AMENDMENT NO. 11 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 11, dated as of October 16, 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, 9 and 10 (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 advised the Agent and the Lenders that
Penn Traffic intends to enter into an arrangement with Jubilee Limited
Partnership ("JUBILEE") whereby Jubilee will advance to Penn Traffic a sum of
money against the liquidation of the inventory in nine (9) Harts stores with a
book value of approximately $15,000,000 (the "HARTS ASSETS") in connection with
the shutdown of the stand-alone Harts general merchandise stores and will then
sell such inventory as Penn Traffic's agent (the "HARTS LIQUIDATION
TRANSACTION");
WHEREAS, the Borrowers have requested that the Agent and the Lenders
amend the Loan Agreement in order (i) to permit Penn Traffic to enter into and
perform its obligations under the Harts Liquidation Transaction and (ii) to 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) Article One of the Loan Agreement is hereby amended by
adding the following definition of "Harts Liquidation Transaction":
"'HARTS LIQUIDATION TRANSACTION' means the arrangement
between Penn Traffic and Jubilee Limited Partnership ("JUBILEE") whereby Jubilee
will advance to Penn Traffic a sum of money against the liquidation of inventory
in nine (9) Harts stores with a book value of approximately $15,000,000 (the
"HARTS ASSETS") in connection with the shutdown of the stand-alone Harts general
merchandise stores and will then sell such inventory as Penn Traffic's agent;
PROVIDED, HOWEVER, that such Harts Liquidation Transaction shall be fully
consummated in fiscal year 1996 and PROVIDED, FURTHER, that Penn Traffic shall
receive an advance (the "Initial Advance") of at least $7,200,000 with respect
to such Harts Assets prior to the release by the Agent of any security interest
with respect to such Hart Assets; PROVIDED, FURTHER, that Penn Traffic shall
have received an aggregate advance of at least $9,000,000 with respect to such
Hart Assets within two weeks from the date of the Initial Advance; and PROVIDED,
FURTHER, that in no event shall Penn Traffic be required to return any amount to
Jubilee or any other person if the effect thereof would be to reduce the
aggregate amount of the foregoing aggregate advance to less than $9,000,000."
(ii) Section 1 of the Loan Agreement is further amended by (a)
deleting the word "and" immediately prior to clause (l) in the definition of
"Permitted Liens"; and (b) deleting the period at the end of clause (l) of such
definition and substituting therefor the following:
"; (m) on and after the date of the receipt by Penn Traffic of
the Initial Advance (as defined in the definition of Harts
Liquidation Transaction as contained in this Agreement), Liens in
the Harts Assets (as defined in the definition of Harts
Liquidation Transaction) granted pursuant to the Harts
Liquidation Transaction".
(iii) Section 10.5 of the Loan Agreement is hereby amended by
(x) deleting the words "no longer used or useful in the business of "
in clause (e) thereof and by substituting therefor the word "by" and
(y) deleting Section 10.5(f) thereof and by substituting, in lieu
thereof, the following:
"(f) a sale of Qualified Real Property as part of a
Sale/Leaseback Transaction, a sale of other Property as part of a Sale/Leaseback
Transaction permitted under Section 10.14 of this Agreement, and the Harts
Liquidation Transaction;"
(iv) Section 10.14 of the Loan Agreement is hereby amended by
deleting Section 10.14(b) thereto in its entirety and by substituting,
in lieu thereof, the following:
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"(b) Equipment acquired by a Borrower or a PT Stores
Subsidiary after the date hereof in anticipation of entering into a Sale and
leaseback Transaction with respect thereto, PROVIDED, HOWEVER, that such Sale
and Leaseback Transaction is consummated within 180 days after the subject
Equipment is acquired, and that the aggregate amount of the Net Proceeds
received by all Borrowers and PT Stores Subsidiaries from such Sale and
Leaseback Transactions in any 365-day period does not exceed $20,000,000."
2. RELEASE OF CERTAIN COLLATERAL SECURITY. As of the later of (x)
the effective date of this Amendment and (y) the payment to Penn Traffic by
Jubilee of an advance of at least $7,200,000 under the Harts Liquidation
Transaction, the Agent hereby releases the security interest in the Harts Assets
granted by the Borrowers in favor of the Agent for the benefit of the Lenders
under the Loan Agreement and the other Loan Documents.
3. DELIVERY OF CERTAIN DOCUMENTS. The Borrowers hereby agree to
furnish the Agent with true and correct copies of all material documentation in
connection with the Harts Liquidation Transaction promptly upon execution
thereof and at such other times as Agent shall reasonably request.
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
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
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circumstance existing or occurring on or prior to the date hereof.
(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.
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 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.
7. 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
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such other instruments and documents as the Agent shall reasonably
request.
(iv) The Agent shall have received an original counterpart of
this Amendment, duly executed and delivered by the Borrowers and the
Required Lenders.
8. 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.
9. 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/ Matt A. Fox
---------------------
Title: Vice Chairman - Finance
DAIRY DELL
By:/s/ Matt A. Fox
---------------------
Title
BIG M SUPERMARKETS, INC.
By:/s/ Matt A. Fox
---------------------
Title
PENNY CURTISS BAKING
COMPANY, INC.
By:/s/ Matt A. Fox
---------------------
Title
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LENDERS:
Commitment: $35,000,000 NATWEST USA CREDIT CORP.
Pro-Rata Share: 14%
Lending Office:
175 Water Street
New York, New York 10038 By:
---------------------
Title: VP
Commitment: $20,000,000 NATIONAL BANK OF CANADA
Pro-Rata Share: 8%
Lending Office:
Main Place Tower By:
Suite 2540 ---------------------
350 Main Street Title: VP
Buffalo, New York 14202
By:
---------------------
Title
Commitment: $20,000,000 FUJI BANK, LTD.
Pro-Rata Share: 8%
Lending Office:
Two World Trade Center
79th Fl. By:
New York, New York 10048 ---------------------
Title: Vice President
& Manager
Commitment: $30,000,000 SANWA BUSINESS CREDIT
Pro-Rata Share: 12% CORPORATION
Lending Office:
One South Wacker Drive
Suite 2800
Chicago, IL 60606 By:
---------------------
Title: Vice President
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:
---------------------
Title: Senior Account Executive
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Commitment: $25,000,000 HELLER FINANCIAL, INC.
Pro-Rata Share: 10%
Lending Office:
101 Park Avenue, 12th Fl.
New York, New York 10178 By:
---------------------
Title: Vice Pres.
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:
---------------------
Title:
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:
---------------------
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:
New York, NY 10022 ---------------------
Title: Senior Vice President
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:
---------------------
Title: Senior Vice President &
Senior Manager
(BY: Mr. ?)
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
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AGENT
NATWEST USA CREDIT CORP.,
As Agent
By:
---------------------
Title: VP
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