Agreement, there is no suit, action, claim or proceeding pending or threatened
against Resigning Trustee related to the Securities, the Indenture, or Resigning
Trustee's administration of the trusts created under the Indenture.
Other than as expressly set forth above, the Resigning Trustee makes no
representations or warranty regarding the financial condition of the Company or
the Guarantor or their ability to fulfill their obligations under the Indenture.
The Successor hereby acknowledges that Successor has been the Servicer
of the accounts that are the subject of the Indenture under a Services Agreement
dated as of October 18, 1995, by and among Mellon Bank Corporation and KeyCorp,
as amended (the "Services Agreement") and that, in that capacity, the Successor
has no notice of any event or circumstance that has not been previously conveyed
to the Resigning Trustee in writing that would make the representations made by
the Resigning Trustee in (b) through (d) above, untrue.
SECTION 3.03. REPRESENTATIONS OF SUCCESSOR. Successor hereby
represents and warrants to Resigning Trustee and the Company as follows:
(a) Successor is a federal savings bank organized and existing
under the laws of the United States of America; and
(b) Successor is qualified and eligible to serve as Trustee under
the Indenture.
ARTICLE IV
INDEMNIFICATION
SECTION 4.01. RIGHTS OF INDEMNIFICATION. KeyCorp acknowledges and
affirms that Successor is entitled to all such rights and remedies, including
any rights of indemnification, as may be available to Successor as a "Buyer"
under (a) the Purchase Agreement and (b) the Services Agreement, the terms of
which are incorporated herein by reference.
<PAGE>
ARTICLE V
MISCELLANEOUS
SECTION 5.01. DEFINITIONS. Terms not otherwise defined in this
Agreement shall have the respective meanings assigned in the Indenture.
SECTION 5.02. COUNTERPARTS. This Agreement may be executed in a number
of counterparts, each of which shall constitute an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 5.03. PRESERVATION OF RIGHTS. Except as expressly provided
herein, nothing contained in this Agreement shall in any way affect (a) the
obligations or rights of the Company, the Resigning Trustee, the Successor or
any Securityholder under the Indenture or (b) the obligations or rights of the
Resigning Trustee and Successor under the Purchase Agreement or the Services
Agreement.
SECTION 5.04. SEVERABILITY. In the event any provisions of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
SECTION 5.05. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of KeyCorp, Resigning Trustee, Successor, and the
Company and their respective successors and assigns.
Intending to be legally bound, the parties hereto have executed this
Agreement by their duly authorized corporate officers as of the date first above
written.
<PAGE>
ADDRESS FOR NOTICES:
RESIGNING TRUSTEE:
KEY BANK OF NEW YORK
KEY BANK OF NEW YORK
c/o KeyBank National Association /s/ EDWARD TOGNETTI
Law Group ------------------------
17th Floor By: Edward Tognetti
127 Public Square Title :Authorized Officer
Cleveland, OH 44114 Date: September 3, 1996
Attn: Edward Tognetti
ADDRESS FOR NOTICES:
KEYCORP:
KEYCORP
KEYCORP /s/ DANIEL STOLZER
127 Public Square -------------------
Cleveland, Ohio 44114 By: Daniel Stolzer
Attn: Daniel Stolzer Title: Authorized Officer
Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
SUCCESSOR:
MELLON BANK, F.S.B.
MELLON BANK, F.S.B.
Corporate Trust Group /s/ STEPHEN GORZYNSKI
80 State Street ---------------------
6th Floor By: Stephen Gorzynski
Albany, NY 12207 Title: Vice President
Attn: Stephen Gorzynski Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
THE COMPANY:
AGWAY FINANCIAL CORPORATION
AGWAY FINANCIAL CORPORATION
Suite 780 /s/ PETER J. O'NEILL
Wilmington Trust Center -------------------
1100 North Market Street By: Peter J. O'Neill
Wilmington, DE 19801 Title: Vice President
Date: September 3, 1996
ACKNOWLEDGED BY:
THE GUARANTOR:
AGWAY, INC/
AGWAY, INC.
