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Exhibit 10.27    
  


 
 

AMENDMENT NO. 3 TO THE CREDIT AGREEMENT    
  


        AMENDMENT NO. 3 dated as of January 28, 2003 in respect of the Credit Agreement dated as of September 19, 2000 (as amended, modified, supplemented
and in effect from time to time, the "Credit Agreement") among PATHMARK STORES, INC. (the
"Borrower"), the LENDERS party thereto (individually, a "Lender" and collectively, the
"Lenders") and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), as Administrative Agent (the "Administrative
Agent"). 


        The
Borrower has requested that the Administrative Agent consent to certain amendments to the Credit Agreement and waive certain Defaults thereunder. The Administrative Agent, pursuant
to authority granted by, and having obtained all necessary consents of, the Required Lenders (as defined in the Credit Agreement), has agreed to such amendments and waiver and, accordingly, the
parties hereto hereby agree as follows: 


        Section 1.    Definitions.    Except as otherwise defined in this Amendment No. 3, terms defined in the
Credit Agreement are used herein as defined therein. 


        Section 2.    Amendments.    Subject to the conditions precedent set forth in Section 5 below, but
effective as of the date hereof, the Credit Agreement shall be amended as follows: 



        2.01.    References
in the Credit Agreement (including references to the Credit Agreement as amended hereby) to "this Agreement"
(and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be a reference to the Credit Agreement as amended hereby. 


        2.02.    Definitions.    Section 1.01 of the Credit Agreement is hereby amended as follows: 



        (a)  adding
the following new definitions and inserting the same in the appropriate alphabetical locations to read in their entirety as follows: 




        "Applicable Commitment Fee Rate" means, (a) for each day during the period from and including the Effective Date to but excluding
January 28, 2003, 1/2 of 1%, and (b) for January 28, 2003 and every day thereafter, 3/4 of 1%. 


        "Cash Flow" means, for any period, the result of Consolidated EBITDA for such period minus
Capital Expenditures referred to in clause (i) of the definition of the term "Capital Expenditures" for such period. 


        "Fixed Charges Ratio" means, on any date, the ratio of (a) Cash Flow for the period of four consecutive fiscal quarters most
recently ended as of such date to (b) Consolidated Interest Expense for such period. 



	(b)
	amending
the chart in the definition of "Applicable Rate" to read in its entirety as follows: 






 






	 
	 	Revolving Credit and

Tranche A Term Loans
	 	Tranche B Term Loans
	 
	Leverage Ratio
 
	 	ABR

Spread
	 	Eurodollar

Spread
	 	ABR

Spread
	 	Eurodollar

Spread
	 
	Category 1	 	 	 	 	 	 	 	 	 
	Greater than or equal to

3.00 to 1	 	2.50	%	3.50	%	3.50	%	4.50	%
	 	 	
	 	
	 	
	 	
	 
	Category 2	 	 	 	 	 	 	 	 	 
	Less than 3.00 to 1 but

greater than or equal to

2.50 to 1.00	 	2.25	%	3.25	%	3.25	%	4.25	%
	 	 	
	 	
	 	
	 	
	 
	Category 3	 	 	 	 	 	 	 	 	 
	Less than 2.50 to 1 but

greater than or equal to

2.00 to 1.00	 	2.00	%	3.00	%	3.25	%	4.25	%
	 	 	
	 	
	 	
	 	
	 
	Category 4	 	 	 	 	 	 	 	 	 
	Equal to or less than 2.00

to 1.00	 	1.75	%	2.75	%	3.25	%	4.25	%
	 	 	
	 	
	 	
	 	
	 





        2.03.    Commitment Fee.    Section 2.12(a) of the Credit Agreement is hereby amended to read in its entirety
as follows: 


        "(a)
Commitment Fee.    The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee,
which shall accrue at a rate per annum equal to the Applicable Commitment Fee Rate on the average daily unused amount of the Revolving Commitment of such Lender during the period from and including
the Effective Date to but excluding the date on which such Commitment terminates. Accrued commitment fees shall be payable in arrears on the 15th day of January, April, July and October of each year
and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of computing commitment fees with respect to Revolving
Commitments, a Revolving Commitment of a Lender shall be deemed to be used to the extent of the outstanding Revolving Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender
shall be disregarded for such purpose)." 


