EXHIBIT 99.2
------------
AMENDMENT NO. 5 TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
AMENDMENT NO. 5, dated as of May 7, 2003 (this "AMENDMENT") to
that certain Revolving Credit and Term Loan Agreement dated as of June 29, 1999,
as amended as of June 26, 2000, as of September 14, 2001, as of April 19, 2002
and as of October 31, 2002, and as may be further amended, modified, restated or
supplemented from time to time (the "LOAN AGREEMENT") among THE PENN TRAFFIC
COMPANY ("PENN TRAFFIC"), DAIRY DELL, INC., BIG M SUPERMARKETS, INC. and XXXXX
XXXXXXX BAKING COMPANY, INC. (individually, each a "BORROWER" and collectively,
the "BORROWERS"), the Lenders party to the Loan Agreement (collectively, the
"LENDERS"), FLEET CAPITAL CORPORATION, as Administrative Agent for the Lenders
(in such capacity, the "AGENT"), GMAC BUSINESS CREDIT, LLC, as documentation
agent, and AMSOUTH BANK and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as co-agents is made by, between and among the Borrowers, the
Lenders and the Agent. Capitalized terms used herein, except as otherwise
defined herein, shall have the meanings given to such terms in the (i) Loan
Agreement and (ii) Security Agreement.
WHEREAS, the Borrowers and the Lenders have agreed to make
certain amendments to the Loan Agreement and the Security Agreement, subject to
the terms and conditions set forth herein.
WHEREAS, the Agent and the Lenders wish to confirm the
Revolving Credit Commitments of the Lenders as of the date hereof.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
SECTION I. RATIFICATION OF EXISTING AGREEMENTS
1.01 All of the representations and warranties made by the
Borrowers in the Loan Agreement and the other Loan Documents are true and
correct on the date hereof as if made on and as of the date hereof, except to
the extent that any of such representations and warranties relate by their terms
to a prior date.
1.02 The Borrowers agree that the Obligations of the Borrowers to
the Agent and each of the Lenders as evidenced by or otherwise arising under the
Loan Agreement and the other Loan Documents are, by the Borrowers' execution of
this Amendment, ratified and confirmed in all respects.
1.03 The Borrowers acknowledge and agree that all of their
obligations arising under and relating to this Amendment constitute Obligations
under the Loan Agreement.
SECTION II. AMENDMENTS TO LOAN AGREEMENT
2.01 AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is hereby
amended as of May 7, 2003 (the "EFFECTIVE DATE"), subject to the fulfillment of
the conditions under Section III hereof, as follows:
(a) The following new definitions are hereby added to
Section 1.01 of the Loan Agreement (in the appropriate alphabetical sequence).
(i) "Business Operations and Valuation
Consultant" means a nationally recognized Person (or two nationally recognized
Persons) in the business of providing financial and business analysis, advisory,
valuation and consulting services, acceptable to the Agent, retained by the
Borrowers at the Borrowers' expense for such purposes, including the providing
of written reports setting forth in reasonable detail its (or their) findings
and analysis, and containing such other information as the Agent may reasonably
request from time to time.
(ii) "Slow Moving Reserve" means reserves with
respect to Eligible Inventory located in the Borrowers' warehouses equal to 50%
of the value of general merchandise Inventory plus 100% of the value of all
other Inventory (i.e. grocery, frozen, meat, dairy products and the like), which
in each case was received more than 120 days prior to the date of determination.
(iii) "Valuation Reserve" means a reserve
established by the Required Lenders which shall be no greater than the
difference between (i) the sum of (x) 75% of the fair market value of the Real
Estate Interests and (y) 80% of the orderly liquidation value of the Equipment,
in each case given in appraisals of such assets from time to time and (ii) the
then aggregate outstanding principal amount of the Term Loans.
(b) The definition of "Consolidated Adjusted Net Income"
in Section 1.01 of the Loan Agreement is hereby amended by deleting the word
"and" following clause (f), and inserting after clause "(g)" the following new
clause "(h):
"(h) any charge against net income required to be
taken for settlement accounting under FASB # 88.".
