Document:

SIXTH AMENDMENT,
ACKNOWLEDGMENT

    AND CONSENT AND WAIVER TO
CREDIT AGREEMENT

     

    This
SIXTH AMENDMENT, ACKNOWLEDGMENT
AND CONSENT AND WAIVER TO CREDIT AGREEMENT, dated as
of December 18, 2008 (this “Amendment”), is by
and among: (a) THE PENN TRAFFIC COMPANY, a Delaware corporation (“Penn Traffic”), PENNY
CURTISS BAKING COMPANY, INC., a New York corporation (“Penny Curtiss”), and
BIG M SUPERMARKETS, INC., a New York corporation (“BIG M”, and together
with Penn Traffic and Penny Curtiss, jointly, severally and collectively
referred to herein, as “Borrowers” and
individually as “Borrower”); (b) the
other Credit Parties signatory hereto; (c) GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation (in its individual capacity, “GE Capital”), for
itself, as Lender, and as Agent for Lenders; 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”)
sold their wholesale grocery business (the “Wholesale Business”)
pursuant to the terms of (i) that certain Asset Purchase Agreement (a copy of
which is annexed hereto as Exhibit A), dated as
of December 17, 2008, among C&S Wholesale Grocers, Inc. (“C&S”) and the
Seller Companies, (ii) that certain Transition Services Agreement (a copy of
which is annexed hereto as Exhibit B), dated as
of December 21, 2008, among C&S and the Seller Companies and (iii) that
certain Third Party Logistics Agreement (a copy of which is annexed hereto as
Exhibit C),
dated as of December 21, 2008, between C&S 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 137 State Route 104, Oswego, New York to Price
Chopper Operating Company, Inc. (the “Oswego Sale”) was
wired into the escrow account of Bond, Schoeneck & 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, certain Events 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. Waivers.  (a)
As of the Sixth Amendment Effective Date (as hereinafter defined), Agent and
Lenders hereby waive the Event of Default under Section 8.1(b) of the
Credit Agreement resulting solely from the failure of a Net Proceeds Reserve to
be implemented pursuant to Section 6.8(e)(vii)
of the Credit Agreement in connection with the 2006 sale of BiLo Store #9210
located at 1225 Scalp Avenue, Richland, Pennsylvania.

     

    (b) As of the
Sixth Amendment Effective Date, Agent and Lenders hereby waive any Event of
Default under Section
8.1(b) of the Credit Agreement resulting solely from the consummation of
the Wholesale Business Sale to the extent it violated Section 6.8 of the
Credit Agreement.

     

    3. Acknowledgment and
Consent.  Notwithstanding the provisions of Sections 1.3(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 (the “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, provided that: (a)
Borrowers may use the Escrow Amount, plus up to
$10,000,000 of the Net Proceeds from the Wholesale Business Sale to prepay the
Supplemental Real Estate Facility (without penalty or premium) in an amount that
would result in the remaining outstanding principal amount of the Supplemental
Real Estate Facility being no less than $10,000,000 (the “SREF Prepayment ”),
(b) the remaining amount of the Net Proceeds from the Wholesale Business Sale
after payment of the SREF Prepayment (the “Diverted Amount”)
shall be deposited in the Diversion Account, (c) upon satisfaction of the
conditions set forth in Section 11 of this
Amendment, the Diverted Amount shall be used to repay the outstanding Revolving
Loans (and not the Term Loan) in full in cash in accordance with Section 1.10 of the
Credit Agreement (including the payment, if any, of LIBOR funding breakage costs
in accordance with Section 1.13(b) of
the Credit Agreement), and (d) to the extent the Revolving Loans have been paid
in full in cash, the remaining amount of the Diverted Amount shall remain in the
Diversion Account in accordance with the Credit Agreement.  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 agree that upon payment by C&S to the
Seller Companies of the Purchase Price Agent and Lenders shall release 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 provisions of the foregoing sentence only, C&S shall be
deemed a third party beneficiary of this Amendment, 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
Sixth Amendment Effective Date as follows:

