FIFTH AMENDMENT,
ACKNOWLEDGMENT
AND CONSENT AND WAIVER TO
CREDIT AGREEMENT
This Fifth Amendment, Acknowledgment and Consent
and Waiver to Credit Agreement, dated as of December 18, 2008 to
the Credit Agreement referred to below (this “
Amendment ”) among (a) THE PENN TRAFFIC COMPANY, a
Delaware corporation, PENNY CURTISS BAKING COMPANY, INC., a New
York corporation, and BIG M SUPERMARKETS, INC., a New York
corporation (collectively referred to herein as “
Borrowers ” and individually as “
Borrower ”); (b) the other Credit Parties signatory
hereto; (c) KIMCO CAPITAL CORP., a Delaware corporation (in its
individual capacity, “ Kimco ”), for itself, as
Lender, and as Agent for Lenders (in such capacity, the “
Agent ”); and (d) the other Lenders signatory hereto
from time to time (collectively, the “ Lenders
”).
WITNESSETH
:
WHEREAS, the Borrowers, Agent and Lenders are
parties to that certain Credit Agreement, dated as of April 13,
2005 (including all annexes, exhibits and schedules thereto, and as
amended, restated, supplemented or otherwise modified prior to the
date hereof, the “ Credit Agreement
”);
WHEREAS, Penn Traffic and Big M (together, the
“ Seller Companies ”) desire to sell their
wholesale grocery business (the “ Wholesale Business
”) pursuant to the terms of (i) that certain Asset Purchase
Agreement (in substantially the form annexed hereto as Exhibit
A ), dated as of December 17, 2008, among C&S Wholesale
Grocers, Inc. and the Seller Companies, (ii) a
Transition Services Agreement (in substantially the form annexed
hereto as Exhibit B ) among C&S Wholesale Grocers, Inc.
and the Seller Companies and (iii) a Third Party Logistics
Agreement (in substantially the form annexed hereto as Exhibit
C ) between C&S Wholesale Grocers, Inc. and Penn Traffic
(the documents referenced in clauses (i), (ii) and (iii) together
with all annexes, exhibits and schedules thereto are hereinafter
referred to as the “ Asset Purchase Agreement
”); and
WHEREAS, on December 16, 2008, $519,000 of Net
Proceeds (the “ Escrow Amount ”) from the sale
of the store located at 137 State Route 104, Oswego, New York to
Price Chopper Operating Company, Inc. (the “ Oswego
Sale ”) was wired into the escrow account of Bond,
Schoeneck & King, PLLC (“ Escrow Agent ”)
pursuant to the terms of that certain Escrow Agreement, dated as of
December 15, 2008, among Agent, Supplemental Real Estate Facility
Agent and Escrow Agent;
WHEREAS, Agent and Lenders have agreed to waive,
pursuant to and in accordance with the terms of the Credit
Agreement, a certain Event of Default, in the manner and on the
terms and conditions provided for herein;
WHEREAS, the Borrowers have requested that Agent
and Lenders consent to the Seller Companies entry into the Asset
Purchase Agreement and to the transactions contemplated thereby
(the “ Wholesale Business Sale ”) on the terms
and conditions provided for herein; and
WHEREAS, Agent and Lenders have agreed to
consent to the Wholesale Business Sale and amend the Credit
Agreement on the terms and conditions, provided for
herein.
NOW THEREFORE, in consideration of the premises
and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1.
Definitions
. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them
in the Credit Agreement or Annex A thereto.
2.
Waiver . As of the Fifth Amendment Effective
Date (as hereinafter defined), Agent and Lenders hereby waive the
Event of Default under Section 8.1(o) of the Credit Agreement
arising as a result of an event of default under the GE Credit
Agreement resulting solely from the failure of a Net Proceeds
Reserve to be implemented pursuant to Section 6.8(e)(vii) of
the GE Credit Agreement in connection with the 2006 sale of BiLo
Store #9210 located at 1225 Scalp Avenue, Richland,
Pennsylvania.
3.
Acknowledgment and
Consent . Notwithstanding the provisions of
Sections 1.2(b)(ii) and 6.8 of the Credit Agreement
and the terms of the Intercreditor Agreement, Agent and Lenders
hereby consent to the Wholesale Business Sale pursuant to the Asset
Purchase Agreement (it being understood that any amendments or
modifications to the Asset Purchase Agreement following the
effectiveness of this Amendment that in the reasonable discretion
of the Agent could adversely affect any of the rights or remedies
of the Agent or any Lender must be acceptable to the Agent in its
sole discretion) for an aggregate purchase price of (i) not less
than $27,000,000 in cash, plus (ii) not less than
$11,000,000 for the accounts receivable of the Wholesale Business
(the “ Purchase Price ”), provided that:
(a) Borrowers shall use the Escrow Amount, plus up to
$10,000,000 of the Net Proceeds from the Wholesale Business Sale to
prepay the Loans (without penalty or premium) in an amount that
would result in the remaining outstanding principal amount of the
Loans being no less than $10,000,000 (the “ Prepayment
”) and (b) the remaining amount of the Net Proceeds from the
Wholesale Business Sale after the payment of the Prepayment (the
“ Diverted Amount ”) shall be deposited in the
Diversion Account and used in accordance with Section 3 of the GE
Sixth Amendment (as hereinafter defined). In addition,
Agent and Lenders hereby acknowledge and agree that the sale of the
Wholesale Business as contemplated by the Asset Purchase Agreement
shall be free and clear of all existing and future liens, claims
and encumbrances of Agent and Lenders, and Agent and Lenders hereby
release effective as of the payment of the Purchase Price by the
buyer, any and all liens, claims or encumbrances any of them has or
may have on the assets being transferred pursuant to the Asset
Purchase Agreement. With respect to the immediately
preceding sentence of this Section 3 only, C&S Wholesale
Grocers, Inc. shall be deemed a third party beneficiary of this
Consent, coupled with the power of enforcement thereof.
