FIFTH AMENDMENT, ACKNOWLEDGMENT AND CONSENT AND WAIVER TO CREDIT AGREEMENT
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, XXXXX XXXXXXX 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 000 Xxxxx Xxxxx 000, Xxxxxx, Xxx Xxxx to Price
Chopper Operating Company, Inc. (the “Oswego Sale”) was
wired into the escrow account of Bond, Xxxxxxxxx & 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 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxxx.
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.
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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.”
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(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) Xxxxx 00, 0000, (x) 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.”
(ii) amending
the definition of “Material Contracts”
by deleting such definition in its entirety and substituting in lieu thereof the
following new definition:
“‘Material Contracts’
means (a) the Asset Purchase Agreement as defined in the Fifth Amendment, and
(b) the agreements set forth in Disclosure Schedule
(3.22(a)).”
(iii) adding
the following new definitions in the appropriate alphabetical
order:
‘Fifth Amendment’
means the Fifth Amendment to Credit Agreement, dated as of December 18, 2008,
among Agent, Lenders and Borrowers, and acknowledged and agreed to by each of
the other Credit Parties.
‘Fifth Amendment Effective
Date’ means the date on which the conditions precedent to the
effectiveness of the Fifth Amendment are satisfied, which date is December 18,
2008.”
(h) Schedule 6.8(e) to
the Credit Agreement is hereby amended by replacing such Schedule 6.8(e) in
its entirety with the Schedule
6.8(e) attached as Schedule 2
hereto.
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5. Amendments to the Credit
Agreement. The Credit Agreement is hereby amended as of the
date upon which the Diverted Amount is applied to the outstanding Revolving
Loans under the GE Credit Agreement in accordance with Section 3(c) of the GE
Sixth Amendment as follows:
(a) Subsection (g) of
Annex C to the Credit Agreement is hereby amended by deleting “Minimum Revolving
Outstanding Loan Balance (as defined in the GE Credit Agreement) as prohibited
by Section 5.15
of the GE Credit Agreement” where it appears in subsection (g) and substituting
in lieu thereof “$0”.
(b) Subsection (h) of
Annex C to the Credit Agreement is hereby amended by deleting such subsection
(h) in its entirety and inserting the following new subsection (h) in place
thereof:
“Agent
agrees, that to the extent the GE Credit Agreement Agent receives funds in the
Collection Account, whether through daily sweeps of the applicable Concentration
Accounts or through payments made by the Borrowers pursuant to Sections 1.3 and 1.10
or otherwise, which funds (or any portion thereof), if applied to the
outstanding balance of the Loans, would cause the outstanding principal amount
of the Revolving Loan to be less than $0, the GE Credit Agreement Agent, at the
direction of the Borrower Representative, shall use reasonable efforts to
immediately forward such funds (or the applicable portion thereof) to the
Diversion Account. For the avoidance of doubt, the amount of funds
which shall be forwarded to the Diversion Account shall be limited to the amount
which, if applied to the outstanding balance of the Loans, would cause the
outstanding amount of the Revolving Loan to be less than $0 (the “Diverted Funds”),
with any excess remaining after such forwarding of the Diverted Funds to the
Diversion Account to be applied by the GE Credit Agreement Agent to the GE Loans
in accordance with the GE Credit Agreement. Each of the Credit
Parties expressly acknowledges and agrees that neither the Agent, the GE Credit
Agreement Agent nor any Lender shall have any liability to such Credit Party or
any other Person in the event the GE Credit Agreement Agent applies funds in
contravention of this clause (h). Except as
permitted in this clause (h), the Third
Amendment and the Fifth Amendment, no Credit Party shall, or shall cause or
permit any Person thereof to, deposit, accumulate or maintain cash in the
Diversion Account in an amount in excess of the Diverted Funds, and if at any
time the then aggregate outstanding principal amount of the Revolving Loans
exceeds $0, the excess shall be transferred to the Collection Account for
application to the Obligations in accordance with clause (k)
below.”