     

    (a) Section 1.1(a) of the
Credit Agreement is hereby amended by deleting the first sentence of such Section 1.1(a) in its
entirety and substituting in lieu thereof the following:

     

    “Subject
to the terms and conditions hereof and at the sole and absolute discretion of
Agent, each Revolving Lender agrees to make available to Borrowers from time to
time until the Commitment Termination Date its Pro Rata Share of advances (each,
a “Revolving Credit
Advance”); provided, however, Borrowers
shall not request, and Lenders shall have no obligation to make, any Revolving
Loan to Borrowers at any time if (x) during the period commencing on the Closing
Date and ending on the Sixth Amendment Effective Date, Excess Revolver
Availability is equal to or less than $26,000,000, (y) during the period
commencing on the Sixth Amendment Effective Date and ending on the Commitment
Termination Date, Excess Revolver Availability is equal to or less than
$13,500,000, and (z) the unfunded portion of the aggregate commitments of the
lenders under the Supplemental Real Estate Facility is greater than
$0.”

     

    (b) Section 1.1(c)(i) of
the Credit Agreement is hereby amended by deleting the first sentence of such
Section
1.1(c)(i) in its entirety and inserting the following sentence in place
thereof:

     

    “Agent
shall notify the Swing Line Lender upon Agent’s receipt of any Notice of
Revolving Credit Advance (other than any Notice of Revolving Credit Advance with
regard to which Agent uses its discretion not fund such request pursuant to
Section
2.2(d)).”

     

    (c) Section 1.5(a) of the
Credit Agreement is hereby amended by deleting such Section 1.5(a) in its
entirety and substituting in lieu thereof the following new Section
1.5(a):

     

    “(a)           Borrowers
shall pay interest to Agent, for the ratable benefit of Lenders in accordance
with the various Loans being made by each Lender, in arrears on each applicable
Interest Payment Date, at the following rates:  (i) with respect to
the Revolving Credit Advances, the Index Rate plus the Applicable Revolver Index
Margin per annum or, at the election of Borrower Representative, the applicable
LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, based on the
aggregate Revolving Credit Advances outstanding from time to time as described
below; (ii) with respect to the Term Loan, the Index Rate plus the Applicable
Term Loan Index Margin per annum; and (iii) with respect to the Swing Line Loan,
the Index Rate plus the Applicable Revolver Index Margin per annum, based on the
aggregate Swing Line Advances outstanding from time to time as described
below.

     

    
      
         

      

      
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    The
Applicable Margins are as follows:

     

    
      	
              Applicable
      Revolver Index Margin

            	
              1.50%

            
	 	 
	
              Applicable
      Revolver LIBOR Margin

            	
              3.00%

            
	 	 
	
              Applicable
      Term Loan Index Margin

            	
              5.00%

            
	 	 
	
              Applicable
      Unused Facility Fee Margin

            	
              0.500%”

            

    

    

    (d) Clause (ii) of the
second sentence of Section 1.14 of the
Credit Agreement is hereby amended by deleting “at Agent’s discretion” where it
appears in such clause (ii).

     

    (e) Section 2.2(d) is
hereby amended by deleting such Section 2.2(d) in its
entirety and substituting in lieu thereof the following new Section
2.2(d):

     

    “(d)           on
and after the Sixth Amendment Effective Date, in addition to the Borrowers’
satisfaction of the other conditions to borrowing set forth in this Section 2.2, all
Revolving Credit Advances shall be made at Agent’s discretion;”

     

    (f) Section 6.8(e)(vii)
of the Credit Agreement is hereby amended by deleting such Section 6.8(e)(vii)
in its entirety and inserting the following new Section 6.8(e)(vii)
in place thereof:

     