(c) The definition of "Consolidated EBITDA" in Section
1.01 of the Loan Agreement is hereby amended by deleting the word "and"
following clause (b)(v), and inserting after clause "(vi)" the following:
"(vii) costs not exceeding $2,000,000 related to
severance obligations incurred after March 1, 2003;
(viii) the accrued costs related to the closure of
stores by the Borrowers, minus the cash closing costs
of stores closed after May 1, 2003; (ix) all of the
costs associated with appraisals, reports, and costs
of business consultants and financial advisors,
including without limitation the Business Operations
and Valuation Consultant; and (x) for the fourth
Fiscal Quarter of Fiscal Year 2003 and the first
Fiscal Quarter of Fiscal Year 2004, the difference
between (1) first in first out gross
2
profit calculated without taking into account the
accounting pronouncement EITF 02-16 and (2) first in
first out gross profit calculated in accordance with
GAAP consistent with the Company's implementation of
EITF 02-16; for the avoidance of doubt this addback
will be utilized in all calculations which include
the fourth Fiscal Quarter of Fiscal Year 2003 and the
first Fiscal Quarter of Fiscal Year 2004";
(d) The definition of PACA Reserve in Section 1.01 of the
Loan Agreement is hereby amended to add the following: "Such reserve shall be
adjusted no less often than monthly based on amounts owed for the purchase of
produce as shown in the Borrowing Base Certificate delivered to the Agent as
provided in the Security Agreement."
(e) Section 2.2(a) of the Loan Agreement is hereby
amended to add the following to the third sentence thereof: "provided, that each
Borrower agrees that no Revolving Borrowing or Letters of Credit shall be
requested unless the amount thereof is less than or equal to such Borrower's
Revolving Borrowing Capacity less the sum of (i) any outstanding Revolving Loans
and Swing Line Loans to such Borrower, (ii) $17,500,000 and (iii) the Valuation
Reserve; and provided further that the Slow Moving Reserve shall have been
deducted in determining the Value of Eligible Inventory."
(f) Section 7.2 of the Loan Agreement is hereby amended
as follows:
(i) the designation of the existing subsection
"(b)" is hereby changed to "(b)(i)";
(ii) the following new subsection 7.2(b)(ii) is
hereby inserted:
"(ii) As soon as available, but in any event
not later than thirty (30) days after the
close of each monthly reporting period in
the Borrowers' Fiscal Year, consolidated
unaudited balance sheets, together with a
statement showing the agings of all accounts
payable reflected in such balance sheets, of
Penn Traffic and its consolidated
Subsidiaries as at the end of such period,
and consolidated unaudited statements of
income and expense and cash flow for Penn
Traffic and its consolidated Subsidiaries
for such period, commencing with the period
ending May 31, 2003, all in reasonable
detail, fairly presenting the financial
position and results of operation of Penn
Traffic and its consolidated Subsidiaries as
at the date thereof and for such period,
prepared generally in accordance with GAAP
consistent with the audited Financial
Statements required pursuant to Section
7.2(a) and subject to normal Fiscal Quarter
end and Fiscal Year end adjustments.";
(iii) the following new subsection 7.2(b)(iii) is
hereby inserted:
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"(iv) Promptly upon receipt by the
Borrowers, the reports furnished by each of
the consultants, including the Business
Operations and Valuation Consultant, without
change or revision;
(g) Article 7 of the Loan Agreement is hereby amended by
adding the following new Sections 7.14 and 7.15:
"7.14 CONSULTANTS. The Business Operations and
Valuation Consultant shall be selected and retained
by the Borrowers, at the Borrowers' expense, as soon
as possible, but in no event later than May 22, 2003.
The retention agreement between the Borrowers and the
Business Operations and Valuation Consultant shall
state that the Business Operations and Valuation
Consultant shall provide its report to the Borrowers
and the Agent as promptly as possible after the date
on which the Business Operations and Valuation
Consultant is retained by the Borrowers. The
Borrowers agree that following notice from the Agent
to the Borrowers, the Agent or its representative may
contact representatives of any of the consultants,
including the Business Operations and Valuation
Consultant, to discuss the reports provided by them.
The Borrowers will inform representatives of the
consultants, including Business Operations and
Valuation Consultant, of the aforementioned consent."
7.15 CERTAIN RESERVES. The Agent may in its
reasonable discretion establish reserves for, INTER
ALIA, inadequate payments by the Borrowers of tobacco
taxes and sales taxes, such reserves being in
addition to any reserves established by the Agent
within clause (b)(D) of the definition of Revolving
Borrowing Capacity.