PETER J. O'NEILL
------------------
By: Peter J. O'Neill
Title: Senior Vice President
Date: September 3, 1996
<PAGE>
AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE
----------------------------------------------------
THIS AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE (this
"Agreement") dated as of September 3, 1996, by and among KeyCorp, an Ohio
Corporation ("KeyCorp"), Key Bank of New York a state chartered banking
corporation, successor to First Trust & Deposit Company ("Resigning Trustee"),
Agway Financial Corporation, as successor to Agway, Inc. (the "Guarantor") under
Supplemental Indenture dated as of October 1, 1986, (the "Company"), Agway,
Inc., and Mellon Bank, F.S.B. a federal savings bank organized under the laws of
the United States of America ("Successor").
WHEREAS, Resigning Trustee and the Company entered into an Indenture
dated as of October 1, 1974, (the "Indenture"), pursuant to which the 7 1/2 %
Subordinated Debentures due July 1, 2001 and the 7% Subordinated Debentures due
July 1, 2001 (the "Securities") were issued; and
WHEREAS, Resigning Trustee has been acting as Trustee under the
Indenture; and
WHEREAS, the Indenture provides that the Trustee may resign and a
successor trustee be appointed; and
WHEREAS, Resigning Trustee desires to resign as Trustee and the Company
desires to appoint Successor as successor trustee under the Indenture, and
Successor desires to serve as successor trustee subject to the terms and
conditions of the Indenture and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
ARTICLE I
RESIGNATION
SECTION 1.01. RESIGNATION OF RESIGNING TRUSTEE. Resigning Trustee
hereby resigns as Trustee under the Indenture, effective immediately prior to
the opening of business on the Effective Date (as hereinafter defined).
<PAGE>
ARTICLE II
APPOINTMENT OF SUCCESSOR TRUSTEE
SECTION 2.01. APPOINTMENT. The Company hereby appoints Successor to
serve as successor Trustee with all the authority, rights and powers which are
vested in, and all duties and obligations which are binding on, the Trustee
under the Indenture, effective as of the opening of business on the first
Business Day following the date of execution by the last party to execute this
Agreement (the "Effective Date"). As used herein, Business Day means a day on
which banks in the city of Pittsburgh, Pennsylvania, or in the city where the
principal corporate trust office of the Successor is located, are not required
or authorized to remain closed and on which the New York Stock Exchange is not
closed.
SECTION 2.02. ACCEPTANCE. Successor hereby accepts the appointment by
the Company and agrees to serve as successor Trustee under the Indenture and to
perform the duties and obligations of the Trustee under the Indenture, effective
as of the opening of business on the Effective Date.
SECTION 2.03. VESTING OF RIGHTS, POWERS AND DUTIES. In accordance with
the provisions of the Indenture, all rights, powers and duties of the Trustee
under the Indenture shall be vested in and undertaken by Successor, effective as
of the opening of business on the Effective Date.
SECTION 2.04. NOTICE TO SECURITYHOLDERS. The Company agrees to provide
notice of the resignation of Resigning Trustee and the appointment of Successor
in accordance with the terms of Section 8.11 of the Indenture.
SECTION 2.05. ASSIGNMENT OF POWERS AND PROPERTY. Resigning Trustee
hereby confirms and assigns to Successor, in trust under the Indenture, all
property, rights, powers, duties, trusts, immunities and obligations of
Resigning Trustee as Trustee. Resigning Trustee confirms that it has transferred
to Successor in its capacity as Servicer (a) all moneys, securities and other
assets held under the Indenture and (b) all documents relating to the trust
created by the Indenture and all other information in its possession relating to
the administration and status thereof pursuant to the terms of the Purchase
Agreement (as hereinafter defined) and the Services Agreement dated October 18,
1995, as amended, by and among Mellon Bank Corporation and KeyCorp.
SECTION 2.06. FURTHER ASSURANCES. Resigning Trustee hereby agrees, upon
reasonable request of Successor, to execute, acknowledge and deliver such
further instruments of transfer and further assurances and to do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in Successor all the property, rights, powers, duties, trusts,
immunities and obligations of Resigning Trustee as Trustee under the Indenture.