    “(vii)      upon
any such sale, Agent shall establish a Reserve in an amount equal to (i) for any
owned Real Estate located in New York, 74% of the Net Proceeds from such sale or
(ii) for any owned Real Estate (other than owned Real Estate located in New
York) 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 Supplemental Real Estate Facility,”

     

    (g) 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:

     

    
      
         

      

      
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    “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 closure of those
locations listed on Schedule 1A to the
Sixth Amendment so long as such sale or other disposition otherwise complies
with each of the conditions set forth in clauses (iii), (iv), (vi), (vii), (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
or closure of up to 6 additional locations so long as such sale, closure or
other disposition otherwise complies with each of the conditions set forth in
clauses (iii), (iv), (vi), (vii), (ix), (x) and (xi) of this Section 6.8(e), as
reasonably determined by Agent (except that if (I) the “four wall EBITDA” of
such location for the twelve (12) month period most recently ended is greater
than $200,000 and (II) such location is an owned Real Estate location, such
disposition shall require Agent’s written consent, to be given at Agent’s
discretion).  It being understood that (A) notwithstanding anything to
the contrary set forth in the Intercreditor Agreement, upon the sale or other
disposition of the lease of a location listed as a “Minor Lease Location” on
Schedule 1B to
the Sixth Amendment, Borrowers shall be permitted to make a payment to
Supplemental Real Estate Facility Agent in an amount equal to 75% of the Net
Proceeds from the sale or disposition of such lease, and (B) 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.”

     

    (h) Section 8.1(m) of the
Credit Agreement is hereby amended by deleting such Section 8.1(m) in its
entirety and substituting in lieu thereof the following new Section
8.1(m):

     

    “(m)                      If
at any time the sum of (A) the Borrowing Base, plus all collected
and available funds in the Diversion Account as of such date, in each case,
less (B) the
sum of the aggregate Revolving Loan and the Swing Line Loan then outstanding is
less than $13,500,000.”

     

    (i) Sections 8.1 (q) and
(r) of the
Credit Agreement are hereby amended by deleting such sections in their
entirety.

     

    (j) Section 9.9(a)(i) is
hereby amended by adding a new sentence at the end thereof as
follows:

     

    “Agent
shall give Revolving Lenders prompt notice of the exercise of its discretion
pursuant to Section
2.2(d) not to fund a Revolving Credit Advance.”

     

    (k) Section 11.2(c) of
the Credit Agreement is hereby amended by adding a new sentence immediately
following the first sentence of such Section 11.2(c) as
follows:

     

    
      
         

      

      
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    “No
amendment, modification, termination or waiver of or consent with respect to
Sections 1.1(a)
and 8.1(m)
shall be effective unless the same shall be in writing and signed by Agent, each
Lender and Borrowers.”

     

    (l) 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))”

     

    (m) Annex A of the Credit
Agreement is hereby amended by:

     

    (i) amending
the definition of “Applicable L/C
Margin” by deleting such definition in its entirety and substituting in
lieu thereof the following new definition:

     

    “‘Applicable L/C
Margin’ means an amount equal to the Applicable Revolver LIBOR
Margin.”

     

    (ii) amending
and restating the definition of “Borrowing Base” in
its entirety to read as follows:

     

    “‘Borrowing Base’
means, as of any date of determination by Agent from time to time, an amount
equal to the sum at such time of:

     

    (a)           85%
of Borrowers’ Eligible Credit Card Receivables, and

     

    (b)           85%
of Borrowers’ Eligible Accounts, and

     

    (c)           the
lesser of (i) 65% of Borrowers’ Eligible Inventory valued at the lower of cost
(determined on a first-in, first-out basis) or market or (ii) 85% of the net
orderly liquidation value of Borrowers’ Eligible Inventory, and

     

    (d)           80%
of the net appraised value of Borrowers’ Eligible Scripts, and

     

    (e)           40%
of the fair market value of Borrowers’ and Guarantors’ Eligible Real Estate,
and

     

    (f)           the
lesser of (i) 35% of the net orderly liquidation value of Borrowers’ Eligible
Machinery and Equipment and (ii) $2,500,000, and

     

    (g)           the
lesser of (i) the Loan Value Reserve and (ii) 50% of the fair market value of
Eligible New York Real Estate,

     

    in each
case, less
Reserves established by Agent in its reasonable discretion.”

