AMENDMENT NO. 10 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 10, dated as of August 31, 1995 (this "AMENDMENT") to
that certain Loan and Security Agreement dated as of March 5, 1993, as amended
by Amendment Nos. 1, 2, 3, 4, 5, 6, 7, 8 and 9 (collectively, the "LOAN
AGREEMENT") among THE PENN TRAFFIC COMPANY ("Penn Traffic"), DAIRY DELL, BIG M
SUPERMARKETS, INC. and PENNY CURTISS BAKING COMPANY, INC. (individually, each a
"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.
WHEREAS, the Borrowers have requested that the Agent and the Lenders:
(1) agree to amend the definition of "Consolidated Adjusted Net Worth" as set
forth in the Loan Agreement in order to "add back" the charge recognized by the
Borrowers in the Borrowers' second quarter of fiscal year 1996 arising from the
closing of the "Harts" stores of the Borrowers; (2) agree to amend the Loan
Agreement to permit Penn Traffic to repurchase up to $10,000,000 of its common
stock; (3) agree to amend the Consolidated EBDAIT covenant set forth in Section
10.20 of the Loan Agreement; and (4) 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:
(i) (a) the definition of "CAPITAL EXPENDITURES" in Section 1
of the Loan Agreement is hereby amended by adding the following
sentence thereto at the end of such definition: "Capital Expenditures
shall specifically include any consideration paid by Penn Traffic or
any other Borrower in connection with a redemption or repurchase of
Penn Traffic's capital
stock as permitted under Section 10.6 of this Agreement and such
consideration shall constitute Cash Capital Expenditures for the
purposes of this Agreement.".
(b) The definition of "CONSOLIDATED ADJUSTED NET WORTH" in
Section 1 of the Loan Agreement is hereby amended (x) by deleting the
text of clause (c)(ii) thereof in its entirety and by substituting, in
lieu thereof, the words "arising from any cumulative adjustment to net
income resulting from a change after March 5, 1993 in income tax rates
as required by Statement of Financial Accounting Standards No. 109"
and (y) by adding the following clause (i) thereto immediately after
the end of clause (h) thereof: "; PLUS (i) the amount by which (x) the
charge recognized by the PT Stores Group in the second quarter of
fiscal year 1996 arising from the discontinuation of the "Hart's"
operations of the PT Stores Group (such charge not to exceed
$55,000,000) exceeds (y) the amount of all tax benefits accruing or to
be accruing to the PT Stores Group as a result of such charge"; and
(ii) Section 2.2(a) of the Loan Agreement is hereby amended by
deleting the words "Each Borrowing shall be in the principal amount of
not less than $100,000 (or the unused balance of such Borrower's
Borrowing Capacity, if less)." and by substituting, in lieu thereof,
the words "Each Borrowing of Prime-Based Revolving Loans shall be in
the principal amount of not less than $100,000 (or the unused balance
of such Borrower's Borrowing Capacity, if less) and each Borrowing of
Eurodollar Revolving Loans shall be in the principal amount of not
less than $5,000,000."
(iii) Section 2.8(c) of the Loan Agreement is hereby amended
by deleting the words "four Interest Periods" therein and by
substituting, in lieu thereof, the words "six Interest Periods".
(iv) Section 10.6 of the Loan Agreement is hereby amended by
adding the following sentence to the end thereof: "In addition, if no
Event or Event of Default has occurred and is continuing, Penn Traffic
may repurchase its capital stock on the open market for a fair market
value; PROVIDED, HOWEVER, that the aggregate purchase price for all
such repurchases during the term of this Agreement shall not exceed
$10,000,000; and PROVIDED, FURTHER, that Penn Traffic shall give the
Agent written notice within one (1) Business Day of any such
repurchase if the purchase price for such repurchase plus the
aggregate purchase price for all prior repurchases of the capital
stock of
2
Penn Traffic not previously reported shall exceed an aggregate of
$1,000,000; and PROVIDED, FURTHER, that no such repurchase may be made
in the event that such repurchase would not be permitted under the
indentures and other agreements executed in connection with the Senior
Notes and the Subordinated Notes."
(v) Section 10.20 of the Loan Agreement is hereby amended by (x)
deleting the reference to "January 31, 1993" therein and by
substituting a reference to "January 29, 1995" therefor and
(y) deleting the table contained therein and substituting the
following in lieu thereof:
Cumulative
"Fiscal Year Consolidated EBDAIT
----------- -------------------
1996 $ 230,000,000
1997 465,000,000
1998 710,000,000
1999 975,000,000
2000 1,250,000,000"
2. 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
and 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 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.
3
(c) The Obligations under the Loan Agreement as amended by this
Amendment constitute "Senior Indebtedness" as defined under the
indentures relating to the Senior Notes and to the Subordinated Notes.