        2.04.    Review of Real Property Assets.    Section 5.13 of the Credit Agreement is hereby amended by inserting
a new paragraph (e) therein reading in its entirety as follows: 


        "(e)
Review of Real Property Assets.    The Borrower acknowledges that the Administrative Agent intends to engage a third party,
reasonably acceptable to the Borrower, to conduct a review and evaluation relating to the Real Property Assets, generally consistent in scope with the review and evaluation of the Real Property Assets
undertaken in connection with the execution and delivery of this Agreement on or about the Effective Date. The Borrower acknowledges that such review and evaluation will commence as soon as reasonably
practicable on or after January 28, 2003 and the Administrative Agent intends that such review and evaluation will be completed and that its results will be made available to the Lenders by
March 31, 2003. In that connection the Borrower will, and will cause each of its Subsidiaries to, cooperate in all respects with the Administrative Agent and such third parties to enable such
review and evaluation to be timely completed in a manner satisfactory to the Administrative Agent and the Lenders and will not, and will cause each of its Subsidiaries not to, cause such review and
evaluation to be hindered, impeded or delayed. Without limiting the foregoing 


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or Section 5.09, the Borrower will, and will cause each of its Subsidiaries to, permit representatives designated by the Administrative Agent or such third parties, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss the Real Property Assets with its officers and any lessors of Real Property Assets,
all as often as reasonably requested. The cost of such review and evaluation shall be borne by the Borrower." 



        2.05.    Leverage Ratio.    Section 6.15 of the Credit Agreement is hereby amended to read in its entirety as
follows: 


        "SECTION
6.15.    Leverage Ratio.    The Borrower will not permit the Leverage Ratio for any four-fiscal-
quarter period ending during any period set forth below to be in excess of the ratio set forth below opposite such period: 



	Period
 
	 	Amount

	

Effective Date through fourth quarter

of 2001 Fiscal Year	
 	

4.25 to 1.00
	

first and second quarters of

2002 Fiscal Year	
 	

3.75 to 1.00
	

third and fourth quarters of

2002 Fiscal Year	
 	

4.00 to 1.00
	

first, second and third quarters

of 2003 Fiscal Year	
 	

4.25 to 1.00
	

fourth quarter of 2003 Fiscal Year

through second quarter of 2004 Fiscal Year	
 	

4.10 to 1.00
	

third and fourth quarters of

2004 Fiscal Year	
 	

3.90 to 1.00
	

2005 Fiscal Year	
 	

2.75 to 1.00
	

Thereafter	
 	

2.50 to 1.00"






        2.06.    Consolidated Interest and Rental Expense Coverage Ratio.    Section 6.16 of the Credit Agreement is
hereby amended to read in its entirety as follows: 


        "SECTION
6.16.    Consolidated Interest and Rental Expense Coverage Ratio.    The Borrower will not permit the ratio
of (a) Consolidated EBITDAR of the Borrower and the Subsidiaries to (b) the sum, without
duplication, of (i) Consolidated Interest Expense and (ii) Consolidated Rental Payments for any four-fiscal-quarter period ending during any period set forth below to be less
than the ratio set forth below opposite such period: 


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	Period
 
	 	Amount

	

Effective Date through fourth quarter

of 2001 Fiscal Year	
 	

1.40 to 1.00
	

2002 Fiscal Year	
 	

1.45 to 1.00
	

2003 Fiscal Year and first and second

quarters of 2004 Fiscal Year	
 	

1.45 to 1.00
	

third and fourth quarters of

2004 Fiscal Year	
 	

1.50 to 1.00
	

2005 Fiscal Year	
 	

1.65 to 1.00
	

Thereafter	
 	

1.70 to 1.00"






        2.07.    Minimum Consolidated EBITDA.    Section 6.17 of the Credit Agreement is hereby amended to read in its
entirety as follows: 


        "SECTION
6.17.    Minimum Consolidated EBITDA.    The Borrower will not permit Consolidated EBITDA of the Borrower and
the Subsidiaries for any four-fiscal-quarter period ending during any period set forth below to be less than the amount set forth below opposite such period: 