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Successor as follows:
(a) The Company is a corporation duly organized and existing under
the laws of the State of Delaware;
(b) The Indenture as supplemented was validly and lawfully executed
and delivered by the Company and the Securities were validly and lawfully issued
by the Company;
(c) The Company has performed or fulfilled each covenant, agreement
and condition on its part to be performed or fulfilled under the Indenture on or
prior to the date hereof; and
(d) No default or Event of Default of which the Company has notices
or is required to take notice has occurred and is continuing;
(e) All payments of principal, premium, if any, and interest on the
Securities due and payable prior to the Effective Date have been made as
required in the Indenture; and
(f) The outstanding principal balance of the 7 1/2 % Subordinated
Debentures due July 1, 2001 is $ 2,824,300.00 as of June 30, 1996 and interest
thereon has been paid through and including July 1, 1996. The outstanding
principal balance of the 7% Subordinated Debentures due July 1, 2001 is $
925,800.00 as of June 30,1996 and interest thereon has been paid through and
including July 1, 1996.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF RESIGNING TRUSTEE.
Resigning Trustee hereby represents and warrants to Successor as follows:
(a) Resigning Trustee is a banking corporation organized and
existing under the laws of the state of New York;
(b) To the best knowledge of Resigning Trustee and without further
verification, the Indenture is in full force and effect and since the date of
the Purchase Agreement dated as of October 18, 1995 between KeyCorp and Mellon
Bank Corporation, as amended (the "Purchase Agreement"), has not been amended or
further supplemented;
<PAGE>
(c) Since the date of the Purchase Agreement, Resigning Trustee has
received no notice of any default or Event of Default under the terms of the
Indenture. Any default or Event of Default occurring prior to such date and
continuing as of the date of the Purchase Agreement is referenced on Schedule
5.05(b) to the Purchase Agreement;
(d) To the best knowledge of Resigning Trustee and without further
verification, except as disclosed on Schedules 3.07 and 5.05(b) to the Purchase
Agreement, there is no suit, action, claim or proceeding pending or threatened
against Resigning Trustee related to the Securities, the Indenture, or Resigning
Trustee's administration of the trusts created under the Indenture.
Other than as expressly set forth above, the Resigning Trustee makes no
representations or warranty regarding the financial condition of the Company or
the Guarantor or their ability to fulfill their obligations under the Indenture.
The Successor hereby acknowledges that Successor has been the Servicer
of the accounts that are the subject of the Indenture under a Services Agreement
dated as of October 18, 1995, by and among Mellon Bank Corporation and KeyCorp,
as amended (the "Services Agreement") and that, in that capacity, the Successor
has no notice of any event or circumstance that has not been previously conveyed
to the Resigning Trustee in writing that would make the representations made by
the Resigning Trustee in (b) through (d) above, untrue.
SECTION 3.03. REPRESENTATIONS OF SUCCESSOR. Successor hereby represents
and warrants to Resigning Trustee and the Company as follows:
(a) Successor is a federal savings bank organized and existing
under the laws of the United States of America; and
(b) Successor is qualified and eligible to serve as Trustee under
the Indenture.
ARTICLE IV
INDEMNIFICATION
SECTION 4.01. RIGHTS OF INDEMNIFICATION. KeyCorp acknowledges and
affirms that Successor is entitled to all such rights and remedies, including
any rights of indemnification, as may be available to Successor as a "Buyer"
under (a) the Purchase Agreement and (b) the Services Agreement, the terms of
which are incorporated herein by reference.
<PAGE>
ARTICLE V
MISCELLANEOUS
SECTION 5.01. DEFINITIONS. Terms not otherwise defined in this
Agreement shall have the respective meanings assigned in the Indenture.