6. Representations and
Warranties. To induce Agent and Lenders to enter into this
Amendment, each of the Credit Parties, jointly and severally, makes the
following representations and warranties to Agent and Lenders:
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(a) The
execution, delivery and performance of this Amendment and the performance of the
Credit Agreement after giving effect to this Amendment by such Credit Party
thereto: (i) are within such Person’s corporate or limited liability company
power, as applicable; (ii) have been duly authorized by all necessary corporate
or limited liability company; (iii) do not contravene any provision of such
Person’s charter, bylaws or operating agreement as applicable; (iv) do not
violate any law or regulation, or any order or decree of any court or
Governmental Authority by which such Person or its assets are bound; (v) do not
conflict with or result in the breach or termination of, constitute a default
under or accelerate or permit the acceleration of any performance required by,
any indenture, mortgage, deed of trust, material lease, material agreement or
other material instrument to which such Person is a party or by which such
Person or any of its property is bound; (vi) do not result in the creation or
imposition of any Lien upon any of the property of such Person other than those
in favor of Agent, on behalf of itself and Lenders, pursuant to the Loan
Documents; and (vii) other than the consents being obtained on or prior to the
date hereof, do not require the consent or approval of any Governmental
Authority or any other Person.
(b) This
Amendment has been duly executed and delivered by or on behalf of such Credit
Party.
(c) This
Amendment constitutes a legal, valid and binding obligation of such Credit
Party, enforceable against such Credit Party in accordance with its
terms.
(d) No
Default or Event of Default has occurred and is continuing after giving effect
to this Amendment.
(e) After
giving effect to this Amendment, the representations and warranties of such
Credit Party contained in the Credit Agreement and each other Loan Document
shall be true and correct on and as of the date hereof with the same effect as
if such representations and warranties had been made on and as of such date,
except that any such representation or warranty which is expressly made only as
of a specified date need be true only as of such date and except for changes
therein expressly permitted by the Credit Agreement.
7. No Other
Amendments/Waivers. Except as expressly amended herein, the
Credit Agreement and the other Loan Documents shall be unmodified and shall
continue to be in full force and effect in accordance with their
terms. In addition, except as expressly set forth herein, this
Amendment shall not be deemed a waiver of any term or condition of any Loan
Document and shall not be deemed to prejudice any right or rights which Agent,
for itself and Lenders, may now have or may have in the future under or in
connection with any Loan Document or any of the instruments or agreements
referred to therein, as the same may be amended from time to time.
8. Waiver of
Claims. The Credit Parties hereby acknowledge and agree that
as of December 15, 2008, the aggregate outstanding principal amount of the Loans
was $20,405,000 and, after giving effect to the payment of the Purchase Price as
provided in section 3 hereof, is $10,000,000, and that such aggregate
outstanding principal amount is payable pursuant to the Credit Agreement without
defense, offset, withholding, cancellation or reduction of any
kind. Each of the Credit Parties hereby waives, releases, remises and
forever discharges Agent, Lenders and each other Indemnified Person from any and
all claims, suits, actions, investigations, proceedings or demands arising out
of or in connection with the Credit Agreement (collectively, “Claims”), whether
based in contract, tort, implied or express warranty, strict liability, criminal
or civil statute or common law of any kind or character, known or unknown, which
such Credit Party ever had, now has or might hereafter have against Agent or
Lenders which relates, directly or indirectly, to any acts or omissions of
Agent, Lenders or any other Indemnified Person on or prior to the date hereof;
provided that,
such Credit Party does not waive any Claim solely to the extent such Claim
relates to the Agent’s or any Lender’s gross negligence or willful
misconduct.
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9. Expenses. (a)
In connection with this Amendment, the Borrowers shall pay to Agent for the
benefit of the Lenders an amendment fee (the “Amendment Fee”) in
the amount of $300,000, which amount shall be fully earned on the Fifth
Amendment Effective Date but payable in two installments as follows: $150,000 to
Agent for the benefit of the Lenders on the Fifth Amendment Effective Date; and
$150,000 to Agent for the benefit of the Lenders on April 13, 2009.
(b) Each
Borrower hereby reconfirms its respective obligations pursuant to Section 11.3 of the
Credit Agreement to pay and reimburse Agent, for all reasonable costs and
expenses (including, without limitation, reasonable fees of counsel) incurred in
connection with the negotiation, preparation, execution and delivery of this
Amendment and all other documents and instruments delivered in connection
herewith.