(h) Section 8.13(a) (Cash Capital Expenditures) of the
Loan Agreement is hereby amended by deleting the information set forth under the
headings "FISCAL YEAR" and "AMOUNTS" and replacing such information with the
following:
"FISCAL YEAR AMOUNTS
----------- -------
2004 $17,000,000
2005 $17,000,000
2006 $22,000,000
(i) Section 8.13(e) (Cash Capital Expenditures) of the
Loan Agreement is hereby amended to insert the following before the ".":
"provided, that notwithstanding the foregoing, the Borrowers shall not make,
based solely upon Carryover Cash Capex from Fiscal Year 2003, Cash Capital
Expenditures in Fiscal Year 2004 or any subsequent Fiscal Year".
(j) Section 8.14 (Consolidated EBITDA) of the Loan
Agreement is hereby amended by(x) deleting the information set forth under the
headings "FISCAL QUARTER" and "AMOUNTS" and replacing it with the following:
4
"FISCAL
QUARTER AMOUNTS
------- -------
Fiscal Year 2004 Q1 $64,000,000
Fiscal Year 2004 Q2 $54,000,000
Fiscal Year 2004 Q3 $55,000,000
Fiscal Year 2004 Q4 $57,000,000
Fiscal Year 2005 Q1 $62,000,000
Fiscal Year 2005 Q2 $68,000,000
Fiscal Year 2005 Q3 $78,000,000
Fiscal Year 2005 Q4 $90,000,000
Fiscal Year 2006 Q1 $95,000,000
Fiscal Year 2006 Q2 $99,000,000
Fiscal Year 2006 Q3 $103,000,000
Fiscal Year 2006 Q4 $108,000,000
Fiscal Year 2007 Q1 $111,000,000
Fiscal Year 2007 Q2 $114,000,000"
(k) Section 8.15 (Consolidated Funded Debt Ratio) of the
Loan Agreement is hereby amended by deleting the information set forth under the
headings "FISCAL YEAR", "FISCAL QUARTER" and "REQUIREMENT" and replacing it with
the following:
FISCAL
"FISCAL YEAR QUARTER REQUIREMENT
----------- ------- -----------
2004 1 6.5
2004 2 6.5
2004 3 6.5
2004 4 6.2
2005 1 5.8
2005 2 5.2
2005 3 4.6
2005 4 4.0
2006 1 3.9
2006 2 3.8
2006 3 3.7
2006 4 3.7
2007 1 3.7
2007 2 3.7
(l) Section 8.16 (Consolidated Interest Coverage Ratio)
of the Loan Agreement is hereby amended by deleting the information set forth
under the headings "FISCAL YEAR", "QUARTER" and "REQUIREMENT" and replacing it
with the following:
FISCAL
"FISCAL YEAR QUARTER REQUIREMENT
------------ ------- -----------
2004 1 1.70
2 1.45
5
FISCAL
"FISCAL YEAR QUARTER REQUIREMENT
------------ ------- -----------
3 1.45
4 1.45
2005 1 1.55
2 1.65
3 1.90
4 2.10
2006 1 2.30
2 2.40
3 2.50
4 2.60
2007 1 2.80
2 2.90"
(m) Section 8.17 (Consolidated Fixed Charge Coverage
Ratio) of the Loan Agreement is hereby amended by deleting the information set
forth under the headings "FISCAL YEAR" and "REQUIREMENT" and replacing it with
the following:
"FISCAL YEAR REQUIREMENT
----------- -----------
2004 0.85
2005 1.00
2006 1.00"
(n) Annex B to the Loan Agreement is amended to read in
the form attached hereto as "Annex B," including the textual provisions thereof.
2.02 AMENDMENT TO SECURITY AGREEMENT. Exhibit "I" to the Security
Agreement is hereby deleted in its entirety and replaced with new Exhibit "I" in
the form of Annex C hereto.
SECTION III. CONDITIONS PRECEDENT
3.01 The amendments hereunder shall be subject to the fulfillment
of the following conditions on the date hereof:
(a) All representations and warranties contained in this
Amendment or otherwise made in writing to the Agent in connection herewith shall
be true and correct.
(b) No unwaived event shall have occurred which
constitutes an Event of Default under the Loan Agreement or would constitute
such an Event of Default but for the requirement that notice be given or time
elapse or both.