SECTION 5.02. COUNTERPARTS. This Agreement may be executed in a number
of counterparts, each of which shall constitute an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 5.03. PRESERVATION OF RIGHTS. Except as expressly provided
herein, nothing contained in this Agreement shall in any way affect (a) the
obligations or rights of the Company, the Resigning Trustee, the Successor or
any Securityholder under the Indenture or (b) the obligations or rights of the
Resigning Trustee and Successor under the Purchase Agreement or the Services
Agreement.
SECTION 5.04. SEVERABILITY. In the event any provisions of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
SECTION 5.05. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of KeyCorp, Resigning Trustee, Successor, and the
Company and their respective successors and assigns.
Intending to be legally bound, the parties hereto have executed this
Agreement by their duly authorized corporate officers as of the date first above
written.
<PAGE>
ADDRESS FOR NOTICES:
RESIGNING TRUSTEE:
KEY BANK OF NEW YORK KEY BANK OF NEW YORK
c/o KeyBank National Association
Law Group /s/ EDWARD TOGNETTI
17th Floor --------------------
127 Public Square By: Edward Tognetti
Cleveland, OH 44114 Title :Authorized Officer
Attn: Edward Tognetti Date: September 3, 1996
ADDRESS FOR NOTICES:
KEYCORP: KEYCORP
127 Public Square
Cleveland, Ohio 44114 /s/ DANIEL STOLZER
Attn: Daniel Stolzer --------------------
By: Daniel Stolzer
Title: Authorized Officer
Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
SUCCESSOR:
MELLON BANK, F.S.B. MELLON BANK, F.S.B.
Corporate Trust Group
80 State Street /s/ STEPHEN GORZYNSKI
6th Floor ---------------------
Albany, NY 12207 By: Stephen Gorzynski
Attn: Stephen Gorzynski Title: Vice President
Date: September 3, 1996
<PAGE>
ADDRESS FOR NOTICES:
THE COMPANY:
AGWAY FINANCIAL CORPORATION
AGWAY FINANCIAL CORPORATION
Suite 780 /s/ PETER H. O'NEILL
Wilmington Trust Center ----------------------
1100 North Market Street By: Peter J. O'Neill
Wilmington, DE 19801 Title: Vice President
Date: September 3, 1996
ACKNOWLEDGED BY:
THE GUARANTOR:
AGWAY, INC. AGWAY, INC.
/s/ PETER J. O'NEILL
-----------------------
By: Peter J. O'Neill
Title: Senior Vice President
Date: September 3, 1996
EXHIBIT 5
<PAGE>
August 27, 1997
Agway Inc.
333 Butternut Drive
DeWitt, NY 13214
Gentlemen:
As General Counsel of Agway Inc., I am acting as your legal counsel in
connection with the registration of 10,000 shares ($100 par value) of 8%
Cumulative Preferred Stock, Series B, 4,000 shares ($25 par value) of Series HM
Preferred Stock and 4,000 shares ($25 par value) of Membership Common Stock
(hereinafter referred to as the "Equity Securities"), being registered with the
Securities and Exchange Commission on Form S-3. I am familiar with the relevant
documents and materials used in preparing such registration.
Based upon my review of the relevant documents and materials, it is my
opinion that:
(a) Agway Inc. is a valid and subsisting Delaware corporation;
(b) The Equity Securities being registered with the Securities
and Exchange Commission on Form S-3 will, when sold, be
legally issued, fully paid and non-assessable (except as
may be limited by bankruptcy, insolvency, reorganization,
or other laws of general applicability relating to or
affecting creditors' rights or by general equity
principles) so long as (i) the Registration Statement
remains effective under the Securities Act of 1933, as
amended, and (ii) the Equity Securities shall have been
duly executed and shall have been duly delivered to the
purchasers thereof against payment of the agreed
consideration therefor.
(c) The matters of law and legal conclusions set forth under
"Description of 8% Cumulative Preferred Stock, Series B",
"Description of Honorary Member Preferred Stock, Series
HM", and "Description of Membership Common Stock" in the
Prospectus filed as a part of said registration are
correct.
This letter is written to be used as an exhibit in the filing of the
Registration Statement, and I hereby consent to the reference to my name under
the caption "LEGAL OPINION" in the Prospectus.