     

    
      
         

      

      
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    (iii) amending
and restating the definition of “Eligible Real Estate”
in its entirety to read as follows:

     

    “‘Eligible Real Estate’
means the owned Real Estate of the Credit Parties (other than Eligible New York
Real Estate) (i) upon which Agent has a first-priority, perfected Lien and
security interest as set forth on Disclosure Schedule
(3.6(e)), (ii) as to which the granting by Borrowers of a Lien thereon
will not breach any agreement or violate any prohibition in any agreement
relevant to such Real Estate, (iii) which is not subject to any Lien other than
in favor of Agent, the Supplemental Real Estate Facility Agent, the Trade Lien
Collateral Agent and Permitted Encumbrances, (iv) as to which the
representations and warranties in this Agreement with respect to Real Estate are
true and correct (except as such representations expressly relate to an earlier
date), (v) as to which the Borrowers have fully performed each of their
covenants herein with respect to such Real Estate in all material respects, and
(vi) as to which there is an operating supermarket on such Real
Estate.”

     

    (iv) amending
the definition of “Index Rate” by
deleting such definition in its entirety and substituting in lieu thereof the
following new definition:

     

    “‘Index Rate’ means,
for any day, a floating rate equal to the highest of (i) the rate publicly
quoted from time to time by The Wall Street Journal
as the “base rate on corporate loans posted by at least 75% of the nation’s 30
largest banks” (or, if The Wall Street
Journal ceases quoting a base rate of the type described, the highest per
annum rate of interest published by the Federal Reserve Board in Federal Reserve
statistical release H.15 (519) entitled “Selected Interest Rates” as the
Bank prime loan rate or its equivalent), (ii) the Federal Funds Rate plus 50 basis points
per annum, and (iii) the sum of (a) the LIBOR Rate for a LIBOR Period of three
(3) months commencing on such day, plus (b) the excess
of the Applicable Revolver LIBOR Margin over the Applicable Revolver Index
Margin, in each instance, as of such day.  Each change in any interest
rate provided for in the Agreement based upon the Index Rate shall take effect
at the time of such change in the Index Rate.”

     

    (v) 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 Sixth Amendment, and (b)
the agreements set forth in Disclosure Schedule
(3.22(a)).”

     

    (vi) amending
the definition of “Maximum Amount” by
deleting the period at the end of such definition and substituting in lieu
thereof the following proviso:

     

    “; provided that from
December 18, 2008 through the date that the Diverted Amount is applied in
accordance with Section 3(c) of the
Sixth Amendment, as used to calculate the fee due pursuant to Section 1.9(b)
hereof, “Maximum Amount” shall mean $50,000,000.”

     

    
      
         

      

      
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    (vii) adding
the following new definitions in the appropriate alphabetical
order:

     

    “‘Diverted Amount’
shall have the meaning ascribed to such term in the Sixth
Amendment.

     

    ‘Eligible New York Real
Estate’ means the owned Real Estate of the Credit Parties located in New
York (i) upon which Agent has a first-priority, perfected Lien and security
interest as set forth on Disclosure Schedule
(3.6(e)), (ii) as to which the granting by Borrowers of a Lien thereon
will not breach any agreement or violate any prohibition in any agreement
relevant to such Real Estate, (iii) which is not subject to any Lien other than
in favor of Agent, the Supplemental Real Estate Facility Agent, the Trade Lien
Collateral Agent and Permitted Encumbrances, (iv) as to which the
representations and warranties in this Agreement with respect to Real Estate are
true and correct (except as such representations expressly relate to an earlier
date), (v) as to which the Borrowers have fully performed each of their
covenants herein with respect to such Real Estate in all material respects, and
(vi) as to which there is an operating supermarket on such Real
Estate.