3. 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.
4. ENTIRE AGREEMENT; 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,
rescission, 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.
5. EFFECTIVE DATE. This Agreement shall become effective upon
compliance with the conditions set forth immediately below:
(i) 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.
(ii) The Borrowers shall deliver to the Agent for the benefit
of the Lenders an opinion of Borrowers' counsel in form and substance
satisfactory to the Agent and its counsel (which opinion shall cover
such matters as the Agent may reasonably request, including a
statement that the Obligations under the Loan Agreement as amended by
this Amendment constitute "Senior Indebtedness" as defined under the
indentures relating to the Senior Notes and to the Subordinated
Notes).
(iii) The Borrowers shall deliver to the Agent a certificate of
the Borrowers' Chief Executive or Chief Financial Officer with respect
to Section (i) above and such other instruments and documents as the
Agent or any Lender shall reasonably request.
4
(iv) The Agent shall have received an original counterpart of
this Amendment, duly executed and delivered by the Borrowers and the
Required Lenders.
6. 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.
7. 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: /s/ Martin A. Fox
_____________________
Title:
DAIRY DELL
By: /s/ Martin A. Fox
_____________________
Title
BIG M SUPERMARKETS, INC.
By: /s/ Martin A. Fox
_____________________
Title
5
PENNY CURTISS BAKING
COMPANY, INC.
By: /s/ Martin A. Fox
_____________________
Title
LENDERS:
Commitment: $35,000,000 NATWEST USA CREDIT CORP.
Pro-Rata Share: 14%
Lending Office:
175 Water Street
New York, New York 10038 By: /s/ George N. Triebenbacher
_____________________________
Title: Vice President
Commitment: $20,000,000 NATIONAL BANK OF CANADA
Pro-Rata Share: 8%
Lending Office:
Main Place Tower By: /s/ Michael S. Woodard
Suite 2540 ________________________
350 Main Street Title: Assistant Vice President
Buffalo, New York 14202
By: /s/
_____________________
Title
Commitment: $20,000,000 FUJI BANK, LTD.
Pro-Rata Share: 8%
Lending Office:
Two World Trade Center
79th Fl. By: /s/
New York, New York 10048 _____________________
Title:
Commitment: $30,000,000 SANWA BUSINESS CREDIT
Pro-Rata Share: 12% CORPORATION
Lending Office:
One South Wacker Drive
Suite 2800
Chicago, IL 60606 By: /s/ Lawrence J. Placek
_______________________
Title: Vice President
6
Commitment: $30,000,000 BANKAMERICA
Pro-Rata Share: 12% BUSINESS CREDIT, INC.
Lending Office:
40 East 52nd Street
Second Fl.
New York, New York 10022 By: /s/ Louis Alexander
____________________
Title: Senior Account Executive
Commitment: $25,000,000 HELLER FINANCIAL, INC.
Pro-Rata Share: 10%
Lending Office:
101 Park Avenue, 12th Fl.
New York, New York 10178 By: /s/ Thomas W. Bukowski
_______________________
Title: Vice President
Commitment: $10,000,000 IBJ SCHRODER
Pro-Rata Share: 4% BANK & TRUST COMPANY
Lending Office:
One State Street
9th Fl.
New York, New York 10004 By: /s/ J. Christopher Mangin
__________________________
Title: Vice President
Commitment: $10,000,000 MIDLANTIC BANK N.A. (formerly
Pro-Rata Share: 4% known as Midlantic National
Lending Office: Bank)
499 Thornalle Street
9th Fl.
Edison, New Jersey 08837 By: /s/ Michael A. Richards
________________________
Title: Assistant Vice President
Commitment: $30,000,000 MITSUBISHI TRUST AND
Pro-Rata Share: 12% BANKING CORPORATION
Lending Office:
520 Madison Avenue
25th Fl. By: /s/ Patricia Loret de Mola
New York, NY 10022 ___________________________
Title: Senior Vice President
7
Commitment: $15,000,000 INDUSTRIAL BANK OF JAPAN,
Pro-Rata Share: 6% LIMITED, New York Branch
Lending Office:
One State Street
9th Fl.
New York, New York 10004 By: /s/ J. Oda
_____________________
Title: Senior Vice President
& Senior Manager
Commitment: $25,000,000 COMPAGNIE FINANCIERE DE CIC ET
Pro-Rata Share: 10% DE L'UNION EUROPEENNE
Lending Office:
520 Madison Avenue
37th Floor By: /s/ Brian O'Leary
New York, New York 10022 __________________________
Title: Vice President
By: /s/ Sean Mounier
_____________________
Title: First Vice President
AGENT
NATWEST USA CREDIT CORP.,
As Agent
By: /s/ George N. Triebenbacher
_____________________
Title
8