EXHIBIT 10.P
AMENDMENT NO. 15 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 15, dated as of May 27, 1997 (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 and 14 (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
covenant regarding sales of assets set forth in Section 10.5 of the Loan
Agreement; (ii) modify the existing Capital Expenditures covenant set forth in
Section 10.17 of the Loan Agreement; (iii) modify the existing Interest Coverage
ratio set forth in Section 10.18 of the Loan Agreement; (iv) modify the
Consolidated Adjusted Net Worth covenant set forth in Section 10.19 of the Loan
Agreement; (v) modify the Consolidated EBDAIT covenant set forth in Section
10.20 of the Loan Agreement; and (vi) modify the definition of Consolidated
Adjusted Net Income.
WHEREAS, the Borrowers, the Agent and the Lenders have agreed to amend
the Loan Agreement pursuant to the terms and conditions set forth herein.
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) the definition of "Consolidated Adjusted Net Income" in
Section 1.1 of the Loan Agreement is hereby amended by deleting clause (f)
thereof and by substituting, in lieu thereof, the following: "(f) gain or loss
arising from items which are either (i) extraordinary, (ii) infrequent of
occurrence or (iii) unusual in nature, each of the foregoing as determined in
accordance with GAAP, including, but not limited to, costs and expenses
recognized in Fiscal Year 1998 in connection with the Borrowers' management
reorganization, centralization of operations and related corporate actions
including the hiring of new management personnel."
(ii) Section 10.5(e)(ii) of the Loan Agreement is hereby
amended by deleting the number "$15,000,000" and substituting in its place the
number "$25,000,000".
(iii) Section 10.17 of the Loan Agreement shall be amended by
adding the following clause (c):
"(c) Notwithstanding Sections 10.17(a) and 10.17(b), in the
event that the Borrowers Consolidated EBDAIT for Fiscal Year 1998 is less than
$175,000,000, then (i) the amount of Cash Capital Expenditures of the Borrowers
and their Subsidiaries permitted for Fiscal Year 1998 shall be an amount not to
exceed $35,000,000, (ii) until such time as Borrowers Consolidated EBDAIT for
any period of two consecutive Fiscal Quarters exceeds $100,000,000, the amount
of Cash Capital Expenditures of the Borrowers and their Subsidiaries permitted
for the first half of each Fiscal Year shall be an amount not to exceed
$18,000,000 and the amount of Cash Capital Expenditures of the Borrowers and
their Subsidiaries permitted for the second half of each Fiscal Year shall be an
amount not to exceed $18,000,000 and (iii) at such time in Fiscal Year 1999 or
thereafter that Borrowers Consolidated EBDAIT for any period of two consecutive
Fiscal Quarters exceeds $100,000,000, the amount of Cash Capital Expenditures
permitted hereunder shall be that set forth above in Sections 10.17(a) and
10.17(b)."
(iv) 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:
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"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:
Fiscal Quarter Fiscal Year Ratio
Coverage Period ending with each
Fiscal Quarter 1994 1.55:1
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 1.15:1
Coverage Period ending with Second
Fiscal Quarter 1999 1.20:1
Coverage Periods ending with Third
Fiscal Quarter and Fourth Fiscal Quarter 1999 1.25:1
Coverage Period ending with First
Fiscal Quarter and Second Fiscal Quarter 2000 1.35:1
Coverage Period ending with Third
Fiscal Quarter and Fourth Fiscal Quarter 2000 1.40:1"
(v) 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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Consolidated Adjusted
Fiscal Quarter/Fiscal Year 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)
Second 1998 ($25,000,000)
Third 1998 ($40,000,000)
Fourth 1998 ($55,000,000)
First 1999 ($65,000,000)
Second 1999 ($75,000,000)
Third 1999 ($85,000,000)
Fourth 1999 ($100,000,000)
First 2000 ($107,500,000)
Second 2000 ($115,000,000)
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Consolidated Adjusted
Fiscal Quarter/Fiscal Year Net Worth
Third 2000 ($122,500,000)
Fourth 2000 ($130,000,000)"
(vi) 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 (or, for such lesser period indicated below) of the
Borrower ending on or prior to the date of determination to be less than:
Fiscal Quarter/Fiscal Year Amount
First Fiscal 1998 $35,000,000
Quarter only
Two consecutive 1998 $74,000,000
Fiscal Quarters
ending with
Second Fiscal
Quarter 1998
Three consecutive 1998 $112,000,000
Fiscal Quarters
ending with
Third Fiscal
Quarter 1998
Fourth 1998 $164,000,000
First 1999 $175,000,000
Second 1999 $186,000,000
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Third 1999 $197,000,000
Fourth 1999 $205,000,000
First 2000 $210,000,000
Second 2000 $215,000,000
Third 2000 $220,000,000
Fourth 2000 $225,000,000"
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.
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(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
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Notes and to the Subordinated Notes).
(iii) The Borrowers shall deliver to the Agent a certificate of
the Borrowers' Chief Executive 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 an amendment fee
in the amount of $312,500 for the benefit of the Lenders executing
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.
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