	Period
 
	 	Amount

	

Effective Date through third quarter

of 2000 Fiscal Year	
 	
$	

170,000,000
	

fourth quarter of 2000 Fiscal Year through

fourth quarter of 2001 Fiscal Year	
 	
$	

160,000,000
	

first, second and third quarters of

2002 Fiscal Year	
 	
$	

170,000,000
	

fourth quarter of 2002 Fiscal Year	
 	
$	

160,000,000
	

first, second and third quarters

of 2003 Fiscal Year	
 	
$	

155,000,000
	

fourth quarter of 2003 Fiscal Year

through second quarter of 2004 Fiscal Year	
 	
$	

160,000,000
	

third and fourth quarters of

2004 Fiscal Year	
 	
$	

165,000,000
	

2005 Fiscal Year	
 	
$	

210,000,000
	

Thereafter	
 	
$	

220,000,000"






        2.08.    Fixed Charges Ratio.    A new Section 6.19 is hereby added at the end of Article VI of the
Credit Agreement to read in its entirety as follows: 


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        "SECTION
6.19.    Fixed Charges Ratio.    The Borrower will not permit the Fixed Charges Ratio for any
four-fiscal-quarter period to be less than 1.00 to 1.00." 


        Section 3.    Waiver.    Subject to the conditions precedent set forth in Section 5 below, the
Administrative Agent hereby waives any Default that occurs or has occurred during the period from and including the Effective Date to but excluding March 31, 2003 arising out of the failure of
the Borrower to cause any Real Property Assets acquired by the Borrower or any Subsidiary Loan Party after the Effective Date to be subjected to a Lien securing the Obligations. 



        Section 4.    Representations and Warranties.    The Borrower represents and warrants to the Lenders that: 



        (a)  this
Amendment No. 3 has been duly and validly executed and delivered by the Borrower and constitutes the Borrower's legal, valid and binding obligation,
enforceable against the Borrower in accordance with its terms; 


        (b)  on
the date hereof, after giving effect to this Amendment No. 3, no Default has occurred and be continuing; and 



        (c)  the
representations and warranties set forth in Article 3 of the Credit Agreement are true and correct in all material respects on and as of the date hereof after
giving effect to this Amendment No. 3, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall
have been true, correct and complete in all material respects on and as of such earlier date and as if each reference in said Article 3 to "this Agreement" included reference to the Credit
Agreement. 




It
shall be an Event of Default for all purposes of the Credit Agreement, as amended hereby, if any representation, warranty or certification made by the Borrower in this Amendment No. 3, or in
any certificate or other writing furnished to any Lender or the Administrative Agent pursuant to this Amendment No. 3, shall prove to have been false or misleading as of the time made or
furnished in any material respect. 


        Section 5.    Conditions.    The amendments to the Credit Agreement set forth in Section 2 hereof and
the waiver set forth in Section 3 hereof shall become effective, as of the date hereof, upon the satisfaction of the following conditions precedent: 


        5.01.    Execution by All Parties.    The Administrative Agent (or its counsel) shall have received either
(i) a counterpart of this Amendment No. 3 signed on behalf of the Borrower and the Administrative Agent, with the consent of the Required Lenders, and the Consent and Agreement to
Amendment signed on
behalf of the Loan Parties thereto or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Amendment
No. 3) that such party has signed a counterpart of this Amendment No. 3 and the Consent and Agreement to Amendment. 


        5.02.    Documents.    The Administrative Agent shall have received the following documents, each of which shall be
satisfactory to the Administrative Agent in form and substance: 


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        (1)    Corporate Documents.    The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of this Amendment No. 3 and any other
legal matters relating to the Loan Parties or this Amendment No. 3, all in form and substance satisfactory to the Administrative Agent and its counsel. 


        (2)    Opinion of Counsel to the Company.    The Administrative Agent shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the date hereof) of each of (i) Shearman & Sterling, counsel for the Borrower, substantially in the form of
Exhibit A-1 and (ii) Marc Strassler, Senior Vice President and General Counsel of the Borrower, substantially in the form of Exhibit A-2. The Borrower
hereby requests such counsel to deliver such opinions. 


