AMENDMENT NO. 6 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 6, dated as of August , 1994 (this "AMENDMENT") to
that certain Loan and Security Agreement dated as of March 5, 1993, as amended
by Amendment Nos. 1, 2, 3, 4, and 5 (collectively the "LOAN AGREEMENT") among
THE PENN TRAFFIC COMPANY ("PENN TRAFFIC"), DAIRY DELL, BIG M SUPERMARKETS, INC.,
and PENNY CURTISS BAKING COMPANY, INC. (individually "BORROWER" and collectively
the "BORROWERS"), the Lenders listed therein (collectively the "LENDERS") and
NATWEST USA CREDIT CORP., as Agent for the Lenders (in such capacity, the
"AGENT"), is made by, between and among the Borrowers, the Agent, and the
Lenders. Capitalized terms used herein, except as otherwise defined herein,
shall have the meanings given to such terms in the Loan Agreement.
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WHEREAS, the Borrowers have requested that the Agent and the Lenders:
(1) increase the Maximum Credit Line; (2) change the rate of interest and (3)
make certain other amendments to the Loan Agreement.
WHEREAS, the Borrowers, the Agent and the Lenders have agreed to amend
the Loan Agreement pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is hereby
amended as of the effective date hereof as follows:
1(a) AMENDED DEFINITIONS. Section 1 of the Loan Agreement is hereby
amended as follows:
(i) The definition of "EURODOLLAR RATE" is hereby amended by
deleting in (a) thereof the words and figures "two and one-half
percent (2 1/2%)" and substituting in lieu thereof the words and
figures "two and one-quarter percent (2 1/4%)" and is further amended
by deleting the last three lines thereof and substituting therefore
the following: "provided, however, that during a Reduction Period the
Eurodollar Rate shall mean a rate per annum of
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(a) one-quarter of one percent (1/4%) lower than such rate if the
Interest Coverage Ratio was 2.0 to 1 or more, but less than 2.1 to 1
or (b) one half of one percent (1/2%) lower than such rate if the
Interest Coverage Ratio was 2.1 to 1 or more."
(ii) The definitions of "MAXIMUM REVOLVING CREDIT LINE" hall be
further amended, upon the satisfaction of the terms and conditions set
forth in this subsection (ii), to read as follows:
"MAXIMUM REVOLVING CREDIT LINE: means $225,000,000, or the
lesser amount to which the Borrowers have reduced the Maximum
Revolving Credit Line in accordance with Section 2.2(b)"
(iii) "TOTAL FACILITY". The definition of Total Facility
contained in Section 2.1 shall be amended as follows: The first
sentence of Section 2.1 is further amended by replacing the figure
$200,000,000 appearing in the first sentence thereof with the figure
"225,000,000".
The amendments provided for in Section 1(a)(ii) and (iii) do not
become effective until all of the following conditions precedent shall have been
met:
1. On or before January 31, 1995 the Borrowers shall have requested
of the Agent in writing that the Maximum Revolving Line be increased from
$200,000,000 to $225,000,000.
2. The Agent has been able to obtain commitments in writing from a
Lender or New Lender (the "New Lender"), aggregating $25,000,000.
3. At the time of the Borrowers' request no Event or Event of
Default shall have occurred and there shall have been no material adverse change
in the business or financial condition of any of the Borrowers.
4. The Borrowers shall deliver to the Agent for the benefit of the
Lenders, if requested by the Agent an opinion of Borrowers' counsel in form and
substance satisfactory to the Agent and its counsel.
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5. The Borrowers shall deliver to the Agent a certificate of the
Borrowers' Chief Executive or Chief Operating Officer with respect to Section 3
above and such other instruments and documents as the Agent or any Lender shall
reasonably request.
6. The execution and delivery of additional Revolving Credit Notes
in the form of Exhibit C to the Loan Agreement to the committing Lenders or New
Lender in the aggregate amount of $25,000,000.
7. The Borrowers and the committing Lenders or New Lender shall
agree to an Increased Line fee as proposed in Section 3 below.
(iv) The definition of "PRIME-BASED RATE" is hereby amended by
adding to the end thereof the following:
"if during a Reduction Period the Interest Coverage Ratio was 2.0
to 1 or more but less than 2.1 to 1 or one half of one percent
(1/2%) if the Interest Coverage Ratio was 2.1 to 1 or more as the
case may be"
2. AMENDMENT FEE. The Borrowers, jointly and severally, agree to
pay to the Agent, for the account of the Lenders in proportion to their Pro Rata
Shares immediately prior to this Amendment: an amendment fee of $350,000 upon
the execution and delivery of this Amendment.
3. INCREASED LINE FEE. In the event that Section 1(ii) becomes
effective the Borrowers jointly and severally agree to pay an Increased Line Fee
to the New Lender in such amount as the New Lender and the Borrowers shall
agree.
4. REPRESENTATIONS AND WARRANTIES. As an inducement to the Agent
and the Lenders to enter into this Amendment, each of the Borrowers hereby
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders as follows:
(a) It has the power and authority to enter into this Amendment,
has taken all corporate action required to authorize its execution,
delivery, and performance of this Amendment. This Amendment has been
duly executed and delivered by it and
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constitutes its valid and binding obligation, enforceable against it
in accordance with its terms. The execution, delivery, and
performance of this Amendment will not violate its certificate of
incorporation or by-laws or any agreement or legal requirements
binding upon it.
