EXHIBIT 10.R
AMENDMENT NO. 17 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 17, dated as of March 13, 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 and 16
(collectively, the "LOAN AGREEMENT") among THE PENN TRAFFIC COMPANY ("Penn
Traffic"), DAIRY DELL, BIG M SUPERMARKETS, INC. and XXXXX XXXXXXX 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) modify the existing Interest
Coverage ratio set forth in Section 10.18 of the Loan Agreement; (ii) modify the
Consolidated Adjusted Net Worth covenant set forth in Section 10.19 of the Loan
Agreement; and (iii) modify the Consolidated EBDAIT covenant set forth in
Section 10.20 of 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.
WHEREAS, the Borrowers have agreed to pay an amendment fee in the aggregate
amount of $375,000.00 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 10.18 of the Loan Agreement shall be amended by deleting such
Section 10.18 in its entirety, and by substituting, in lieu thereof, the
following:
"10.18 INTEREST COVERAGE. For each Coverage Period, the PT Stores Group
will maintain the Interest Coverage Ratio for such Coverage Period set forth in
the following table:
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Fiscal Quarter Fiscal Year Ratio
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Coverage Period ending with each Fiscal Quarter 1994 1.55:1
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Coverage Period ending with each Fiscal Quarter 1995 1.60:1
--------------------------------------------------------------------------------
Coverage Period ending with each Fiscal Quarter 1996 1.65:1
--------------------------------------------------------------------------------
Coverage Period ending with each Fiscal Quarter 1997 1.15:1
--------------------------------------------------------------------------------
Coverage Period ending with each Fiscal Quarter 1998 1.10:1
--------------------------------------------------------------------------------
Coverage Period ending with First Fiscal Quarter 1999 1.00:1
--------------------------------------------------------------------------------
Coverage Period ending with Second Fiscal Quarter 1999 1.00:1
--------------------------------------------------------------------------------
Coverage Period ending with Third Fiscal Quarter 1999 0.95:1
--------------------------------------------------------------------------------
Coverage Period ending with Fourth Fiscal Quarter 1999 1.00:1
--------------------------------------------------------------------------------
Coverage Period ending with First Fiscal Quarter 2000 1.10:1
--------------------------------------------------------------------------------
Coverage Period ending with Second Fiscal Quarter 2000 1.15:1
--------------------------------------------------------------------------------
Coverage Period ending with Third Fiscal Quarter 2000 1.20:1
--------------------------------------------------------------------------------
Coverage Period ending with Fourth Fiscal Quarter 2000 1.25:1"
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(ii) Section 10.19 of the Loan Agreement shall be amended by deleting such
Section 10.19 in its entirety and by substituting, in lieu thereof, the
following:
"10.19 CONSOLIDATED ADJUSTED NET WORTH. The PT Stores Group will not permit
Consolidated Adjusted Net Worth to be less than the following amounts as at the
last day of each Fiscal Quarter set forth below:
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Fiscal Quarter/Fiscal Year Consolidated Adjusted Net Worth
--------------------------------------------------------------------------------
First 1994 $0
--------------------------------------------------------------------------------
Second 1994 $0
--------------------------------------------------------------------------------
Third 1994 $0
--------------------------------------------------------------------------------
Fourth 1994 $0
--------------------------------------------------------------------------------
First 1995 $1,250,000
--------------------------------------------------------------------------------
Second 1995 $2,500,000
--------------------------------------------------------------------------------
Third 1995 $3,750,000
--------------------------------------------------------------------------------
Fourth 1995 $5,000,000
--------------------------------------------------------------------------------
First 1996 $6,250,000
--------------------------------------------------------------------------------
Second 1996 $7,500,000
--------------------------------------------------------------------------------
Third 1996 $8,750,000
--------------------------------------------------------------------------------
Fourth 1996 $10,000,000
--------------------------------------------------------------------------------
First 1997 $11,250,000
--------------------------------------------------------------------------------
Second 1997 $12,500,000
--------------------------------------------------------------------------------
Third 1997 $8,750,000
--------------------------------------------------------------------------------
Fourth 1997 $10,000,000
--------------------------------------------------------------------------------
First 1998 ($10,000,000)
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Second 1998 ($25,000,000)
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Third 1998 ($40,000,000)
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Fourth 1998 ($55,000,000)
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First 1999 ($65,000,000)
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Second 1999 ($85,000,000)
--------------------------------------------------------------------------------
Third 1999 ($110,000,000)
--------------------------------------------------------------------------------
Fourth 1999 ($125,000,000)
--------------------------------------------------------------------------------
First 2000 ($145,000,000)
--------------------------------------------------------------------------------
Second 2000 ($155,000,000)
--------------------------------------------------------------------------------
Third 2000 ($165,000,000)
--------------------------------------------------------------------------------
Fourth 2000 ($170,000,000)"
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(iii) Section 10.20 of the Loan Agreement shall be amended by deleting such
Section 10.20 in its entirety, and by substituting, in lieu thereof, the
following:
"10.20 CONSOLIDATED EBDAIT. The Borrowers will not permit Consolidated
EBDAIT at the end of each Fiscal Quarter for the four most recent consecutive
Fiscal Quarters of Penn Traffic (or, for such lesser period indicated below)
ending on or prior to the date of determination to be less than:
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Fiscal Quarter/Fiscal Year Amount
--------------------------------------------------------------------------------
First Fiscal Quarter only 1998 $35,000,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Two consecutive Fiscal 1998 $74,000,000
Quarters ending with Second
Fiscal Quarter 1998
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Three consecutive Fiscal 1998 $112,000,000
Quarters ending with Third
Fiscal Quarter 1998
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Fourth Fiscal Quarter only 1998 $ 38,000,000
--------------------------------------------------------------------------------
Two consecutive Fiscal 1999 $ 69,000,000
Quarters ending with the
First Fiscal Quarter 1999
--------------------------------------------------------------------------------
Three consecutive Fiscal 1999 $107,000,000
Quarters ending with the
Second Fiscal Quarter 1999
--------------------------------------------------------------------------------
Third 1999 $144,000,000
--------------------------------------------------------------------------------
Fourth 1999 $155,000,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
First 2000 $167,000,000
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Second 2000 $178,000,000
--------------------------------------------------------------------------------
Third 2000 $189,000,000
--------------------------------------------------------------------------------
Fourth 2000 $190,000,000"
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2. 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 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.
3. 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.
4. 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.
5. 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" 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.
6. 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.
7. 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.