10. Effectiveness. This
Amendment shall become effective as of the date hereof (the “Fifth Amendment Effective
Date”) only upon satisfaction in full in the reasonable judgment of Agent
of each of the following conditions:
(a) Payment of the Amendment
Fee. The Borrowers shall have paid to the Agent that portion
of the Amendment Fee that is required to be paid on the Fifth Amendment
Effective Date pursuant to section 9 hereof.
(b) Amendment. The
Agent shall have received counterpart signature pages of this Amendment duly
executed and delivered by each of Agent, Lenders and the Borrowers.
(c) Amendment to the GE Credit
Agreement. The Agent shall have received evidence that
Borrowers have received a duly executed amendment to the GE Credit Agreement, in
substantially the form attached hereto as Exhibit D (the “GE Sixth
Amendment”).
(d) Amendment to Intercreditor
Agreement. The Agent shall have received counterpart signature
pages of the amendment to the Intercreditor Agreement attached hereto as Exhibit E duly
executed and delivered by each of Agent, GE Credit Agreement Agent and the
Borrowers.
(e) Representations and
Warranties. The representations and warranties of the Credit
Parties in this Amendment shall be true and correct on and as of the date
hereof, except that any such representation or warranty which is expressly made
only as of a specified date need be true only as of such date.
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11. GOVERNING
LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
12. Counterparts. This
Amendment may be executed by the parties hereto on any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
[SIGNATURE
PAGES FOLLOW]
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the day and year first above written.
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BORROWERS
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THE
PENN TRAFFIC COMPANY
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By:
___________________________
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Name:
________________________
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Title:
_________________________
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XXXXX
XXXXXXX BAKING COMPANY, INC.
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By:
___________________________
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Name:
________________________
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Title:
_________________________
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BIG
M SUPERMARKETS, INC.
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By:
___________________________
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Name: _________________________
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Title:
_________________________
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[SIGNATURE
PAGE TO AMENDMENT]
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LENDERS
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KIMCO CAPITAL CORP., as Agent and
Lender
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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JUBILEE-VI LLC, a Delaware limited
liability company),
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As
successor-in-interest to
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JUBILEE
LIMITED PARTNERSHIP V,
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as
Lender
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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[SIGNATURE
PAGE TO AMENDMENT]
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The
following Persons are signatories to this Amendment in their capacity as
Credit Parties and not as Borrowers.
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SUNRISE
PROPERTIES, INC.
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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PENNWAY
EXPRESS, INC.
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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COMMANDER
FOODS INC.
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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P
AND C FOOD MARKETS INC. OF VERMONT
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By:
___________________________
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Name:
______________________
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Title:
__________________________
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P.T.
DEVELOPMENT, LLC
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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[SIGNATURE
PAGE TO AMENDMENT]
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P.T.
FAYETTEVILLE/UTICA, LLC
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By:
___________________________
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Name:
_________________________
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Title:
_________________________
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[SIGNATURE
PAGE TO AMENDMENT]
The
following Persons are signatories to this Amendment in their capacity as Credit
Parties and not as Borrowers.
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SUNRISE
PROPERTIES, INC.
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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PENNWAY
EXPRESS, INC.
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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COMMANDER
FOODS INC.
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By:
___________________________
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Name:
_________________________
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Title:
_________________________
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P
AND C FOOD MARKETS INC. OF VERMONT
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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P.T.
DEVELOPMENT, LLC
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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[SIGNATURE
PAGE TO AMENDMENT]
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P.T.
FAYETTEVILLE/UTICA, LLC
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By:
___________________________
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Name:
_________________________
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Title:
__________________________
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[SIGNATURE
PAGE TO AMENDMENT]
Schedule
1
Schedule
2
Exhibit
A
Asset Purchase
Agreement
Exhibit
B
Transition Services
Agreement
Exhibit
C
Third Party Logistics
Agreement
Exhibit
D
Amendment to the GE Credit
Agreement
Exhibit
E
Amendment to Intercreditor
Agreement