     

    ‘Sixth Amendment’
means the Sixth 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.

     

    ‘Sixth Amendment Effective
Date’ means the date on which the conditions precedent to the
effectiveness of the Sixth Amendment are satisfied.”

     

    (n) Clause (a)(i) of
Annex B of the
Credit Agreement is hereby amended by adding “; provided, that
commencing on the Sixth Amendment Effective Date the amount of the L/C Sublimit
shall be reduced to FORTY-SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($47,500,000)” immediately following “(the “L/C Sublimit”)” where
it appears at the end of such clause
(a)(i).

     

    (o) Annex J to the Credit
Agreement is hereby amended by replacing such Annex J in its
entirety with the Annex J attached as
Schedule 2
hereto.

     

    (p) 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 3
hereto.

     

    (q) Exhibit 4.1(b) to the
Credit Agreement is hereby amended by replacing such Exhibit 4.1(b) in its
entirety with the Exhibit
4.1(b)  attached as Schedule 4
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 in accordance with Section 3(c) of this
Amendment as follows:

     

    (a) Section 5.15 of the
Credit Agreement is hereby amended by deleting such Section 5.15 in its
entirety and substituting in lieu thereof “[Intentionally
omitted.]”.

     

    (b) Section 6.2(d) of the
Credit Agreement is hereby amended by deleting “, Borrowers are in compliance
with Section
5.15 hereof and continue to maintain the Minimum Outstanding Revolving
Loan Balance” where it appears in such Section
6.2(d).

     

    (c) Annex A of the Credit
Agreement is hereby amended by:

     

    (i) deleting
the definition of “Minimum Outstanding
Revolving Loan Balance” in its entirety; and

     

    (ii) amending
the definition of “Revolving Loan
Commitment” by deleting the period at the end of such definition and
substituting in lieu thereof the following proviso:

     

    “; provided, that
commencing on the date upon which the Diverted Amount is applied in accordance
with Section
3(c) of the Sixth Amendment the Revolving Loan Commitment shall be
reduced to FIFTY MILLION DOLLARS ($50,000,000).”.

     

    (d) Subsection (g) of
Annex C to the
Credit Agreement is hereby amended by deleting “the Minimum Outstanding
Revolving Loan Balance as prohibited by Section 5.15 of the
Agreement” where it appears in subsection (g) and
substituting in lieu thereof “$0”.

     

    (e) 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 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 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 Agent to the Loans in accordance with the
Agreement.  Each of the Credit Parties expressly acknowledges and
agrees that neither the Agent nor any Lender shall have any liability to such
Credit Party or any other Person in the event the Agent applies funds in
contravention of this clause (h). Except as
permitted in this clause (h), the Third
Amendment and the Sixth 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.”

     

    
      
         

      

      
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    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:

     

    (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
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.

     

    
      
         

      

      
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    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 (i)
Revolving Loans is $57,799,260 and (ii) the Term Loan is $6,000,000, each plus
additional interest, fees, costs and expenses (collectively, the “Outstanding
Obligations”), and that such Outstanding Obligations are 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.

     

    9. Expenses.  (a)
In connection with this Amendment, Borrowers agree to pay to Agent for the
ratable benefit of the Lenders, in immediately available funds, a non-refundable
amendment fee in the amount of 1.00% of the Commitments (after giving effect to
the reduction of Revolving Loan Commitments pursuant to this Amendment) (the
“Amendment
Fee”) which shall be fully earned, due and payable in immediately
available funds on or before the Sixth Amendment Effective Date.

     

    (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 “Sixth Amendment Effective
Date”) only upon satisfaction in full in the reasonable judgment of Agent
of each of the following conditions:

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    (a) Payment of the Amendment
Fee.  Borrowers shall have paid the Amendment Fee to
Agent.