(b) As of the date hereof and after giving effect to the terms
of this Amendment: (i) the Loan Agreement is in full force and effect
and constitutes a binding obligation of the Borrowers, enforceable
against the Borrowers and owing in accordance with its terms; (ii) the
Obligations are due and owing by the Borrowers in accordance with
their terms; and (iii) Borrowers have no defense to or setoff,
counterclaim, or claim against payment of the Obligations and
enforcement of the Loan Documents based upon a fact or circumstance
existing or occurring on or prior to the date hereof.
5. NO IMPLIED AMENDMENTS. Except as expressly provided herein, the
Loan Agreement and the other Loan Documents are not amended or otherwise
affected in any way by this Amendment.
6. ENTIRE AQREEMENT; MODIFICATIONS; BINDING EFFECT. This Amendment
constitutes the entire agreement of the parties with respect to its subject
matter and supersedes all prior oral or written understandings about such
matter. Each of the Borrowers confirms that, in entering into this Amendment,
it did not rely upon any agreement, representation, or warranty by the Agent or
any Lender except those expressly set forth herein. No modification, recision,
waiver, release, or amendment of any provision of this Amendment may be made
except by a written agreement signed by the parties hereto. The provisions of
this Amendment are binding upon and inure to the benefit of the representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein or obligation hereunder may be assigned by any Borrower without
the prior written consent of the Required Lenders.
7. EFFECTIVE DATE. This Agreement shall become effective when
executed by the Borrowers and such number of Lenders as shall constitute the
amount of Required Lenders provided however that with respect to Section
1(a)(ii) and
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(iii) such Section shall not become effective until compliance with the
conditions set forth immediately below Section 1(a)(iii) hereof.
8. SEVERABILITY. If any provision of this Amendment is prohibited
or invalid, under applicable law, it is ineffective only to such extent, without
invalidating the remainder of this Amendment.
9. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, and by each party in separate counterparts, each of which is an
original, but all of which shall together constitute one and the same agreement.
10. GOVERNING LAW. This Amendment is deemed to have been made in the
State of New York and is governed by and interpreted in accordance with the laws
of such state, provided that no doctrine of choice of law (except as may be
applicable under the UCC with respect to the Security Interest) shall be used to
apply the laws of any other state or jurisdiction.
IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first above written.
BORROWERS:
THE PENN TRAFFIC COMPANY
By:
------------------------------------
Title:
DAIRY DELL
By:
------------------------------------
Title:
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BIG M SUPERMARKETS, INC.
By:
------------------------------------
Title:
PENNY CURTISS BAKING
COMPANY, INC.
By:
------------------------------------
Title:
LENDERS:
Commitment: $35,000,000 NATWEST USA CREDIT CORP.
Pro-Rata Share: 17.5%
Lending
Office: 175 Water Street
New York, New York 10038 By:
------------------------------------
Title:
Commitment: $20,000,000 NATIONAL BANK OF CANADA
Pro-Rata Share: 10%
Lending
Office: Empire Tower-Suite 1540
350 Main Street By:
Buffalo, New York 14202 ------------------------------------
Title:
Commitment: $20,000,000 FUJI BANK, LTD.
Pro-Rata Share: 10%
Lending
Office: Two World Trade Center
79th Fl
New York, New York 10048 By:
-------------------------------------
Title:
(Signatures continued on next page)
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Commitment: $20,000,000 SANWA BUSINESS CREDIT
Pro-Rata Share: 10% CORPORATION
Lending
Office: One South Wacker Drive
Suite 2800
Chicago, IL. 60606 By:
------------------------------------
Title:
Commitment: $25,000,000 BANKAMERICA
Pro-Rata Share: 12.5% BUSINESS CREDIT, INC.
Lending
Office: 40 East 52nd Street
Second Fl.
New York, NY 10022 By:
------------------------------------
Title:
Commitment: $25,000,000 HELLER FINANCIAL, INC.
Pro-Rata Share: 12.5%
Lending
Office: 101 Park Avenue, 12th Fl.
New York, NY 10178 By:
------------------------------------
Title:
Commitment: $10,000,000 IBJ SCHRODER
Pro-Rata Share: 5%
Lending
Office: One State Street
9th Fl. By:
New York, NY 10004 ------------------------------------
Title:
Commitment: $10,000,000 MIDLANTIC NATIONAL BANK
Pro-Rata Share: 5%
Lending
Office: 499 Thornalle Street
9th Fl. By:
Edison, NJ 08837 ------------------------------------
Title:
(Signatures continued on next page)
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Commitment: $20,000,000 MITSUBISHI TRUST AND
Pro-Rata Share: 10% BANKING CORPORATION
Lending
Office: 520 Madison Avenue
25th Fl.
New York, NY 10022 By:
------------------------------------
Title
Commitment: $15,000,000 CONTINENTAL BANK, N.A.
Pro-Rata Share: 7.5%
Lending
Office: 231 South La Salle St.
12th Fl. C By:
Chicago, IL. 60697 ------------------------------------
Title
AGENT
NATWEST USA CREDIT CORP.,
As Agent
By:
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Title:
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