        (3)    Officer's Certificate.    The Administrative Agent shall have received a certificate, dated as of the date
hereof, of the President, a Vice President or a Financial Officer of each Borrower to the effect that (i) no Default has occurred and is continuing as of the date hereof after giving effect to
this Amendment No. 3 and (ii) the representations and warranties set forth in Article 3 of the Credit Agreement are true and correct in all material respects on and as of the date
hereof after giving effect to this Amendment No. 3, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all material respects on and as of such earlier date and as if each reference in said Article 3 to "this Agreement" included reference
to the Credit Agreement. 


        (4)    Other Documents.    Such other documents as the Administrative Agent or any Bank or special New York counsel to
Chase may reasonably request. 




        5.03.    Fees and Expenses.    



        (1)  The
payment to each Lender that consents to, and authorizes the Administrative Agent to execute, this Amendment No. 3 not later than 12:00 noon New York time on
January 28, 2003, of an amendment fee in an amount equal to 0.25% of the sum of (x) the Revolving Commitment of such Lender on such date  plus (y) the aggregate outstanding principal
amount of the Term Loans of such Lender on such date; and 


        (2)  receipt
by the Administrative Agent of all fees and other amounts due and payable on or prior to the date hereof, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder, including without limitation the reasonable fees of Milbank, Tweed,
Hadley & McCloy LLP, counsel for JP Morgan Chase Bank. 




        Section 6.    Loan Documents.    References in the Loan Documents to "the Credit Agreement" (and indirect
references such as "thereunder", "thereby", "therein" and "thereof") shall be deemed to be a reference to the Credit Agreement as amended hereby. 


        Section 7.    Miscellaneous.    Except as herein provided, the Credit Agreement shall remain unchanged and in
full force and effect. This Amendment No. 3 may be executed in counterparts which, taken together, shall constitute a single document and any of the parties hereto may execute this Amendment
No. 3 by signing any such counterpart. This Amendment No. 3 shall be governed by and construed in accordance with the law of the State of New York. 


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        IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed as of the date and year first above written. 



	 	 	PATHMARK STORES, INC.
	

 	
 	
By:	

/s/  FRANK G. VITRANO      
 Name: Frank G. Vitrano

Title:  President and Chief Financial Officer
	

 	
 	
JPMORGAN CHASE BANK (formerly known

as The Chase Manhattan Bank),

as Administrative Agent
	

 	
 	

By:	

/s/  TERI STREUSAND      
 Name: Teri Streusand

Title:  Vice President






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CONSENT AND AGREEMENT TO AMENDMENT    
  


        Each of the undersigned hereby (1) consents to the amendments provided for in this Amendment No. 3, (2) agrees that each reference to the
Credit Agreement in each Loan Document to which it is a party shall be a reference to the Credit Agreement as amended by this Amendment No. 3 and (3) confirms its obligations under each
Loan Document to which it is a party after giving effect to the amendments set forth in this Amendment No. 3. 



	AAL REALTY CORP.	 	ADBRETT CORP.
	
By:	

/s/  Marc A. Strassler      
 Title: Senior Vice President	
 	

By:	

/s/  Marc A. Strassler      
 Title: Senior Vice President
	
 BRIDGE STUART, INC.	
 	

GAW PROPERTIES CORP.
	
By:	

/s/  Marc A. Strassler      
 Title: Senior Vice President	
 	

By:	

/s/  Marc A. Strassler      
 Title: Senior Vice President
	
 PLAINBRIDGE LLC	
 	

PTMK LLC
	
By:	

/s/  Marc A. Strassler      
 Title: Senior Vice President	
 	

By:	

/s/  Marc A. Strassler      
 Title: Senior Vice President
	
 SUPERMARKETS OIL COMPANY, INC.	
 	

 	

 
	
By:	

/s/  Marc A. Strassler      
 Title: Senior Vice President	
 	

 	

 




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Exhibit 10.27


AMENDMENT NO. 3 TO THE CREDIT AGREEMENT

CONSENT AND AGREEMENT TO AMENDMENT