     

    (b) Amendment.  Agent
shall have received counterpart signature pages of this Amendment duly executed
and delivered by each of Agent, Lenders and the Borrowers.

     

    (c) Supplemental Real Estate
Facility.  Agent shall have received evidence that (i)
Borrowers have received a duly executed amendment to the Supplemental Real
Estate Facility, in substantially the form attached hereto as Exhibit D and (ii)
the Supplemental Real Estate Facility Agent has acknowledged that, as of the
Sixth Amendment Effective Date, the Extension Conditions (as defined in the
Supplemental Real Estate Facility) have been satisfied or waived pursuant to the
terms of the Supplemental Real Estate Facility.

     

    (d) Amendment to Intercreditor
Agreement.  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, Supplement Real Estate Facility 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.

     

    11. NY Real Estate Recording
Taxes. On or before January 30, 2009 (or such later date as Agent may
determine in its reasonable discretion), Borrowers shall have (at their sole
cost) (a) executed and delivered (or caused the applicable Credit Party to
execute and deliver) to Agent a gap mortgage and consolidation agreement or new
mortgages, if necessary, (collectively, the “Gap Mortgages”) for
the Real Estate located in New York (“New York Real
Estate”) in an aggregate amount equal to not less than $17,000,000,
together with an agreement of confirmation, reaffirmation, consolidation and
modification, if applicable, and/or modification to the existing mortgages on
the New York Real Estate, as applicable, and all affidavits required to record
the same, (b) executed and delivered (or caused the applicable Credit Party or
third party to execute and deliver) all waivers, consents and other documents
necessary to effectuate the Gap Mortgages and any modification to the existing
mortgages, including all recordings, filings and other actions necessary to
confirm, establish and  protect Agent’s security interest in and to
the New York Real Estate, (c) provided lien searches and any other evidence
required by Agent that the New York Real Estate  is free and clear of
all Liens other than the Permitted Encumbrances approved by Agent, (d) paid any
mortgage recording tax and any other amounts required in connection with such
Gap Mortgages and agreements of confirmation, reaffirmation, consolidation and
modification (“Additional Mortgage
Recording Tax”), (e) delivered to Agent, (i) a title insurance policy for
each such Gap Mortgage and an endorsement or new title policy for each existing
mortgage on the New York Real Estate, in each case dated the date of recording
of such Gap Mortgage insuring that the applicable Gap Mortgage and the existing
mortgages are valid and enforceable Liens on the New York Real Estate (subject
only to Permitted Encumbrances approved by Agent), insuring payment of the
Additional Mortgage Recording Tax and otherwise in form and substance reasonably
satisfactory to Agent or (ii) an endorsement to the existing title insurance
policies for the New York Real Estate amending the date of such title insurance
policy to the date of recording of the Gap Mortgages, insuring that the Gap
Mortgages on the New York Real Estate, as consolidated and modified, continue to
be a valid and enforceable Lien (subject only to Permitted Encumbrances approved
by Agent), insuring payment of the Additional Mortgage Recording Tax and
otherwise in form and substance reasonably satisfactory to Agent, as applicable,
(f) provided confirmation satisfactory to Agent of the subordination of
Mortgages in favor of the Supplemental Real Estate Facility Agent to the Gap
Mortgages and the existing mortgages encumbering the New York Real Estate, as
consolidated and modified, as applicable, and (g) provided such additional
documents, including legal opinions, as Agent, in its reasonable good faith
judgment, may require.

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    12. GOVERNING
LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

     

    13. 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]

    

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    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.

    

    
      	 
      	
              BORROWERS

            
	 	 
	 
      	
              THE
      PENN TRAFFIC COMPANY

            
	 	 
	 	      
              By:
       ____________________________

            
	
            	
              Name:
       __________________________

            
	 
      	
              Title:
       ___________________________

            
	 
      	 
      
	 
      	
              PENNY
      CURTISS BAKING COMPANY, INC.

