CONSENT AND AMENDMENT TO LOAN AND SECURITY AGREEMENT
Agreement, dated as of September 29, 1994, (this
"Agreement") by and among The Penn Traffic Company ("Penn
Traffic"), Diary Dell, Big M Supermarkets, Inc., and Penny
Curtiss Baking Company, Inc. (individually a "BORROWER" and
collectively the "BORROWERS"), the financial institutions
listed on the signatures pages hereof (collectively the
"LENDERS") and NatWest USA Credit Corp., as Agent for the
Lenders (in such capacity, the "Agent").
-------------------
The Borrowers, the Lenders, and the Agent are parties to
a Loan and Security Agreement dated March 5, 1993, as amended
by Amendment No. 1 dated March 12, 1993, Amendment No. 2
dated March 24, 1993, Amendment No. 3 dated April 15, 1993
and Amendment No. 4 dated August 20, 1993 (as amended by
Amendments Nos. 1, 2, 3 and 4, the "Loan Agreement").
Capitalized terms used herein, except as otherwise
defined herein, shall have the meanings given to such terms
in the Loan Agreement.
Penn Traffic has requested that the Agent obtain the
consent of the Required Lenders to: (i) the issuance prior
to December 31, 1995 by Penn Traffic of up to $125,000,000 of
not less than seven year senior notes (the "Senior Notes")
(ii) the use of the net proceeds from the issuance of the
Senior Notes (iii) the acquisition by Penn Traffic of up to
45 supermarket stores presently owned by the American Stores
Company operated under the name "Acme" supermarkets and
located in eastern Pennsylvania and south central New York,
(the "Acme Stores") possibly together with a warehouse used
in connection therewith and located in the Scranton
Pennsylvania area (the "Acme Warehouse") and the acquisition
by Penn Traffic of up to an additional 10 supermarket stores
presently owned by the American Stores Company also operated
under the name "Acme" supermarkets and located in the
Allentown/Bethlehem Pennsylvania market and in 5 small towns
in eastern Pennsylvania (the "Additional Acme Stores") for an
aggregate purchase price not to exceed $150,000,000. The
Acme Stores, the Acme Warehouse and the Additional Acme
Stores are listed and described in Exhibit A hereto.
The transactions relating to the issuance of the Senior
Notes and the use of the proceeds thereof, and the
acquisition of the properties as described above (the "Acme
Acquisition") require the consent of the Required Lenders
pursuant to the Loan Agreement. The Required Lenders are
prepared to provide such consent but only on the terms and
conditions of this Agreement.
Now Therefore, the Borrowers, the Lenders and the Agent
agree as follows:
-2-
1. CONSENT TO THE INSSUANCE OF THE SENIOR NOTES
AND TO THE USE OF THE PROCEEDS THEREOF. To the extent such
consent is required under the Loan Documents (including,
without limitation, Section 10.8 and 10.9 of the Loan
Agreement) and provided the Senior Notes are issued on or
prior to December 31, 1995, the Required lenders do hereby:
(i) consent to the issuance of up to $125,000,000 of Senior
Notes as described in the preamble to this Agreement and (ii)
further approve the use of the net proceeds from the issuance
of the Senior Notes upon issuance thereof, notwithstanding
the limitation contained in Section 10.8 and 10.9 of the Loan
Agreement, and do further consent to the use of the net
proceeds of the issuance of the Senior Notes for general
corporate purposes.
2. CONSENT TO THE ACME ACQUISITION. To the
extent that such consent in required under the Loan Documents
(including, without limitation, Section 10.5 of the Loan
Agreement) and provided the Acme Acquisition is consummated
on or before December 31, 1995, the Required Lenders do
hereby consent to the Acme Acquisition for the maximum
purchase price set forth in the preamble to this Agreement.