Very truly yours,
/s/ David M. Hayes
David M. Hayes
Senior Vice President
General Counsel
AGWAY INC.
<PAGE>
August 27, 1997
Agway Financial Corporation
Suite 1300
1105 North Market Street
Wilmington, Delaware 19801
Gentlemen:
As General Counsel of Agway Financial Corporation ("AFC"), I am acting
as your legal counsel in connection with the registration of $75,000,000 in
principal amount of Subordinated Member Money Market Certificates and
Subordinated Money Market Certificates and $19,140,000 in principal amount of
Money Market Certificates, member and general, under the interest reinvestment
option (hereinafter referred to as the "Debt Securities"), being registered with
the Securities and Exchange Commission on Form S-3. I am familiar with the
relevant documents and materials used in preparing such registration.
Based upon my review of the relevant documents and materials, it is my
opinion that:
(a) AFC is a valid and subsisting Delaware corporation;
(b) The Debt Securities being registered with the Securities
and Exchange Commission on Form S-3 will, when sold, be
legally issued and binding obligations of Agway Financial
Corporation (except as may be limited by bankruptcy,
insolvency, reorganization, or other laws of general
applicability relating to or affecting creditors' rights
or by general equity principles) so long as (i) the
Registration Statement remains effective under the
Securities Act of 1933, as amended, and the Indentures
continue to qualify under the Trust Indenture Act of 1939,
as amended, and (ii) the Debt Securities shall have been
duly executed and authenticated as provided in the
Indentures, and shall have been duly delivered to the
purchasers thereof against payment of the agreed
consideration therefor.
(c) The matters of law and legal conclusions set forth under
"Description of the Certificates" in the Prospectus filed
as a part of said registration are correct.
This letter is written to be used as an exhibit in the filing of the
Registration Statement, and I hereby consent to the reference to my name under
the caption "LEGAL OPINION" in the Prospectus.
Very truly yours,
/S/ David M. Hayes
David M. Hayes
General Counsel
AGWAY FINANCIAL CORPORATION
EXHIBIT 12
<PAGE>
<TABLE>
<CAPTION>
COMPUTATION OF RATIO OF MARGINS TO FIXED CHARGES AND PREFERRED DIVIDENDS COMBINED
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
FOR THE YEARS ENDED JUNE 30,
(THOUSANDS OF DOLLARS)
-----------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Margins before income taxes and
member refunds........................... $ 16,583 $ 21,070 $ (6,053) $ 4,833 $ 17,395
Fixed charges - Interest................. 64,432 63,721 56,507 49,849 49,128
- Rentals.................. 3,772 3,004 2,789 2,298 2,610
----------- ---------- ----------- ---------- ----------
Total fixed charges...................... 68,204 66,725 59,296 52,147 51,738
----------- ---------- ----------- ---------- ----------
Adjusted net margins..................... $ 84,787 $ 87,795 $ 53,243 $ 56,980 $ 69,133
=========== ========== =========== ========== ==========
Ratio of adjusted net margins to total
fixed charges............................ 1.2 1.3 (a) 1.1 1.3
=========== ========== =========== ========== ==========
Deficiency of adjusted net margins to
total fixed charges...................... N/D N/D $ 6,053 N/D N/D
=========== ========== =========== ========== ==========
Fixed charges and preferred dividends
combined:
Preferred dividend factor:
Preferred dividend requirements..... $ 4,115 $ 4,255 $ 4,654 $ 4,909 $ 4,130
Ratio of pre-tax margins to
after-tax margins*.................. 64.3% 52.9% 71.1% 13.5% 143%
Preferred dividend factor on
pre-tax basis....................... 6,400 8,043 6,546 36,363 2,888
Total fixed charges (above).............. 68,204 66,725 59,296 52,147 51,738
----------- ---------- ----------- ---------- ----------
Fixed charges and preferred dividends
combined................................. $ 74,604 $ 74,768 $ 65,842 $ 88,510 $ 54,626
=========== ========== =========== ========== ==========
Ratio of adjusted net margins to fixed
charges and preferred dividends
combined**............................... 1.1 1.2 (b) (b) 1.3
=========== ========== =========== ========== ==========
Deficiency of adjusted net margins to
fixed charges and preferred dividends
combined................................. N/D N/D $ 12,599 $ 31,530 N/D
=========== ========== =========== ========== ==========
</TABLE>
* Represents pre-tax adjusted net margin from continuing operations
divided by after-tax margin, which adjusts dividends on preferred stock
to a pre-tax basis.