            
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name: 
      __________________________

            
	 
      	
              Title: 
      ___________________________

            
	 
      	 
      
	 
      	
              BIG
      M SUPERMARKETS, INC.

            
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name: 
      __________________________

            
	 
      	
              Title:   
      __________________________

            

    

    

    
      
         

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
         

      

    

     

    
      	 
      	
              LENDERS

            
	 	 
	 
      	
              GENERAL
      ELECTRIC CAPITAL

            
	 
      	
              CORPORATION, as Agent and
      Lender

            
	 	 
	 	 
	 
      	
              By:
       ____________________________

            
	 	      
              Name:
       __________________________

            
	
            	
              Title:   
      Duly
      Authorized Signatory

            
	 
      	
            

    

    

    
      
         

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
         

      

    

     

    

    
      	 
      	
              BANK
      OF AMERICA, N.A.,

            
	 
      	
              as
      Lender

            
	 	 
	 	      
              By:
       ____________________________

            
	
            	
              Name:
       __________________________

            
	 
      	
              Title: 
      ___________________________

            

    

    

    
      
         

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
         

      

    

    

     

    
      	 
      	
              WELLS
      FARGO RETAIL FINANCE, LLC,

            
	 
      	
              as
      Lender

            
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name: 
      __________________________

            
	 
      	
              Title: ___________________________

            

    

    

     

    
      
         

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
         

      

       

       

    

    
      	 
      	
              WACHOVIA
      CAPITAL FINANCE 

              CORPORATION
      (NEW ENGLAND) (f/k/a 

              CONGRESS
      FINANCIAL CORPORATION 

              (NEW
      ENGLAND)), as
    Lender

            
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name: 
      __________________________

            
	 
      	
              Title: 
        __________________________

            

    

    

     

    
      
         

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
         

      

    

    The
following Persons are signatories to this Amendment in their capacity as Credit
Parties and not as Borrowers.

     

    
      	 
      	
              SUNRISE
      PROPERTIES, INC.

            
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name: 
      __________________________

            
	 
      	
              Title: 
      ___________________________

            
	 	 
	 	 
	 
      	
              PENNWAY
      EXPRESS, INC.

            
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name: 
      __________________________

            
	 
      	
              Title: 
      ___________________________

            
	 	 
	 	 
	 
      	
              COMMANDER
      FOODS INC.

            
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name: 
      __________________________

            
	 
      	
              Title: 
      ___________________________

            
	 	 
	 	 
	 
      	
              P
      AND C FOOD MARKETS INC. OF VERMONT

            
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name: 
      __________________________

            
	 
      	
              Title: 
      ___________________________

            
	 	 
	 	 
	 
      	
              P.T.
      DEVELOPMENT, LLC

            
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name:
       __________________________

            
	 
      	
              Title:
      ___________________________

            

    

    

    
      
         

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
         

      

    

     

    

     

    
      	 
      	
              P.T.
      FAYETTEVILLE/UTICA, LLC

            
	 	 
	 	 
	 	      
              By: 
      ____________________________

            
	
            	
              Name:
       __________________________

            
	 
      	
              Title: 
      ___________________________

            

    

     

    
      
         

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
         

      

    

     

    Schedule
1A

    

    Schedule
1B

    Schedule
2

    

    (Annex J to the Credit
Agreement)

    ___________________________________________________________________________

    

    ANNEX
J (from Annex A -
Commitments definition)

     

    to

     

    CREDIT
AGREEMENT

     

    Schedule
3

    

    (Disclosure Schedule
6.8(e) to the Credit Agreement)

    ___________________________________________________________________________

    

    Disclosure Schedule
6.8(e)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Schedule
4

    

    (Exhibit 4.1(b) to the
Credit Agreement)