3. AMENDMENTS TO LOAN AGREEMENT. Upon Penn
Traffic's consummation of the Acme Acquisition on or before
-3-
December 31, 1995, the following amendments to the Loan
Agreement shall become effective:
a. ADDITIONAL DEFINITION. There shall be
added to Section 1 of the Loan Agreement the following
definition in the appropriate alphabetical order.
i. "DEFINITION OF "ACME ACQUISITION" "ACME
ACQUISITION" means the purchase by Penn Traffic of
up to 55 supermarket stores and the contents
thereof owned by American Stores Company, each
operated under the name "Acme" and located in
eastern Pennsylvania, south central New York, and
the Allentown/Bethlehem area of Pennsylvania,
together with the possible acquisition of the
warehouse located in the Scranton Pennsylvania
area";
ii. the definition of "Capital Expenditures"
is amended by adding the following at the end of
the proviso in subsection (a) thereof: "and shall
not include any expenditures in connection with the
Acme Acquisition."
b. the table set forth in Section 10.17(a) of
the Loan Agreement is amended by deleting under column
headings set forth therein the figures with respect to the
-4-
Fiscal Years 1996, 1997, 1998, 1999 and 2000 and substituting
the following:
Total Permitted
Cash Capital Financed Capital Capital
Fiscal Year Expenditures Expenditures Expenditures
----------- ------------ ---------------- ---------------
1996 $140,000,000 $20,000,000 Total of
plus the lesser Permitted Cash
of: (i) Capital
$40,000,000 or Expenditures and
(ii) the amount Permitted
by which Financed Capital
Consolidated Expenditures for
EBDAIT exceeds the Fiscal Year
$210,000,000
1997 $110,000,000 $20,000,000 Total of
plus the lesser Permitted Cash
of: (i) Capital
$40,000,000 or Expenditures and
(ii) the amount Permitted
by which Financed Capital
Consolidated Expenditures for
EBDAIT exceeds the Fiscal Year
$210,000,000
1998 $115,000,000 $20,000,000 Total of
plus the lesser Permitted Cash
of: (i) Capital
$40,000,000 or Expenditures and
(ii) the amount Permitted
by which Financed Capital
Consolidated Expenditures for
EBDAIT exceeds the Fiscal Year
$210,000,000
1999 $120,000,000 $20,000,000 Total of
plus the lesser Permitted Cash
of: (i) Capital
$40,000,000 or Expenditures and
(ii) the amount Permitted
by which Financed Capital
Consolidated Expenditures for
EBDAIT exceeds the Fiscal Year
$210,000,000
-5-
2000 $125,000,000 $20,000,000 Total of
plus the lesser Permitted Cash
of: (i) Capital
$40,000,000 or Expenditures and
(ii) the amount Permitted
by which Financed Capital
Consolidated Expenditures for
EBDAIT exceeds the Fiscal Year
$210,000,000
4. CONDITIONS TO THE REQUIRED LENDERS' CONSENT.
The Required Lenders' Consent given in Section 2 hereof shall
not be effective until the following conditions precedent are
satisfied:
(a) The Borrowers shall have delivered to the
Agent, for distribution to the lenders, definitive versions
of the instruments, documents and agreements with respect:
(i) to the issuance of the Senior Notes prior to issuance
thereof and (ii) to the Acme Acquisition prior to the
consummation of the Acme Acquisition.
(b) An Event of Default shall not have
occurred either prior to the issuance of the Senior Notes or
prior to the consummation of the Acme Acquisition.
(c) Penn Traffic shall have issued at least
$75,000,000 of Senior Notes as described in the preamble to
this Agreement, and shall have received the net proceeds
thereof.
-6-
The Required Lenders' consent given in Section 2
hereof in respect to the Acme Acquisition shall not be
effective until Penn Traffic shall deliver a certificate by
an officer thereof that the Acme Acquisition is about to be
consummated in accordance with the definitive version of the
Acme Acquisition instruments, documents and agreements
delivered pursuant to Section 4(a)(ii).
5. SCOPE OF CONSENT. The Borrowers acknowledge
that the Required Lenders' consent hereunder is being given
only as to those matters set forth in Sections 1 and 2 above
that require such consent under the provisions of the Loan
Documents and should not be construed as the Lenders' consent
to any other aspect thereof, nor as the Lenders' endorsement
of the issuance by Pen Traffic of the Senior Notes or the
Acme Acquisition described in Sections 1 and 2 above. Such
consent shall not be construed as a consent to any similar or
other transaction or as a waiver of any unrelated Default or
Event of Default.