4.
Amendments to the Credit
Agreement. The Credit Agreement is hereby
amended as of the Fifth Amendment Effective Date as
follows:
(a)
Section 1.6(c)
is hereby amended by deleting such
section in its entirety.
(b)
The second sentence
of Section 1.11 of the
Credit Agreement is hereby amended by deleting “at
Agent’s discretion” where it appears in such
sentence.
(c)
Section 6.8(e)
of the Credit Agreement is hereby
amended by (i) deleting “and” at the end of subsection
(ix) thereof, (ii) inserting “and” at the end of
subsection (x) thereof, and (iii) inserting the new subsection (xi)
as follows:
“(xi) upon
any such sale, there shall be established under the GE Credit
Agreement a Reserve in an amount equal to (i) for any owned Real
Estate of the Credit Parties located in the state of New York, 74%
of the Net Proceeds from such sale, or (ii) for any other owned
Real Estate of the Credit Parties, 45% of the Net Proceeds from
such sale (the “ Net Proceeds Reserve ”);
provided , that, the amount of any such Reserve shall not
exceed the then outstanding principal amount of the
Loans.”
(d)
Section 6.8(e)
of the Credit Agreement is hereby
further amended by deleting the last paragraph of such Section
6.8(e) in its entirety and inserting the following new
paragraph in place thereof:
“
provided , further , that Borrowers may (x) upon
written notice to Agent, sell and transfer, close or otherwise
dispose of assets in connection with the sale or other disposition
of any owned Real Estate locations so long as such sale, closure or
other disposition otherwise complies with each of the conditions
set forth in clauses (iii), (iv), (vi), (viii), (ix), (x) and (xi)
of this Section 6.8(e) , as reasonably determined by Agent
and Borrowers provide Agent with a detailed closing statement for
any such sale and (y) upon written notice to Agent, sell and
transfer, close or otherwise dispose of assets in connection with
the sale of the “Minor Lease” and “Major
Lease” locations listed on Schedule 1 to the Fifth Amendment,
so long as (I) such sale or other disposition otherwise complies
with each of the conditions set forth in clauses (iii), (iv),
(viii), (ix) and (x) of Section 6.8(e), as reasonably determined by
the Agent, (II) Borrowers provide Agent with a detailed closing
statement for any such sale, (III) notwithstanding anything to the
contrary set forth in the Intercreditor Agreement, upon the sale or
other disposition of any such lease, the Borrowers shall make a
payment to Agent in an amount equal to 75% of the Net Proceeds from
the sale or disposition of such lease (in the case of a lease
identified as a “Minor Lease” on Schedule 1
to the Fifth Amendment) or 100% of the Net Proceeds from the sale
or disposition of such lease (in the case of a lease identified as
a “Major Lease” on Schedule 1 to the Fifth Amendment)
and (IV) in the case of a lease identified as a “Major
Lease” on Schedule 1 to the Fifth Amendment, the purchase
price for such Lease is equal to or greater than the amount listed
next to the applicable location in Schedule 1 to the Fourth
Amendment, it being understood that such location dispositions
referred to in clauses (x) and (y) above shall not be included in
clause (i) of this Section 6.8(e) for any
purpose.”
(e)
Section 6.8
of the Credit Agreement is hereby
amended by inserting “and” after subsection (h),
deleting “and” at the end of subsection (i) and
deleting subsection (j).
(f)
Section 11.7
of the Credit Agreement is hereby
amended by amending and restating the parenthetical in such Section
11.7 in its entirety as follows:
“(other
than the SREF Intercreditor Agreement and the Trade Lien
Intercreditor Agreement, which notwithstanding anything to the
contrary contained herein, shall govern and control in case of any
such conflict (except any conflict with Section 6.8(e) of this
Agreement for which such Section 6.8(e) shall
control))”
(g)
Annex A of the Credit Agreement is hereby amended
by:
(i)
amending the definition of “
Commitment Termination Date ” by deleting such
definition in its entirety and replacing it with the
following:
“‘ Commitment Termination
Date ’ means the earliest of (a) April 13, 2010, (b) the
date the Loans are declared due and payable pursuant to Section
8.2(b) of the Credit Agreement and (c) the date of payment or
prepayment in full in cash by Borrowers of the
Loans.”