    ___________________________________________________________________________

    

    Exhibit
4.1(b)

    Form of
Borrowing Base Certificate

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
A

    

    Asset Purchase
Agreement

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
B

    

    Transition Services
Agreement

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
C

    

    Third Party Logistics
Agreement

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
D

    

    Amendment to Supplemental
Real Estate Facility

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
E

    

    Amendment to Intercreditor
AgreementFIFTH 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, PENNY CURTISS 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 137 State Route 104, Oswego, New York to Price
Chopper Operating Company, Inc. (the “Oswego Sale”) was
wired into the escrow account of Bond, Schoeneck & 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 1225 Scalp Avenue, Richland, Pennsylvania.

     

    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.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    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.”

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (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) April 13, 2010, (b) 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.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    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:

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    

    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]

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    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.

    

    
      	 
      	
              BORROWERS

            
	 	 
	 
      	
              THE
      PENN TRAFFIC COMPANY

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name: 
        ________________________

            
	 
      	
              Title:
        _________________________

            
	 
      	 
      
	 
      	
              PENNY
      CURTISS BAKING COMPANY, INC.

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name: 
        ________________________

            
	 
      	
              Title:
        _________________________

            
	 
      	 
      
	 
      	
              BIG
      M SUPERMARKETS, INC.

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name: _________________________

            
	 
      	
              Title: 
       _________________________

            

    

    

    
      
        
        

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
              LENDERS

            
	 	 
	 
      	
              KIMCO CAPITAL CORP., as Agent and
      Lender

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name: 
      _________________________

            
	 
      	
              Title: 
      __________________________

            
	 
      	 
      
	 	 
	 
      	
              JUBILEE-VI LLC, a Delaware limited
      liability company),

            
	 
      	
              As
      successor-in-interest to

            
	 
      	
              JUBILEE
      LIMITED PARTNERSHIP V,

            
	 
      	
              as
      Lender

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            

    

     

    
 

    
      
        
        

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
              The
      following Persons are signatories to this Amendment in their capacity as
      Credit Parties and not as Borrowers.

            
	 	 
	 
      	
              SUNRISE
      PROPERTIES, INC.

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            
	 	 
	 	 
	 
      	
              PENNWAY
      EXPRESS, INC.

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            
	 	 
	 	 
	 
      	
              COMMANDER
      FOODS INC.

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            
	 	 
	 	 
	 
      	
              P
      AND C FOOD MARKETS INC. OF VERMONT

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      ______________________

            
	 
      	
              Title:
      __________________________

            
	 	 
	 	 
	 
      	
              P.T.
      DEVELOPMENT, LLC

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            

    

    

    
      
        
        

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
        
        

      

    

     

     

    
      	 
      	
              P.T.
      FAYETTEVILLE/UTICA, LLC

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title: 
      _________________________

            

    

    

    
      
        
        

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
        
        

      

    

     

    The
following Persons are signatories to this Amendment in their capacity as Credit
Parties and not as Borrowers.

     

    
      	 
      	
              SUNRISE
      PROPERTIES, INC.

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            
	 	 
	 	 
	 
      	
              PENNWAY
      EXPRESS, INC.

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            
	 	 
	 	 
	 
      	
              COMMANDER
      FOODS INC.

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
        _________________________

            
	 	 
	 	 
	 
      	
              P
      AND C FOOD MARKETS INC. OF VERMONT

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            
	 	 
	 	 
	 
      	
              P.T.
      DEVELOPMENT, LLC

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            

    

    

    
      
        
        

      

      
        
          [SIGNATURE
PAGE TO AMENDMENT]

        

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
              P.T.
      FAYETTEVILLE/UTICA, LLC

            
	 	 
	 	

              By: 
      ___________________________

            
	
            	
              Name:
      _________________________

            
	 
      	
              Title:
      __________________________

            

    

     

     

    
      
        
        

      

      
        
          [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

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