** Represents adjusted net margin divided by fixed charges and preferred
dividends combined.
N/D No deficiency.
(a) Adjusted net margins are inadequate to cover total fixed charges.
(b) Adjusted net margins are inadequate to cover total fixed charges and
preferred dividends combined.
<PAGE>
<TABLE>
<CAPTION>
COMPUTATION OF RATIO OF MARGINS TO FIXED CHARGES AND PREFERRED DIVIDENDS COMBINED
AGWAY INC. (PARENT)
FOR THE YEARS ENDED JUNE 30,
(THOUSANDS OF DOLLARS)
-----------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Margins before income taxes and
member refunds........................... $ 3,535 $ 24,106 $ 4,600 $ (17,330) $ 4,501
Fixed charges - Interest................. 6,792 7,156 5,874 14,985 8,282
- Rentals.................. 2,074 1,506 1,960 1,183 755
----------- ---------- ----------- ---------- ----------
Total fixed charges...................... 8,866 8,662 7,834 16,168 9,037
----------- ---------- ----------- ---------- ----------
Adjusted net margins..................... $ 12,401 $ 32,768 $ 12,434 $ (1,162) $ 13,538
=========== ========== =========== ========== ==========
Ratio of adjusted net margins to total
fixed charges............................ 1.4 3.8 1.6 (a) 1.5
=========== ========== =========== ========== ==========
Deficiency of adjusted net margins to
total fixed charges...................... N/D N/D N/D $ 17,330 N/D
=========== ========== =========== ========== ==========
Fixed charges and preferred dividends
combined:
Preferred dividend factor:
Preferred dividend requirements....... $ 4,115 $ 4,255 $ 4,654 $ 4,909 $ 4,130
Ratio of pre-tax margin to
after-tax margins*.................... 323.6% 90.9% (291.2%) 214.5% 404.4%
Preferred dividend factor on..........
pre-tax basis......................... 1,272 4,681 (1,598) 2,289 1,021
Total fixed charges (above).............. 8,866 8,662 7,834 16,168 9,037
----------- ---------- ----------- ---------- -----------
Fixed charges and preferred dividends
combined................................. $ 10,138 $ 13,343 $ 6,236 $ 18,457 $ 10,058
=========== ========== =========== ========== ===========
Ratio of adjusted net margins to fixed
charges and preferred dividends
combined**............................... 1.2 2.5 2.0 (b) 1.3
=========== ========== =========== ========== ===========
Deficiency of adjusted net margins to
fixed charges and preferred dividends.... N/D N/D N/D $ 19,619 N/D
=========== ========== =========== ========== ===========
</TABLE>
* Represents pre-tax adjusted net margin from continuing operations
divided by after-tax margin, which adjusts dividends on preferred stock
to a pre-tax basis.
** Represents adjusted net margin divided by fixed charges and preferred
dividends combined.
N/D No deficiency.
(a) Adjusted net margins are inadequate to cover total fixed charges.
(b) Adjusted net margins are inadequate to cover total fixed charges and
preferred dividends combined.
EXHIBIT 23
<PAGE>
CONSENT OF COUNSEL
The consent of David M. Hayes, General Counsel and Secretary of the
Company, is included in his opinions, a copy of which is filed as Exhibit 5.
