Exhibit 10.5S
AMENDMENT NO. 18 AND WAIVER TO
LOAN AND SECURITY AGREEMENT
AMENDMENT No. 18, dated as of August 31, 1998 (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, 10, 11, 12, 13, 14, 15, 16 and 17
(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 FLEET
BANK, N.A. (as successor to 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
amend the Loan Agreement to, among other things, (i) waive the existing Interest
Coverage ratio set forth in Section 10.18 of the Loan Agreement through
March 31, 1999; (ii) waive the Consolidated Adjusted Net Worth covenant set
forth in Section 10.19 of the Loan Agreement through March 31, 1999; (iii) waive
the Consolidated EBDAIT covenant set forth in Section 10.20 of the Loan
Agreement through March 31, 1999 and (iv) modify the restrictions on sales of
assets set forth in Section 10.5 of the Loan Agreement and certain reporting
requirements.
WHEREAS, the Borrowers, the Agent and the Lenders have agreed to amend
the Loan Agreement pursuant to the terms and conditions set forth herein.
WHEREAS, the Borrowers have agreed to pay an amendment fee in the
aggregate amount of $500,000 to the Agent on behalf of, and for the benefit of,
those Lenders only which have executed this Agreement (the "AMENDMENT FEE").
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) Section 10.5 of the Loan Agreement shall be amended by
deleting the word "and" immediately prior to clause (i) and adding a new clause
immediately prior to the period at the end of the penultimate sentence of such
Section, which new clause shall read in its entirety as follows:
"and (j) sales of (i) certain retail stores located in
Pennsylvania, and (ii) the wholesale and franchise operations located
in Pennsylvania and all related assets in Pennsylvania including the
Dubois warehouse, in each case which have previously been identified
to the Agent, provided that such sales are for fair market value to
Persons who are not Affiliates of the Borrowers and provided that the
net proceeds of each such sale is remitted to the Agent for
application to the Obligations; PROVIDED, HOWEVER, that applying the
net proceeds of each such sale to the Obligations shall not reduce the
Commitments or prevent the Borrowers from borrowing Revolving Loans
hereunder to the extent they are otherwise permitted to do so."
(ii) Section 7.8 of the Loan Agreement shall be amended by adding
a new sentence at the end reading in its entirety as follows:
"At such time, if any, that the Borrowers' availability to borrow
Revolving Loans is $25,000,000 or less on an aggregate basis, each
Borrower will provide the Agent no later than Friday of each week
during which the Borrowers' availability to borrow Revolving Loans is
$25,000,000 or less, a Borrowing Base Certificate calculated as of a
date no earlier than the Friday of the immediately preceding week.
2. WAIVERS TO LOAN AGREEMENT. The Lenders hereby agree that from
August 1, 1998 through March 31, 1999 the Borrowers shall not be required to
comply with Sections 10.18, 10.19 and 10.20 of the Loan Agreement.
3. 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
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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.
(c) The Obligations under the Loan Agreement as amended by this
Amendment constitute "Senior Indebtedness" and "Designated Senior
Indebtedness" as defined under the indentures relating to the Senior
Notes and to the Subordinated Notes.
4. NO IMPLIED AMENDMENTS OR WAIVERS. 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. Except for the specific
waivers set forth in Section 2, nothing herein shall be or be deemed to be a
waiver of any covenant or agreement contained in the Loan Agreement and each
Borrower hereby agrees that all of the covenants and agreements contained in the
Loan Agreement are hereby ratified and confirmed in all respects.
5. 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.
6. EFFECTIVE DATE. This Amendment 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
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statement that the Obligations under the Loan Agreement as amended by
this Agreement constitute "Senior Indebtedness" and "Designated 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, Vice Chairman-Finance or Chief
Financial Officer with respect to Section (i) above and 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.
(v) The Agent shall have received payment of the Amendment
Fee, which shall be paid pro-rata to those Lenders which have executed
this Agreement.
7. 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.
8. 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.
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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:
BIG M SUPERMARKETS, INC.
By:
-------------------------------------
Title:
PENNY CURTISS BAKING COMPANY, INC.
By:
-------------------------------------
Title:
LENDERS:
Commitment: $35,000,000 FLEET BANK, N.A. (as successor to
Pro-Rata Share: 14% NatWest USA Credit Corp.)
Lending Office:
60 East 42nd Street
New York, New York 10017 By:
-------------------------------------
Title: Senior Vice President
Commitment: $20,000,000 NATIONAL BANK OF CANADA
Pro-Rata Share: 8%
Lending Office:
Main Place Tower By:
Suite 2540 -------------------------------------
350 Main Street Title: Vice President
Buffalo, New York 14202
By:
-------------------------------------
Title: Marketing Officer
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Commitment: $10,000,000 TRANSAMERICA BUSINESS
Pro-Rata Share: 4% CREDIT CORP.
Lending Office:
555 Theodore Fremd Avenue
Suite C301 By:
Rye, New York 10580 -------------------------------------
Title: Senior Vice President
Commitment: $30,000,000 SANWA BUSINESS CREDIT
Pro-Rata Share: 12% CORPORATION
Lending Office:
One South Wacker Drive
Suite 2800 By:
Chicago, IL 60606 -------------------------------------
Title:
Commitment: $45,000,000 BANKAMERICA BUSINESS
Pro-Rata Share: 18% CREDIT, INC.
Lending Office:
40 East 52nd Street
Second Fl By:
New York, New York 10022 -------------------------------------
Title: Vice President
Commitment: $50,000,000 HELLER FINANCIAL, INC.
Pro-Rata Share: 20%
Lending Office:
101 Park Avenue, 12th Fl. By:
New York, New York 10178 -------------------------------------
Title: Senior Vice President
Commitment: $10,000,000 LEHMAN COMMERCIAL
Pro-Rata Share: 4% PAPER, INC.
Lending Office:
3 World Financial Center
10th Fl. By:
New York, New York 10285 -------------------------------------
Title: Authorized Signatory
Commitment: $10,000,000 AMSOUTH BANK
Pro-Rata Share: 4%
Lending Office:
350 Park Avenue By:
New York, New York 10022 -------------------------------------
Title: Attorney-in-Fact
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Commitment: $15,000,000 THE CIT GROUP/BUSINESS
Pro-Rata Share: 6% CREDIT, INC.
Lending Office:
300 South Grand Avenue
3rd Fl. By:
Los Angeles, CA 90071 -------------------------------------
Title: Assistant Secretary
Commitment: $25,000,000 COMPAGNIE FINANCIERE DE CIC
Pro-Rata Share: 10% ET DE L'UNION EUROPEENNE
Lending Office:
520 Madison
37th Floor By:
New York, New York 10022 -------------------------------------
Title: First
Vice President Vice President
AGENT:
FLEET BANK, N.A. (as successor to
NatWest USA Credit Corp.),
As Agent
By:
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Title: Senior Vice President
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