6. REPRESENTATIONS AND WARRANTIES; WAIVER OF
DEFENSES. As a further inducement to the Lenders to enter
into this Agreement, the Borrowers hereby represent and
warrant to the Agent and the Lenders and agree with the Agent
and the Lenders as follows:
-7-
(a) The Borrowers have the power and
authority to enter into this Agreement and each other
agreement or instrument to be delivered by them pursuant
hereto. This Agreement has been duly executed and delivered
by and constitutes the Borrowers' valid and binding
obligation, enforceable against the Borrowers in accordance
with its terms. The execution, delivery, and performance of
this Agreement will not violate any of the certificates of
incorporation or by-laws or any agreement or legal
requirements binding on any of the Borrowers.
(b) On the date hereof: (i) the Loan Agreement
and the other Loan Documents are in full force and effect and
constitute the Borrowers' binding obligation, enforceable
against them in accordance with their respective terms; (ii)
the Obligations are due and owning by them in accordance with
the terms of the Loan Documents to which the Borrowers are a
party; (iii) no Event or Event of Default has occurred and is
continuing; and (iv) the Borrowers hereby waive and release
all defenses to and setoffs, counterclaims, and claims
against payment of the Obligations and enforcement of the
Loan Documents that are now existing or occurring on or prior
to the date hereof.
7. NO IMPLIED AMENDMENTS. Except as expressly
provided herein, the Loan Agreements and the other Loan
-8-
Documents are not amended or otherwise affected in any way by
this Agreement.
8. ENTIRE AGREEMENT; MODIFICATIONS; BINDING
EFFECT. This Agreement constitutes the entire agreement of
the parties with respect to its subject matter and supersedes
all prior oral or written understandings about such matters.
The Borrowers confirm that, in entering into this Agreement,
they 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 Agreement may
be made except by a written agreement signed by the parties
hereto. The provisions of this Agreement shall be 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 the Borrowers without the Required lenders'
prior written consent.
9. SEVERABILITY. If any provision of this
Agreement shall be prohibited or invalid, under applicable
law, it shall be ineffective only to such extent, without
invalidating the remainder of this Agreement.
10. COUNTERPARTS. This Agreement may be executed
in any number of counterparts, and by each party in separate
-9-
counterparts, each of which is an original but all of which
shall together constitute one and the same agreement.
11. GOVERNING LAW. This Agreement is deemed to
have been made in the State of New York and is governed by
and shall be interpreted in accordance with the laws of such
state.
12. EFFECTIVE DATE. This Agreement shall become
effective when executed by the Borrowers and those of the
Lenders as shall constitute the number of Required Lenders.
-10-
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement on the day and year first above
written.
BORROWERS:
----------
THE PENN TRAFFIC COMPANY
By:
-------------------------
Title:
DAIRY DELL
By:
-------------------------
Title:
BIG M SUPERMARKETS, INC.
By:
-------------------------
Title:
PENNY CURTISS BAKING
COMPANY, INC.
By:
-------------------------
Title:
-11-
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: Main Place Tower, Suite 2450
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. By:____________________
New York, New York 10048 Title:
Commitment: $20,000,000 SANWA BUSINESS CREDIT
Pro-Rata Share: 10% CORPORATION
Lending
Office: One South Wacker Drive
Suite 2800 By:____________________
Chicago, IL 60606 Title:
Commitment: $25,000,000 BANKAMERICA
Pro-Rata Share: 12.5% BUSINESS CREDIT, INC.
Lending
Office: 40 East 52nd Street
Second Fl. By:____________________
New York, New York 10022 Title:
Commitment: $25,000,000 HELLER FINANCIAL, INC.
Pro-Rata Share: 12.5%
Lending
Office: 101 Park Avenue
12th Fl. By:____________________
New York, New York 10178 Title:
(Signatures continued on next page)
-12-
Commitment: $10,000,000 IBJ SCHRODER
Pro-Rata Share: 5%
Lending
Office: One State Street
9th Fl. By:____________________
New York, New York 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:
Commitment: $20,000,000 MITSUBISHI TRUST AND
Pro-Rata Share: 10% BANKING CORPORATION
Lending
Office: 520 Madison Avenue
25th Fl. By:____________________
New York, New York 10022 Title:
Commitment: $15,000,000 CONTINENTAL BANK, N.B.
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:____________________
Title:
-13-