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Agway Inc.:
We consent to the incorporation by reference in this registration statement on
Form S-3 of our reports dated August 22, 1997 on our audits of the consolidated
financial statements and financial statement schedules of Agway Inc. and
Consolidated Subsidiaries as of June 30, 1997 and 1996, and for the years ended
June 30, 1997, 1996, and 1995, appearing in the Annual Report on Form 10-K (SEC
File No. 2-22791) of Agway Inc. and Consolidated Subsidiaries filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
We also consent to the reference to our firm under the caption "Experts" in this
Prospectus.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Syracuse, New York
September 2, 1997
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
August 11, 1995, relating to the consolidated financial statements of H. P. Hood
Inc., which appears on page 29 of Agway Inc.'s Annual Report on Form 10-K for
the year ended June 30, 1997. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
September 2, 1997
EXHIBIT 25
<PAGE>
[CONFORMED COPY]
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM T-1
-----------------------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS
TRUSTEE
-----------------------
Check if an application to determine eligibility of
a Trustee pursuant to Section 305(b)(2)
---
MELLON BANK, F.S.B.
(Name of Trustee)
13-3680276 U.S.
(I.R.S. Employer Identification No.) (Jurisdiction of incorporation)
80 Route 4 East
Paramus, New Jersey 07652
(Address of Principal Executive Office)
ELAINE D. RENN
Vice President
MELLON BANK, N.A.
ONE MELLON BANK CENTER
PITTSBURGH, PENNSYLVANIA 15258-0001
(412) 234-4694
(Name, Address and Telephone Number of Agent for Service)
-----------------------
AGWAY, INC.
(Name of Obligor)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
15-0277720
(I.R.S. Employer Identification No.)
333 Butternut Drive, DeWitt, New York 13214
(Address of Principal Executive Offices)
DEBT SECURITIES (LISTED ON SCHEDULE II)
(Title of Indenture Securities)
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE --
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
Office of Thrift Supervision Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
The obligor is not an affiliate of the trustee.
ITEMS 3-15 ARE NOT APPLICABLE SINCE THE OBLIGOR IS NOT IN DEFAULT ON SECURITIES
ISSUED UNDER INDENTURES UNDER WHICH THE APPLICANT IS TRUSTEE.
16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
Exhibit 1 - A copy of the Trustee's Federal Stock Charter dated
November l, 1992; a copy of the Written Consent of
Trustee's Sole Stockholder dated August 23, 1994
amending Trustee's Federal Stock Charter effective
August 24, 1994 (See Note A).
Exhibit 2 - Copy of Office of Thrift Supervision Order No. 92-427
dated September 30, 1992 approving Trustee's application
to convert to a federal savings bank pursuant to Section
5(o) of the Home Owners' Loan Act, 12 U.S.C. ss.1464(o);
copy of Certificate of Corporate Existence of Trustee
issued by the Office of Thrift Supervision dated May 28,
1996 (See Note A).
Exhibit 3 - Copy of letter from Angelo A. Vigna, Regional Director,
Office of Thrift Supervision, dated October 11, 1995
authorizing Trustee to exercise corporate trust powers in
New Jersey; copy of letter from Michael L. Simone,
Assistant Director, Office of Thrift Supervision dated
April 5, 1996 providing non-objection to Trustee's
exercise of corporate trust powers in Indiana, Maine,
Michigan, New York, Ohio, Washington and Wyoming
(See Note A).
Exhibit 4 - Copy of Trustee's By-Laws as amended August 3, 1993 and
March 20, 1996 (See Note A).
Exhibit 5 - Not Applicable.
Exhibit 6 - Consent of the Trustee required by Section 321(b) of the
Act dated July 8, 1996 (See Note A).
Exhibit 7 - Trustee's audited balance sheets as of December 31, 1995
and December 31, 1996 (attached).
NOTE A: Incorporated by reference to Statement by Mellon Bank, F.S.B. of
Eligibility Under the Trust Indenture Act of 1939 as a Corporation Designated to
Act As Trustee, filed as Exhibit 25.l to Registration Statement No. 333-11117
filed with the Securities and Exchange Commission on August 30, 1996.
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939, THE
TRUSTEE, MELLON BANK, F.S.B., A FEDERAL SAVINGS BANK ORGANIZED AND EXISTING
UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY CAUSED THIS STATEMENT
OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, ALL IN THE CITY OF PITTSBURGH, AND COMMONWEALTH OF PENNSYLVANIA, ON
THE 27TH DAY OF AUGUST, 1997.