(c) The Borrowers shall have delivered to the Agent for
the benefit of each of the Lenders consenting hereto the Amendment Fee (as such
term is defined in Section V hereof).
(d) The Borrowers and the Required Lenders shall have
executed and delivered this Amendment to the Agent.
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(e) The Agent shall have received satisfactory evidence
that all corporate action necessary for the valid execution and delivery by the
Borrowers of this Amendment and any and all other agreements and documents
contemplated pursuant to the transactions contemplated by this Amendment and the
performance of the transactions contemplated hereby and thereby shall have been
taken.
(f) The Agent shall have received from the Borrowers such
other approvals, opinions of counsel or documents as the Agent may reasonably
request, which shall be in form and substance reasonably satisfactory to the
Agent.
(g) The Penn Traffic Company shall have filed with the
Securities and Exchange Commission its annual report for the 2003 Fiscal Year
accompanied by a report thereon, unqualified in scope, by Price
WaterhouseCoopers LLC.
SECTION IV. REPRESENTATIONS
4.01 The Borrowers jointly and severally represent and warrant
(which representations and warranties shall survive the execution and delivery
hereof) to the Agent and each of the Lenders that:
(a) Such party has the power and authority to execute,
deliver and carry out the terms and provisions of this Amendment and the
transactions contemplated hereby and has taken or caused to be taken all
necessary action to authorize the execution, delivery and performance of this
Amendment and the transactions contemplated hereby;
(b) No consent of any other person, and no action of, or
filing with any governmental or public body or authority is required to
authorize, or is otherwise required in connection with the execution, delivery
and performance of this Amendment by such party;
(c) This Amendment has been duly executed and delivered
on behalf of such party by a duly authorized officer of such party, and
constitutes the legal, valid and binding obligation of such party enforceable in
accordance with its terms, subject to bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting the enforcement of creditors' rights
generally and the exercise of judicial discretion in accordance with general
principles of equity;
(d) The execution, delivery and performance of this
Amendment will not violate any law, statute or regulation or any order or decree
of any court or governmental instrumentality, or conflict with, or result in the
breach of, or constitute a default under any contractual obligation of such
party; and
(e) On and as of the date hereof and giving effect to
this Amendment, no Event of Default has occurred under the Loan Documents and no
default or event of default has occurred under the Senior Notes Indenture.
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SECTION V. MISCELLANEOUS
5.01 NO PRESENT CLAIMS. The Borrowers acknowledge and agree that,
as of the date hereof in respect of the Loan Documents and transactions
thereunder: (a) none of the Borrowers or any of their affiliates has any claim
or cause of action against any of the Lenders or the Agent, the Documentation
Agent or the Co-Agents (or any of their directors, officers, employees,
attorneys or agents); (b) none of the Borrowers or any of their affiliates has
offset rights, counterclaims or defenses of any kind against any of their
obligations, indebtedness or liabilities to any of the Lenders or the Agent; and
(c) each of the Lenders, the Agent, the Documentation Agent and the Co-Agents
have heretofore properly performed and satisfied in a timely manner all of their
obligations to the Borrowers and each of their affiliates. The Lenders, the
Agent, the Documentation Agent and the Co-Agents wish (and the Borrowers agree)
to eliminate any possibility that any past conditions, acts, omissions, events,
circumstances or matters in respect of the Loan Documents and transactions
thereunder, would impair or otherwise adversely affect any of the rights,
interests, contracts, collateral security or remedies of the Lenders, the Agent,
the Documentation Agent and the Co-Agents. Therefore, the Borrowers, on their
behalf and on behalf of each of their respective successors and assigns, hereby
waive, release and discharge the Lenders, the Agent, the Documentation Agent and
the Co-Agents and all of their directors, officers, employees, attorneys and
agents, from any and all claims, demands, actions or causes of action arising
out of or in any way relating to the Loan Documents and any documents,
instruments, agreements (including this Amendment), dealings or other matters
connected with the Loan Documents, including, without limitation, all known and
unknown matters, claims, transactions or things occurring on or prior to the
date of this Amendment related to the Loan Documents. The waivers, releases, and
discharges in this paragraph shall be effective regardless of any other event
that may occur or not occur on or after the date hereof.