MELLON BANK, F.S.B.
TRUSTEE
By: /s/ Elaine D. Renn
Elaine D. Renn
Vice President
<PAGE>
SCHEDULE I
----------
ADDITIONAL OBLIGOR
------------------
The following subsidiary obligor is a wholly owned subsidiary of Agway, Inc.
State or Other
Jurisdiction of IRS Employer
Incorporation or Identification
Name and Address Organization Number
- ---------------- ---------------- --------------
Agway Financial Corporation Delaware 06-1174232
1105 North Market Street
Suite 1300
Wilmington, DE 19801
<PAGE>
SCHEDULE II
-----------
(TITLE OF THE INDENTURE SECURITIES)
-----------------------------------
1. Subordinated Member Money Market Certificates issued in multiples of
$5,000, due October 31, 2007 (minimum 8.25% per annum).
2. Subordinated Money Market Certificates issued in multiples of $5,000,
due October 31, 2007 (minimum 7.75% per annum).
3. Subordinated Member Money Market Certificates issued in multiples of $100,
due October 31, 2007 (minimum 8.00% per annum).
4. Subordinated Money Market Certificates issued in multiples of $100, due
October 31, 2007 (minimum 7.50% per annum).
5. Subordinated Money Market Certificates issued in multiples of $2,000, due
October 31, 2003 (minimum 8.50% per annum).
6. Subordinated Money Market Certificates issued in multiples of $2,000, due
October 31, 2001 (minimum 8.25% per annum).
<PAGE>
Exhibit 7
MELLON BANK, F.S.B.
(Formerly The Dreyfus Security Savings Bank, F.S.B.)
Balance Sheets
December 31, 1996 and 1995
<TABLE>
<CAPTION>
Assests 1996 1995
------- ------------ -----------
<S> <C> <C>
Cash and due from banks $ 1,282,017 342,260
Federal funds sold 16,794,450 6,571,060
Securities :
Held -to-maturity (market value of $7,482,307 and $9,418,209) 7,492,658 9,299,676
Available-for-sale (amortized cost of $36,780,005 and $3,930,741 37,599,840 3,975,391
Federal Home Loan Bank of New York stock, at cost - 87,900
Mortgage loans held for sale - 2,035,455
Loans:
Real estate mortgages 5,205,401 6,331,107
Consumer 139,369 336,622
------------ -----------
5,344,470 6,667,729
Less allowance for loan losses 112,300 50,904
------------ -----------
Net loans 5,232,470 6,616,825
Accrued interest and dividends receivable 380,834 233,615
Trust Fees receivable 1,826,592 -
Due from affiliates 699,255 67,567
Fixed assets (net) 753,685 71,705
Goodwill (net) 9,422,654 -
Other Assests - 185,840
------------ -----------
Total assets $ 81,484,455 29,487,294
------------ -----------
Liabilities and Stockholder's Equity
------------------------------------
Liabilities:
Deposits (note 6):
Interest bearing:
Certificates and money market accounts $ 14,913,935 20,849,872
Noninterest bearing 92,075 64,659
------------ -----------
Total Deposits 15,006,010 20,914,531
Due to affiliates 3,681,000 426,271
Income taxes payable to parent 915,927 -
Other liabilities and accrued expenses 1,970,653 113,369
------------ -----------
Total liabilities 21,573,590 21,454,171
Stockholder's equity
Common stock ($300 par value; 10,000 shares authorized,
issued and outstanding) 3,000,000 3,000,000
Additional paid-in capital 54,832,382 4,832,382
Retained earnings 1,545,503 171,719
------------ -----------
59,377,885 8,004,101
Net unrealized gain on available-for-sale securities, net of tax 532,980 29,022
------------ -----------
Total stockholder's equity 59,910,865 8,033,123
Commitments and contingencies
------------ -----------
Total liabilities and stockholder's equity $ 81,484,455 29,487,294
------------ -----------
</TABLE>