5.02 NO WAIVER. Except as otherwise expressly provided for in this
Amendment, nothing in this Amendment shall extend to or affect in any way any of
the rights or obligations of the Borrowers or any of the Agent's or the Lenders'
obligations, rights and remedies arising under the Loan Documents, and neither
the Agent nor any Lender shall be deemed to have waived any or all of its rights
or remedies with respect to any Event or Event of Default existing on the date
hereof or arising hereafter.
5.03 FEES. In consideration of the Lenders' agreement to this
Amendment, the Borrowers agree to pay to the Agent an amendment fee, in addition
to any and all other fees which are due or may become due to the Lenders, in an
amount equal to 3/4 of 1% of the Lenders' Aggregate Exposure (the "AMENDMENT
FEE") payable on or before May 8, 2003 for distribution thereafter by the Agent
to the Lenders agreeing to this Amendment in writing on or before 5:00 PM EDT
May 7, 2003, in accordance with each such Lender's Pro Rata Share. The Borrowers
acknowledge and agree that the Amendment Fee set forth herein constitutes an
Obligation under the Loan Agreement. The Pro Rata Share of any Lender not so
agreeing hereto shall be paid to the Lenders so agreeing pro rata with each such
Lender's Pro Rata Share compared to the aggregate of the Pro Rata Shares of the
Lenders so agreeing.
5.04 REVOLVING CREDIT COMMITMENTS OF LENDERS. Each Lender party
hereto, and the Agent, confirms that Annex A annexed hereto sets forth the
Revolving Credit Commitment of
8
such Lender as of the date hereof. The Swing Line Lender confirms that the
Commitment of the Swing Line Lender is as set forth in Section 2.12 of the Loan
Agreement.
5.05 GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (OTHER THAN CONFLICTS OF
LAWS PRINCIPLES THEREOF REQUIRING THE APPLICATION OF THE LAW OF A DIFFERENT
JURISDICTION).
5.06 WAIVER OF JURY TRIAL. THE BORROWERS HEREBY WAIVE THEIR RIGHTS
TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AMENDMENT, THE LOAN DOCUMENTS OR ANY OF THE BORROWERS'
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH OBLIGATIONS. THE
BORROWERS hereby waive any right THEY may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. the Borrowers confirm that none of the Agent, any of the
Lenders, nor any of their respective agents, employees, or representatives has
indicated, either orally or in writing, that the Agent or any lender would not
seek to enforce the foregoing waivers.
5.07 COUNTERPARTS; FACSIMILE SIGNATURE. This Amendment may be
executed in counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective when copies hereof which, when taken together, bear the signatures of
each of the Borrowers, the Agent and the Required Lenders shall be delivered to
the Agent. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be as effective as delivery of a manually executed
signature page hereto and the full text of this Amendment.
5.08 HEADINGS. Headings used herein are for convenience of
reference only and are not to affect the construction of, or to be taken into
consideration in interpreting, this Amendment.
5.09 WAIVERS; AMENDMENTS. Neither this Amendment nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrowers, the Agent and the Required
Lenders.
5.10 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.
5.11 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,
9
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.
5.12 EFFECTIVE DATE. This Amendment shall become effective on the
Effective Date subject to the fulfillment of the conditions in Section III
hereof:
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their duly authorized officers as of
the date first above written.
BORROWERS:
---------
THE PENN TRAFFIC COMPANY
By:
-------------------------------------
Title:
DAIRY DELL, INC.
By:
-------------------------------------
Title:
BIG M SUPERMARKETS, INC.
By:
-------------------------------------
Title:
XXXXX XXXXXXX BAKING COMPANY INC.
By:
-------------------------------------
Title:
ADMINISTRATIVE AGENT:
--------------------
FLEET CAPITAL CORPORATION
By:
-------------------------------------
Title:
SWING LINE LENDER:
-----------------
FLEET CAPITAL CORPORATION
By:
-------------------------------------
Title:
11
LENDERS:
--------
FLEET CAPITAL CORPORATION
By:
-------------------------------------
Title:
GMAC BUSINESS CREDIT, LLC.
By:
-------------------------------------
Title:
AMSOUTH BANK
By:
-------------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
-------------------------------------
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By:
-------------------------------------
Title:
LASALLE BUSINESS CREDIT, INC.
By:
-------------------------------------
Title:
CITIZENS BUSINESS CREDIT COMPANY
By:
-------------------------------------
Title:
12
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
-------------------------------------
Title:
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
By:
-------------------------------------
Title:
FOOTHILL CAPITAL CORPORATION
By:
-------------------------------------
Title:
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:
-------------------------------------
Title:
SOVEREIGN BANK
By:
-------------------------------------
Title:
THE PROVIDENT BANK
By:
-------------------------------------
Title:
13
ANNEX A
LENDER REVOLVING COMMITMENT
------ --------------------
Fleet Capital Corporation $ 26,640,775
GMAC Business Credit, LLC $ 19,218,750
AmSouth Bank $ 14,053,980
Bank of America National Trust
and Savings Association $ 22,421,875
Foothill Capital Corporation $ 27,586,645
General Electric Capital Corporation $ 16,015,625
LaSalle Business Credit, Inc. $ 16,015,625
CIT Group/Business Credit, Inc. $ 16,015,625
Citizens Business Credit Company $ 9,609,375
IBJ Whitehall Business Credit
Corporation $ 9,609,375
Transamerica Business Credit
Corporation $ 14,999,850
Sovereign Bank $ 6,406,250
The Provident Bank $ 6,406,250
Total $ 205,000,000
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ANNEX B
PRICING GRID
(Rates and fees in basis points)
----------------------------------------------------------------------------------------------------------------------
Revolving/Swing Line
Loans Term Loans A Term Loans B
----------------------- ----------------------- ----------------------
Consolidated Unused
Funded Debt Line
Ratio Libor + Prime Rate + Libor + Prime Rate + Libor + Prime Rate + Fee
------------- -------- ------------ -------- ------------ ------- ------------- ----------
Tier A: 5.25+ N/A 100 N/A 100 400 300 50
----------------------------------------------------------------------------------------------------------------------
Tier I: 4.76 - 5.25 300 200 300 200 375 275 50
----------------------------------------------------------------------------------------------------------------------
Tier II: 4.26 - 4.75 275 175 275 175 375 275 50
----------------------------------------------------------------------------------------------------------------------
Tier III: 3.76 - 4.25 250 150 250 150 350 250 50
----------------------------------------------------------------------------------------------------------------------
Tier IV: 3.26 - 3.75 225 125 225 125 350 250 50
----------------------------------------------------------------------------------------------------------------------
Tier V: <3.25 212.5 112.5 212.5 112.5 350 250 50
----------------------------------------------------------------------------------------------------------------------
(1) There will be no pricing adjustment prior to May 1, 2000 (the
"Adjustment Date"). The initial review for pricing adjustment will occur
following receipt of the Borrowers' financial statements delivered pursuant to
Section 7.2(a) for Fiscal Year 2000.
(2) Thereafter, rate adjustments based on the Pricing Grid will be made
following receipt from the Borrowers of the financial statements delivered
pursuant to Section 7.2(a) or 7.2(b), and of a request for a rate adjustment
accompanied by a schedule reflecting the appropriate calculation.
(3) Quarterly adjustments based on the Pricing Grid shall occur 45 and
90 days after the end of the quarter or year-end, as appropriate, based on the
financial statements for the corresponding periods respectively.
(4) Solely for the purposes of calculating Consolidated Funded Debt
Ratio under this Pricing Grid for the first Fiscal Quarter of Fiscal Year 2001
and any subsequent Fiscal Quarter or Fiscal Year, Consolidated Funded Debt shall
include the Undrawn Amount of all Letters of Credit outstanding on the date of
determination.
(5) Notwithstanding clauses (2) and (3) above, from and after November
1, 2002, each of the Applicable Margins for determining the Eurodollar Rate and
the Prime Rate shall be equal to the basis points set forth in the line
designated "Tier II" above, until thereafter adjusted as provided in clauses (2)
and (3) above.
(6) Libor based rates are not available for the Revolving/Swing Line
Loans and Term Loans A in Tier A.
(7) The margins under the caption "Term Loans B" shall be reduced as
follows:
(a) Upon the aggregate principal balances of the Term Loans
having been reduced to $66,337,000 or less, such margins shall each be
reduced by 25 basis points, and
(b) Upon the aggregate principal balances of the Term Loans
having been reduced to $33,168,000 or less, such reduced margins shall
each be further reduced by 25 basis points.
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ANNEX C
[To be provided.]
16
